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PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
Dated as of June 25, 1997
by and among
NORTH ATLANTIC TRADING ACQUISITION COMPANY, INC.
and
NATWEST CAPITAL MARKETS LIMITED
as Initial Purchaser
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12% SENIOR PIK PREFERRED STOCK
TABLE OF CONTENTS
Page
1. Definitions......................................................... 1
2. Exchange Offer...................................................... 5
3. Shelf Registration.................................................. 8
4. Additional Dividends................................................ 9
5. Registration Procedures............................................. 11
6. Registration Expenses............................................... 20
7. Indemnification..................................................... 21
8. Rules 144 and 144A.................................................. 25
9. Underwritten Registrations.......................................... 25
10. Miscellaneous. ..................................................... 25
(a) No Inconsistent Agreements................................. 25
(b) Adjustments Affecting Transfer Restricted Preferred Stock.. 26
(c) Amendments and Waivers..................................... 26
(d) Notices.................................................... 26
(e) Successors and Assigns..................................... 28
(f) Counterparts............................................... 28
(g) Headings................................................... 28
(h) Governing Law.............................................. 28
(i) Severability............................................... 28
(j) Preferred Stock Held by the Company or their Affiliates.... 28
(k) Third Party Beneficiaries.................................. 29
(i)
PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of
June 25, 1997, by and among North Atlantic Trading Acquisition Company, Inc., a
Delaware corporation (the "Company"). and NatWest Capital Markets Limited (the
"Initial Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated June 18, 1997, among the Company and the Initial Purchaser (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchaser of 1,360 units (the "Units") consisting of 1,000 shares of 12% Senior
Payment-in-Kind Preferred Stock (the "Preferred Stock") with warrants to
purchase an aggregate of 44,440 shares of common stock of the Company. In order
to induce the Initial Purchaser to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement for the benefit of the Initial Purchaser and its direct and indirect
transferees. The execution and delivery of this Agreement is a condition to the
obligation of the Initial Purchaser to purchase the Preferred Stock under the
Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Dividends: Has the meaning provided in Section
4(a) hereof.
Advice: Has the meaning provided in the last paragraph of
Section 5 hereof.
Agreement: Has the meaning provided in the first introductory
paragraph hereto.
Applicable Period: Has the meaning provided in Section 2(b)
hereof.
Certificate of Designation: means the certificate of
designation governing the Preferred Stock and the Exchange Preferred Stock.
Closing Date: Has the meaning provided in the Purchase
Agreement.
Company: Has the meaning provided in the first introductory
paragraph hereto.
Effectiveness Date: The 90th day after the Filing Date.
Effectiveness Period: Has the meaning provided in Section
3(a) hereof.
Event Date: Has the meaning provided in Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Offer: Has the meaning provided in Section 2(a)
hereof.
Exchange Preferred Stock: The shares of 12% Senior
Payment-In-Kind Preferred Stock of the Company that are identical to the
Preferred Stock in all material respects, except that the provisions regarding
restrictions on transfer shall be modified, as provided in the Certificate of
Designation, and the issuance thereof pursuant to the Exchange Offer shall have
been registered pursuant to an effective Registration Statement in compliance
with the Securities Act.
Exchange Registration Statement: Has the meaning provided in
Section 2(a) hereof.
Filing Date: The 30th day after the Issue Date.
Holder: Any holder of Transfer Restricted Preferred Stock.
Indemnified Person: Has the meaning provided in Section 7(c)
hereof.
Indemnifying Person: Has the meaning provided in Section 7(c)
hereof.
Initial Purchaser: Has the meaning provided in the first
introductory paragraph hereto.
Inspectors: Has the meaning provided in Section 5(o) hereof.
Issue Date: The date on which the original Preferred Stock
was sold to the Initial Purchaser pursuant to the Purchase Agreement.
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NASD: Has the meaning provided in Section 5(s) hereof.
Participant: Has the meaning provided in Section 7(a) hereof.
Participating Broker-Dealer: Has the meaning provided in
Section 2(b) hereof.
Paying Agent: United States Trust Company of New York as
Paying Agent for the Preferred Stock.
Persons: An individual, trustee, corporation, partnership,
limited liability company, joint stock company, trust, unincorporated
association, union, business association, firm or other legal entity.
Preferred Stock: Has the meaning provided in the second
introductory paragraph hereto.
Private Exchange: Has the meaning provided in Section 2(b)
hereof.
Private Exchange Preferred Stock: Has the meaning provided in
Section 2(b) hereof.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, and all other amendments and supplements to the
Prospectus, with respect to the terms of the offering of any portion of the
Transfer Restricted Preferred Stock covered by such Registration Statement
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: Has the meaning provided in the second
introduc- tory paragraph hereto.
Records: Has the meaning provided in Section 5(o) hereof.
Registration Statement: Any registration statement of the
Company, including, but not limited to, the Exchange Registration Statement,
that covers any of the Transfer Restricted Preferred Stock pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement,
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including post-effective amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
Rule 144(k): Rule 144(k) promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other than
Rule 144A) or regulation hereafter adopted by the SEC as a replacement thereto
having substantially the same effect as such Rule.
Rule 144A: Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Shelf Notice: Has the meaning provided in Section 2(c)
hereof.
Shelf Registration: Has the meaning provided in Section 3(a)
hereof.
