EXHIBIT 2
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REGISTRATION RIGHTS AGREEMENT
Dated as of July 28, 1997,
by and among
AUTOTOTE CORPORATION,
each of the Guarantors named herein
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
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This Registration Rights Agreement (this "Agreement") is made and
entered into as of July, 28, 1997, by and among Autotote Corporation, a Delaware
corporation (the "Company"), Autotote Lottery Corp., Autotote Enterprises Inc.,
Autotote Communication Services, Inc., Marvin H. Sugarman Productions, Inc.,
Racing Technology, Inc., Autotote Keno Corp., Autotote Systems Inc., Autotote
International Inc., Autotote Management Corp., Autotote Mexico, Ltd. and Newark
Holdings, Inc. (collectively, the "Guarantors"), and Donaldson Lufkin & Jenrette
Securities Corporation (the "Initial Purchaser"), which has agreed to purchase
the Company's 10 7/8% Series A Senior Notes due 2004 (the "Series A Notes")
pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated July
21, 1997 (the "Purchase Agreement"), by and among the Company, the Guarantors
and the Initial Purchaser. In order to induce the Initial Purchaser to purchase
the Series A Notes, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchaser set forth in Section 3 of
the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Additional Interest: As defined in Section 5 hereof.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Series B Notes that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for Series A Notes
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Series A Notes
acquired directly from the Company or any of its affiliates).
Business Day: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the corpo-
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rate trust office of the Trustee, on which banks are authorized to close.
Certificated Securities: As defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes validly
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Series A Notes, each Interest
Payment Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of the
Series B Notes pursuant to the Exchange Offer Registration Statement pursuant to
which the Company shall offer the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities for Series B Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities validly
tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser
proposes to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act.
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Global Noteholder: As defined in the Indenture.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated the Closing Date, among the Company,
the Guarantors and IBJ Schroder Bank & Trust Company, as trustee (the
"Trustee"), pursuant to which the Notes are to be issued, as such Indenture is
amended or supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series A Notes and the Series B Notes.
Person: An individual, partnership, corporation, trust, unincorporated
organization, or a government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each person
who is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
Registration Statement: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) which
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
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Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Series B Notes: The Company's 10 7/8% Series B Senior Notes due 2004 to
be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon the
request of any Holder of Series A Notes covered by a Shelf Registration
Statement, in exchange for such Series A Notes.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur
of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying with
the prospectus delivery requirements of the Act, (b) the date on which such Note
has been disposed of in accordance with a Shelf Registration Statement, (c) the
date on which such Note is disposed of by a Broker-Dealer pursuant to the "Plan
of Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Note is distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) hereof have been
complied with), the Company and the Guarantors shall, at their cost, (i) cause
to be filed with the Commission as soon as practicable after the Closing Date,
but in no event later than 30 days after the Closing Date, the Exchange Offer
Registration Statement, (ii) use their respective commercially reasonable best
efforts to cause such
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Exchange Offer Registration Statement to become effective at the earliest
possible time, but in no event later than 120 days after the Closing Date, (iii)
in connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause such
Exchange Offer Registration Statement to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
Series B Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer (provided, however, that
neither the Company nor any Guarantor shall be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or take any
action which would subject it to general service of process or taxation in any
jurisdiction where it is not so subject), and (iv) upon the effectiveness of
such Exchange Offer Registration Statement, commence and Consummate the Exchange
Offer. The Exchange Offer shall be on the appropriate form permitting
registration of the Series B Notes to be offered in exchange for the Series A
Notes that are Transfer Restricted Securities and to permit sales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers as
contemplated by Section 3(c) hereof.
(b) The Company and the Guarantors shall use their respective
commercially reasonable best efforts to cause the Exchange Offer Registration
Statement to be effective continuously, and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 Business Days (or
longer if required by applicable law). The Company and the Guarantors shall
cause the Exchange Offer to comply in all material respects with all applicable
federal and state securities laws. No securities other than the Notes shall be
included in the Exchange Offer Registration Statement. The Company and the
Guarantors shall use their respective commercially reasonable best efforts to
cause the Exchange Offer to be Consummated on the earliest practicable date
after the Exchange Offer Registration Statement has become effective, but in no
event later than 180 days after the Closing Date.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any affiliate
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of the Company who holds Series A Notes or any Restricted Broker-Dealer who
holds Series A Notes that are Transfer Restricted Securities and that were
acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities, may exchange such Series A Notes (other
than Transfer Restricted Securities acquired directly from the Company or any
affiliate of the Company) pursuant to the Exchange Offer; provided, however,
such Broker-Dealer may be deemed to be an "underwriter" within the meaning of
the Act and must, therefore, deliver a prospectus meeting the requirements of
the Act in connection with its initial sale of each Series B Note received by
such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement
may be satisfied by the delivery by such Broker-Dealer of the Prospectus
contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers that the Commission may require in order to permit such sales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer,
except to the extent required by the Commission as a result of a change in
policy after the date of this Agreement.
Each Holder of Series A Notes (other than certain specified Holders)
who wishes to acquire Series B Notes, pursuant to the Exchange Offer, will be
required to represent that (i) it is not an affiliate of the Company, (ii) any
Series B Notes to be received by it were acquired in the ordinary course of its
business and (iii) at the time of commencement of the Exchange Offer, it has no
arrangement with any person to participate in the distribution (within the
meaning of the Act) of the Series B Notes.
The Company and the Guarantors shall use their respective commercially
reasonable best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) hereof to the extent necessary to ensure that it is available
for sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers, and to ensure that such Registration Statement conforms in all
material respects with the requirements of this Agreement, the Act and the
policies, rules and Regulations of the Commission as announced from time to
time, for a period of 180 days from the date on which the Exchange Offer is
Consummated.
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The Company and the Guarantors shall provide sufficient copies of the
latest version of such Prospectus to such Restricted Broker-Dealers upon
request, and in no event later than two Business Days after such request, at any
time during such 180 day period in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. In the event that (i) the Company is not
required to file an Exchange Offer Registration Statement with respect to the
Series B Notes because the Exchange Offer is not permitted by applicable law
(after the procedures set forth in Section 6(a)(i) hereof have been complied
with) or if for any reason the Exchange Offer is not Consummated within 180 days
after the Closing Date or (ii) any Holder of Transfer Restricted Securities
shall notify the Company within 20 Business Days following the Consummation of
the Exchange Offer that (A) such Holder was prohibited by law or Commission
policy from participating in the Exchange Offer or (B) such Holder may not
resell the Series B Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the Prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
such Holder or (C) such Holder is a Broker-Dealer and holds Series A Notes
acquired directly from the Company or one of its affiliates, then the Company
and the Guarantors shall use their commercially reasonable best efforts (x) to
cause to be filed on or prior to 30 days after the date on which the Company
determines that it is not required to file the Exchange Offer Registration
Statement pursuant to clause (i) above or 30 days after the date on which the
Company receives the notice specified in clause (ii) above a shelf registration
statement pursuant to Rule 415 under the Act (which may be an amendment to the
Exchange Offer Registration Statement (in either event, the "Shelf Registration
Statement")) relating to all Transfer Restricted Securities the Holders of which
shall have provided the information required pursuant to Section 4(b) hereof,
and (y) to cause such Shelf Registration Statement to become effective on or
prior to 90 days after the date on which the Company becomes obligated to file
such Shelf Registration Statement. If, after the Company has filed an Exchange
Offer Registration Statement which satisfies the requirements of Section 3(a)
hereof, the Company is required to file and make effective a Shelf Registration
Statement solely because the Exchange Offer shall not be permitted under
applicable federal law, then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) of this
Section 4(a). Such an event shall have no effect on the require-
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ments of clause (y) of this Section 4(a). The Company and the Guarantors shall
use their respective commercially reasonable best efforts to keep the Shelf
Registration Statement discussed in this Section 4(a) continuously effective,
supplemented and amended as required by and subject to the provisions of
Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a), and to ensure that it conforms in
all material respects with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, until the earlier of two years after the effective date and such time as
all Transfer Restricted Securities covered by such Shelf Registration Statement
have been sold hereunder (as may be extended pursuant to this Agreement
following the date on which such Shelf Registration Statement first becomes
effective under the Act).
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 Business Days after receipt of a request
therefor, such information specified in item 507 of Regulation S-K under the
Act, and any other similar information reasonably requested by the Company, for
use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. Each Holder as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading. A Holder of Transfer Restricted Securities shall not be entitled to
Additional Interest pursuant to Section 5 hereof to the extent that such Holder
fails to comply with any obligation under this subsection 4(b).
