Ex4(a)(ii)
SHARE REGISTRATION RIGHTS AGREEMENT
Dated as of April 7, 2000
by and among
ST ACQUISITION CORP.,
as Issuer,
and
CIBC INC.,
CIBC WORLD MARKETS CORP.,
CHASE SECURITIES INC.,
CONTINENTAL CASUALTY COMPANY
and
LAUREL HILL CAPITAL PARTNERS LLC,
as Purchasers
----------
100,000 Shares of
SENIOR REDEEMABLE PREFERRED STOCK,
$1,000 Liquidation Preference Per Share
TABLE OF CONTENTS
Page
----
1. Definitions............................................................. 2
2. Exchange Offer.......................................................... 5
3. Shelf Registration...................................................... 9
4. Additional Dividends................................................... 10
5. Registration Procedures................................................ 12
6. Registration Expenses.................................................. 21
7. Indemnification........................................................ 22
8. Rules 144 and 144A..................................................... 25
9. Underwritten Registrations............................................. 25
10. Miscellaneous.......................................................... 26
(a) Remedies.......................................................... 26
(b) No Inconsistent Agreements........................................ 26
(c) Adjustments Affecting Registrable Shares.......................... 26
(d) Amendments and Waivers............................................ 27
(e) Notices........................................................... 27
(f) Successors and Assigns............................................ 29
(g) Counterparts...................................................... 29
(h) Headings.......................................................... 29
(i) Governing Law..................................................... 29
(j) Severability...................................................... 29
(k) Shares Held by the Company or Its Affiliates...................... 29
(l) Third Party Beneficiaries......................................... 30
(m) Registration of Dividend Shares................................... 30
(n) Entire Agreement.................................................. 30
(o) Assumption Permitted.............................................. 30
-i-
SHARE REGISTRATION RIGHTS AGREEMENT
This Share Registration Rights Agreement (this "Agreement") is made and
entered into as of April 7, 2000, by and among ST Acquisition Corp., a Texas
corporation, as issuer ("Acquisition"), and CIBC Inc., CIBC World Markets Corp.,
Chase Securities Inc., Continental Casualty Company and Laurel Hill Capital
Partners LLC, as purchasers (the "Purchasers").
This Agreement is entered into in connection with the Purchase Agreement,
dated April 7, 2000, by and among Acquisition and the Purchasers (the "Purchase
Agreement") relating to, among other things, the sale by the Company to the
Purchasers of 100,000 shares (the "Initial Shares") of Acquisition's Senior
Redeemable Preferred Stock, $1,000 liquidation preference per share (the
"Shares"). In order to induce the Purchasers to enter into the Purchase
Agreement, Acquisition has agreed to provide the registration rights set forth
in this Agreement for the benefit of the holders of Registrable Shares (as
defined), including, without limitation, the Purchasers. The execution and
delivery of this Agreement is a condition to the Purchasers' obligation to
purchase the Shares under the Purchase Agreement.
The Initial Shares are being sold in connection with the merger (the
"Merger") of Acquisition with and into TNP Enterprises, Inc., a Texas
corporation ("TNP"), with TNP surviving the Merger pursuant to the Agreement and
Plan of Merger dated as of May 24, 1999 by and among SW Acquisition L.P.,
Acquisition and TNP (as amended through the date hereof and together with all
ancillary agreements entered into in connection therewith). The time of the
consummation of the Merger is referred to herein as the "Effective Time.
Immediately after the Effective Time, TNP will execute an assumption
agreement (the "Assumption Agreement"), substantially in the form attached to
the Purchase Agreement as Exhibit A, pursuant to which TNP, as the survivor of
the Merger, will assume all of the obligations of Acquisition under this
Agreement and the Purchase Agreement. References to this Agreement as of and
after the Effective Time will refer to this Registration Rights Agreement
together with the Assumption Agreement and references to the Purchase Agreement
as of and after the Effective Time will refer to the Purchase Agreement together
with the Assumption Agreement. As used herein, the "Company" shall mean
Acquisition prior to the Effective Time and, at and after the Effective Time,
TNP.
The parties hereby agree as follows:
-2-
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Acquisition: See the first introductory paragraph to this Agreement.
Additional Dividends: See Section 4(a).
Advice: See the last paragraph of Section 5.
Agreement: See the first and fourth introductory paragraphs to this
Agreement.
Applicable Period: See Section 2(b).
Assumption Agreement: See the third introductory paragraph to this
Agreement.
Business Day: A day that is not a Saturday, a Sunday, or a day on which
banking institutions in New York, New York are required to be closed.
Closing Date: The Closing Date as defined in the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Company: See the fourth introductory paragraph to this Agreement.
Dividend Shares: The Shares issued as dividends or Additional Dividends on
outstanding Shares or Dividend Shares, as the case may be.
DTC: See Section 5(i).
Effective Time: See the third introductory paragraph to this Agreement.
Effectiveness Date: The 150th day after the Issue Date.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
-3-
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Exchange Shares: See Section 2(a).
Filing Date: The 60th day after the Issue Date (regardless of whether the
actual filing precedes such date).
Holder: Any registered holder of Registrable Shares.
Indemnified Person: See Section 7(c).
Indemnifying Person: See Section 7(c).
Initial Shares: See the second introductory paragraph to this Agreement.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 5(o).
Issue Date: The date on which the Shares were sold to the Purchasers
pursuant to the Purchase Agreement.
Merger: See the third introductory paragraph to this Agreement.
NASD: National Association of Securities Dealers, Inc.
Participant: See Section 7(a).
