Execution Copy
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EXHIBIT 4.18
REGISTRATION RIGHTS AGREEMENT
Dated as of December 20, 2002
between
INTERSTATE POWER AND LIGHT COMPANY
and
ROBERT W. BAIRD & CO. INCORPORATED
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This REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
December 20, 2002, is made and entered between Interstate Power and Light
Company, an Iowa corporation (the "Company"), and Robert W. Baird & Co.
Incorporated ("Baird").
This Agreement is made pursuant to the Purchase Agreement, dated
December 18, 2002, between the Company and Baird (the "Purchase Agreement"),
which provides for the sale by the Company to Baird of 6,000,000 shares of
the Company's 8.375% Series A Cumulative Preferred Stock, par value $0.01 per
share (the "Securities"). In order to induce Baird to enter into the
Purchase Agreement, the Company has agreed to provide to Baird and its 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 as
follows:
1. Definitions.
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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 l934, as
amended from time to time.
"Affiliate" shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by or is under common
control with such Person, or (b) any Person who is a director or officer
of (i) such Person, (ii) of any subsidiary of such Person, or (iii) a
Person described in clause (a) above. For purposes of this definition,
control of a Person shall mean the power, direct or indirect, (x) to
vote 51% or more of the securities having ordinary voting power for the
election of directors of such Person, whether by ownership of
securities, contract, proxy or otherwise, or (y) to direct or cause the
direction of the management and policies of such Person, whether by
ownership of securities, contract, proxy or otherwise.
"Agreement" shall have the meaning set forth in the preamble.
"Articles of Amendment" means the Articles of Amendment to the
Company's Restated Articles of Incorporation relating to the Securities
filed with the Secretary of State of the State of Iowa on December 18,
2002.
"Baird" shall have the meaning set forth in the preamble.
"Closing Date" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any
other depositary appointed by the Company; provided, however, that such
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depositary must have an address in the Borough of Manhattan, in the City
of New York.
"Effectiveness Period" shall have the meaning set forth in
Section 2.2 hereof.
"Exchange Offer" shall mean the exchange offer by the Company
of Exchange Securities for Registrable Securities pursuant to Section
2.1 hereof.
"Exchange Offer Registration" shall mean a registration under
the 1933 Act effected pursuant to Section 2.1 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, including the Prospectus contained therein, all
exhibits thereto and all documents incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section
2.1 hereof.
"Exchange Securities" shall mean shares of the Company's
8.375% Series B Cumulative Preferred Stock identical to the Securities
in all material respects (except that such shares will be a separate
series and except for certain additional dividend rate provisions and
restrictive legends), to be offered to Holders of Securities in exchange
for Registrable Securities pursuant to the Exchange Offer.
"Holder" shall mean Baird, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct
and indirect transferees who become registered owners of Registrable
Securities and each Participating Broker-Dealer that holds Exchange
Securities for so long as such Participating Broker-Dealer is required
to deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of such Exchange Securities.
"Majority Holders" shall mean the Holders of a majority of the
number of shares 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 or any Affiliate of the Company shall be disregarded
in determining whether such consent or approval was given by the Holders
of such required percentage amount.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Participating Broker-Dealer" shall mean Baird and any other
broker-dealer which makes a market in the Securities and exchanges
Registrable Securities in the Exchange Offer for Exchange Securities.
"Person" shall mean an individual, partnership (general or
limited), corporation, limited liability company, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section
2.1 hereof.
"Private Exchange Securities" shall have the meaning set forth
in Section 2.1 hereof.
"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 any such prospectus supplement with respect to the terms of
the offering of any portion of the Registrable Securities covered by a
Shelf Registration Statement, and by all other amendments and
supplements to a prospectus, including post-effective amendments, and in
each case including all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Registrable Securities" shall mean the Securities and, if
issued, the Private Exchange Securities; provided, however, that the
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Securities and, if issued, the Private Exchange Securities, shall cease
to be Registrable Securities when (i) a Registration Statement with
respect to such securities shall have been declared effective under the
1933 Act and such securities shall have been disposed of pursuant to
such Registration Statement, (ii) such securities have been sold to the
public pursuant to Rule l44 (or any similar provision then in force, but
not Rule 144A) under the 1933 Act, (iii) such securities shall have
ceased to be outstanding or (iv) the Exchange Offer is consummated
(except in the case of Securities purchased from the Company and
continued to be held by Baird).
"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, stock exchange or
the NASD registration and filing fees, including, if applicable, the
fees and expenses of any "qualified independent underwriter" (and its
counsel) that is required to be retained by any holder of Registrable
Securities in accordance with the rules and regulations of the NASD,
(ii) all fees and expenses incurred in connection with compliance with
state securities or blue sky laws and compliance with the rules of the
NASD (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any
of the Exchange Securities or Registrable Securities and any filings
with the NASD), (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and
other documents relating to the performance of and compliance with this
Agreement, (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Securities on any securities
exchange or exchanges, (v) all rating agency fees, (vi) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance
and compliance, (vii) the fees and expenses of any escrow agent or
custodian, (viii) in the case of a Shelf Registration Statement, the
reasonable fees and disbursements of one special counsel designated in
writing by the Majority Holders to represent the Holders of Registrable
Securities and (ix) any fees and disbursements of the underwriters
customarily required to be paid by issuers or sellers of securities and
the fees and expenses of any special experts retained by the Company in
connection with any Registration Statement, but excluding 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 by reference therein.
