1
EXHIBIT 99.3
================================================================================
[New Common Stock]
REGISTRATION RIGHTS AGREEMENT
Dated as of March 31, 2000
by and among
▇▇▇▇▇▇ SERVICES CORPORATION
and
EACH SECURITIES HOLDER REFERRED TO HEREIN
================================================================================
2
TABLE OF CONTENTS
Page
----
Section 1. Definitions 2
1.1. Defined Terms 2
Section 2. Demand Registration Rights of Securities Holders 8
2.1. Demand Registration Rights 8
2.2. Determination 9
2.3. Notices; Minimum Registerable Amounts 9
2.4. Discretion of Securities Holder 10
2.5. Allocation Among Initiating Securities Holders 11
2.6. Piggyback Rights of Securities Holders and the Company 11
2.7. Limitation on Registration Rights 12
Section 3. Company Sale Events 13
3.1. Determination 13
3.2. Notice 13
3.3. Piggyback Rights of Securities Holders 13
3.4. Discretion of the Company 14
Section 4. Black-Out Periods 14
4.1. Black-Out Periods for Securities Holders 14
Section 5. Agreements Concerning Offerings 14
5.1. Obligations of Securities Holders 14
5.2. Obligations of the Company 15
5.3. Agreements Related to Offerings 16
5.4. Certain Expenses 19
5.5. Public Reporting; Rule 144 19
5.6. Limitations on Subsequent Registration Rights 20
5.7. Indemnification and Contribution 20
5.8. Underwritten Offerings 27
5.9. Transfer of Rights Under this Agreement; Transfers of Registerable Common 27
5.10. Termination of Rights 28
Section 6. Sequencing of Public Sale Events 28
6.1. Effective Notice Period 28
(i)
3
Page
----
6.2. Restrictive Legend on Certificates 28
Section 7. Representations and Warranties of the Company 29
Section 8. Representations and Warranties of the Securities Holders 33
Section 9. Delivery of Comfort Letter and Legal Opinion 35
Section 10. Miscellaneous 35
10.1. Notices 35
10.2. Amendments and Waivers 35
10.3. Termination 36
10.4. Survival of Representations and Warranties 36
10.5. Headings 36
10.6. Counterparts 36
10.7. GOVERNING LAW 36
10.8. Adjustment of Shares 36
10.9. No Inconsistent Agreements 36
10.10. Severability 37
10.11. ENTIRE AGREEMENT 37
10.12. Listing of New Common Stock 37
10.13. No Required Sale 37
EXHIBITS
Exhibit A - Securities Holders Questionnaire 39
Exhibit B - Supplemental Addendum 45
(ii)
4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 31, 2000, by and among
▇▇▇▇▇▇ SERVICES CORPORATION, a corporation organized under the laws of the State
of Delaware (the "Company"), and each SECURITIES HOLDER (as defined in
subsection 1.1).
-1-
5
W I T N E S S E T H:
WHEREAS, on June 25, 1999 the Company, formerly known as ▇▇▇▇▇▇ Services
(Delaware), Inc., filed a voluntary petition for relief under Chapter 11 of
title 11 of the United States Code (as amended, the "Bankruptcy Code") with the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). On November 30, 1999, the Bankruptcy Court entered an Order confirming
the First Amended Joint Plan of Reorganization of ▇▇▇▇▇▇ Services (Delaware),
Inc. et al., dated as of September 21, 1999 (the "Plan"); and
WHEREAS, the Plan provides that the Company shall enter into a registration
rights agreement with certain of its shareholders.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the parties hereto hereby agree as follows:
Section 1. Definitions.
1.1. Defined Terms. (a) As used in this Agreement, the terms defined in the
caption and the recitals shall have the meanings set forth therein, and the
following terms shall have the following meanings:
"affiliate" shall have the meaning ascribed thereto in Rule 12b-2
under the Exchange Act as in effect on the date hereof.
"Agreement" shall mean this Registration Rights Agreement, as amended,
supplemented or otherwise modified from time to time.
"AREP" shall mean American Real Estate Holdings, L.P.
"Canadian Prospectus" shall mean a Preliminary Prospectus or
Prospectus, as applicable, in respect of which a receipt has been issued by
the Canadian Securities Authority in each of the provinces of Canada in
which the document has been filed.
"Canadian Securities Authorities" shall mean the securities regulatory
authorities in each of the provinces of Canada, and "Canadian Securities
Authority" shall mean any one of the Canadian Securities Authorities.
"Canadian Securities Laws" shall mean the securities legislation of
each of the provinces of Canada and the respective regulations thereunder
and the published rules, policy statements, blanket rulings, orders,
notices or national instruments applicable therein.
"Canadian Shelf Procedures" shall mean the procedures contemplated by
National Policy 47 of the Canadian Securities Administrators for the
distribution of securities of
-2-
6
eligible issuers under the prompt offering qualification system, as the
same may be amended or superseded from time to time.
"Commission" shall mean the United States Securities and Exchange
Commission or any successor thereto.
"Company Private Sale Event" shall mean any sale of New Common Stock
by the Company which sale is not effected pursuant to a Registration
Statement; excluding, however, any sale or related series of sales of New
Common Stock by the Company (a) in connection with the acquisition by the
Company of another company or business or investment by the Company in any
joint venture or (b) pursuant to any "employee benefit plan" within the
meaning of Rule 405 under the Securities Act adopted by the Company or any
other member of the ▇▇▇▇▇▇ Group.
"Company Public Sale Event" shall mean any sale by the Company of New
Common Stock pursuant to (i) a Registration Statement filed by the Company
(other than a Registration Statement filed by the Company on Form S-4, or
Form S-8 or (ii) a Canadian Prospectus filed by the Company (other than in
respect of shares of New Common Stock issued (a) in connection with an
acquisition by the Company of another company or business or an investment
by the Company in a joint venture or (b) pursuant to an "employee benefit
plan" within the meaning of Rule 405 under the Securities Act adopted by
the Company or any other member of the ▇▇▇▇▇▇ Group.
"Company Sale Notice" shall mean a Notice of Offering from the Company
to each Security Holder stating that the Company proposes to effect a
Company Public Sale Event or a Company Private Sale Event, as the case may
be.
"Demand Registration" shall mean any Registration and/or Qualification
of Registerable Common pursuant to a Registration Statement filed by the
Company in accordance with the provisions of subsection 2.2.
"Effective Date" shall mean March 31, 2000, being the date on which
the Plan became effective, as provided therein. Notwithstanding that this
Agreement is expressed to be dated as of March 31, 2000, it is agreed that
this Agreement shall be deemed to be delivered on and take effect as of and
from the Closing Date, as defined in the Secured PIK/Term Credit Agreement.
"Effective Notice Period" shall have the meaning assigned to such term
in subsection 6.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor legislation thereto.
"Exit Facility" shall mean the Exit Facility, dated as of March 31,
2000, among the Company, the Subsidiaries of the Company party thereto,
Foothill Capital
-3-
7
Corporation, as arranger and administrative agent, and the lenders party
thereto.
"First Phase" shall mean the period of time commencing on the
Effective Date and ending on the date that is the earlier of (a) the date
on which the Company is eligible to use Form S-3 to effect a Registration
of shares of New Common Stock and (b) the fifteen (15) month anniversary of
the Effective Date.
"Form S-3" shall mean such form of registration statement under the
Securities Act as in effect on the date hereof or any successor form
thereto.
"Form S-4" shall mean such form of registration statement under the
Securities Act as in effect on the date hereof or any successor form
thereto.
"Form S-8" shall mean such form of registration statement under the
Securities Act as in effect on the date hereof or any successor form
thereto.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"High River" shall mean High River Limited Partnership.
"Initiating Securities Holders" shall have the meaning assigned to
such term in subsection 2.3(b).
"Material Adverse Change" shall mean, for purposes of subsections
2.4(b) and (c), any material adverse change in, or the occurrence of any
event which would reasonably be expected to have a material adverse effect
on, the business, condition (financial or otherwise) or prospects of the
▇▇▇▇▇▇ Group taken as a whole (it being understood that a change in general
political, financial, banking or capital market conditions shall not be a
"Material Adverse Change" unless such change has, or would reasonably be
expected to have, a material adverse effect on the ▇▇▇▇▇▇ Group as
described above).
"Minimum Registerable Amount" shall mean, on any date of determination
thereof during (a) the First Phase, the number of shares of Registerable
Common representing at least (i) in the case of a Demand Registration other
than a Shelf Registration, 10% of the issued and then outstanding shares of
New Common Stock or (ii) in the case of a Shelf Registration, 15% of the
issued and then outstanding shares of New Common Stock and (b) the Second
Phase, (i) in the case of a Demand Registration other than a Shelf
Registration, 7.5% of the issued and then outstanding shares of New Common
Stock or (ii) in the case of a Shelf Registration, 11.25% of the issued and
then outstanding shares of New Common Stock; provided, that notwithstanding
the foregoing, if a Securities Holder owns less than what would otherwise
be the Minimum Registerable Amount, the Minimum Registerable Amount with
respect to such Securities Holder shall
-4-
8
be 75% of the aggregate number of shares of Registerable Common owned by
such Securities Holder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
or any successor thereto.
"New Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company authorized pursuant to the Plan to be issued from and
after the Effective Date, and any reclassification thereof, including any
common stock issuable upon conversion of convertible securities issued
pursuant to the Plan.
"Notice of Offering" shall mean a written notice with respect to (a) a
proposed Sale Event pursuant to a Demand Registration, (b) a Company Public
Sale Event or (c) a Company Private Sale Event, in each case setting forth
(i) the expected maximum and minimum number of shares of Registerable
Common or New Common Stock, as the case may be, proposed to be offered and
sold, (ii) the lead managing underwriter, if applicable and known and (iii)
the proposed method of distribution and the expected timing of the
offering, including whether the proposed offering will be registered in the
United States, qualified for distribution in Canada, or both.
"Person" shall mean any individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority, limited liability company or other entity
of whatever nature.
"▇▇▇▇▇▇ Group" shall mean the Company together with each Subsidiary of
the Company.
"Piggybacking Notice" shall have the meaning assigned to such term in
subsection 2.6(a).
"Piggybacking Securities Holder" shall have the meaning assigned to
such term in subsection 2.6(a).
"Preliminary Prospectus" shall mean (i) each preliminary prospectus
included in a Registration Statement or in any amendment thereto prior to
the date on which such Registration Statement is declared effective under
the Securities Act, including any prospectus filed with the Commission
pursuant to Rule 424(a) under the Securities Act or (ii) each preliminary
prospectus, as the same may be amended prior to the issuance of the final
receipt by the applicable Canadian Securities Authority.
"Prospectus" shall mean each prospectus (i) included in a Registration
Statement at the time it becomes effective (including, without limitation,
a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective Registration Statement in
accordance with Rule 430A), together with any supplement thereto, as filed
with, or transmitted for filing to the Commission pursuant to Rule 424(b)
under the
-5-
9
Securities Act or (ii) for which a receipt is issued by the Canadian
Securities Authority in each province in which such document is filed
pursuant to any applicable Canadian Securities Laws (and including, without
limitation, the information that is permitted to have been omitted by
National Policy Statement No. 44 of the Canadian Securities Administrators
for the pricing of securities after the final prospectus is receipted, as
the same may be amended or superseded from time to time).
"Public Sale Event" shall mean a Securities Holder Public Sale Event
or a Company Public Sale Event, as the case may be.
"Purchase Agreement" shall mean, in connection with any Sale Event,
any written agreement entered into by any Securities Holder providing for
the sale of Registerable Common and/or the Company providing for the sale
of New Common Stock.
"Qualification" shall mean the qualification of securities pursuant to
a Canadian Prospectus, for which a final receipt has been issued by the
Securities Regulatory Authority in each province in which such document is
filed.