Participating Broker-Dealer: See Section 2(b).
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government (including any agency or political subdivision
thereof).
Private Exchange: See Section 2(b).
Private Exchange Shares: See Section 2(b).
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
-4-
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Shares covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the second and fourth introductory paragraphs to
this Agreement.
Purchasers: See the first introductory paragraph to this Agreement.
Records: See Section 5(o).
Registrable Shares: Each Share upon original issuance thereof and at all
times subsequent thereto, each Exchange Share as to which Section 2(c)(iv)
hereof is applicable upon original issuance thereof and at all times subsequent
thereto and each Private Exchange Share, if issued, upon original issuance
thereof and at all times subsequent thereto, until, in the case of any such
Share, Exchange Share or Private Exchange Share, if issued, as the case may be,
the earliest to occur of (i) a Registration Statement (other than, with respect
to any Exchange Share as to which Section 2(c)(iv) hereof is applicable)
covering such Share, Exchange Share or Private Exchange Share, as the case may
be, has been declared effective by the Commission and such Share, Exchange Share
or Private Exchange Share, as the case may be, has been disposed of in
accordance with such effective Registration Statement, (ii) such Share, Exchange
Share or Private Exchange Share, as the case may be, is sold in compliance with
Rule 144, (iii) in the case of any Share, such Share has been exchanged pursuant
to the Exchange Offer for an Exchange Share or Exchange Shares which may be
resold without restriction under federal securities laws, or (iv) such Share,
Exchange Share or Private Exchange Share, as the case may be, ceases to be
outstanding for purposes of the Statement of Resolution.
Registration Statement: Any registration statement of the Company,
including, but not limited to, the Exchange Registration Statement, that covers
any of the Registrable Shares pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 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 Commission providing for offers and sales of securities
made in compliance therewith
-5-
resulting in offers and sales by subsequent holders that are not affiliates of
an issuer of such securities being free of the registration and prospectus
delivery requirements of the Securities Act.
Rule 144A: Rule 144A 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 Commission.
Rule 415: Rule 415 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
Shares: See the second introductory paragraph to this Agreement. Unless the
context otherwise necessitates, when used in this Agreement the term "Shares"
shall be deemed to include any and all Dividend Shares that may be outstanding
at the time of the application of any of the applicable provisions of this
Agreement.
Shelf Notice: See Section 2(c).
Shelf Registration: See Section 3(b).
Statement of Resolution: The statement of resolution filed by Acquisition
with the Secretary of State of the State of Texas relating to the Shares issued
by Acquisition.
Subsequent Shelf Registration: See Section 3(b).
TNP: See the third introductory paragraph to this Agreement.
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 Commission no later than the Filing
Date, an offer to exchange (the "Exchange Offer") any and all of the Registrable
Shares (other than Private Exchange Shares, if any) for a like aggregate
liquidate preference of preferred equity securities of Acquisition and, at and
after the Effective Time, TNP, which are identical in all material respects to
the Shares (the "Exchange Shares") (and which are entitled to the benefits of
the Statement of Resolution), except that the Exchange Shares shall have been
registered pursuant to an effective Registration Statement under the Securities
Act and
-6-
shall contain no restrictive legend thereon. The Exchange Offer shall be
registered under the Securities Act on the appropriate form (the "Exchange
Registration Statement") and shall comply with all applicable tender offer rules
and regulations under the Exchange Act. The Company agrees to use its reasonable
best efforts to (x) cause the Exchange Registration Statement to be declared
effective under the Securities Act on or before the Effectiveness Date; (y) keep
the Exchange Offer open for at least 30 days (or longer if required by
applicable law) after the date that notice of the Exchange Offer is first mailed
to Holders; and (z) consummate the Exchange Offer on or prior to the 30th day
following the date on which the Exchange Registration Statement is declared
effective. If after such Exchange Registration Statement is initially declared
effective by the Commission, the Exchange Offer or the issuance of the Exchange
Shares thereunder is interfered with by any stop order, injunction or other
order or requirement of the Commission or any other governmental agency or
court, such Exchange Registration Statement shall be deemed not to have become
effective for purposes of this Agreement. Each Holder who participates in the
Exchange Offer will be required to represent that any Exchange Shares 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 does not and will not have
any arrangement or understanding with any Person to participate in the
distribution of the Exchange Shares, that such Holder is not an affiliate of the
Company within the meaning of Rule 405 of the Securities Act, and any additional
representations that in the written opinion of counsel to the Company are
necessary under then-existing interpretations of the Commission in order for the
Exchange Registration Statement to be declared effective. Upon consummation of
the Exchange Offer in accordance with this Section 2, the provisions of this
Agreement shall continue to apply, mutatis mutandis, solely with respect to
Registrable Shares that are Private Exchange Shares and Exchange Shares held by
Participating Broker-Dealers, and the Company shall have no further obligation
to register Registrable Shares (other than Private Exchange Shares and other
than in respect of any Exchange Shares as to which clause 2(c)(iv) hereof
applies) pursuant to Section 3 of this Agreement.
(b) The Company shall include within the Prospectus contained in the
Exchange Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Purchasers, which shall contain a summary statement
of the positions taken or policies made by the Staff of the Commission 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
Shares 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 Commission or such positions or policies, in
the judgment of the Purchasers, represent the prevailing views of the Staff of
the Commission. Such "Plan of Distribution" section shall also allow, to the
extent permitted by applicable policies and regulations of the Commission, the
use of the Prospectus by all Persons subject to the
-7-
prospectus delivery requirements of the Securities Act, including, to the extent
so permitted, all Participating Broker-Dealers, and include a statement
describing the manner in which Participating Broker-Dealers may resell the
Exchange Shares.