SECTION 5. LIQUIDATED DAMAGES
(a) The Company, the Guarantors and the Initial Purchaser agree that
the Holders of Transfer Restricted Securities will suffer damages if the Company
fails to fulfill its obligation under Section 3 or Section 4 hereof and that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, the Company and the Guarantors hereby jointly and severally agree
to pay, as liquidated damages, additional interest on the Series A Notes
("Additional Interest")
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under the circumstances and to the extent set forth below (without duplication):
(i) if neither the Exchange Offer Registration Statement nor the
Shelf Registration Statement has been filed within 30 days following
the Closing Date, then, commencing on the 31st day after the Closing
Date Additional Interest shall accrue on the Series A Notes over and
above the stated interest at a rate of 0.50% per annum for the first
90 days immediately following the 30th day after the Closing Date,
such Additional Interest rate increasing by an additional 0.50% per
annum at the beginning of each subsequent 90-day period;
(ii) if the Exchange Offer Registration Statement or Shelf
Registration Statement is not declared effective within 120 days
following the date on which such registration statement is required to
be filed, then, commencing on the 121st day after such date,
Additional Interest shall accrue on the Series A Notes over and above
the stated interest at a rate of 0.50% per annum for the first 90 days
immediately following the 120th day after such date, such Additional
Interest rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 90-day period;
(iii) if (A) the Company has not exchanged Series B Notes for all
Series A Notes validly tendered in accordance with the terms of the
Exchange Offer on or prior to the 180th day after the Closing Date or
(B) the Exchange Offer Registration Statement has been declared
effective and thereafter ceases to be effective at any time prior to
the time that the Exchange Offer is Consummated or (C) if applicable,
the Shelf Registration Statement has been declared effective and such
Shelf Registration Statement thereafter ceases to be effective at any
time within the time period specified in Section 4 hereof during which
the Shelf Registration Statement must be kept continuously effective,
then Additional Interest shall be accrued on the Series A Notes (over
and above the stated interest at a rate of 0.50% per annum for the
first 90 days commencing on (x) the 181st day after the Closing Date
with respect to the Series A Notes validly tendered and not exchanged
by the Company, in the case of (A) above, or (y) the day following the
date the Exchange Offer Registration Statement ceases to be effective
in the case of (B) above, or (z) the day following the date such Shelf
Registration ceases to be effective, in the case of (C) above,
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such Additional Interest rate increasing by an additional 0.50% per
annum at the beginning of each subsequent 90-day period;
provided, however, that the Additional Interest rate on the Series A Notes may
not exceed at any one time in the aggregate 1.0% per annum; and provided,
further, that (1) upon the filing of the Exchange Offer Registration Statement
or a Shelf Registration Statement (in the case of clause (i) of Section 5(a)
hereof), (2) upon the effectiveness of the Exchange Offer Registration Statement
or the Shelf Registration (in the case of clause (ii) of Section 5(a) hereof),
or (3) upon the exchange of Series B Notes for all Series A Notes validly
tendered (in the case of clause (iii)(A) of Section 5(a) hereof), or upon the
effectiveness of the Exchange Offer Registration Statement that had ceased to
remain effective (in the case of (iii)(B) of Section 5(a) hereof), or upon the
effectiveness of the Shelf Registration Statement that had ceased to remain
effective (in the case of (iii)(C) of Section 5 hereof), Additional Interest on
the Series A Notes as a result of such clause (or the relevant subclause
thereof), as the case may be, shall immediately cease to accrue.
All accrued Additional Interest shall be paid to the Record Holder in
the same manner in which payments of interest are made pursuant to the
Indenture. The amount of Additional Interest will be determined by multiplying
the applicable Additional Interest rate by the principal amount of the Notes,
multiplied by a fraction, the numerator of which is the number of days such
Additional Interest rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months) and the denominator
of which is 360. All obligations of the Company and the Guarantors set forth in
the preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to
such security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all applicable
provisions of Section 6(c) hereof shall use their respective commercially
reasonable best efforts to effect such exchange and to permit the sale of
Broker-Dealer Transfer Restricted Securities being sold in accor-
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dance with the intended method or methods of distribution thereof, and shall
comply with all of the following provisions:
(i) If, following the date hereof, there has been published a
change in Commission policy with respect to exchange offers such as
the Exchange Offer, such that in the reasonable opinion of counsel to
the Company there is a substantial question as to whether the Exchange
Offer is permitted by applicable federal law, the Company and the
Guarantors hereby agree to seek a no-action letter or other
interpretive advice from the Commission staff allowing the Company and
the Guarantors to Consummate an Exchange Offer for such Series A
Notes. In connection with the foregoing, the Company and the
Guarantors hereby agree to take all such other actions as are
reasonably requested by the Commission staff or otherwise required in
connection with the issuance of such advice, including without
limitation (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis
prepared by counsel to the Company setting forth the legal bases, if
any, upon which such counsel has concluded that such an Exchange Offer
should be permitted and (C) diligently pursuing a resolution by the
Commission staff of such submission (which need not be favorable);
provided, however, that pursuant to this Agreement the Company may