"Registerable Common" shall mean with respect to each Securities
Holder (a) the shares of New Common Stock issued to such Securities Holder
pursuant to the Plan, and (b) any other securities issued as (or issuable
upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, such shares of Registerable Common;
excluding in all cases, however, any shares of Registerable Common from and
after the transfer thereof pursuant to a Registration Statement, a Canadian
Prospectus or Rule 144.
"Registration" shall mean a registration of securities pursuant to the
Securities Act.
"Registration Statement" shall mean (i) any registration statement
(including the Preliminary Prospectus, the Prospectus, any amendments
(including any post-effective amendments) thereto, any supplements and all
exhibits thereto and any documents incorporated therein by reference
pursuant to the rules and regulations of the Commission or any applicable
Canadian securities laws), filed by the Company in connection with any
Public Sale Event with the Commission or (ii) a Canadian Prospectus filed
with any Canadian Securities Authority any amendments or supplements
thereto and any documents, incorporated by reference therein pursuant to
the rules of the applicable Canadian Securities Authority, which in either
case complies with all applicable requirements of the Securities Act and
the rules and regulations of the Commission thereunder and all applicable
Canadian Securities Laws.
"Responsible Officer" shall mean with respect to any Person, the
president, chief executive officer, chief operating officer, chief
financial officer or treasurer of such Person.
-6-
10
"Rule 144", shall mean Rule 144 promulgated by the Commission under
the Securities Act, or any successor to such Rule.
"Rule 415" shall mean Rule 415 promulgated by the Commission under the
Securities Act, or any successor to such Rule.
"Rule 424" shall mean Rule 424 promulgated by the Commission under the
Securities Act, or any successor to such Rule.
"Rule 430A" shall mean Rule 430A promulgated by the Commission under
the Securities Act, or any successor to such Rule.
"Sale Event" shall mean any sale by the Company of New Common Stock
pursuant to a Company Private Sale Event or a Company Public Sale Event or
any sale by any Securities Holder of Registerable Common pursuant to any
Registration Statement.
"Second Phase" shall mean the period following the end of the First
Phase and prior to the Termination Date.
"Secured PIK/Term Credit Agreement" shall mean the Secured PIK/Term
Credit Agreement, dated as of March 31, 2000, among the Company, Canadian
Imperial Bank of Commerce as administrative agent, and the various lenders
from time to time party thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor legislation thereto.
"Securities Holder" shall mean each entity set forth on the signature
pages of this Agreement under the heading "SECURITIES HOLDERS".
"Securities Holder Public Sale Event" shall mean any sale of
Registerable Common by a Securities Holder pursuant to a Demand
Registration.
"Securities Holder Sale Notice" shall mean a Notice of Offering to the
Company from a Securities Holder requesting the Company to effect a Demand
Registration of Registerable Common (to which such Securities Holder is at
the time entitled pursuant to subsection 2.1) and stating whether such
Securities Holder is requesting that such Demand Registration be a Shelf
Registration and whether such Registerable Common is to be registered for
sale in the United States, Canada or both; provided that if more than one
Notice of Offering is required to aggregate the Minimum Registerable
Amount, the term "Securities Holder Sale Notice" shall refer collectively
to all such Notices of Offering delivered by Securities Holders to the
Company in accordance with subsection 2.3(b).
-7-
11
"Securities Holder's Questionnaire" shall mean the questionnaire to be
provided by each Securities Holder to the Company in connection with a
Public Sale Event or Company Private Sale Event, substantially in the form
of Exhibit A, as the same from time to time may be amended, supplemented or
otherwise modified.
"Shelf Registration" shall mean any Qualification or Registration of
Registerable Common pursuant to (i) a Registration Statement filed by the
Company in accordance with the provisions of subsection 2.2 and which
provides for the offering of Registerable Common to be made on a continuous
basis pursuant to Rule 415 or (ii) a Prospectus filed by the Company in
accordance with the provisions of Section 2.2 and which provides for the
Offering of Registerable Common to be made on a continuous basis pursuant
to national Policy Statement No. 44 of the Canadian Securities
Administrators.
"Subsidiary" shall mean, as to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect the majority of the board of directors or other
managers of such corporation, partnership or other entity are at that time
owned directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a
"Subsidiary" or "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company.
"Supplemental Addendum" shall mean a Supplemental Addendum,
substantially in the form of Exhibit B to this Agreement.
"Termination Date" shall mean, as to each Securities Holder, the date
on which counsel to the Company delivers an opinion in accordance with
subsection 5.10 to such Securities Holder.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement.
Section 2. Demand Registration Rights of Securities Holders.
2.1. Demand Registration Rights. At any time prior to the Termination Date,
each Securities Holder shall have the right, subject to subsections 2.3, 2.4(b)
and (c) and 6.1, to request one (1) Demand Registration on behalf of itself and
its affiliates, and the Company shall be obligated to provide a Demand
Registration in response to each such request; provided that the Company shall
be obligated to provide no more than two (2) such Demand Registrations in the
aggregate during the First Phase; and provided, further, that, during the First
Phase, if the initial Demand Registration is a Shelf Registration, the Company
shall be obligated to provide only such Shelf Registration; and provided,
further, that if the Company delivers a Piggybacking
-8-
12
Notice after receiving a Securities Holder Sale Notice, each Securities Holder
who delivered such Securities Holder Sale Notice shall not be deemed to have
requested a Demand Registration under this subsection 2.1 for purposes of
calculating the limitations on Demand Registrations set forth in this subsection
2.1; and provided, further, that High River and AREP shall together have the
right to request a total of two (2) Demand Registrations, allocable between them
as they shall determine in their sole discretion.
2.2. Determination. Subject to the terms and conditions hereof, if the
Company shall at any time receive one or more Securities Holder Sale Notices in
accordance with subsection 2.3 representing, in the aggregate, at least the
Minimum Registerable Amount, then the Company shall (a) file a Registration
Statement within 45 days, and in any event, but subject to subsection 5.3(b),
make such filing within 60 days (provided that such time periods shall begin on
the date of the Company's receipt of the Securities Holder Sale Notice which,
together with any earlier delivered Securities Holder Sale Notice, represents
the applicable Minimum Registerable Amount), which Registration Statement shall
cover the maximum number of shares of Registerable Common set forth in such
Securities Holder Sale Notice, and, if applicable, such additional shares of New
Common Stock as permitted under subsection 2.6 and (b) use its best efforts to
facilitate such Demand Registration as provided herein. Notwithstanding the
foregoing, the Company may delay the filing of (but not its obligation to
expeditiously prepare) any Registration Statement relating to a Demand
Registration for a reasonable period of time (not in excess of 90 days) if the
Board of Directors of the Company reasonably determines to delay such filing
and, within ten (10) days of such determination, the Company provides each
Securities Holder that delivered a Securities Holder Sale Notice with a
certificate signed by the Chairman of the Board of Directors of the Company or
the Chief Executive Officer of the Company stating that, in the good faith
judgment of the Board of Directors of the Company, the filing of such
Registration Statement would adversely affect any material business situation,
transaction or negotiation then contemplated by the Company or materially and
adversely affect the Company. The Company shall promptly give notice to each
such Securities Holder of the end of any delay period under this subsection.
Subject to any extension under subsection 4.1(b), the Company shall keep any
Registration Statement effective for a period of (i) in the case of a Demand
Registration other than a Shelf Registration, until the earlier of (x) the three
(3) month anniversary of the date that the Registration Statement with respect
thereto is declared effective by the Commission or a final receipt is issued by
the applicable Canadian Securities Authority, as applicable, and (y) the date on
which all of the Registerable Common covered by such Registration Statement has
been sold and (ii) in the case of a Shelf Registration, until the earlier of (x)
two (2) years following the date the Registration Statement with respect thereto
is declared effective by the Commission or a final receipt is issued by the
applicable Canadian Securities Authority, as applicable, and (y) the date on
which all of the Registerable Common covered by such Registration Statement has
been sold or, in each case, such shorter period if any such Registration is
terminated in accordance with the terms hereof prior to the end of the
applicable period.
2.3. Notices; Minimum Registerable Amounts. (a) Subject to subsection 2.1,
-9-
13
any Securities Holder may send a Securities Holder Sale Notice to the Company in
respect of a Demand Registration. Simultaneously with the delivery to the
Company of a Securities Holder Sale Notice, the Securities Holder so requesting
a Demand Registration shall deliver to each other Securities Holder a copy of
such Securities Holder Sale Notice and such other information as such Securities
Holder may deem appropriate.
(b) Notwithstanding subsection 2.3(a), no Securities Holder Sale Notice
delivered by a Securities Holder shall be effective to require the Company to
provide a Demand Registration, unless (i) the aggregate number of shares of New
Common Stock represented by such Securities Holder Sale Notice equals or exceeds
the Minimum Registerable Amount or (ii) within twenty (20) days of the delivery
of the first Securities Holder Sale Notice in respect of an aggregate number of
shares of New Common Stock that does not equal or exceed the minimum
Registerable Amount one or more additional Securities Holder Sale Notices are
delivered by Securities Holders then entitled to request a Demand Registration
pursuant to subsection 2.1(a) such that the aggregate number of shares of New
Common Stock represented by all such Securities Holder Sale Notices (including
the Securities Holder Sale Notice which commenced such twenty (20) day period)
is at least equal to the Minimum Registerable Amount. All Securities Holders
delivering Securities Holder Sale Notices in accordance with the immediately
preceding sentence are hereinafter referred to as the "Initiating Securities
Holders". Subject to subsection 2.4, the delivery of any Securities Holder Sale
Notice pursuant to this subsection 2.3(b), shall be deemed a request by each
Initiating Securities Holder under subsection 2.1 for a Demand Registration,
provided that if all Securities Holder Sale Notices so delivered do not
represent at least the Minimum Registerable Amount, then all such Securities
Holder Sale Notices shall be deemed null and void and shall not constitute a
request for Demand Registration under subsection 2.1 by any Initiating
Securities Holder.
(c) Any Securities Holder Sale Notice may be revised from time to time
prior to the earlier of (i) the execution of the Purchase Agreement, if any, for
such offering and (ii) the effectiveness of the Registration Statement for, or
date of final receipt for the Canadian Prospectus relating to, as applicable,
such offering.
(d) The Company shall promptly provide a Securities Holder Questionnaire
(i) in the case of a Demand Registration, to each Securities Holder that
delivers a Securities Holder Sale Notice in accordance with this subsection 2.3
and each Piggybacking Securities Holder and (ii) in the case of a Company Public
Sale Event or Company Private Sale Event, to each Securities Holder that has
indicated its desire pursuant to subsection 3.3 to participate in such Sale
Event.
2.4. Discretion of Securities Holder. (a) In connection with any Securities
Holder Public Sale Event, subject to the provisions of this Agreement, the
Securities Holder requesting a Demand Registration (if such Public Sale Event
was initiated by an individual Securities Holder) or the Initiating Securities
Holders owning a majority of the aggregate number of shares of Registerable
Common that all such Initiating Securities Holders are seeking to include in
such Public Sale Event (if such Public Sale Event was initiated by Initiating
Securities
-10-
14
Holders), in its or their sole discretion, as the case may be, shall determine
whether (i) to proceed with, withdraw from or terminate such proposed Securities
Holder Public Sale Event, (ii) to enter into one or more Purchase Agreements for
such Securities Holder Public Sale Event and (iii) to take such actions as may
be necessary to close the sale of Registerable Common contemplated by such
offering, including, without limitation, waiving any conditions to closing such
sale which have not been fulfilled.
(b) Subject to subsection 2.4(c), in the event that the Securities Holder
or the Initiating Securities Holders, as the case may be, determine(s) pursuant
to subsection 2.4(a) not to proceed with a Demand Registration of Registerable
Common at any time before (i) the Registration Statement with respect to such
Demand Registration has been declared effective by the Commission or (ii) a
final receipt has been issued by the applicable Canadian Securities Authority
for the Canadian Prospectus, as applicable, and such Securities Holder or
Initiating Securities Holders, as the case may be, reimburse(s) the Company for
all reasonable fees, costs and expenses in connection therewith, then all
Securities Holder Sale Notices delivered in respect of such Demand Registration
shall be deemed null and void and shall not constitute a request for Demand
Registration under subsection 2.1 by any Securities Holder or Initiating
Securities Holders.
(c) If the Securities Holder or the Initiating Securities Holders, as the
case may be, determine(s) pursuant to subsection 2.4(a) not to proceed with a
Demand Registration (i) at any time at the request of the Company or (ii) as a
result of a Material Adverse Change at any time, then, in either such case, such
Securities Holder or Initiating Securities Holders, as the case may be, will not
be required to reimburse the Company for the fees, costs and expenses in
connection with such Demand Registration and all Securities Holder Sale Notices
delivered in respect of such Demand Registration shall be deemed null and void
and shall not constitute a request for Demand Registration under subsection 2.1
by any Securities Holder or Initiating Securities Holders.
2.5. Allocation Among Initiating Securities Holders. In connection with any
Demand Registration requested by Initiating Securities Holders in accordance
with subsection 2.3, if the lead managing underwriter selected by such
Initiating Securities Holders in accordance with subsection 5.8 with respect to
such offering (or, if the offering is not underwritten, if a financial advisor
to such Initiating Securities Holders) determines that marketing factors require
a limitation on the number of shares of Registerable Common to be offered and
sold in such offering, there shall be included in the offering only that number
of shares of Registerable Common that such lead managing underwriter or
financial advisor, as the case may be, reasonably and in good faith believes
will not jeopardize the success of the offering, which shares of Registerable
Common shall be allocated among the Initiating Securities Holders on a pro rata
basis based on the number of shares of Registerable Common each such Initiating
Securities Holder seeks to include in such offering.
2.6. Piggyback Rights of Securities Holders and the Company. (a) In
connection with any Demand Registration that has been requested by a Securities
Holder or Initiating
-11-
15
Securities Holders, as the case may be, in accordance with subsections 2.1 and
2.3, any other Securities Holder then holding Registerable Common (a
"Piggybacking Securities Holder") and the Company shall be entitled, subject to
subsection 2.6(b), to participate on the same terms and conditions as such
Securities Holder in the Securities Holder Public Sale Event relating thereto
and offer and sell shares of Registerable Common or shares of New Common Stock,
respectively, therein as provided in this subsection 2.6. Any party desiring to
so participate shall give written notice (a "Piggybacking Notice") to the
Securities Holder requesting such Demand Registration and, if such party is not
the Company, to the Company no later than fifteen (15) days following receipt of
a Securities Holder Sale Notice, of the aggregate number of shares of
Registerable Common that such Piggybacking Securities Holder or shares of New
Common Stock that the Company, as the case may be, then desires to offer and
sell in such Securities Holder Public Sale Event.
(b) The extent to which a Piggybacking Securities Holder or the Company may
participate in any Securities Holder Public Sale Event in accordance with
paragraph (a) of this subsection 2.6 shall be limited to that number of shares
of Registerable Common or shares of New Common Stock that will not require a
reduction in the number of shares of Registerable Common of the Initiating
Securities Holders or the Securities Holder requesting such Demand Registration
to be included therein or change in a manner materially adverse to such
Initiating Securities Holders or Securities Holder, as the case may be, the
proposed method of the offering, including, without limitation, the economic
benefits to such Initiating Securities Holders or Securities Holder. If the lead
managing underwriter selected by the Initiating Securities Holders or the
Securities Holder initiating such Securities Holder Public Sale Event (or, if
the offering is not underwritten, a financial advisor to such Initiating
Securities Holders or Securities Holder) determines that marketing factors
require a limitation on the number of shares of Registerable Common or shares of
New Common Stock to be offered and sold in such offering, there shall be
included in the Registration Statement with respect to such offering only that
number of shares of Registerable Common held by such Piggybacking Securities
Holders or shares of New Common Stock to be sold by the Company, if any, that
such lead managing underwriter or financial advisor, as the case may be,
reasonably and in good faith believes will not jeopardize the success of the
offering, which shares shall be allocated first among the Piggybacking
Securities Holders on a pro rata basis based on the number of shares of
Registerable Common each such Securities Holder is seeking to include in such
offering and second to the Company.
2.7. Limitation on Registration Rights. Notwithstanding any other provision
of this Agreement, no Person shall have the right to cause the Company to file a
Canadian Prospectus unless such Person provides evidence reasonably satisfactory
to the Company that a proposed trade in securities by such Person would be a
"distribution" as such term is used under applicable Canadian Securities Laws or
would otherwise require the filing of a Canadian Prospectus with any one or more
of the Canadian Securities Authorities under applicable Canadian Securities Laws
and the issuance of a final receipt therefor from such authorities in order to
permit the proposed trade.
-12-
16
Section 3. Company Sale Events.
3.1. Determination. (a) Subject to subsection 6.1, the Company may at any
time effect a Company Public Sale Event pursuant to a Registration Statement
filed by the Company, provided that the Company gives each Securities Holder a
Company Sale Notice, no less than thirty (30) days prior to the filing of the
related Registration Statement.
(b) The Company may at any time effect a Company Private Sale Event,
provided that the Company gives each Securities Holder a Company Sale Notice, so
as to be received no less than fifteen (15) days prior to the closing date of
such Company Private Sale Event.
3.2. Notice. The Company Sale Notice shall contain a statement that the
Securities Holders are entitled to participate in such offering and the number
of shares of Registerable Common which represents the best estimate of the lead
managing underwriter (or, if not known or applicable, the Company) that will be
available for sale by the Securities Holders in the proposed offering, if any.
3.3. Piggyback Rights of Securities Holders. (a) If the Company shall have
delivered a Company Sale Notice, Securities Holders shall be entitled to
participate on the same terms and conditions as the Company in the Company
Public Sale Event or the Company Private Sale Event, as the case may be, to
which such Company Sale Notice relates and to offer and sell shares of
Registerable Common therein only to the extent provided in this subsection 3.3.
Each Securities Holder desiring to participate in such offering shall notify the
Company in writing, by delivering a Piggybacking Notice no later than ten (10)
days following receipt of a Company Sale Notice, of the aggregate number of
shares of Registerable Common that such Securities Holder then desires to sell
in the offering.
(b) Each Securities Holder desiring to participate in a Company Public Sale
Event or a Company Private Sale Event may include shares of Registerable Common
in (i) any Registration Statement relating to a Company Public Sale Event or
(ii) in a Company Private Sale Event, in each case to the extent that the
inclusion of such shares shall not reduce the number of shares of New Common
Stock to be offered and sold by the Company to be included therein or change in
a manner materially adverse to the Company the proposed method of the offering,
including, without limitation, the economic benefits to the Company. If the lead
managing underwriter selected by the Company for such offering (or, if the
offering is not underwritten, a financial advisor to the Company) determines
that marketing factors require a limitation on the number of shares of
Registerable Common to be offered and sold in such Company Public Sale Event or
Company Private Sale Event, as the case may be, there shall be included in the
offering only that number of shares of Registerable Common, if any, that such
lead managing underwriter or financial advisor, as the case may be, reasonably
and in good faith believes will not jeopardize the success of the offering,
which shares of Registerable Common shall be allocated among such Securities
Holders on a pro rata basis based on the number of shares of Registerable Common
each such Securities Holder is seeking to include in such Sale Event.
-13-
17
3.4. Discretion of the Company. In connection with any Company Public Sale
Event or Company Private Sale Event, subject to the provisions of this
Agreement, the Company, in its sole discretion, shall determine whether (a) to
proceed with, withdraw from or terminate such Company Public Sale Event or
Company Private Sale Event, as the case may be, (b) to enter into the Purchase
Agreement for such Company Public Sale Event or Company Private Sale Event, as
the case may be, and (c) to take such actions as may be necessary to close the
sale of New Common Stock contemplated by such offering, including, without
limitation, waiving any conditions to closing such sale which have not been
fulfilled.
Section 4. Black-Out Periods.
4.1. Black-Out Periods for Securities Holders. (a) No Securities Holder
shall offer to sell or sell any shares of Registerable Common pursuant to a
Demand Registration, and the Company shall not be required to supplement or
amend any Registration Statement or otherwise facilitate the sale of
Registerable Common pursuant thereto, during the 90-day period immediately
following the receipt by each Securities Holder of a certificate of an
authorized officer of the Company to the effect that the Board of Directors of
the Company has in good faith and for valid business reasons requested that the
Securities Holders refrain from selling shares of Registerable Common; provided,
however, that the identity of a potential purchaser or purchasers of
Registerable Common from a Securities Holder shall not constitute a valid
business reason. Any period described in this subsection 4.1(a) during which
Securities Holders are not able to sell shares of Registerable Common pursuant
to a Demand Registration is herein referred to as a "black-out" period. The
Company shall notify each Securities Holder of the expiration or earlier
termination of any "black-out" period (the nature and pendency of which need not
be disclosed during such "black-out" period).
(b) The period during which the Company is required pursuant to subsection
2.2 to keep any Demand Registration effective shall be extended by a number of
days equal to the number of days, if any, of any "black-out" period applicable
to Securities Holders pursuant to this subsection 4.1 occurring during such
period, plus a number of days equal to the number of days during such period, if
any, of any period during which the Securities Holders are unable to sell any
shares of Registerable Common pursuant to a Demand Registration as a result of
the happening of any event of the nature described in subsection 5.3(c)(ii),
5.3(c)(iii) or 5.3(c)(v).
Section 5. Agreements Concerning Offerings.
5.1. Obligations of Securities Holders. (a) Each Securities Holder shall,
upon the reasonable request of the Company, advise the Company of the number of
shares of Registerable Common then held or beneficially owned by it.
(b) It shall be a condition precedent to the obligations of the Company to
effect a Registration of any shares of Registerable Common or to include shares
of Registerable Common in a Company Private Sale Event that each Securities
Holder desiring to participate in a Public Sale Event or a Company Private Sale
Event, as the case may be, shall have furnished to
-14-
18
the Company a completed Securities Holder's Questionnaire and such additional
information regarding itself, the Registerable Common held by it and the
intended method of disposition of such securities as shall be required by law,
the Commission or any applicable Canadian Securities Authority, to effect the
Registration or private sale of their Registerable Common and any other
information relating to such Registration or private sale reasonably requested
by the Company.
5.2. Obligations of the Company. Whenever required under this Agreement to
proceed with a Registration of any Registerable Common, the Company shall,
subject to the terms and conditions of this Agreement, as expeditiously as
reasonably possible:
(a) In accordance with subsection 2.2, prepare and file with the
Commission and/or the applicable Canadian Securities Authority, as
appropriate, a Registration Statement with respect to such Registerable
Common and use its best efforts to cause such Registration Statement to
become effective and/or a final receipt to be issued with respect to the
Canadian Prospectus.
(b) Prepare and file with the Commission and/or the applicable
Canadian Securities Authority, as appropriate, such amendments (including
post-effective amendments) to such Registration Statement, supplements to
the related Prospectus used in connection with such Registration Statement,
and otherwise use its best efforts, to the end that such Registration
Statement reflects the plan of distribution of the securities registered
thereunder that is included in the relevant Notice of Offering, if any, in
respect of a Demand Registration and, subject to subsection 2.2, is
effective until the completion of the distribution contemplated by such
Registration Statement or so long thereafter as a dealer is required by law
to deliver a Prospectus in connection with the offer and sale of the shares
of Registerable Common covered by such Registration Statement .
(c) Notify the Securities Holders selling Registerable Common, at any
time when a Prospectus relating thereto is required to be delivered under
the Securities Act, when the Company becomes aware of the occurrence of any
event, as a result of which the Prospectus included in such Registration
Statement (as then in effect) contains an untrue statement of material fact
or omits to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
and use its best efforts to prepare and file promptly, and in any event
within ten (10) days, with the Commission and/or the applicable Canadian
Securities Authority, as appropriate, a supplement or amendment to such
Prospectus so that, as thereafter delivered to purchasers of such
Registerable Common, such Prospectus will not contain an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(d) Provide to any Securities Holder requesting to include
Registerable Common in such Registration Statement and any managing
underwriter participating in
-15-
19
any distribution thereof, and to any attorney, accountant or other agent
retained by such Securities Holder or managing underwriter, reasonable
access to appropriate officers and directors of the Company to ask
questions and to obtain information reasonably requested by any such Person
in connection with such Registration Statement or any amendment thereto,
provided, however, that (i) in connection with any such access or request,
any such requesting Persons shall cooperate to the extent reasonably
practicable to minimize any disruption to the operation by the Company of
its business and (ii) any records, information or documents shall be kept
confidential by such requesting Persons, unless (x) such records,
information or documents are in the public domain or otherwise publicly
available other than through disclosure by such requesting party or (y)
disclosure of such records, information or documents is required by court
or administrative order or by applicable law (including, without
limitation, the Securities Act).
(e) Furnish to the participating Securities Holders, such number of
copies of a Prospectus, including a Preliminary Prospectus, in conformity
with the requirements of the Securities Act and/or applicable Canadian
Securities Laws, and such other documents as they may reasonably request in
order to facilitate the disposition of Registerable Common owned by them.
(f) Use its best efforts to register and qualify the securities
covered by such Registration Statement under such other securities or "Blue
Sky" laws of such jurisdictions in the United States as shall be reasonably
requested by the Securities Holders, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
states or jurisdictions or to make any filing or take any other action
which could subject it to taxation as a result of such filing.
(g) Enter into and perform its obligations under a Purchase Agreement,
if the offering is an underwritten offering, in usual and customary form,
with the managing underwriter of such underwritten offering; provided,
however, that each Securities Holder participating in such Public Sale
Event shall also enter into and perform its obligations under such Purchase
Agreement so long as such obligations are usual and customary obligations
of selling stockholders in a registered public offering.
5.3. Agreements Related to Offerings. Subject to the terms and conditions
hereof, in connection with any Demand Registration:
(a) The Company will cooperate with any underwriters for, and the
Securities Holders of, the shares of Registerable Common proposed to be
sold pursuant to a Registration Statement, and will, unless the parties to
the Purchase Agreement otherwise agree, enter into a Purchase Agreement not
inconsistent with the terms and conditions of this Agreement and containing
such other terms and conditions of a type and form reasonable and customary
for companies of similar size and credit rating (including, but not limited
to, such provisions for delivery of a "comfort letter" and legal opinion as
are
-16-
20
customary), and take all such other reasonable actions as are necessary or
advisable to permit, expedite and facilitate the disposition of such shares
of Registerable Common in the manner contemplated by such Registration
Statement in each case to the same extent as if all the shares of
Registerable Common then being offered were for the account of the Company.
(b) Neither a Registration Statement nor any amendment or supplement
thereto will be filed by the Company until counsel for the Initiating
Securities Holder or the securities Holder delivering the relevant
effective Securities Holder Sale Notice shall have had a reasonable
opportunity to review the same and each Securities Holder participating in
such Sale Event shall have had a reasonable opportunity to exercise its
rights under subsection 5.2(d) with respect thereto. No amendment to such
Registration Statement naming any Securities Holder as a selling security
holder shall be filed with the Commission and/or the applicable Canadian
Securities Authority, as applicable, until such Securities Holder shall
have had a reasonable opportunity to review such Registration Statement as
originally filed. Neither such Registration Statement nor any related
Prospectus or any amendment or supplement thereto shall be filed by the
Company with the Commission and/or the applicable Canadian Securities
Authority, as applicable, which shall be disapproved (for reasonable cause)
by the managing underwriters named therein or any participating Securities
Holders within a reasonable period after notice thereof.
(c) The Company will use its reasonable efforts to keep the Securities
Holders informed of the Company's best estimate of the earliest date on
which such Registration Statement or any post-effective amendment thereto
will become effective and/or the Canadian Prospectus will be receipted and
will notify each Securities Holder and the managing underwriters
participating in the distribution pursuant to such Registration Statement
promptly (i) when such Registration Statement or any post-effective
amendment to such Registration Statement becomes effective and/or when a
final receipt is issued in respect of such Canadian Prospectus, (ii) of any
request by the Commission and/or the applicable Canadian Securities
Authority, as applicable, for an amendment or any supplement to such
Registration Statement or any related Prospectus, (iii) of the issuance by
the Commission or any Canadian Securities Authority of any stop order
suspending the effectiveness of such Registration Statement or of any order
preventing or suspending the use of any related Prospectus or the
initiation or threat of any proceeding for that purpose, (iv) of the
suspension of the qualification of any shares of New Common Stock included
in such Registration Statement for sale in any jurisdiction or the
initiation or threat of a proceeding for that purpose, (v) of any
determination by the Company that an event has occurred (the nature and
pendency of which need not be disclosed during a "black-out period"
pursuant to subsection 4.1) which makes untrue any statement of a material
fact made in such Registration Statement or any related Prospectus or which
requires the making of a change in such Registration Statement or any
related Prospectus in order that the same will not contain any untrue
statement of a material fact or omit to
-17-
21
state a material fact required to be stated therein or necessary to make
the statements therein not misleading and otherwise comply with applicable
securities laws and (vi) of the completion of the distribution contemplated
by such Registration Statement if it relates to a Company Sale Event.
(d) In the event of the issuance of any stop order suspending the
effectiveness of such Registration Statement or of any order suspending or
preventing the use of any related Prospectus or suspending the
qualification of any shares of Common Stock included in such Registration
Statement for sale in any jurisdiction, the Company will use its reasonable
best efforts promptly to obtain its withdrawal.
(e) The Company agrees to otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission and any
Canadian Securities Authorities, and make available to its security holders
(within the meaning of Rule 158 under the Securities Act), as soon as
reasonably practicable, but not later than fifteen months after the
effective date of such Registration Statement, an earnings statement
covering the period of at least twelve months beginning with the first full
fiscal quarter after the effective date of such Registration Statement,
which earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 promulgated thereunder.
(f) The Company shall, subject to permitted "black-out" periods, upon
the happening of any event of the nature described in subsection
5.3(c)(ii), 5.3(c)(iii) or 5.3(c)(v), as expeditiously as reasonably
possible, prepare a supplement or post-effective amendment to the
applicable Registration Statement or a supplement to the related
Prospectus, any document incorporated therein by reference or file any
other required documents and deliver a copy thereof to each Securities
Holder so that, as thereafter delivered to the purchasers of the
Registerable Common being sold thereunder, such Prospectus will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
and shall otherwise comply with all applicable securities laws.
(g) Upon receipt of any notice from the Company of the happening of
any event of the kind described in subsection 5.2(c), each Securities
Holder will immediately discontinue disposition of the Registerable Common
pursuant to the Registration Statement relating to such Registerable Common
until such Securities Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by subsection 5.2(c), or until such
Securities Holder has been advised in writing by the Company that the use
of the Prospectus may be resumed and has received copies of any additional
or supplemental filings which are incorporated by reference therein. If
reasonably requested by the Company, the Securities Holders will, or will
request the managing underwriter or underwriters, if any, to, deliver to
the Company all copies, other than permanent file copies, of the Prospectus
covering the Registerable Common current at the time of receipt
-18-
22
of such notice.
5.4. Certain Expenses. Subject to subsection 2.4(b), the Company shall pay
all fees, disbursements and expenses in connection with the performance of its
obligations hereunder, including, without limitation, all registration and
filing fees, printing expenses, auditors' fees, listing fees, registrar and
transfer agents' fees, reasonable fees and disbursements of counsel to the
Securities Holders (provided that the Company need not pay for more than the
U.S. counsel and/or one Canadian counsel for such Securities Holders) and
counsel for the Company, expenses (including reasonable fees and disbursements
of counsel) of complying with applicable securities or "Blue Sky" laws and the
fees of the NASD or other governing body of any securities exchange on which the
New Common Stock is listed in connection with its review of any offering
contemplated in such Registration Statement, but not including underwriting
fees, discounts and commissions.
5.5. Public Reporting; Rule 144. (a) The Company agrees to:
(i) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act or the Exchange
Act;
(ii) file with any applicable Canadian Governmental Authorities in a
timely manner all documents required of the Company by such Governmental
Authorities and of any securities exchange on which the securities of the
Company are listed or quoted under any applicable Canadian securities laws;
and
(iii) furnish to any Securities Holder forthwith upon request (A) a
written statement by the Company that it has complied with the current
public information and reporting requirements of Rule 144 or any similar
rule or regulation hereafter adopted by the Commission and the Exchange
Act, (B) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents required to be filed by the
Company pursuant to subsections 5.5(a)(i) or 5.5(a)(ii), and (C) such other
information as is available to the Company without unreasonable cost or
expense and may be reasonably requested in connection with availing any
Securities Holder of any rule or regulation of the Commission which permits
the selling of any such securities without Registration or pursuant to such
rule or regulation.
(b) During any period in which the Company is not subject to Section
13 or 15(d) of the Exchange Act, the Company shall, upon the request of any
Securities Holder, make available to such Securities Holder and any
prospective purchaser of Registerable Common designated by such Securities
Holder the information required by Rule 144(c) in order to permit resales
of the Registerable Common held by such Securities Holder pursuant to Rule
144.
(c) Any Securities Holder selling shares of Registerable Common shall
promptly deliver to the Company a copy of any other documentation required
to be filed by such Securities Holder with any Governmental Authority in
connection with such sale, including, with
-19-
23
respect to sales under Rule 144, a copy of the completed Form 144 filed by such
Securities Holder with the Commission.
5.6. Limitations on Subsequent Registration Rights. From and after the date
of this Agreement, the Company shall not, without the prior written consent of
Securities Holders owning a majority of the Registerable Common held by
Securities Holders at such time, enter into any agreement (other than this
Agreement) which would allow any holder or prospective holder of New Common
Stock (a) on demand of such holder to cause the Company to effect a Registration
of such securities prior to the second anniversary of the Effective Date, (b) to
include such securities in any Registration Statement filed under subsection 2.2
hereof to the exclusion of shares of Registerable Common that any Securities
Holder desires to include in any such offering or (c) to include such securities
in any Company Public Sale Event or Company Private Sale Event to the exclusion
of shares of Registerable Common that any Securities Holder desires to include
in any such offering.
5.7. Indemnification and Contribution. (a) In connection with a Demand
Registration, provisions substantially in conformity with the following
provisions shall be contained in the related Purchase Agreement unless the
parties to such Purchase Agreement agree otherwise:
(i) The Company shall agree to indemnify and hold harmless each
Securities Holder and each Person, if any, who controls such Securities
Holder within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities,
joint or several, or actions in respect thereof to which such Securities
Holder or controlling Person may become subject under the Securities Act,
or otherwise (collectively, "Losses"), insofar as such Losses arise out of,
or are based upon, any untrue statement or alleged untrue statement of any
material fact contained in such Registration Statement, any related
Preliminary Prospectus or any related Prospectus, or any amendment or
supplement thereto, or arise out of, or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse such Securities Holder or controlling Person for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss; provided, however, that the
Company shall not be so liable to the extent that any such Loss arises out
of, or is based upon, an untrue statement or alleged untrue statement of a
material fact or an omission or alleged omission to state a material fact
in said Registration Statement, said Preliminary Prospectus, said
Prospectus or any said amendment or supplement in reliance upon, and in
conformity with, written information furnished to the Company by or on
behalf of a Securities Holder specifically for use therein. Notwithstanding
the foregoing, the Company shall not be liable in any such case to the
extent that any such Loss arises out of, or is based upon, an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus if (A) such Securities Holder failed to send
or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale of Registerable Common to the Person
asserting such Loss or
-20-
24
who purchased such Registerable Common which is the subject thereof if, in
either case, such delivery is required by the Securities Act and (B) the
Prospectus would have corrected such untrue statement or omission or
alleged untrue statement or alleged omission; and the Company shall not be
liable in any such case to the extent that any such Loss arises out of, or
is based upon, an untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in
the Prospectus, if such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in an amendment or supplement to
the Prospectus and if, having previously been furnished by or on behalf of
the Company with copies of the Prospectus as so amended or supplemented,
such Securities Holder thereafter fails to deliver such Prospectus as so
amended or supplemented, prior to or concurrently with the sale of
Registerable Common to the Person asserting such Loss or who purchased such
Registerable Common which is the subject thereof if, in either case, such
delivery is required by the Securities Act. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(ii) Each Securities Holder severally shall agree to indemnify and
hold harmless the Company, each of its officers and directors who sign the
Registration Statement, each other Securities Holder and each Person, if
any, who controls the Company or such other Securities Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any Losses to which the Company, such officers or directors,
such other Securities Holder or such controlling Person may become subject
under the Securities Act, or otherwise, insofar as such Losses arise out
of, or are based upon, any untrue statement or alleged untrue statement of
any material fact contained in such Registration Statement, any related
Preliminary Prospectus or any related Prospectus, or any amendment or
supplement thereto, or arise out of, or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse the Company, such officers or directors, such other
Securities Holder or such controlling Person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such Loss, in each case to the extent, but only to the
extent, that any such Loss arises out of, or is based upon, an untrue
statement or alleged untrue statement of a material fact or an omission or
alleged omission to state a material fact in said Registration Statement,
said Preliminary Prospectus or said Prospectus, or any said amendment or
supplement in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of such Securities Holder
specifically for use therein; provided, however, that the liability of each
Securities Holder on account of the foregoing shall be limited to an amount
equal to the net proceeds of the sale of shares of Registerable Common by
such Securities Holder in the offering which gave rise to the liability.
(iii) The Company shall agree to indemnify and hold harmless each
underwriter and each Person, if any, who controls any such underwriter
within the
-21-
25
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any Losses to which such underwriter or controlling Person may
become subject under the Securities Act, or otherwise, insofar as such
Losses arise out of, or are based upon, any untrue statement or alleged
untrue statement of any material fact contained in such Registration
Statement, any related Preliminary Prospectus or any related Prospectus, or
any amendment or supplement thereto, or arise out of, or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse such underwriter or controlling Person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss; provided, however, that the
Company shall not be so liable to the extent that any such Loss arises out
of, or is based upon, an untrue statement or alleged untrue statement of a
material fact or an omission or alleged omission to state a material fact
in said Registration Statement, said Preliminary Prospectus or said
Prospectus or any said amendment or supplement in reliance upon, and in
conformity with, written information furnished to the Company by or on
behalf of such underwriter specifically for use therein. Notwithstanding
the foregoing, the Company shall not be liable in any such case to the
extent that any such Loss arises out of, or is based upon, an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus if (A) such underwriter failed to send or
deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale of Registerable Common to the Person asserting
such Loss or who purchased such Registerable Common which is the subject
thereof if, in either case, such delivery is required by the Securities Act
and (B) the Prospectus would have corrected such untrue statement or
omission or alleged untrue statement or alleged omission; and the Company
shall not be liable in any such case to the extent that any such Loss
arises out of, or is based upon, an untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact in the Prospectus, if such untrue statement or alleged untrue
statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and if, having previously been furnished by or
on behalf of the Company with copies of the Prospectus as so amended or
supplemented, such underwriter thereafter negligently fails to deliver such
Prospectus as so amended or supplemented, prior to or concurrently with the
sale of Registerable Common to the Person asserting such Loss or who
purchased such Registerable Common which is the subject thereof if, in
either case, such delivery is required by the Securities Act. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have, provided that the Company shall only be required to
provide the indemnification described in this subsection 5.7(a)(iii) to an
underwriter and each Person, if any, who controls such underwriter if such
underwriter agrees to indemnification provisions substantially in the form
set forth in subsection 5.7(b).
(iv) Each Securities Holder severally shall agree to indemnify and
hold harmless each underwriter and each Person, if any, who controls such
underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against
-22-
26
any Losses, joint or several, or actions in respect thereof to which such
underwriter or such controlling Person may become subject under the
Securities Act, or otherwise, insofar as such Losses arise out of, or are
based upon, any untrue statement or alleged untrue statement of any
material fact contained in such Registration Statement, any related
Preliminary Prospectus or any related Prospectus, or any amendment or
supplement thereto, or arise out of, or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse such underwriter or such controlling Person for any legal or
other expenses reasonably incurred by them in connection with investigating
or defending any such Loss, in each case to the extent, but only to the
extent, that any such Loss arises out of, or is based upon, an untrue
statement or alleged untrue statement of a material fact or an omission or
alleged omission to state a material fact in said Registration Statement,
said Preliminary Prospectus or said Prospectus, or any said amendment or
supplement in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of such Securities Holder
specifically for use therein; provided that the liability of such
Securities Holder on account of the foregoing shall be limited to an amount
equal to the net proceeds of the sale of shares of Registerable Common by
such Securities Holder in the offering which gave rise to the liability.
Notwithstanding the foregoing, such Securities Holder shall not be liable
in any such case to the extent that any such Loss arises out of, or is
based upon, an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus if (A) such underwriter
failed to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale of Registerable Common to the
Person asserting such Loss or who purchased such Registerable Common which
is the subject thereof if, in either case, such delivery is required by the
Securities Act and (B) the Prospectus would have corrected such untrue
statement or omission or alleged untrue statement or alleged omission; and
such Securities Holder shall not be liable in any such case to the extent
that any such Loss arises out of, or is based upon, an untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact in the Prospectus, if such untrue statement or
alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and if, having previously been
furnished with copies of the Prospectus as so amended or supplemented, such
underwriter thereafter negligently fails to deliver such Prospectus as so
amended or supplemented, prior to or concurrently with the sale of
Registerable Common to the Person asserting such Loss or who purchased such
Registerable Common which is the subject thereof if, in either case, such
delivery is required by the Securities Act. No Securities Holder shall be
required to provide the indemnification described in this subsection
5.7(a)(iv) to an underwriter or any Person who controls such underwriter if
such underwriter has not agreed to indemnification provisions substantially
in the form set forth in subsection 5.7(b).
(v) Promptly after receipt by an indemnified party pursuant to the
indemnification provisions of such Purchase Agreement of notice of any
claim or the
-23-
27
commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party pursuant to
such indemnification provisions, notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to the indemnified party otherwise than
pursuant to the indemnification provisions of such Purchase Agreement
unless the indemnifying party is materially prejudiced by such lack of
notice. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate in defense of such claim, and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, (x) the indemnifying party shall not be liable to the
indemnified party pursuant to the indemnification provisions hereof or of
such Purchase Agreement for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation, (y) the indemnifying party
shall not be liable for the costs and expenses of or Losses arising out of
any settlement of such claim or action unless such settlement was effected
with the consent of the indemnifying party and (z) the indemnified party
shall be obligated to cooperate with the indemnifying party in the
investigation of such claim or action; provided, however, that the
Securities Holders (together with their respective controlling Persons) and
the underwriters (together with their respective controlling Persons) shall
each as a separate group have the right to employ one separate counsel to
represent such Securities Holders and such underwriters (and their
respective controlling Persons) who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by such Securities
Holders and underwriters against the Company pursuant to the
indemnification provisions of such Purchase Agreement if, in the reasonable
judgment of either Securities Holders' counsel or counsel for the
underwriters, there exists an actual or potential conflict of interest
between such Securities Holders (and its controlling persons) on the one
hand and such underwriters (and their controlling persons) on the other,
and in that event the reasonable fees and expenses of both such separate
counsel shall also be paid by the Company.
(b) As a condition to agreeing in any Purchase Agreement to the
indemnification provisions described in subsection 5.7(a)(iii) and
5.7(a)(iv) in favor of an underwriter participating in the offering covered
by the related Registration Statement and its controlling Persons, the
Company and the Securities Holders participating in an offering pursuant to
such Registration Statement may require that such underwriter agree in the
Purchase Agreement to provisions substantially in the form set forth in
subsection 5.7(a)(v) and to severally indemnify and hold harmless the
Company, each of its officers and directors who sign such Registration
Statement, each Securities Holder participating in such offering and each
Person, if any, who controls the Company or such Securities Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any Losses to which
-24-
28
the Company, such officers and directors, such Securities Holder or such
controlling Person may become subject under the Securities Act, or otherwise,
insofar as such Losses arise out of, or are based upon, any untrue statement or
alleged untrue statement of any material fact contained in such Registration
Statement in which such underwriter is named as an underwriter, any related
Preliminary Prospectus or any related Prospectus, or any amendment or supplement
thereto, or arise out of, or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and to reimburse the Company, such
officers and directors, such Securities Holder or such controlling Person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss in each case to the extent, but only to
the extent, that any such Loss arises out of, or is based upon, an untrue
statement or alleged untrue statement of a material fact or an omission or
alleged omission to state a material fact in said Registration Statement, said
Preliminary Prospectus or said Prospectus or any said amendment or supplement in
reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of such underwriter specifically for use therein.
(c) In order to provide for just and equitable contribution between the
Company and such Securities Holders in circumstances in which the
indemnification provisions described in this subsection 5.7 and contained in any
Purchase Agreement are for any reason insufficient or inadequate to hold the
indemnified party harmless (other than as a result of their nonapplicability in
accordance with their terms), the Company and such Securities Holders shall
contribute to the aggregate Losses (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution actually received from Persons other than the Company
and such Securities Holders) incurred by the Company and one or more of its
directors or its officers who sign such Registration Statement or such
Securities Holders or any controlling Person of any of them, in such proportion
as is appropriate to reflect their relative degrees of fault in connection with
the actions which resulted in such Losses, as well as any other relevant
equitable considerations. The relative fault of the Company and of such
Securities Holder shall be determined by reference to, among other things,
whether the untrue or allegedly untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Securities Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; provided, however, that the liability of each such
Securities Holder to make such contribution shall be limited to an amount equal
to the net proceeds of the sale of shares of Registerable Common by such
Securities Holder in the offering which gave rise to the liability. As among
themselves, such Securities Holders agree to contribute to amounts payable by
other such Securities Holders in such manner as shall, to the extent permitted
by law, give effect to the provisions in such Purchase Agreement comparable to
subsection 5.7(a)(ii). The Company and such Securities Holders agree that it
would not be just and equitable if their respective obligations to contribute
pursuant to this subsection 5.7(c) were to be determined by pro rata allocation
(other than as set forth above) of the aggregate Losses by reference to the
proceeds realized by such Securities Holders in a sale pursuant to said
Registration Statement or
-25-
29
said Prospectus or by any other method of allocation which does not take account
of the considerations set forth in this subsection 5.7(c). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution under this subsection from any
Person who was not guilty of such fraudulent misrepresentation.
(d) The Company and the Securities Holders participating in an offering
pursuant to a Registration Statement agree that, if the underwriters
participating in a Public Sale Event are agreeable, the Purchase Agreement, if
any, relating to such Registration Statement shall contain provisions to the
effect that in order to provide for just and equitable contribution between such
underwriters on the one hand and the Company and such Securities Holders on the
other hand in circumstances in which the indemnification provisions of such
Purchase Agreement are for any reason insufficient or inadequate to hold the
indemnified party harmless (other than as a result of their non-applicability in
accordance with their terms), the Company and such Securities Holders on the one
hand and such underwriters on the other hand will contribute on the basis herein
set forth to the aggregate Losses (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or claims asserted, but after deducting any
contribution actually received from Persons other than the Company and such
Securities Holders and such underwriters), incurred by the Company and one or
more of its directors or its officers who sign such Registration Statement or
such Securities Holders or such underwriters, or any controlling Person of any
of them, in such proportion as is appropriate to reflect their relative degrees
of fault in connection with the actions which resulted in such Losses, as well
as any other relevant equitable considerations. The relative fault of the
Company, of such Securities Holders and of such underwriter shall be determined
by reference to, among other things, whether the untrue or allegedly untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, by such Securities
Holders or by such underwriter and the parties, relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. Notwithstanding the provisions set forth above, (x) no underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the shares of New Common Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission and (y)
the liability of each such Securities Holder to make such contribution shall be
limited to an amount equal to the net proceeds of the sale of shares of
Registerable Common by such Securities Holder in the offering which gave rise to
the liability. As among themselves, such Securities Holders agree to contribute
to amounts payable by other such Securities Holders in such manner as shall, to
the extent permitted by law, give effect to the provisions in such Purchase
Agreement comparable to subsection 5.7(a)(ii). As between the Company and such
Securities Holders, such parties agree that it would not be just and equitable
if their respective obligations to contribute pursuant to this subsection 5.7(d)
were to be determined by pro rata allocation (other than as set forth above) of
the aggregate Losses by reference to the proceeds realized by such Securities
Holders in a sale pursuant to said
-26-
30
Registration Statement or said Prospectus or by any other method of allocation
which does not take account of the considerations set forth in this subsection
5.7(d). No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution under the
provisions set forth above from any Person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company and the Securities Holders participating
in any distribution of shares of Registerable Common under the provisions of
this subsection 5.7 and provisions in any Purchase Agreement substantially
similar to subsections 5.7(a), 5.7(b), 5.7(c) or 5.7(d) shall survive the
termination of any or all of the other provisions of this Agreement or such
Purchase Agreement.
5.8. Underwritten Offerings. If at any time any of the Securities Holders
participating in a Demand Registration desire to sell Registerable Common in an
underwritten offering, the investment banker or investment bankers that will
manage the offering will be selected by (a) if such Demand Registration was
initiated by Initiating Securities Holders, the Initiating Securities Holders
owning a majority of the aggregate number of shares of Registerable Common that
all such Initiating Securities Holders are seeking to include in the related
Sale Event and (b) if such Demand Registration was initiated by an individual
Securities Holder, the Securities Holder requesting such Securities Holder
Public Sale Event, provided that in any event, such investment banker or bankers
must be reasonably satisfactory to the Company.
5.9. Transfer of Rights Under this Agreement; Transfers of Registerable
Common. (a) At any time, the rights and obligations of a Securities Holder under
this Agreement may be transferred by a Securities Holder to a transferee of
Registerable Common, provided that, within a reasonable period of time (but in
no event later than 10 days) after such transfer, (i) the transferring
Securities Holder shall have furnished the Company and the other Securities
Holders written notice of the name and address of such transferee and the
Registerable Common with respect to which such rights are being transferred and
(ii) such transferee shall furnish the Company and the Securities Holders (other
than the transferring Securities Holder) a copy of a duly executed Supplemental
Addendum by which such transferee (A) assumes all of the obligations and
liabilities of its transferor hereunder, (B) enjoys all of the rights of its
transferor hereunder and (C) agrees to be bound hereby. Notwithstanding the
foregoing, a Securities Holder's transfer of its rights and obligations under
this Agreement in accordance with the preceding sentence to a transferee of less
than all of the Registerable Common owned by such transferor shall not be
effective to transfer the right to request a Demand Registration pursuant to
subsection 2.1 hereof unless (x) at the time of such transfer the transferor
Securities Holder has not exhausted its right to request such a Demand
Registration and (y) the transfer is of at least 10% of the issued and then
outstanding shares of New Common Stock, provided, that, subject to the Company's
rights under subsection 5.10 of this Agreement, such a transfer of the right to
request a Demand Registration shall not divest the transferor Securities Holder
of its right to request a Demand Registration pursuant to subsection 2.1 hereof.
(b) Except with respect to transfers pursuant to subsection 5.9(a), a
transferee
-27-
31
of Registerable Common shall neither assume any liabilities or obligations nor
enjoy any rights hereunder and shall not be bound by any of the terms hereof.
5.10. Termination of Rights. The rights granted under this Agreement shall
terminate as to each Securities Holder at such time as such Securities Holder
shall receive, either before or after the Company's receipt of a Securities
Holder Sale Notice or a Piggybacking Notice, an opinion of counsel to the
Company in form reasonably satisfactory to counsel to such Securities Holder
that all of the Registerable Common then held by such Securities Holder can be
sold within a given three (3) month period commencing on the date of such
opinion in a transaction or transactions exempt from the Registration
requirements of the Securities Act.
Section 6. Sequencing of Public Sale Events.
6.1. Effective Notice Period. Subject to the last sentence of this
subsection 6.1, during the term of this Agreement, no priority of right shall
exist between or among Securities Holders or between any Securities Holder, on
the one hand, and the Company, on the other, with respect to providing a Notice
of Offering with respect to, and effecting, a Public Sale Event. Once properly
given, a Securities Holder Sale Notice or a Company Sale Notice regarding a
Company Public Sale Event, as the case may be, shall be effective (and shall
preclude any such Notice of Offering by another party except in accordance with
clause (ii) of Section 2.3(b)) during the period (the "Effective Notice Period")
commencing on the date of such Notice of Offering and ending on the earliest of
(a) withdrawal of such Notice of Offering (notice of which shall be promptly
effected in the same manner as such Notice of Offering), (b) the abandonment of
the Public Sale Event to which such Notice of Offering relates (notice of which
shall be promptly effected in the same manner as such Notice of Offering) and
(c) the later of (i) 150 days after such a Notice of Offering has been given,
provided that the Registration Statement relating to such Notice of Offering has
been declared effective within 90 days of such Notice of Offering, and (ii) 90
days after the closing date of the Public Sale Event to which such Notice of
Offering relates; provided that nothing in this subsection 6.1 shall limit the
Company's right to give a Notice of Offering with respect to, and effect, a
Company Private Sale Event. Upon the termination of an Effective Notice Period,
any Securities Holder so entitled pursuant to subsection 2.1 or the Company can
provide a Notice of Offering, provided that if such Notice of Offering is given
within 12 months after the end of an Effective Notice Period by the party that
gave the immediately preceding Notice of Offering, any other party shall, for
the 45-day period following its receipt of such Notice of Offering, have the
right to preempt such Notice of Offering by itself delivering a Notice of
Offering.
6.2. Restrictive Legend on Certificates. (a) Each Certificate evidencing
shares of New Common Stock distributed pursuant to the Plan to the Securities
Holders shall, subject to paragraph (b) below, be stamped or otherwise imprinted
with a conspicuous legend in the
-28-
32
following form:
"The securities evidenced by this certificate were issued pursuant to an
exemption from registration under the Securities Act of 1933, as amended
(the "Act"), and may be offered, sold or otherwise transferred only
pursuant to a Registration Statement effective under the Act or an
exemption from the provisions of Section 5 of the Act."
(b) A holder of a certificate evidencing shares of New Common Stock bearing
the legend specified in paragraph (a) shall be entitled to receive from the
Company, whether or not in connection with a sale or proposed sale, a new
certificate or certificates evidencing an identical number of shares (the
transfer expenses for which shall be paid by the Company) but without such
legend at such time as (i) such shares are sold pursuant to a Registration
Statement effective under the Securities Act, (ii) such holder furnishes the
Company with a certificate to the effect that such holder is not an affiliate or
an "underwriter" within the meaning of Section 1145(b) of the Bankruptcy Code
and, upon the request of the Company, an opinion of counsel reasonably
satisfactory to the Company to such effect and to the effect that such shares
may be sold without registration under the Securities Act or (iii) the
registration rights granted in this Agreement otherwise terminate in accordance
with subsection 5.10. The shares of the New Common Stock represented by any such
replacement certificate issued without the legend specified in paragraph (a)
pursuant to the immediately preceding sentence shall cease to be Registerable
Common for all purposes of this Agreement.
Section 7. Representations and Warranties of the Company. In connection
with the Registration Statement in respect of any Demand Registration, the
Company shall, on the date of effectiveness of such Registration Statement or
the date of the final receipt for the Canadian Prospectus (the "effective
date"), certify to each Securities Holder in a certificate of a Responsible
Officer of the Company to the effect that the representations and warranties set
forth below are true and correct at and as of the effective date. In connection
with any other Sale Event in which Securities Holders participate, except as
otherwise may be agreed upon by such participating Securities Holders and the
Company, the Company shall represent and warrant in the Purchase Agreement
relating to such Sale Event to the Securities Holders and any underwriters
participating in such Sale Event as follows (except as otherwise indicated, each
reference in this Section to "the Registration Statement" shall refer to a
Registration Statement in respect of any Demand Registration or other such Sale
Event in which Securities Holders participate, including all information deemed
to be a part thereof, as amended, and each reference to "the Prospectus" shall
refer to the related Prospectus):
(a) (i) When the Registration Statement became (in the case of a
Demand Registration to be filed pursuant to a Shelf Registration) or shall
become effective, the Registration Statement did or will comply as of its
effective date in all material respects with the applicable requirements of
the Securities Act and the rules and regulations thereunder; (ii) when the
Prospectus is filed in accordance with Rule 424(b) and/or in accordance
with applicable Canadian Securities Laws , the Prospectus (and any
-29-
33
supplements thereto) will comply in all material respects with the
applicable requirements of the Securities Act and/or applicable Canadian
Securities Laws and the rules and regulations thereunder; (iii) the
Registration Statement did not or will not as of its effective date contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and (iv) the Prospectus, if not filed pursuant to
Rule 424(b), did not or will not as of the date thereof, and on the date of
any filing pursuant to Rule 424(b), the Prospectus (together with any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and if filed pursuant to Canadian Securities Law will
constitute full, true and plain disclosure of all material facts relating
to the securities offered thereunder; provided, however, that the Company
makes no representations or warranties as to the information contained in
or omitted from the Registration Statement, or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Securities
Holder specifically for use in connection with the preparation of the
Registration Statement or the Prospectus (or any supplement thereto) or any
information furnished in writing to the Company by or on behalf of any
underwriter specifically for use in connection with the preparation of the
Registration Statement or the Prospectus (or any supplement thereto), other
than that the Company has no knowledge of any such untrue statement or
omission in respect of such information.
(b) The public accountants who certified the Company's financial
statements in the Registration Statement are independent certified public
accountants within the meaning of the Securities Act and the applicable
published rules and regulations thereunder, or, to the extent that Canadian
law is deemed to control pursuant to the terms of the Securities Act,
within the meaning of such controlling Canadian law; the historical
consolidated financial statements, together with the related schedules and
notes, forming part of the Registration Statement and the Prospectus comply
in all material respects with the requirements of the Securities Act and/or
applicable Canadian Securities Laws and the rules and regulations
thereunder and have been prepared, and present fairly in all material
respects the consolidated financial condition, results of operations and
changes in financial condition of the Company and its consolidated
Subsidiaries at the respective dates and for the respective periods
indicated, in accordance with generally accepted accounting principles
applied consistently throughout such periods (except as specified therein);
and the historical consolidated financial data set forth in the Prospectus
are derived from the accounting records of the Company and its consolidated
Subsidiaries, and are a fair presentation of the data purported to be
shown; and the pro forma consolidated financial statements (if any),
together with the related notes, forming part of the Registration Statement
and the Prospectus, comply in all material respects with the requirements
of all applicable securities laws, including, without limitation,
Regulation S-X of the Securities Act, to the extent applicable.
-30-
34
(c) Except as may be set forth in the Prospectus, each member of the
▇▇▇▇▇▇ Group has been duly organized and is validly existing as a
corporation, limited or general partnership, limited liability company or
other similar entity in good standing under the laws of the jurisdiction in
which it is organized, with the corporate or other analogous power and
authority to own its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign
corporation or other analogous entity and is in good standing under the
laws of each jurisdiction which requires such qualification where the
failure to be so qualified could materially adversely affect the business,
operations, property or financial condition of the ▇▇▇▇▇▇ Group taken as a
whole.
(d) Except as may be set forth in the Prospectus, all the outstanding
shares of capital stock of each Subsidiary have been duly authorized and
validly issued and are fully paid and nonassessable by the issuer, and all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company either directly or through Subsidiaries free and clear of any
security interests, claims, liens or encumbrances (other than those granted
to secure the obligations of the ▇▇▇▇▇▇ Group in respect of the Secured
PIK/Term Credit Agreement or the Exit Facility or other secured debt
permitted therein), except in each case where the failure to so own the
capital stock of a Subsidiary could materially adversely affect the
business, operations, property or financial condition of the ▇▇▇▇▇▇ Group
taken as a whole.
(e) Except as may be set forth in the Prospectus, no member of the
▇▇▇▇▇▇ Group is in violation of any term or provision of any charter,
by-law, franchise, license, permit, judgment, decree or order or any
applicable statute, rule or regulation, which violation could be material
to the business, operations, property or financial condition of the ▇▇▇▇▇▇
Group taken as a whole.
(f) Except as may be set forth in the Prospectus, no default exists
and no event has occurred which with notice, lapse of time, or both, would
constitute a default, in the due performance and observance of any term,
covenant or condition of any agreement to which the Company or any of the
Subsidiaries is a party or by which it or any of them is bound, which
default could materially adversely affect the business, operations,
property or financial condition of the ▇▇▇▇▇▇ Group taken as a whole.
(g) Except as may be set forth in the Prospectus, each member of the
▇▇▇▇▇▇ Group has all requisite corporate or other analogous power and
authority and has received and is operating in compliance in all material
respects with all governmental or regulatory or other franchises, grants,
authorizations, approvals, licenses, permits, easements, consents,
certificates and orders, necessary to own its properties and conduct
businesses as currently owned and conducted and as proposed to be
conducted, except where the failure to do so could not materially adversely
affect the business, operations, property or financial condition of the
▇▇▇▇▇▇ Group, taken as a whole.
-31-
35
(h) Except as may be described in the Prospectus, since the date of
the most recent financial statements included in the Prospectus, there has
been no material adverse change in the business, operations, property or
financial condition of the ▇▇▇▇▇▇ Group taken as a whole, whether or not
arising from transactions in the ordinary course of business.
(i) Except as may be described in the Prospectus, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the best knowledge of the Company, threatened
against any member of the ▇▇▇▇▇▇ Group or against any of their respective
properties or revenues, existing or future which, if adversely determined,
could have a material adverse effect on the business, property or financial
condition of the ▇▇▇▇▇▇ Group taken as a whole, or which otherwise is of a
character required to be disclosed in the Prospectus; there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or the Prospectus, or to be filed
as an exhibit thereto, which is not described or filed as required; and the
descriptions of such franchises, contracts and other documents described in
the Prospectus fairly summarize the matters purported to be described
therein.
(j) Except as may be described in the Prospectus, there is no pending
or, to the best knowledge of the Company, threatened action, suit, or
judicial, arbitral, rule-making or other administrative or other proceeding
against the Company which challenges the validity of (i) this Agreement or
(ii) any Purchase Agreement entered into in connection with the offering or
any action taken or to be taken pursuant to or in connection with such
agreements.
(k) The Company's authorized equity capitalization is as set forth in
the Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus; all of the
issued and outstanding shares of capital stock of the Company have been
duly authorized and validly issued and, except as set forth in the
Prospectus, are fully paid and nonassessable.
(l) The Company has all requisite corporate power and authority, has
taken all requisite corporate action, and has received and is in compliance
with all governmental, judicial and other authorizations, approvals and
orders, necessary in connection with the offering, and to carry out the
provisions and conditions of this Agreement and the Purchase Agreement, if
any, related thereto, except for such approvals and conditions that need to
be obtained or satisfied as are set forth in the Prospectus and such
approvals or authorizations as may be required under the Securities Act,
the securities or "Blue Sky" laws of any jurisdiction or the rules of any
securities exchange on which the securities of the Company are listed in
connection with the purchase and distribution of shares of New Common Stock
in the offering. The Purchase Agreement, if any, entered into in connection
with the offering has been duly authorized, executed and delivered by the
Company and is a valid and binding obligation of the Company, enforceable
against the
-32-
36
Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles; provided, that no representation is made
as to the validity, binding effect or enforceability of any provision that
purports to provide indemnification of any Person for any Losses resulting
from violation by such person of any applicable securities or "Blue Sky"
laws.
(m) To the best knowledge of the Company, neither the sale of the New
Common Stock to be sold pursuant to the Registration Statement, nor the
execution, delivery or performance by the Company of the Purchase
Agreement, if any, entered into in connection with the offering or the
consummation of any other of the transactions contemplated in such Purchase
Agreement, if any, will conflict with, result in a breach of, or constitute
a default under, the charter or by-laws of the Company or any of the
Subsidiaries or the terms of any material indenture or other material
agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which it or any of them is bound, or any material statute
applicable to the Company or any of the Subsidiaries or any material order,
decree, rule or regulation applicable to the Company or any of the
Subsidiaries of any Governmental Authority.
(n) Except (i) as set forth in the Prospectus and (ii) to the extent
permitted under subsection 5.6, no holders of securities of the Company
have rights to the registration of such securities under any Registration
Statement except the Securities Holders.
For purposes of the foregoing representations and warranties, the Company may
assume that any agreement is the valid and binding obligation of any other
parties to such agreement.
Section 8. Representations and Warranties of the Securities Holders. Each
participating Securities Holder shall, in connection with a Sale Event, if
required by the terms of a Purchase Agreement relating to such Sale Event, for
itself severally and not jointly represent and warrant to (i) in the case of an
underwritten Public Sale Event, the Company, the underwriter or underwriters and
each other Securities Holder participating in such underwritten Public Sale
Event or (ii) in the case of a non-underwritten Sale Event, the Company and the
purchaser or purchasers and each other Securities Holder participating in such
non-underwritten Sale Event, as follows:
(a) Such Securities Holder has all requisite power and authority to
enter into and carry out the terms of this Agreement and such Purchase
Agreement and the other agreements and instruments related to such
agreements to which it is a party.
(b) Each of this Agreement and such Purchase Agreement has been duly
authorized, executed and delivered by or on behalf of such Securities
Holder, and constitutes the valid and binding obligation of such Securities
Holder enforceable against such Securities Holder in accordance with its
terms, except as enforceability may be
-33-
37
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles; provided, that no representation is made
as to the validity, binding effect or enforceability of any provision
purporting to provide indemnification of any person for any Losses
resulting from violation by such person of any applicable securities or
"Blue Sky" laws.
(c) Such Securities Holder, immediately prior to any sale of shares of
Registerable Common pursuant to such Purchase Agreement, will have good and
marketable title to such shares of Registerable Common, free and clear of
all liens, security interests, encumbrances, equities, claims or other
defects in title (other than those created by this Agreement); and, upon
payment therefor, good and marketable title to such shares of Registerable
Common will pass to the purchaser thereof, free and clear of any lien,
security interest, encumbrance, equity, claims or other defect in title.
(d) Such Securities Holder has not taken and will not take, directly
or indirectly, any action designed to constitute or which has constituted
or which might reasonably be expected to cause or result in, under the
Exchange Act or the rules or regulations promulgated thereunder or other
applicable law, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of shares of Registerable
Common.
(e) Written information furnished by or on behalf of such Securities
Holder to the Company expressly for use in the Registration Statement, any
related Preliminary Prospectus, or any related Prospectus or any amendment
or supplement thereto will not contain, in each case as of the date such
information was furnished, any untrue statement of a material fact or omit
to state any material fact required to be stated or necessary to make the
statements in such information not misleading.
(f) To the best knowledge of such Securities Holder, neither the sale
of the Registerable Common to be sold pursuant to the Registration
Statement, nor the execution, delivery or performance by such Securities
Holder of the Purchase Agreement, if any, entered into in connection with
the offering or the consummation of any other of the transactions
contemplated in such Purchase Agreement, if any, will conflict with, result
in a breach of, or constitute a default under, the charter or by-laws of
such Securities Holder or the terms of any material indenture or other
material agreement or instrument to which such Securities Holder is a party
or by which it is bound, or any material statute applicable to such
Securities Holder or any material order, decree, rule or regulation
applicable to such Securities Holder of any Governmental Authority.
(g) Such Securities Holder will deliver to any underwriter a properly
completed and executed United States Treasury Department Form W-8 or Form
W-9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
-34-
38
Section 9. Delivery of Comfort Letter and Legal Opinion. On the date that a
Registration Statement relating to a Sale Event in which Securities Holders
participate is declared effective by the Commission or any Canadian Securities
Authority, the Company shall comply with the following:
(a) The Company shall have received, and delivered to each Securities
Holder participating in such Sale Event, a copy of the "comfort" letter or
letters, or updates thereof according to customary practice, of the
independent certified public accountants who have certified the Company's
financial statements included in the Registration Statement covering
substantially the same matters with respect to the Registration Statement
(including the Prospectus) and with respect to events subsequent to the
date of the Company's financial statements as are customarily covered in
accountants' letters delivered to underwriters in underwritten public
offerings of securities. The Company will use its reasonable best efforts
to cause such "comfort" letters to be addressed to such Securities Holders.
(b) Each Securities Holder and any underwriters participating in such
offering shall have received an opinion and any updates thereof of outside
counsel to the Company reasonably satisfactory to such Securities Holders
and underwriters covering substantially the same matters as are customarily
covered in opinions of issuer's counsel delivered to underwriters in
underwritten public offerings of securities, addressed to each of such
Securities Holders and underwriters participating in such offering and
dated the closing date thereof.
Section 10. Miscellaneous.
10.1. Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by facsimile
transmission), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when actually delivered or, in the case of
notice by facsimile transmission, when sent and confirmation of receipt is
received. Notices to the Securities Holders shall be deemed to have been given
or made when sent. All notices shall be addressed as follows or to such other
address as may be hereafter designated in writing by the respective parties
hereto:
The Company: ▇▇▇▇▇▇ Services Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
The Securities Holders: The address of each Securities Holder as set
forth on the signature pages hereof.
10.2. Amendments and Waivers. The Securities Holders of not less than
-35-
39
66-2/3% of the Registerable Common held or beneficially owned by Securities
Holders at any point in time and the Company may from time to time enter into
written amendments, supplements or modifications to this Agreement for the
purpose of adding any provisions hereto or thereto or changing in any manner the
rights of the Securities Holders or the Company hereunder or thereunder, and the
Securities Holders of not less than 66-2/3% of the Registerable Common held or
beneficially owned by Securities Holders at any point in time may execute a
written instrument waiving, on such terms and conditions as may be specified
therein, any of the requirements of this Agreement which are solely for the
benefit of the Securities Holders and where such waiver does not adversely
affect the interests of the Company; provided, however, that no such waiver and
no such amendment, supplement or modification shall (i) adversely affect the
rights of a Securities Holder under Section 2 hereof or (ii) amend, modify or
waive any provision of Section 5 or this subsection 10.2, in each case without
the written consent of each Securities Holder. Any such waiver and any such
amendment, modification or supplement shall apply equally to each of the
Securities Holders and the Company.
10.3. Termination. This Agreement and the respective obligations and
agreements of the parties hereto, except as otherwise expressly provided herein,
shall terminate on the Termination Date.
10.4. Survival of Representations and Warranties. Except as they may by
their terms relate to an earlier date, all representations and warranties made
hereunder and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the termination of any or all of the provisions of this
Agreement.
10.5. Headings. The descriptive headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
10.6. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all of such
counterparts shall together constitute one and the same agreement.
10.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10.8. Adjustment of Shares. Each reference to a number of shares of New
Common Stock in this Agreement shall be adjusted proportionately to reflect any
stock dividend, split or reverse split or the like affected with respect to all
outstanding shares of New Common Stock.
10.9. No Inconsistent Agreements. The Company will not on or after the date
of
-36-
40
this Agreement enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Securities Holders in this Agreement
or otherwise conflicts with the provisions hereof.
10.10. Severability. Any provision of this Agreement prohibited or rendered
unenforceable by any applicable law of any jurisdiction shall as to such
jurisdiction be ineffective to the extent of such prohibition or
unenforceability, without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.11. ENTIRE AGREEMENT. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
10.12. Listing of New Common Stock. The Company shall use its commercially
reasonable efforts to cause the New Common Stock to be listed or admitted to
trading on the New York Stock Exchange, Inc. and The Toronto Stock Exchange, and
if the New Common Stock cannot be listed on the New York Stock Exchange, Inc.,
then on the NASDAQ National Market.
10.13. No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any of the Securities Holders to
sell any New Common Stock pursuant to any Registration Statement or otherwise.
-37-
41
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
▇▇▇▇▇▇ SERVICES CORPORATION
By:______________________________________
Name:
Title:
SECURITIES HOLDERS:
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.,
its General Partner
By:______________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC, its General Partner
By:______________________________________
Name:
Title:
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-38-
42
EXHIBIT A
SECURITIES HOLDER'S QUESTIONNAIRE
Please complete and return immediately to ▇▇▇▇▇▇ Services Corporation at
the following address:
▇▇▇▇▇▇ Services Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attention: Chief Financial Officer
The information requested below is required for purposes of any Public Sale
Event pursuant to the Registration Rights Agreement dated as of March 31, 2000
(the "Agreement") that may be initiated from time to time. If you do not furnish
the Company with the requested information, you will not be entitled to
participate in any such registration. Unless otherwise defined herein,
capitalized terms shall have the meanings ascribed thereto in the Agreement.
Please do not leave any request for information unanswered. If your
response to a request is "no" or "not applicable," please so state. If
additional space is required, please attach additional sheets to the end of this
Questionnaire, clearly identifying the portion hereof to which they relate.
If you have any questions regarding this Questionnaire, please
contact____________________ .
I. Information required for notices.
Institution Name:
Street Address:
Post Office Box:
City/State/Zip:
Fed. Tax ID. No.
(if any):
Telecopier Number:
Contacts (Please include alternative contacts).
-39-
43
1. Name:
Title:
Function:
Business Telephone:
2. Name:
Title:
Function:
Business Telephone:
II. Information required by the Securities Act of 1933, as amended, and related
regulations.
A. Federal Securities Laws
1. Name and Address. Give your name and address exactly as they should
appear in any Prospectus.
2. Ownership of Registerable Common. State the number of shares of
Registerable Common, if any, owned by you or your affiliates as of the date
hereof.
Shares of Registerable Common:
3. Beneficial Ownership of New Common Stock. Please furnish the following
information, in the tabular form indicated, as to the shares of New Common Stock
beneficially owned (see definition at end of Questionnaire) by you (including
amounts held in your Trust Department in discretionary accounts):
If such ownership is
shared with others,
indicate nature and
Number of Nature of extent of such
Shares(1) Beneficial Ownership(2) shared ownership
--------- ----------------------- ---------------------
[FN]
_____________
(1) Include shares which you have the right to acquire through the exercise of
options, warrants or other securities on or before 60 days after the
estimated date of the Prospectus.
(2) Please indicate the extent to which you have sole voting power, shared
voting power, sole investment power and shared investment power with
respect to shares of New Common Stock you beneficially own.
-40-
44
4. Disclaimer of Beneficial Ownership. Please indicate below the number and
description of any shares of New Common Stock with respect to which you disclaim
beneficial ownership and whether such shares are included in the figure(s)
reported above.
5. Five Percent Beneficial Owners. Please give the name and address of any
Person, corporation or other entity, other than the parties to the Agreement,
known to you to own beneficially 5% or more of the outstanding New Common Stock
(i.e., ______ shares or more).
NOTE: For purposes of your response to this question, the term "Person"
includes two or more Persons acting as a partnership, limited
partnership, syndicate, or other group for the purpose of acquiring,
holding or disposing of the Company's securities.
6. Underwriters. Please describe briefly and state the nature of any
relationship or interest that you have or any associate of yours (see definition
at end of Questionnaire) has, in any underwriter of the securities to be
offered. If you are a member or controlling Person of a firm that may be an
underwriter of the securities to be offered, briefly describe your relationship
to, and interest in, such underwriter.
NOTE: The underwriters will be listed in the final amendment to the
Registration Statement, a copy of which will be sent to you at a later
date.
7. Material Relationships. Please list all material relationships that you
now have, or have had since _______________, with the Company or any of its
affiliates, other than your ownership of the New Common Stock or your
participation in the Company's bankruptcy case.
B. NASD Regulations.
8. NASD Membership. State whether you are a "member" of the National
Association of Securities Dealers, Inc. (the "NASD"), a "Person associated with
a member" or an "underwriter or a related Person" with respect to the proposed
offering.
NOTES: (1) The NASD By-Laws define "member" to mean either any broker or
dealer admitted to membership in the NASD.
(2) The NASD By-Laws define "Person associated with a member" to
mean every sole proprietor, partner, officer, director or branch
manager of any member, or any natural Person occupying a similar
status or performing similar functions, or any natural Person engaged
in the investment banking or securities
-41-
45
business who is directly or indirectly controlling or controlled by
such member, whether or not any such Person is registered or exempt
from Registration with the NASD.
(3) The NASD has interpreted "underwriter or a related Person"
with respect to a proposed offering to include an underwriter,
underwriters' counsel, financial consultants and advisers, finders,
members of the selling or distribution group, and any and all other
Persons "associated with" or "related to" any of such Persons.
9. Purchase by NASD Affiliates. If your answer to the preceding question
was "yes," please furnish the following information, in the tabular form
indicated, as to all purchases and acquisitions (including contracts to purchase
or to acquire) by you, of warrants, options or any other securities of the
Company or any subsidiary thereof, during the preceding 12 months, as well as
all proposed purchases or acquisitions by you which are to be consummated in
whole or in part prior to, at the time of or within six months after the
effectiveness of the Registration Statement.
Purchaser or Seller or Amount and Price or
Prospective Prospective Name of Other
Date Purchaser Seller Securities Consideration
---- ------------ ----------- ---------- -------------
________ ____________ ___________ __________ _____________
________ ____________ ___________ __________ _____________
________ ____________ ___________ __________ _____________
10. Dealings with Company. Please describe any other dealings within the
preceding 12 months not already described in response to the foregoing questions
between the Company or any subsidiary or controlling shareholder thereof and any
underwriter, related Person of such underwriter, NASD member or Person
associated with such member affiliated with you, as such terms are defined in
the Notes to Question 10.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS TO ANY PERSON WHO MAY BE
LIABLE IN RESPECT OF A REGISTRATION OR OTHER OFFERING PURSUANT TO THE AGREEMENT
THAT THE ANSWERS GIVEN IN THIS QUESTIONNAIRE ARE CORRECTLY STATED TO THE
KNOWLEDGE, INFORMATION AND BELIEF OF THE UNDERSIGNED. THE UNDERSIGNED HEREBY
AGREES TO PROMPTLY NOTIFY THE COMPANY OF ANY CHANGE IN SUCH ANSWERS WHICH MAY
OCCUR DURING THE PERIOD BEGINNING WITH THE DATE BELOW AND ENDING ON THE DATE 90
DAYS AFTER THE EFFECTIVE DATE OF ANY REGISTRATION STATEMENT RELATING TO A
REGISTRATION OR OTHER OFFERING PURSUANT TO THE AGREEMENT. THE UNDERSIGNED HEREBY
AGREES, FOLLOWING NOTICE OF ANY PROPOSED REGISTRATION TO UPDATE AND AMEND THIS
QUESTIONNAIRE IF THERE IS ANY MATERIAL CHANGE IN THE ABOVE INFORMATION AND TO
PROVIDE ANY ADDITIONAL INFORMATION REQUESTED BY THE COMPANY PURSUANT TO THE
AGREEMENT.
Dated: ______________, 20__.
-42-
46
Holder:
By:
Name:
Title:
-43-
47
DEFINITIONS
As used in this Questionnaire:
"affiliate" means a Person or organization that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company.
An "associated person" means (1) any corporation or organization (other
than the Company or a majority owned subsidiary) of which you are an executive
officer or partner or are, directly or indirectly, the beneficial owner of 10%
or more of any class or equity securities and (2) any trust or other estate in
which you have substantial beneficial interest or to which you serve as trustee
or in a similar fiduciary capacity.
Securities "owned beneficially" by you are securities (whether or not
registered in your name) in which you have or share (directly or indirectly
through any contract, arrangement, understanding, relationship or otherwise) (i)
voting power, which includes the power to vote or direct the voting of the
securities, or (ii) investment power, which includes the power to dispose, or
direct the disposition, of the securities. You are also deemed to be the
beneficial owner of any securities which you have the right to acquire
immediately or within 60 days (a) through the exercise of any option, warrant or
right, (b) through the conversion of a security or (c) pursuant to the power to
revoke, or the automatic termination of, a trust, discretionary account or
similar arrangement.
Thus, securities held in the name of other individuals, in the name of an
estate or trust or pursuant to a pledge agreement where you have either the
power to direct the voting of the securities or the disposition of such
securities should be listed as "owned beneficially" by you. The Commission has
also taken the position that securities held by your spouse, minor children, or
other relatives sharing your home should be shown as "owned beneficially" by you
on the theory that, absent special circumstances you are able to exercise a
controlling influence over the purchase, sale or voting of such securities.
-44-
48
EXHIBIT B
SUPPLEMENTAL ADDENDUM
The undersigned is a holder of New Common Stock of ▇▇▇▇▇▇ Services
Corporation. The undersigned hereby agrees as follows:
The undersigned hereby accepts the terms of and becomes a party to (as a
Securities Holder) the Registration Rights Agreement dated as of March 31, 2000
by and among ▇▇▇▇▇▇ Services Corporation (the "Company") and each Securities
Holder named therein. In connection therewith, the undersigned agrees to (A)
assume all obligations and liabilities thereunder, (B) enjoy all of the rights
thereunder, (C) be bound thereby and (D) perform and comply with the agreements
and commitments on the part of the undersigned, as assignee, set forth in the
Registration Rights Agreement.
As used in this Supplemental Addendum, capitalized terms defined in the
Registration Rights Agreement shall have their respective defined meanings.
Name of
Address: Institution:_____________________
By____________________________
Name:
Title:
Date: _______________, _____
-45-