The Company shall use its reasonable 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 all Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time beginning when the Exchange Shares are first issued
in the Exchange Offer and ending upon the earlier of the expiration of the 180th
day after the Exchange Offer has been completed and such Persons are no longer
required to comply with the prospectus delivery requirements in connection with
offers and sales of the Exchange Shares (the "Applicable Period").
If, upon consummation of the Exchange Offer, any Purchaser holds any Shares
acquired by it and having the status of an unsold allotment in the initial
distribution, the Company upon the request of such Purchaser shall,
simultaneously with the delivery of the Exchange Shares in the Exchange Offer,
issue and deliver to such Purchaser, in exchange (the "Private Exchange") for
the Shares held by such Purchaser, a like liquidation preference of preferred
equity securities of the Company that are identical in all material respects to
the Exchange Shares except for the existence of restrictions on transfer thereof
under the Securities Act and securities laws of the several states of the U.S.
(the "Private Exchange Shares") (and which are issued pursuant to the same
indenture as the Exchange Shares). The Private Exchange Shares shall bear the
same CUSIP number as the Exchange Shares to the extent possible. Dividends on
the Exchange Shares and Private Exchange Shares will accumulate from the last
dividend payment date on which dividends were paid on the Shares surrendered in
exchange therefor or, if no dividends have been paid on the Shares, 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, which may be
a Holder or an affiliate thereof;
(3) permit Holders to withdraw tendered Registrable Shares 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
-8-
(4) otherwise comply in all material respects with all applicable
laws.
As soon as practicable after the close of the Exchange Offer or the Private
Exchange, as the case may be, the Company shall:
(5) accept for exchange all Registrable Shares validly tendered and
not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(6) cancel all Registrable Shares so accepted for exchange
concurrently with the consummation of such exchange; and
(7) deliver promptly to each Holder tendering such Registrable Shares,
Exchange Shares or Private Exchange Shares, as the case may be, equal in
liquidation preference to the Shares of such Holder so accepted for
exchange.
The Exchange Shares and the Private Exchange Shares may be issued under the
Statement of Resolution or a statement of resolution identical in all material
respects to the Statement of Resolution, which in either event will provide that
the Exchange Shares will not be subject to the transfer restrictions set forth
in the Statement of Resolution and/or the Purchase Agreement, as applicable, and
that the Exchange Shares, the Private Exchange Shares and the Shares, if any,
will vote and consent together on all matters as one class and that none of the
Exchange Shares, the Private Exchange Shares or the Shares, if any, 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 Commission, the Company is not permitted to
effect an Exchange Offer, (ii) the Exchange Offer is not consummated within 180
days of the Issue Date and the Holders of 25% of the Registrable Shares so
request, (iii) any holder of Private Exchange Shares so requests in writing to
the Company or (iv) in the case of any Holder that participates in the Exchange
Offer (and tenders its Registrable Shares prior to the expiration thereof), such
Holder does not receive Exchange Shares on the date of the exchange that may be
sold without restriction under federal securities laws (other than due solely to
the status of such Holder as an affiliate of the Company within the meaning of
the Securities Act) and so notifies the Company within 30 days following the
consummation of the Exchange Offer (and providing a reasonable basis for its
conclusions), in the case of each of clauses (i)-(iv), then the Company shall as
promptly as practicable deliver to the Holders and the Transfer Agent written
notice thereof (the "Shelf Notice") and shall file a Shelf Registration pursuant
to Section 3.
-9-
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c), then:
(a) Shelf Registration. The Company shall as promptly as reasonably
practicable file with the Commission a Registration Statement for an offering to
be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Shares (the "Initial Shelf Registration"). If the Company shall not
have yet filed the Exchange Registration Statement, the Company shall file with
the Commission the Initial Shelf Registration on or prior to the Filing Date and
shall use its reasonable best efforts to cause such Initial Shelf Registration
to be declared effective under the Securities Act on or prior to the
Effectiveness Date. Otherwise, the Company shall file with the Commission the
Initial Shelf Registration within 45 days of the delivery of the Shelf Notice
and shall use its reasonable best efforts to cause such Shelf Registration to be
declared effective under the Securities Act on or prior to the 90th day after
filing of the Initial Shelf Registration. The Initial Shelf Registration shall
be on Form S-1 or another appropriate form permitting registration of such
Registrable Shares 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 Registrable Shares to be
included in any Shelf Registration. The Company shall use its reasonable best
efforts to keep the Initial Shelf Registration continuously effective under the
Securities Act until the date which is 24 months from the Issue Date (or, if
Rule 144(k) under the Securities Act is amended to permit unlimited resales by
non-affiliates within a lesser period, such lesser period) (subject to extension
pursuant to the last paragraph of Section 5 hereof) (the "Effectiveness Period")
or such shorter period ending when (i) all Registrable Shares covered by the
Initial Shelf Registration have been sold in the manner set forth and as
contemplated in the Initial Shelf Registration or (ii) a Subsequent Shelf
Registration covering all of the Registrable Shares has been declared effective
under the Securities Act.