Shelf Registration Statement: shall mean a "shelf"
registration statement of the Company and the Guarantors which covers all of the
Transfer Restricted Preferred Stock on an appropriate form under Rule 415 under
the 1933 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: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Preferred Stock: Each share of Preferred
Stock upon original issuance of the Preferred Stock and at all times subsequent
thereto, each share of Exchange Preferred Stock as to which Section 2(c)(v)
hereof is applicable upon original issuance and at all times subsequent thereto
and each Private Exchange Preferred Stock upon original issuance thereof and at
all times subsequent thereto, until in the case of any such Preferred Stock,
Exchange Preferred Stock or Private Exchange
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Preferred Stock, as the case may be, the earliest to occur of (i) a Registration
Statement (other than, with respect to any Exchange Preferred Stock as to which
Section 2(c)(v) hereof is applicable, the Exchange Registration Statement)
covering such Preferred Stock, Exchange Preferred Stock or Private Exchange
Preferred Stock, as the case may be, has been declared effective by the SEC and
such Preferred Stock, Exchange Preferred Stock or Private Exchange Preferred
Stock, as the case may be, has been disposed of in accordance with such
effective Registration Statement, (ii) such Preferred Stock, Exchange Preferred
Stock or Private Exchange Preferred Stock, as the case may be, is, or may be,
sold in compliance with Rule 144(k), or (iii) such Preferred Stock, Exchange
Preferred Stock or Private Exchange Preferred Stock, as the case may be, ceases
to be outstanding for purposes of the Certificate of Designation.
Underwritten registration or underwritten offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Exchange Offer
(a) The Company agrees to file with the SEC no later than the
Filing Date an offer to exchange (the "Exchange Offer") any and all of Preferred
Stock (other than the Private Exchange Preferred Stock, if any) for a like
number of shares of Exchange Preferred Stock. The Exchange Offer shall be
registered under the Securities Act on the appropriate form (the "Exchange
Registration Statement") and shall comply with all applicable tender offer rules
and regulations under the Exchange Act and state securities or Blue Sky Laws.
The Company agrees to use its best efforts to (x) cause the Exchange
Registration Statement to be declared effective under the Securities Act no
later than the 90th day after the Filing Date; (y) keep the Exchange Offer open
for at least 30 business days (or longer if required by applicable law) after
the date that notice of the Exchange Offer is mailed to the Holders; and (z)
consummate the Exchange Offer on or prior to the 120th day following the Filing
Date. If after such Exchange Registration Statement is declared effective by the
SEC, the Exchange Offer or the issuance of the Exchange Preferred Stock
thereunder is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such Exchange
Registration Statement shall be deemed not to have become effective for purposes
of this Agreement until each stop order, injunction or other order or
requirement is no longer in effect. Each Holder who participates in the Exchange
Offer will be required to represent that any Exchange Preferred Stock received
by it will be acquired in the ordinary course of its business, that at the time
of the consummation of the Exchange Offer such Holder will have no arrangement
or understanding with any Person to participate in the distribution of the
Exchange Preferred Stock in violation of the provisions of the Securities Act,
and that such Holder in not an "affiliate" of any of the Company within the
meaning of the Securities Act. Upon
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consummation of the Exchange Offer in accordance with this Section 2, the
Company shall have no further obligation to register Transfer Restricted
Preferred Stock (other than Private Exchange Preferred Stock and other than in
respect of any Exchange Preferred Stock as to which clause 2(c)(v) hereof
applies) pursuant to Section 3 hereof. No securities other than the Exchange
Preferred Stock shall be included in the Exchange Registration Statement.
(b) The Company shall include within the Prospectus contained
in the Exchange Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchaser, which shall
contain a summary statement of the positions taken or policies made by the Staff
of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of Exchange Preferred Stock received by such broker-dealer in the
Exchange Offer (a "Participating Broker-Dealer"), whether such positions or
policies have been publicly disseminated by the Staff of the SEC or such
positions or policies, in the judgment of the Initial Purchaser, represent the
prevailing views of the Staff of the SEC. Such "Plan of Distribution" section
shall also expressly permit the use of the Prospectus by all Persons subject to
the prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange Preferred Stock.
The Company shall use its best efforts to keep the Exchange
Registration Statement effective and to amend and supplement the Prospectus
contained therein, in order to permit such Prospectus to be lawfully delivered
by any Participating Broker-Dealer subject to the prospectus delivery
requirements of the Securities Act for such period of time as is necessary to
comply with applicable law in connection with any resale of the Exchange
Preferred Stock; provided, however, that such period shall not exceed 180 days
after the consummation of the Exchange Offer (or such longer period if extended
pursuant to the last paragraph of Section 5 hereof) (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial
Purchaser holds any Preferred Stock acquired by it and having the status of an
unsold allotment in the initial distribution, the Company shall, upon the
request of the Initial Purchaser, simultaneously with the delivery of the
Exchange Preferred Stock in the Exchange Offer issue and deliver to the Initial
Purchaser in exchange (the "Private Exchange") for such Preferred Stock held by
the Initial Purchaser a like principal amount of Preferred Stock of the Company,
that is identical in all material respects to the Exchange Preferred Stock (the
"Private Exchange Preferred Stock") (and which is issued pursuant to the same
Certificate of Designation as the Exchange Preferred Stock) except for the
placement of a restrictive legend on such Private Exchange Preferred Stock. The
Private Exchange
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Preferred Stock shall if permissible bear the same CUSIP number as the Exchange
Preferred Stock.
Interest on the Exchange Preferred Stock and the Private
Exchange Preferred Stock will accrue from the last interest payment date on
which interest was paid on the Preferred Stock surrendered in exchange therefor
or, if no interest has been paid on the Preferred Stock, from the Issue Date.
