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EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
among
Solectron Corporation,
Issuer,
and
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Morgan Stanley & Co. Incorporated,
and
Hambrecht & Quist LLC,
Initial Purchasers
Dated as of February 26, 1996
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of February 26, 1996, among SOLECTRON CORPORATION, a California
corporation (the "Company"), and MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, MORGAN STANLEY & CO. INCORPORATED and HAMBRECHT &
QUIST LLC (the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated February
26, 1996 among the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of $150,000,000 principal amount of the Company's 7
3/8% Series A Senior Notes due 2006 (the "Debt Securities"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree, and all other
Holders (as defined below) of Registrable Securities from time to time, by their
acceptance thereof, shall be conclusively deemed to have agreed, as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"CLOSING DATE" shall mean the date on which the Closing Time (as
defined in the Purchase Agreement) occurs.
"COMPANY" shall have the meaning set forth in the preamble and also
includes the Company's successors.
"DEBT SECURITIES" shall have the meaning set forth in the preamble.
"DEPOSITARY" shall mean the Trustee, or any other exchange agent
appointed by the Company.
"EXCHANGE OFFER" shall mean the exchange offer by the Company of
Exchange Securities for Registrable Securities pursuant to Section 2(a)
hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"EXCHANGE SECURITIES" shall mean 7 3/8% Series B Senior Notes due 2006
issued by the Company under the Indenture containing terms identical in all
material respects to the Debt Securities (except that (i) interest thereon
shall accrue from the last date on which interest was paid or duly provided
for on the Debt Securities or, if no such interest has been paid, from the
date of their original issue, (ii) the transfer restrictions thereon shall
be eliminated, (iii) certain provisions relating to an increase in the
stated rate of interest thereon shall be eliminated and (iv) the legend
thereon relating to this Agreement shall be eliminated), to be offered to
Holders of Debt Securities in exchange for Debt Securities pursuant to the
Exchange Offer.
"HOLDERS" shall mean each of the Initial Purchasers, for so long as it
owns any Registrable Securities, and each of its successors, assigns and
direct and indirect transferees who shall at the time be owners of
Registrable Securities under the Indenture; provided that the term Holder
shall exclude any underwriter who purchased Registrable Securities for
distribution in an underwritten public offering pursuant to an effective
Registration Statement.
"INDENTURE" shall mean the Indenture relating to the Debt Securities
dated as of February 15, 1996 between the Company and State Street Bank and
Trust Company, as Trustee, as the same may be amended from time to time in
accordance with the terms thereof, or such other indenture as may be
reasonably acceptable to Merrill Lynch.
"INITIAL PURCHASERS" shall have the meaning set forth in the preamble.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; PROVIDED
that whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities
held by the Company shall be disregarded in determining whether such
consent or approval was given by the Holders of such required percentage or
amount; and PROVIDED, FURTHER, that whenever the consent or approval of
Holders of Registrable Securities is required hereunder with regard to
matters related to an underwritten registration or similar offering or with
regard to matters pertaining to a Registration Statement, Registrable
Securities held by Holders not participating in such underwritten
registration or similar offering, or Registrable
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Securities not registered pursuant to such Registration Statement (or, at
any time prior to the filing of a Subject Registration Statement and after
the determination to file such Subject Registration Statement is made,
Registrable Securities whose Holders have not requested that such
Registrable Securities be included in such Subject Registration Statement),
as the case may be, shall be disregarded in determining whether such
consent or approval was given by the Holders of such required percentage or
amount.
"MERRILL LYNCH" shall mean Merrill Lynch, Pierce, Fenner & Smith
Incorporated, on behalf of the Initial Purchasers.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Subject Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated or deemed to be incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.
"PURCHASER SHELF REGISTRATION STATEMENT" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of Section
2(b)(iii) of this Agreement with respect to offers and sales of Registrable
Securities held by any or all of the Initial Purchasers (except Registrable
Securities which the Initial Purchasers have elected not to include in such
Purchaser Shelf Registration Statement or the Initial Purchasers of which
have not complied with their obligations under the penultimate paragraph of
Section 3 hereof or under the penultimate sentence of Section 2(b) hereof)
after completion of the Exchange Offer on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated or
deemed to be incorporated by reference therein.
"REGISTRABLE SECURITIES" shall mean the Debt Securities; PROVIDED,
HOWEVER, that any Debt Securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Debt Securities
shall have been declared effective under the 1933 Act and such Debt
Securities shall have been disposed of pursuant to such Registration
Statement, (ii) such Debt Securities shall have been sold to the public
pursuant to Rule 144 (or any similar provision then in force, but not Rule
144A) under the 1933 Act, (iii) such Debt Securities shall have become
eligible for resale pursuant to Rule 144(k) under the 1933 Act (assuming
such securities have never been owned by
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the Company or an affiliate of the Company), (iv) such Debt Securities
shall have ceased to be outstanding or (v) such Debt Securities have been
exchanged for Exchange Securities upon consummation of the Exchange Offer.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities
Dealers, Inc. ("NASD") registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or
blue sky laws (including reasonable fees and disbursements of one firm of
legal counsel for any underwriters and Holders in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities),
(iii) all expenses of printing and distributing any Registration Statement,
any Prospectus and any amendments or supplements thereto, (iv) all rating
agency fees, (v) the fees and disbursements of counsel for the Company and
of the independent public accountants of the Company, including the
expenses of "cold comfort" letters required by this Agreement, (vi) the
fees and expenses of the Trustee, and any escrow agent or custodian, and
(vii) the reasonable fees and expenses of any special experts retained by
the Company in connection with any Registration Statement, but excluding
fees of counsel to the underwriters or the Holders and underwriting
discounts and commissions and transfer taxes, if any, relating to the sale
or disposition of Registrable Securities by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement, and all amendments
and supplements to any such Registration Statement, including post-
effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated or deemed to be
incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b)(i) or
(ii) of this Agreement which covers all of the Registrable Securities
(except Registrable Securities which the Holders have elected not to
include in such Shelf Registration Statement or the Holders of which have
not complied with their obligations under the penultimate paragraph of
Section 3 hereof or under the penultimate sentence of Section 2(b) hereof)
on an appropriate form under Rule 415 under the 1933 Act, or any similar
rule that may be adopted by the SEC, and all amendments and supplements to
such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated or deemed to be incorporated by reference
therein.
