-------------------------------------------------------
SHARE REGISTRATION RIGHTS AGREEMENT
Dated as of March 12, 1997
by and between
FAIRFIELD MANUFACTURING COMPANY, INC.
as Issuer
and
CIBC WOOD GUNDY SECURITIES INC.
as Initial Purchaser
-------------------------------------------------------
TABLE OF CONTENTS
Page
----
1. Definitions..............................................1
2. Exchange Offer...........................................5
3. Shelf Registration.......................................9
4. Additional Dividends....................................11
5. Registration Procedures.................................12
6. Registration Expenses...................................23
7. Indemnification.........................................24
8. Rules 144 and 144A......................................29
9. Underwritten Registrations..............................29
10. Registration of Transfers and Exchanges.................29
11. Miscellaneous...........................................36
(a) Remedies.......................................36
(a) Enforcement....................................36
(a) No Inconsistent Agreements.....................36
(b) Adjustments Affecting Registrable
Preferred Stock..............................36
(c) Amendments and Waivers.........................36
(d) Notices........................................37
(e) Successors and Assigns.........................38
(f) Counterparts...................................38
(g) Headings.......................................38
(h) Governing Law..................................38
(i) Severability...................................39
(j) Securities Held by the Company
or Its Affiliates............................39
(k) Third Party Beneficiaries......................39
(l) Entire Agreement...............................39
-i-
SHARE REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as
of March 12, 1997, by and between FAIRFIELD MANUFACTURING COMPANY, INC., a
Delaware corporation (the "Company"), and CIBC WOOD GUNDY SECURITIES CORP. (the
"Initial Purchaser").
This Agreement is entered into in connection with the
Securities Purchase Agreement, dated as of March 7, 1997, by and between the
Company and the Initial Purchaser (the "Purchase Agreement"), relating to the
sale by the Company to the Initial Purchaser of the Company's 11-1/4% Cumulative
Exchangeable Preferred Stock, par value $.01 per share (the "New Preferred
Stock"). The New Preferred Stock is exchangeable, at the option of the Company,
in whole but not in part, for the Company's 11- 1/4% Subordinated Exchange
Debentures due 2009 (the "Debentures") on any dividend payment date occurring
after the earlier of (i) July 2, 2001 and (ii) the date on which the Company's
11-3/8% Senior Subordinated Notes due 2001 are redeemed, subject to certain
conditions.
In order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement for the benefit of the Initial Purchaser and its
direct and indirect transferees and assigns. The execution and delivery of this
Agreement is a condition to the Initial Purchaser's obligation to purchase the
New Preferred Stock under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Dividends: See Section 4(a) hereof.
Advice: See Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 2 hereof.
Certificate of Designation: The Certificate of Designation
governing the New Preferred Stock as filed with
-2-
the Secretary of State of the State of Delaware, as amended from time to time.
Certificate Shares: See Section 10 hereof.
Closing: The Closing as defined in the Purchase Agreement.
Closing Date: The Closing Date as defined in the
Purchase Agreement.
Company: See the introductory paragraphs hereto.
Debentures: See the introductory paragraphs hereto.
Depositary: The Depository Trust Company until a
successor is appointed by the Company and the Transfer Agent.
Effectiveness Date: The 150th day after the Issue Date.
Effectiveness Period: See Section 3 hereof.
Event Date: See Section 4 hereof.
Exchange Act: The Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the
SEC promulgated thereunder.
Exchange Preferred Stock: See Section 2 hereof.
Exchange Offer: See Section 2 hereof.
Exchange Registration Statement: See Section 2 hereof.
Filing Date: Within 30 days after the Issue Date.
Global Certificates: See Section 10 hereof.
Holder: Any holder of shares of Registrable Preferred Stock.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
-3-
Initial Purchaser: See the introductory paragraphs
hereto.
Initial Shelf Registration: See Section 3(a) hereof.
Inspectors: See Section 5(n) hereof.
Issue Date: The date on which the original New Preferred
Stock was issued and sold to the Initial Purchaser pursuant to the
Purchase Agreement.
NASD: See Section 5(r) hereof.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2 hereof.
Person: An individual, partnership, corporation, limited
liability company, unincorporated association, trust or joint venture, or a
governmental agency or political subdivision thereof.
Private Exchange: See Section 2 hereof.
Private Exchange Certificate: The certificate of
designation governing the terms of the Private Exchange Preferred Stock.
Private Exchange Preferred Stock: See Section 2 hereof.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereto.
Records: See Section 5(n) hereof.
-4-
Registrable Preferred Stock: Each share of New Preferred Stock
upon original issuance thereof and at all times subsequent thereto, each share
of Exchange Preferred Stock as to which Section 2(c)(1)(i) hereof is applicable
upon original issuance and at all times subsequent thereto and each share of
Private Exchange Preferred Stock upon original issuance thereof and at all
times subsequent thereto, until in the case of any such shares of New Preferred
Stock, Exchange Preferred Stock or Private Exchange Preferred Stock, as the
case may be, the earliest to occur of (i) a Registration Statement (other than,
with respect to any Exchange Preferred Stock as to which Section 2(c)(1)(i)
hereof is applicable, the Exchange Registration Statement) covering such
shares of New Preferred Stock, Exchange Preferred Stock or such Private
Exchange Preferred Stock, as the case may be, have been declared effective
by the SEC and such shares of New Preferred Stock, Exchange Preferred
Stock or Private Exchange Preferred Stock, as the case may be, have been
disposed of in accordance with such effective Registration Statement, (ii) such
shares of New Preferred Stock, Exchange Preferred Stock or Private Exchange
Preferred Stock, as the case may be, are sold in compliance with Rule 144 or
could be sold in compliance with paragraph (k) of such Rule 144, (iii) such
shares of New Preferred Stock have been exchanged for shares of Exchange
Preferred Stock pursuant to an Exchange Offer and such shares of Exchange
Preferred Stock are tradeable by the holders thereof which are not affiliates of
the Company (within the meaning of the Act) without restriction under the Act
and without material restriction under applicable state securities laws, or (iv)
such shares of New Preferred Stock, Exchange Preferred Stock or Private Exchange
Preferred Stock, as the case may be, cease to be outstanding. For purposes of
this Agreement and the registration requirements contained herein, Registrable
Preferred Stock shall be deemed to include, and all Registration Statements
required to be filed in accordance with the terms of this Agreement shall cover,
the Exchange Debentures (as defined in the Purchase Agreement) into which the
New Preferred Stock, Exchange Preferred Stock or Private Exchange Preferred
Stock that is Registrable Preferred Stock is exchangeable.
Registration Default: See Section 4(a) hereof.
Registration Statement: Any registration statement of the
Company, including, but not limited to, the Exchange Registration Statement,
filed with the SEC pursuant to the provisions of this Agreement, including the
-5-
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 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith 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 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
Shelf Notice: See Section 2(c) hereof.
Shelf Registration: See Section 3(b) hereof.
Subsequent Shelf Registration: See Section 3(b) hereof.
Transfer Agent. The Transfer Agent for the New
Preferred Stock, the Exchange Preferred Stock and/or the Private
Exchange Preferred Stock, as the context may require.
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
-6-
(a) The Company agrees to use its best efforts to file with
the SEC as soon as practicable after the Closing, but in no event later than the
Filing Date, an offer to exchange (the "Exchange Offer") any and all shares of
the New Preferred Stock for a like number of shares (with a liquidation
preference equal to that of the surrendered shares) of another series of senior
exchangeable preferred stock of the Company that will have terms identical in
all material respects to the New Preferred Stock (the "Exchange Preferred
Stock"), except that (i) the Exchange Preferred Stock shall have been registered
pursuant to an effective Registration Statement under the Securities Act and the
certificates therefor shall contain no restrictive legend thereon and (ii) the
certificate of designation governing such Exchange Preferred Stock does
not need to contain the provisions set forth in the Certificate of Designation
concerning Additional Dividends including, without limitation,
paragraph (c)(viii) thereof. 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 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 business days (or longer if required by
applicable law) after the date that notice of the Exchange Offer is mailed
to Holders; and (z) consummate the Exchange Offer on or prior to the 180th
day following the Issue Date. If after such Exchange Registration Statement
is initially declared effective by the SEC, the Exchange Offer or the issuance
of the Exchange Preferred Stock thereunder is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Exchange Registration Statement shall
be deemed not to have become effective for purposes of this Agreement.
Each Holder who participates in the Exchange Offer will be required to represent
that any Exchange Preferred Stock received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
Person to participate in the distribution of the Exchange Preferred Stock in
violation of the provisions of the Securities Act, and that such Holder is not
an affiliate of the Company within the meaning of the Securities Act. 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
-7-
Registrable Preferred Stock that is Private Exchange Preferred Stock and
Exchange Preferred Stock held by Participating Broker-Dealers, and the
Company shall have no further obligation to register Registrable Preferred Stock
(other than Private Exchange Preferred Stock and other than in respect of any
Exchange Preferred Stock as to which clause 2(c)(1)(i) hereof applies) pursuant
to Section 3 hereof. No securities other than the Exchange Preferred Stock shall
be included in the Exchange Registration Statement.
(b) The Company shall include within the Prospectus contained
in the Exchange Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchaser, that shall
contain a summary statement of the positions taken or policies made by the
Staff of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of Exchange Preferred Stock received by such
broker-dealer (a "Participating Broker-Dealer") in the Exchange Offer (other
than with respect to any shares of New Preferred Stock acquired by them and
having, or that is reasonably likely to be determined to have, the status of an
unsold allotment in the initial distribution), whether such positions or
policies have been publicly disseminated by the Staff of the SEC or such
positions or policies, in the judgment of the Initial Purchaser, represent the
prevailing views of the Staff of the SEC. Such "Plan of Distribution" section
shall also expressly permit the use of the Prospectus by all Persons subject to
the prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange Preferred Stock.
The Company shall use its best efforts to keep the Exchange
Registration Statement effective and to amend and supplement the Prospectus
contained therein, in order to permit such Prospectus to be lawfully delivered
by all Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as is necessary to comply with applicable law in
connection with any resale of the Exchange Preferred Stock; provided, however,
that such period shall not exceed 180 days after the Exchange Registration
Statement is declared effective (or such longer period if extended pursuant to
the last paragraph of Section 5 hereof) (the "Applicable Period").
-8-
If, prior to consummation of the Exchange Offer, the Initial
Purchaser holds any shares of New Preferred Stock acquired by them and having,
or that is reasonably likely to be determined to have, the status of an unsold
allotment in the initial distribution, and the Initial Purchaser reasonably
determines that it is not eligible to participate in the Exchange Offer, the
Company shall, upon the request of the Initial Purchaser simultaneously with the
delivery of the Exchange Preferred Stock in the Exchange Offer, issue and
deliver to the Initial Purchaser in exchange (the "Private Exchange") for such
shares of New Preferred Stock held by the Initial Purchaser exchangeable
preferred stock having a liquidation preference equal to that of the surrendered
shares of the New Preferred Stock and having terms identical in all material
respects to the New Preferred Stock (the "Private Exchange Preferred Stock").
The Private Exchange Preferred Stock shall bear the same CUSIP number as the
Exchange Preferred Stock.
Dividends on the Exchange Preferred Stock and the Private
Exchange Preferred Stock will accumulate from the last dividend payment date on
which dividends were paid on the New Preferred Stock surrendered in exchange
therefor or, if no dividends have been paid (or deemed to have been paid in
accordance with the terms of the Certificate of Designation) on the New
Preferred Stock, from the Issue Date.
In connection with the Exchange Offer, the Company shall:
(1) mail to each Holder a copy of the Prospectus forming part
of the Exchange Registration Statement, together with an appropriate
letter of transmittal and related documents;
(2) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of
New York;
(3) permit Holders to withdraw tendered shares of New
Preferred Stock at any time prior to the close of business, New York
time, on the last business day on which the Exchange Offer shall remain
open; and
(4) otherwise comply in all material respects with all
applicable laws, rules and regulations.
-9-
As soon as practicable after the close of the Exchange Offer
or the Private Exchange, as the case may be, the Company shall:
(1) accept for exchange all shares of New Preferred Stock
tendered and not validly withdrawn pursuant to the Exchange Offer
or the Private Exchange;
(2) deliver to the Transfer Agent for cancellation and
retirement certificates representing all shares of New Preferred
Stock so accepted for exchange; and
(3) cause the Transfer Agent to countersign and deliver
promptly to each Holder of shares of New Preferred Stock, certificates
for the shares of Exchange Preferred Stock or Private Exchange
Preferred Stock, as the case may be, equal in liquidation preference to
the shares of New Preferred Stock of such Holder so accepted for
exchange.
The certificate of designation for the Exchange Preferred
Stock and the Private Exchange Certificate, if any, shall each provide that the
shares of Exchange Preferred Stock and Private Exchange Preferred Stock shall
vote as a class with each other and, under certain circumstances, with each
holder of any New Preferred Stock on all matters submitted to them to vote,
including, but not limited to, changes in the respective certificates of
incorporation and election of directors.
(c) If (1) prior to the consummation of the Exchange Offer,
the Company or Holders of at least a majority in aggregate liquidation
preference of the Registrable Preferred Stock reasonably determine in good faith
(after conferring with counsel) that (i) the Exchange Preferred Stock would not,
upon receipt, be tradeable by such Holders which are not affiliates (within the
meaning of the Securities Act) of the Company without restriction under the
Securities Act and without material restrictions under applicable state
securities laws, (ii) the interests of the Holders under this Agreement would be
materially adversely affected by the consummation of the Exchange Offer or (iii)
the SEC is unlikely to permit the consummation of the Exchange Offer prior to
the Effectiveness Date, (2) subsequent to the consummation of the Private
Exchange, any holder of the Private Exchange Preferred Stock so requests or (3)
the Exchange Offer is commenced and not consummated within 180 days of the date
of this Agreement, then the
-10-
Company shall promptly deliver to the Holders and the Transfer Agent written
notice thereof (the "Shelf Notice") and shall file an Initial Shelf
Registration pursuant to Section 3 (provided that, in the event an Exchange
Offer is consummated within 30 days following the delivery of a Shelf
Notice, the Company shall be relieved of its obligation to file an Initial Shelf
Registration pursuant to clause (3)). Following the delivery of a Shelf Notice
to the Holders of Registrable Notes (in the circumstances contemplated by
clauses (1) and (3) of the preceding sentence), the Company shall not have any
further obligation to conduct the Exchange Offer or the Private Exchange under
this Section 2.
(d) If the issuance of the Debentures 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 or a Shelf Registration Statement, then, prior to any issuance of
Debentures, the Company shall file with the Commission and cause to become
effective a Registration Statement registering the issuance of such Debentures.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c)
hereof, then:
(a) Shelf Registration. The Company shall prepare and
file with the SEC a Registration Statement for an offering to be made on
a continuous basis pursuant to Rule 415 covering all of the Registrable
Preferred Stock (the "Initial Shelf Registration"). If the Company shall not
have yet filed an Exchange Registration Statement, the Company shall use its
best efforts to file with the SEC the Initial Shelf Registration on or prior to
the Filing Date. Otherwise, the Company shall use its best efforts to file with
the SEC the Initial Shelf Registration within 30 days of the delivery of the
Shelf Notice. The Initial Shelf Registration shall be on Form S-1 or another
appropriate form permitting registration of such Registrable Preferred Stock for
resale by Holders in the manner or manners designated by them (including,
without limitation, one or more underwritten offerings). The Company shall not
permit any securities other than the Registrable Preferred Stock to be included
in the Initial Shelf Registration or any Subsequent Shelf Registration (as
defined below).
The Company shall use its best efforts to cause the Initial
Shelf Registration to be declared effective
-11-
under the Securities Act on or prior to the Effectiveness Date and to keep
the Initial Shelf Registration continuously effective under the Securities
Act until the date that is 36 months from the Effectiveness Date, subject
to extension pursuant to the last paragraph of Section 5 hereof (the
"Effectiveness Period"), or such shorter period ending when (i) all the
shares of Registrable Preferred Stock 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 Preferred Stock 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 45 days of such
cessation of effectiveness amend the Initial 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 Preferred Stock (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
under the Securities Act as soon as practicable after such filing and to keep
such Registration Statement 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 Registration or any Subsequent Shelf
Registration 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 the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority of shares of the Registrable Preferred
Stock covered by such Registration Statement or by any underwriter of such
Registrable Preferred Stock.
-12-
4. Additional Dividends
(a) The Company and the Initial Purchaser agree that the
Holders of Registrable Preferred Stock will suffer damages if the Company fails
to fulfill its obligations under Section 2 or Section 3 hereof and that it would
not be feasible to ascertain the extent of such damages with precision.
Accordingly, the Company agrees to pay additional interest on the New Preferred
Stock ("Additional Dividends") under the circumstances set forth below:
(i) if the Exchange Registration Statement has not been
filed on or prior to the Filing Date or the Initial Shelf Registration
has not been filed within 30 days following the delivery of a Shelf
Notice;
(ii) if neither the Exchange Registration Statement nor the
Initial Shelf Registration has been declared effective on or prior to
the Effectiveness Date; and/or
(iii) if either (A) the Company has not exchanged the Exchange
Preferred Stock for all New Preferred Stock validly tendered in
accordance with the terms of the Exchange Offer on or prior to 180 days
after the Issue Date or (B) the Exchange Registration Statement ceases
to be effective at any time prior to the time that the Exchange Offer
is consummated or (C) if applicable, the Shelf Registration has been
declared effective and such Shelf Registration ceases to be effective
at any time prior to the earlier of the date on which all Registrable
Preferred Stock covered by the Shelf Registration have been sold in the
manner set forth and as contemplated in the Shelf Registration or the
third anniversary of the Issue Date;
(each such event referred to in clauses (i) through (iii) above is a
"Registration Default"), the sole remedy available to holders of the New
Preferred Stock will be the immediate accrual of Additional Dividends as
follows: the per annum dividend rate on the New Preferred Stock will increase by
0.5% per annum upon the occurrence of a Registration Default; and the per annum
dividend rate will increase by an additional 0.5% per annum for each subsequent
90-day period during which the Registration Default remains uncured, up to a
maximum additional interest rate of 1.0% per annum, provided, however, that (1)
upon the filing of the Exchange Registration Statement or the Initial Shelf
Registration (in the case of (i) above), (2) upon the
-13-
effectiveness of the Exchange Registration Statement or a Shelf Registration
(in the case of (ii) above) or (3) upon the exchange of Exchange Preferred
Stock for all New Preferred Stock tendered (in the case of (iii)(A) above),
or upon the effectiveness of the Exchange Registration Statement which had
ceased to remain effective (in the case of (iii)(B) above), or upon the
effectiveness of the Shelf Registration which had ceased to remain effective
(in the case of (iii)(C) above), Additional Dividends on the New Preferred
Stock as a result of such clause (i), (ii) or (iii) (or the relevant subclause
thereof), as the case may be, shall cease to accrue and the dividend rate on
the New Preferred Stock will immediately revert (without any further action
by the Company) to the interest rate originally borne by the New Preferred
Stock.
(b) The Company shall notify the Transfer Agent within one
business day after each and every date on which an event occurs in respect of
which Additional Dividends are required to be paid (an "Event Date"). Any
amounts of Additional Dividends due pursuant to (a)(i), (a)(ii) or (a)(iii) of
this Section 4 will be payable semi-annually on each March 15 and September 15
commencing on September 15, 1997 (to the Holders of record on the March 1 and
September 1 immediately preceding such dates) in accordance with the Certificate
of Designation and the Private Exchange Certificate, if applicable, commencing
with the first such date occurring after any such Additional Dividends commence
to accrue after March 15, 1997.
5. Registration Procedures
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, the Company shall effect such registrations
to permit the sale of the securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Company hereunder the
Company shall:
(a) Use its best efforts to prepare and file with the SEC
prior to the Filing Date (or, in the case of an Initial Shelf Registration,
within 30 days of the delivery of a Shelf Notice), a Registration Statement as
prescribed by Sections 2 or 3 hereof, and use its best efforts to cause each
such Registration Statement to become effective and remain effective as provided
herein; provided, however, that, if (1) such filing is pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
-14-
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Preferred Stock during the Applicable Period, before filing any
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company shall furnish to and afford the Holders of the Registrable
Preferred Stock covered by such Registration Statement or each such
Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, a reasonable opportunity to review copies of
all such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed (in each
case at least three business days prior to such filing). The Company shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto if the Holders of a majority in aggregate principal amount
of the shares of Registrable Preferred Stock covered by such Registration
Statement, or any such Participating Broker-Dealer, as the case may be, their
counsel, or the managing underwriters, if any, shall reasonably object;
provided, however, during any delay in meeting the time frames contemplated by
Section 4 hereof as a result of actions by any Holder of Registrable Preferred
Stock, no Additional Dividends shall accrue or be payable to such Holder.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange Registration
Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented by
any Prospectus supplement required by applicable law, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus. The Company shall be deemed not to have used its
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 Preferred Stock covered thereby or
Participating Broker-Dealers seeking to sell Exchange Preferred Stock not
-15-
being able to sell such Registrable Preferred Stock or such Exchange Preferred
Stock during that period unless such action is required by applicable law or
unless the Company complies with this Agreement, including without limitation,
the provisions of paragraph 5(k) hereof and the last paragraph of this
Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section
3 hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Preferred Stock during the Applicable Period, notify the selling Holders of
shares of Registrable Preferred Stock, or each such Participating Broker-Dealer,
as the case may be, their counsel and the managing underwriters, if any,
promptly (but in any event within two business days), and confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective under the
Securities Act (including in such notice a written statement that any Holder
may, upon request, obtain, at the sole expense of the Company, one conformed
copy of such Registration Statement or post-effective amendment including
financial statements and schedules, documents incorporated or deemed to be
incorporated by reference and exhibits), (ii) of the issuance by the SEC of any
stop order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii) if at any time when a
Prospectus is required by the Securities Act to be delivered in connection with
sales of the Registrable Preferred Stock or resales of Exchange Preferred Stock
by Participating Broker-Dealers the representations and warranties of the
Company contained in any agreement (including any underwriting agreement),
contemplated by Section 5(m) hereof, cease to be true and correct in all
material respects, (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 Preferred Stock or the
Exchange Preferred Stock to be sold by any Participating Broker-Dealer for offer
or sale in any jurisdiction, or the initiation or threatening of any proceeding
for such purpose, (v) of the happening of any event, the existence of any
condition or any information becoming known that makes any statement made in
such
-16-
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 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
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Preferred Stock during the Applicable Period, 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 Preferred Stock or the Exchange Preferred Stock 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 moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and
if requested by the managing underwriter or underwriters (if any), or the
Holders of a majority of shares of the Registrable Preferred Stock being sold in
connection with an underwritten offering or any Participating Broker-Dealer, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters (if any), such Holders,
any Participating Broker-Dealer or counsel for any of them determine is
reasonably necessary to be included therein, (ii) make all required filings of
such prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment and
-17-
(iii) supplement or make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Preferred Stock during the Applicable Period, furnish to each selling Holder of
Registrable Preferred Stock and to each such Participating Broker-Dealer who so
requests and to counsel and each managing underwriter, if any, at the sole
expense of the Company, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto, including
financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Preferred Stock during the Applicable Period, deliver to each selling Holder of
Registrable Preferred Stock, or each such Participating Broker-Dealer, as the
case may be, their respective counsel, and the underwriters, if any, at the sole
expense of the Company, as many copies of the Prospectus (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 of such Prospectus and each amendment or supplement
thereto by each of the selling Holders of Registrable Preferred Stock or each
such Participating Broker-Dealer, as the case may be, and the underwriters or
agents, if any, and dealers (if any), in connection with the offering and sale
of the Registrable Preferred Stock covered by, or the sale by Participating
Broker-Dealers of the Exchange Preferred Stock pursuant to, such Prospectus and
any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Preferred
Stock or any delivery of a Prospectus contained in the Exchange Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Preferred Stock during the Applicable Period, to use its reasonable best
-18-
efforts to register or qualify, and to cooperate with the selling Holders of
Registrable Preferred Stock or each such Participating Broker-Dealer, as the
case may be, the managing underwriter or underwriters, if any, and their
respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Preferred Stock for offer and sale under the securities or Blue Sky laws of
such jurisdictions within the United States as any selling Holder,
Participating Broker-Dealer, or the managing underwriter or underwriters
reasonably request; provided, however, that where Exchange Preferred Stock
held by Participating Broker-Dealers or Registrable Preferred Stock is offered
other than through an underwritten offering, the Company agrees to cause the
Company's counsel to perform Blue Sky investigations and file registrations
and qualifications required to be filed pursuant to this Section 5(h); keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective
and do any and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of the Exchange Preferred Stock
held by Participating Broker-Dealers or the Registrable Preferred Stock
covered by the applicable Registration Statement; provided, however, that
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(i) If a Shelf Registration is filed pursuant to Section 3
hereof, cooperate with the selling Holders of Registrable Preferred Stock and
the managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing shares of Registrable
Preferred Stock to be sold, which certificates shall not bear any restrictive
legends and shall be in a form eligible for deposit with The Depository Trust
Company; and enable such shares of Registrable Preferred Stock to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or Holders may reasonably request.
(j) Use its best efforts to cause the Registrable Preferred
Stock covered by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Preferred Stock, except as may be
required
-19-
solely as a consequence of the nature of such selling Holder's business,
in which case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Preferred Stock during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole
expense of the Company, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Preferred Stock being sold thereunder or to the purchasers of
the Exchange Preferred Stock to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(l) Prior to the effective date of the first Registration
Statement relating to the Registrable Preferred Stock, (i) provide the Transfer
Agent with certificates for the Registrable Preferred Stock in a form eligible
for deposit with The Depository Trust Company and (ii) provide a CUSIP number
for the Registrable Preferred Stock.
(m) In connection with any underwritten offering of
Registrable Preferred Stock pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in underwritten offerings of preferred
stock similar to the New Preferred Stock 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
Preferred Stock and, in such connection, (i) make such representations and
warranties to, and covenants with, the underwriters with respect to the business
of the Company and its subsidiaries (including any acquired business, properties
or entity, if applicable) and
-20-
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 stock
similar to the New Preferred Stock, and confirm the same in writing if and when
requested; (ii) obtain the written opinion of counsel to the Company and written
updates thereof in form, scope and substance reasonably satisfactory to the
managing underwriter or underwriters, ad dressed to the underwriters covering
the matters customarily covered in opinions requested in underwritten offerings
of preferred stock similar to the New Preferred Stock and such other matters as
may be reasonably requested by the managing underwriter or underwriters; (iii)
obtain "cold comfort" letters and updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included or incorporated by reference
in the Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten offerings of
preferred stock similar to the New Preferred Stock and such other matters as
reasonably requested by the managing underwriter or underwriters; and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in Section 7
hereof (or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of shares of Registrable Preferred Stock
covered by such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified pursuant
to said Section. The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Preferred Stock during the Applicable Period, make available for inspection by
any selling Holder of such Registrable Preferred Stock being sold, or each such
-21-
Participating Broker-Dealer, as the case may be, any underwriter participating
in any such disposition of Registrable Preferred Stock, if any, and any
attorney, accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent corporate
documents and instruments of the Company and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and
employees of the Company and its subsidiaries to supply all information
reasonably requested by any such Inspector in connection with such Registration
Statement. Records that the Company determines, in good faith, to be
confidential and any Records that it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
Registration Statement, (ii) the release of such Records is ordered pursuant to
a subpoena or other order from a court of competent jurisdiction, (iii)
disclosure of such information is, in the opinion of counsel for any Inspector,
necessary or advisable in connection with any action, claim, suit or proceeding,
directly or indirectly, involving or potentially involving such Inspector and
arising out of, based upon, relating to, or involving this Agreement or any
transactions contemplated hereby or arising hereunder or (iv) the information in
such Records has been made generally available to the public (other than as a
result of a breach of any obligation of confidentiality hereunder by an
Inspector or any of its representatives). Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company unless and
until such information is generally available to the public. Each selling Holder
of such Registrable Preferred Stock and each such Participating Broker-Dealer
will be required to further agree that it will, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company to undertake appropriate action to prevent
disclosure of the Records deemed confidential at the Company's sole expense.
-22-
(o) Comply with all applicable rules and regulations of the
SEC and make generally available to its securityholders earning 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 Preferred Stock is sold to
underwriters in a firm commitment or best efforts underwritten offering and (ii)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month periods.
(p) Upon consummation of an Exchange Offer or a Private
Exchange, obtain an opinion of counsel to the Company, in a form customary for
underwritten transactions, addressed to the Transfer Agent for the benefit of
all Holders of Registrable Preferred Stock participating in the Exchange Offer
or the Private Exchange, as the case may be, that the Exchange Preferred Stock
or Private Exchange Preferred Stock, as the case may be, is duly authorized,
validly issued, fully paid and non-assessable.
(q) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of shares of Registrable Preferred Stock by Holders
to the Company (or to such other Person as directed by the Company) in exchange
for shares of Exchange Preferred Stock or Private Exchange Preferred Stock, as
the case may be, the Company shall ▇▇▇▇, or cause to be marked, on the
certificates representing such shares of Registrable Preferred Stock that such
shares of Registrable Preferred Stock are being cancelled in exchange for the
Exchange Preferred Stock or the Private Exchange Preferred Stock, as the case
may be.
(r) Cooperate with each seller of Registrable Preferred Stock
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Preferred Stock and their
respective counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD").
(s) Provide an indenture trustee for the Exchange Indenture
(as defined in the Purchase Agreement) and cause the Exchange Indenture to be
qualified under the TIA not
-23-
later than the effective date of the Exchange Offer or the first Registration
Statement relating to the Registrable Preferred Stock; and in connection
therewith, cooperate with the trustee under the Exchange Indenture and the
Holders of the Registrable Preferred Stock to effect such changes to such
indenture as may be required for such indenture to be so qualified in accordance
with the terms of the TIA; and execute, and use its best efforts to cause such
trustee to execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to enable the
Exchange Indenture to be so qualified in a timely manner.
(t) Use its reasonable best efforts to cause the Registrable
Preferred Stock covered by a Registration Statement or the Exchange Preferred
Stock, as the case may be, to be rated with the appropriate rating agencies, if
so requested by the Holders of a majority of shares of Registrable Preferred
Stock covered by such Registration Statement or the Exchange Preferred Stock, as
the case may be, or the managing underwriter or underwriters, if any.
(u) Use its best efforts to take all other steps necessary or
advisable to effect the registration of the Exchange Preferred Stock and/or
Registrable Preferred Stock covered by a Registration Statement contemplated
hereby.
The Company may require each seller of Registrable Preferred
Stock as to which any registration is being effected to furnish to the
Company such information regarding such seller and the distribution of such
Registrable Preferred Stock as the Company may, from time to time, reasonably
request. The Company may exclude from such registration the Registrable
Preferred Stock of any seller who unreasonably fails to furnish such information
within a reasonable time after receiving such request and during any delay in
meeting the time frames contemplated by Section 4 hereof as a result of a delay
in receiving such information, no Additional Dividends shall accrue or be
payable to such seller. Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such seller not materially misleading.
Each Holder of Registrable Preferred Stock and each
Participating Broker-Dealer agrees by acquisition of such Registrable Preferred
Stock or Exchange Preferred Stock to be sold by such Participating
Broker-Dealer, as the case
-24-
may be, that, upon actual receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition
of such Registrable Preferred Stock covered by such Registration Statement or
Prospectus or Exchange Preferred Stock to be sold by such Holder or
Participating Broker-Dealer, as the case may be, until such Holder's or
Participating Broker-Dealer's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) hereof, or until it is advised
in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any amendments or
supplements thereto. In the event the Company shall give any such notice, each
of the Effectiveness Period and the Applicable Period shall be extended by the
number of days during such periods from and including the date of the giving of
such notice to and including the date when each seller of Registrable Preferred
Stock covered by such Registration Statement or Exchange Preferred Stock to be
sold by such Participating Broker-Dealer, as the case may be, shall have
received (x) the copies of the supplemented or amended Prospectus contemplated
by Section 5(k) hereof or (y) the Advice.
6. Registration Expenses
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 Preferred
Stock or Exchange Preferred Stock and determination of the eligibility of the
Registrable Preferred Stock or Exchange Preferred Stock for investment under
the laws of such jurisdictions (x) where the holders of Registrable Preferred
Stock are located, in the case of the Exchange Preferred Stock, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Preferred Stock or
Exchange Preferred Stock to be sold by a Participating Broker-Dealer during the
Applicable Period)), (ii) printing expenses, including, without limitation,
expenses of printing certificates for
-25-
Registrable Preferred Stock or Exchange Preferred Stock in a form eligible
for deposit with The Depository Trust Company and of printing prospectuses
if the printing of prospectuses is requested by the managing underwriter or
underwriters, if any, by the Holders of a majority of shares of the
Registrable Preferred Stock included in any Registration Statement
or sold by any Participating Broker-Dealer as the case may be, (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and fees and disbursements of special counsel for the sellers of
Registrable Preferred Stock (subject to the provisions of Section 6(b) hereof),
(v) fees and disbursements of all independent certified public accountants
referred to in Section 5(m)(iii) hereof (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
the Transfer Agent, (ix) fees and expenses of all other Persons retained by the
Company, (x) internal expenses of the Company (including, without limitation,
all salaries and expenses of officers and employees of the Company performing
legal or accounting duties), (xi) the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange,
if applicable, and (xii) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, securities
sales agreements, indentures and any other documents necessary in order to
comply with this Agreement but in each case excluding fees and expenses of
counsel to any underwriters or the Holders and underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Preferred Stock by a Holder.
7. Indemnification
(a) The Company agrees to indemnify and hold harmless each
Holder of Registrable Preferred Stock and each Participating Broker-Dealer
selling Exchange Preferred Stock during the Applicable Period, the officers and
directors 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 expenses actually incurred in connection with
any suit, action or proceeding or any claim asserted) caused by, arising out of
or based upon any
-26-
untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement (or any amendment thereto) or Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, or caused by, arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, 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 or underwriter furnished to the Company in writing by such
Participant or underwriter expressly for use therein; provided that the
foregoing indemnity with respect to any preliminary Prospectus shall not inure
to the benefit of any Participant or underwriter (or to the benefit of any
person controlling such Participant or underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased Registrable
Preferred Stock or Exchange Preferred Stock if such untrue statement or omission
or alleged untrue statement or omission made in such preliminary Prospectus is
eliminated or remedied in the related Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) and a
copy of the related Prospectus (as so amended or supplemented) shall have been
furnished to such Participant or underwriter at or prior to the sale of such
Registrable Preferred Stock or Exchange Preferred Stock, as the case may be, to
such person or at a time the Company had notified persons under the last
paragraph of Section 5 hereof to cease using such Registration Statement or
Prospectus.
(b) Each Participant will be required to agree, severally and
not jointly, to indemnify and hold harmless the Company, its directors and
officers who sign the Registration Statement and each Person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Company to each Participant, but only (i) with reference to information
relating to such Participant furnished to the Company in writing by such
Participant expressly for use in any Registration Statement or Prospectus,
any amendment or supplement thereto, or any preliminary prospectus or
(ii) with respect to any untrue statement or representation made by such
Participant in writing to the Company. The
-27-
liability of any Participant under this paragraph shall in no event exceed the
proceeds received by such Participant from sales of Registrable Preferred
Stock or Exchange Preferred Stock 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 (unless and to the extent that it did not
otherwise learn of such action or claim and such omission results in the
forfeiture by the Indemnifying Person of substantial rights and defenses). 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 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 been advised by counsel
that representation of both parties by the same counsel would be inappropriate
under applicable standards of professional conduct due to differing interests
between them. It is understood that, unless there exists a conflict among
Indemnified Persons, the Indemnifying Person shall not, in connection with any
one such proceeding or separate but substantially similar related proceeding in
the same jurisdiction arising out of the same general allegations or
circumstances, 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 promptly as they are
incurred. Any such separate firm for the Participants
-28-
and such control Persons of Participants shall be designated in writing by
Participants who sold a majority of shares of Registrable Preferred Stock and
Exchange Preferred Stock sold by all such Participants and any such separate
firm for the Company, its directors, its officers and such control Persons of
the Company shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected without
its prior written consent (which consent shall not be unreasonably withheld or
delayed), but if settled with such consent or if there be a final non-appealable
judgment for the plaintiff for which the Indemnified Person is entitled to
indemnification pursuant to this Agreement, the Indemnifying Person agrees to
indemnify and hold harmless each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for reasonable 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 or compromise of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party, unless such settlement includes an unconditional
written release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding.
(d) If the indemnification provided for in the first and
second paragraphs of this Section 7 is for any reason unavailable to, or
insufficient to hold harmless, an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, 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
-29-
amount paid or payable by such Indemnified Person as a result of such
losses, claims, damages or liabilities in such proportion as is appropriate
to reflect (i) the relative benefits received by the Indemnified Person
or Persons on the one hand and the Indemnified Person or Persons on the
other from the offering of the New Preferred Stock or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, not
only such relative benefits but also the relative fault of the Indemnifying
Person or Persons on the one hand and the Indemnified Person or Persons on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof) 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 such
Participant or such other Indemnified Person, as the case may be, on the other,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(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, 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 Preferred
Stock or Exchange Preferred Stock, as the case may be, exceeds the amount of any
damages that such Participant has otherwise been required to pay or has paid by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
-30-
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
The Company covenants that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder in a timely manner in accordance
with the requirements of the Securities Act and the Exchange Act and, if at any
time the Company is not required to file such reports, it will, upon the request
of any Holder of Registrable Preferred Stock, make publicly available annual
reports and such information, documents and other reports of the type specified
in Sections 13 and 15(d) of the Exchange Act. The Company further covenants for
so long as any Registrable Preferred Stock remains outstanding, to make
available to any Holder of Registrable Preferred Stock in connection with any
sale thereof, the information required by Rule 144A(d)(4) under the Securities
Act in order to permit resales of such Registrable Preferred Stock pursuant to
(a) Rule 144A or (b) any similar rule or regulation hereafter adopted by the
SEC, unless at the time the Registrable Preferred Stock are not fully salable
under Rule 144 or any successor provision.
9. Underwritten Registrations
If any of the Registrable Preferred Stock covered by any Shelf
Registration is 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 of shares of such Registrable Preferred
Stock included in such offering and reasonably acceptable to the Company.
No Holder of Registrable Preferred Stock may participate in
any underwritten registation hereunder unless such Holder (a) agrees to sell
such Holder's Registrable Preferred Stock on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities,
-31-
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Registration of Transfers and Exchanges
(a) Transfer and Exchange of Certificated Shares. When
shares of New Preferred Stock or Private Exchange Preferred Stock that are
represented by definitive certificates ("Certificated Shares") are presented to
the Transfer Agent with a request:
(i) to register the transfer of the Certificated Shares; or
(ii) to exchange such Certificated Shares for an equal
number of Certificated Shares,
the Holders hereby acknowledge that the Transfer Agent shall register the
transfer or make the exchange as requested if the requirements under this
Section 10(a) hereof for such transactions are met; provided, however, that the
Certificated Shares presented or surrendered for registration of transfer or
exchange:
(x) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Company and the
Transfer Agent, duly executed by the holder thereof or by his
attorney, duly authorized in writing; and
(y) in the case of Registrable Preferred Stock, such shares of New
Preferred Stock or Private Exchange Preferred Stock be
accompanied by the following additional information and
documents, as applicable:
(A) if such shares are being delivered to the Transfer
Agent by a Holder for registration in the name of
such Holder, without transfer, a certification from
such Holder to that effect (in substantially the form
of Exhibit A hereto); or
(B) if such shares are being transferred to a
qualified institutional buyer (as defined in Rule
144A under the Securities Act, a "QIB") in
accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in
accordance with Rule 144
-32-
or Regulation S under the Securities Act, a
certification to that effect (in substantially
the form of Exhibit A hereto);
or
(C) if such shares are being transferred to an
institutional "accredited investor" within the
meaning of subparagraph (a)(1), (a)(2), (a)(3) or
(a)(7) of Rule 501 under the Securities Act, delivery
of a Certificate of Transfer in the form of Exhibit B
hereto and an opinion of counsel and/or other
information satisfactory to the Company to the effect
that such transfer is in compliance with the
Securities Act; or
(D) if such shares are being transferred in reliance
on another exemption from the registration
requirements of the Securities Act, a
certification to that effect (in substantially the
form of Exhibit A hereto) and an opinion of
counsel reasonably acceptable to the Company to
the effect that such transfer is in compliance
with the Securities Act.
(b) Restrictions on Transfer of Certificated Shares for a
Beneficial Interest in Global Shares. Certificated Shares may not be exchanged
for a beneficial interest in one or more global certificates representing all
shares of New Preferred Stock or Private Exchange Preferred Stock held by the
Depositary (the "Global Certificates") except upon satisfaction of the
requirements set forth below. Upon receipt by the Transfer Agent of Certificated
Shares, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Transfer Agent, together with:
(A) certification, substantially in the form of Exhibit A
hereto, that such Certificated Shares are being
transferred to a QIB in accordance with Rule 144A
under the Securities Act; and
(B) written instructions directing the Transfer Agent to
make, or to direct the Depositary to make, an
endorsement on the Global Certificate to reflect an
increase in the aggregate number of shares of New
Preferred
-33-
Stock or Private Exchange Preferred Stock
represented by the Global Certificate,
then the Transfer Agent shall cancel the certificate representing such
Certificated Shares and cause, or direct the Depositary to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Transfer Agent, the number of shares of New Preferred Stock or Private
Exchange Preferred Stock represented by the Global Certificates to be increased
accordingly. If no Global Certificate is then outstanding, the Company shall
issue and the Transfer Agent shall authenticate a new Global Certificate in the
appropriate amount.
(c) Transfer and Exchange of Global Certificates. The
transfer and exchange of Global Certificates or beneficial interests therein
shall be effected through the Depositary, in accordance with the procedures
of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global
Certificate for Certificated Shares.
(i) Any person having a beneficial interest in a Global
Certificate may upon request exchange such beneficial
interest for Certificated Shares. Upon receipt by the
Transfer Agent of written instructions or such other
form of instructions as is customary for the Depositary
from the Depositary or its nominee on behalf of any
person having a beneficial interest in a Global
Certificate and upon receipt by the Transfer Agent of a
written order or such other form of instructions as is
customary for the Depositary or the person designated
by the Depositary as having such a beneficial interest
containing registration instructions and, in the case
of any such transfer or exchange of Registrable
Preferred Stock, the following additional information
and documents:
(A) if such beneficial interest is being transferred to
the person designated by the Depositary as being the
beneficial owner, a certification from such person to
that effect (in substantially the form of Exhibit A
hereto); or
-34-
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the
Securities Act, a certification to that effect (in
substantially the form of Exhibit A hereto); or
(C) if such beneficial interest is being transferred
to an institutional "accredited investor" within
the meaning of subparagraphs (a)(1), (a)(2),
(a)(3) or (a)(7) of Rule 501 under the Securities
Act, delivery of a Certificate of Transfer in the
form of Exhibit B hereto and an opinion of counsel
and/or other information satisfactory to the
Company to the effect that such transfer is in
compliance with the Securities Act; or
(D) if such beneficial interest is being transferred
in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect (in substantially the
form of Exhibit A hereto) and an opinion of
counsel from the transferee or transferor
reasonably acceptable to the Company to the effect
that such transfer is in compliance with the
Securities Act,
then the Transfer Agent will cause, in accordance with the
standing instructions and procedures existing between the
Depositary and the Transfer Agent, the aggregate number of
shares of New Preferred Stock or Private Exchange Preferred
Stock represented by the Global Certificates to be reduced
and, following such reduction, the Company will execute and,
upon receipt of an authentication order in the form of an
Officers' Certificate, the Transfer Agent will authenticate
and deliver to the transferee a certificate representing such
Certificated Shares.
(ii) Certificated Shares issued in exchange for a beneficial
interest in a Global Certificate pursuant to this
Section 10(d) shall be registered in such names and for
such number of shares of New Preferred Stock or Private
Exchange Preferred
-35-
Stock as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct
the Transfer Agent in writing. The Transfer Agent shall
deliver such Certificated Shares to the persons in whose
names such shares of New Preferred Stock or Private Exchange
Preferred Stock are so registered.
(e) Restrictions on Transfer and Exchange of Global
Certificates. A Global Certificate may not be transferred as a whole except by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
(f) Authentication of Certificated Shares in Absence of
Depositary. If at any time:
(i) the Depositary for the shares of New Preferred Stock or
Private Exchange Preferred Stock notifies the Company that the
Depositary is unwilling or unable to continue as Depositary
for the Global Certificates and a successor Depositary for
the Global Certificates is not appointed by the Company
within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Transfer
Agent in writing that it elects to cause the issuance of
Certificated Shares,
then the Company will execute, and the Transfer Agent, upon receipt of an
Officers' Certificate requesting the authentication and delivery of Certificated
Shares, will authenticate and deliver certificates representing Certificated
Shares, in an aggregate number equal to the aggregate number of certificates
representing Certificated Shares represented by the Global Certificates, in
exchange for such Global Certificates.
(g) Legends.
(i) Except as permitted by the following paragraph (ii), each
Global Certificate and each certificate representing
Certificated Shares shall bear a legend substantially in the
form attached hereto as Exhibit C.
-36-
(ii) Upon the shares of Private Exchange Preferred Stock
ceasing to be Registrable Preferred Stock:
(A) in the case of any certificate that represents
Certificated Shares, the Transfer Agent shall
permit the holder thereof to exchange such
certificate for a certificate representing such
Certificated Shares that does not bear the first
paragraph of the legend referred to above and
rescind any related restriction on the transfer;
and
(B) any such shares represented by a Global Certificate
shall not be subject to the provisions set forth in
(i) above (such sales or transfers being subject only
to the provisions of Section 10(c) hereof).
(h) Cancellation and/or Adjustment of a Global Certificate.
At such time as all beneficial interests in a Global Certificate have either
been exchanged for certificates representing Certificated Shares, redeemed,
repurchased or cancelled, such Global Certificates shall be returned to or
retained and cancelled by the Transfer Agent. At any time prior to such
cancellation, if any beneficial interest in a Global Certificate is exchanged
for certificates representing Certificated Shares, redeemed, repurchased or
cancelled, the number of shares represented by such Global Certificates shall be
reduced and an endorsement shall be made on such Global Certificates, by the
Transfer Agent to reflect such reduction.
(i) Obligations with Respect to Transfers and
Exchanges of Certificated Shares.
(i) To permit registrations of transfers and exchanges, the
Company shall execute, at the Transfer Agent's request, and
the Transfer Agent shall authenticate certificates
representing Certificated Shares and Global
Certificates.
(ii) All certificates representing Certificated Shares and Global
Certificates issued upon any registration, transfer or
exchange of certificates representing Certificated Shares or
Global Certificates shall be the valid obligations of the
Company, entitled to the same benefits as the shares
surrendered upon the registration of transfer or exchange.
-37-
(iii) Prior to due presentment for registration of transfer of any
shares of Registrable Preferred Stock, the Transfer Agent and
the Company may deem and treat the person in whose name any
such shares are registered as the absolute owner of such
shares, and neither the Transfer Agent nor the Company shall
be affected by notice to the contrary.
11. Miscellaneous
(a) Remedies. In the event of a breach by the Company of any
of its obligations under this Agreement, other than the occurrence of an event
which requires payment of Additional Dividends, each Holder of Registrable
Preferred Stock, in addition to being entitled to exercise all rights provided
herein, in the Certificate of Designation or, in the case of the Initial
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. The Company 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) Enforcement. The Transfer Agent shall be authorized to
enforce the provisions of this Agreement for the ratable benefit of the Holders.
(c) No Inconsistent Agreements. The Company has not, as of the
date hereof, and the Company shall not, after the date of this Agreement, enter
into any agreement with respect to any of its securities that is inconsistent
with the rights granted to the Holders of Registrable Preferred Stock in this
Agreement or otherwise conflicts with the provisions hereof. The Company has not
entered and will not enter into any agreement with respect to any of its
securities that will grant to any Person piggy-back registration rights with
respect to a Registration Statement.
