Exhibit 4.2
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ COMPANY
10.875% SENIOR SUBORDINATED NOTES DUE 2011
UNCONDITIONALLY GUARANTEED AS TO THE
PAYMENT OF PRINCIPAL, PREMIUM,
IF ANY, AND INTEREST BY
CARTER'S DE SAN ▇▇▇▇▇, INC.
AND
CARTER'S IMAGINATION, INC.
-------------
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
August 15, 2001
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
Fleet Securities, Inc., and
BNP Paribas Securities Corp.,
As representatives of the several Purchasers
named in Schedule I to the Purchase Agreement
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Company, a Massachusetts corporation (the
"Company"), proposes to issue and sell to the Purchasers (as defined herein)
upon the terms set forth in the Purchase Agreement (as defined herein) its
10.875% Senior Subordinated Notes due 2011, which are unconditionally
guaranteed by Carter's de San ▇▇▇▇▇, Inc. and Carter's Imagination, Inc. As
an inducement to the Purchasers to enter into the Purchase Agreement and in
satisfaction of a condition to the obligations of the Purchasers thereunder,
the Company agrees with the Purchasers for the benefit of holders (as defined
herein) from time to time of the Registrable Securities (as defined herein)
as follows:
1. CERTAIN DEFINITIONS. For purposes of this Exchange and
Registration Rights Agreement, the following terms shall have the following
respective meanings:
"BASE INTEREST" shall mean the interest that would otherwise accrue on
the Securities under the terms thereof and the Indenture, without giving
effect to the provisions of this Agreement.
The term "BROKER-DEALER" shall mean any broker or dealer registered
with the Commission under the Exchange Act.
"CLOSING DATE" shall mean the date on which the Securities are
initially issued.
1
"COMMISSION" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute for
the particular purpose.
"EFFECTIVE TIME," in the case of (i) an Exchange Registration, shall
mean the time and date as of which the Commission declares the Exchange
Registration Statement effective or as of which the Exchange Registration
Statement otherwise becomes effective and (ii) a Shelf Registration, shall
mean the time and date as of which the Commission declares the Shelf
Registration Statement effective or as of which the Shelf Registration
Statement otherwise becomes effective.
"ELECTING HOLDER" shall mean any holder of Registrable Securities that
has returned a completed and signed Notice and Questionnaire to the Company
in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.
"EXCHANGE OFFER" shall have the meaning assigned thereto in
Section 2(a) hereof.
"EXCHANGE REGISTRATION" shall have the meaning assigned thereto in
Section 3(c) hereof.
"EXCHANGE REGISTRATION STATEMENT" shall have the meaning assigned
thereto in Section 2(a) hereof.
"EXCHANGE SECURITIES" shall have the meaning assigned thereto in
Section 2(a) hereof.
"GUARANTORS" shall have the meaning assigned thereto in the Indenture.
The term "HOLDER" shall mean each of the Purchasers and other persons
who acquire Registrable Securities from time to time (including any
successors or assigns), in each case for so long as such person owns any
Registrable Securities.
"INDENTURE" shall mean the Indenture, dated as of August 15, 2001,
among the Company, the Guarantors and State Street Bank and Trust Company,
as Trustee, as the same shall be amended from time to time.
"NOTICE AND QUESTIONNAIRE" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
The term "PERSON" shall mean a corporation, association, partnership,
organization, business, individual, government or political subdivision
thereof or governmental agency.
"PURCHASE AGREEMENT" shall mean the Purchase Agreement, dated as of
August 8, 2001, among the Purchasers, CH Acquisitions LLC, the Guarantors
and the Company relating to the Securities.
"PURCHASERS" shall mean the Purchasers named in Schedule I to the
Purchase Agreement.
"REGISTRABLE SECURITIES" shall mean the Securities; PROVIDED, HOWEVER,
that a Security shall cease to be a Registrable Security when (i) the
Security has been exchanged for an Exchange Security in an Exchange Offer
as contemplated in Section 2(a) hereof (PROVIDED that any Exchange Security
that, pursuant to the last two sentences of Section 2(a), is
2
included in a prospectus for use in connection with resales by
broker-dealers shall be deemed to be a Registrable Security with respect
to Sections 5, 6 and 9 until resale of such Registrable Security has
been effected within the 180-day period referred to in Section 2(a));
(ii) a Shelf Registration Statement registering such Security under the
Securities Act has been declared or becomes effective and such Security
has been sold or otherwise transferred by the holder thereof pursuant to
and in a manner contemplated by such effective Shelf Registration
Statement; (iii) such Security is sold pursuant to Rule 144 under
circumstances in which any legend borne by such Security relating to
restrictions on transferability thereof, under the Securities Act or
otherwise, is removed by the Company or pursuant to the Indenture; (iv)
such Security is eligible to be sold pursuant to paragraph (k) of Rule
144; or (v) such Security shall cease to be outstanding.
"REGISTRATION DEFAULT" shall have the meaning assigned thereto in
Section 2(c) hereof.
"REGISTRATION EXPENSES" shall have the meaning assigned thereto in
Section 4 hereof.
"RESALE PERIOD" shall have the meaning assigned thereto in Section 2(a)
hereof.
"RESTRICTED HOLDER" shall mean (i) a holder of Securities or Exchange
Securities that is an affiliate of the Company within the meaning of Rule
405, (ii) a holder who acquires Exchange Securities outside the ordinary
course of such holder's business, (iii) a holder who has arrangements or
understandings with any person to participate in the Exchange Offer for the
purpose of distributing Exchange Securities and (iv) a holder that is a
broker-dealer, but only with respect to Exchange Securities received by
such broker-dealer pursuant to an Exchange Offer in exchange for
Registrable Securities acquired by the broker-dealer directly from the
Company.
"RULE 144," "RULE 405" AND "RULE 415" shall mean, in each case, such
rule promulgated under the Securities Act (or any successor provision), as
the same shall be amended from time to time.
"SECURITIES" shall mean, collectively, the 10.875% Senior Subordinated
Notes due 2011 of the Company to be issued and sold to the Purchasers, and
securities issued in exchange therefor or in lieu thereof pursuant to the
Indenture. Each Security is entitled to the benefit of the guarantees
provided for in the Indenture (the "Guarantee") and, unless the context
otherwise requires, any reference herein to a "Security," an "Exchange
Security" or a "Registrable Security" shall include a reference to the
related Guarantee.
"SECURITIES ACT" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
"SHELF REGISTRATION" shall have the meaning assigned thereto in
Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall have the meaning assigned thereto
in Section 2(b) hereof.
"SPECIAL INTEREST" shall have the meaning assigned thereto in
Section 2(c) hereof.