(b) Subsequent Shelf Registrations. If the Initial Shelf Registration or
any Subsequent 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 reasonable best
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Shelf Registration in a manner to obtain the
withdrawal of the order suspending the effectiveness thereof, or file an
additional "shelf" Registration Statement pursuant to Rule 415 covering all of
the Registrable Shares (a "Subsequent Shelf Registration"). If a Subsequent
Shelf Registration is filed, the Company shall use its reasonable best efforts
to cause the Subsequent Shelf Registration to be declared effective as soon as
practicable after such filing and to keep such Subsequent Shelf Registration
continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the Initial
Shelf
-10-
Registration or any Subsequent Shelf Registrations was previously continuously
effective. As used herein the term "Shelf Registration" means the Initial Shelf
Registration and any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Company shall promptly supplement and
amend any Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate liquidation preference of the Registrable
Shares covered by such Shelf Registration or by any underwriter of such
Registrable Shares, in each case, with the Company's consent, which consent
shall not be unreasonably withheld or delayed.
4. Additional Dividends
(a) The Company and the Purchasers agree that the Holders of Registrable
Shares will suffer damages if the Company fails to fulfill its obligations under
Section 2 or Section 3 hereof and that it would not be feasible to ascertain the
extent of such damages with precision. Accordingly, the Company agrees to pay,
as liquidated damages, additional dividends on the Registrable Shares
("Additional Dividends") under the circumstances and to the extent set forth
below, each of which shall be given independent effect (each a "Registration
Default"):
(i) if (A) neither the Exchange Registration Statement nor the Initial
Shelf Registration has been filed on or prior to the Filing Date or (B)
notwithstanding that the Company has consummated or will consummate an
Exchange Offer, the Company is required to file a Shelf Registration and
such Shelf Registration is not filed on or prior to the 45th day after
delivery of the Shelf Notice, then, in the case of subclause (A),
commencing on the day after the Filing Date or, in the case of subclause
(B), commencing on the 46th day following delivery of the Shelf Notice,
Additional Dividends shall accumulate on the Registrable Shares over and
above the dividend rate otherwise then in effect at a rate of 0.50% per
annum for the first 90 days immediately following the Filing Date or such
45th day, as the case may be, such Additional Dividends rate increasing by
an additional 0.25% per annum at the beginning of each subsequent 90-day
period;
(ii) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration is declared effective on or prior to the
Effectiveness Date or (B) notwithstanding that the Company has consummated
or will consummate an Exchange Offer, the Company is required to file a
Shelf Registration and such Shelf Registration is not declared effective by
the Commission on or prior to the 90th day after filing of the Initial
Shelf Registration, then, commencing on the day after the Effectiveness
Date or
-11-
the 90th day, as the case may be, Additional Dividends shall accumulate on
the Registrable Shares over and above the dividend rate otherwise then if
effect at a rate of 0.50% per annum for the first 90 days immediately
following the day after the Effectiveness Date or the 90th day, as the case
may be, such Additional Dividends rate increasing by an additional 0.25%
per annum at the beginning of each subsequent 90-day period; and
(iii) if (A) the Company has not exchanged Exchange Shares for all
Shares validly tendered in accordance with the terms of the Exchange Offer
on or prior to the 180th day after the Issue Date, (B) the Exchange
Registration Statement ceases to be effective prior to consummation of the
Exchange Offer or (C) if applicable, a 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 accumulate
on the Registrable Shares over and above the dividend rate otherwise then
in effect at a rate of 0.50% per annum for the first 90 days commencing on
the (x) 181st day after the Issue Date in the case of (A) above or (y) the
day such Exchange Registration Statement or Shelf Registration ceases to be
effective in the case of (B) and (C) above, such Additional Dividends rate
increasing by an additional 0.25% per annum at the beginning of each such
subsequent 90-day period;
provided, however, that the Additional Dividends rate on the Registrable Shares
may not exceed in the aggregate 2.0% per annum; provided further that (1) upon
the filing of the Exchange Registration Statement or each Shelf Registration (in
the case of (i) above), (2) upon the effectiveness of the Exchange Registration
Statement or each Shelf Registration, as the case may be (in the case of (ii)
above), or (3) upon the exchange of Exchange Shares for all Registrable Shares
tendered (in the case of (iii)(A) above) or upon the effectiveness of an
Exchange Registration Statement or Shelf Registration which had ceased to remain
effective (in the case of (iii)(B) and (C) above), Additional Dividends on any
Registrable Shares then accumulating Additional Dividends as a result of such
clause (or the relevant subclause thereof), as the case may be, shall cease to
accumulate.
(b) The Company shall notify each Holder within one Business Day after each
and every date on which a Registration Default occurs in respect of which
Additional Dividends is required to be paid (an "Event Date"). Any amounts of
Additional Dividends due pursuant to a Registration Default will be payable in
Share Dividends, semi-annually on each regular dividend payment date specified
in the Statement of Resolution (to the Holders of Registrable Shares of record
on the regular record date therefor (as specified in the Statement of
Resolution) immediately preceding such dates), commencing with the first such
regular dividend payment date occurring after any such Additional Dividends
commences to accumulate. The amount of Additional Dividends will be determined
by multiplying the applicable Additional Dividends rate by the liquidation
preference of the Shares subject
-12-
thereto, 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 the
denominator of which is 360.
Notwithstanding anything to the contrary in this Section 4, the Company
shall not be required to pay Additional Dividends to a Holder (i) if such Holder
failed to comply with its obligations to make the representations set forth in
Section 2(a) or failed to provide the information required to be provided by it,
if any, pursuant to Section 5 or (ii) if the Exchange Offer was consummated
within 180 days of the Issue Date and such Holder of Registrable Shares was, at
any time while the Exchange Offer was pending, eligible to exchange, and did not
validly tender, such Registrable Shares for freely transferable corresponding
Exchange Shares in such Exchange Offer.