In connection with the Exchange Offer, the Company shall:
(1) mail to each Holder a copy of the Prospectus
forming part of the Exchange Registration Statement, together with an
appropriate letter of transmittal and related documents;
(2) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of
New York;
(3) permit Holders to withdraw tendered Preferred Stock at
any time prior to the close of business, New York time, on the
last business day on which the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all
applicable laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer
or the Private Exchange, as the case may be, the issuers shall:
(1) accept for exchange all Preferred Stock tendered and not
validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(2) deliver to the Trustee for cancellation all Preferred
Stock so accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to
each Holder of Preferred Stock, Exchange Preferred Stock or Private
Exchange Preferred Stock, as the case may be, equal in principal amount
to the Preferred Stock of such Holder so accepted for exchange.
The Exchange Preferred Stock and the Private Exchange
Preferred Stock to be issued under (i) the Certificate of Designation or (ii) a
Certificate of Designation identical in all material respects to the
Certificate of Designation, which in either event
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shall provide that (1) the Exchange Preferred Stock shall not be subject to the
transfer restrictions set forth in the Certificate of Designation and (2) the
Private Exchange Preferred Stock shall be subject to the transfer restrictions
set forth in the Indenture. The Indenture or such indenture shall provide that
the Exchange Preferred Stock, the Private Exchange Preferred Stock and the
Preferred Stock shall vote and consent together on all matters as one class and
that none of the Exchange Preferred Stock, the Private Exchange Preferred Stock
or the Preferred Stock will have the right to vote or consent as a separate
class on any matter.
(c) If, (i) because of any change in law or in currently
prevailing interpretations of the Staff of the SEC, the Company are not
permitted to effect an Exchange Offer, (ii) the Exchange offer is not
consummated within 120 days after the Filing Date, (iii) any holder of Private
Exchange Preferred Stock so requests at any time after the consummation of the
Private Exchange, (iv) if any Holder (other than the Initial Purchaser) is not
eligible to participate in the Exchange Offer, then the Company shall promptly
deliver to the Holders and the Trustee written notice thereof (the "Shelf
Notice") to the Trustee and, in the case of clauses (i), and (ii) above, all
Holders, in the case of clause (iii) above, the Holders of the Private Exchange
Preferred Stock and, in the case of clause (iv) above, the affected Holder, and
shall file a Shelf Registration pursuant to Section 3 hereof, provided, however,
that in the case of clause (iii) above such holder shall pay all reasonable
registration expenses of the Company as described in Section 6 hereof in
connection with such Shelf Registration.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c)
hereof, then:
(a) Shelf Registration. The Company shall as promptly as
reasonably practicable file with the SEC a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering all of
the Transfer Restricted Preferred Stock (the "Shelf Registration"). If the
Company shall not have yet filed an Exchange Registration Statement, the Company
shall use its best efforts to file with the SEC the Shelf Registration on or
prior to the Filing Date. The Shelf Registration shall be on Form S-1 or another
appropriate form permitting registration of such Transfer Restricted Preferred
Stock for resale by Holders in the manner or manners designated by them
(including, without limitation, one or more underwritten offerings). The Company
shall not permit any securities other than the Transfer Restricted Preferred
Stock to be included in the Shelf Registration.
The Company shall use its best efforts to cause the Shelf
Registration to
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be declared effective under the Securities Act by the 165th day after the Issue
Date and to keep the Shelf Registration continuously effective under the
Securities Act until the date which is two years from the Issue Date, subject to
extension pursuant to the last paragraph of Section 5 hereof, or such shorter
period ending when all Transfer Restricted Preferred Stock covered by the Shelf
Registration have been sold in the manner set forth and as contemplated in the
Shelf Registration or when such Preferred Stock becomes eligible for resale
without volume restrictions pursuant to Rule 144 and or the Securities Act.
(b) Withdrawal of Stop Orders. If the Shelf Registration
ceases to be effective for any reason at any time during the Effectiveness
Period (other than because of the sale of all of the securities registered
thereunder), the Company shall use its best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof.
(c) Supplements and Amendments. The Company shall promptly
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested for such purpose by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Preferred Stock covered by such Registration
Statement or by any underwriter of such Transfer Restricted Preferred Stock.