"TRUST INDENTURE ACT" shall mean the Trust Indenture Act of 1939, or
any successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.
Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Exchange and Registration
3
Rights Agreement, and the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Exchange and Registration Rights
Agreement as a whole and not to any particular Section or other subdivision.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) Except as set forth in Section 2(b) below, the Company agrees to
file under the Securities Act no later than 120 days after the Closing Date
(or if such date is not a business day, the next succeeding business day),
a registration statement relating to an offer to exchange (such
registration statement, the "Exchange Registration Statement", and such
offer, the "Exchange Offer") any and all of the Securities for a like
aggregate principal amount of debt securities issued by the Company and
guaranteed by the Guarantors, which debt securities and related guarantees
are substantially identical to the Securities and the Guarantee,
respectively (and are entitled to the benefits of a trust indenture which
is substantially identical to the Indenture or is the Indenture and which
has been qualified under the Trust Indenture Act), except that they have
been registered pursuant to an effective registration statement under the
Securities Act and do not contain provisions for the additional interest
contemplated in Section 2(c) below (such new debt securities hereinafter
called "Exchange Securities"). The Company agrees to use its best efforts
to cause the Exchange Registration Statement to become effective under the
Securities Act no later than 180 days after the Closing Date (or if such
date is not a business day, the next succeeding business day). The Exchange
Offer will be registered under the Securities Act on the appropriate form
and will comply with all applicable tender offer rules and regulations
under the Exchange Act. The Company further agrees to use its best efforts
to commence and complete the Exchange Offer promptly, but no later than 45
days after such registration statement has become effective (or if such
date is not a business day, the next succeeding business day), hold the
Exchange Offer open for at least 20 business days and exchange Exchange
Securities for all Registrable Securities that have been properly tendered
and not withdrawn on or prior to the expiration of the Exchange Offer. The
Exchange Offer will be deemed to have been "completed" only if the debt
securities and related guarantees received by holders other than Restricted
Holders in the Exchange Offer for Registrable Securities are, upon receipt,
transferable by each such holder without restriction under the Securities
Act and the Exchange Act and without material restrictions under the blue
sky or securities laws of a substantial majority of the States of the
United States of America. The Exchange Offer shall be deemed to have been
completed upon the earlier to occur of (i) the Company having exchanged the
Exchange Securities for all outstanding Registrable Securities pursuant to
the Exchange Offer and (ii) the Company having exchanged, pursuant to the
Exchange Offer, Exchange Securities for all Registrable Securities that
have been properly tendered and not withdrawn before the expiration of the
Exchange Offer, which shall be on a date that is at least 20 business days
following the commencement of the Exchange Offer. The Company agrees (x) to
include in the Exchange Registration Statement a prospectus for use in any
resales by any holder of Exchange Securities that is a broker-dealer and
(y) to keep such Exchange Registration Statement effective for a period
(the "Resale Period") beginning when Exchange Securities 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 or such time as such
broker-dealers no longer own any Registrable Securities. With respect to
such Exchange Registration Statement, such holders shall have the benefit
of the rights of indemnification and contribution set forth in Sections
6(a), (c), (d) and (e) hereof.
(b) If (i) on or prior to the time the Exchange Offer is completed
existing Commission interpretations are changed such that the debt
securities or the related guarantees received by holders other than
Restricted Holders in the Exchange Offer for Registrable Securities
4
are not or would not be, upon receipt, transferable by each such holder
without restriction under the Securities Act, (ii) the Exchange Offer
has not been completed within 225 days following the Closing Date or
(iii) the Exchange Offer is not available to any holder of the
Securities and such holder notifies the Company in writing within 20
days following the completion of the Exchange Offer that such holder was
prohibited from participating in the Exchange Offer, the Company shall,
in lieu of (or, in the case of clause (iii), in addition to) conducting
the Exchange Offer contemplated by Section 2(a), file under the
Securities Act as soon as practicable, but no later than the later of 90
days after the time such obligation to file arises, a "shelf"
registration statement providing for the registration of, and the sale
on a continuous or delayed basis by the holders of, all of the
Registrable Securities, pursuant to Rule 415 or any similar rule that
may be adopted by the Commission (such filing, the "Shelf Registration"
and such registration statement, the "Shelf Registration Statement").
The Company agrees to use its best efforts (x) to cause the Shelf
Registration Statement to become or be declared effective no later than
180 days after such Shelf Registration Statement is filed and to keep
such Shelf Registration Statement continuously effective for a period
ending on the earlier of the second anniversary of the Effective Time or
such time as there are no longer any Registrable Securities outstanding,
PROVIDED, HOWEVER, that no holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement or to use the
prospectus forming a part thereof for resales of Registrable Securities
unless such holder is an Electing Holder, and (y) after the Effective
Time of the Shelf Registration Statement, promptly upon the request of
any holder of Registrable Securities that is not then an Electing
Holder, to take any action reasonably necessary to enable such holder to
use the prospectus forming a part thereof for resales of Registrable
Securities, including, without limitation, any action necessary to
identify such holder as a selling securityholder in the Shelf
Registration Statement, PROVIDED, HOWEVER, that nothing in this Clause
(y) shall relieve any such holder of the obligation to return a
completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(d)(iii) hereof. The Company further agrees to
supplement or make amendments to the Shelf Registration Statement, as
and when required by the rules, regulations or instructions applicable
to the registration form used by the Company for such Shelf Registration
Statement or by the Securities Act or rules and regulations thereunder
for shelf registration, and the Company agrees to furnish to each
Electing Holder copies of any such supplement or amendment prior to its
being used or promptly following its filing with the Commission.