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"SUBJECT REGISTRATION STATEMENT" shall mean a Shelf Registration
Statement or a Purchaser Shelf Registration Statement or both (as the
context requires).
"TRUSTEE" shall mean the trustee with respect to the Debt Securities
under the Indenture.
All references herein to information which is "included" or "contained" in a
Registration Statement or Prospectus, and all references of like import, shall
include the information (including financial statements) incorporated or deemed
to be incorporated by reference therein, and all references herein to amendments
or supplements to a Registration Statement or Prospectus shall include any
documents filed by the Company under the 1934 Act which is deemed to be
incorporated by reference therein.
2. REGISTRATION UNDER THE 1933 ACT.
(a) EXCHANGE OFFER REGISTRATION. To the extent not prohibited by law
(including, without limitation, any applicable interpretation of the staff of
the SEC), the Company shall use its reasonable efforts (A) to file within 60
days after the Closing Date an Exchange Offer Registration Statement covering
the offer by the Company to the Holders to exchange all of the Registrable
Securities (except Registrable Securities held by an Initial Purchaser and
acquired directly from the Company if such Initial Purchaser is not permitted,
in the reasonable opinion of counsel to the Initial Purchasers, pursuant to
applicable law or SEC interpretation, to participate in the Exchange Offer) for
Exchange Securities, (B) to cause such Exchange Offer Registration Statement to
be declared effective by the SEC within 150 days after the Closing Date, (C) to
cause such Registration Statement to remain effective until the closing of the
Exchange Offer and (D) to consummate the Exchange Offer within 180 days
following the Closing Date. The Exchange Securities will be issued under the
Indenture. Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Exchange Offer, it being the objective
of such Exchange Offer to enable each Holder (other than Participating Broker-
Dealers (as defined in Section 3(f)) and broker-dealers who purchased Debt
Securities directly from the Company to resell pursuant to Rule 144A or any
other available exemption under the 1933 Act) eligible and electing to exchange
Registrable Securities for Exchange Securities (assuming that such Holder is not
an affiliate of the Company, acquires the Exchange Securities in the ordinary
course of such Holder's business and has no arrangements or understandings with
any person to participate in the distribution (within the meaning of the 1933
Act) of Exchange Securities) to trade such Exchange Securities from and after
their receipt without any limitations or restrictions under the 1933 Act and
without material restrictions under the securities laws of a substantial
proportion of the several states of the United States.
In connection with the Exchange Offer, the Company shall:
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(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 30 days after the
date notice thereof is mailed to the Holders (or longer if required by
applicable law);
(iii) use the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Registrable Securities at
any time prior to the close of business, New York City time, on the last
business day on which the Exchange Offer shall remain open, by sending to
the institution specified in the notice, a telegram, facsimile transmission
or letter setting forth the name of such Holder, the principal amount of
Registrable Securities delivered for exchange, and a statement that such
Holder is withdrawing his election to have such Debt Securities exchanged;
and
(v) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(i) accept for exchange Registrable Securities duly tendered and not
validly withdrawn pursuant to the Exchange Offer in accordance with the
terms of the Exchange Offer Registration Statement and the letter of
transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Securities to each Holder of Registrable Securities equal in
amount to the Registrable Securities of such Holder so accepted for
exchange.
Interest on each Exchange Security will accrue from the last date on
which interest was paid or duly provided for on the Registrable Securities
surrendered in exchange therefor or, if no interest has been paid on the
Registrable Securities, from the date of their original issue. The Exchange
Offer shall not be subject to any conditions, other than (i) that the Exchange
Offer, or the making of any exchange by a Holder, does not violate applicable
law or any applicable interpretation of the Staff of the SEC, (ii) that no
action or proceeding shall have been instituted or threatened in any court or by
or before any governmental agency or body with respect to the Exchange Offer,
(iii) that there shall not have been adopted or enacted any law, statute, rule
or regulation, (iv) that there shall not have been declared by United States
federal or California or New York state authorities a banking moratorium, (v)
that
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trading on the New York Stock Exchange or generally in the United States over-
the-counter market shall not have been suspended by order of the SEC or any
other governmental authority and (vi) such other conditions as may be reasonably
acceptable to Merrill Lynch, in each of clauses (ii) through (v), which, in the
Company's judgment, would reasonably be expected to impair the ability of the
Company to proceed with the Exchange Offer. In addition, each Holder of
Registrable Securities (other than Participating Broker-Dealers (as defined))
who wishes to exchange such Registrable Securities for Exchange Securities in
the Exchange Offer will be required to represent that (i) it is not an affiliate
of the Company, (ii) any Exchange Securities to be received by it were acquired
in the ordinary course of business and (iii) it has no arrangement with any
person to participate in the distribution (within the meaning of the 1933 Act)
of the Exchange Securities. Each Participating Broker-Dealer shall be required
to make such representations as, in the reasonable judgment of the Company, may
be necessary under applicable SEC rules, regulations or interpretations or
customary in connection with similar exchange offers. Each Holder (including
Participating Broker-Dealers) shall be required to make such other
representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to render the use of Form S-4 or another
appropriate form under the 1933 Act available and will be required to agree to
comply with their agreements and covenants set forth in this Agreement. The
Exchange Offer shall be subject to the further condition that no stop order
shall have been issued by the SEC or any state securities authority suspending
the effectiveness of the Exchange Offer Registration Statement and no
proceedings shall have been initiated or, to the knowledge of the Company,
threatened for that purpose. To the extent permitted by law, the Company shall,
upon request of the Initial Purchasers, inform the Initial Purchasers of the
names and addresses of the Holders to whom the Exchange Offer is made, and the
Initial Purchasers shall have the right to, and, if requested by the Company,
shall, contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
For greater clarity, the Company's obligation to use its reasonable
efforts to make the Exchange Offer hereunder terminates at the close of business
on the 180th day following the Closing Date.
(b) SHELF REGISTRATION. (i) If, because of any change in law or
applicable interpretations thereof by the staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
or (ii) if for any other reason the Exchange Offer Registration Statement is not
declared effective within 150 days after the Closing Date, or (iii) upon the
request of the Initial Purchasers (but only with respect to any Registrable
Securities which the Initial Purchasers acquired directly from the Company)
following the consummation of the Exchange Offer if any of the Initial
Purchasers shall hold Registrable Securities which it acquired directly from the
Company and if such Initial Purchaser is not permitted, in the reasonable
opinion of counsel to the Initial Purchasers, pursuant to applicable law or
applicable interpretation of the staff of the SEC to participate in the Exchange
Offer, the Company shall, at its cost (in the case of (i) and (ii) above) or at
the cost of the Initial Purchasers (in the case of (iii) above, which cost the
Initial Purchasers hereby agree to pay, unless the Company is required by clause
(i) or (ii) above to file a Shelf
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Registration Statement and Purchaser Shelf Registration Statement in a combined
Registration Statement with the Shelf Registration Statement):
(A) in the event clause (i) or (ii) is applicable, as promptly as
practicable, file with the SEC a Shelf Registration Statement relating to
the offer and sale of the Registrable Securities (other than Registrable
Securities owned by Holders who have elected not to include such
Registrable Securities in such Shelf Registration Statement or who have not
complied with their obligations under the penultimate paragraph of
Section 3 hereof or under the penultimate sentence of this Section 2(b)) by
the Holders from time to time in accordance with the methods of
distribution elected by the Majority Holders of such Registrable Securities
and set forth in such Shelf Registration Statement, and use its reasonable
efforts to cause such Shelf Registration Statement to be declared effective
by the SEC by the 180th day after the Closing Date. In the event that the
Company is required to file a Purchaser Shelf Registration Statement upon
the request of the Initial Purchasers pursuant to clause (iii) above, the
Company shall use its reasonable efforts (unless clauses (i) or (ii) above
are applicable) to file and have declared effective by the SEC an Exchange
Offer Registration Statement pursuant to Section 2(a) with respect to all
Registrable Securities (other than Registrable Securities acquired directly
from the Company and held by the Initial Purchasers) and use its reasonable
efforts to file, promptly after any such request from the Initial
Purchasers, and have declared effective, a Purchaser Shelf Registration
Statement (which may be a combined Registration Statement with the Exchange
Offer Registration Statement or, if clause (i) or (ii) above is applicable,
a combined Registration Statement with the Shelf Registration Statement);
(B) use its reasonable efforts to keep the relevant Subject
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of
three years from the date a Shelf Registration Statement is declared
effective by the SEC (or six months from the date a Purchaser Shelf
Registration Statement is declared effective) or in each case such shorter
period which will terminate when all of the Registrable Securities covered
by the relevant Subject Registration Statement have been sold pursuant to
such Subject Registration Statement or otherwise are no longer Registrable
Securities; and
(C) notwithstanding any other provisions hereof, use its reasonable
efforts to ensure that (i) any Subject Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (ii) any Subject Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any Prospectus forming part of any Subject
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement of
a material fact or omit to state a material fact
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necessary in order to make the statements, in light of the circumstances
under which they were made, not misleading.
To the extent permitted by law, the Company further agrees, if
necessary, to supplement or amend the Shelf Registration Statement (if
reasonably requested by one firm of legal counsel selected by the Majority
Holders) or the Purchaser Shelf Registration Statement (if reasonably requested
by the Initial Purchasers), as the case may be, with respect to information
relating to the Holders or the Initial Purchasers, respectively, and otherwise
as required by Section 3(b) below, to use all reasonable efforts to cause any
such amendment to become effective and such Subject Registration Statement to
become usable as soon as thereafter practicable and to furnish to the Holders of
Registrable Securities registered thereby or the relevant Initial Purchasers, as
the case may be, copies of any such supplement or amendment promptly after its
being used or filed with the SEC. Anything herein to the contrary
notwithstanding, the Company shall not be required to (x) permit or effect more
than one underwritten offering of Registrable Securities pursuant to the Shelf
Registration Statement, (y) permit or effect any underwritten offerings under
the Purchaser Shelf Registration Statement or (z) permit or effect any offerings
through sales agents, distributors or other similar offerings in respect of any
Registration Statement. The Company may require, as a condition to including
the Registrable Securities of any Holder in any Subject Registration Statement,
that such Holder shall have furnished to the Company a written agreement to the
effect that such Holder agrees to comply with and be bound by the provisions of
this Registration Rights Agreement. For further clarity, the Company shall have
no obligation to keep the Shelf Registration Statement effective after
consummation of the Exchange Offer, and the Company's obligation to use its
reasonable efforts to file a Shelf Registration Statement and to keep such Shelf
Registration Statement effective shall immediately terminate upon effectiveness
of the Exchange Offer Registration Statement (regardless of when such
effectiveness shall occur).
(c) EXPENSES. The Company (i) shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or 2(b), except that
the Initial Purchasers shall pay all Registration Expenses in connection with
any Purchaser Shelf Registration Statement pursuant to which only Registrable
Securities which they acquired directly from the Company are registered for
resale, and (ii) in the case of the Shelf Registration Statement, will reimburse
the Holders for the reasonable fees and disbursements of one firm of legal
counsel (reasonably satisfactory to the Company) designated in writing by the
Majority Holders to act as counsel for the Holders of the Registrable Securities
in connection therewith (including any Initial Purchasers whose Registrable
Securities are registered for resale pursuant to such Shelf Registration
Statement). Each Holder (including each Initial Purchaser) shall pay all
expenses of its counsel other than as set forth in the preceding sentence,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to any
Subject Registration Statement or the exchange of its Registrable Securities
pursuant to any Exchange Offer Registration Statement. Notwithstanding anything
in this Agreement to the contrary, the Company shall not be required to pay the
fees and disbursements of legal counsel for any Holders (including Initial
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Purchasers) except (A) as provided in clause (ii) of the first sentence of this
paragraph, (B) to the extent such fees and disbursements constitute Registration
Expenses which the Company is required to pay pursuant to the other provisions
of this Agreement and (C) to the extent required by Section 5 hereof.
