EXHIBIT 4.8
REGISTRATION RIGHTS AGREEMENT
Dated February 3, 1997
among
COMMUNITY BANK SYSTEM, INC.
COMMUNITY CAPITAL TRUST I
and
M.A. SCHAPIRO & CO., INC.
as Initial Purchaser
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
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entered into as of February 3, 1997 among COMMUNITY BANK SYSTEM, INC., a
Delaware bank holding corporation (the "Company"), COMMUNITY CAPITAL TRUST
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I, a business trust formed under the laws of the state of Delaware (the
"Trust"), and M.A. SCHAPIRO & CO., INC. (the "Initial Purchaser").
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This Agreement is made in connection with the Purchase Agreement
dated January 29, 1997 the "Purchase Agreement"), among the Company, as
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issuer of the Series A 9.75% Junior Subordinated Deferrable Interest
Debentures due January 31, 2027 (the "Subordinated Debentures"), the Trust
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and the Initial Purchaser, which provides for among other things, the sale by
the Trust to the Initial Purchaser of 30,000 of the Trust's Series A 9.75%
Capital Securities, liquidation amount $1,000 per Capital Security (the
"Capital Securities") the proceeds of which will be used by the Trust
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to purchase Subordinated Debentures. The Capital Securities, together with
the Subordinated Debentures and the Company's guarantee of the Capital
Securities (the "Capital Securities Guarantee") are collectively
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referred to as the "Securities". In order to induce the Initial Purchaser to
enter into the Purchase Agreement, the Company and the Trust have agreed to
provide to the Initial Purchaser and its direct and indirect transferees the
registration rights set forth in this Agreement. The execution and delivery
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. As used in this Agreement, the following
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capitalized defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
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Section 3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(t)
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hereof.
"Business Day" shall mean a day that is not a Saturday, a Sunday, or
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a day on which banking institutions in New York, New York are authorized or
required to be closed.
"Closing Time" shall mean the Closing Time as defined in the Purchase
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Agreement.
"Company" shall have the meaning set forth in the preamble to this
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Agreement and also includes the Company's successors and permitted assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended and
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Restated Declaration of Trust, dated as of February 3, 1997, by the trustees
named therein and the Company as sponsor.
"Depositary" shall mean The Depository Trust Company, or any other
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depositary appointed by the Trust; provided, however, that such depositary
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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
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2(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended from time to time, or any successor legislation.
"Exchange Offer" shall mean the offer by the Company and the Trust to
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the Holders to exchange all of the Registrable Securities (other than Private
Exchange Securities) for a like principal amount of Exchange Securities
pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
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Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
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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 Period" shall have the meaning set forth in Section 2(a)
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hereof.
"Exchange Securities" shall mean (i) with respect to the Subordinated
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Debentures, the Series B 9.75% Junior Subordinated Deferrable Interest
Debentures due January 31, 2027 (the "Exchange Debentures") containing
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terms identical to the Subordinated Debentures (except that they will not
contain terms with respect to the transfer restrictions under the Securities
Act, will not require transfers thereof to be in minimum blocks of $100,000
principal amount and will not provide for any increase in the interest rate
thereon), (ii) with respect to the Capital Securities, the Trust's Series B
9.75% Capital Securities, liquidation amount $1,000 per Capital Security (the
"Exchange Capital Securities") which will have terms identical to
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the Capital Securities (except they will not contain terms with respect
to transfer restrictions under the Securities Act, will not require
minimum transfers thereof to be in blocks of $100,000 liquidation amount and
will not provide for any increase in the Distribution rate thereon) and
(iii) with respect to the Capital Securities Guarantee, the Company's
guarantee (the "Exchange Capital Securities Guarantee") of the
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Exchange Capital Securities which will have terms identical to the Capital
Securities Guarantee.
"Holder" shall mean the Initial Purchaser, for so long as it owns any
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Registrable Securities, and its successors, assigns and direct and indirect
transferees who become registered owners of Registrable Securities under the
Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the Subordinated
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Debentures and the Exchange Debentures dated as of February 3, 1997 among the
Company, as issuer, and The Chase Manhattan Bank, as trustee, as the same may
be amended from time to time in accordance with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the preamble
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to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n) hereof.
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"Issue Date" shall mean the date of original issuance of the
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Securities.
"Liquidated Damages" shall have the meaning set forth in Section 2(e)
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hereof.
"Majority Holders" shall mean the Holders of a majority of the
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aggregate liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth in
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Section 3(t) hereof.
"Person" shall mean a legal person, including any individual,
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corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Private Exchange" shall have the meaning set forth in Section 2(a)
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hereof.
"Private Exchange Securities" shall have the meaning set forth in
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Section 2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
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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 Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including posteffective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
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to this Agreement.
"Records" shall have the meaning set forth in Section 3(n) hereof.