4. Additional Dividends
(a) The Company and the Initial Purchaser agree that the
Holders of Transfer Restricted Preferred Stock will suffer damages if the
Company fails to fulfill its obligations under Section 2 or Section 3 hereof and
that it would not be feasible to ascertain the extent of such damages with
precision. Accordingly, the Company agrees to pay, as liquidated damages and as
the sole and exclusive remedy therefor, additional dividends on the Preferred
Stock ("Additional Dividends") under the circumstances and to the extent set
forth below:
(i) if neither the Exchange Registration Statement nor the
Shelf Registration has been filed on or prior to the Filing Date, then,
commencing on the 31st day after the Issue Date, Additional Dividends
shall accrue on the Preferred Stock over and above the stated interest
at a rate of 0.50% per annum for the first 60 days commencing on the
31st day after the Issue Date, such Additional Dividends rate
increasing by an additional 0.50% per annum at the beginning of each
subsequent 30-day period;
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(ii) if neither the Exchange Registration Statement nor the
Shelf Registration is declared effective by the SEC on or prior to the
Effectiveness Date, then, commencing on the 91st day after the Filing
Date, Additional Dividends shall accrue on the Preferred Stock included
or which should have been included in such Registration Statement over
and above the stated interest at a rate of 0.50% per annum for the
first 30 days commencing on the 91st day after the Filing Date, such
Additional Dividend rate increasing by an additional 0.50% per annum at
the beginning of each subsequent 30-day period; and
(iii) if (A) the Company has not exchanged Exchange Preferred
Stock for all Preferred Stock validly tendered in accordance with the
terms of the Exchange Offer on or prior to the 120th day after the
Filing Date or (B) the Exchange Registration Statement ceases to be
effective at any time prior to the time that the Exchange Offer is
consummated or (C) if applicable, the Shelf Registration has been
declared effective and such Shelf Registration ceases to be effective
at any time during the Effectiveness Period, then Additional Dividends
shall accrue (over and above any interest otherwise payable on such
Preferred Stock) at a rate of 0.50% per annum for the first 30 days
commencing on (x) the 121st day after the Filing Date with respect to
the Preferred Stock validly tendered and not exchanged by the Company,
in the case of (A) above, or (y) the day the Exchange Registration
Statement ceases to be effective in the case of (B) above, or (z) the
day such Shelf Registration ceases to be effective in the case of (C)
above, such Additional Dividend rate increasing by an additional 0.50%
per annum at the beginning of each such subsequent 30-day period (it
being understood and agreed that, notwithstanding any provision to the
contrary, so long as any Preferred Stock which is the subject of a
Shelf Notice is then covered by an effective Shelf Registration
Statement, no Additional Dividends shall accrue on such Preferred
Stock);
provided, however, that the Additional Dividends rate on any affected Preferred
Stock may not exceed at any one time in the aggregate 2.0% per annum; and
provided, further, that (1) upon the filing of the Exchange Registration
Statement or a Shelf Registration (in the case of clause (i) of this Section
4(a)), (2) upon the effectiveness of the Exchange Registration Statement or the
Shelf Registration (in the case of clause (ii) of this Section 4(a)), or (3)
upon the exchange of Exchange Preferred Stock for all Preferred Stock tendered
(in the case of clause (iii)(A) of this Section 4(a)), or upon the effectiveness
of the Exchange Registration Statement which had ceased to remain effective (in
the case of (iii)(B) of this Section 4(a)), or upon the effectiveness of the
Shelf Registration which had ceased to remain effective (in the case of (iii)(C)
of this Section 4(a)), Additional Dividends on the affected Preferred Stock as a
result of such clause (or the relevant subclause thereof), as the case may be,
shall cease to accrue.
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(b) The Company shall notify the Paying Agent within one
business day after each and every date on which an event occurs in respect of
which Additional Dividends are required to be paid (an "Event Date"). The
Company shall pay the Additional Dividends due on the Transfer Restricted
Preferred Stock by depositing with the Paying Agent (which shall not be the
Company for these purposes) for the Transfer Restricted Preferred Stock, in
trust, for the benefit of the holders thereof, prior to 11:00 A.M. on the next
dividend payment date specified by the Certificate of Designation (or such other
certificate of designation), sums sufficient to pay the Additional Dividends
then due. Any amounts of Additional Dividends due pursuant to clauses (a)(i),
(a)(ii) or (a)(iii) of this Section 4 will be payable to the Holders of affected
Preferred Stock in cash quarterly on each dividend payment date specified by the
Certificate of Designation (or such other certificate of designation) to the
record holders entitled to receive the dividend payment to be made on such date.
Commencing with the first such date occurring after any such Additional
Dividends commence to accrue. The amount of Additional Dividends will be
determined by multiplying the applicable Additional Dividends rate by the
principal amount of the affected Transfer Restricted Preferred Stock of such
Holders, multiplied by a fraction, the numerator of which is the number of days
such Additional Dividends rate was applicable during such period (determined on
the basis of a 360-day year comprised of twelve 30-day months and, in the case
of a partial month, the actual number of days elapsed), and the denominator of
which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, the Company shall effect such
registration(s) to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by the
Company hereunder, the Company shall:
(a) Prepare and file with the SEC prior to the Filing Date a
Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use its best efforts to cause each such
Registration Statement to become effective and remain effective as
provided herein; provided, however, that, if (1) such filing is
pursuant to Section 3 hereof, or (2) a Prospectus contained in an
Exchange Registration Statement filed pursuant to Section 2 hereof is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Preferred Stock during the
Applicable Period, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Company shall,
if requested in writing, furnish to and afford the Holders of the
Transfer Restricted Preferred Stock
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covered by such Registration Statement or each such Participating
Broker-Dealer, as the case may be, 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 (in
each case at least three 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 under the immediately preceding sentence, if the Holders of a
majority in aggregate principal amount of the Transfer Restricted
Preferred Stock covered by such Registration Statement, or any such
Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriters, if any, shall reasonably object direct in
writing, which writing shall set forth a basis for such objection.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange
Registration Statement, as the case may be, as may be necessary to keep
such Registration Statement continuously effective for the
Effectiveness Period or the Applicable Period or until consummation of
the Exchange Offer, as the case may be; cause the related Prospectus to
be supplemented by any Prospectus supplement required by applicable
law, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) promulgated under the Securities Act;
and comply with the provisions of the Securities Act and the Exchange
Act applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such
Prospectus as so supplemented and with respect to the subsequent resale
of any securities being sold by a Participating Broker-Dealer covered
by any such Prospectus; the Company shall be deemed not to have used
its best efforts to keep a Registration Statement effective during the
Applicable Period if it voluntarily takes any action that would result
in selling Holders of the Transfer Restricted Preferred Stock covered
thereby or Participating Broker-Dealers seeking to sell Exchange
Preferred Stock not being able to sell such Transfer Restricted
Preferred Stock or such Exchange Preferred Stock during that period
unless such action is required by applicable law or unless the Company
complies with this Agreement, including, without limitation, the
provisions of paragraph 5(k) hereof and the last paragraph of this
Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any
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Participating Broker-Dealer who seeks to sell Exchange Preferred
Stock during the Applicable Period, notify the selling Holders of
Transfer Restricted Preferred Stock, or each such Participating
Broker-Dealer, as the case may be, their counsel and the managing
underwriters, if any, promptly (but in any event within two business
days), and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any Holder may, upon
request, obtain, at the sole expense of the Company, one conformed copy
of such Registration Statement or post-effective amendment including
financial statements and schedules, documents incorporated or deemed to
be incorporated by reference and exhibits), (ii) of the issuance by the
SEC of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that
purpose, (iii) if at any time when a Prospectus is required by the
Securities Act to be delivered in connection with sales of the Transfer
Restricted Preferred Stock or resales of Exchange Preferred Stock by
Participating Broker-Dealers the representations and warranties of the
Company contained in any agreement (including any underwriting
agreement), contemplated by Section 5(n) hereof cease to be true and
correct, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Transfer
Restricted Preferred Stock or the Exchange Preferred Stock to be sold
by any Participating Broker-Dealer for offer or sale in any
jurisdiction, or the initiation or threatening of any proceeding for
such purpose, (v) of the happening of any event, the existence of any
condition or any information becoming known that makes any statement
made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any
changes in or amendments or supplements to such Registration Statement,
Prospectus or documents so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (vi)
of the determination by the Company that a post-effective amendment to
a Registration Statement would be appropriate.