(d) EFFECTIVE REGISTRATION STATEMENT. (i) The Company will be deemed
not to have used its reasonable efforts to cause any Subject Registration
Statement to remain effective during the requisite period if the Company
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Registrable
Securities covered thereby not being able to exchange or offer and sell such
Registrable Securities during that period unless (A) such action is, in the
reasonable judgment of the Company, required by applicable law (including,
without limitation, any interpretation of the SEC) or (B) such action is taken
by the Company in good faith and for valid business reasons (not including
avoidance of the Company's obligations hereunder), including the acquisition or
divestiture of assets, so long as the Company promptly complies with the
requirements of Section 3(k) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Subject Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC.
(e) INCREASE IN INTEREST RATE. In the event that (i) the Exchange
Offer Registration Statement is not filed with the SEC on or prior to the 60th
calendar day after the Closing Date, (ii) the Exchange Offer Registration
Statement is not declared effective by the SEC on or prior to the 150th calendar
day after the Closing Date or (iii) the Exchange Offer is not consummated or a
Shelf Registration Statement is not declared effective by the SEC on or prior to
the 180th calendar day after the Closing Date, the interest rate borne by the
Debt Securities shall be increased by 0.50% per annum following such 60th day in
the case of clause (i) above, such 150th day in the case of clause (ii) above,
or such 180th day in the case of clause (iii) above; PROVIDED that the aggregate
amount of any such increase in such interest rate will in no event exceed 0.50%
per annum; and PROVIDED, FURTHER that if the Exchange Offer Registration
Statement is not declared effective by the SEC on or prior to the 150th day
following the Closing Date, then Debt Securities owned by Persons who do not
comply in all material respects with their obligations under the penultimate
paragraph of Section 3 will not be entitled to any such increase in the interest
rate for any day after the 180th day following the Closing Date. Upon (x) the
filing of the Exchange Offer Registration Statement after the 60th day described
in clause (i) above, (y) the effectiveness of the Exchange Offer Registration
Statement after the 150th day described in clause (ii) above or (z) the
consummation of the Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 180th day described in clause (iii)
above, the interest rate borne by the Debt Securities from the date of such
filing, effectiveness or consummation, as the case may be, will be reduced to
the original interest rate (subject to any increase required by any other
provisions of the Debt Securities).
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(f) LIQUIDATED DAMAGES/SPECIFIC ENFORCEMENT. With respect to any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b) hereof that results in an increase in the interest rate borne by
the Debt Securities pursuant to the terms hereof, the parties hereto agree that
such additional interest shall constitute liquidated damages in respect of such
failure and the Initial Purchasers and the Holders shall have no other remedy
with respect thereto other than to receive such additional interest. The
Company acknowledges that with respect to any other failure by the Company to
comply with its obligations under Section 2(a) and Section 2(b) hereof material
irreparable injury to the Initial Purchasers or the Holders may result, for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may, to the extent permitted by
law, obtain such relief as may be required to specifically enforce the Company's
obligations under Section 2(a) and Section 2(b) hereof.
3. REGISTRATION PROCEDURES. In connection with the obligations of
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, but only so long as the Company shall have an obligation
under this Agreement to keep a Registration Statement effective, the Company
shall:
(a) use its reasonable efforts to prepare and file with the SEC a
Registration Statement, within the relevant time period specified in Section 2,
on the appropriate form under the 1933 Act, which form (i) shall be selected by
the Company, (ii) shall, in the case of a Shelf Registration, be available for
the sale of the Registrable Securities by the selling Holders thereof and (iii)
shall comply as to form in all material respects with the requirements of the
applicable form and include or incorporate by reference all financial statements
required by the SEC to be filed therewith, and use its reasonable efforts to
cause such Registration Statement to become effective and use its reasonable
efforts to cause such Registration Statement to remain effective in accordance
with Section 2 hereof;
(b) to the extent permitted by law, use its reasonable efforts to (i)
prepare and file with the SEC such amendments and post-effective amendments to
each Registration Statement as may be necessary under applicable law to keep
such Registration Statement effective for the applicable period, (ii) cause each
Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed (if required) pursuant to Rule 424 under the 1933 Act,
and (iii) comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by each Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify a single firm of
legal counsel for the Holders of Registrable Securities (including any Initial
Purchasers) and Merrill Lynch, at least five days prior to filing, that the
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising Merrill Lynch that the distribution of Registrable Securities
will be made in accordance with the method elected by the Majority
-11-
Holders; and (ii) furnish to each Holder of Registrable Securities registered
under the Shelf Registration Statement, to a single firm of legal counsel for
the Holders (including the Initial Purchasers) and to the managing underwriters
of an underwritten offering of Registrable Securities, if any, and their
counsel, without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and documents
incorporated by reference therein as such Holder, counsel or underwriters may
reasonably request and, if the Holder so requests, all exhibits (including those
incorporated by reference) in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) subject to Section 3(k) and
the last paragraph of Section 3, hereby consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto but only during the period of time that the Company is required to keep
the Shelf Registration Statement effective pursuant to this Agreement;
(d) use its reasonable efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions in the United States as the Majority Holders of Registrable
Securities covered by a Registration Statement and the managing underwriter of
an underwritten offering of Registrable Securities shall reasonably request at
least ten days prior to the time the applicable Registration Statement is
declared effective by the SEC, to cooperate with the Holders in connection with
any filings required to be made with the NASD, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder pursuant to such Registration Statement;
PROVIDED, HOWEVER, that the Company shall not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d) or (ii)
take any action that would subject it to general service of process or taxation
in any such jurisdiction if it is not then so subject;
(e) in the case of a Subject Registration Statement, notify a single
firm of legal counsel for the Holders of Registrable Securities registered
thereby (including any Initial Purchasers) and Merrill Lynch promptly and, if
requested by such counsel or Merrill Lynch, confirm such advice in writing
promptly (by notice to such counsel or to Merrill Lynch) (i) when such
Registration Statement has become effective and when any post-effective
amendments thereto become effective, (ii) of any request by the SEC or any state
securities authority for post-effective amendments and supplements to such
Registration Statement and the related Prospectus or for additional information
after such Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of such
Registration Statement and the closing of any sale of Registrable Securities
covered thereby pursuant to an underwriting agreement to which the Company is a
party, the representations and warranties of the Company contained in such
underwriting agreement cease to be true and correct in all material respects,
(v) of the receipt by an appropriate officer or employee of the Company of
-12-
any notification with respect to the suspension of the qualification of the
Registrable Securities covered by such Registration Statement for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose
and (vi) upon an appropriate officer or employee of the Company becoming aware
thereof, of the happening of any event or the discovery of any facts during the
period such Registration Statement is effective which (A) makes any statement
made in such Registration Statement or the related Prospectus untrue in any
material respect or (B) causes such Registration Statement or the related
Prospectus to 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;
(f) (A) in the case of the Exchange Offer, (i) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section
covering the use of the Prospectus included in the Exchange Offer
Registration Statement by Participating Broker-Dealers (as defined below)
who have exchanged their Registrable Securities for Exchange Securities for
the resale of such Exchange Securities, (ii) furnish to each Participating
Broker-Dealer who notifies the Company in writing that it desires to
participate in the Exchange Offer, without charge, as many copies of each
Prospectus included in the Exchange Offer Registration Statement, including
any preliminary prospectus, and any amendment or supplement thereto, as
such broker-dealer may reasonably request, (iii) include in the Exchange
Offer Registration Statement a statement that any broker-dealer who holds
Registrable Securities acquired for its own account as a result of market-
making activities or other trading activities (a "Participating Broker-
Dealer"), and who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer, may be a statutory underwriter and must
deliver a prospectus meeting the requirements of the 1933 Act in connection
with any resale of such Exchange Securities, (iv) subject to Section 3(k)
and the last paragraph of Section 3, hereby consent to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto by any Participating Broker-Dealer in
connection with the sale or transfer of the Exchange Securities covered by
the Prospectus or any amendment or supplement thereto for a period ending
90 days following consummation of the Exchange Offer or, if earlier, when
the Participating Broker-Dealer has given notice to the Company that all
Exchange Securities received by such Participating Broker-Dealer in
exchange for Registrable Securities acquired for their own account as a
result of market-making or other trading activities have been disposed of
by such Participating Broker-Dealer, and (v) include in the transmittal
letter or similar documentation to be executed by an exchange offeree in
order to participate in the Exchange Offer a provision to substantially the
following effect (or such similar provision as is reasonably acceptable to
counsel for the Initial Purchasers and as, in the reasonable opinion of the
Company, may at the time be required by applicable law or SEC
interpretation):
"If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Securities. If the undersigned is a broker-
dealer that will receive Exchange
-13-
Securities for its own account in exchange for Registrable Securities,
it represents that the Registrable Securities to be exchanged for
Exchange Securities were acquired by it as a result of market-making
activities or other trading activities and acknowledges that it will
deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of such Exchange Securities pursuant to the
Exchange Offer; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act"; and
(B) to the extent any Participating Broker-Dealer participates in the
Exchange Offer, the Company shall use its reasonable efforts to cause to be
delivered at the request of an entity representing the Participating
Broker-Dealers (which entity shall be Merrill Lynch, Pierce, Fenner & Smith
Incorporated or another Initial Purchaser) only one, if any, "cold comfort"
letter with respect to the Prospectus in the Exchange Offer Registration
Statement in the form existing on the last date for which exchanges are
accepted pursuant to the Exchange Offer; and
(C) to the extent any Participating Broker-Dealer participates in the
Exchange Offer and notifies the Company or causes the Company to be
notified in writing that it is a Participating Broker-Dealer, the Company
shall use its reasonable efforts to maintain the effectiveness of the
Exchange Offer Registration Statement for a period of 90 days following the
last date on which exchanges are accepted pursuant to the Exchange Offer,
or, if earlier, when the Participating Broker-Dealers have given notice to
the Company that all Exchange Securities received by Participating Broker-
Dealers in exchange for Registrable Securities acquired for their own
account as a result of market-making or other trading activities have been
disposed of by such Participating Broker-Dealers; and
(D) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as would
otherwise be contemplated by Section 3(b), or take any other action as a
result of this Section 3(f), for a period exceeding 90 days after the last
date for which exchanges are accepted pursuant to the Exchange Offer (or
such earlier date referred to in Paragraph (C) above) and Participating
Broker-Dealers shall not be authorized by the Company to, and shall not,
deliver such Prospectus after such period in connection with resales
contemplated by this Section 3 or otherwise;
it being understood that, notwithstanding anything in this Agreement to the
contrary, the Company shall not be required to comply with any provision of this
Section 3(f) or any other provision of this Agreement relating to the
distribution of Exchange Securities by Participating Broker-Dealers, to the
extent that the Company reasonably concludes (with the consent of Merrill Lynch
not to be unreasonably withheld) that compliance with such provision is no
longer required by applicable law or interpretation of the staff of the SEC;
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(g)(A) in the case of an Exchange Offer, furnish one firm of legal
counsel for the Initial Purchasers and (B) in the case of a Shelf
Registration, furnish one firm of legal counsel for the Holders of
Registrable Securities covered thereby copies of any request received by or
on behalf of the Company, from the SEC or any state securities authority
for amendments or supplements to the relevant Registration Statement and
Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon as
practicable and provide prompt notice to one firm of legal counsel for the
Holders of the withdrawal of any such order;
(i) upon their request, in the case of a Shelf Registration, furnish
to each Holder of Registrable Securities registered thereby, without charge, at
least one conformed copy of each Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(j) in the case of Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legend (except any customary legend borne by securities
held through The Depository Trust Company or any similar depository), and cause
such Registrable Securities to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling Holders
or the underwriters, if any, may reasonably request at least two business days
prior to the closing of any sale of Registrable Securities;
(k) in the case of a Shelf Registration, upon an appropriate officer
or employee of the Company becoming aware of the occurrence of any event or the
discovery of any facts, each as contemplated by Section 3(e)(vi) hereof, use its
reasonable efforts to prepare a supplement or post-effective amendment to the
relevant Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain at the time of such delivery any 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. The Company agrees to notify each Holder of Registrable
Securities registered under the relevant Subject Registration Statement to
suspend use of the Prospectus as promptly as practicable after an appropriate
officer or employee of the Company becomes aware of the occurrence of such an
event, and each Holder of Registrable Securities registered under the relevant
Subject Registration Statement hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct such
misstatement or omission or has advised such Holders that use of such Prospectus
may be resumed. At such time as such public disclosure is otherwise made and
the relevant Subject Registration Statement has been appropriately amended or
supplemented or the Company determines that such disclosure is not necessary, in
each case to correct any misstatement of a material fact or to include any
omitted material fact,
-15-
or the Company otherwise determines that use of such Prospectus may be resumed,
the Company agrees promptly to notify each Holder of Registrable Securities
registered under the relevant Subject Registration Statement of such
determination and (if applicable) to furnish each such Holder such numbers of
copies of the Prospectus, as amended or supplemented, as such Holder may
reasonably request;
(l) obtain a CUSIP number for all Exchange Securities, or Registrable
Securities sold pursuant to a Shelf Registration Statement, as the case may be,
not later than the effective date of a Registration Statement, and provide the
Trustee with printed certificates for the Exchange Securities or the Registrable
Securities sold pursuant to a Shelf Registration Statement, as the case may be,
in a form eligible for deposit with the Depository Trust Company (PROVIDED that
the Company shall not be required to provide for any Exchange Securities or
Registrable Securities sold pursuant to a Shelf Registration Statement to be so-
called "book-entry only" securities);
(m) unless the Indenture, as it relates to the Exchange Securities or
the Registrable Securities, as the case may be, has already been so qualified,
use its reasonable efforts to (i) cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Securities or Registrable Securities, as the case
may be, (ii) cooperate with the Trustee and the Holders to effect such changes
to the Indenture, if any, as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and (iii) execute, and uses
its reasonable efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable the Indenture to be so qualified in a timely
manner;
(n) in the case of a Shelf Registration, take all customary and
appropriate actions (including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the disposition of the Registrable
Securities registered thereby, PROVIDED that the Company shall not be required
to (A) enter into (x) more than one underwriting agreement (the "Underwriting
Agreement") with respect to Registrable Securities registered under the Shelf
Registration Statement or (y) any underwriting agreement with respect to the
sale of any Registrable Securities pursuant to a Purchaser Shelf Registration
Statement or (B) enter into any sales agency agreements, distribution agreements
or other similar agreements whatsoever with respect to the Registrable
Securities. The Company agrees that it will in good faith negotiate the terms
of any such Underwriting Agreement, which shall be in form and scope as is
customary for similar offerings of debt securities with similar credit ratings
(including, without limitation, representations and warranties to the
underwriters) and shall otherwise be reasonable satisfactory to the Company and
the managing underwriters; and:
(i) with regard to not more than one underwritten offering pursuant
to the Underwriting Agreement (opinions of counsel that are required to be
filed as Exhibit 5 to any registration statement being specifically
excluded from this limitation), if requested by the managing underwriters,
obtain opinions of counsel to the Company
-16-
(which counsel shall be reasonably satisfactory to the managing
underwriters) addressed to such underwriters, covering the matters
customarily covered in opinions requested in sales of securities or
underwritten offerings and in substantially the form specified in the
Underwriting Agreement; PROVIDED, HOWEVER, that all of such opinions shall
be dated as of a single date and no updates thereof shall be required; and
PROVIDED, FURTHER, that except as set forth in this paragraph (i), the
Company shall have no obligation to deliver any legal opinions (excluding
Exhibit 5 opinions) under or in connection with this Agreement;
(ii) with regard to not more than one underwritten offering pursuant
to the Underwriting Agreement, if requested by the managing underwriters,
obtain a single "cold comfort" letter and a single update thereto not later
than two weeks after the date of the original letter (or if not available
under applicable accounting pronouncements or standards, a single
"procedures" letter and a single update thereto) from the Company's
independent certified public accountants addressed to the underwriters
named in the Underwriting Agreement and use reasonable efforts to have such
letter addressed to the selling Holders of Registrable Securities (PROVIDED
that such letter need not be addressed to any Holders to whom, in the
reasonable opinion of the Company's independent certified public
accountants, addressing such letter is not permissible under applicable
accounting standards), such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" (or "procedures")
letters to underwriters in connection with similar underwritten offerings;
PROVIDED, HOWEVER, that except as set forth in this paragraph (ii), the
Company shall have no obligation to delivery any "cold comfort" or
"procedures" letters or any updates thereto under or in connection with
this Agreement; and
(iii) deliver such documents and certificates as may be reasonably
requested and as are customarily delivered in similar underwritten
offerings.
Notwithstanding anything herein to the contrary, the Company shall have no
obligation to enter into any underwriting agreement or permit an underwritten
offering of Registrable Securities unless a request therefor shall have been
received from the Majority Holders. In the case of such a request for an
underwritten offering, the Company shall provide written notice to the Holders
of all Registrable Securities of such underwritten offering at least 30 days
prior to the filing of a prospectus supplement for such underwritten offering.