The parties hereto agree that the liquidated damages provided for in this
Section 4 constitute a reasonable estimate of and are intended to constitute the
sole damages that will be suffered by Holders of Registrable Shares by reason of
the failure of (i) the Shelf Registration or the Exchange Registration Statement
to be filed, (ii) the Shelf Registration to remain effective or (iii) the
Exchange Registration Statement to be declared effective and remain effective
and the Exchange Offer to be consummated, in each case to the extent required by
this Agreement.
5. Registration Procedures
In connection with the filing of any Registration Statement pursuant to
Sections 2 or 3 hereof, the Company shall use its reasonable best efforts to
effect such registrations to permit the sale of such 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 use its reasonable best efforts to:
(a) Prepare and file with the Commission prior to the Filing Date, the
Exchange Registration Statement or if the Exchange Registration Statement is not
filed or is unavailable, a Shelf Registration as prescribed by Section 2 or 3,
and use its reasonable best efforts to cause each such Registration Statement to
become effective and remain effective as provided herein; provided that, if (1)
a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2 is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Shares during the Applicable Period and
has advised the Company that it is a Participating Broker-Dealer, before filing
any Registration Statement or Prospectus or any amendments or supplements
thereto, the Company shall, if requested, furnish to and afford the Holders of
the Registrable Shares to be registered pursuant to such Shelf
-13-
Registration or 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 (in each case at least
five Business Days prior to such filing). The Company shall not file any such
Registration Statement or Prospectus or any amendments or supplements thereto if
the Holders of a majority in aggregate liquidation preference of the Registrable
Shares 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.
(b) Prepare and file with the Commission 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, as
the case may be; cause the related Prospectus to be supplemented by any
Prospectus supplement required by applicable law, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act and the
Exchange Act applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being
sold by a Participating Broker-Dealer covered by any such Prospectus. The
Company shall be deemed not to have used its reasonable 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 Registrable Shares
covered thereby or Participating Broker-Dealers seeking to sell Exchange Shares
not being able to sell such Registrable Shares or such Exchange Shares during
that period unless such action is required by applicable law, rule or regulation
or unless the Company complies with this Agreement, including, without
limitation, the provisions of paragraph 5(k) hereof and the last paragraph of
Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a
Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period from whom the Company has received written notice that it will
be a Participating Broker-Dealer, notify the selling Holders of Registrable
Shares, and each such Participating Broker-Dealer, 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 (including in such notice a written statement that any
Holder may, upon request, obtain, without charge, one conformed copy of
-14-
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 Commission of any stop
order suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the initiation
of any proceedings for that purpose, (iii) if at any time when a prospectus is
required by the Securities Act to be delivered in connection with sales of the
Registrable Shares the representations and warranties of the Company contained
in any agreement pursuant to this Agreement (including any underwriting
agreement contemplated by Section 5(n) hereof) cease to be true and correct in
any material respect, (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 Registrable Shares or
the Exchange Shares 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 of material fact 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 the light of the circumstances
under which they were made, not misleading, and (vi) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a
Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, use its reasonable 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 Registrable Shares
or the Exchange Shares to be sold by any Participating Broker-Dealer, for sale
in any jurisdiction, and, if any such order is issued, to use its reasonable
best efforts to obtain the withdrawal of any such order at the earliest possible
date.
(e) If a Shelf Registration is filed pursuant to Section 3 and if requested
by the managing underwriters, if any, or the Holders of a majority in aggregate
liquidation preference of the Registrable Shares being sold in connection with
an underwritten offering,
-15-
(i) as promptly as practicable incorporate in a prospectus supplement or post-
effective amendment such information or revisions to information therein
relating to such underwriters or selling Holders as the managing underwriters,
if any, or such Holders or their counsel reasonably request to be included or
made 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, or (2) a
Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, furnish to each selling Holder of Registrable Shares and to
each such Participating Broker-Dealer who so requests and to counsel and each
managing underwriter, if any, without charge, 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, or (2) a
Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer, deliver to each selling Holder of Registrable
Shares or each such Participating Broker-Dealer, as the case may be, their
respective counsel, and the underwriters, if any, without charge, as many copies
of the Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably request; and,
subject to the last paragraph of this Section 5, the Company hereby consents to
the use (in accordance with law) of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of Registrable Shares and each
Participating Broker-Dealer, and the underwriters or agents, if any, and dealers
(if any), in connection with the offering and sale of the Registrable Shares
covered by, or the sale by Participating Broker-Dealers of the Exchange Shares
pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Shares or any delivery of a
Prospectus contained in the Exchange Registration Statement by any Participating
Broker-Dealer who seeks to sell Exchange Shares during the Applicable Period,
use its reasonable best efforts to register or qualify, and cooperate with the
selling Holders of Registrable Shares and each such Participating Broker-Dealer,
the underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Shares or Exchange Shares, as the case may
-16-
be, 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, if any, reasonably
request in writing; provided that where Exchange Shares held by Participating
Broker-Dealers or Registrable Shares are offered pursuant to an underwritten
offering, counsel to the underwriters shall, at the cost and expense of the
Company, perform the 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 Shares by Participating
Broker-Dealers or the Registrable Shares covered by the applicable Registration
Statement; provided 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, cooperate with
the selling Holders of Registrable Shares, any Participating Broker-Dealer and
the managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Shares 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 (the "DTC"); and
enable such Registrable Shares to be in such denominations and registered in
such names as the managing underwriter or underwriters, if any, or Holders may
reasonably request at least two Business Days prior to such sale of Registrable
Shares.
(j) Use its reasonable best efforts to cause the Registrable Shares covered
by the Registration Statement to be registered with or approved by such
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition of
such Registrable Shares, in which case the Company will cooperate in all
reasonable respects with the filing of such Registration Statement and the
granting of such approvals; provided 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.
(k) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a
Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, upon the occurrence of any event
-17-
contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 5(a) hereof) file with the Commission, at the
Company's sole expense, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Shares being sold thereunder or to the purchasers of the
Exchange Shares 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 the light of the circumstances
under which they were made, not misleading.
(l) Use its reasonable best efforts to cause the Registrable Shares covered
by a Registration Statement to be rated with the appropriate rating agencies, if
so requested by the Holders of a majority in aggregate liquidation preference of
Registrable Shares covered by such Registration Statement or the managing
underwriter or underwriters, if any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Shares, (i) provide the Holders with printed
certificates for the Registrable Shares or the Exchange Shares, as the case may
be, in a form eligible for deposit with the Depository Trust Company and (ii)
provide a CUSIP number for the Registrable Shares or the Exchange Shares, as the
case may be.
(n) In connection with an underwritten offering of Registrable Shares
pursuant to a Shelf Registration, enter into an underwriting agreement as is
customary in underwritten offerings of preferred equity securities similar to
the Shares and take all such other actions as are reasonably requested by the
managing underwriter or underwriters in order to expedite or facilitate the
registration or the disposition of such Registrable Shares and, in such
connection, (i) make such representations and warranties to the underwriters,
with respect to the business of the Company and its subsidiaries and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, as are customarily made
by issuers to underwriters in underwritten offerings of preferred equity
securities similar to the Shares, and confirm the same in writing if and when
requested; (ii) obtain the opinion of counsel to the Company and updates thereof
in form 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 preferred equity
securities similar to the Shares and such other matters as may be reasonably
requested by managing underwriters; (iii) obtain "cold comfort" letters and
updates thereof in form and substance reasonably satisfactory to the managing
underwriter or underwriters from the independent certified public accountants of
the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company
-18-
for which financial statements and financial data are, or are required to be,
included 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 preferred equity securities similar to the Shares 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 liquidation preference of Registrable Shares
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.
(o) If (1) a Shelf Registration is filed pursuant to Section 3, or (2) a
Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, make available for inspection by any selling Holder of such
Registrable Shares being sold, and each Participating Broker-Dealer, any
underwriter participating in any such disposition of Registrable Shares, if any,
and any attorney, accountant or other agent retained by any such selling Holder,
each 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
reasonably requested by any such Inspector in connection with such Registration
Statement. Records which the Company determines, in good faith, to be
confidential and any Records which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
Registration Statement, (ii) the release of such Records is ordered pursuant to
a subpoena or other order from a court of competent jurisdiction, (iii) the
information in such Records has been made generally available to the public
other than as a result of a disclosure or failure to safeguard by such Inspector
or (iv) disclosure of such information is, in the opinion of counsel for any
Inspector, necessary or advisable in connection with any action, claim, suit or
proceeding, directly or indirectly, involving or potentially involving such
Inspector and arising out of, based upon, related to, or involving this
Agreement, or any transactions contemplated hereby or arising hereunder. Each
selling Holder of such Registrable Shares and each 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
-19-
market transactions in the securities of the Company or any of its subsidiaries
unless and until such is made generally available to the public. Each Inspector,
each selling Holder of such Registrable Shares and each 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
pursuant to clauses (ii) or (iv) of the previous sentence or otherwise, give
notice to the Company and allow the Company to undertake appropriate action to
obtain a protective order or otherwise prevent disclosure of the Records deemed
confidential at its expense.
(p) Provide a transfer agent for the Registrable Shares or the Exchange
Shares, as the case may be.
(q) Comply with all applicable rules and regulations of the Commission and
make generally available to its securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Shares are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(r) Upon consummation of the Exchange Offer or a Private Exchange, obtain
an opinion of counsel to the Company, in a form customary for underwritten
transactions, addressed to the Holders of Registrable Shares participating in
the Exchange Offer or the Private Exchange, as the case may be, as follows: (i)
the Exchange Shares or the Private Exchange Shares, as the case may be have been
duly authorized, and are validly issued, fully paid and nonassessable and free
of any preemptive or similar rights; and (ii) the Amended and Restated Articles
of Incorporation of the Company, by virtue of the Statement of Resolution, sets
forth the rights, preferences and priorities of the Exchange Shares or Private
Exchange Shares, as the case may be, and the holders of Exchange Shares or
Private Exchange Shares, as the case may be, will have the rights set forth in
the Statement of Resolution.
(s) If the Exchange Offer or a Private Exchange is to be consummated, upon
delivery of the Registrable Shares by Holders to the Company (or to such other
Person as directed by the Company) in exchange for the Exchange Shares or the
Private Exchange Shares, as the case may be, the Company shall ▇▇▇▇, or caused
to be marked, on such Registrable Shares that such Registrable Shares are being
cancelled in exchange for the Exchange Shares or the Private Exchange Shares, as
the case may be; in no event shall such Registrable Shares be marked as paid or
otherwise satisfied.
-20-
(t) Cooperate with each seller of Registrable Shares covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Shares and their respective counsel in
connection with any filings required to be made with the NASD.
(u) Use its best efforts to take all other steps reasonably necessary to
effect the registration of the Registrable Shares covered by a Registration
Statement contemplated hereby.