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(d) Use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending
the qualification (or exemption from qualification) of any of the
Transfer Restricted Preferred Stock or the Exchange Preferred Stock for
sale in any jurisdiction, and, if any such order is issued, to use its
best efforts to obtain the withdrawal of any such order at the earliest
possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3
hereof and if requested by the managing underwriter or underwriters (if
any), or the Holders of a majority in aggregate principal amount of the
Transfer Restricted Preferred Stock being sold in connection with an
underwritten offering, (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriter or underwriters (if any), such Holders, or counsel for any
of them reasonably request to be included therein, (ii) make all
required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and (iii) supplement or make
amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Preferred Stock during the Applicable
Period, furnish to each selling Holder of Transfer Restricted Preferred
Stock and to each such Participating Broker-Dealer who so requests and
to counsel and each managing underwriter, if any, at the sole expense
of the Company, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto,
including financial statements and schedules, and, if requested, all
documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Preferred Stock during the Applicable
Period, deliver to each selling Holder of Transfer Restricted Preferred
Stock, or each such Participating Broker-Dealer, as the case may be,
their respective counsel, and the underwriters, if any, at the sole
expense of the Company, as many copies of the Prospectus or
Prospectuses (including each
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form of preliminary prospectus) and each amendment or supplement
thereto and any documents incorporated by reference therein as such
Persons may reasonably request; and, subject to the last paragraph of
this Section 5, Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Holders
of Transfer Restricted Preferred Stock or each such Participating
Broker-Dealer, as the case-may be, and the underwriters or agents, if
any, and dealers (if any), in connection with the offering and sale of
the Transfer Restricted Preferred Stock covered by, or the sale by
Participating Broker-Dealers of the Exchange Preferred Stock pursuant
to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Transfer Restricted
Preferred Stock or any delivery of a Prospectus contained in the
Exchange Registration Statement by any Participating Broker-Dealer who
seeks to sell Exchange Preferred Stock during the Applicable Period, to
use its best efforts to register or qualify such Transfer Restricted
Preferred Stock (and to cooperate with selling Holders of Transfer
Restricted Preferred Stock or each such Participating Broker-Dealer, as
the case may be, the managing underwriter or underwriters, if any, and
their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of
such Transfer Restricted Preferred Stock) for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer, or the
managing underwriter or underwriters reasonably request in writing;
provided, however, that where Exchange Preferred Stock held by
Participating Broker-Dealers or Transfer Restricted Preferred Stock are
offered other than through an underwritten offering, the Company agrees
to cause their counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective and do any and all other
acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Preferred Stock held
by Participating Broker-Dealers or the Transfer Restricted Preferred
Stock covered by the applicable Registration Statement; provided,
however, that the Company shall not be required to (A) qualify
generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service
of process in any such jurisdiction where it is not then so subject or
(C) subject itself to taxation in excess of a nominal dollar amount in
any such jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3
hereof,
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cooperate with the selling Holders of Transfer Restricted Preferred
Stock and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Preferred Stock to be sold, which
certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company; and enable
such Transfer Restricted Preferred Stock to be in such denominations
and registered in such names as the managing underwriter or
underwriters, if any, or Holders may reasonably request.
(j) Use its best efforts to cause the Transfer Restricted
Preferred Stock covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities as
may be necessary to enable the Holders thereof or the underwriter or
underwriters, if any, to dispose of such Transfer Restricted Preferred
Stock, except as may be required solely as a consequence of the nature
of a selling Holder's business, in which case each of the Company will
cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Preferred Stock during the Applicable
Period, upon the occurrence of any event contemplated by paragraph
5(c)(v) or 5(c)(vi) hereof, as promptly an practicable prepare and
(subject to Section 5(a) hereof) file with the SEC, at the sole expense
of the Company, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Transfer Restricted Preferred Stock
being sold thereunder or to the purchasers of the Exchange Preferred
Stock to whom such Prospectus will be delivered by a Participating
Broker-Dealer, any such Prospectus will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(l) Prior to the effective date of the first Registration
Statement relating to the Transfer Restricted Preferred Stock, provide
a CUSIP number for the Transfer Restricted Preferred Stock or Exchange
Preferred Stock, as the case may be.