Such notice shall (x) offer each such Holder the right to participate in such
underwritten offering (but may indicate that whether or not all Registrable
Securities are included will be at the discretion of the underwriters), (y)
specify a date, which shall be no earlier than 10 days following the date of
such notice, by which such Holder must inform the Company of its intent to
participate in such underwritten offering and (z) include the instructions such
Holder must follow in order to participate in such underwritten offering;
(o) in the case of a Shelf Registration, and to the extent customary
in connection with a "due diligence" investigation for an offering of debt
securities with a similar
-17-
credit rating to that of the Registrable Securities, make available for
inspection by representatives appointed by the Majority Holders and any
underwriters participating in any disposition pursuant to a Shelf Registration
Statement and one firm of legal counsel retained for all Holders participating
in such Shelf Registration, and one firm of legal counsel to the underwriters,
if any, all financial and other records, pertinent corporate documents and
properties of the Company reasonably requested by any such persons, and cause
the respective officers, employees, and any other agents of the Company to
supply all information reasonably requested by any such representative,
underwriters or counsel in connection with the Shelf Registration Statement;
PROVIDED that, if any such records, documents or other information relates to
pending or proposed acquisitions or dispositions, or otherwise relates to
matters reasonably considered by the Company to constitute sensitive or
proprietary information, the Company need not provide such records, documents or
information unless the foregoing parties enter into a confidentiality agreement
in customary form and reasonably acceptable to such parties and the Company;
(p) (i) a reasonable time prior to the filing of any Exchange Offer
Registration Statement, any Prospectus forming a part thereof, any amendment to
an Exchange Offer Registration Statement or amendment or supplement to such
Prospectus, provide copies of such document to the Initial Purchasers, and make
such changes in any such document prior to the filing thereof as Merrill Lynch
or one firm of legal counsel to the Initial Purchasers may reasonably request;
(ii) in the case of a Shelf Registration, a reasonable time prior to filing any
Shelf Registration Statement, any Prospectus forming a part thereof, any
amendment to such Shelf Registration Statement or amendment or supplement to
such Prospectus, provide copies of such document to Merrill Lynch, one firm of
legal counsel appointed by the Majority Holders to represent the Holders
participating in such Shelf Registration, the managing underwriters of an
underwritten offering of Registrable Securities, if any, and their counsel, and
make such changes in any such document prior the filing thereof as Merrill
Lynch, such one firm of legal counsel for the Holders, such managing
underwriters or their counsel may reasonably request; and (iii) cause the
representatives of the Company to be available for discussion of such document
as shall be reasonably requested by Merrill Lynch, one firm of legal counsel to
the Holders, the managing underwriters and their counsel and shall not at any
time make any filing of such document of which Merrill Lynch, one firm of legal
counsel to the Holders, the managing underwriters and their counsel shall not
have previously been advised and furnished a copy or to which Merrill Lynch, one
firm of legal counsel to the Holders, the managing underwriters and their
counsel shall reasonably object; PROVIDED that the provisions of this paragraph
(p) shall not apply to any document filed by the Company pursuant to the 1934
Act which is incorporated or deemed to be incorporated by reference in any
Registration Statement or Prospectus;
(q) use its reasonable efforts to cause the Exchange Securities, if
applicable, and, in the event of a Shelf Registration, the Debt Securities to be
rated with not more than two rating agencies selected by the Company, if so
requested by the Majority Holders or by the managing underwriters of an
underwritten offering of Registrable Securities, if any, unless the
-18-
Exchange Securities or the Registrable Securities, as the case may be, are
already so rated or unless the Company has obtained such ratings for its long-
term debt securities generally;
(r) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering at
least 12 months which shall satisfy the provisions of Section 11(a) of the 1933
Act and Rule 158 thereunder; PROVIDED that the Company's obligations under this
paragraph (r) shall be satisfied by the filing of its quarterly and annual
reports on Forms 10-K and 10-Q; and
(s) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any managing
underwriters and their counsel.
In the case of a Subject Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) (i) require
each Holder of Registrable Securities to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing and such other information as, in the reasonable opinion of the
Company, is required for inclusion in the Subject Registration Statement (which
requests may be given to a single firm of legal counsel for the Holders), and
(ii) further require each Holder of Registrable Securities, through one firm of
legal counsel on behalf of all such Holders, to furnish to the Company comments
on the Subject Registration Statement and the Prospectus included therein or any
amendment or supplement to any of the foregoing not later than such times as the
Company reasonably may request.
In the case of a Subject Registration Statement, each Holder agrees
and, in the case of the Exchange Offer Registration Statement, each
Participating Broker-Dealer agrees that, upon receipt of any notice from the
Company of the happening of any event or the discovery of any facts, each of the
kind described in Section 3(e)(ii)-(vi) or Section 3(k) hereof (it being
understood and agreed that, for purposes of this paragraph, all references in
Sections 3(e)(ii)-(vi) and Section 3(k) to a "Subject Registration Statement", a
"Shelf Registration Statement" or a "Registration Statement" shall be deemed to
mean and include the Shelf Registration Statement, the Purchaser Shelf
Registration Statement or the Exchange Offer Registration Statement or all or
any combination thereof (as the context requires), MUTATIS MUTANDIS), such
Holder or Participating Broker-Dealer, as the case may be, will forthwith
discontinue disposition of Registrable Securities pursuant to such Registration
Statement and discontinue use of the Prospectus included therein until such
Holder's or Participating Broker-Dealer's receipt, as the case may be, of (A)
copies of the supplemented or amended Prospectus contemplated by Section 3(k)
hereof or (B) notice from the Company that the sale of the Registrable
Securities may be resumed, and, if so directed by the Company, such Holder or
Participating Broker-Dealer, as the case may be, will deliver to the Company (at
its expense) all copies in its possession, other than permanent file copies then
in its possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. If
-19-
the Company shall give any such notice to suspend the disposition of Registrable
Securities pursuant to a Registration Statement as a result of the happening of
any event or the discovery of any facts, each of the kind described in Section
3(e)(vi) or 3(k) hereof, the Company shall be deemed to have used its reasonable
efforts to keep such Registration Statement effective during such period of
suspension, PROVIDED that the Company shall use its reasonable efforts to file
and have declared effective (if an amendment) as soon as practicable an
amendment or supplement to such Registration Statement or the related Prospectus
and shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days during the
period from and including the date of the giving of such notice to and including
the date when the Holders shall have received copies of the supplemented or
amended Prospectus necessary to resume such dispositions or the date on which
the Company has given notice that the sale of Registrable Securities may be
resumed, as the case may be. Each Holder of Registrable Securities hereby
agrees that it will at all times use the then most current preliminary
prospectus or Prospectus (as the case may be), as then amended or supplemented,
which has been provided to it by the Company in connection with the resale or
transfer of any Registrable Securities pursuant to a Registration Statement or
Prospectus.