alternatively determine to file a Shelf Registration Statement; and
provided, further, that the Company and the Guarantors agree to pursue
the issuance of a decision to the Commission staff level, but shall
not be required to taken commercially unreasonable action in
connection therewith.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the consummation of the Exchange Offer, a written
representation to the Company and the Guarantors (which may be
contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that such Holder (A) is
not an affiliate of the Company, (B) is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any
person to participate in, a distribution of the Series B Notes to be
issued in the Exchange Offer and (C) is acquiring the Series B Notes
in its ordinary course of business. Each Holder shall also acknowledge
and agree that any Broker-Dealer and any such Holder using the
Exchange Offer to participate in a dis-
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tribution of the securities to be acquired in the Exchange Offer (1)
could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (including, if applicable, any no-action
letter obtained pursuant to clause (i) above, and (2) must comply with
the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of Series B Notes obtained by such Holder in
exchange for Series A Notes acquired by such Holder directly from the
Company or an affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the
Guarantors are registering the Exchange Offer in reliance on the
position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
(available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) of this Section 6(a), (B) including a
representation that neither the Company nor any Guarantor has entered
into any arrangement or understanding with any Person to distribute
the Series B Notes to be received in the Exchange Offer and that, to
the best of the Company's and each Guarantor's information and belief,
each Holder participating in the Exchange Offer is acquiring the
Series B Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Series B Notes received in the Exchange Offer and
(C) any other undertaking or representation required by the Commission
as set forth in any no-action letter obtained pursuant to clause (i)
of this Section 6(a).
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) hereof and shall use their respective commercially
reasonable best efforts to effect such registration to permit the sale of
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the Transfer Restricted Securities being sold in accordance with the intended
method or methods of distribution thereof (as indicated in the information
furnished to the Company pursuant to Section 4(b) hereof), and pursuant thereto
the Company and the Guarantors will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.
(c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Exchange Offer Registration Statement and the related Prospectus, to the extent
that the same are required to be available to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers), the Company and
the Guarantors shall:
(i) use their respective commercially reasonable best efforts to
keep such Registration Statement continuously effective and provide
all requisite financial statements for the period specified in Section
3 or 4 hereof, as applicable. Upon the occurrence of any event that
would cause any such Registration Statement or the Prospectus
contained therein (A) to contain a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this Agreement,
the Company and the Guarantors shall file promptly an appropriate
amendment to such Registration Statement, (1) in the case of clause
(A) of this Section 6(c)(i), correcting any such misstatement or
omission, and (2) in the case of clauses (A) and (B) of this Section
6(c)(i), use their respective commercially reasonable best efforts to
cause such amendment to be declared effective and such Registration
Statement and the related Prospectus to become usable for their
intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, or such shorter
period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold; cause the
Pro-
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spectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 under the Act, and
to comply with Rules 424, 430A and 462, as applicable, under the Act
in a timely manner; and comply in all material respects with the
provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise the underwriter, if any, and selling Holders named
in any Registration Statement promptly and, if requested by such
Persons, confirm such advice in writing (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration Statement
or amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement under the Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, (D) of the existence of
any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by
reference therein untrue, or that requires the making of any additions
to or changes in the Registration Statement in order to make the
statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. If at any time the Commission shall issue
any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company and the
Guarantors shall use their respective commercially reasonable best
efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
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(iv) furnish to the Initial Purchaser, each selling Holder named
in any Registration Statement or Prospectus and each underwriter in
connection with such sale, if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration
Statement or Prospectus (including, upon reasonable request, all
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review
and comment of such Holders and underwriter in connection with such
sale, if any, for a period of at least five Business Days, and the
Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which the selling Holders of the Transfer Restricted Securities
covered by such Registration Statement or the underwriter in
connection with such sale, if any, shall reasonably object within
three Business Days after the receipt thereof; provided, however, that
any document incorporated by reference in any such Registration
Statement after the initial filing shall be provided to such selling
Holders and such underwriter no later than one Business Day after such
amendment or supplement is filed with the Commission.
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter in connection with such sale, if any, make the Company's
and the Guarantors' representatives available for discussion of such
document and other customary due diligence matters, and, to the extent
reasonably practicable, include such information in such document
prior to the filing thereof as such selling Holders or underwriter, if
any, reasonably may request;
(vi) make available at reasonable times for inspection by the
selling Holders, any managing underwriter participating in any
disposition pursuant to such Registration Statement and any attorney
or accountant retained by such selling Holders or such underwriter,
all financial and other records, pertinent corporate documents and
properties of the Company and the Guarantors and cause the Company's
and the Guarantors' officers, directors and employees to supply all
information reasonably requested by any such Holder, underwriter,
attorney or accountant in
-16-
connection with such Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness;
(vii) if requested by any selling Holders or the underwriter in
connection with such sale, if any, promptly include in any
Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such
selling Holders and underwriter, if any, may reasonably request to
have included therein, including, without limitation, information
relating to the "Plan of Distribution" of the Transfer Restricted
Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter, the
purchase price being paid therefor and any other terms of the offering
of the Transfer Restricted Securities to be sold in such offering; and
make all required filings of such supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be included in such supplement or post-effective amendment;
(viii) furnish to each selling Holder and the underwriter in
connection with such sale, if any, without charge, at least one copy
of the Registration Statement, as first filed with the Commission, and
of each amendment thereto, including, upon the request of such Person,
all documents incorporated by reference therein (in each case, without
exhibits, unless requested);
(ix) deliver to each selling Holder and the underwriter, if any,
without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as
such Persons reasonably may request; the Company and the Guarantors
hereby consent to the use (in accordance with law) of the Prospectus
and any amendment or supplement thereto by each of the selling Holders
and the underwriter, if any, in connection with the offering and the
sale of the Transfer Restricted Securities covered by the Prospectus
or any amendment or supplement thereto;
(x) enter into such customary agreements (including an
underwriting agreement), make such customary representations and
warranties and take all other reasonable actions in connection
therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to any Registration Statement
contemplated
-17-
by this Agreement as may be reasonably requested by any Transfer
Restricted Securities or the underwriter in connection with any sale
or resale pursuant to any Registration Statement contemplated by this
Agreement, and in such connection, whether or not an underwriting
agreement is entered into and whether or not the registration is an
Underwritten Registration, the Company and the Guarantors shall:
(A) furnish (or in the case of paragraphs (2) and (3) of
this Section 6(c)(x), use their respective commercially
reasonable best efforts to furnish) to each selling Holder and
each underwriter, if any, upon the effectiveness of the Shelf
Registration Statement and to each Restricted Broker-Dealer upon
Consummation of the Exchange Offer:
(1) a certificate, dated the date of Consummation of
the Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed on behalf
of the Company and each Guarantor by (x) the President or
any Vice President and (y) a principal financial or
accounting officer of the Company and such Guarantor,
confirming, as of the date thereof, the matters
substantially similar to those set forth in paragraphs (a)
and (d) of Section 9 of the Purchase Agreement and such
other similar matters as the Holders, underwriter, if any,
and/or Restricted Broker-Dealers may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for
the Company and the Guarantors covering matters customarily
covered in opinions requested in Underwritten Offerings and
such other matters as the Holders, underwriter, if any,
and/or Restricted Broker-Dealers may reasonably request, and
in any event including a statement to the effect that such
counsel has participated in conferences with officers and
other representatives of the Company and the Guarantors,
representatives of the independent public accountants for
the Company and the Guarantors and have considered the
matters required to be stated therein and the statements
-18-
contained therein, although such counsel has not
independently verified the accuracy, completeness or
fairness of such statements; and that such counsel advises
that, on the basis of the foregoing (relying as to
materiality to a large extent upon facts provided to such
counsel by officers and other representatives of the Company
and the Guarantors and without independent check or
verification), no facts came to such counsel's attention
that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective and, in the case of the Exchange Offer
Registration Statement, as of the date of Consummation of
the Exchange Offer, 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 contained in
such Registration Statement as of its date and, in the case
of the opinion dated the date of Consummation of the
Exchange Offer, as of the date of Consummation, contained an
untrue statement of a material fact or omitted 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. Without limiting the foregoing,
such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial data
included in any Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement or the
date of Consummation of the Exchange Offer, as the case may
be, from the Company's and Guarantors' independent
accountants, in the customary form and covering matters of
the type customarily covered in comfort letters to
underwriters in connection with primary Underwritten
Offerings;
-19-
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, in connection with any sale or
resale pursuant to any Shelf Registration Statement the
indemnification provisions and procedures of Section 8 hereof
with respect to all parties to be indemnified pursuant to said
Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by the Selling Holders, the underwriter, if
any, and Restricted Broker-Dealers to evidence compliance with
clause (A) above and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the
Company and the Guarantors pursuant to this clause (x).
The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at any time
the representations and warranties of the Company and the Guarantors
contemplated in (A)(1) of this Section 6(c)(x) cease to be true and correct, the
Company and the Guarantors shall so advise the underwriter, if any, the selling
Holders and, if applicable, each Restricted Broker-Dealer promptly and if
requested by such Persons, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter, if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders or underwriter, if any, may reasonably request and do any and
all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted
Securities covered by the applicable Registration Statement; provided,
however, that neither the Company nor any Guarantor shall be obligated
to file in any jurisdiction in which it is not so qualified or to take
any action which would subject it to general service of process or
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xii) issue, upon the request of any Holder of Series A Notes
covered by any Shelf Registration Statement con-
-20-
templated by this Agreement, Series B Notes having an aggregate
principal amount equal to the aggregate principal amount of Series A
Notes surrendered to the Company by such Holder in exchange therefor;
such Series B Notes to be registered in the name of such Holder or in
the name of the purchaser(s) of such Notes, as the case may be; in
return, the Series A Notes held by such Holder shall be surrendered to
the Company for cancellation;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with the selling Holders and
the underwriter, if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities
to be sold and not bearing any restrictive legends; and to register
such Transfer Restricted Securities in such denominations and such
names as the Holders or the underwriter, if any, may request at least
two Business Days prior to such sale of Transfer Restricted
Securities;
(xiv) use their respective commercially reasonable best efforts
to cause the disposition of the Transfer Restricted Securities covered
by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof or the underwriter, if any, to
consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (xi) of this Section 6(c);
(xv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Se-
-21-
curities which are in a form eligible for deposit with the Depository
Trust Company;
(xvii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use their respective
commercially reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental
agencies or authorities as may be reasonably necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xviii) otherwise use their respective commercially reasonable
best efforts to comply in all material respects with all applicable
rules and regulations of the Commission, and make generally available
to its security holders with regard to any applicable Registration
Statement, as soon as practicable, a consolidated earnings statement
meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of
the Registration Statement (as such term is defined in paragraph (c)
of Rule 158 under the Act);
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required
by this Agreement and, in connection therewith, cooperate with the
Trustee and the Holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its
commercially reasonable best efforts to cause the Trustee to execute,
all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to
enable such Indenture to be so qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13
or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon re-
-22-
ceipt of any notice from the Company of the existence of any fact of the kind
described in Section 6(c), including Section 6(c)(iii)(C) or (D) hereof, such
Holder will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) hereof, or until it is advised in writing by the Company that the use
of the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (the
"Advice"). If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice. In
the event the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(C) or (D) hereof to and including the date when each selling Holder
covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or
shall have received the Advice.
Each Holder further agrees that upon receipt of notice from the
Company, along with a copy of a letter from an underwriter or underwriters
indicating that in such person's judgment, the hold-back restriction set forth
in this paragraph is necessary to market the offering that the Company intends
to make to the public of its securities, through an underwriter, such Holder
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement for such period as is required
to complete such offering and for a further period of 90 days after the
completion of such offering. Each Holder also agrees that the Company has the
right to require the Holder to discontinue dispositions for up to 90 days if the
Company gives notice of a material acquisition or event; provided, however, that
each Holder shall be subject to the hold-back restrictions of this Section 6(d)
only twice during the term of this Agreement. During any such discontinuance, no
Additional Interest shall accrue or otherwise be payable to the Holders.
-23-
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses (including
filings made with the NASD (and, if applicable, the fees and expenses of any
"qualified independent underwriter") and its counsel that may be required by the
rules and regulations of the NASD); (ii) all reasonable fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Series B Notes
to be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all reasonable fees and disbursements of
counsel for the Company, the Guarantors and, in accordance with Section 7(b),
the Holders of Transfer Restricted Securities; (v) if applicable, all
application and filing fees in connection with listing the Notes on a national
securities exchange or automated quotation system; and (vi) all reasonable fees
and disbursements of independent certified public accountants of the Company and
the Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance). Notwithstanding anything in this
Section 7 to the contrary, the Company shall not be required to pay (a) the fees
and expenses of any underwriter or of legal counsel for any underwriter, other
than a "qualified independent underwriter" (acting solely in such capacity) as
provided in clauses (i) and (ii) of the preceding sentence or (b) any
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Transfer Restricted Securities.