The Company may require each seller of Registrable Shares as to which any
registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Registrable Shares as the
Company may, from time to time, reasonably request. The Company may exclude from
such registration the Registrable Shares of any seller who fails to furnish such
information within a reasonable time after receiving such request. No seller
shall be entitled to Additional Dividends pursuant to Section 4 unless and until
such seller has provided all such information. Each seller as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such seller not materially
misleading.
Each Holder of Registrable Shares and each Participating Broker-Dealer
agrees by acquisition of such Registrable Shares or Exchange Shares to be sold
by such Participating Broker-Dealer, as the case may be, that, upon 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), such Holder will forthwith
discontinue disposition of such Registrable Shares covered by such Registration
Statement or Prospectus or Exchange Shares to be sold by such Holder or
Participating Broker-Dealer, as the case may be, and, in each case,
dissemination of such Prospectus until such Holder's or Participating
Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k), 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 Registrable Shares covered by such Registration
Statement or Exchange Shares 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) or (y) the Advice.
-21-
6. Registration Expenses
All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by the Company, whether or not the
Exchange Offer or a Shelf Registration is filed or becomes effective, including,
without limitation, (i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with the NASD
in connection with an underwritten offering and (B) fees and expenses of
compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with Blue
Sky qualifications of the Registrable Shares or Exchange Shares and
determination of the eligibility of the Registrable Shares or Exchange Shares
for investment under the laws of such jurisdictions (x) where the holders of
Registrable Shares are located, in the case of the Exchange Shares, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Shares or Exchange
Shares to be sold by a Participating Broker-Dealer during the Applicable
Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Shares or Exchange Shares in a form
eligible for deposit with the DTC and of printing prospectuses if the printing
of prospectuses is requested by the managing underwriter or underwriters, if
any, or by the Holders of a majority in aggregate liquidation preference of the
Registrable Shares included in any Registration Statement or by any
Participating Broker-Dealer, as the case may be, (iii) reasonable messenger,
telephone and delivery expenses incurred in connection with the Exchange
Registration Statement and any Shelf Registration, (iv) fees and disbursements
of counsel for the Company and reasonable fees and disbursements of special
counsel for the Purchasers and the sellers of Registrable Shares, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 5(n)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) rating agency fees, (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
or special audit, (xi) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange, (xii) the
fees and disbursements of underwriters, if any, customarily paid by issuers or
sellers of securities (but not including any underwriting discounts or
commissions or transfer taxes, if any, attributable to the sale of the
Registrable Shares which discounts, commissions or taxes shall be paid by
Holders of such Registrable Shares) and (xiii) 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.
-22-
7. Indemnification
(a) Acquisition and, at and after the Effective Time, TNP, agrees to
indemnify and hold harmless each Holder of Registrable Shares and each
Participating Broker-Dealer, the officers, directors, employees and agents of
each such Person, and each Person, if any, who controls any such Person 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 reasonable 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 or Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) 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 the light of the circumstances
under which they were made, not misleading, except insofar as 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 relating to any Participant furnished to the Company in writing
by or on behalf of such Participant expressly for use therein; provided,
however, that the Company shall not be liable if 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 any such loss,
liability, claim, damage or expense suffered or incurred by the Participants
resulted from any action, claim or suit by any Person who purchased Registrable
Shares or Exchange Shares which are the subject thereof from such Participant
and it is established in the related proceeding that 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 Registrable Shares
or Exchange Shares sold to such Person if required by applicable law, 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 will be required to agree, severally and not jointly,
to indemnify and hold harmless Acquisition and, at and after the Effective Time,
TNP, their respective directors and officers and each Person who controls
Acquisition and, at and after the Effective Time, TNP, 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
with reference to information relating to such Participant furnished to the
-23-
Company in writing by such Participant expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus. The liability of any Participant under this paragraph shall in no
event exceed the proceeds received by such Participant from sales of Registrable
Shares or Exchange Shares giving rise to such obligations.
(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, upon request of the
Indemnified Person, shall 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; 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. 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 has failed within a
reasonable 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 the Indemnified Person shall have reasonably concluded that there may
be one or more legal defenses available to it and/or other Indemnified Persons
that are different from or additional to those available to any such
Indemnifying Person. It is understood that, unless there is a conflict among
Indemnified Persons, the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
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 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 Registrable Shares sold by all
such Participants and any such separate firm for the Company, its directors,
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 written consent, but if settled with such
consent or if there is a final non-appealable judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for
reasonable
-24-
fees and expenses actually incurred by counsel as contemplated by the third
sentence of this paragraph, the Indemnifying Person agrees that it shall be
liable for any settlement of any proceeding effected without its consent if (i)
such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement; provided, however, that the Indemnifying
Person shall not be liable for any settlement effected without its consent
pursuant to this sentence if the Indemnifying Person is contesting, in good
faith, the request for reimbursement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement (A) includes an unconditional
release of such Indemnified Person, in form and substance 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 an Indemnified Person.
(d) If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, then each 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 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) as well as any other
relevant equitable considerations. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or by the Participants 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 under 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 purpose) 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,
-25-
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 Registrable Shares or
Exchange Shares, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(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.
8. Rules 144 and 144A
Acquisition and, at and after the Effective Time, TNP, covenants, for so
long as any Registrable Shares remain outstanding, 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 Commission thereunder in a timely manner
and, if at any time it is not required to file such reports, it will, upon the
request of any Holder of Registrable Shares, make publicly available other
information so long as necessary to permit sales pursuant to Rule 144 and Rule
144A. Acquisition and, at and after the Effective Time, TNP, further covenants,
for so long as any Registrable Shares remain outstanding, to make available to
any Holder or beneficial owner of Registrable Shares in connection with any sale
thereof and any prospective purchaser of such Registrable Shares from such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Securities Act in order to permit resales of such Registrable Shares
pursuant to Rule 144A.