4. UNDERWRITTEN REGISTRATIONS. If any of the Registrable Securities
covered by the Shelf Registration Statement are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will manage the offering will be selected by the Majority Holders and shall
be reasonably acceptable to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall
indemnify and hold harmless each Initial Purchaser, each Holder and each Person,
if any, who controls any of such parties within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Exchange Securities
or Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom
-20-
of a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(ii) against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred (including
(subject to Section 5(c) below) the reasonable fees and disbursements of
counsel chosen by Merrill Lynch, Pierce, Fenner & Smith Incorporated or, in
the event that Merrill Lynch, Pierce, Fenner & Smith Incorporated is not an
indemnified party, by a majority of the indemnified parties), reasonably
incurred in investigating, preparing or defending against any litigation,
or investigation or proceeding by any court or governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
of this Section 5(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Initial Purchaser, any Holder or any underwriter expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto); and PROVIDED, FURTHER, that this indemnity
agreement with respect to any Prospectus shall not inure to the benefit of any
Initial Purchaser or Holder from whom the person asserting any such losses,
claims, damages or liabilities purchased Registrable Securities or Exchange
Securities (or any person who controls such Initial Purchaser or Holder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act) if a
copy of the Prospectus (as then amended or supplemented and furnished by the
Company to such Initial Purchaser or Holder, as the case may be) was not sent or
given by or on behalf of such Initial Purchaser or Holder, as the case may be,
to such person, if such is required by law, at or prior to the sale of such
Registrable Securities or Exchange Securities and if the Prospectus (as to
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability.
(b) In the case of a Shelf Registration, each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, each
Initial Purchaser, each underwriter who participates in an offering of
Registrable Securities and the other Holders and each of their respective
directors and officers (including each officer of the Company who signed the
Registration Statement in question) and each Person, if any, who controls the
Company, any Initial Purchaser, any underwriter or any other Holder within the
meaning of Section 15 of the
-21-
1933 Act or Section 20 of the 1934 Act, against any and all losses,
liabilities, claims, damages and expenses described in the indemnity
contained in Section 5(a) hereof, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on behalf
of such Holder expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto); PROVIDED, HOWEVER, that no such Holder shall be liable for any
claims hereunder in excess of the amount of net proceeds received by such
Holder from the sale of Registrable Securities pursuant to such Registration
Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have other than on account of this indemnity agreement or the contribution
agreement set forth in Section 5(d) below. An indemnifying party may
participate at its own expense in the defense of such action. In no event shall
the indemnifying party or parties be liable for the fees and expenses of more
than one legal counsel (which shall be selected by Merrill Lynch, Pierce, Fenner
& Smith Incorporated or, in the event that Merrill Lynch, Pierce, Fenner & Smith
Incorporated is not an indemnified party, by a majority in number of the
indemnified parties) for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which any of the indemnity provisions set forth in this Section
5 are for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Initial
Purchasers and the Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company, the Initial Purchasers and the
Holders, as incurred; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company, the Initial Purchasers and Holders,
such parties shall contribute to such aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement in
such proportion as shall be appropriate to reflect (i) the relative benefits
received by the Company on the one hand, the Initial Purchasers on another hand,
and the Holders on another hand, from the offering of the Exchange Securities or
Registrable Securities, as the case may be, included in such offering, and (ii)
the relative fault of the Company on the one hand, the Initial Purchasers on
another hand, and the Holders on another hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or
action in respect thereof, as well as any other relevant equitable
considerations. The Company, the Initial Purchasers and the Holders agree that
it would not be just and equitable if contribution pursuant to this Section 5
were to be determined by pro rata allocation or by any other method
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of allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 5, each Person, if any, who
controls an Initial Purchaser or a Holder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such Initial Purchaser or such Holder, and each director of the
Company, each officer of the Company who signed the Registration Statement in
question, and each Person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
6. MISCELLANEOUS. (a) RULE 144. For so long as the Company is
subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the
Company covenants that it will file the reports required to be filed by it under
Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by
the SEC thereunder, that if it ceases to be so required to file such reports, it
will upon the request of any Holder of Registrable Securities (i) make publicly
available such information as is necessary to permit sales pursuant to Rule 144
under the 1933 Act and (ii) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
1933 Act within the limitation of the exemptions provided by (x) Rule 144 under
the 1933 Act, as such Rule may be amended from time to time or (y) any similar
rules or regulations hereafter adopted by the SEC (PROVIDED that the obligations
of the Company under any such similar rules or regulations shall not be more
burdensome in any substantial respect than those referred to in clause (x)).
Upon the request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
(b) NO INCONSISTENT AGREEMENTS. The Company has not entered into nor
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure; PROVIDED, HOWEVER, that to the extent any provision of this
Agreement relates to the Purchaser Shelf Registration Statement or otherwise to
the Initial Purchasers, such provision may be amended, modified or supplemented,
and waivers or consents to departures from such provisions thereof may be given,
by Merrill Lynch; and PROVIDED, FURTHER, that no amendment, modification,
supplement or waiver or consent to any departure from the provisions of Section
5 hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company and Merrill Lynch to
the extent that any such amendment, modification,
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supplement, waiver or consent is, in their reasonable judgment, necessary or
appropriate to comply with applicable law (including any interpretation of the
staff of the SEC) or any change therein and a waiver or consent to departure
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders, determined on the basis of
securities being sold rather than registered under such Registration Statement.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telecopier, or any courier providing overnight delivery (i) if to a
Holder, at its address appearing in the "Note register" (as defined in the
Indenture) or at such other address as shall have been given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(d), which address initially is, with respect to the Initial
Purchasers, the address care of Merrill Lynch, Pierce, Fenner & Smith
Incorporated set forth in the Purchase Agreement, and (ii) if to the Company
initially at the Company's address set forth in the Purchase Agreement, or in
each case to such other address notice of which is given in accordance with the
provisions of this Section 6(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next business day if timely delivered
to an air courier providing overnight delivery.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; PROVIDED that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof or of the Indenture or the Offering
Memorandum dated February 26, 1996; and PROVIDED, FURTHER, that Holders of
Registrable Securities may not assign their rights under this Agreement except
in connection with the permitted transfer of Registrable Securities and then
only insofar as relates to such Registrable Securities. If any transferee of
any Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject
to all of the terms of this Agreement, and by taking and holding such
Registrable Securities, such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this Agreement,
and such Person shall be entitled to receive the benefits hereof.
(f) THIRD PARTY BENEFICIARY. The Holders from time to time shall
each be a third party beneficiary to the agreements made hereunder between the
Company, on the one hand, and the Initial Purchasers, on the other hand, and
Merrill Lynch shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.
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(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
------------------------
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SOLECTRON CORPORATION
By: /s/ Susan Wang
-----------------------------
Name: Susan Wang
Title: Senior Vice President and
Chief Financial Officer
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
HAMBRECHT & QUIST LLC
By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Andrew Burch
-------------------------
Name: Andrew Burch
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