The Company and the Guarantors will, in any event, bear their
respective internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by the Company or the Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Holders of Transfer Restricted Securities being tendered in
the Exchange Offer and/or resold pursuant to the "Plan of Dis-
-24-
tribution" contained in the Exchange Offer Registration Statement or registered
pursuant to the Shelf Registration Statement, as applicable, for the reasonable
fees and disbursements of not more than one counsel, who shall be chosen by the
Holders of a majority in principal amount of the Transfer Restricted Securities
for whose benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder and (ii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) any Holder (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Holder"), to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without limitation,
reimbursement of all reasonable costs of investigating, preparing, pursuing or
defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Holder) directly or indirectly
caused by, related to, based upon, arising out of or in connection with any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement, preliminary prospectus or Prospectus (or any amendment
or supplement thereto), or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or preliminary prospectus or supplement
thereto, in light of the circumstances under which they were made) not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses are caused by an untrue statement or omission or alleged untrue
statement or omission that is made in reliance upon and in conformity with
information relating to any of the Holders furnished in writing to the Company
by any of the Holders expressly for use therein; provided, however, that the
Company shall not be liable to any Indemnified Holder under the indemnity
agreement in this subsection (a) with respect to any preliminary prospectus to
the extent that any such loss, claim, damage, liability or expense of the
Indemnified Holder results from the fact that the Indemnified Holder sold Notes
to a person as to whom it shall be es-
-25-
tablished that 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 shall have furnished such Indemnified Holder with
such amendment or supplement thereto on a timely basis), in any case where such
delivery is required by applicable law and the loss, claim, damage, liability or
expense of the Indemnified Holder results from an untrue statement or omission
of a material fact contained in the preliminary prospectus which was corrected
in the final Prospectus (or in the final Prospectus as then amended or
supplemented if the Company shall have furnished such Indemnified Holder with
such amendment or supplement thereto on a timely basis).
In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
of the Indemnified Holders with respect to which indemnity may be sought against
the Company or the Guarantors, such Indemnified Holder (or the Indemnified
Holder controlled by such controlling person) shall promptly notify the Company
and the Guarantors in writing (provided, that the failure to give such notice
shall not relieve the Company or the Guarantors of their obligations pursuant to
this Agreement). Such Indemnified Holder shall have the right to employ its own
counsel in any such action and the fees and expenses of such counsel shall be
paid by the Company and the Guarantors (regardless of whether it is ultimately
determined that an Indemnified Holder is not entitled to indemnification
hereunder). The Company and the Guarantors shall not, in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for such Indemnified Holders, which firm shall be designated by the
Holders. The Company and the Guarantors shall not be liable for any settlement
of any action effected without its prior written consent. The Company and the
Guarantors shall be liable for any settlement of any such action or proceeding
effected with the Company's prior written consent, which consent shall not be
withheld unreasonably, and the Company and the Guarantors agree to indemnify and
hold harmless each Indemnified Holder from and against any loss, claim, damage,
liability or expense by reason of any settlement of any action effected with the
written consent of the Company. Neither the Company nor any Guarantor shall,
without the prior written consent of each Indemnified Holder, settle or
compromise or consent to the entry of judgment in or otherwise
-26-
seek to terminate any pending or threatened action, claim, litigation or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Holder is a party thereto), unless
such settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Holder from all liability arising out of such
action, claim, litigation or proceeding.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and the Guarantors, and
their respective directors, officers, and any person controlling (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company,
and the respective officers, directors, partners, employees, representatives and
agents of each such person, to the same extent as the foregoing indemnity from
the Company and the Guarantors to each of the Indemnified Holders, but only with
respect to claims and actions based on information relating to such Holder
furnished in writing by such Holder expressly for use in any Registration
Statement. In case any action or proceeding shall be brought against the
Company, any Guarantor or its directors or officers or any such controlling
person in respect of which indemnity may be sought against a Holder of Transfer
Restricted Securities, such Holder shall have the rights and duties given the
Company and the Guarantors, and the Company, such Guarantor, such directors or
officers or such controlling persons shall have the rights and duties given to
each Holder by the preceding paragraph. In no event shall any Holder be liable
or responsible for any amount in excess of the amount by which the total
received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof
(other than by reason of exceptions provided in those Sections) in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the Company and
the Guarantors, on the one hand, and of the Indem-
-27-
nified Holder, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Guarantors, on the one hand, and of the Indemnified Holder, 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 such Guarantor or by the Indemnified Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in the second paragraph
of Section 8(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company, the Guarantors and each Holder of Transfer Restricted
Securities agree that it would not be just and equitable if contribution
pursuant to this Section 8(c) were determined by pro rata allocation (even if
the Holders 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 in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or expenses referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Holder or its related Indemnified Holders shall
be required to contribute, in the aggregate, any amount in excess of the amount
by which the total received by such Holder with respect to the sale of its
Transfer Restricted Securities pursuant to a Registration Statement exceeds the
sum of (A) the amount paid by such Holder for such Transfer Restricted
Securities plus (B) the amount of any damages which such Holder 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 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 8(c) are several in proportion to the re-
-28-
spective principal amount of Series A Notes held by each of the Holders
hereunder and not joint.