(d) Actions Affecting Registrable Preferred Stock. The Company
shall not, directly or indirectly, take any action with respect to the
Registrable Preferred Stock as a class that would materially adversely affect
the ability of the Holders of Registrable Preferred Stock to
-38-
include such Registrable Preferred Stock in a registration undertaken pursuant
to this Agreement.
(e) 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 of shares
of the then outstanding Registrable Preferred Stock and (B) in circumstances
that would materially adversely affect the Participating Broker-Dealers, the
Participating Broker-Dealers holding not less than a majority of shares of the
Exchange Preferred Stock held by all Participating Broker-Dealers; provided,
however, that Section 7 and this Section 11(c) 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 Preferred Stock or Exchange Preferred
Stock, 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 Preferred Stock whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable Preferred
Stock may be given by Holders of at least a majority of shares of the
Registrable Preferred Stock being sold by such Holders pursuant to such
Registration Statement; provided, however, that the provisions of this sentence
may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(f) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Registrable Preferred Stock or any
Participating Broker-Dealer, at the most current address of such Holder
or Participating Broker-Dealer, as the case may be, on the stock books
of the Company with a copy in like manner to the Initial Purchaser as
follows:
CIBC WOOD GUNDY SECURITIES CORP.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
-▇▇-
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Finance
Department
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
2. if to the Initial Purchaser, at the addresses
specified in Section 11(f)(1);
3. if to the Company, at the addresses as follows:
FAIRFIELD MANUFACTURING COMPANY, INC.
▇.▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
with copies to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one
business day after being timely delivered to a next-day air courier; and when
receipt is acknowledged by the addressee, if sent by facsimile.
(g) 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, including 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 Preferred
Stock.
-40-
(h) 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.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(k) 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.
(l) Securities Held by the Company or Its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
shares of Registrable Preferred Stock is required hereunder, shares of
Registrable Preferred Stock held by the Company or its affiliates (as such
term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of
such required percentage.
(m) Third Party Beneficiaries. Holders of Registrable
Preferred Stock and Participating Broker-Dealers are intended third party
beneficiaries of this Agreement and this Agreement may be enforced by such
Persons.
-41-
(n) Entire Agreement. This Agreement, together with the
Purchase Agreement and the Certificate of Designation, 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 between the Initial Purchaser 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.
-42-
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
FAIRFIELD MANUFACTURING COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President Finance
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above
CIBC WOOD GUNDY SECURITIES, CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. PHOENIX
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Phoenix
Title: Managing Director
EXHIBIT A
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF REGISTRABLE PREFERRED STOCK
Re: Shares of New Preferred Stock
and/or Private Exchangeable Preferred Stock
(the "Shares") of Fairfield Manufacturing
Company, Inc.
This Certificate relates to ____ Shares held in* ___
book-entry or* _______ certificated form by ______ (the "Transferor").
The Transferor:*
|_| has requested the Transfer Agent by written order to deliver in
exchange for its beneficial interest in the Global Certificate held by the
Depositary one or more certificates in definitive, registered form an aggregate
number equal to its beneficial interest in such Global Certificate (or the
portion thereof indicated above); or
|_| has requested the Transfer Agent by written order to exchange or
register the transfer of one or more certificates representing Shares.
In connection with such request and in respect of each such
Share, the Transferor does hereby certify that Transferor is familiar with the
Registration Rights Agreement relating to the above captioned Shares and the
restrictions on transfers thereof as provided in Section 10 of such Registration
Rights Agreement, and that the transfer of these Shares does not require
registration under the Securities Act of 1933, as amended (the "Securities Act")
because*:
|_| Such Shares are being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 10 (a)(y)(A) or Section 10(d)(i)(A)
of the Registration Rights Agreement).
|_| Such Shares are being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Securities Act), in reliance on Rule
144A or in accordance with Regulation S under the Securities Act.
|_| Such Shares are being transferred in accordance with
Rule 144 under the Securities Act.
-44-
|_| Such Shares are being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than Rule 144A or Rule 144 or Regulation S under the Securities Act. An
opinion of counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate.
---------------------------
[INSERT NAME OF TRANSFEROR]
By: -----------------------
Date: _____________
*Check applicable box.
EXHIBIT B
Certificate of Transfer
Fairfield Manufacturing Company, Inc.
▇.▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
In connection with our proposed purchase of shares of New
Preferred Stock or Private Exchange Preferred Stock, each par value $.01 per
share (the "Securities"), of Fairfield Manufacturing Company, Inc. (the
"Company"), we confirm that:
1. We understand that the Securities have not been registered
under the Securities Act of 1933, as amended (the "Securities Act")
and, unless so registered, may not be sold except as permitted in the
following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Securities to offer, sell
or otherwise transfer such Securities while they are Registrable
Preferred Stock within the meaning of the Registration Rights Agreement
to which this certificate is an exhibit only (a) to the Company or any
of its subsidiaries, (b) pursuant to a registration statement which has
been declared effective under the Securities Act, (c) so long as the
Securities are eligible for resale pursuant to Rule 144A, under the
Securities Act, to a person we reasonably believe is a "qualified
institutional buyer" under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB and to whom notice is given
that the transfer is being made in reliance on Rule 144A, (d) pursuant
to offers and sales that occur outside the United States within the
meaning of Regulation S under the Securities Act, (e) to an
institutional "accredited investor" within the meaning of subparagraphs
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act that is
purchasing for his own account or for the account of such an
institutional "accredited investor," or (f) pursuant to any other
available exemption from the registration requirements of the
Securities Act, subject in each of the foregoing cases to any
requirement of law that the disposition of our property or the property
of such investor account or accounts be
at all times within our or their control and to compliance with any
applicable state securities laws. The foregoing restrictions on
resale will not apply after the Securities are no longer Registrable
Preferred Stock. We understand that the Securities purchased by us
will bear a legend to the foregoing effect.
2. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and we are acquiring the Securities for investment purposes and
not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each
able to bear the economic risk of our or its investment for an
indefinite period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
4. You and your counsel are entitled to rely upon this letter
and you are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby.
Very truly yours,
(Name of Purchaser)
By: ____________________
Date:___________________
Upon transfer the Securities would be registered in the name
of the new beneficial owner as follows:
Name:___________________
Address:________________
Taxpayer ID Number:________________
EXHIBIT C
[LEGENDS]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT)
OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501
(A)(1), (2), (3) OR (7) UNDER THE ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2)
AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO FAIRFIELD
MANUFACTURING COMPANY, INC. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR
HAS HAD FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRANSFER AGENT A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRANSFER AGENT), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRANSFER AGENT
AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE THE BENEFITS OF A SHARE
REGISTRATION RIGHTS AGREEMENT DATED AS
OF MARCH 12, 1997 BY AND BETWEEN THE COMPANY AND CIBC WOOD GUNDY SECURITIES
CORP., A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. NO
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE SHARE REGISTRATION
RIGHTS AGREEMENT AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE SHARE REGISTRATION
RIGHTS AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY
A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE SHARE REGISTRATION RIGHTS AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)
--------
(1)This paragraph is to be included only if the certificate is in global form.