(c) In the event that (i) the Company has not filed the Exchange
Registration Statement or Shelf Registration Statement on or before the
date on which such registration statement is required to be filed pursuant
to Section 2(a) or 2(b), respectively, or (ii) such Exchange Registration
Statement or Shelf Registration Statement has not become effective or been
declared effective by the Commission on or before the date on which such
registration statement is required to become or be declared effective
pursuant to Section 2(a) or 2(b), respectively, or (iii) the Exchange Offer
has not been completed within 45 days after the initial effective date of
the Exchange Registration Statement relating to the Exchange Offer (if the
Exchange Offer is then required to be made) or (iv) any Exchange
Registration Statement or Shelf Registration Statement required by Section
2(a) or 2(b) hereof is filed and declared effective but shall thereafter
either be withdrawn by the Company or shall become subject to an effective
stop order issued pursuant to Section 8(d) of the Securities Act suspending
the effectiveness of such registration statement (except as specifically
permitted herein) without being succeeded promptly by an additional
registration statement filed and declared effective (each such event
referred to in clauses (i) through (iv) (excluding any permitted period
provided in Section 2(f) hereof), a "Registration Default" and each period
during which a Registration Default has occurred and is continuing, a
"Registration Default Period"), then, as liquidated damages for such
Registration Default, subject to the
5
provisions of Section 9(b), special interest ("Special Interest"), in
addition to the Base Interest, shall accrue in an amount equal to $.05
per week per $1,000 in principal amount of Registrable Securities held
by such holder for each week or portion thereof that the Registration
Default continues for the first 90-day Registration Default Period. The
amount of the liquidated damages shall increase by an additional $.05
per week per $1,000 in principal amount of Registrable Securities with
respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of liquidated damages of $.50
per week per $1,000 in principal amount of Transfer Restricted
Securities; PROVIDED that the Issuer and the Guarantors shall in no
event be required to pay liquidated damages for more than one
Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in
the case of (i) above, (2) upon the effectiveness of the Exchange
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (ii) above, or (3) upon the completion of the
Exchange Offer, in the case of (iii) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result
of such clause (i), (ii), or (iii), as applicable, shall cease.
(d) The Company shall take, and shall cause the Guarantors to take, all
actions necessary or advisable to be taken by it to ensure that the
transactions contemplated herein are effected as so contemplated, including
all actions necessary or desirable to register the Guarantee under the
registration statement contemplated in Section 2(a) or 2(b) hereof, as
applicable.
(e) Any reference herein to a registration statement as of any time
shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time and any reference herein
to any post-effective amendment to a registration statement as of any time
shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time.
(f) The Company may suspend the Shelf Registration Statement
contemplated in Section 2(b) hereof for a period not to exceed 45 days in
any 90-day period or an aggregate of 90 days in any 12-month period if the
Board of Directors of the Company shall have determined in good faith that
because of valid business reasons (not including avoidance of the Company's
obligations hereunder), including, without limitation, the acquisition or
divestiture of assets, pending corporate developments and similar events,
it is in the best interests of the Company to suspend the Shelf
Registration Statement, and prior to such suspension, the Company provides
the holders with written notice thereof, which notice need not specify the
nature of the event giving rise to such suspension.
3. REGISTRATION PROCEDURES.
If the Company files a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:
(a) At or before the Effective Time of the Exchange Offer or the Shelf
Registration, as the case may be, the Company shall qualify the Indenture
under the Trust Indenture Act of 1939.
(b) In the event that such qualification would require the appointment
of a new trustee under the Indenture, the Company shall appoint a new
trustee thereunder pursuant to the applicable provisions of the Indenture.
6
(c) In connection with the Company's obligations with respect to the
registration of Exchange Securities as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, the Company shall, as soon as
practicable (or as otherwise specified):
(i) prepare and file with the Commission, no later than 120
days after the Closing Date, an Exchange Registration Statement on
any form which may be utilized by the Company and which shall
permit the Exchange Offer and resales of Exchange Securities by
broker-dealers during the Resale Period to be effected as
contemplated by Section 2(a), and use its best efforts to cause
such Exchange Registration Statement to become effective no later
than 180 days after the Closing Date;
(ii) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Exchange
Registration Statement and the prospectus included therein as may
be necessary to effect and maintain the effectiveness of such
Exchange Registration Statement for the periods and purposes
contemplated in Section 2(a) hereof and as may be required by the
applicable rules and regulations of the Commission and the
instructions applicable to the form of such Exchange Registration
Statement, and promptly provide each broker-dealer holding
Exchange Securities with such number of copies of the prospectus
included therein (as then amended or supplemented), in conformity
in all material respects with the requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of
the Commission thereunder, as such broker-dealer reasonably may
request prior to the expiration of the Resale Period, for use in
connection with resales of Exchange Securities;
(iii) promptly notify each broker-dealer that has requested
copies of the prospectus included in such registration statement,
and confirm such advice in writing, (A) when such Exchange
Registration Statement or the prospectus included therein or any
prospectus amendment or supplement or post-effective amendment has
been filed, and, with respect to such Exchange Registration
Statement or any post-effective amendment, when the same has
become effective, (B) of the issuance by the Commission of any
stop order suspending the effectiveness of such Exchange
Registration Statement or the initiation or threatening of any
proceedings for that purpose, (C) if at any time the
representations and warranties of the Company contemplated by
Section 5 cease to be true and correct in all material respects,
(D) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Exchange Securities
for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, or (E) at any time during the
Resale Period when a prospectus is required to be delivered under
the Securities Act, that such Exchange Registration Statement,
prospectus, prospectus amendment or supplement or post-effective
amendment does not conform in all material respects to the
applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder or contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light
of the circumstances then existing;
(iv) in the event that the Company would be required, pursuant
to Section 3(c)(iii)(E) above, to notify any broker-dealers
holding Exchange Securities, without delay prepare and furnish to
each such holder a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to
purchasers of such Exchange Securities during the Resale Period,
such prospectus shall
7
conform in all material respects to the applicable requirements of
the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and shall 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 not misleading in light of the circumstances
then existing;
(v) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of such Exchange Registration
Statement or any post-effective amendment thereto at the earliest
practicable date;
(vi) use its best efforts to (A) register or qualify the
Exchange Securities under the securities laws or blue sky laws of
such jurisdictions as are contemplated by Section 2(a) no later
than the commencement of the Exchange Offer, (B) keep such
registrations or qualifications in effect and comply with such
laws so as to permit the continuance of offers, sales and dealings
therein in such jurisdictions until the expiration of the Resale
Period and (C) take any and all other actions as may be reasonably
necessary or advisable to enable each broker-dealer holding
Exchange Securities to consummate the disposition thereof in such
jurisdictions; PROVIDED, HOWEVER, that none of the Company or the
Guarantors shall be required for any such purpose to (1) qualify
as a foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this
Section 3(c)(vi), (2) consent to general service of process in any
such jurisdiction or (3) make any changes to its certificate of
incorporation or by-laws or any agreement between it and its
stockholders;
(vii) use its best efforts to obtain the consent or approval
of each governmental agency or authority, whether federal, state
or local, which may be required to effect the Exchange
Registration, the Exchange Offer and the offering and sale of
Exchange Securities by broker-dealers during the Resale Period;
(viii) provide a CUSIP number for all Exchange Securities,
not later than the applicable Effective Time;
(ix) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as
soon as practicable but no later than eighteen months after the
effective date of such Exchange Registration Statement, an earning
statement of the Company and its subsidiaries complying with
Section 11(a) of the Securities Act (including, at the option of
the Company, Rule 158 thereunder).
(d) In connection with the Company's obligations with respect to the
Shelf Registration, if applicable, the Company shall, as soon as
practicable (or as otherwise specified):
(i) prepare and file with the Commission, as soon as
practicable but in any case within the time periods specified in
Section 2(b), a Shelf Registration Statement on any form which may
be utilized by the Company and which shall register all of the
Registrable Securities for resale by the holders thereof in
accordance with such method or methods of disposition as may be
specified by such of the holders as, from time to time, may be
Electing Holders and use its best efforts to cause such Shelf
Registration Statement to become effective as soon as practicable
but in any case within the time periods specified in Section 2(b);
8
(ii) not less than 30 calendar days prior to the Effective
Time of the Shelf Registration Statement, mail the Notice and
Questionnaire to the holders of Registrable Securities; no holder
shall be entitled to be named as a selling securityholder in the
Shelf Registration Statement as of the Effective Time, and no
holder shall be entitled to use the prospectus forming a part
thereof for resales of Registrable Securities at any time, unless
such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set
forth therein; PROVIDED, HOWEVER, holders of Registrable
Securities shall have at least 28 calendar days from the date on
which the Notice and Questionnaire is first mailed to such holders
to return a completed and signed Notice and Questionnaire to the
Company;
(iii) after the Effective Time of the Shelf Registration
Statement, upon the request of any holder of Registrable
Securities that is not then an Electing Holder, promptly send a
Notice and Questionnaire to such holder; PROVIDED that the Company
shall not be required to take any action to name such holder as a
selling securityholder in the Shelf Registration Statement or to
enable such holder to use the prospectus forming a part thereof
for resales of Registrable Securities until such holder has
returned a completed and signed Notice and Questionnaire to the
Company;
(iv) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Shelf
Registration Statement and the prospectus included therein as may
be necessary to effect and maintain the effectiveness of such
Shelf Registration Statement for the period specified in Section
2(b) hereof and as may be required by the applicable rules and
regulations of the Commission and the instructions applicable to
the form of such Shelf Registration Statement, and furnish to the
Electing Holders copies of any such supplement or amendment
simultaneously with or prior to its being used or filed with the
Commission;
(v) comply with the provisions of the Securities Act with
respect to the disposition of all of the Registrable Securities
covered by such Shelf Registration Statement in accordance with
the intended methods of disposition by the Electing Holders
provided for in such Shelf Registration Statement;
(vi) provide (A) the Electing Holders, (B) the underwriters
(which term, for purposes of this Exchange and Registration Rights
Agreement, shall include a person deemed to be an underwriter
within the meaning of Section 2(a)(11) of the Securities Act), if
any, thereof, (C) any sales or placement agent therefor, (D)
counsel for any such underwriter or agent and (E) not more than
one counsel for all the Electing Holders the opportunity to
participate in the preparation of such Shelf Registration
Statement, each prospectus included therein or filed with the
Commission and each amendment or supplement thereto;
(vii) for a reasonable period prior to the filing of such
Shelf Registration Statement, and throughout the period specified
in Section 2(b), make available at reasonable times at the
Company's principal place of business or such other reasonable
place for inspection by the persons referred to in Section
3(d)(vi) who shall certify to the Company that they have a current
intention to sell the Registrable Securities pursuant to the Shelf
Registration such financial and other information and books and
records of the Company, and cause the officers, employees, counsel
and independent certified public accountants of the Company to
respond to such
9
inquiries, as shall be reasonably necessary, in the judgment of
the respective counsel referred to in such Section, to conduct
a reasonable investigation within the meaning of Section 11 of
the Securities Act; PROVIDED, HOWEVER, that each such party
shall be required to maintain in confidence and not to disclose
to any other person any information or records reasonably
designated by the Company as being confidential, until such
time as (A) such information becomes a matter of public record
(whether by virtue of its inclusion in such registration
statement or otherwise), or (B) such person shall be required
so to disclose such information pursuant to a subpoena or order
of any court or other governmental agency or body having
jurisdiction over the matter (subject to the requirements of
such order, and only after such person shall have given the
Company prompt prior written notice of such requirement), or
(C) such information is required to be set forth in such Shelf
Registration Statement or the prospectus included therein or in
an amendment to such Shelf Registration Statement or an
amendment or supplement to such prospectus in order that such
Shelf Registration Statement, prospectus, amendment or
supplement, as the case may be, complies with applicable
requirements of the federal securities laws and the rules and
regulations of the Commission and does not contain an untrue
statement of a material fact or omit to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing; PROVIDED, that such party shall
prior to disclosure pursuant to the clause (c) above provide 5
business day written notice to the Company of the information
such party believes is required to be disclosed. If during such
5 business day period, the Company shall advise such party that
based upon advice of counsel, such information is not required
to be disclosed pursuant to clause (c) above, then such party
shall continue to maintain such information in confidence;
(viii) promptly notify each of the Electing Holders, any sales
or placement agent therefor and any underwriter thereof (which
notification may be made through any managing underwriter that is
a representative of such underwriter for such purpose) and confirm
such advice in writing, (A) when such Shelf Registration Statement
or the prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and, with
respect to such Shelf Registration Statement or any post-effective
amendment, when the same has become effective, (B) of the issuance
by the Commission of any stop order suspending the effectiveness
of such Shelf Registration Statement or the initiation or
threatening of any proceedings for that purpose, (C) if at any
time the representations and warranties of the Company
contemplated by Section 3(d)(xvii) or Section 5 cease to be true
and correct in all material respects, (D) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding
for such purpose, or (E) if at any time when a prospectus is
required to be delivered under the Securities Act, that such Shelf
Registration Statement, prospectus, prospectus amendment or
supplement or post-effective amendment does not conform in all
material respects to the applicable requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of
the Commission thereunder or contains an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
10
(ix) use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement
or any post-effective amendment thereto at the earliest
practicable date;
(x) if requested by any managing underwriter or underwriters,
any placement or sales agent or any Electing Holder, promptly
incorporate in a prospectus supplement or post-effective amendment
such information as is required by the applicable rules and
regulations of the Commission and as such managing underwriter or
underwriters, such agent or such Electing Holder specifies should
be included therein relating to the terms of the sale of such
Registrable Securities, including information with respect to the
principal amount of Registrable Securities being sold by such
Electing Holder or agent or to any underwriters, the name and
description of such Electing Holder, agent or underwriter, the
offering price of such Registrable Securities and any discount,
commission or other compensation payable in respect thereof, the
purchase price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable
Securities to be sold by such Electing Holder or agent or to such
underwriters; and make all required filings of such prospectus
supplement or post-effective amendment promptly after notification
of the matters to be incorporated in such prospectus supplement or
post-effective amendment;
(xi) furnish to each Electing Holder, each placement or sales
agent, if any, therefor, each underwriter, if any, thereof and the
respective counsel referred to in Section 3(d)(vi) an executed
copy (or, in the case of an Electing Holder, a conformed copy) of
such Shelf Registration Statement, each such amendment and
supplement thereto (in each case including all exhibits thereto
(in the case of an Electing Holder of Registrable Securities, upon
request) and documents incorporated by reference therein) and such
number of copies of such Shelf Registration Statement (excluding
exhibits thereto and documents incorporated by reference therein
unless specifically so requested by such Electing Holder, agent or
underwriter, as the case may be) and of the prospectus included in
such Shelf Registration Statement (including each preliminary
prospectus and any summary prospectus), in conformity in all
material respects with the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder, and such other
documents, as such Electing Holder, agent, if any, and
underwriter, if any, may reasonably request in order to facilitate
the offering and disposition of the Registrable Securities owned
by such Electing Holder, offered or sold by such agent or
underwritten by such underwriter and to permit such Electing
Holder, agent and underwriter to satisfy the prospectus delivery
requirements of the Securities Act; and the Company hereby
consents to the use of such prospectus (including such preliminary
and summary prospectus) and any amendment or supplement thereto by
each such Electing Holder and by any such agent and underwriter,
in each case in the form most recently provided to such person by
the Company, in connection with the offering and sale of the
Registrable Securities covered by the prospectus (including such
preliminary and summary prospectus) or any supplement or amendment
thereto;
(xii) use best efforts to (A) register or qualify the
Registrable Securities to be included in such Shelf Registration
Statement under such securities laws or blue sky laws of such
jurisdictions as any Electing Holder and each placement or sales
agent, if any, therefor and underwriter, if any, thereof shall
reasonably request, (B) keep such registrations or qualifications
in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such
jurisdictions
11
during the period the Shelf Registration is required to remain
effective under Section 2(b) above and for so long as may be
necessary to enable any such Electing Holder, agent or
underwriter to complete its distribution of Securities pursuant
to such Shelf Registration Statement and (C) take any and all
other actions as may be reasonably necessary or advisable to
enable each such Electing Holder, agent, if any, and
underwriter, if any, to consummate the disposition in such
jurisdictions of such Registrable Securities; PROVIDED,
HOWEVER, that none of the Company or the Guarantors shall be
required for any such purpose to (1) qualify as a foreign
corporation in any jurisdiction wherein it would not otherwise
be required to qualify but for the requirements of this
Section 3(d)(xii), (2) consent to general service of process in
any such jurisdiction or (3) make any changes to its certificate
of incorporation or by-laws or any agreement between it and its
stockholders;
(xiii) use its best efforts to obtain the consent or approval
of each governmental agency or authority, whether federal, state
or local, which may be required to effect the Shelf Registration
or the offering or sale in connection therewith or to enable the
selling holder or holders to offer, or to consummate the
disposition of, their Registrable Securities;
(xiv) unless any Registrable Securities shall be in book-entry
only form, cooperate with the Electing Holders and the managing
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be
sold, which certificates, if so required by any securities
exchange upon which any Registrable Securities are listed, shall
be penned, lithographed or engraved, or produced by any
combination of such methods, on steel engraved borders, and which
certificates shall not bear any restrictive legends; and, in the
case of an underwritten offering, enable such Registrable
Securities to be in such denominations and registered in such
names as the managing underwriters may request at least two
business days prior to any sale of the Registrable Securities;
(xv) provide a CUSIP number for all Registrable Securities,
not later than the applicable Effective Time;
(xvi) enter into one or more underwriting agreements,
engagement letters, agency agreements, "best efforts" underwriting
agreements or similar agreements, as appropriate, including
customary provisions relating to indemnification and contribution,
and take such other actions in connection therewith as any
Electing Holders aggregating at least 20% in aggregate principal
amount of the Registrable Securities at the time outstanding shall
request in order to expedite or facilitate the disposition of such
Registrable Securities;
(xvii) whether or not an agreement of the type referred to in
Section 3(d)(xvi) hereof is entered into and whether or not any
portion of the offering contemplated by the Shelf Registration is
an underwritten offering or is made through a placement or sales
agent or any other entity, (A) make such representations and
warranties to the Electing Holders and the placement or sales
agent, if any, therefor and the underwriters, if any, thereof in
form, substance and scope as are customarily made in connection
with an offering of debt securities pursuant to any appropriate
agreement or to a registration statement filed on the form
applicable to the Shelf Registration; (B) obtain an opinion of
counsel to the Company in customary form and covering such
matters, of the type customarily covered by such an opinion, as
the managing underwriters, if any, or as any Electing Holders of
at least 20% in aggregate principal amount of the Registrable
Securities at the time outstanding may reasonably
12
request, addressed to such Electing Holder or Electing Holders
and the placement or sales agent, if any, therefor and the
underwriters, if any, thereof and dated the effective date of
such Shelf Registration Statement (and if such Shelf
Registration Statement contemplates an underwritten offering of
a part or all of the Registrable Securities, dated the date of
the closing under the underwriting agreement relating thereto);
(C) obtain a "cold comfort" letter or letters from the
independent certified public accountants of the Company
addressed to the selling Electing Holders, the placement or
sales agent, if any, therefor or the underwriters, if any,
thereof, dated (i) the effective date of such Shelf
Registration Statement and (ii) the effective date of any
prospectus supplement to the prospectus included in such Shelf
Registration Statement or post-effective amendment to such
Shelf Registration Statement which includes unaudited or
audited financial statements as of a date or for a period
subsequent to that of the latest such statements included in
such prospectus (and, if such Shelf Registration Statement
contemplates an underwritten offering pursuant to any
prospectus supplement to the prospectus included in such Shelf
Registration Statement or post-effective amendment to such
Shelf Registration Statement which includes unaudited or
audited financial statements as of a date or for a period
subsequent to that of the latest such statements included in
such prospectus, dated the date of the closing under the
underwriting agreement relating thereto), such letter or
letters to be in customary form and covering such matters of
the type customarily covered by letters of such type; (D)
deliver such documents and certificates, including officers'
certificates, as may be reasonably requested by any Electing
Holders of at least 20% in aggregate principal amount of the
Registrable Securities at the time outstanding or the placement
or sales agent, if any, therefor and the managing underwriters,
if any, thereof to evidence the accuracy of the representations
and warranties made pursuant to clause (A) above or those
contained in Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained in the
underwriting agreement or other agreement entered into by the
Company or the Guarantors; and (E) undertake such obligations
relating to expense reimbursement, indemnification and
contribution as are provided in Section 6 hereof;
(xviii) notify in writing each holder of Registrable
Securities of any proposal by the Company to amend or waive any
provision of this Exchange and Registration Rights Agreement
pursuant to Section 9(h) hereof and of any amendment or waiver
effected pursuant thereto, each of which notices shall contain the
text of the amendment or waiver proposed or effected, as the case
may be;
(xix) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or
participate as a member of an underwriting syndicate or selling
group or "assist in the distribution" (within the meaning of the
Conduct Rules (the "Conduct Rules) of the National Association of
Securities Dealers, Inc. ("NASD") or any successor thereto, as
amended from time to time) thereof, whether as a holder of such
Registrable Securities or as an underwriter, a placement or sales
agent or a broker or dealer in respect thereof, or otherwise,
assist such broker-dealer in complying with the requirements of
such Conduct Rules, including by (A) if such Conduct Rules shall
so require, engaging a "qualified independent underwriter" (as
defined in such Conduct Rules) to participate in the preparation
of the Shelf Registration Statement relating to such Registrable
Securities, to exercise usual standards of due diligence in
respect thereto and, if any portion of the offering contemplated
by such Shelf Registration Statement is an underwritten offering
or is made through a placement or sales agent, to recommend
13
the yield of such Registrable Securities, (B) indemnifying any
such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 6 hereof
(or to such other customary extent as may be requested by such
underwriter), and (C) providing such information to such
broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Conduct
Rules; and
(xx) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as
soon as practicable but in any event not later than eighteen
months after the effective date of such Shelf Registration
Statement, an earning statement of the Company and its
subsidiaries complying with Section 11(a) of the Securities Act
(including, at the option of the Company, Rule 158 thereunder).
(e) In the event that the Company would be required, pursuant to
Section 3(d)(viii)(E) above, to notify the Electing Holders, the placement
or sales agent, if any, therefor and the managing underwriters, if any,
thereof, the Company shall without delay prepare and furnish to each of the
Electing Holders, to each placement or sales agent, if any, and to each
such underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall conform in all material
respects to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission thereunder
and shall 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 not misleading in light of the circumstances then
existing. Each Electing Holder agrees that upon receipt of any notice from
the Company pursuant to Section 3(d)(viii)(E) hereof, such Electing Holder
shall forthwith discontinue the disposition of Registrable Securities
pursuant to the Shelf Registration Statement applicable to such Registrable
Securities until such Electing Holder shall have received copies of such
amended or supplemented prospectus, and if so directed by the Company, such
Electing Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Electing Holder's
possession of the prospectus covering such Registrable Securities at the
time of receipt of such notice.
(f) In the event of a Shelf Registration, in addition to the
information required to be provided by each Electing Holder in its Notice
Questionnaire, the Company may require such Electing Holder to furnish to
the Company such additional information regarding such Electing Holder and
such Electing Holder's intended method of distribution of Registrable
Securities as may be required in order to comply with the Securities Act.
Each such Electing Holder agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished
by such Electing Holder to the Company or of the occurrence of any event in
either case as a result of which any prospectus relating to such Shelf
Registration contains or would contain an untrue statement of a material
fact regarding such Electing Holder or such Electing Holder's intended
method of disposition of such Registrable Securities or omits to state any
material fact regarding such Electing Holder or such Electing Holder's
intended method of disposition of such Registrable Securities required to
be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and promptly to
furnish to the Company any additional information required to correct and
update any previously furnished information or required so that such
prospectus shall not contain, with respect to such Electing Holder or the
disposition of such Registrable Securities, 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 not misleading in light
of the circumstances then existing. No Electing Holder may
14
include any of its Securities in any Shelf Registration pursuant to this
Agreement unless and until such Electing Holder furnishes to the Company
a complete and accurate Notice Questionnaire and provides any additional
information the Company may require pursuant to this clause (f).
(g) Until the expiration of two years after the Closing Date, the
Company will not, and will not permit any of its "affiliates" (as defined
in Rule 144) to, resell any of the Securities that have been reacquired by
any of them except pursuant to an effective registration statement under
the Securities Act; PROVIDED, that nothing shall prohibit an affiliate of
the Company from reselling any Exchange Securities it acquires.
4. REGISTRATION EXPENSES.
The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Exchange and Registration Rights Agreement, including (a) all Commission and any
NASD registration, filing and review fees and expenses including fees and
disbursements of counsel for the placement or sales agent or underwriters in
connection with such registration, filing and review, (b) all fees and expenses
in connection with the qualification of the Securities for offering and sale
under the State securities and blue sky laws referred to in Section 3(d)(xii)
hereof and determination of their eligibility for investment under the laws of
such jurisdictions as any managing underwriters or the Electing Holders may
designate, including any fees and disbursements of counsel for the Electing
Holders or underwriters in connection with such qualification and determination;
PROVIDED that such fees of counsel under clauses (a) and (b) hereof shall not,
in the aggregate, exceed $75,000, (c) all expenses relating to the preparation,
printing, production, distribution and reproduction of each registration
statement required to be filed hereunder, each prospectus included therein or
prepared for distribution pursuant hereto, each amendment or supplement to the
foregoing, the expenses of preparing the Securities for delivery and the
expenses of printing or producing any underwriting agreements, agreements among
underwriters, selling agreements and blue sky or legal investment memoranda and
all other documents in connection with the offering, sale or delivery of
Securities to be disposed of (including certificates representing the
Securities), (d) messenger, telephone and delivery expenses relating to the
offering, sale or delivery of Securities and the preparation of documents
referred in clause (c) above, (e) fees and expenses of the Trustee under the
Indenture, any agent of the Trustee and any counsel for the Trustee and of any
collateral agent or custodian, (f) internal expenses (including all salaries and
expenses of the Company's officers and employees performing legal or accounting
duties), (g) fees, disbursements and expenses of counsel and independent
certified public accountants of the Company (including the expenses of any
opinions or "cold comfort" letters required by or incident to such performance
and compliance), (h) fees, disbursements and expenses of any "qualified
independent underwriter" engaged pursuant to Section 3(d)(xix) hereof, (i) fees,
disbursements and expenses of one counsel for the Electing Holders retained in
connection with a Shelf Registration, as selected by the Electing Holders of at
least a majority in aggregate principal amount of the Registrable Securities
held by Electing Holders (which counsel shall be reasonably satisfactory to the
Company), (j) any fees charged by securities rating services for rating the
Securities, and (k) fees, expenses and disbursements of any other persons,
including special experts, retained by the Company in connection with such
registration (collectively, the "Registration Expenses"). To the extent that any
Registration Expenses are incurred, assumed or paid by any holder of Registrable
Securities or any placement or sales agent therefor or underwriter thereof, the
Company shall reimburse such person for the full amount of the Registration
Expenses so incurred, assumed or paid promptly after receipt of a request
therefor. Notwithstanding the foregoing, the holders of the Registrable
Securities being registered shall pay all agency fees and commissions and
underwriting discounts and commissions attributable to the sale of such
Registrable Securities
15
and the fees and disbursements of any counsel or other advisors or experts
retained by such holders (severally or jointly), other than the counsel and
experts specifically referred to above.
5. REPRESENTATIONS AND WARRANTIES.
Each of the Company and the Guarantors represents and warrants to, and
agrees with, each Purchaser and each of the holders from time to time of
Registrable Securities that:
(a) Each registration statement covering Registrable Securities and
each prospectus (including any preliminary or summary prospectus) contained
therein or furnished pursuant to Section 3(d) or Section 3(c) hereof and
any further amendments or supplements to any such registration statement or
prospectus, when it becomes effective or is filed with the Commission, as
the case may be, and, in the case of an underwritten offering of
Registrable Securities, at the time of the closing under the underwriting
agreement relating thereto, will conform in all material respects to the
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder and 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
not misleading; and at all times subsequent to the Effective Time when a
prospectus would be required to be delivered under the Securities Act,
other than from (i) such time as a notice has been given to holders of
Registrable Securities pursuant to Section 3(d)(viii)(E) or Section
3(c)(iii)(E) hereof until (ii) such time as the Company furnishes an
amended or supplemented prospectus pursuant to Section 3(e) or Section
3(c)(iv) hereof, each such registration statement, and each prospectus
(including any summary prospectus) contained therein or furnished pursuant
to Section 3(d) or Section 3(c) hereof, as then amended or supplemented,
will conform in all material respects to the requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and 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 not misleading in the
light of the circumstances then existing; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by a holder of Registrable Securities expressly for
use therein.
(b) Any documents incorporated by reference in any prospectus referred
to in Section 5(a) hereof, when they become or became effective or are or
were filed with the Commission, as the case may be, will conform or
conformed in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and none of such documents will
contain or contained an untrue statement of a material fact or will omit or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by a holder of Registrable Securities expressly for
use therein.
(c) The compliance by the Company with all of the provisions of this
Exchange and Registration Rights Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any subsidiary of the Company is a
party or by which the Company or any subsidiary of the Company is bound or
to which any of the property or assets of the Company or any subsidiary of
the Company is subject, except for any such conflict, breach or default
which would not have a material adverse effect on the Company and its
subsidiaries taken as a whole, nor will such action result in
16
any violation of the provisions of the certificate of incorporation, as
amended, or the by-laws of the Company or the Guarantors or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any subsidiary of the
Company or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the consummation by
the Company and the Guarantors of the transactions contemplated by this
Exchange and Registration Rights Agreement, except the registration
under the Securities Act of the Securities, qualification of the
Indenture under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
State securities or blue sky laws in connection with the offering and
distribution of the Securities.
(d) This Exchange and Registration Rights Agreement has been duly
authorized, executed and delivered by the Company.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY AND THE GUARANTORS. The Company and
the Guarantors, jointly and severally, will indemnify and hold harmless
each of the holders of Registrable Securities included in an Exchange
Registration Statement, each of the Electing Holders of Registrable
Securities included in a Shelf Registration Statement and each person who
participates as a placement or sales agent or as an underwriter in any
offering or sale of such Registrable Securities against any losses, claims,
damages or liabilities, joint or several, to which such holder, agent or
underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Exchange
Registration Statement or Shelf Registration Statement, as the case may be,
under which such Registrable Securities were registered under the
Securities Act, or any preliminary, final or summary prospectus contained
therein or furnished by the Company to any such holder, Electing Holder,
agent or underwriter, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such holder, such
Electing Holder, such agent and such underwriter for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; PROVIDED,
HOWEVER, that none of the Company or the Guarantors shall be liable to any
such person in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, or preliminary, final or summary prospectus, or
amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by such person expressly for
use therein.
(b) INDEMNIFICATION BY THE HOLDERS AND ANY AGENTS AND UNDERWRITERS. The
Company will require, as a condition to including any Registrable
Securities in any registration statement filed pursuant to Section 2(b)
hereof and to entering into any underwriting agreement with respect
thereto, that the Company shall have received an undertaking reasonably
satisfactory to it from the Electing Holder of such Registrable Securities
and from each underwriter named in any such underwriting agreement,
severally and not jointly, to (i) indemnify and hold harmless the Company,
the Guarantors, and all other holders of Registrable Securities, against
any losses, claims, damages or liabilities to which the Company, the
Guarantors or such other holders of Registrable Securities may become
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or
17
liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such registration statement, or any preliminary, final or
summary prospectus contained therein or furnished by the Company to any
such Electing Holder, agent or underwriter, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Company by such Electing Holder or underwriter
expressly for use therein, and (ii) reimburse the Company and the
Guarantors for any legal or other expenses reasonably incurred by the
Company and the Guarantors in connection with investigating or defending
any such action or claim as such expenses are incurred; PROVIDED,
HOWEVER, that no such Electing Holder shall be required to undertake
liability to any person under this Section 6(b) for any amounts in
excess of the dollar amount of the proceeds to be received by such
Electing Holder from the sale of such Electing Holder's Registrable
Securities pursuant to such registration. The Company may, as a
condition to include any Registrable Securities in any such registration
statement or enter into any underwriting agreement with respect thereto,
require each such Electing Holder and underwriter to enter into an
undertaking reasonably satisfactory to the Company to the effect set
forth in this clause (b).
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the
commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against an indemnifying party pursuant to the
indemnification provisions of or contemplated by this Section 6, notify
such indemnifying party in writing of the commencement of such action; but
the omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under the indemnification provisions of or contemplated by Section 6(a) or
6(b) hereof. In case any such action shall be brought against any
indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party for any
legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnified party shall, without the written consent of the indemnifying
party, which consent shall not be unreasonably withheld, effect the
settlement or compromise of, or consent to the entity of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder. No indemnifying
party shall, without the written consent of the indemnified party, effect
the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of
which indemnification or contribution may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
18
(d) CONTRIBUTION. If for any reason the indemnification provisions
contemplated by Section 6(a) or Section 6(b) are unavailable to or
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the
statements or omissions which 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 such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or by such indemnified
party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were determined by pro rata
allocation (even if the holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in this Section 6(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, or
liabilities (or actions in respect thereof) referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 6(d),
no holder shall be required to contribute any amount in excess of the
amount by which the dollar amount of the proceeds received by such holder
from the sale of any Registrable Securities (after deducting any fees,
discounts and commissions applicable thereto) exceeds the amount of any
damages which such holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission,
and no underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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. The holders' and any underwriters'
obligations in this Section 6(d) to contribute shall be several in
proportion to the principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.
(e) The obligations of the Company and the Guarantors under this
Section 6 shall be in addition to any liability which the Company or the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director and partner of each holder, agent and
underwriter and each person, if any, who controls any holder, agent or
underwriter within the meaning of the Securities Act; and the obligations
of the holders and any agents or underwriters contemplated by this Section
6 shall be in addition to any liability which the respective holder, agent
or underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company or the Guarantors
(including any person who, with his consent, is named in any registration
statement as about to become a director of the Company or the Guarantors)
and to each person, if any, who controls the Company within the meaning of
the Securities Act.
7. UNDERWRITTEN OFFERINGS.
19
(a) SELECTION OF UNDERWRITERS. If any of the Registrable Securities
covered by the Shelf Registration are to be sold pursuant to an
underwritten offering, the managing underwriter or underwriters thereof
shall be designated by Electing Holders holding at least a majority in
aggregate principal amount of the Registrable Securities to be included in
such offering, provided that such designated managing underwriter or
underwriters is or are reasonably acceptable to the Company.
(b) PARTICIPATION BY HOLDERS. Each holder of Registrable Securities
hereby agrees with each other such holder that no such holder may
participate in any underwritten offering hereunder unless such holder (i)
agrees to sell such holder's Registrable Securities on the basis provided
in any underwriting arrangements approved by the persons entitled hereunder
to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such
underwriting arrangements.
8. RULE 144.
The Company covenants to the holders of Registrable Securities that to
the extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.
9. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company represents, warrants,
covenants and agrees that it has not granted, and shall not grant,
registration rights with respect to Registrable Securities or any other
securities which would be inconsistent with the terms contained in this
Exchange and Registration Rights Agreement.
(b) SPECIFIC PERFORMANCE. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of
its obligations hereunder and that the Purchasers and the holders from time
to time of the Registrable Securities may be irreparably harmed by any such
failure, and accordingly agree that the Purchasers and such holders, in
addition to any other remedy to which they may be entitled at law or in
equity, shall be entitled to compel specific performance of the obligations
of the Company under this Exchange and Registration Rights Agreement in
accordance with the terms and conditions of this Exchange and Registration
Rights Agreement, in any court of the United States or any State thereof
having jurisdiction.
(c) NOTICES. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, if delivered personally or by
courier, or three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested) as follows: If
to the Company, to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, and if to a
20
holder, to the address of such holder set forth in the security register
or other records of the Company, or to such other address as the Company
or any such holder may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.
(d) PARTIES IN INTEREST. All the terms and provisions of this Exchange
and Registration Rights Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the parties hereto and the holders
from time to time of the Registrable Securities and the respective
successors and assigns of the parties hereto and such holders. In the event
that any transferee of any holder of Registrable Securities shall acquire
Registrable Securities, in any manner, whether by gift, bequest, purchase,
operation of law or otherwise, such transferee shall, without any further
writing or action of any kind, be deemed a beneficiary hereof for all
purposes and such Registrable Securities shall be held subject to all of
the terms of this Exchange and Registration Rights Agreement, and by taking
and holding such Registrable Securities such transferee shall be entitled
to receive the benefits of, and be conclusively deemed to have agreed to be
bound by all of the applicable terms and provisions of this Exchange and
Registration Rights Agreement. If the Company shall so request, any such
successor, assign or transferee shall agree in writing to acquire and hold
the Registrable Securities subject to all of the applicable terms hereof.
(e) SURVIVAL. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Exchange and
Registration Rights Agreement or made pursuant hereto shall remain in full
force and effect regardless of any investigation (or statement as to the
results thereof) made by or on behalf of any holder of Registrable
Securities, any director, officer or partner of such holder, any agent or
underwriter or any director, officer or partner thereof, or any controlling
person of any of the foregoing, and shall survive delivery of and payment
for the Registrable Securities pursuant to the Purchase Agreement and the
transfer and registration of Registrable Securities by such holder and the
consummation of an Exchange Offer.
(f) GOVERNING LAW. This Exchange and Registration Rights Agreement
shall be governed by and construed in accordance with the laws of the State
of New York
(g) HEADINGS. The descriptive headings of the several Sections and
paragraphs of this Exchange and Registration Rights Agreement are inserted
for convenience only, do not constitute a part of this Exchange and
Registration Rights Agreement and shall not affect in any way the meaning
or interpretation of this Exchange and Registration Rights Agreement.
(h) ENTIRE AGREEMENT; AMENDMENTS. This Exchange and Registration Rights
Agreement and the other writings referred to herein (including the
Indenture and the form of Securities) or delivered pursuant hereto which
form a part hereof contain the entire understanding of the parties with
respect to its subject matter. This Exchange and Registration Rights
Agreement supersedes all prior agreements and understandings between the
parties with respect to its subject matter. This Exchange and Registration
Rights Agreement may be amended and the observance of any term of this
Exchange and Registration Rights Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only
by a written instrument duly executed by the Company and the holders of at
least a majority in aggregate principal amount of the Registrable
Securities at the time outstanding. Each holder of any Registrable
Securities at the time or thereafter outstanding shall be bound by any
amendment or waiver effected pursuant to this Section 9(h), whether or not
any notice, writing or marking indicating such amendment or waiver appears
on such Registrable Securities or is delivered to such holder.
21
(i) INSPECTION. For so long as this Exchange and Registration Rights
Agreement shall be in effect, this Exchange and Registration Rights
Agreement and a complete list of the names and addresses of all the holders
of Registrable Securities shall be made available for inspection and
copying on any business day by any holder of Registrable Securities for
proper purposes only (which shall include any purpose related to the rights
of the holders of Registrable Securities under the Securities, the
Indenture and this Agreement) at the offices of the Company at the address
thereof set forth in Section 9(c) above and at the office of the Trustee
under the Indenture.
(j) COUNTERPARTS. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same
instrument.
22
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers, the
Guarantors and the Company. It is understood that your acceptance of this letter
on behalf of each of the Purchasers is pursuant to the authority set forth in a
form of Agreement among Purchasers, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Company
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: EXECUTIVE VICE PRESIDENT
Carter's de San ▇▇▇▇▇, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: VICE PRESIDENT
Carter's Imagination, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: VICE PRESIDENT
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
Fleet Securities, Inc.
BNP Paribas Securities Corp.
By: ▇▇▇▇▇▇▇ Sachs & Co.
By: /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
------------------------------
(▇▇▇▇▇▇▇, Sachs & Co)