SECTION 9. RULE 144A
The Company and each Guarantor hereby agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding and during any
period in which the Company or such Guarantor is not subject to Section 13 or
15(d) of the Securities Exchange Act, to make available, upon request of any
Holder of Transfer Restricted Securities, to any Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to the exemptions provided by Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, lock-up letters and other documents required
under the terms of such underwriting arrangements and as the Company may
reasonably request.
SECTION 11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment
bankers and manager or managers for any Underwritten Offering that will
administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering, subject to the consent of the Company (which will not be
unreasonably withheld or delayed). Such investment bankers and managers are
referred to herein as the "underwriters."
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided herein, in the Indenture, the Purchase Agreement or granted
by law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Com-
-29-
pany and the Guarantors agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by them of the
provisions of this Agreement and hereby agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders 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 and the
Guarantors' securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. Neither the Company nor any
Guarantor will take any action, or voluntarily permit any change to incur, with
respect to the Notes that would materially and adversely affect the ability of
the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given, unless (i) in the case of Section 5
hereof and this Section 12(d)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer and
that does not affect directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
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(i) If to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
(ii) if to the Company or the Guarantors:
Autotote Corporation
750 Lexington Avenue
25th Floor
New York, New York 10022
Telecopier No.: (212) 754-2372
Attention: Martin E. Schloss, Esq.
With a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, NY 10022
Telecopier No.: (212) 715-8000
Attention: Howard J. Rothman, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
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.
The address or person to whose attention any notice or communication
shall be given may be changed in accordance with the provisions of this Section
12(e).
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns of each of the parties, including without limitation and without the
need for an express assignment, subsequent Holders of Transfer Restricted
Securities; provided, however, that this Agreement shall not inure to the
benefit of or be binding upon a successor or assign of a Holder unless and to
the extent such successor or assign acquired Transfer Restricted Securities
directly from such Holder.
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(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF. 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) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AUTOTOTE CORPORATION
By: /s/ William Luke
----------------
Name: William Luke
Title: Vice President and CFO
AUTOTOTE LOTTERY CORP.
By: /s/ William Luke
----------------
Name: William Luke
Title: Vice President of Finance
and Treasurer
AUTOTOTE ENTERPRISES INC.
By: /s/ William Luke
----------------
Name: William Luke
Title: Vice President and Treasurer
AUTOTOTE COMMUNICATION SERVICES, INC.
By: /s/ William Luke
----------------
Name: William Luke
Title: Vice President and Treasurer
MARVIN H. SUGARMAN PRODUCTIONS, INC.
By: /s/ William Luke
----------------
Name: William Luke
Title: Vice President and Treasurer
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RACING TECHNOLOGY, INC.
By: /s/ Martin E. Schloss
---------------------
Name: Martin E. Schloss
Title: Vice President, Secretary
and Director
AUTOTOTE KENO CORP.
By: /s/ William Luke
----------------
Name: William Luke
Title: Treasurer
AUTOTOTE SYSTEMS, INC.
By: /s/ Martin E. Schloss
---------------------
Name: Martin E. Schloss
Title: Vice President, Secretary
and Director
AUTOTOTE INTERNATIONAL INC.
By: /s/ Martin E. Schloss
---------------------
Name: Martin E. Schloss
Title: Secretary and Director
AUTOTOTE MANAGEMENT CORP.
By: /s/ William Luke
----------------
Name: William Luke
Title: Treasurer and Director
AUTOTOTE MEXICO, LTD.
By: /s/ Martin E. Schloss
---------------------
Name: Martin E. Schloss
Title: Vice President, Secretary
and Director
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NEWARK HOLDING, INC.
By: /s/ Martin E. Schloss
---------------------
Name: Martin E. Schloss
Title: Vice President, Secretary
and Director
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Justin Vorwerk
------------------
Name: Justin Vorwerk
Title: Managing Director