9. Underwritten Registrations
If any of the Registrable Shares 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 liquidation preference of such Registrable
Shares included in such offering and shall be reasonably acceptable to the
Company.
No Holder of Registrable Shares may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Shares on the
-26-
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) Remedies. Except as provided in Section 4, in the event of a breach by
Acquisition and, at and after the Effective Time, TNP, of any of its obligations
under this Agreement, each Holder of Registrable Shares and each Participating
Broker-Dealer holding Exchange Shares, in addition to being entitled to exercise
all rights provided herein, in the Statement of Resolution or, in the case of an
Purchaser, in the Purchase Agreement, or granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. Except as provided in Section 4, Acquisition and, at and after the
Effective Time, TNP, agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Acquisition has not entered, as of the date
hereof, and Acquisition and, at and after the Effective Time, TNP, shall not
enter, after the date of this Agreement, into any agreement with respect to any
of its securities that is inconsistent with the rights granted to the Holders of
Registrable Shares in this Agreement or otherwise conflicts with the provisions
hereof. Acquisition has not entered and, at and after the Effective Time, TNP,
shall not enter into any agreement with respect to any of its securities which
will grant to any Person piggy-back rights with respect to a Registration
Statement.
(c) Adjustments Affecting Registrable Shares. Acquisition and, at and after
the Effective Time, TNP, shall not directly or indirectly, take any action with
respect to the Registrable Shares as a class that would adversely affect the
ability of the Holders of Registrable Shares to include such Registrable Shares
in a registration undertaken pursuant to this Agreement.
(d) 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 (A) the Holders of not less than a majority in aggregate liquidation
preference of the then outstanding Registrable Shares and (B) in circumstances
that would adversely affect Participating Broker-Dealers, the Participating
Broker-Dealers holding not less than a majority in aggregate liquidation
preference of the Exchange Shares held by all Participating Broker-Dealers;
-27-
provided, however, that Section 7 and this Section 10(d) may not be amended,
modified or supplemented without the prior written consent of each Holder and
each Participating Broker-Dealer (including any person who was a Holder or
Participating Broker-Dealer of Registrable Shares or Exchange Shares, as the
case may be, disposed of pursuant to any Registration Statement).
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Registrable Shares whose securities are being tendered pursuant to
the Exchange Offer or sold pursuant to a Registration Statement and that does
not directly or indirectly affect, impair, limit or compromise the rights of
other Holders of Registrable Shares may be given by Holders of at least a
majority in aggregate liquidation preference of the Registrable Shares being
tendered or being sold by such Holders pursuant to such Registration Statement.
(e) 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 telecopier:
1. if to a Holder of Registrable Shares 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 Statement of Resolution, with a copy in like manner to
the Purchasers at their addresses set forth in Schedule 1 to the Purchase
Agreement and as follows:
CIBC INC.
CIBC WORLD MARKETS CORP.
CHASE SECURITIES INC.
CONTINENTAL CASUALTY COMPANY
LAUREL HILL CAPITAL PARTNERS LLC
c/o CIBC Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Finance
Department
-28-
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
2. if to the Purchasers, at the address specified in Section 10(e)(1);
3. if to the Company, as follows:
c/o Laurel Hill Capital Partners LLC
▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with copies to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: M. ▇▇▇▇▇▇▇ ▇▇▇▇, 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 guaranteeing overnight
delivery; and when receipt is acknowledged by the addressee, if telecopied.
(f) 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 and
the Holders; provided, however, that this Agreement shall not inure to the
benefit of or be binding upon a successor or assign of a Holder unless and to
the extent such successor or assign holds Registrable Shares.
(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.
-29-
(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, AS APPLIED TO CONTRACTS MADE
AND PERFORMED 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.
(j) 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.
(k) Shares Held by the Company or Its Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Shares is required
hereunder, Registrable Shares 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.
(l) Third Party Beneficiaries. Holders of Registrable Shares and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
(m) Registration of Dividend Shares. If the issuance of Dividend Shares
requires registration under the Securities Act and any such issuance shall not
have been effectively registered under the Securities Act pursuant to the
Exchange Registration Statement then, prior to any issuance of Dividend Shares,
the Company shall file with the Commission and cause to become effective a
Registration Statement registering the issuance of such Dividend Shares.
-30-
(n) Entire Agreement. This Agreement, together with the Purchase Agreement
and the Statement of Resolution, is intended by the parties as a final and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein and any and all prior
oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda among the Purchasers
on the one hand and the Company on the other, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest with respect to the subject matter hereof and thereof are
merged herein and replaced hereby.
(o) Assumption Permitted. The assumption by TNP pursuant to the Assumption
Agreement of the obligations of Acquisition hereunder shall be permitted without
the written consent of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Share Registration
Rights Agreement as of the date first written above.
ST ACQUISITION CORP.
By:
----------------------------------
Name:
Title:
CIBC INC.
By:
----------------------------------
Name:
Title:
CIBC WORLD MARKETS CORP.
By:
----------------------------------
Name:
Title:
CHASE SECURITIES INC.
By:
----------------------------------
Name:
Title:
CONTINENTAL CASUALTY COMPANY
By:
----------------------------------
Name:
Title:
LAUREL HILL CAPITAL PARTNERS LLC
By:
----------------------------------
Name:
Title: