Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
Dated as of May 26, 2000
by and among
TNP ENTERPRISES, INC.,
as Issuer,
and
CIBC WORLD MARKETS CORP.
and
CHASE SECURITIES INC.,
as Initial Purchasers
__________________________
100,000 Shares of
14 1/2% SENIOR REDEEMABLE PREFERRED STOCK,
$1,000 Liquidation Preference Per Share
TABLE OF CONTENTS
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Page
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1. Definitions......................................... 1
2. Exchange Offer...................................... 5
3. Shelf Registration.................................. 8
4. Additional Dividends................................ 9
5. Registration Procedures............................. 11
6. Registration Expenses............................... 20
7. Indemnification..................................... 21
8. Rules 144 and 144A.................................. 24
9. Underwritten Registrations.......................... 24
10. Miscellaneous....................................... 25
(a) Remedies 25
(b) No Inconsistent Agreements.................. 25
(c) Adjustments Affecting Registrable Shares.... 25
(d) Amendments and Waivers...................... 25
(e) Notices 26
(f) Successors and Assigns...................... 27
(g) Counterparts................................ 27
(h) Headings 27
(i) Governing Law............................... 28
(j) Severability................................ 28
(k) Shares Held by the Company or Its Affiliates 28
(l) Third Party Beneficiaries................... 28
(m) Registration of Dividend Shares............. 28
(n) Entire Agreement............................ 28
SHARE REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
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entered into as of May 26, 2000, by and among TNP Enterprises, Inc., a Texas
corporation, as issuer (the "Company"), and CIBC World Markets Corp. and Chase
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Securities Inc., as initial purchasers (the "Initial Purchasers").
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This Agreement is entered into in connection with the Purchase
Agreement, dated May 19, 2000, by and among the Company, SW Acquisition, L.P., a
Texas limited Partnership (the "Partnership" and, together with the Company, the
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"Issuers"), and the Initial Purchasers (the "Purchase Agreement") relating to,
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among other things, the sale by the Issuers to the Initial Purchasers of 100,000
units (the "Units") consisting of 100,000 shares (the "Initial Shares") of the
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Company's 14 1/2% Senior Redeemable Preferred Stock, $1,000 liquidation
preference per share (the "Shares"), and 100,000 warrants exercisable into
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limited partnership interests in the Partnership. In order to induce the
Initial Purchasers 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 holders of Registrable Shares (as defined), including, without
limitation, the Initial Purchasers. The execution and delivery of this
Agreement is a condition to the Initial Purchasers' obligation to purchase the
Shares under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
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As used in this Agreement, the following terms shall have the
following meanings:
Additional Dividends: See Section 4(a).
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Advice: See the last paragraph of Section 5.
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Agreement: See the first introductory paragraph to this agreement.
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Applicable Period: See Section 2(b).
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Business Day: A day that is not a Saturday, a Sunday, or a day on
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which banking institutions in New York, New York are required to be closed.
Closing Date: The Closing Date as defined in the Purchase Agreement.
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Commission: The Securities and Exchange Commission.
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Company: See the first introductory paragraph to this Agreement.
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Dividend Shares: The Shares issued as dividends on outstanding Shares
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or Dividend Shares, as the case may be.
DTC: See Section 5(i).
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Effectiveness Date: The 150th day after the Issue Date.
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Effectiveness Period: See Section 3(a).
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Event Date: See Section 4(b).
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Exchange Act: The Securities Exchange Act of 1934, as amended, and
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the rules and regulations of the Commission promulgated thereunder.
Exchange Offer: See Section 2(a).
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Exchange Registration Statement: See Section 2(a).
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Exchange Shares: See Section 2(a).
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Filing Date: The 60th day after the Issue Date (regardless of whether
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the actual filing precedes such date).
Holder: Any registered holder of Registrable Shares.
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Indemnified Person: See Section 7(c).
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Indemnifying Person: See Section 7(c).
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Initial Purchasers: See the first introductory paragraph to this
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Agreement.
Initial Shares: See the second introductory paragraph to this
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Agreement.
Initial Shelf Registration: See Section 3(a).
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Inspectors: See Section 5(o).
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Issue Date: The date on which the Shares were sold to the Initial
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Purchasers pursuant to the Purchase Agreement.
Issuers: See the second introductory paragraph to this Agreement.
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NASD: National Association of Securities Dealers, Inc.
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Participant: See Section 7(a).
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Participating Broker-Dealer: See Section 2(b).
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Partnership: See the second introductory paragraph to this Agreement.
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Person: Any individual, corporation, partnership, limited liability
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company, joint venture, association, joint stock company, trust, unincorporated
organization or government (including any agency or political subdivision
thereof).
Private Exchange: See Section 2(b).
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Private Exchange Shares: See Section 2(b).
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Prospectus: The prospectus included in any Registration Statement
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(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, with respect to the terms of the offering of any portion
of the Registrable Shares covered by such Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: See the second introductory paragraph to this
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Agreement.
Records: See Section 5(o).
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Registrable Shares: Each Share upon original issuance thereof and at
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all times subsequent thereto, each Exchange Share as to which Section 2(c)(iv)
hereof is applicable upon original issuance thereof and at all times subsequent
thereto and each Private Exchange Share, if issued, upon original issuance
thereof and at all times subsequent thereto, until, in the case of any such
Share, Exchange Share or Private Exchange Share, if issued, as the case may be,
the earliest to occur of (i) a Registration Statement (other than, with respect
to any Exchange Share as to which Section 2(c)(iv) hereof is applicable)
covering such Share, Exchange Share or Private Exchange Share, as the case may
be, has been declared effective by the Commission and such Share, Exchange Share
or Private Exchange Share, as the case may be, has been disposed of in
accordance with such effective Registration Statement, (ii) such Share, Exchange
Share or Private Exchange Share, as the case may be, is sold in compliance
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with Rule 144, (iii) in the case of any Share, such Share has been exchanged
pursuant to the Exchange Offer for an Exchange Share or Exchange Shares which
may be resold without restriction under federal securities laws, or (iv) such
Share, Exchange Share or Private Exchange Share, as the case may be, ceases to
be outstanding for purposes of the Statement of Resolution.
Registration Statement: Any registration statement of the Company,
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including, but not limited to, the Exchange Registration Statement, that covers
any of the Registrable Shares pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
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amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the Commission providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
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amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the Commission.
Rule 415: Rule 415 under the Securities Act, as such Rule may be
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amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
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and regulations of the Commission promulgated thereunder.
Shares: See the second introductory paragraph to this Agreement.
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Unless the context otherwise necessitates, when used in this Agreement the term
"Shares" shall be deemed to include any and all Dividend Shares that may be
outstanding at the time of the application of any of the applicable provisions
of this Agreement.
Shelf Notice: See Section 2(c).
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Shelf Registration: See Section 3(b).
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Statement of Resolution: The statement of resolution filed by the
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Company with the Secretary of State of the State of Texas relating to the Shares
issued by the Company.
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Subsequent Shelf Registration: See Section 3(b).
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Transfer Agent: See Section 2(b)(3).
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Underwritten registration or underwritten offering: A registration in
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which securities of the Company are sold to an underwriter for reoffering to the
public.
Units: See the second introductory paragraph to this Agreement.
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2. Exchange Offer
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(a) The Company agrees to file with the Commission no later than the
Filing Date, an offer to exchange (the "Exchange Offer") any and all of the
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Registrable Shares (other than Private Exchange Shares, if any) for a like
aggregate liquidate preference of preferred equity securities of the Company
which are identical in all material respects to the Shares (the "Exchange
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Shares") (and which are entitled to the benefits of the Statement of
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Resolution), except that the Exchange Shares shall have been registered pursuant
to an effective Registration Statement under the Securities Act and shall
contain no restrictive legend thereon. The Exchange Offer shall be registered
under the Securities Act on the appropriate form (the "Exchange Registration
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Statement") and shall comply with all applicable tender offer rules and
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regulations under the Exchange Act. The Company agrees to use its reasonable
best efforts to (x) cause the Exchange Registration Statement to be declared
effective under the Securities Act on or before the Effectiveness Date; (y) keep
the Exchange Offer open for at least 30 days (or longer if required by
applicable law) after the date that notice of the Exchange Offer is first mailed
to Holders; and (z) consummate the Exchange Offer on or prior to the 30th day
following the date on which the Exchange Registration Statement is declared
effective. If after such Exchange Registration Statement is initially declared
effective by the Commission, the Exchange Offer or the issuance of the Exchange
Shares thereunder is interfered with by any stop order, injunction or other
order or requirement of the Commission or any other governmental agency or
court, such Exchange Registration Statement shall be deemed not to have become
effective for purposes of this Agreement. Each Holder who participates in the
Exchange Offer will be required to represent that any Exchange Shares received
by it will be acquired in the ordinary course of its business, that at the time
of the consummation of the Exchange Offer such Holder does not and will not have
any arrangement or understanding with any Person to participate in the
distribution of the Exchange Shares, that such Holder is not an affiliate of the
Company within the meaning of Rule 405 of the Securities Act, and any additional
representations that in the written opinion of counsel to the Company are
necessary under then-existing interpretations of the Commission in order for the
Exchange Registration Statement to be declared effective. Upon consummation of
the Exchange Offer in accordance with this Section 2, the provisions of this
Agreement shall continue to apply, mutatis mutandis, solely with respect to
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Registrable Shares that are Private Exchange Shares and Exchange Shares held by
Participating Broker-Dealers,
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and the Company shall have no further obligation to register Registrable Shares
(other than Private Exchange Shares and other than in respect of any Exchange
Shares as to which clause 2(c)(iv) hereof applies) pursuant to Section 3 of this
Agreement.
(b) The Company shall include within the Prospectus contained in the
Exchange Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the Staff of the Commission
with respect to the potential "underwriter" status of any broker-dealer that is
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Shares received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer"), whether such positions or policies have been
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publicly disseminated by the Staff of the Commission or such positions or
policies, in the judgment of the Initial Purchasers, represent the prevailing
views of the Staff of the Commission. Such "Plan of Distribution" section shall
also allow, to the extent permitted by applicable policies and regulations of
the Commission, the use of the Prospectus by all Persons subject to the
prospectus delivery requirements of the Securities Act, including, to the extent
so permitted, all Participating Broker-Dealers, and include a statement
describing the manner in which Participating Broker-Dealers may resell the
Exchange Shares.
The Company shall use its reasonable best efforts to keep the Exchange
Registration Statement effective and to amend and supplement the Prospectus
contained therein, in order to permit such Prospectus to be lawfully delivered
by all Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time beginning when the Exchange Shares are first issued
in the Exchange Offer and ending upon the earlier of the expiration of the 180th
day after the Exchange Offer has been completed and such Persons are no longer
required to comply with the prospectus delivery requirements in connection with
offers and sales of the Exchange Shares (the "Applicable Period").
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If, upon consummation of the Exchange Offer, any Initial Purchaser
holds any Shares acquired by it and having the status of an unsold allotment in
the initial distribution, the Company upon the request of such Initial Purchaser
shall, simultaneously with the delivery of the Exchange Shares in the Exchange
Offer, issue and deliver to such Initial Purchaser, in exchange (the "Private
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Exchange") for the Shares held by such Initial Purchaser, a like liquidation
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preference of preferred equity securities of the Company that are identical in
all material respects to the Exchange Shares except for the existence of
restrictions on transfer thereof under the Securities Act and securities laws of
the several states of the U.S. (the "Private Exchange Shares"). The Private
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Exchange Shares shall bear the same CUSIP number as the Exchange Shares to the
extent possible. Dividends on the Exchange Shares and Private Exchange Shares
will accumulate from the last dividend payment date on which dividends were paid
on the Shares surrendered in exchange therefor or, if no dividends have been
paid on the Shares, from the Issue Date.