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(m) In connection with any underwritten offering initiated by
the Company of Transfer Restricted Preferred Stock pursuant to a Shelf
Registration, enter into an underwriting agreement as is customary in
underwritten offerings of securities similar to the Preferred Stock and
take all such other actions as are reasonably requested by the managing
underwriter or underwriters in order to facilitate the registration or
the disposition of such Transfer Restricted Preferred Stock and, in
such connection, (i) make such representations and warranties to, and
covenants with, the underwriters with respect to the business of the
Company and its respective subsidiaries and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily
made by Company to underwriters in underwritten offerings of securities
similar to the Preferred Stock, and confirm the same in writing if and
when requested; (ii) obtain the written opinion of counsel to the
Company and written updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters,
addressed to the underwriters covering the matters customarily covered
in opinions requested in underwritten offerings of debt similar to the
Preferred Stock and such other matters as may be reasonably requested
by the managing underwriter or underwriters; (iii) obtain "cold
comfort" letters and updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters
from the independent certified public accountants of the Company (and,
if necessary, any other independent certified public accountants of any
subsidiary of any of the Company or of any business acquired by any of
the Company for which financial statements and financial data are, or
are required to be, included or incorporated by reference in the
Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings of debt similar to the Preferred Stock and such
other matters as reasonably requested by the managing underwriter or
underwriters; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no
less favorable than those set forth in Section 7 hereof (or such other
provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of Transfer Restricted Preferred Stock
covered by such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at 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 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any
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Participating Broker-Dealer who seeks to sell Exchange Preferred Stock
during the Applicable Period, make available for inspection by any
selling Holder of such Transfer Restricted Preferred Stock being sold,
or each such Participating Broker-Dealer, as the case may be, any
underwriter participating in any such disposition of Transfer
Restricted Preferred Stock, 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 instruments of the Company and its
subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of
the Company and its respective subsidiaries to make available for
inspection all information reasonably requested by any such Inspector
in connection with such Registration Statement. Records which the
Company determine, in good faith, to be confidential and any Records
which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records
is necessary to avoid or correct a misstatement or omission in such
Registration Statement, (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction, (iii) disclosure of such information is, in the opinion
of counsel (a copy of which shall be delivered to the Company) for any
Inspector, necessary or advisable in connection with any action, claim,
suit or proceeding, directly or indirectly, involving or potentially
involving such Inspector and arising out of, based upon, relating to,
or involving this Agreement, or any transactions contemplated hereby or
arising hereunder, or (iv) the information in such Records has been
made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will
be required to agree that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by
it as the basis for any market transactions in the securities of the
Company unless and until such information is generally available to the
public. Each selling Holder of such Transfer Restricted Preferred Stock
and each such Participating Broker-Dealer will be required to further
agree that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company
and allow the Company to undertake appropriate action to prevent
disclosure of the Records deemed confidential at the Company's sole
expense.
(o) Comply with all applicable rules and regulations of the
SEC and make generally available to its securityholders earnings
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any
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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 Transfer Restricted Preferred
Stock are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of
the Company after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
(p) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Transfer Restricted Preferred Stock
by Holders to the Company (or to such other Person as directed by the
Company) in exchange for the Exchange Preferred Stock or the Private
Exchange Preferred Stock, as the case may be, the Company shall ▇▇▇▇,
or cause to be marked, on such Transfer Restricted Preferred Stock that
such Transfer Restricted Preferred Stock is being cancelled in exchange
for the Exchange Preferred Stock or the Private Exchange Preferred
Stock, as the case may be; in no event shall such Transfer Restricted
Preferred Stock be marked as paid or otherwise satisfied.
(q) Cooperate with each seller of Transfer Restricted
Preferred Stock covered by any Registration Statement and each
underwriter, if any, participating in the disposition of such Transfer
Restricted Preferred Stock and their respective counsel in connection
with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD").
(r) Use its best efforts to take all other steps necessary or
advisable to effect the registration of the Transfer Restricted
Preferred Stock covered by a Registration Statement contemplated
hereby.
The Company may require each seller of Transfer Restricted
Preferred Stock as to which any Registration Statement is being effected to
furnish to the Company such information regarding such seller and the
distribution of such Transfer Restricted Preferred Stock as the Company may,
from time to time, reasonably request. The Company may exclude from such
Registration Statement the Transfer Restricted Preferred Stock of any seller who
unreasonably fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such seller not materially misleading.
Each Holder of Transfer Restricted Preferred Stock and each
Participat-
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ing Broker-Dealer agrees by acquisition of such Transfer Restricted
Preferred Stock or Exchange Preferred Stock to be sold by such Participating
Broker-Dealer, as the case may be, that, upon actual receipt of any notice from
the Company of the happening of any event of the kind described in Section
5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith
discontinue disposition of such Transfer Restricted Preferred Stock covered by
such Registration Statement or Prospectus or Exchange Preferred Stock to be sold
by such Holder or Participating Broker-Dealer, as the case may be, until such
Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until
it is advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any amendments
or supplements thereto. In the event the Company shall give any such notice,
each of the Effectiveness Period and the Applicable Period shall be extended by
the number of days during such periods from and including the date of the giving
of such notice to and including the date when each seller of Transfer Restricted
Preferred Stock covered by such Registration Statement or Exchange Preferred
Stock to be sold by such Participating Broker-Dealer, as the case may be, shall
have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof or (y) the Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Exchange Offer or a Shelf Registration is filed or becomes
effective, including, without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the Issuer's counsel in
connection with Blue Sky qualifications of the Transfer Restricted Preferred
Stock or Exchange Preferred Stock and determination of the eligibility of the
Transfer Restricted Preferred Stock or Exchange Preferred Stock for investment
under the laws of such jurisdictions (x) where the holders of Transfer
Restricted Preferred Stock are located, in the case of the Exchange Preferred
Stock, or (y) as provided in Section 5(h) hereof, in the case of Transfer
Restricted Preferred Stock or Exchange Preferred Stock to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing
expenses, including, without limitation, expenses of printing certificates for
Transfer Restricted Preferred Stock or Exchange Preferred Stock in a form
eligible for deposit with The Depository Trust Company and of printing
Prospectuses if the printing of Prospectuses is requested by the managing
underwriter or underwriters, if any, by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Preferred Stock included in any
Registration Statement or sold by any
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Participating Broker-Dealer, as the case may be, (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company, (v)
fees and disbursements of all independent certified public accountants referred
to in Section 5(n)(iii) hereof (including, without limitation, the expenses of
any special audit and "cold comfort" letters required by or incident to such
performance by or incident to such performance), (vi) rating agency fees, if
any, and any fees associated with making the Transfer Restricted Preferred Stock
or Exchange Preferred Stock eligible for trading through The Depository Trust
Company, (vii) Securities Act liability insurance, if the Company desires such
insurance, (viii) fees and expenses of all other Persons retained by the
Company, (ix) internal expenses of the Company (including, without limitation,
all salaries and expenses of officers and employees of the Company performing
legal or accounting duties), (x) the expense of any annual audit, (ix) the fees
and expenses incurred in connection with the listing of the securities to be
registered on any securities exchange or any inter-dealer quotation system, if
applicable, and (xii) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, securities
sales agreements, indentures and any other documents necessary in order to
comply with this Agreement.
(b) The Company shall reimburse the Holders of the Transfer
Restricted Preferred Stock being registered in a Shelf Registration for the
reasonable fees and disbursements of not more than one counsel chosen in writing
by the Holders of a majority in aggregate principal amount of the Transfer
Restricted Preferred Stock to be included in such Registration Statement. In
addition, the Company, shall reimburse the Initial Purchaser for 50% (but not
more than $30,000) of the reasonable fees and expenses of one counsel in
connection with the Exchange Offer which shall be White & Case, and shall not be
required to pay any other legal expenses of the Initial Purchaser in connection
therewith.
7. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Holder of Transfer Restricted Preferred Stock offered
pursuant to a Shelf Registration Statement and each Participating Broker-Dealer
selling Exchange Preferred Stock during the Applicable Period, the affiliates,
directors, officers, agents, representatives and employees of each such Person
or its affiliates, and each other Person, if any, who controls any such Person
or its affiliates within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act (each, a "Participant") from and against any
and all losses, claims, damages and liabilities (including, without limitation,
the reasonable legal fees and other expenses actually incurred in connection
with any suit, action or proceeding or any claim asserted) caused by, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement pursuant to which the
offering of such Transfer Restricted Preferred Stock or Exchange Preferred
Stock, as the case may be, is registered (or any
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amendment thereto) or related Prospectus (or any amendments or supplements
thereto) or any related preliminary prospectus, or caused by, arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the Company will not be required to indemnify a Participant if (i)
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company in writing by or on behalf
of such Participant expressly for use therein or (ii) if such Participant sold
to the person asserting the claim the Transfer Restricted Preferred Stock or
Exchange Preferred Stock which are the subject of such claim and such untrue
statement or omission or alleged untrue statement or omission was contained or
made in any preliminary prospectus and corrected in the Prospectus or any
amendment or supplement thereto and the Prospectus does not contain any other
untrue statement or omission or alleged untrue statement or omission of a
material fact that was the subject matter of the related proceeding and such
Participant failed to deliver or provide a copy of the Prospectus (as amended or
supplemented) to such Person with or prior to the confirmation of the sale of
such Transfer Restricted Preferred Stock or Exchange Preferred Stock sold to
such Person if required by applicable laws, unless such failure to deliver or
provide a copy of the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless the Company, its respective directors and officers
and each Person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to each Participant, but only (i) with
reference to information furnished to the Company in writing by or on behalf of
such Participant expressly for use in any Registration Statement or Prospectus,
any amendment or supplement thereto, or any preliminary prospectus or (ii) with
respect to any untrue statement or representation made by such Participant in
writing to the Company.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such Person (the "Indemnified
Person") shall promptly notify the Person against whom such indemnity may be
sought (the "Indemnifying Person") in writing, and the Indemnifying Person shall
have the right to retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others the Indemnifying
Person may reasonably designate in such proceeding and shall pay the
reasonable fees and expenses actually incurred by such counsel related to such
proceeding;
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provided, however, that the failure to so notify the Indemnifying Person shall
not relieve it of any obligation or liability which it may have hereunder or
otherwise (unless and only to the extent that such failure results in the loss
or compromise of any material rights or defenses by the Indemnifying Person). In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed in writing to the contrary, (ii)
the Indemnifying Person shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that, unless there
exists a conflict among Indemnified Persons, the Indemnifying Person shall not,
in connection with any one such proceeding or separate but substantially similar
related proceeding in the same jurisdiction arising out of the same general
allegations, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified Persons,
and that all such fees and expenses shall be reimbursed promptly as they are
incurred. Any such separate firm for the Participants and such control Persons
of Participants shall be designated in writing by Participants who sold a
majority in interest of Transfer Restricted Preferred Stock and Exchange
Preferred Stock sold by all such Participants and any such separate firm for the
Company, its directors, their officers and such control Persons of the Company
shall be designated in writing by the Company. The Indemnifying Person shall not
be liable for any settlement of any proceeding effected without its prior
written consent, but if settled with such consent or if there be a final
non-appealable judgment for the plaintiff for which the Indemnified Person is
entitled to indemnification pursuant to this Agreement, the Indemnifying Person
agrees to indemnify and hold harmless each Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. No Indemnifying
Person shall, without the prior written consent of the Indemnified Person,
effect any settlement or compromise of any pending or threatened proceeding in
respect of which any Indemnified Person is our could have been a party, and
indemnity could have been sought hereunder by such Indemnified Person, unless
such settlement (A) includes an unconditional written release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Indemnified Person.
(d) If the indemnification provided for in Section 7(a) and
7(b) hereof is for any reason unavailable to, or insufficient to hold harmless,
an Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, than each
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Indemnifying Person under such paragraphs, in lieu of indemnifying such
Indemnified Person thereunder and in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect (i) the relative benefits received by
the Indemnifying Person or Persons on the one hand and the Indemnified Person or
Persons on the other from the offering of the Preferred Stock or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
Indemnifying Person or Persons on the one hand and the Indemnified Person or
Persons on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative fault of the parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or such Participant or such other Indemnified Person, as the case may
be, on the other, the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purposes) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Transfer Restricted
Preferred Stock or Exchange Preferred Stock, as the case may be, exceeds the
amount of any damages that such Participant has otherwise been required to pay
or has paid by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(f) The indemnity and contribution agreements contained in
this Section 7 will be in addition to any liability which the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.
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8. Rules 144 and 144A. The Company covenants that it will file
the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder in a timely
manner in accordance with the requirements of the Securities Act and the
Exchange Act and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder of Transfer Restricted
Preferred Stock, make publicly available annual reports and such information,
documents and other reports of the type specified in Sections 13 and 15(d) of
the Exchange Act. The Company further covenants for so long as any Transfer
Restricted Preferred Stock remain outstanding, to make available to any Holder
or beneficial owner of Transfer Restricted Preferred Stock in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Preferred Stock from such Holder or beneficial owner the information required by
Rule 144(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Preferred Stock pursuant to Rule 144A.
9. Underwritten Registrations. If any of the Transfer
Restricted Preferred Stock covered by any Shelf Registration are to be sold in
an underwritten offering, the investment banker or investment bankers and
manager or managers that will manage the offering will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Preferred Stock included in such offering and reasonably acceptable to the
Company.
No Holder of Transfer Restricted Preferred Stock may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Transfer Restricted Preferred Stock on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
10. Miscellaneous. (a) No Inconsistent Agreements. The Company
has not entered, as of the date hereof, and the Company shall not, after the
date of this Agreement, enter into any agreement with respect to any of its
securities that is inconsistent with the rights granted to the Holders of
Transfer Restricted Preferred Stock in this Agreement or otherwise conflicts
with the provisions hereof. Other than as provided in Schedule A attached
hereto, the Company has entered and none of the Company will enter into any
agreement with respect to any of its securities which will grant to any Person
piggy-back registration rights with respect to a Registration Statement.
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(b) Adjustments Affecting Transfer Restricted Preferred Stock.
Other than as provided in Schedule B attached hereto, the Company shall not,
directly or indirectly, take any action with respect to the Transfer Restricted
Preferred Stock as a class that would adversely affect the ability of the
Holders of Transfer Restricted Preferred Stock to include such Transfer
Restricted Preferred Stock in a registration undertaken pursuant to this
Agreement.
(c) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, otherwise than with the
prior written consent of the Holders of not less than a majority in aggregate
principal amount of the then outstanding Transfer Restricted Preferred Stock.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Transfer Restricted Preferred Stock whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of Transfer
Restricted Preferred Stock may be given by Holders of at least a majority in
aggregate principal amount of the Transfer Restricted Preferred Stock being sold
by such Holders pursuant to such Registration Statement; provided, however, that
the provisions of this sentence may not be amended, modified or supplemented
except in accordance with the provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Transfer Restricted
Preferred Stock or any Participating Broker-Dealer, at the
most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of
the registrar under the Indenture, with a copy in like manner
to the Initial Purchaser as follows:
NatWest Capital Markets Limited
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Finance Department
with a copy to:
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White & Case
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
2. if to the Initial Purchaser, at the addresses
specified in Section 10(d)(1);
3. if to the Company, as follows:
North Atlantic Trading Acquisition
Company, Inc.
c/o National Tobacco Company, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Weil, Gotshal, ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one business
day after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto; provided, however, that this Agreement shall not inure to the benefit of
or be binding upon a successor or assign of a Holder unless and to the extent
such successor or assign holds Registerable Preferred Stock.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when
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so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenienceof reference only and shall not limit or otherwise affect the meaning
thereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(j) Preferred Stock Held by the Company or their Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registerable Preferred Stock is required hereunder, Registerable Preferred Stock
held by the Company or its affiliates (as such term is defined in Rule 405 under
the Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(k) Third Party Beneficiaries. Holders of Registerable
Preferred Stock and Participating Broker-Dealers are intended third party
beneficiaries of this Agreement and this Agreement may be enforced by such
Persons.
IN WITNESS WHEREOF, the parties have executed the Agreement as
of the date first written above.
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Company:
NORTH ATLANTIC TRADING
ACQUISITION COMPANY, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written:
NATWEST CAPITAL MARKETS LIMITED
By: /s/▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
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