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"Registrable Securities" shall mean the Securities and, if issued,
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the Private Exchange Securities; provided, however, that Securities or
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Private Exchange Securities, as the case may be, shall cease to be
Registrable Securities when (i) a Registration Statement with respect to such
Securities or Private Exchange Securities for the exchange or resale thereof,
as the case may be, shall have been declared effective under the Securities
Act and such Securities or Private Exchange Securities, as the case may be,
shall have been disposed of pursuant to such Registration Statement,
(ii) such Securities or Private Exchange Securities, as the case may be,
shall have been sold to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the Securities Act,
(iii) such Securities or Private Exchange Securities, as the case may be,
shall have ceased to be outstanding or (iv) with respect to the Securities,
such Securities have been exchanged for Exchange Securities upon consummation
of the Exchange Offer and are thereafter freely tradeable by the holder
thereof (other than an affiliate of the Company).
"Registration Expenses" shall mean any and all expenses incident to
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performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities
Dealers, Inc. (the "NASD") registration and filing fees, including, if
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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 (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 compliance with the rules of the NASD, (iii) all expenses of
any Persons in preparing or assisting in preparing, word processing, printing
and distributing any Registration Statement, any Prospectus and any
amendments or supplements thereto, and in preparing or assisting in
preparing, printing and distributing any underwriting agreements, securities
sales agreements and other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) the fees and
disbursements of counsel for the Company and of the independent certified
public accountants of the Company, including the expenses of any "cold
comfort" letters required by or incident to such performance and compliance,
(vi) the fees and expenses of the Trustee, and any exchange agent or
custodian, (vii) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Securities on any securities
exchange or exchanges, and (viii) the reasonable fees and expenses of any
special experts retained by the Company in connection with any Registration
Statement.
"Registration Statement" shall mean any registration statement of the
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Company and the Trust 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.
"Rule 144(k) Period" shall mean the period of three years (or such
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shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
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"Securities" shall have the meaning set forth in the preamble to this
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Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended
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from time to time.
"Shelf Registration" shall mean a registration effected pursuant to
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Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in
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Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set forth in
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Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
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statement of the Company and the Trust pursuant to the provisions of Section
2(b) hereof which covers all of the Registrable Securities or all of the
Private Exchange Securities, as the case may be, on an appropriate form under
Rule 415 under the Securities 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.
"TIA" shall have the meaning set forth in Section 3(1) hereof.
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"Trustees" shall mean any and all trustees with respect to (i) the
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Capital Securities under the Declaration, (ii) the Subordinated Debentures
under the Indenture and (iii) the Capital Securities Guarantee.
2. Registration Under the Securities Act.
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(a) Exchange Offer. To the extent not prohibited by any
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applicable law or applicable interpretation of the staff of the SEC, the
Company and the Trust shall, for the benefit of the Holders, at the Company's
cost, use their reasonable best efforts to (i) cause to be filed with the SEC
within 150 days after January 29, 1997 an Exchange Offer Registration
Statement on an appropriate form under the Securities Act covering the
Exchange Offer, (ii) cause such Exchange Offer Registration Statement to be
declared effective under the Securities Act by the SEC not later than the
date which is 180 days after January 29, 1997, and (iii) keep such Exchange
Offer Registration Statement effective for not less than 30 calendar days (or
longer if required by applicable law) after the date notice of the Exchange
Offer is mailed to the Holders. Upon the effectiveness of the Exchange Offer
Registration Statement, the Company and the Trust 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 a like
principal amount of Exchange Debentures or a like liquidation amount of
Exchange Capital Securities, together with the Exchange Guarantee, as
applicable (assuming that such Holder is not an affiliate of the Company
within the meaning of Rule 405 under the Securities Act and is not a
broker-dealer tendering Registrable Securities acquired directly from the
Company for its own account, 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 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 Securities Act and under state securities or blue sky laws.
In connection with the Exchange Offer, the Company and the Trust
shall:
(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 acceptance for a period of not
less than 30 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");
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(iii) utilize the services of the Depositary for the Exchange Offer:
(iv) permit Holders to withdraw tendered Securities at any time prior to
the close of business, New York 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 principal amount of Securities delivered for exchange, and a
statement that such Holder is withdrawing his election to have such
Securities exchanged;
(v) notify each Holder that any Security not tendered by such Holder in
the Exchange Offer will remain outstanding and continue to accrue interest or
accumulate distributions, as the case may be, but will not retain any rights
under this Agreement (except in the case of the Initial Purchaser and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws relating
to the Exchange Offer.
If the Initial Purchaser determines upon advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt by
the Company and the Trust of a written request from the Initial Purchaser,
the Company and the Trust, as applicable, shall issue and deliver to the
Initial Purchaser in exchange (the "Private Exchange") for the
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Securities held by the Initial Purchaser, a like liquidation amount of
Capital Securities of the Trust, together with the Exchange Guarantee, or a
like principal amount of the Subordinated Debentures of the Company, as
applicable, that are identical (except that such securities may bear a
customary legend with respect to restrictions on transfer pursuant to the
Securities Act) to the Exchange Securities (the "Private Exchange
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Securities") and which are issued pursuant to the Indenture, the
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Declaration or the Guarantee (which provides that the Exchange Securities
will not be subject to the transfer restrictions set forth in the Indenture
or the Declaration, as applicable, and that the Exchange Securities, the
Private Exchange Securities and the Securities will vote and consent together
on all matters as one class and that neither the Exchange Securities, the
Private Exchange Securities nor 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 the Exchange Securities and the Company and
the Trust will seek to cause the CUSIP Service Bureau to issue the same CUSIP
Numbers for the Private Exchange Securities as for the Exchange Securities
issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and,
if applicable, the Private Exchange, the Company and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof tendered and
not validly withdrawn pursuant to the Exchange Offer or the Private Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee for
cancellation all Securities or portions thereof so accepted for exchange by
the Company; and
(iii) issue, and cause the applicable Trustee under the Indenture,
the Declaration or the Guarantee, as applicable, to promptly authenticate and
deliver to each Holder, new Exchange Securities or Private Exchange
Securities, as applicable, equal in principal amount to the principal amount
of the Subordinated Debentures or equal in liquidation amount to the
liquidation amount to the Capital Securities (together with the guarantee
thereof) as are surrendered by such Holder.