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In connection with the Exchange Offer, the Company shall:
(1) mail to each Holder a copy of the Prospectus forming part of the
Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(2) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York, which may be
a the transfer agent for the Shares (the "Transfer Agent") or an affiliate
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thereof;
(3) permit Holders to withdraw tendered Registrable Shares at any
time prior to the close of business, New York time, on the last Business
Day on which the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all applicable
laws.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Company shall:
(5) accept for exchange all Registrable Shares validly tendered and
not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(6) deliver to the Transfer Agent for cancellation all Registrable
Shares so accepted for exchange concurrently with the consummation of such
exchange; and
(7) cause the Transfer Agent to authenticate and deliver promptly to
each Holder tendering such Registrable Shares, Exchange Shares or Private
Exchange Shares, as the case may be, equal in liquidation preference to the
Shares of such Holder so accepted for exchange.
The Exchange Shares and the Private Exchange Shares may be issued
under the Statement of Resolution or a statement of resolution identical in all
material respects to the Statement of Resolution, which in either event will
provide that the Exchange Shares will not be subject to the transfer
restrictions set forth in the Statement of Resolution and that the Exchange
Shares, the Private Exchange Shares and the Shares, if any, will vote and
consent together on all matters as one class and that none of the Exchange
Shares, the Private Exchange Shares or the Shares, if any, will have the right
to vote or consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the Commission, the Company is not permitted to
effect an Exchange Offer, (ii) the Exchange Offer is not consummated within 180
days of the Issue
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Date, (iii) any holder of Private Exchange Shares so requests in writing to the
Company or (iv) in the case of any Holder that participates in the Exchange
Offer (and tenders its Registrable Shares prior to the expiration thereof), such
Holder does not receive Exchange Shares on the date of the exchange that may be
sold without restriction under federal securities laws (other than due solely to
the status of such Holder as an affiliate of the Company within the meaning of
the Securities Act) and so notifies the Company within 30 days following the
consummation of the Exchange Offer (and providing a reasonable basis for its
conclusions), in the case of each of clauses (i)-(iv), then the Company shall as
promptly as practicable deliver to the Holders and the Transfer Agent written
notice thereof (the "Shelf Notice") and shall file a Shelf Registration
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pursuant to Section 3.
3. Shelf Registration
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If a Shelf Notice is delivered as contemplated by Section 2(c), then:
(a) Shelf Registration. The Company shall as promptly as reasonably
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practicable file with the Commission a Registration Statement for an offering to
be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Shares (the "Initial Shelf Registration"). If the Company shall not
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have yet filed the Exchange Registration Statement, the Company shall file with
the Commission the Initial Shelf Registration on or prior to the Filing Date and
shall use its reasonable best efforts to cause such Initial Shelf Registration
to be declared effective under the Securities Act on or prior to the
Effectiveness Date. Otherwise, the Company shall file with the Commission the
Initial Shelf Registration within 45 days of the delivery of the Shelf Notice
and shall use its reasonable best efforts to cause such Shelf Registration to be
declared effective under the Securities Act on or prior to the 90th day after
filing of the Initial Shelf Registration. The Initial Shelf Registration shall
be on Form S-1 or another appropriate form permitting registration of such
Registrable Shares for resale by Holders in the manner or manners designated by
them (including, without limitation, one or more underwritten offerings). The
Company shall not permit any securities other than the Registrable Shares to be
included in any Shelf Registration. The Company shall use its reasonable best
efforts to keep the Initial Shelf Registration continuously effective under the
Securities Act until the date which is 24 months from the Issue Date (or, if
Rule 144(k) under the Securities Act is amended to permit unlimited resales by
non-affiliates within a lesser period, such lesser period) (subject to extension
pursuant to the last paragraph of Section 5 hereof) (the "Effectiveness Period")
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or such shorter period ending when (i) all Registrable Shares covered by the
Initial Shelf Registration have been sold in the manner set forth and as
contemplated in the Initial Shelf Registration or (ii) a Subsequent Shelf
Registration covering all of the Registrable Shares has been declared effective
under the Securities Act.
(b) Subsequent Shelf Registrations. If the Initial Shelf
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Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the
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Effectiveness Period (other than because of the sale of all of the securities
registered thereunder), the Company shall use its reasonable best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness thereof,
and in any event shall within 30 days of such cessation of effectiveness amend
the Shelf Registration in a manner to obtain the withdrawal of the order
suspending the effectiveness thereof, or file an additional "shelf" Registration
Statement pursuant to Rule 415 covering all of the Registrable Shares (a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed,
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the Company shall use its reasonable best efforts to cause the Subsequent Shelf
Registration to be declared effective as soon as practicable after such filing
and to keep such Subsequent Shelf Registration continuously effective for a
period equal to the number of days in the Effectiveness Period less the
aggregate number of days during which the Initial Shelf Registration or any
Subsequent Shelf Registrations was previously continuously effective. As used
herein the term "Shelf Registration" means the Initial Shelf Registration and
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any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Company shall promptly
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supplement and amend any Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate liquidation preference of
the Registrable Shares covered by such Shelf Registration or by any underwriter
of such Registrable Shares, in each case, with the Company's consent, which
consent shall not be unreasonably withheld or delayed.