"SEC" shall mean the United States Securities and Exchange
Commission or any successor agency or government body performing the
functions currently performed by the United States Securities and
Exchange Commission.
"SEC Order" shall have the meaning set forth in Section 2.1.
"Securities" shall have the meaning set forth in the preamble.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2.2 hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of
Section 2.2 of this Agreement which covers all of the Registrable
Securities or all of the Private Exchange Securities 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 by reference therein.
"Underwriter" shall have the meaning set forth in Section 4.
2. Registration Under the 1933 Act.
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2.1 Exchange Offer. Except as provided in Section 2.2 and to the
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extent not prohibited by any applicable law or applicable interpretation of
the staff of the SEC, the Company shall, for the benefit of the Holders, at
the cost of the Company, (A) prepare and, as soon as practicable but not
later than April 1, 2003, file with the SEC an Exchange Offer Registration
Statement on an appropriate form under the 1933 Act with respect to a
proposed Exchange Offer and the issuance and delivery to the Holders, in
exchange for the Registrable Securities (other than Private Exchange
Securities), of a like number of shares of Exchange Securities, (B) use its
reasonable best efforts to cause the Exchange Offer Registration Statement to
be declared effective under the 1933 Act on or before June 1, 2003, (C) use
its reasonable best efforts to keep the Exchange Offer Registration Statement
effective until the closing of the Exchange Offer and (D) use its reasonable
best efforts to cause the Exchange Offer to be consummated on or before July
1, 2003. The Exchange Securities will be issued pursuant to the Articles of
Amendment. 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 eligible and
electing to exchange Registrable Securities for Exchange Securities (assuming
that such Holder (a) is not an affiliate of the Company within the meaning of
Rule 405 under the 1933 Act, (b) is not a broker-dealer tendering Registrable
Securities acquired directly from the Company for its own account,
(c) acquired the Exchange Securities in the ordinary course of such Holder's
business and (d) has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing the
Exchange Securities) to transfer such Exchange Securities from and after
their receipt without any limitations or restrictions under the 1933 Act and
under state securities or blue sky laws.
In connection with the Exchange Offer, the Company shall:
(a) mail as promptly as practicable 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;
(b) keep the Exchange Offer open for acceptance for a period
of not less than 20 business days after the date notice thereof is
mailed to the Holders (or longer if required by applicable law) (such
period referred to herein as the "Exchange Period");
(c) utilize the services of the Depositary for the Exchange
Offer;
(d) permit Holders to withdraw tendered Registrable
Securities at any time prior to 5:00 p.m. (Eastern Time), on the last
business day of the Exchange Period, by sending to the institution
specified in the notice, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the number of shares of
Registrable Securities delivered for exchange, and a statement that such
Holder is withdrawing such Holder's election to have such Securities
exchanged;
(e) notify each Holder that any Registrable Security not
tendered will remain outstanding and continue to accrue dividends, if
any, but will not retain any rights under this Agreement (except in the
case of Baird and Participating Broker-Dealers as provided herein); and
(f) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer, Baird holds any
Securities acquired by it and having the status of an unsold allotment in the
initial distribution, the Company upon the request of Baird shall,
simultaneously with the delivery of the Exchange Securities in the Exchange
Offer and subject to compliance with applicable securities laws, issue and
deliver to Baird in exchange (the "Private Exchange") for the Securities held
by Baird, a like number of shares of preferred securities of the Company,
that are identical (except that such securities shall bear appropriate
transfer restrictions) to the Exchange Securities (the "Private Exchange
Securities").
The Exchange Securities and the Private Exchange Securities shall
be issued under the Articles of Amendment. The Articles of Amendment shall
provide that the Exchange Securities, the Private Exchange Securities and the
Securities shall vote and consent together on all matters as one class and
that none of the Exchange Securities, the Private Exchange Securities or the
Securities will have the right to vote or consent as a separate class on any
matter. The Private Exchange Securities shall be of the same series as and
the Company shall use all commercially reasonable efforts to have the Private
Exchange Securities bear the same CUSIP number as the Exchange Securities.
The Company shall not have any liability under this Agreement solely as a
result of such Private Exchange Securities not bearing the same CUSIP number
as the Exchange Securities.
As soon as practicable after the close of the Exchange Offer and/or
the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all 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 shall be an exhibit thereto;
(ii) accept for exchange all Securities properly tendered
pursuant to the Private Exchange;
(iii)cancel all Registrable Securities so accepted for
exchange; and
(iv) deliver Exchange Securities or Private Exchange
Securities, as the case may be, to each Holder of Registrable Securities
so accepted for exchange in that number of shares equal to the number of
shares of the Registrable Securities of such Holder so accepted for
exchange.
Dividends on each Exchange Security and Private Exchange Security
will accrue from the last date on which dividends were paid on the
Registrable Securities surrendered in exchange therefor or, if no dividends
have been paid on the Registrable Securities, from the date of original
issuance.
The Exchange Offer and the Private Exchange shall not be subject to
any conditions, other than (i) that the Exchange Offer or the Private
Exchange, 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)
the due tendering of Registrable Securities in accordance with the Exchange
Offer and the Private Exchange, (iii) that each Holder of Registrable
Securities exchanged in the Exchange Offer shall have represented that all
Exchange Securities to be received by it shall be acquired in the ordinary
course of its business and that at the time of the consummation of the
Exchange Offer it shall have no arrangement or understanding with any person
to participate in the distribution (within the meaning of the 1933 Act) of
the Exchange Securities and shall have made such other representations as may
be reasonably necessary under applicable SEC rules, regulations or
interpretations to render the use of Form S-4 or other appropriate form under
the 1933 Act available and (iv) that no action or proceeding shall have been
instituted or threatened in any court or by or before any governmental agency
with respect to the Exchange Offer or the Private Exchange which, in the
judgment of the Company, would reasonably be expected to impair the ability
of the Company to proceed with the Exchange Offer or the Private Exchange and
that the Exchange Offer and the Private Exchange shall comply with the
provisions of the SEC's Release No. 35-27614, 70-10077 dated as of December
12, 2002 by which the Company is bound (the "SEC Order"). The Company shall
inform Baird of the names and addresses of the Holders to whom the Exchange
Offer is made, and Baird shall have the right to contact such Holders and
otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
2.2 Shelf Registration. (i) If, because of any changes in the
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law, SEC rules or regulations or applicable interpretations thereof by the
staff of the SEC, the Company is not permitted to effect the Exchange Offer
as contemplated by Section 2.1 hereof, (ii) if for any other reason the
Exchange Offer Registration Statement is not declared effective on or prior
to June 1, 2003 (other than as a result of an ongoing review of the Exchange
Offer Registration Statement by the staff of the SEC) or the Exchange Offer
is not consummated on or prior to July 1, 2003 (provided that if the Exchange
Offer Registration Statement shall be declared effective after June 1, 2003
or if the Exchange Offer shall be consummated after July 1, 2003, then the
obligation of the Company under this clause (ii) arising from the failure of
the Exchange Offer Registration Statement to be declared effective on or
before June 1, 2003 or the failure of the Exchange Offer to be consummated on
or before July 1, 2003, respectively, shall terminate), (iii) upon the
request of Baird within 90 days following the consummation of the Exchange
Offer, or (iv) if, as a result of any changes in law, SEC rules or
regulations or applicable interpretations thereof by the staff of the SEC or
otherwise, a Holder (other than Baird holding securities acquired directly
from the Company) is not permitted to participate in the Exchange Offer or
does not receive fully tradeable Exchange Securities pursuant to the Exchange
Offer, then in case of each of clauses (i) through (iv) the Company shall, at
its cost:
(a) As promptly as practicable, file with the SEC, and
thereafter shall use its reasonable best efforts to cause to be declared
effective as promptly as practicable but no later than July 1, 2003, a
Shelf Registration Statement relating to the offer and sale of the
Registrable Securities by the Holders from time to time in accordance
with the methods of distribution elected by the Majority Holders
participating in the Shelf Registration and set forth in such Shelf
Registration Statement.
(b) Use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of
two years from the Closing Date, or for such shorter period that will
terminate when all Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or cease to be outstanding or otherwise to be Registrable
Securities (the "Effectiveness Period"); provided, however, that the
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Effectiveness Period in respect of the Shelf Registration Statement
shall be extended to the extent required to permit dealers to comply
with the applicable prospectus delivery requirements of Rule 174 under
the 1933 Act and as otherwise provided herein.
(c) Notwithstanding any other provisions hereof, use its
reasonable best efforts to ensure that (i) any Shelf 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
Shelf 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 Shelf 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 necessary in order to make the statements, in light of the
circumstances under which they were made, not misleading; provided,
however, that clauses (ii) and (iii) shall not apply to any information
relating to Baird or any Holder furnished to the Company in writing by
Baird or such Holder expressly for use in the Shelf Registration
Statement.
The Company further agrees, if necessary, to supplement or amend
the Shelf Registration Statement, as required by Section 3(b) below, and to
furnish to the Holders of Registrable Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
2.3 Expenses. The Company shall pay all Registration Expenses in
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connection with the registration pursuant to Section 2.1 or 2.2. Each Holder
shall pay all underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
2.4. Effectiveness.
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(a) The Company will be deemed not to have used its
reasonable best efforts to cause the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, to
become, or to remain, effective during the requisite period if the
Company voluntarily takes any action that would, or omits to take any
action which omission 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 as and to the extent
contemplated hereby, unless such action is required by applicable law,
as contemplated by clause (i) of Section 2.2, or, in the case of the
Exchange Offer Registration Statement, such action would violate the
provisions of the SEC Order.
(b) An Exchange Offer Registration Statement pursuant to
Section 2.1 hereof or a Shelf Registration Statement pursuant to Section
2.2 hereof will not be deemed to have become effective unless it has
been declared effective by the SEC; provided, however, that if, after it
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has been declared effective, the offering of Registrable Securities
pursuant to an Exchange Offer Registration Statement or a Shelf
Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement will be deemed not to have
become effective during the period of such interference, until the
offering of Registrable Securities pursuant to such Registration
Statement may legally resume.
2.5 Additional Dividend Payments. The Articles of Amendment
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executed in connection with the Securities will provide that in the event
that (a) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to April 1, 2003, (b) the Exchange Offer Registration
Statement has not been declared effective on or prior to June 1, 2003, (c)
the Exchange Offer is not consummated, on or prior to July 1, 2003 or (d) if
required, the Shelf Registration Statement is not declared effective on or
prior to July 1, 2003 (each such event referred to in clauses (a) through (d)
above, a "Registration Default"), the rate of dividends that accrues on the
Securities shall be increased ("Additional Dividend Payments") by one-quarter
of one percent (0.25%) per annum upon the occurrence of a Registration
Default, which rate will increase by an additional one-quarter of one percent
(0.25%) at the beginning of each subsequent 90-day period that such
Additional Dividend Payments continue to accrue under any such circumstance,
provided that the maximum aggregate increase in the dividend accrual rate
will in no event exceed one and one-quarter percent (1.25%) per annum.
Following the cure of all Registration Defaults the accrual of Additional
Dividend Payments will cease and the dividend accrual rate will revert to the
original rate.
If the Shelf Registration Statement (if required) is unusable by
the Holders for any reason after the Shelf Registration Statement has been
declared effective by the SEC, and the aggregate number of days in any
consecutive twelve-month period for which the Shelf Registration Statement
shall not be usable exceeds 30 days in the aggregate, then the rate of
dividend payments that accrues on the Securities, so long as any Securities
are Registrable Securities, will be increased by one-quarter of one percent
(0.25%) per annum for the first 90-day period (or portion thereof) beginning
on the 31st day following the date that such Shelf Registration Statement
ceases to be usable, which rate shall be increased by an additional
one-quarter of one percent (0.25%) per annum at the beginning of each
subsequent 90-day period, provided that the maximum aggregate increase in the
dividend accrual rate will in no event exceed one and one-quarter percent
(1.25%) per annum. Any amounts payable under this paragraph shall also be
deemed "Additional Dividend Payments" for purposes of this Agreement. Upon
the Shelf Registration Statement once again becoming usable, the rate of
dividend payments that accrues on the Securities will be reduced to the
original dividend accrual rate if the Company is otherwise in compliance with
this Agreement at such time. Additional Dividend Payments shall be computed
based on the actual number of days elapsed in each 90-day period in which the
Shelf Registration Statement is unusable.
The Company shall notify each record holder of the Securities
within three business days after each and every date on which an event occurs
in respect of which Additional Dividend Payments are required to be paid (an
"Event Date"). The Additional Dividend Payments due shall be payable on each
dividend payment date with respect to the Securities on the same terms and
conditions and subject to the same limitations as govern, at such time, the
payment of regular dividends as set forth in the Articles of Amendment. Each
obligation to pay Additional Dividend Payments shall be deemed to accrue and
be cumulative from and including the day following the applicable Event Date.
3. Registration Procedures.
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In connection with and subject to the rights and the obligations of
the Company with respect to Registration Statements pursuant to Sections 2.1
and 2.2 hereof, the Company shall:
(a) 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, (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 or incorporated by reference therein and (iv) shall comply in
all material respects with the requirements of Regulation S-T under the
1933 Act, and use its reasonable best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof;
(b) 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; and cause each Prospectus to be
supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provision
then in force) under the 1933 Act and comply with the provisions of the
1933 Act, the 1934 Act and the rules and regulations thereunder
applicable to them 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 (including sales by any Participating
Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities, at least five business days prior to
filing, that a Shelf Registration Statement with respect to the
Registrable Securities is being filed and advising such Holders that the
distribution of Registrable Securities will be made in accordance with
the method selected by the Majority Holders participating in the Shelf
Registration; (ii) furnish to each Holder of Registrable Securities and
to each underwriter of an underwritten offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement
thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if
the Holder so requests, all exhibits in order to facilitate the public
sale or other disposition of the Registrable Securities; and (iii)
hereby consents 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;
(d) use its reasonable best efforts to register or qualify
the Registrable Securities under all applicable state securities or
"blue sky" laws of such jurisdictions as any Holder of Registrable
Securities covered by a Registration Statement and each underwriter of
an underwritten offering of Registrable Securities shall reasonably
request by the time the applicable Registration Statement is declared
effective by the SEC, and do any and all other acts and things which may
be reasonably necessary or advisable to enable each such Holder and
underwriter to consummate the disposition in each such jurisdiction of
such Registrable Securities owned by such Holder; provided, however,
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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 which would subject it to general service of
process or taxation in any such jurisdiction where it is not then so
subject;
(e) notify promptly each Holder of Registrable Securities
under a Shelf Registration or any Participating Broker-Dealer who has
notified the Company that it is utilizing the Exchange Offer
Registration Statement as provided in paragraph (f) below and, if
requested by such Holder or Participating Broker-Dealer, confirm such
advice in writing promptly (i) when a Registration Statement has become
effective and when any post-effective amendments and supplements thereto
become effective, (ii) of any request by the SEC or any state securities
authority for post-effective amendments and supplements to a
Registration Statement and Prospectus or for additional information
after the 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 a Registration Statement or the
initiation of any proceedings for that purpose, (iv) in the case of a
Shelf Registration, if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered
thereby, the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true and correct
in all material respects, (v) of the happening of any event or the
discovery of any facts during the period a Shelf Registration Statement
is effective which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or
which requires the making of any changes in such Registration Statement
or Prospectus in order to make the statements therein not misleading,
(vi) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities or the
Exchange Securities, as the case may be, for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose and
(vii) of any determination by the Company that a post-effective
amendment to such Registration Statement would be appropriate;
(f) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a
section entitled "Plan of Distribution" which section shall be
reasonably acceptable to Baird on behalf of the Participating
Broker-Dealers, and which shall contain a summary statement of the
positions taken or policies made by the staff of the SEC with respect to
the potential "underwriter" status of any broker-dealer that holds
Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities and that will be
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
of Exchange Securities to be received by such broker-dealer in the
Exchange Offer, whether such positions or policies have been publicly
disseminated by the staff of the SEC or such positions or policies, in
the reasonable judgment of Baird on behalf of the Participating
Broker-Dealers and its counsel, represent the prevailing views of the
staff of the SEC, including a statement that any such broker-dealer who
receives Exchange Securities for Registrable Securities pursuant to the
Exchange Offer may be deemed a statutory underwriter and must deliver a
prospectus meeting the requirements of the 1933 Act in connection with
any resale of such Exchange Securities, (ii) furnish to each
Participating Broker-Dealer who has delivered to the Company the notice
referred to in Section 3(e), 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 Participating Broker-Dealer may reasonably request,
(iii) hereby consents to the use of the Prospectus forming part of the
Exchange Offer Registration Statement or any amendment or supplement
thereto, by any Person subject to the prospectus delivery requirements
of the SEC, including all Participating Broker-Dealers, in connection
with the sale or transfer of the Exchange Securities covered by the
Prospectus or any amendment or supplement thereto, and (iv) include in
the transmittal letter or similar documentation to be executed by an
exchange offeree in order to participate in the Exchange Offer (x) the
following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer;"
and
(y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the
broker-dealer will not be deemed to admit that it is an underwriter
within the meaning of the 1933 Act; and
(B) in the case of any Exchange Offer Registration
Statement, the Company agrees to deliver to Baird on behalf of the
Participating Broker-Dealers upon the effectiveness of the Exchange
Offer Registration Statement (i) an opinion of counsel or opinions
of counsel substantially in the form attached hereto as Exhibit A
and (ii) officers' certificates substantially in the form
customarily delivered in a public offering of preferred stock;
(g) (i) in the case of an Exchange Offer, furnish counsel
for Baird and (ii) in the case of a Shelf Registration, furnish counsel
for the Holders of Registrable Securities copies of any comment letters
received from the SEC or any other request by the SEC or any state
securities authority for amendments or supplements to a 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 at
the earliest possible moment;
(i) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities, and each underwriter, if any, without
charge, at least one conformed copy of each Registration Statement and
any post-effective amendment thereto, including financial statements and
schedules (without documents incorporated therein by reference and all
exhibits thereto, unless requested);
(j) in the case of a 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 legends; and
enable such Registrable Securities to be in such denominations and
registered in such names as the selling Holders or the underwriters, if
any, may reasonably request at least three business days prior to the
closing of any sale of Registrable Securities;
(k) in the case of a Shelf Registration, upon the occurrence
of any event or the discovery of any facts, each as contemplated by
Sections 3(e)(v) and 3(e)(vi) hereof, as promptly as practicable after
the occurrence of such an event, use its reasonable best efforts to
prepare a supplement or post-effective amendment to the 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 or
Participating Broker-Dealers, 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 or will
remain so qualified. At such time as such public disclosure is
otherwise made 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, the Company agrees promptly to
notify each Holder of such determination and to furnish each Holder such
number of copies of the Prospectus as amended or supplemented, as such
Holder may reasonably request;
(l) in the case of a Shelf Registration, a reasonable time
prior to the filing of any Registration Statement, any Prospectus, any
amendment to a Registration Statement or amendment or supplement to a
Prospectus or any document which is to be incorporated by reference into
a Registration Statement or a Prospectus after initial filing of a
Registration Statement, provide copies of such document to Baird on
behalf of such Holders; and make representatives of the Company as shall
be reasonably requested by the Holders of Registrable Securities, or
Baird on behalf of such Holders, available for discussion of such
document upon reasonable advance notice. In connection with such
discussions, the Holders or Baird, on behalf of such Holders, shall use
their or its, as the case may be, reasonable best efforts to minimize
any disruption to the business of the Company;
(m) obtain a CUSIP number for all Exchange Securities,
Private Exchange Securities or Registrable Securities, as the case may
be, not later than the effective date of a Registration Statement, and
provide the Depositary or its custodian certificates for the Exchange
Securities, Private Exchange Securities or the Registrable Securities,
as the case may be, in a form eligible for deposit with the Depositary;
(n) in the case of a Shelf Registration, enter into
agreements (including underwriting agreements) and take all other
customary and appropriate actions in order to expedite or facilitate the
disposition of such Registrable Securities and in such connection
whether or not an underwriting agreement is entered into and whether or
not the registration is an underwritten registration:
(i) make such representations and warranties to the
Holders of such Registrable Securities and the underwriters, if
any, in form, substance and scope as are customarily made by
issuers to underwriters in similar underwritten offerings as may be
reasonably requested by them;
(ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the Holders of a majority of the number
of Registrable Securities being sold) addressed to each selling
Holder and the underwriters, if any, covering the matters
customarily covered in opinions requested in sales of securities or
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters;
(iii) obtain "cold comfort" letters and updates thereof
from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements are, or are
required to be, included in the Registration Statement) addressed
to the underwriters, if any, and use reasonable efforts to have
such letter addressed to the selling Holders of Registrable
Securities (to the extent consistent with Statement on Auditing
Standards No. 72 of the American Institute of Certified Public
Accountants), such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters
to underwriters in connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with the
Holders and an agent of the Holders providing for, among other
things, the appointment of such agent for the selling Holders for
the purpose of soliciting purchases of Registrable Securities,
which agreement shall be in form, substance and scope customary for
similar offerings;
(v) if an underwriting agreement is entered into, cause
the same to set forth indemnification provisions and procedures
substantially equivalent to the indemnification provisions and
procedures set forth in Section 4 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to
said Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of
transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
offerings to the Holders of a majority of the number of Registrable
Securities being sold and the managing underwriters, if any.
The above shall be done at (i) the effectiveness of such
Registration Statement (and each post-effective amendment thereto) and (ii)
each closing under any underwriting or similar agreement as and to the extent
required thereunder;
(o) in the case of a Shelf Registration or if a Prospectus is
required to be delivered by any Participating Broker-Dealer in the case
of an Exchange Offer, make available for inspection by representatives
of the Holders of the Registrable Securities, any underwriters
participating in any disposition pursuant to a Shelf Registration
Statement, any Participating Broker-Dealer and any counsel or accountant
retained by any of the foregoing, all financial and other records,
pertinent corporate documents and properties of the Company reasonably
requested by any such persons, and cause the officers, directors,
employees, and any other agents of the Company to supply all information
reasonably requested by any such representative, underwriter, special
counsel or accountant in connection with a Registration Statement, and
make such representatives of the Company available for discussion of
such documents as shall be reasonably requested by Baird;
(p) (i) in the case of an Exchange Offer Registration
Statement, 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 Baird
and to counsel to the Holders of Registrable Securities and make such
changes in any such document prior to the filing thereof as Baird or
counsel to the Holders of Registrable Securities may reasonably request
and, except as otherwise required by applicable law, not file any such
document in a form to which Baird on behalf of the Holders of
Registrable Securities and counsel to the Holders of Registrable
Securities shall not have previously been advised and furnished a copy
of or to which Baird on behalf of the Holders of Registrable Securities
or counsel to the Holders of Registrable Securities shall reasonably
object, and make the representatives of the Company available for
discussion of such documents as shall be reasonably requested by Baird;
and
(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 the Holders of
Registrable Securities, to Baird, to counsel for the Holders and to
the underwriter or underwriters of an underwritten offering of
Registrable Securities, if any, make such changes in any such
document prior to the filing thereof as Baird, the counsel to the
Holders or the underwriter or underwriters reasonably request and
not file any such document in a form to which the Majority Holders,
Baird on behalf of the Holders of Registrable Securities, counsel
for the Holders of Registrable Securities or any underwriter shall
not have previously been advised and furnished a copy of or to
which the Majority Holders, Baird of behalf of the Holders of
Registrable Securities, counsel to the Holders of Registrable
Securities or any underwriter shall reasonably object, and make the
representatives of the Company available for discussion of such
document as shall be reasonably requested by the Holders of
Registrable Securities, Baird on behalf of such Holders, counsel
for the Holders of Registrable Securities or any underwriter.
(q) in the case of a Shelf Registration, use its reasonable
best efforts to cause all Registrable Securities to be listed on any
securities exchange on which similar securities issued by the Company
are then listed if requested by the Majority Holders, or if requested by
the underwriter or underwriters of an underwritten offering of
Registrable Securities, if any;
(r) in the case of a Shelf Registration, use its reasonable
best efforts to cause the Registrable Securities to be rated by the
appropriate rating agencies, if so requested by the Majority Holders, or
if requested by the underwriter or underwriters of an underwritten
offering of Registrable Securities, if any;
(s) otherwise 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 of the Company
covering at least 12 months which shall satisfy the provisions of
Section 11(a) of the 1933 Act and Rule 158 thereunder; and
(t) cooperate and assist in any filings required to be made
with the NASD and, in the case of a Shelf Registration, in the
performance of any due diligence investigation by any underwriter and
its counsel (including any "qualified independent underwriter" that is
required to be retained in accordance with the rules and regulations of
the NASD).
In the case of a Shelf Registration Statement, the Company may (as
a condition to such Holder's participation in the Shelf Registration) require
each Holder of Registrable Securities (i) to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder
of such Registrable Securities as the Company may from time to time
reasonably request and (ii) to agree in writing to be bound by this
Agreement, including the indemnification provisions.
In the case of a Shelf Registration Statement, each Holder 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)(v) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(k) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at its expense) all copies in such
Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice.
In the event that the Company fails to effect the Exchange Offer or
file any Shelf Registration Statement and maintain the effectiveness of any
Shelf Registration Statement as provided herein, the Company shall not file
any Registration Statement with respect to any securities (within the meaning
of Section 2(1) of the 1933 Act) of the Company other than Registrable
Securities; notwithstanding the foregoing, the Company shall be permitted to
file registration statements solely to register securities issued pursuant to
employee benefit plans, qualified stock option plans or other employee
compensation plans.
If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or managers that will manage such
offering will be selected by the Majority Holders of such Registrable
Securities included in such offering and shall be 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.
4. Indemnification; Contribution.
-----------------------------
(a) The Company agrees to indemnify and hold harmless Baird,
each Holder, each Participating Broker-Dealer, each Person who
participates as an underwriter (any such Person being an "Underwriter")
and each Person, if any, who controls any Holder or Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage
and expense 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 or supplement
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
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 loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any 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; provided that (subject to Section 4(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any
indemnified party), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any 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) above;
provided, however, that this indemnity agreement shall not apply to any
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loss, liability, claim, damage or expense to the extent arising out of
any 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 the Holder or Underwriter expressly for use
in a Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto).
(b) Each Holder severally, but not jointly, agrees to
indemnify and hold harmless the Company, Baird, each Underwriter and the
other selling Holders, and each of their respective directors and
officers, and each Person, if any, who controls the Company, Baird, any
Underwriter or any other selling Holder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity
contained in Section 4(a) hereof, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or
omissions, made in the Shelf Registration Statement (or any amendment
thereto) or any Prospectus included therein (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information with respect to such Holder furnished to the Company by such
Holder expressly for use in the Shelf Registration Statement (or any
amendment thereto) or such Prospectus (or any amendment or supplement
thereto); provided, however, that no such Holder shall be liable for any
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claims hereunder in excess of the amount of net proceeds received by
such Holder from the sale of Registrable Securities pursuant to such
Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action or
proceeding 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 hereunder to the
extent it is not materially prejudiced as a result thereof and in any
event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action;
provided, however, that counsel to the indemnifying party shall not
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(except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying party or
parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel 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. In addition, the
indemnifying party shall be entitled to, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume
the defense of any claim or action brought against an indemnified party
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, the indemnifying
party shall not be liable to the indemnified party under this Section 4
for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs
of investigation; provided, however, that Baird shall have the right to
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employ one counsel to represent it and its officers, employees and
controlling persons who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by Baird against the
Company under this Section 4 if, in the reasonable judgment of Baird,
either (i) there is an actual or potential conflict between the position
of the Company on the one hand and Baird on the other hand or (ii) there
may be defenses available to it that are different from or additional to
those available to the Company (in any of which events the Company shall
not have the right to direct the defense of such action on behalf of
Baird with respect to such different defenses), in any of which events
such reasonable fees and expenses shall be borne by the Company. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 4 (whether or not the
indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by Section 4(a)(ii)
effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 4 is
for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages
or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, in
such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Holders and Baird on the other hand in
connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative fault of the Company on the one hand and the Holders
and Baird on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, the Holders or Baird and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Company, the Holders and Baird agree that it would not be just
and equitable if contribution pursuant to this Section 4 were determined by
pro rata allocation (even if Baird were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 4. The
aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 4
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 4, Baird shall not
be required to contribute any amount in excess of the amount by which the
total price at which the Securities sold by it were offered exceeds the
amount of any damages which Baird has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.
No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls
Baird 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 Baird or
such Holder, and each director of the Company 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.
5. Miscellaneous.
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5.1 Rule 144 and Rule 144A. 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 the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules
and regulations adopted by the SEC thereunder. If the Company ceases to be
so required to file such reports, the Company covenants that it will upon the
request of any Holder of Registrable Securities (a) make publicly available
such information as is necessary to permit sales pursuant to Rule 144 under
the 1933 Act, (b) deliver such information to a prospective purchaser as is
necessary to permit sales pursuant to Rule 144A under the 1933 Act and it
will take such further action as any Holder of Registrable Securities may
reasonably request, and (c) 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 (i)
Rule 144 under the 1933 Act, as such Rule may be amended from time to time,
(ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to
time, or (iii) any similar rules or regulations hereafter adopted by the
SEC. 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. The Company shall not be subject to the requirements
of this Section 5.1, provided, that, it obtains no-action relief from the SEC
regarding its reporting requirements under Section 13 or 15 of the 1934 Act
and under the 1933 Act.
5.2 No Inconsistent Agreements. The Company has not entered into
--------------------------
and will not 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. The rights granted to the Holders hereunder do not and will not for
the term of this Agreement in any way conflict with the rights granted to the
holders of the Company's other issued and outstanding securities under any
such agreements.
5.3 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 of the number of shares outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure.
5.4 Notices. All notices and other communications provided for or
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permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given by such Holder
to the Company, by means of a notice given in accordance with the provisions
of this Section 5.4, which address initially is the address set forth in the
Purchase Agreement with respect to Baird and (b) if to the Company, initially
at the Company's address set forth in the Purchase Agreement, and thereafter
at such other address of which notice is given in accordance with the
provisions of this Section 5.4.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; two
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next business day if timely delivered to an air courier
guaranteeing overnight delivery.
5.5 Successor 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 of the Purchase Agreement.
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, including the restrictions on resale set forth
in this Agreement and, if applicable, the Purchase Agreement, and such person
shall be entitled to receive the benefits hereof.
5.6 Third Party Beneficiaries. Baird (even if Baird is no longer
-------------------------
a Holder of Registrable Securities) shall be a third party beneficiary to the
agreements made hereunder between the Company, on the one hand, and the
Holders, on the other hand, and 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. Each
Holder of Registrable Securities shall be a third party beneficiary to the
agreements made hereunder between the Company, on the one hand, and Baird, on
the other hand, and shall have the right to enforce such agreements directly
to the extent it deems such enforcement necessary or advisable to protect its
rights hereunder.
5.7. Specific Enforcement. Without limiting the remedies available
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to Baird and the Holders, the Company acknowledges that any failure by the
Company to comply with its obligations under Sections 2.1 through 2.4 hereof
may result in material irreparable injury to Baird or the Holders for which
there is no adequate remedy at law, that it would not be possible to measure
damages for such injuries precisely and that, in the event of any such
failure, Baird or any Holder may obtain such relief as may be required to
specifically enforce the obligations of the Company under Sections 2.1
through 2.4 hereof.
5.8. Restriction on Resales. Until the expiration of two years
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after the original issuance of the Securities, the Company will not, and will
cause its "affiliates" (as such term is defined in Rule 144(a)(1) under the
1933 Act) not to, resell any Securities which are "restricted securities" (as
such term is defined under Rule 144(a)(3) under the 1933 Act) that have been
reacquired by any of them.
5.9 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.
5.10 Headings. The headings in this Agreement are for convenience
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of reference only and shall not limit or otherwise affect the meaning hereof.
5.11 GOVERNING LAW. THIS AGREEMENT AND ALL DISPUTES, CONTROVERSIES
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OR CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR A BREACH HEREOF
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF ILLINOIS.
5.12 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Very truly yours,
INTERSTATE POWER AND LIGHT COMPANY
By: /s/ Thomas L. Hanson
------------------------
Thomas L. Hanson
Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
ROBERT W. BAIRD & CO. INCORPORATED
By: /s/ Lance R. Lange
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Authorized Signatory
Exhibit A
Form of Opinion of Counsel
Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, WI 53202
Ladies and Gentlemen:
We have acted as counsel for Interstate Power and Light Company, an
Iowa corporation (the "Company"), in connection with the sale by the Company
to the Robert W. Baird & Co. Incorporated (the "Baird") of 6,000,000 shares
of the Company's 8.375% Series A Cumulative Preferred Stock, par value $0.01
per share, pursuant to the Purchase Agreement dated December 18, 2002 (the
"Purchase Agreement") among the Company and Baird and the filing by the
Company of an Exchange Offer Registration Statement (the "Registration
Statement") in connection with an Exchange Offer to be effected pursuant to
the Registration Rights Agreement (the "Registration Rights Agreement"),
dated December 20, 2002 among the Company and Baird. This opinion is
furnished to you pursuant to Section 3(f)(B) of the Registration Rights
Agreement. Unless otherwise defined herein, capitalized terms used in this
opinion that are defined in the Registration Rights Agreement are used herein
as so defined.
We have examined such documents, records and matters of law as we
have deemed necessary for purposes of this opinion. In rendering this
opinion, as to all matters of fact relevant to this opinion, we have assumed
the completeness and accuracy of, and are relying solely upon, the
representations and warranties of the Company set forth in the Purchase
Agreement and the statements set forth in certificates of public officials
and officers of the Company, without making any independent investigation or
inquiry with respect to the completeness or accuracy of such representations,
warranties or statements, other than a review of the certificate of
incorporation, by-laws and relevant minute books of the Company.
Based on and subject to the foregoing, we are of the opinion that:
1. The Exchange Offer Registration Statement and the Prospectus
(other than the financial statements, notes or schedules thereto and other
financial and statistical data and supplemental schedules included or
incorporated by reference therein or omitted therefrom, as to which such
counsel need express no opinion), comply as to form in all material respects
with the requirements of the 1933 Act and the applicable rules and
regulations promulgated under the 1933 Act.
We have participated in the preparation of the Registration
Statement and the Prospectus and in the course thereof have had discussions
with representatives of the Underwriters, officers and other representatives
of the Company and Deloitte & Touche LLP, the independent public accountants
of the Company, during which the contents of the Registration Statement and
the Prospectus were discussed. We have not, however, independently verified
and are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus. Based on our participation as
described above, nothing has come to our attention that would lead us to
believe that the Registration Statement (except for financial statements and
schedules and other financial and statistical data included therein as to
which we make no statement) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial and statistical data included
therein, as to which such counsel need make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented
Prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits 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.
This opinion is being furnished to you solely for your benefit in
connection with the transactions contemplated by the Registration Rights
Agreement, and may not be used for any other purpose or relied upon by any
person other than you. Except with our prior written consent, the opinions
herein expressed are not to be used, circulated, quoted or otherwise referred
to in connection with any transactions other than those contemplated by the
Registration Rights Agreement by or to any other person.
Very truly yours,