Distributions on each Exchange Capital Security and interest on
each Exchange Debenture and Private Exchange Security issued pursuant to the
Registered Exchange Offer and in the Private Exchange will accumulate or
accrue, as the case may be, from the last date on which a Distribution or
interest was paid on the Capital Security or the Subordinated Debenture
surrendered in exchange therefore or, if no Distribution or interest has been
paid on such Capital Security or Subordinated Debenture, from the Issue Date.
To the extent not prohibited by any law or applicable interpretation of the
staff of the SEC, the Company and the Trust shall use their best efforts to
complete the Exchange Offer as provided above, and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws in connection with the Exchange Offer. The Exchange Offer
shall not be subject to any conditions, other than that the Exchange Offer
does not violate applicable law or any applicable interpretation of the staff
of the SEC. Each Holder of Registrable Securities who wishes to exchange
such Registrable Securities for Exchange Securities in the Exchange Offer
will be required to make certain customary representations in connection
therewith, including, in the case of any Holder of Capital Securities,
representations that (i) it is not an affiliate of the Trust or the Company,
(ii) the Exchange Securities to be received by it were acquired in the
ordinary course of its business and (iii) at the time of the Exchange Offer,
it has no arrangement with any person to participate in the distribution
(within the meaning of the Securities Act) of the Exchange Capital
Securities. The Company and the Trust shall inform the Initial Purchaser,
after consultation with the Trustee, of the names and addresses of the
Holders to whom the Exchange Offer is made, and the Initial Purchaser shall
have the right to contact such Holders and otherwise facilitate the tender of
Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to Registrable Securities that are
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Private Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company and the Trust shall have no further
obligation to register the Registrable Securities (other than Private
Exchange Securities) pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the Company, the
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Trust or the Majority Holders reasonably determine, after conferring with
counsel (which may be in-house counsel), that the Exchange Offer Registration
provided in Section 2(a) above is not available because of any change in law
or in currently prevailing interpretations of the staff of the SEC, (ii) the
Exchange Offer Registration Statement is not declared effective within 180
days of January 29, 1997 or (iii) upon the request of the Initial Purchaser
with respect to any Registrable Securities held by it, if the Initial
Purchaser is not permitted, in the reasonable opinion of Brown & Wood LLP,
pursuant to applicable law or applicable interpretations of the staff of the
SEC, to participate in the Exchange Offer and thereby receive securities that
are freely tradeable without restriction under the Securities Act and
applicable blue sky or state securities laws (any of the events specified in
(i)-(iii) being a "Shelf Registration Event" and the date of occurrence
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thereof, the "Shelf Registration Event Date"), the Company and the Trust
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shall, at their cost, use their reasonable best efforts to cause to be filed
as promptly as practicable after such Shelf Registration Event Date, as the
case may be, and, in any event, within 45 days after such Shelf Registration
Event Date (which shall be no earlier than 75 days after the Closing Time),
a Shelf Registration Statement providing for the sale by the Holders of all
of the Registrable Securities, and shall use their reasonable best efforts to
have such Shelf Registration Statement declared effective by the SEC as soon
as practicable. No Holder of Registrable Securities shall be entitled to
include any of its Registrable Securities in any Shelf Registration pursuant
to this Agreement unless and until such Holder agrees in writing to be bound
by all of the provisions of this Agreement applicable to such Holder and
furnishes to the Company and the Trust in writing, within 15 days after
receipt of a request therefor, such information as the Company and the Trust
may, after conferring with counsel with regard to information relating to
Holders that would be required by the SEC to be included in such Shelf
Registration Statement or Prospectus included therein, reasonably request for
inclusion in any Shelf Registration Statement or Prospectus included therein.
Each Holder as to which any Shelf Registration is being effected agrees to
furnish to the Company and the Trust all information with respect to such
Holder necessary to make the information previously furnished to the Company
by such Holder not materially misleading.
The Company and the Trust agree to use their reasonable best
efforts to keep the Shelf Registration Statement continuously effective for
the Rule 144(k) Period (subject to extension pursuant to the last paragraph
of Section 3 hereof) or for such shorter period which will terminate when all
of the Registrable Securities covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement or cease to be
outstanding (the "Effectiveness Period"). The Company and the Trust
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shall not permit any securities other than Registrable Securities
to be included in the Shelf Registration. The Company and the
Trust will, in the event a Shelf Registration Statement is declared
effective, provide to each Holder a reasonable number of copies of the
Prospectus which is a part of the Shelf Registration Statement, notify each
such Holder when the Shelf Registration has become effective and use its best
efforts to take certain other actions as are required to permit certain
unrestricted resales of the Registrable Securities. The Company and the
Trust further agree, if necessary, to supplement or amend the Shelf
Registration Statement, if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registrations, and the Company and the Trust
agree 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.
(c) Expenses. The Company shall pay all Registration Expenses
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in connection with the registration pursuant to Section 2(a) or 2(b) hereof
and will reimburse the Initial Purchaser for the reasonable fees and
disbursements of Brown & Wood LLP, counsel for the Initial Purchaser,
incurred in connection with the Exchange Offer and, if applicable, the
Private Exchange Offer, and either Brown & Wood LLP or any one other counsel
designated in writing by the Majority Holders to act as counsel for the
Holders of the Registrable Securities in connection with a Shelf Registration
Statement, which other counsel shall be reasonably satisfactory to the
Company. Except as provided herein, each Holder shall pay all expenses of
its counsel, 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.
(d) Effective Registration Statement. An Exchange Offer
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Registration Statement pursuant to Section 2(a) hereof or a Shelf
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;
provided, however, that if, after it has been declared effective, the
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offering of Registrable Securities pursuant to 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 been effective during the
period of such interference, until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume. The Company and
the Trust will be deemed not to have used their 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 either of them voluntarily take 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 such action is
required by applicable law.
(e) Liquidated Damages. In the event that (i) (A) neither the
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Exchange Offer Registration Statement nor a Shelf Registration Statement is
filed with the SEC on or prior to the 150th day after January 29, 1997 or
(B) notwithstanding that the Company and the Trust have consummated or will
consummate an Exchange Offer, the Company and the Trust are required to file
a Shelf Registration Statement and such Shelf Registration Statement is not
filed on or prior to the date required by Section 2(b) hereof, then
commencing on the day after the applicable required filing date, additional
interest shall accrue on the principal amount of the Subordinated Debentures,
and additional Distributions shall accumulate on the liquidation amount of
the Capital Securities, each at a rate of 0.25% per annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the SEC on or prior to the
30th day after the applicable required filing date or (B) notwithstanding
that the Company and the Trust have consummated or will consummate an
Exchange Offer, the Company and the Trust are required to file a Shelf
Registration Statement and such Shelf Registration Statement is not declared
effective by the SEC on or prior to the 30th day after the date such Shelf
Registration Statement was required to be filed, then, commencing on the 31st
day after the applicable required filing date, additional interest shall
accrue on the principal amount of the Subordinated Debentures, and additional
Distributions shall accumulate on the liquidation amount of the Capital
Securities, each at a rate of 0.25% per annum; or
(iii) (A) the Trust has not exchanged Exchange Capital Securities for
all Capital Securities or the Company has not exchanged the Exchange
Guarantee and Exchange Subordinated Debentures for the Guarantee and all
Subordinated Debentures validly tendered, in accordance with the terms of the
Exchange Offer on or prior to the 30th day after the date on which the
Exchange Offer Registration Statement was declared effective or (B) if
applicable, the Shelf Registration Statement has been declared effective and
such Shelf Registration Statement ceases to be effective at any time prior to
the expiration of the Rule 144(k) Period (other than after such time as all
Capital Securities have been disposed of thereunder or otherwise cease to be
Registrable Securities), then additional interest shall accrue on the
principal amount of Subordinated Debentures, and additional Distributions
shall accumulate on the liquidation amount of the Capital Securities, each at
a rate of 0.25% per annum commencing on (x) the 31st day after such effective
date, in the case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective in the case of (B) above;
provided, however, that neither the additional interest rate on the
Subordinated Debentures, nor the additional distribution rate on the
liquidation amount of the Capital Securities, may exceed in the aggregate
0.25% per annum; provided, further, however, that (1) upon the filing of the
Exchange Offer Registration Statement or a Shelf Registration Statement (in
the case of clause (i) above), (2) upon the effectiveness of the Exchange
Offer Registration Statement or a Shelf Registration Statement (in the case
of clause (ii) above), or (3) upon the exchange of Exchange Capital
Securities, the Exchange Guarantee and Exchange Subordinated Debentures for
all Capital Securities, the Guarantee and Subordinated Debentures tendered
(in the case of clause (iii)(A) above), or upon the effectiveness of the
Shelf Registration Statement which had ceased to remain effective (in the
case of clause (iii)(B) above), additional interest on the Subordinated
Debentures, and additional distributions on the liquidation amount of the
Capital Securities as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue or accumulate, as the
case may be.
Any amounts of additional interest and additional Distributions due
pursuant to Section 2(e)(i), (ii) or (iii) above (the "Liquidated Damages")
will be payable in cash on January 31 and July 31 of each year to the holders
of record on the 15th day prior to the relevant payment date.
(f) Specific Enforcement. Without limiting the remedies
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available to the Holders, the Company and the Trust acknowledge that any
failure by the Company or the Trust to comply with its obligations under
Section 2(a) and Section 2(b) hereof may result in material irreparable
injury to 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, any Holder may obtain such relief as
may be required to specifically enforce the Company's and the Trust's
obligations under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the
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obligations of the Company and the Trust with respect to the Registration
Statements pursuant to Sections 2(a) and 2(b) hereof, the Company and the
Trust shall use their reasonable best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Company and the Trust, (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 all financial statements required by the SEC to be
filed therewith; and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof; provided, however, that if (1) such filing
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is pursuant to Section 2(b), or (2) a Prospectus contained in an
Exchange Offer Registration Statement filed pursuant to Section 2(a) is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities, before filing any
Registration Statement or Prospectus or any amendments or supplements
thereto, the Company and the Trust shall furnish to and afford the
Holders of the Registrable Securities and each such Participating
Broker-Dealer, as the case may be, covered by such Registration
Statement, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including
copies of any documents to be incorporated by reference therein and all
exhibits thereto) proposed to be filed. The Company and the Trust shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded an
opportunity to review prior to the filing of such document if the
Majority Holders or such Participating Broker-Dealer, as the case may
be, their counsel or the managing underwriters, if any, shall reasonably
object;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented, if so determined by the
Company or the Trust or requested by the SEC, 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 Securities Act, and
comply with the provisions of the Securities Act, the Exchange Act and
the rules and regulations promulgated thereunder applicable to it with
respect to the disposition of all securities covered by each
Registration Statement during the Effectiveness Period or the Applicable
Period, as the case may be, in accordance with the intended method or
methods of distribution by the selling Holders thereof described in this
Agreement (including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities included in the Shelf Registration Statement, at
least three Business Days prior to filing, that a Shelf Registration
Statement with respect to the Registrable Securities is being filed and
advising such Holder that the distribution of Registrable Securities
will be made in accordance with the method selected by the Majority
Holders; and (ii) furnish to each Holder of Registrable Securities
included in the Shelf Registration Statement 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, in order
to facilitate the public sale or other disposition of the Registrable
Securities; and (iii) consent to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of
Registrable Securities included in the Shelf Registration Statement in
connection with the offering and sale of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto;
(d) in the case of a Shelf Registration, use their reasonable best
efforts to register or qualify the Registrable Securities under all
applicable state securities or "blue sky" laws of such jurisdictions by
the time the applicable Registration Statement is declared effective by
the SEC as any Holder of Registrable Securities covered by a
Registration Statement and each underwriter of an underwritten offering
of Registrable Securities shall reasonably request in writing in advance
of such date of effectiveness, and do any and all other acts and things
which may be reasonably necessary or advisable to enable 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 and the Trust 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); (ii) file any general consent to service of process in any
jurisdiction where it would not otherwise be subject to such service of
process or (iii) subject itself to taxation in any such jurisdiction if
it is not then so subject;
(e) in the case of (1) a Shelf Registration or (2) Participating
Broker-Dealers from whom the Company or the Trust has received prior
written notice that they will be utilizing the Prospectus contained in
the Exchange Offer Registration Statement as provided in Section 3(t)
hereof, are seeking to sell Exchange Securities and are required to
deliver Prospectuses, notify each Holder of Registrable Securities, or
such Participating Broker-Dealers, as the case may be, their counsel and
the managing underwriters, if any, promptly and promptly confirm such
notice in writing (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 amendments and supplements to a Registration Statement or
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 qualification of the
Registrable Securities or the Exchange Securities to be offered or sold
by any Participating Broker-Dealer in any jurisdiction described in
paragraph 3(d) hereof 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 and the Trust contained in any purchase
agreement, securities sales agreement or other similar agreement, if any
cease to be true and correct in all material respects, and (v) of the
happening of any event or the failure of any event to occur or the
discovery of any facts or otherwise, during the Effectiveness Period
which makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or which causes such
Registration Statement or Prospectus to omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (vi) the
Company and the Trust's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities included within the coverage of such Shelf
Registration Statement, without charge, at least one conformed copy of
each Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated therein
by reference or exhibits thereto, unless requested);
(h) 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 in
such denominations (consistent with the provisions of the Indenture and
the Declaration) and registered in such names as the selling Holders or
the underwriters may reasonably request at least two Business Days prior
to the closing of any sale of Registrable Securities pursuant to such
Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best
efforts to prepare a supplement or post-effective amendment to a
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 any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and to notify each Holder to suspend use of
the Prospectus as promptly as practicable after the occurrence of such
an event, and each Holder hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct
such misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time prior
to the filing of any document which is to be incorporated by reference
into a Registration Statement or a Prospectus after the initial filing
of a Registration Statement, provide a reasonable number of copies of
such document to the Holders; and make such of the representatives of
the Company and the Trust as shall be reasonably requested by the
Holders of Registrable Securities or the Initial Purchaser on behalf of
such Holders available for discussion of such document;
(k) obtain a CUSIP number for all Exchange Capital Securities and
the Capital Securities (and if the Trust has made a distribution of the
Subordinated Debentures to the Holders of the Capital Securities, the
Subordinated Debentures or the Exchange Subordinated Debentures), 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, as the case may be,
in a form eligible for deposit with the Depositary;
(l) cause the Indenture, the Declaration, the Guarantee and the
Exchange Guarantee to be qualified under the Trust Indenture Act of 1939
(the "TIA") in connection with the registration of the Exchange
---
Securities or Registrable Securities, as the case may be, and effect
such changes to such documents as may be required for them to be so
qualified in accordance with the terms of the TIA and execute, and use
its best efforts to cause the relevant 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 such documents to
be so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in
underwritten offerings and take all such other appropriate actions as
are reasonably requested in order to expedite or facilitate the
registration or 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, if requested by (x) the Initial Purchaser, in the case
where the Initial Purchaser holds Securities acquired by it as part of
its initial distribution and (y) other Holders of Securities covered
thereby: (i) make such representations and warranties to Holders of
such Registrable Securities and the underwriters (if any), with respect
to the business of the Trust, the Company and its subsidiaries as then
conducted and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in
each case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company and the Trust and updates
thereof (which may be in the form of a reliance letter) in form and
substance reasonably satisfactory to the managing underwriters (if any)
and the Holders of a majority in principal amount of the Registrable
Securities being sold, addressed to each selling Holder and the
underwriters (if any) covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as
may be reasonably requested by such underwriters (it being agreed that
the matters to be covered by such opinion may be subject to customary
qualifications and exceptions); (iii) obtain "cold comfort" letters and
updates thereof in form and substance reasonably satisfactory to the
managing underwriters from the independent certified public accountants
of the Company and the Trust (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company and the
Trust or of any business acquired by the Company and the Trust for which
financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection
with underwritten offerings and such other matters as reasonably
requested by such underwriters in accordance with Statement on Auditing
Standards No. 72; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 4 hereof (or such other
provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of Registrable Securities covered by such
Registration Statement and the managing underwriters or agents) with
respect to all parties to be indemnified pursuant to said Section
(including, without limitation, such underwriters and selling Holders).
The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section 2(b)
or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Securities during the Applicable Period, make reasonably
available for inspection by any selling Holder of such Registrable
Securities being sold, or each such Participating Broker-Dealer, as the
case may be, any underwriter participating in any such disposition of
Registrable Securities, if any, and any attorney, accountant or other
agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during
----------
reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Trust, the
Company and its subsidiaries (collectively, the "Records")
-------
as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers,
directors and employees of the Trust, the Company and its subsidiaries
to supply all relevant information in each case reasonably requested by
any such Inspector in connection with such Registration Statement
provided, however, that the foregoing inspection and
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information gathering shall be coordinated on behalf of
the Purchasers by the Initial Purchaser and on behalf of the other
parties, by one counsel designated by the Initial Purchaser and on
behalf of such other parties as described in Section 2(c) hereof.
Records which the Company and the Trust determine, in good faith, to be
confidential and any records which it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a material
misstatement or omission in such Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction or is necessary in connection
with any action, suit or proceeding or (iii) the information in such
Records has been made generally available to the public. Each selling
Holder of such Registrable Securities and each such Participating
Broker-Dealer will be required to agree in writing that information
obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Trust or the Company unless and
until such is made generally available to the public. Each selling
Holder of such Registrable Securities and each such Participating
Broker-Dealer will be required to further agree in writing that it will,
upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company
at its expense to undertake appropriate action to prevent disclosure of
the Records deemed confidential;
(o) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make
generally available to its securityholders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no
later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Registration Statement, which
statements shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer or a Private Exchange,
if requested by a Trustee, obtain an opinion of counsel to the Company
addressed to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer or the Private Exchange,
as the case may be, and which includes an opinion that (i) the Company
and the Trust, as the case requires, has duly authorized, executed and
delivered the Exchange Securities and Private Exchange Securities, and
(ii) each of the Exchange Securities or the Private Exchange Securities,
as the case may be, constitute a legal, valid and binding obligation of
the Company or the Trust, as the case requires, enforceable against the
Company or the Trust, as the case requires, in accordance with its
respective terms (in each case, with customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to
the Company or the Trust, as applicable (or to such other Person as
directed by the Company or the Trust, respectively), in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may
be, the Company or the Trust, as applicable, shall mark, or cause to be
marked, on such Registrable Securities delivered by such Holders that
such Registrable Securities are being cancelled in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may
be; in no event shall such Registrable Securities be marked as paid or
otherwise satisfied;
(r) cooperate with each seller of Registrable Securities covered
by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(s) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby;
(t) (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 the Initial Purchaser or another representative 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 (a "Participating 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 the Initial Purchaser or such other
representative, 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 Securities 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 (each of the Company
and the Trust 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 Securities Act, 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), (iii) use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such
Persons must comply with such requirements under the Securities Act and
applicable rules and regulations in order to resell the Exchange
Securities; provided, however, that such period shall not be required
-------- -------
to exceed 90 days (or such longer period if extended pursuant to the
last sentence of Section 3 hereof) (the "Applicable Period"), 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 Securities 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 Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company and the Trust agree to deliver to the Initial Purchaser or to
another representative of the Participating Broker-Dealers, if requested
by the Initial Purchaser or such other representative of the
Participating Broker-Dealers, on behalf of the Participating
Broker-Dealers upon consummation of the Exchange Offer (i) an opinion of
counsel in form and substance reasonably satisfactory to the Initial
Purchaser or such other representative of the Participating
Broker-Dealers, covering the matters customarily covered in opinions
requested in connection with Exchange Offer Registration Statements and
such other matters as may be reasonably requested (it being agreed that
the matters to be covered by such opinion may be subject to customary
qualifications and exceptions), (ii) an officers' certificate containing
certifications substantially similar to those set forth in Section 5(f)
of the Purchase Agreement and such additional certifications as are
customarily delivered in a public offering of debt securities and
(iii) as well as upon the effectiveness of the Exchange Offer
Registration Statement, a comfort letter, in each case, in customary
form if permitted by Statement on Auditing Standards No. 72.
The Company or the Trust may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Company or the Trust, as applicable, such information regarding such seller
as may be required by the staff of the SEC to be included in a Registration
Statement. The Company or the Trust may exclude from such registration the
Registrable Securities of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such request. The
Company shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or
(2) Participating Broker-Dealers who have notified the Company and the Trust
that they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof, are seeking to
sell Exchange Securities and are required to deliver Prospectuses each Holder
agrees that, upon receipt of any notice from the Company or the Trust of the
happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(v) or 3(e)(vi) 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(i) hereof or until it is advised in
writing (the "Advice") by the Company and the Trust that the
------
use of the applicable Prospectus may be resumed, and, if so
directed by the Company and the Trust, such Holder will deliver to the
Company or the Trust (at the Company's or the Trust's expense, as the case
requires) 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 or Exchange Securities, as the case may be, current at
the time of receipt of such notice. If the Company or the Trust shall give
any such notice to suspend the disposition of Registrable Securities or
Exchange Securities, as the case may be, pursuant to a Registration
Statement, the Company and the Trust shall use their best efforts to file and
have declared effective (if an amendment) as soon as practicable an amendment
or supplement to the Registration Statement and shall extend the period
during which such Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days in the period from and
including the date of the giving of such notice to and including the date
when the Company and the Trust shall have made available to the Holders
(x) copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution. In connection with any
--------------------------------
Registration Statement, the Company and the Trust shall, jointly and
severally, indemnify and hold harmless the Initial Purchaser, each Holder,
each underwriter who participates in an offering of the Registrable
Securities, each Participating Broker-Dealer, each Person, if any, who
controls any of such parties within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each of their respective
directors, officers, employees and agents, as follows:
(i) from and against any and all loss, liability, claim, damage
and expense whatsoever, joint or several, 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),
covering Registrable Securities or Exchange Securities, 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) from and against any and all loss, liability, claim, damage
and expense whatsoever, joint or several, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any court or 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 prior written consent
of the Company; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of counsel chosen
by such Holder, such Participating Broker-Dealer, or any underwriter
(except to the extent otherwise expressly provided in Section 4(c)
hereof)), reasonably incurred in investigating, preparing or defending
against any litigation, or any 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 4(a);
provided, however, that (i) 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 in writing
to the Company or the Trust by such Holder, such Participating Broker-Dealer
or any underwriter with respect to such Holder, Participating Broker-Dealer
or any underwriter, as the case may be, expressly for use in the Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) and (ii) the Company and the Trust shall not be liable to
any such Holder, Participating Broker-Dealer, any underwriter or controlling
person, with respect to any untrue statement or alleged untrue statement or
omission or alleged omission in any preliminary Prospectus to the extent that
any such loss, liability, claim, damage or expense of any Holder,
Participating Broker-Dealer, any underwriter or controlling person results
from the fact that such Holder, any underwriter or Participating
Broker-Dealer sold Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
final Prospectus as then amended or supplemented if the Company had
previously furnished copies thereof to such Holder, underwriter or
Participating Broker-Dealer and the loss, liability, claim, damage or expense
of such Holder, underwriter, Participating Broker-Dealer or controlling
person results from an untrue statement or omission of a material fact
contained in the preliminary Prospectus which was corrected in the final
Prospectus. Any amounts advanced by the Company or the Trust to an
indemnified party pursuant to this Section 4 as a result of such losses shall
be returned to the Company or the Trust if it shall be finally determined by
such a court in a judgment not subject to appeal or final review that such
indemnified party was not entitled to indemnification by the Company or the
Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Trust, any underwriter and the other
selling Holders and each of their respective directors, officers (including
each officer of the Company and the Trust who signed the Registration
Statement), employees and agents and each Person, if any, who controls the
Company, the Trust, any underwriter or any other selling Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all loss, liability, claim, damage and expense
whatsoever 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 Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with written information furnished to the
Company or the Trust by such selling Holder with respect to such Holder
expressly for use in the Registration Statement (or any amendment thereto),
or any such Prospectus (or any amendment or supplement thereto);
provided, however, that, in the case of Shelf Registration Statement, 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 Shelf 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, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it
may have under this Section 4, except to the extent that it is materially
prejudiced by such failure. An indemnifying party may participate at its own
expense in the defense of such action. If an indemnifying party so elects
within a reasonable time after receipt of such notice, an indemnifying party,
severally or jointly with any other indemnifying parties receiving such
notice, may assume the defense of such action with counsel chosen by it and
reasonably acceptable to the indemnified parties defendant in such action,
provided, however, that if (i) representation of such indemnified party
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by the same counsel would present a conflict of interest or (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and any such indemnified party
reasonably determines that there may be legal defenses available to such
indemnified party which are different from or in addition to those available
to such indemnifying party, then in the case of clauses (i) and (ii) of this
Section 4(c) such indemnifying party and counsel for each indemnifying party
or parties shall not be entitled to assume such defense. If an indemnifying
party is not entitled to assume the defense of such action as a result of the
proviso to the preceding sentence, counsel for such indemnifying party and
counsel for each indemnified party or parties shall be entitled to conduct
the defense of such indemnified party or parties. If an indemnifying party
assumes the defense of such action, in accordance with and as permitted by
the provisions of this paragraph, such indemnifying parties shall not be
liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from its 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. 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 written
release in form and substance satisfactory to the indemnified parties 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) Notwithstanding the last sentence of Section 4(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel
pursuant to Section 4(a)(iii) above, such indemnifying party agrees that it
shall be liable for any settlement 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; provided that an indemnifying
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party shall not be liable for any such settlement effected without its consent
if such indemnifying party (1) reimburses such indemnified party in accordance
with such request to the extent it considers reasonable and (2) provides
written notice to the indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust, 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 Trust, and the Holders, as incurred; provided
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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 Trust, and the 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 the relative fault of the Company and Trust, on the one
hand, and the Holders, on the other 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 relative fault of the Company and the Trust, on the one
hand, and of the Holders, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Trust, on the one hand,
or by or on behalf of the Holders, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Trust and the Holders
of the Registrable Securities agree that it would not be just and equitable
if contribution pursuant to this Section 4 were to be determined by pro
rata allocation or by any other method of allocation that does not
take into account the relevant equitable considerations. For purposes
of this Section 4, each affiliate of a Holder, and each director,
officer, employee, agent and Person, if any, who controls a Holder
or such affiliate within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Holder, and each director of each of the Company or the
Trust, each officer of each of the Company or the Trust who signed the
Registration Statement, and each Person, if any, who controls each of the
Company and the Trust within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution
as each of the Company or the Trust.
5. Participation in Underwritten Registrations. No Holder may
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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 reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents reasonably required under the terms of
such underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable
-------------------------
Securities covered by the Shelf Registration Statement who desire to do so
may sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters
and manager or managers that will administer the offering will be selected by
the Holders of a majority in aggregate principal amount of the Registrable
Securities included in such offering; provided, however, that such
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underwriters and managers must be reasonably satisfactory to the
Company and the Trust.
7. Miscellaneous.
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(a) Rule 144 and Rule 144A. For so long as the Company or the
----------------------
Trust is subject to the reporting requirements of Section 13 or 15 of the
Exchange Act and any Registrable Securities remain outstanding, each of the
Company and the Trust will use its best efforts to file the reports required
to be filed by it under the Securities Act and Section 13(a) or 15(d) of the
Exchange 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 (a) make publicly available
such information as is necessary to permit sales of their securities pursuant
to Rule 144 under the Securities Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales of their securities
pursuant to Rule 144A under the Securities 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 Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, (ii) Rule 144A
under the Securities 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 and the
Trusts will deliver to such Holder a written statement as to whether it has
complied with such requirements.
(b) No Inconsistent Agreements. The Company or the Trust has
--------------------------
not entered into nor will the Company or the Trust 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. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's or the Trust's other
issued and outstanding securities under any such agreements.
(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 and the Trust 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 no
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amendment, modification or supplement or waiver or consent to the departure
with respect to the provisions of Section 4 hereof shall be effective as
against any Holder of Registrable Securities unless consented to in writing
by such Holder of Registrable Securities. Notwithstanding the foregoing
sentence, (i) this Agreement may be amended, without the consent of any
Holder of Registrable Securities, by written agreement signed by the Company,
the Trust and Initial Purchaser, to cure any ambiguity, correct or supplement
any provision of this Agreement that may be inconsistent with any other
provision of this Agreement or to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with other provisions of this Agreement, (ii) 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, the Trust and Initial Purchaser to the extent that any such
amendment, modification, 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 (iii) to the extent any provision of this Agreement relates to the
Initial Purchaser, such provision may be amended, modified or supplemented,
and waivers or consents to departures from such provisions may be given, by
written agreement signed by Initial Purchaser, the Company and the Trust.
(d) Notices. All notices and other communications provided for
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or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to
the Initial Purchaser, the address set forth in the Purchase Agreement; and
(ii) if to the Company or the Trust, initially at the Company's address set
forth in the Purchase Agreement and thereafter at such other address, notice
of which is given in accordance with the provisions of this Section 7(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 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.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchaser, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that
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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 or the Indenture. 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 Initial Purchaser shall be a
-----------------------
third party beneficiary of the agreements made hereunder between the Company
and the Trust, 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.
(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
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convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
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MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
(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.
(k) Securities Held by the Company, the Trust or its
------------------------------------------------
Affiliates. Whenever the consent or approval of Holders of a specified
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percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, the Trust or its affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
COMMUNITY BANK SYSTEM, INC.
By:
-------------------------------------
Name: Sanford A. Belden
Title: President
and Chief Executive Officer
COMMUNITY CAPITAL TRUST I
By: COMMUNITY BANK SYSTEM, INC.,
as Sponsor
By:
----------------------------
Name: Sanford A. Belden
Title: President
and Chief Executive Officer
Confirmed and accepted as of
the date first above
written:
M.A. SCHAPIRO & CO., INC.
By: ________________________________
Name: Richard J. Kelly
Title: Director of Investment Banking