4. Additional Dividends
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(a) The Company and the Initial Purchasers agree that the Holders of
Registrable Shares will suffer damages if the Company fails to fulfill its
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Company agrees to pay, as liquidated damages, additional dividends on the
Registrable Shares ("Additional Dividends") under the circumstances and to the
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extent set forth below, each of which shall be given independent effect (each a
"Registration Default"):
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(i) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration has been filed on or prior to the Filing Date or
(B) notwithstanding that the Company has consummated or will consummate an
Exchange Offer, the Company is required to file a Shelf Registration and
such Shelf Registration is not filed on or prior to the 45th day after
delivery of the Shelf Notice, then, in the case of subclause (A),
commencing on the day after the Filing Date or, in the case of subclause
(B), commencing on the 46th day following delivery of the Shelf Notice,
Additional Dividends shall accumulate on the Registrable Shares over and
above the stated dividend
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rate at a rate of 0.50% per annum for the first 90 days immediately
following the Filing Date or such 45th day, as the case may be, such
Additional Dividends rate increasing by an additional 0.25% per annum at
the beginning of each subsequent 90-day period;
(ii) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration is declared effective on or prior to the
Effectiveness Date or (B) notwithstanding that the Company has consummated
or will consummate an Exchange Offer, the Company is required to file a
Shelf Registration and such Shelf Registration is not declared effective by
the Commission on or prior to the 90th day after filing of the Initial
Shelf Registration, then, commencing on the day after the Effectiveness
Date or the 90th day, as the case may be, Additional Dividends shall
accumulate on the Registrable Shares over and above the stated dividend
rate in effect at a rate of 0.50% per annum for the first 90 days
immediately following the day after the Effectiveness Date or the 90th day,
as the case may be, such Additional Dividends rate increasing by an
additional 0.25% per annum at the beginning of each subsequent 90-day
period; and
(iii) if (A) the Company has not exchanged Exchange Shares for all
Shares validly tendered in accordance with the terms of the Exchange Offer
on or prior to the 180th day after the Issue Date, (B) the Exchange
Registration Statement ceases to be effective prior to consummation of the
Exchange Offer or (C) if applicable, a Shelf Registration has been declared
effective and such Shelf Registration ceases to be effective at any time
during the Effectiveness Period, then Additional Dividends shall accumulate
on the Registrable Shares over and above the stated dividend rate at a rate
of 0.50% per annum for the first 90 days commencing on the (x) 181st day
after the Issue Date in the case of (A) above or (y) the day such Exchange
Registration Statement or Shelf Registration ceases to be effective in the
case of (B) and (C) above, such Additional Dividends rate increasing by an
additional 0.25% per annum at the beginning of each such subsequent 90-day
period;
provided, however, that the Additional Dividends rate on the Registrable Shares
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may not exceed in the aggregate 2.0% per annum; provided further that (1) upon
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the filing of the Exchange Registration Statement or each Shelf Registration (in
the case of (i) above), (2) upon the effectiveness of the Exchange Registration
Statement or each Shelf Registration, as the case may be (in the case of (ii)
above), or (3) upon the exchange of Exchange Shares for all Registrable Shares
tendered (in the case of (iii)(A) above) or upon the effectiveness of an
Exchange Registration Statement or Shelf Registration which had ceased to remain
effective (in the case of (iii)(B) and (C) above), Additional Dividends on any
Registrable Shares then accumulating Additional Dividends as a result of such
clause (or the relevant subclause thereof), as the case may be, shall cease to
accumulate.
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(b) The Company shall notify each Holder within one Business Day
after each and every date on which a Registration Default occurs in respect of
which Additional Dividends is required to be paid (an "Event Date"). Any amounts
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of Additional Dividends due pursuant to a Registration Default will be payable
in cash, semi-annually on each regular dividend payment date specified in the
Statement of Resolution (to the Holders of Registrable Shares of record on the
regular record date therefor (as specified in the Statement of Resolution)
immediately preceding such dates), commencing with the first such regular
dividend payment date occurring after any such Additional Dividends commence to
accumulate. The amount of Additional Dividends will be determined by multiplying
the applicable Additional Dividends rate by the liquidation preference of the
Shares subject thereto, multiplied by a fraction, the numerator of which is the
number of days such Additional Dividends rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
Notwithstanding anything to the contrary in this Section 4, the
Company shall not be required to pay Additional Dividends to a Holder (i) if
such Holder failed to comply with its obligations to make the representations
set forth in Section 2(a) or failed to provide the information required to be
provided by it, if any, pursuant to Section 5 or (ii) if the Exchange Offer was
consummated within 180 days of the Issue Date and such Holder of Registrable
Shares was, at any time while the Exchange Offer was pending, eligible to
exchange, and did not validly tender, such Registrable Shares for freely
transferable corresponding Exchange Shares in such Exchange Offer.
The parties hereto agree that the liquidated damages provided for in
this Section 4 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Registrable
Shares by reason of the failure of (i) the Shelf Registration or the Exchange
Registration Statement to be filed, (ii) the Shelf Registration to remain
effective or (iii) the Exchange Registration Statement to be declared effective
and remain effective and the Exchange Offer to be consummated, in each case to
the extent required by this Agreement.
5. Registration Procedures
-----------------------
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Company shall use its reasonable best efforts to
effect such registrations to permit the sale of such securities covered thereby
in accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by the
Company hereunder, the Company shall use its reasonable best efforts to:
(a) Prepare and file with the Commission prior to the Filing Date,
the Exchange Registration Statement or if the Exchange Registration Statement is
not filed or is
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unavailable, a Shelf Registration as prescribed by Section 2 or 3, and use its
reasonable best efforts to cause each such Registration Statement to become
effective and remain effective as provided herein; provided that, if (1) a Shelf
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Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an
Exchange Registration Statement filed pursuant to Section 2 is required to be
delivered under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Shares during the Applicable Period and has advised the Company
that it is a Participating Broker-Dealer, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the Company
shall, if requested, furnish to and afford the Holders of the Registrable Shares
to be registered pursuant to such Shelf Registration or each such Participating
Broker-Dealer, as the case may be, covered by such Registration Statement, their
counsel and the managing underwriters, if any, a reasonable opportunity to
review copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be filed
(in each case at least five Business Days prior to such filing). The Company
shall not file any such Registration Statement or Prospectus or any amendments
or supplements thereto if the Holders of a majority in aggregate liquidation
preference of the Registrable Shares covered by such Registration Statement, or
any such Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the Commission such amendments and post-
effective amendments to each Shelf Registration or Exchange Registration
Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented by
any Prospectus supplement required by applicable law, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force) under
the Securities Act; and comply with the provisions of the Securities Act and the
Exchange Act applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being
sold by a Participating Broker-Dealer covered by any such Prospectus. The
Company shall be deemed not to have used its reasonable best efforts to keep a
Registration Statement effective during the Applicable Period if it voluntarily
takes any action that would result in selling Holders of the Registrable Shares
covered thereby or Participating Broker-Dealers seeking to sell Exchange Shares
not being able to sell such Registrable Shares or such Exchange Shares during
that period unless such action is required by applicable law, rule or regulation
or unless the Company complies with this Agreement, including, without
limitation, the provisions of paragraph 5(k) hereof and the last paragraph of
Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who
-13-
seeks to sell Exchange Shares during the Applicable Period from whom the Company
has received written notice that it will be a Participating Broker-Dealer,
notify the selling Holders of Registrable Shares, and each such Participating
Broker-Dealer, their counsel and the managing underwriters, if any, promptly
(but in any event within two Business Days), and confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any post-
effective amendment, when the same has become effective (including in such
notice a written statement that any Holder may, upon request, obtain, without
charge, one conformed copy of such Registration Statement or post-effective
amendment including financial statements and schedules, documents incorporated
or deemed to be incorporated by reference and exhibits), (ii) of the issuance by
the Commission of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that purpose, (iii) if at
any time when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Shares the representations and
warranties of the Company contained in any agreement pursuant to this Agreement
(including any underwriting agreement contemplated by Section 5(n) hereof) cease
to be true and correct in any material respect, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of a Registration Statement or any of the
Registrable Shares or the Exchange Shares to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (v) of the happening of any
event, the existence of any condition or any information becoming known that
makes any statement of material fact made in such Registration Statement or
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in, or amendments or supplements to, such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and (vi) of the Company's reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, use its reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable Shares
or the Exchange Shares to
-14-
be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and,
if any such order is issued, to use its reasonable best efforts to obtain the
withdrawal of any such order at the earliest possible date.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriters, if any, or the Holders of a majority in
aggregate liquidation preference of the Registrable Shares being sold in
connection with an underwritten offering, (i) as promptly as practicable
incorporate in a prospectus supplement or post-effective amendment such
information or revisions to information therein relating to such underwriters or
selling Holders as the managing underwriters, if any, or such Holders or their
counsel reasonably request to be included or made therein, (ii) make all
required filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment, and (iii) supplement or make amendments to such Registration
Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, furnish to each selling Holder of Registrable Shares and to
each such Participating Broker-Dealer who so requests and to counsel and each
managing underwriter, if any, without charge, one conformed copy of the
Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer, deliver to each selling Holder of Registrable
Shares or each such Participating Broker-Dealer, as the case may be, their
respective counsel, and the underwriters, if any, without charge, as many copies
of the Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably request; and,
subject to the last paragraph of this Section 5, the Company hereby consents to
the use (in accordance with law) of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of Registrable Shares and each
Participating Broker-Dealer, and the underwriters or agents, if any, and dealers
(if any), in connection with the offering and sale of the Registrable Shares
covered by, or the sale by Participating Broker-Dealers of the Exchange Shares
pursuant to, such Prospectus and any amendment or supplement thereto.
-15-
(h) Prior to any public offering of Registrable Shares or any
delivery of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, use its reasonable best efforts to register or qualify, and
cooperate with the selling Holders of Registrable Shares and each such
Participating Broker-Dealer, the underwriters, if any, and their respective
counsel in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Shares or Exchange
Shares, as the case may be, for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any selling Holder,
Participating Broker-Dealer, or the managing underwriter or underwriters, if
any, reasonably request in writing; provided that where Exchange Shares held by
--------
Participating Broker-Dealers or Registrable Shares are offered pursuant to an
underwritten offering, counsel to the underwriters shall, at the cost and
expense of the Company, perform the Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this Section
5(h); keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be kept
effective and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Exchange Shares
by Participating Broker-Dealers or the Registrable Shares covered by the
applicable Registration Statement; provided that the Company shall not be
--------
required to (A) qualify generally to do business in any jurisdiction where it is
not then so qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
(C) subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3, cooperate
with the selling Holders of Registrable Shares, any Participating Broker-Dealer
and the managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Shares to be
sold, which certificates shall not bear any restrictive legends and shall be in
a form eligible for deposit with The Depository Trust Company (the "DTC"); and
---
enable such Registrable Shares to be in such denominations and registered in
such names as the managing underwriter or underwriters, if any, or Holders may
reasonably request at least two Business Days prior to such sale of Registrable
Shares.
(j) Use its reasonable best efforts to cause the Registrable Shares
covered by the Registration Statement to be registered with or approved by such
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition of
such Registrable Shares, in which case the Company will cooperate in all
reasonable respects with the filing of such Registration Statement and the
granting of such approvals; provided that the Company shall not be required to
--------
(A) qualify generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of
process in any such
-16-
jurisdiction where it is not then so subject or (C) subject itself to taxation
in excess of a nominal dollar amount in any such jurisdiction where it is not
then so subject.
(k) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, upon the occurrence of any event contemplated by paragraph
5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to
Section 5(a) hereof) file with the Commission, at the Company's sole expense, a
supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Shares being
sold thereunder or to the purchasers of the Exchange Shares to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(l) Use its reasonable best efforts to cause the Registrable Shares
covered by a Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate liquidation
preference of Registrable Shares covered by such Registration Statement or the
managing underwriter or underwriters, if any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Shares, (i) provide the Holders with printed
certificates for the Registrable Shares or the Exchange Shares, as the case may
be, in a form eligible for deposit with the Depository Trust Company and (ii)
provide a CUSIP number for the Registrable Shares or the Exchange Shares, as the
case may be.
(n) In connection with an underwritten offering of Registrable Shares
pursuant to a Shelf Registration, enter into an underwriting agreement as is
customary in underwritten offerings of preferred equity securities similar to
the Shares and take all such other actions as are reasonably requested by the
managing underwriter or underwriters in order to expedite or facilitate the
registration or the disposition of such Registrable Shares and, in such
connection, (i) make such representations and warranties to the underwriters,
with respect to the business of the Company and its subsidiaries and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, as are customarily made
by issuers to underwriters in underwritten offerings of preferred equity
securities similar to the Shares, and confirm the same in writing if and when
requested; (ii) obtain the opinion of counsel to the Company and updates thereof
in form and substance reasonably satisfactory to the managing underwriter or
underwriters,
-17-
addressed to the underwriters covering the matters customarily covered in
opinions requested in underwritten offerings of preferred equity securities
similar to the Shares and such other matters as may be reasonably requested by
managing underwriters; (iii) obtain "cold comfort" letters and updates thereof
in form and substance reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each of the underwriters, such letters
to be in customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings of preferred
equity securities similar to the Shares and such other matters as reasonably
requested by the managing underwriter or underwriters; and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in Section 7
hereof (or such other provisions and procedures acceptable to Holders of a
majority in aggregate liquidation preference of Registrable Shares covered by
such Registration Statement and the managing underwriter or underwriters or
agents) with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed pursuant
to Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, make available for inspection by any selling Holder of such
Registrable Shares being sold, and each Participating Broker-Dealer, any
underwriter participating in any such disposition of Registrable Shares, if any,
and any attorney, accountant or other agent retained by any such selling Holder,
each Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
----------
reasonable business hours, all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise any
-------
applicable due diligence responsibilities, and cause the officers, directors and
employees of the Company and its subsidiaries to supply all information
reasonably requested by any such Inspector in connection with such Registration
Statement. Records which the Company determines, in good faith, to be
confidential and any Records which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
Registration Statement, (ii) the release of such Records is ordered pursuant to
a subpoena or other order from a court of competent jurisdiction, (iii) the
information in such Records has been made generally available to the public
other than as a result of a disclosure or failure to safeguard by such Inspector
or (iv) disclosure of such information is, in the opinion of counsel for any
Inspector, necessary or advisable in connection with any action, claim, suit or
proceeding,
-18-
directly or indirectly, involving or potentially involving such Inspector and
arising out of, based upon, related to, or involving this Agreement, or any
transactions contemplated hereby or arising hereunder. Each selling Holder of
such Registrable Shares and each Participating Broker-Dealer will be required to
agree that information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company or any of its subsidiaries unless
and until such is made generally available to the public. Each Inspector, each
selling Holder of such Registrable Shares and each Participating Broker-Dealer
will be required to further agree that it will, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction pursuant to clauses
(ii) or (iv) of the previous sentence or otherwise, give notice to the Company
and allow the Company to undertake appropriate action to obtain a protective
order or otherwise prevent disclosure of the Records deemed confidential at its
expense.
(p) Provide a transfer agent for the Registrable Shares or the
Exchange Shares, as the case may be.
(q) Comply with all applicable rules and regulations of the
Commission and make generally available to its securityholders earnings
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Registrable Shares are sold to
underwriters in a firm commitment or best efforts underwritten offering and (ii)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month periods.
(r) Upon consummation of the Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company, in a form customary for
underwritten transactions, addressed to the Transfer Agent for the benefit of
all Holders of Registrable Shares participating in the Exchange Offer or the
Private Exchange, as the case may be, as follows: (i) the Exchange Shares or
the Private Exchange Shares, as the case may be have been duly authorized, and
are validly issued, fully paid and nonassessable and free of any preemptive or
similar rights; and (ii) the Amended and Restated Articles of Incorporation of
the Company, by virtue of the Statement of Resolution, sets forth the rights,
preferences and priorities of the Exchange Shares or Private Exchange Shares, as
the case may be, and the holders of Exchange Shares or Private Exchange Shares,
as the case may be, will have the rights set forth in the Statement of
Resolution.
(s) If the Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Shares by Holders to the Company (or to such
other Person
-19-
as directed by the Company) in exchange for the Exchange Shares or the Private
Exchange Shares, as the case may be, the Company shall ▇▇▇▇, or caused to be
marked, on such Registrable Shares that such Registrable Shares are being
cancelled in exchange for the Exchange Shares or the Private Exchange Shares, as
the case may be; in no event shall such Registrable Shares be marked as paid or
otherwise satisfied.
(t) Cooperate with each seller of Registrable Shares covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Shares and their respective counsel in
connection with any filings required to be made with the NASD.
(u) Use its best efforts to take all other steps reasonably necessary
to effect the registration of the Registrable Shares covered by a Registration
Statement contemplated hereby.
The Company may require each seller of Registrable Shares as to which
any registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Registrable Shares as the
Company may, from time to time, reasonably request. The Company may exclude
from such registration the Registrable Shares of any seller who fails to furnish
such information within a reasonable time after receiving such request. No
seller shall be entitled to Additional Dividends pursuant to Section 4 unless
and until such seller has provided all such information. Each seller as to
which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such seller not
materially misleading.
Each Holder of Registrable Shares and each Participating Broker-Dealer
agrees by acquisition of such Registrable Shares or Exchange Shares to be sold
by such Participating Broker-Dealer, as the case may be, that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi), such Holder will forthwith
discontinue disposition of such Registrable Shares covered by such Registration
Statement or Prospectus or Exchange Shares to be sold by such Holder or
Participating Broker-Dealer, as the case may be, and, in each case,
dissemination of such Prospectus until such Holder's or Participating Broker-
Dealer's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k), or until it is advised in writing (the "Advice")
------
by the Company that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto. In the event the
Company shall give any such notice, each of the Effectiveness Period and the
Applicable Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Shares covered by such Registration
Statement or Exchange Shares to be sold by such Participating Bro-
-20-
ker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) or (y) the
Advice.
6. Registration Expenses
---------------------
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company, whether or not
the Exchange Offer or a Shelf Registration is filed or becomes effective,
including, without limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required to be made with
the NASD in connection with an underwritten offering and (B) fees and expenses
of compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with Blue
Sky qualifications of the Registrable Shares or Exchange Shares and
determination of the eligibility of the Registrable Shares or Exchange Shares
for investment under the laws of such jurisdictions (x) where the holders of
Registrable Shares are located, in the case of the Exchange Shares, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Shares or Exchange
Shares to be sold by a Participating Broker-Dealer during the Applicable
Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Shares or Exchange Shares in a form
eligible for deposit with the DTC and of printing prospectuses if the printing
of prospectuses is requested by the managing underwriter or underwriters, if
any, or by the Holders of a majority in aggregate liquidation preference of the
Registrable Shares included in any Registration Statement or by any
Participating Broker-Dealer, as the case may be, (iii) reasonable messenger,
telephone and delivery expenses incurred in connection with the Exchange
Registration Statement and any Shelf Registration, (iv) fees and disbursements
of counsel for the Company and reasonable fees and disbursements of special
counsel for the Initial Purchasers and the sellers of Registrable Shares, (v)
fees and disbursements of all independent certified public accountants referred
to in Section 5(n)(iii) (including, without limitation, the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance), (vi) rating agency fees, (vii) Securities Act liability insurance,
if the Company desires such insurance, (viii) fees and expenses of all other
Persons retained by the Company (ix) internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees of the Company, performing legal or accounting duties), (x) the
expense of any annual or special audit, (xi) the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange, (xii) the fees and disbursements of underwriters, if any, customarily
paid by issuers or sellers of securities (but not including any underwriting
discounts or commissions or transfer taxes, if any, attributable to the sale of
the Registrable Shares which discounts, commissions or taxes shall be paid by
Holders of such Registrable Shares) and (xiii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any other
documents necessary in order to comply with this Agreement.
-21-
7. Indemnification
---------------
(a) the Company agrees to indemnify and hold harmless each Holder of
Registrable Shares and each Participating Broker-Dealer, the officers,
directors, employees and agents of each such Person, and each Person, if any,
who controls any such Person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "Participant"), from
-----------
and against any and all losses, claims, damages and liabilities (including,
without limitation, the reasonable legal fees and other reasonable expenses
actually incurred in connection with any suit, action or proceeding or any claim
asserted) caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or caused by, arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Participant
furnished to the Company in writing by or on behalf of such Participant
expressly for use therein; provided, however, that the Company shall not be
-------- -------
liable if such untrue statement or omission or alleged untrue statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus or any amendment or supplement thereto and the Prospectus does
not contain any other untrue statement or omission or alleged untrue statement
or omission of a material fact that was the subject matter of the related
proceeding and any such loss, liability, claim, damage or expense suffered or
incurred by the Participants resulted from any action, claim or suit by any
Person who purchased Registrable Shares or Exchange Shares which are the subject
thereof from such Participant and it is established in the related proceeding
that such Participant failed to deliver or provide a copy of the Prospectus (as
amended or supplemented) to such Person with or prior to the confirmation of the
sale of such Registrable Shares or Exchange Shares sold to such Person if
required by applicable law, unless such failure to deliver or provide a copy of
the Prospectus (as amended or supplemented) was a result of noncompliance by the
Company with Section 5 of this Agreement.
(b) Each Participant will be required to agree, severally and not
jointly, to indemnify and hold harmless the Company, its directors and officers
and each Person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to each Participant, but only 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. The liability of any Participant under this paragraph shall in no
event exceed the proceeds received
-22-
by such Participant from sales of Registrable Shares or Exchange Shares giving
rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
------------------
notify the Person against whom such indemnity may be sought (the "Indemnifying
------------
Person") in writing, and the Indemnifying Person, upon request of the
------
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
-------- -------
Indemnifying Person shall not relieve it of any obligation or liability which it
may have hereunder or otherwise. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and the Indemnified Person shall have reasonably concluded that there may
be one or more legal defenses available to it and/or other Indemnified Persons
that are different from or additional to those available to any such
Indemnifying Person. It is understood that, unless there is a conflict among
Indemnified Persons, the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Participants
and such control Persons of Participants shall be designated in writing by
Participants who sold a majority in interest of Registrable Shares sold by all
such Participants and any such separate firm for the Company, its directors,
officers and such control Persons of the Company shall be designated in writing
by the Company. The Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there is a final non-appealable judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for
reasonable 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
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Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement; provided, however, that the
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Indemnifying Person shall not be liable for any settlement effected without its
consent pursuant to this sentence if the Indemnifying Person is contesting, in
good faith, the request for reimbursement. No Indemnifying Person shall, without
the prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement (A) includes an unconditional
release of such Indemnified Person, in form and substance satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of an Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is unavailable to, or insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions (or alleged statements or omissions) that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative fault of the parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company, on the
one hand, or by the Participants or such other Indemnified Person, as the case
may be, on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission and
any other equitable considerations appropriate under the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
--- ----
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
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
-24-
received by such Participant from sales of Registrable Shares or Exchange
Shares, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
------------------
The Company covenants, for so long as any Registrable Shares remain
outstanding, that it will file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
Commission thereunder in a timely manner and, if at any time it is not required
to file such reports, it will, upon the request of any Holder of Registrable
Shares, make publicly available other information so long as necessary to permit
sales pursuant to Rule 144 and Rule 144A. The Company further covenants, for so
long as any Registrable Shares remain outstanding, to make available to any
Holder or beneficial owner of Registrable Shares in connection with any sale
thereof and any prospective purchaser of such Registrable Shares from such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Securities Act in order to permit resales of such Registrable Shares
pursuant to Rule 144A.
9. Underwritten Registrations
--------------------------
If any of the Registrable Shares covered by any Shelf Registration are
to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate liquidation preference of such
Registrable Shares included in such offering and shall be reasonably acceptable
to the Company.
No Holder of Registrable Shares may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Shares on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
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10. Miscellaneous
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(a) Remedies. Except as provided in Section 4, in the event of a
--------
breach by the Company of any of its obligations under this Agreement, each
Holder of Registrable Shares and each Participating Broker-Dealer holding
Exchange Shares, in addition to being entitled to exercise all rights provided
herein, in the Statement of Resolution or, in the case of an 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.
Except as provided in Section 4, 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) No Inconsistent Agreements. The Company has not entered, as of
--------------------------
the date hereof, and the Company shall not enter, after the date of this
Agreement, into any agreement with respect to any of its securities that is
inconsistent with the rights granted to the Holders of Registrable Shares in
this Agreement or otherwise conflicts with the provisions hereof. The Company
has not entered and shall not enter into any agreement with respect to any of
its securities which will grant to any Person piggy-back rights with respect to
a Registration Statement.
(c) Adjustments Affecting Registrable Shares. The Company shall not
----------------------------------------
directly or indirectly, take any action with respect to the Registrable Shares
as a class that would adversely affect the ability of the Holders of Registrable
Shares to include such Registrable Shares in a registration undertaken pursuant
to this Agreement.
(d) Amendments and Waivers. The provisions of this Agreement may not
----------------------
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (A) the Holders of not less than a majority in aggregate liquidation
preference of the then outstanding Registrable Shares and (B) in circumstances
that would adversely affect Participating Broker-Dealers, the Participating
Broker-Dealers holding not less than a majority in aggregate liquidation
preference of the Exchange Shares held by all Participating Broker-Dealers;
provided, however, that Section 7 and this Section 10(d) may not be amended,
-------- -------
modified or supplemented without the prior written consent of each Holder and
each Participating Broker-Dealer (including any person who was a Holder or
Participating Broker-Dealer of Registrable Shares or Exchange Shares, as the
case may be, disposed of pursuant to any Registration Statement).
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Registrable Shares whose securities are being tendered pursuant to
the Exchange Offer or sold pursuant to a Registration Statement and that does
not directly or indirectly affect, impair, limit or
-26-
compromise the rights of other Holders of Registrable Shares may be given by
Holders of at least a majority in aggregate liquidation preference of the
Registrable Shares being tendered or being sold by such Holders pursuant to such
Registration Statement.
(e) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, next-day air courier or telecopier:
1. if to a Holder of Registrable Shares or any Participating Broker-
Dealer, at the most current address of such Holder or Participating Broker-
Dealer, as the case may be, set forth on the records of the registrar under
the Statement of Resolution, with a copy in like manner to the Initial
Purchasers as follows:
CIBC WORLD MARKETS CORP.
CHASE SECURITIES INC.
c/o CIBC WORLD MARKETS CORP.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Finance
Department
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
2. if to the Initial Purchasers, at the address specified in Section
10(e)(1);
3. if to the Company, as follows:
c/o Laurel Hill Capital Partners LLC
▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-27-
with copies to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: M. ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five Business Days
after being deposited in the mail, postage prepaid, if mailed; one Business Day
after being timely delivered to a next-day air courier guaranteeing overnight
delivery; and when receipt is acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Transfer Agent at
the address specified in the Statement of Resolution.
(f) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties hereto
and the Holders; provided, however, that this Agreement shall not inure to the
-------- -------
benefit of or be binding upon a successor or assign of a Holder unless and to
the extent such successor or assign holds Registrable Shares.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
-28-
(j) Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(k) Shares Held by the Company or Its Affiliates. Whenever the
--------------------------------------------
consent or approval of Holders of a specified percentage of Registrable Shares
is required hereunder, Registrable Shares held by the Company or its affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
(l) Third Party Beneficiaries. Holders of Registrable Shares and
-------------------------
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
(m) Registration of Dividend Shares. If the issuance of Dividend
-------------------------------
Shares requires registration under the Securities Act and any such issuance
shall not have been effectively registered under the Securities Act pursuant to
the Exchange Registration Statement then, prior to any issuance of Dividend
Shares, the Company shall file with the Commission and cause to become effective
a Registration Statement registering the issuance of such Dividend Shares.
(n) Entire Agreement. This Agreement, together with the Purchase
----------------
Agreement and the Statement of Resolution, is intended by the parties as a final
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein and any and all
prior oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda among the Initial
Purchasers on the one hand and the Company on the other, or between or among any
agents, representatives, parents, subsidiaries, affiliates, predecessors in
interest or successors in interest with respect to the subject matter hereof and
thereof are merged herein and replaced hereby.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
TNP ENTERPRISES, INC.
By: ___________________________________
Name:
Title:
CIBC WORLD MARKETS CORP.
By: ___________________________________
Name:
Title:
CHASE SECURITIES INC.
By: ___________________________________
Name:
Title: