Exhibit 4.2
--------------------------
REGISTRATION RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 22, 2004
BY AND AMONG
MGM MIRAGE
AND
THE SUBSIDIARY GUARANTORS LISTED ON THE SIGNATURE PAGES HEREOF,
ON THE ONE HAND,
AND
J.P. MORGAN SECURITIES INC.
AND
THE INITIAL PURCHASERS,
ON THE OTHER HAND
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Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered
into on September 22, 2004 (the "CLOSING DATE"), by and among MGM MIRAGE, a
Delaware corporation (the "COMPANY") and the subsidiary guarantors listed on the
signature page of this Agreement (the "SUBSIDIARY GUARANTORS"), on the one hand,
and J.P. Morgan Securities Inc. on its own behalf and as representative of and
each of the other Initial Purchasers named in Schedule A hereto (collectively,
the "INITIAL PURCHASERS"), on the other hand.
This Agreement is made pursuant to that certain Purchase Agreement, dated
September 8, 2004 among the Company, the Subsidiary Guarantors and the Initial
Purchasers (the "PURCHASE AGREEMENT"), which provides for the sale by the
Company to the Initial Purchasers of an aggregate of $450,000,000 in principal
amount of the Company's 6% Senior Notes due 2009 (the "NOTES"), which are
guaranteed by the Subsidiary Guarantors. In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company and the Subsidiary
Guarantors have agreed to provide to the Initial Purchasers and their direct and
indirect transferees the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties hereto covenant
and agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"ADDITIONAL INTEREST" shall have the meaning set forth in Section 2.5
hereof.
"BROKER PROSPECTUS PERIOD" shall mean a period of at least 365 days after
the consummation of the Exchange Offer during which the Company shall make a
prospectus meeting the requirements of the 1933 Act available to all
Participating Broker-Dealers for use in connection with any resale of any
Exchange Notes acquired in the Exchange Offer.
"CLOSING" shall mean the Closing Time as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
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"DEPOSITARY" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that such depositary
must have an address in the Borough of Manhattan, in the City of New York.
"EXCHANGE NOTES" shall mean the 6% Senior Notes due 2009 to be issued by
the Company and guaranteed by the Subsidiary Guarantors under the Existing
Indenture containing terms identical to the Notes in all material respects
(except for references to certain interest rate provisions, restrictions on
transfers and restrictive legends), to be offered to Holders of Notes in
exchange for Transfer Restricted Notes pursuant to the Exchange Offer.
"EXCHANGE OFFER" shall mean the exchange offer by the Company and the
Subsidiary Guarantors of Exchange Notes for Transfer Restricted Notes pursuant
to Section 2.1 hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933 Act
effected pursuant to Section 2.1 hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement,
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.
"EXCHANGE PERIOD" shall have the meaning set forth in Section 2.1 hereof.
"EXISTING INDENTURE" shall mean that certain Indenture related to the
Existing Notes, dated as of September 17, 2003, by and among the Company, the
Subsidiary Guarantors (for purposes of this definition, as defined in the
Existing Indenture) and U.S. Bank National Association, as trustee.
"EXISTING NOTES" shall have the meaning set forth in Section 2.1 hereof.
"HOLDER" shall mean an Initial Purchaser, for so long as it owns any
Transfer Restricted Notes, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Transfer Restricted Notes
under the Indenture and each Participating Broker-Dealer that holds Exchange
Notes for so long as such Participating Broker-Dealer is required to deliver a
prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Notes.
"INDENTURE" shall mean the Indenture relating to the Notes, dated as of
September 22, 2004, among the Company, the Subsidiary Guarantors, and U.S. Bank
National Association, as trustee, as the same may be amended, supplemented,
waived or otherwise modified from time to time in accordance with the terms
thereof.
"INITIAL PURCHASER" or "INITIAL PURCHASERS" shall have the meaning set
forth in the preamble.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Transfer Restricted Notes; provided that
whenever the consent or approval of Holders of a specified percentage of
Transfer Restricted Notes is required hereunder,
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Transfer Restricted Notes held by the Company and other obligors on the Notes or
any Affiliate (as defined in the Existing Indenture and the Indenture, as
applicable) of the Company or any Subsidiary Guarantor shall be disregarded in
determining whether such consent or approval was given by the Holders of such
required percentage amount.
"NOTES" shall have the meaning set forth in the preamble hereof.
"PARTICIPATING BROKER-DEALER" shall mean any of the Initial Purchasers and
any other broker-dealer which makes a market in the Notes and exchanges Transfer
Restricted Notes in the Exchange Offer for Exchange Notes.
"PERSON" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
"PRIVATE EXCHANGE" shall have the meaning set forth in Section 2.1 hereof.
"PRIVATE EXCHANGE NOTES" shall have the meaning set forth in Section 2.1
hereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Transfer Restricted Notes covered by a Shelf Registration Statement, and
by all other amendments and supplements to a prospectus, including post
effective amendments, and in each case including all material incorporated by
reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company and the Subsidiary Guarantors with
this Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. (the "NASD") registration and
filing fees, including, if applicable, the fees and expenses of any "qualified
independent underwriter" that is required to be retained by any holder of
Transfer Restricted Notes in accordance with the rules and regulations of the
NASD, (ii) all fees and expenses incurred in connection with compliance with
state securities or blue sky laws and compliance with the rules of the NASD
(including reasonable fees and disbursements of counsel for any underwriters or
Holders in connection with blue sky qualification of any of the Exchange Notes
or Transfer Restricted Notes and any filings with the NASD), (iii) all expenses
of any Persons in preparing or assisting in preparing, word processing, printing
and distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all fees and expenses incurred in connection with the listing,
if any, of any of the Transfer Restricted Notes on any securities exchange or
exchanges, (v) all rating agency fees, (vi) the fees and disbursements of
counsel for the Company and the Subsidiary Guarantors and of the independent
public accountants of the Company and the Subsidiary Guarantors, including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance, (vii) the fees and expenses of the Trustee
(including the reasonable fees and disbursements of its counsel), and any
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escrow agent or custodian, and (viii) any fees and disbursements of the
underwriters customarily required to be paid by issuers or sellers of securities
and the fees and expenses of any special experts retained by the Company and the
Subsidiary Guarantors in connection with any Registration Statement, but
excluding underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of Transfer Restricted Notes by a Holder.
Notwithstanding the foregoing, except as specifically provided above, the
Company and the Subsidiary Guarantors shall not be responsible for the fees and
expenses of the Initial Purchasers in connection with the Exchange Offer, or the
fees and expenses of counsel to the Initial Purchasers in connection therewith.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company which covers any of the Exchange Notes or Transfer Restricted Notes
pursuant to the provisions of this Agreement, and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission or any successor
agency or government body performing the functions currently performed by the
United States Securities and Exchange Commission.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2.2 hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2.2 of this Agreement which
covers Transfer Restricted Notes or Private Exchange Notes on an appropriate
form under Rule 415 under the 1933 Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"TIA" shall have the meaning set forth in Section 2.1 hereof.
"TRANSFER RESTRICTED NOTES" shall mean the Notes and, if issued, the
Private Exchange Notes; provided, however, that the Notes and, if issued, the
Private Exchange Notes, shall cease to be Transfer Restricted Notes when (i)
such Transfer Restricted Note has been exchanged by a person (other than a
Participating Broker-Dealer) for an Exchange Note in the Exchange Offer, (ii)
following the exchange by a Participating Broker-Dealer in the Exchange Offer of
a Transfer Restricted Note for an Exchange Note, the date on which such Exchange
Note is sold to a purchaser who received from such Participating Broker-Dealer
on or prior to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement, as amended or supplemented, (iii) such
Transfer Restricted Note has been effectively registered under the 1933 Act and
disposed of in accordance with the Shelf Registration Statement, (iv) such
Transfer Restricted Note is eligible for distribution to the public pursuant to
Rule 144(k) (or any similar provision then in force, but not Rule 144A) under
the 1933 Act, or (v) such Transfer Restricted Note ceases to be outstanding.
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"TRUSTEE" shall mean the trustee with respect to the Notes under the
Existing Indenture and the Indenture.
2. REGISTRATION UNDER THE 1933 ACT.
2.1 EXCHANGE OFFER. The Company and the Subsidiary Guarantors shall,
for the benefit of the Holders, at the Company's and Subsidiary Guarantors'
cost, (A) file the Exchange Offer Registration Statement with the SEC on or
prior to the 120th day following the Closing Date, which Exchange Offer
Registration Statement shall be on an appropriate form under the 1933 Act and
shall relate to a proposed Exchange Offer (and only to an Exchange Offer and not
to the registration of the offer or sale of any other securities) and the
issuance and delivery to the Holders who so elect, in exchange for the Transfer
Restricted Notes (other than Private Exchange Notes), of a like principal amount
of Exchange Notes, (B) use their best efforts to have the Exchange Offer
Registration Statement declared effective by the SEC under the 1933 Act on or
prior to the 180th day following the Closing Date, (C) commence the Exchange
Offer promptly after the Exchange Offer Registration Statement is declared
effective, (D) keep the Exchange Offer open for acceptance for not less than 20
business days after notice thereof is mailed to Holders (or longer if required
by applicable law) (such period referred to herein as the "EXCHANGE PERIOD") and
consummate the Exchange Offer no later than 30 business days following the date
on which the Exchange Offer Registration Statement is declared effective by the
SEC, (E) use their best efforts to issue, promptly after the end of the Exchange
Period, Exchange Notes in exchange for all Notes that have been properly
tendered for exchange during the Exchange Period and (F) use their best efforts
to maintain the effectiveness of the Exchange Offer Registration Statement
during the Exchange Period and thereafter until such time as the Company has
issued Exchange Notes in exchange for all Transfer Restricted Notes that have
been properly tendered for exchange during the Exchange Period. The Exchange
Notes will be issued under the Existing Indenture, and will be of the same class
and series, and have the same CUSIP (Committee on Uniform Securities
Identification Procedure) number, as the Company's $600,000,000 million
aggregate principal amount 6% Senior Notes due 2009 issued under the Existing
Indenture (the "EXISTING NOTES"). Upon the effectiveness of the Exchange Offer
Registration Statement, the Company and the Subsidiary Guarantors shall promptly
commence the Exchange Offer, it being the objective of such Exchange Offer to
enable each Holder eligible and electing to exchange Transfer Restricted Notes
for Exchange Notes (assuming that such Holder makes certain representations and
warranties to the Company, including representations that (a) it is not an
affiliate of the Company within the meaning of Rule 405 under the 1933 Act, (b)
any Exchange Notes to be received by it will be acquired in the ordinary course
of its business, (c) if such Holder is not a broker-dealer, that it is not
engaged in, and does not intend to engage in, the distribution of the Exchange
Notes, (d) if such Holder is a broker-dealer that will receive Exchange Notes
for its own account in exchange for Transfer Restricted Notes acquired as a
result of market-making or other trading activities, that such broker-dealer
will deliver a prospectus in connection with any resale of such Exchange Notes,
and (e) it has no arrangements or understandings with any Person to participate
in the distribution of the Transfer Restricted Notes or the Exchange Notes) to
transfer such Exchange Notes from and after their receipt without any
limitations or restrictions under the 1933 Act and under state securities or
blue sky laws. In connection with the Exchange Offer, the Company and the
Subsidiary Guarantors shall additionally:
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(a) utilize the services of the Depositary for the Exchange Offer;
(b) permit Holders to withdraw tendered Transfer Restricted Notes at
any time prior to 5:00 p.m. (Eastern Standard 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 Transfer Restricted Notes
delivered for exchange, and a statement that such Holder is withdrawing
such Holder's election to have such Notes exchanged;
(c) notify each Holder that any Transfer Restricted Notes not
tendered will remain outstanding and continue to accrue interest, but will
not retain any rights under this Agreement (except in the case of the
Initial Purchasers and Participating Broker-Dealers as provided herein);
and
(d) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer, the Initial Purchasers
hold any Notes acquired by them and having the status of an unsold allotment in
the initial distribution, the Company and the Subsidiary Guarantors upon the
request of any Initial Purchaser shall, simultaneously with the delivery of the
Exchange Notes in the Exchange Offer, issue and deliver to such Initial
Purchaser in exchange (the "PRIVATE EXCHANGE") for the Notes held by such
Initial Purchaser, a like principal amount of debt securities of the Company
that are identical (except that such securities shall bear appropriate transfer
restrictions) to the Exchange Notes (the "PRIVATE EXCHANGE NOTES") and
guaranteed by the Subsidiary Guarantors. In the event of a Private Exchange (i)
the Company and the Trustee shall enter into a supplemental indenture to the
Existing Indenture to provide for reasonable and customary transfer restrictions
on the Private Exchange Notes substantially similar to the restrictions set
forth in Section 2.06 of the Indenture or (ii) if the Company and the Trustee
determine, at their reasonable discretion, that entering into the foregoing
supplemental indenture will require the consent of the holders of any note
issued under the Existing Indenture (other than the Initial Purchasers who will
hold the Private Exchange Notes), the Company and the Initial Purchasers who
would be issued such Private Exchange Notes shall take such other actions (which
may include the entering into an agreement), not requiring the consent of any
holder of any note issued under the Existing Indenture (other than the Initial
Purchasers who will hold the Private Exchange Notes), to provide that the
Private Exchange Notes shall be subject to reasonable and customary restrictions
on transfer substantially similar to the restrictions set forth in Section 2.06
of the Indenture.
The Exchange Notes and the Private Exchange Notes shall be issued under
(i) the Existing Indenture or (ii) an indenture identical in all material
respects to the Existing Indenture and which, in either case, has been qualified
under the Trust Indenture Act of 1939, as amended (the "TIA"), or is exempt from
such qualification and shall provide that the Exchange Notes shall not be
subject to the transfer restrictions under the 1933 Act (other than with respect
to the Prospectus delivery requirements for Participating Broker-Dealers) but
that the Private Exchange Notes shall be subject to such transfer restrictions.
The Exchange Notes, the Private Exchange Notes and the Existing Notes shall vote
and consent together on all matters as one class and none of the Exchange Notes,
the Private Exchange Notes or the Existing Notes will have the right to
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vote or consent as a separate class on any matter. The Private Exchange Notes
shall be of the same series as the Exchange Notes. The Company and the
Subsidiary Guarantors shall not have any liability under this Agreement solely
as a result of such Private Exchange Notes not bearing the same CUSIP number as
the Exchange Notes.
As soon as practicable after the close of the Exchange Offer and/or
the Private Exchange, as the case may be, the Company and the Subsidiary
Guarantors shall:
(i) accept for exchange all Transfer Restricted Notes duly tendered
and not validly withdrawn pursuant to the Exchange Offer in accordance
with the terms of the Exchange Offer Registration Statement and the letter
of transmittal which shall be an exhibit thereto;
(ii) accept for exchange all Notes properly tendered pursuant to the
Private Exchange;
(iii) deliver to the Trustee for cancellation all Transfer
Restricted Notes so accepted for exchange; and
(iv) cause the Trustee promptly to authenticate and deliver Exchange
Notes or Private Exchange Notes, as the case may be, to each Holder of
Transfer Restricted Notes so accepted for exchange in a principal amount
equal to the principal amount of the Transfer Restricted Notes of such
Holder so accepted for exchange.
Interest on each Exchange Note and Private Exchange Note, including
Additional Interest, will accrue (a) from the later of (i) the last date on
which interest was paid on the Transfer Restricted Notes surrendered in exchange
therefor or (ii) if the Transfer Restricted Notes are surrendered for exchange
on a date in a period which includes the record date for an interest payment
date to occur on or after the date of such exchange and as to which interest
will be paid, the date of such interest payment date or (b) if no interest has
been paid on the Transfer Restricted Notes, from the Closing Date. The Company
shall inform the Initial Purchasers of the names and addresses of the Holders to
whom the Exchange Offer is made, and the Initial Purchasers shall have the
right, but not the obligation, to contact such Holders and otherwise facilitate
the tender of Transfer Restricted Notes in the Exchange Offer.
2.2 SHELF REGISTRATION. If,
(i) the Company or any Subsidiary Guarantor is not permitted to file
the Exchange Offer Registration Statement or to consummate the Exchange
Offer because the Exchange Offer is not permitted by applicable law or SEC
rules and regulations,
(ii) for any other reason the Exchange Offer is not consummated
within 222 days after the Closing Date,
(iii) any Holder notifies the Company within 30 days following the
date upon which the Exchange Offer Registration Statement is declared
effective that:
(1) such Holder is not entitled to participate in the Exchange
Offer,
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(2) such Holder may not resell or otherwise transfer the
Exchange 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 for such
resales by such Holder, or
(3) such Holder is a broker-dealer and owns Notes acquired
directly from the Company or an affiliate of the Company, or
(iv) the holders of a majority in aggregate principal amount of the
Transfer Restricted Notes are not eligible to participate in the Exchange
Offer and to receive Exchange Notes that they may resell to the public
without volume restrictions under the 1933 Act and the rules thereunder
and without similar restrictions under applicable blue sky or state
securities laws,
then in case of each of clauses (i) through (iv) the Company and the Subsidiary
Guarantors shall promptly deliver to the Holders and the Trustee written notice
thereof and shall, at their cost:
(a) file with the SEC as promptly as practicable (and, in any event
on or prior to the 60th day after such filing obligation arises) and
thereafter shall use their best efforts to cause to be declared effective
no later than 180 days after such filing obligation arises, a Shelf
Registration Statement relating to the offer and sale of the Transfer
Restricted Notes by the Holders from time to time in accordance with the
methods of distribution elected by the Holders of a majority in aggregate
principal amount of Transfer Restricted Notes participating in the Shelf
Registration and set forth in such Shelf Registration Statement; provided,
however, that, if the obligation to file the Shelf Registration Statement
arises because the Exchange Offer has not been consummated within 222 days
after the Closing Date, the Company and Subsidiary Guarantors shall use
their best efforts to file the Shelf Registration Statement as promptly as
practicable after such date, and in any event prior to the 253rd day
following the Closing Date,
(b) use their best efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended (including through
post-effective amendments on Form S-3 if the Company is eligible to use
such Form) in order to permit the Prospectus forming part thereof to be
usable by Holders for a period of two years from the date the Shelf
Registration Statement is declared effective by the SEC, or for such
shorter period that will terminate when all Transfer Restricted Notes
covered by the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement or cease to be outstanding or otherwise to be
Transfer Restricted Notes (the "EFFECTIVENESS PERIOD"); provided, however,
that the Effectiveness Period in respect of the Shelf Registration
Statement shall, upon written request to the Company, be extended to the
extent required to permit dealers to comply with the applicable prospectus
delivery requirements of Rule 174 under the 1933 Act and as otherwise
provided herein, and
(c) notwithstanding any other provisions hereof, use their best
efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming a part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (ii) any Shelf
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Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any Prospectus forming part of
any Shelf Registration Statement, and any supplement to such Prospectus
(as amended or supplemented from time to time), does not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements, in light of the circumstances under which
they were made, not misleading.
The Company and the Subsidiary Guarantors shall not permit any
securities other than Transfer Restricted Notes to be included in the Shelf
Registration Statement. The Company and the Subsidiary Guarantors further agree,
if necessary, to supplement or amend the Shelf Registration Statement, as
required by Section 3(b) below, and to furnish to the Holders of Transfer
Restricted Notes copies of any such supplement or amendment promptly after its
being used or filed with the SEC.
2.3 EXPENSES. The Company and the Subsidiary Guarantors shall pay
all Registration Expenses in connection with the registration pursuant to
Section 2.1 or 2.2. Each Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's Transfer Restricted Notes pursuant to the Shelf Registration
Statement.
2.4 EFFECTIVENESS.
(a) The Company and the Subsidiary Guarantors 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 the
Company or any Subsidiary Guarantor voluntarily takes any action that
would, or omits to take any action which omission would, result in any
such Registration Statement not being declared effective, or in the
Holders of Transfer Restricted Notes covered thereby not being able to
exchange or offer and sell such Transfer Restricted Notes during that
period as and to the extent contemplated hereby, unless such action is
required by applicable law, in each case other than under the
circumstances described in Sections 3(e)(iii), (iv), (v) or (vi) below.
(b) An Exchange Offer Registration Statement pursuant to Section 2.1
hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof
will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been
declared effective, the offering of Transfer Restricted Notes pursuant to
an Exchange Offer Registration Statement or a Shelf Registration Statement
is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement will not be effective during the period of such
interference, until the offering of Transfer Restricted Notes pursuant to
such Registration Statement may legally resume.
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2.5 ADDITIONAL INTEREST. In the event that either,
(a) the Exchange Offer Registration Statement is not filed with the
SEC on or prior to the 120th calendar day following the Closing Date, or a
Shelf Registration Statement is not filed with the SEC prior to the dates
specified for such filing in Section 2.2 hereof;
(b) the Exchange Offer Registration Statement has not been declared
effective by the SEC under the 1933 Act on or prior to the 180th calendar
day following the Closing Date, or a Shelf Registration Statement is not
declared effective by the SEC under the 1933 Act on or prior to the 180th
day after such filing obligation arises,
(c) the Exchange Offer is not consummated within 222 days following
the Closing Date,
(d) a Shelf Registration Statement is declared effective but
thereafter, during the period for which the Company and the Subsidiary
Guarantors are required to maintain the effectiveness of such Shelf
Registration Statement, it ceases to be effective or usable in connection
with the resale of the Notes covered by such Shelf Registration Statement,
or
(e) the Exchange Offer Registration Statement is declared effective,
but thereafter, during the Broker Prospectus Period, it ceases to be
effective (or the Company or any Subsidiary Guarantor restricts the use of
the prospectus included therein) (each such event referred to in these
clauses (a) through (e) above, a "REGISTRATION Default"),
then, the interest rate borne by the Transfer Restricted Notes shall be
increased by one-quarter of one percent (0.25%) per annum with respect to the
first 90-day period (or portion thereof) while a Registration Default is
continuing immediately following the occurrence of such Registration Default,
which rate will increase by an additional one quarter of one percent (0.25%) per
annum at the beginning of each subsequent 90-day period (or portion thereof)
while a Registration Default is continuing until all Registration Defaults have
been cured, provided that the maximum aggregate increase in the interest rate on
the Transfer Restricted Notes will in no event exceed one percent (1.00%) per
annum (the "ADDITIONAL INTEREST"). Following the cure of all Registration
Defaults the accrual of Additional Interest will cease and the interest rate on
the Transfer Restricted Notes will revert to the original rate. Notwithstanding
the foregoing, any Registration Default specified in clause (a), (b) or (c) of
this Section that relates to the Exchange Offer Registration Statement or the
Exchange Offer shall be deemed cured at such time as the Shelf Registration
Statement is declared effective by the SEC, or earlier upon the cure of the
Registration Default described therein.
If the Shelf Registration Statement is unusable by the Holders whose
Transfer Restricted Notes are covered thereby for any reason, and the aggregate
number of days in any consecutive twelve-month period for which the Shelf
Registration Statement shall not be usable exceeds 30 days in the aggregate,
then the interest rate borne by such Holders' Notes will be increased by
one-quarter of one percent (0.25%) per annum for the first 90-day period (or
portion thereof) beginning on the 31st day in any consecutive twelve-month
period that such Shelf Registration
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Statement ceases to be usable, which rate shall be increased by an additional
one-quarter of one percent (0.25%) per annum at the beginning of each subsequent
90-day period (or portion thereof) in any consecutive twelve-month period during
which the Shelf Registration Statement is unusable, provided that the maximum
aggregate increase in the interest rate on such Holder's Notes will in no event
exceed one percent (1.00%) per annum. Any amounts payable under this paragraph
shall also be deemed "ADDITIONAL INTEREST" for purposes of this Agreement. Upon
any such Shelf Registration Statement once again becoming usable, the interest
rate borne by the Notes will be reduced to the original interest rate if no
other Registration Default shall be continuing at such time. Additional Interest
shall be computed based on the actual number of days elapsed in each 90-day
period in which the Shelf Registration Statement is unusable.
The Company shall notify the Trustee within three business days after each
and every date on which an event occurs in respect of which Additional Interest
is required to be paid (an "EVENT DATE"). Any Additional Interest due shall be
payable on each interest payment date to the Holder of Notes with respect to
which Additional Interest is due and owing. Each obligation to pay Additional
Interest shall be deemed to accrue from and including the day following the
applicable Event Date.
3. REGISTRATION PROCEDURES.
In connection with the obligations of the Company and the Subsidiary
Guarantors with respect to Registration Statements pursuant to Sections 2.1 and
2.2 hereof, the Company and the Subsidiary Guarantors shall:
(a) prepare and file with the SEC a Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form
under the 1933 Act and the rules promulgated thereunder, which form (i)
shall be selected by the Company, (ii) shall, in the case of a Shelf
Registration, be available for the sale of the Transfer Restricted Notes
by the selling Holders thereof, (iii) shall comply as to form in all
material respects with the requirements of the applicable form and include
or incorporate by reference all financial statements required by the SEC
to be filed therewith or incorporated by reference therein, and (iv) shall
comply in all respects with the requirements of Regulation S-T under the
1933 Act;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under
applicable law to keep such Registration Statement effective for the
applicable period; and cause each Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provision then in force) under the
1933 Act and comply with the provisions of the 1933 Act, the 1934 Act and
the rules and regulations thereunder applicable to them with respect to
the disposition of all securities covered by each Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof (including sales by
any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Transfer Restricted Notes to be covered thereby, at least five business
days prior to filing, that a
11
Shelf Registration Statement with respect to such Transfer Restricted
Notes is being filed and advising such Holders that the distribution of
such Transfer Restricted Notes will be made in accordance with the method
selected by a majority in aggregate principal amount of the Holders of
Transfer Restricted Notes participating in the Shelf Registration; (ii)
furnish to each Holder of Transfer Restricted Notes to be covered thereby
and to each underwriter of an underwritten offering of Transfer Restricted
Notes, if any, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement
thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if
the Holder so requests, all exhibits in order to facilitate the public
sale or other disposition of the Transfer Restricted Notes; and (iii) do
hereby consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Transfer Restricted Notes in
connection with the offering and sale of the Transfer Restricted Notes
covered by the Prospectus or any amendment or supplement thereto;
(d) use their best efforts to register or qualify the Transfer
Restricted Notes under all applicable state securities or "blue sky" laws
of such jurisdictions as any Holder of Transfer Restricted Notes covered
by a Registration Statement and each underwriter of an underwritten
offering of Transfer Restricted Notes shall reasonably request by the time
the applicable Registration Statement is declared effective by the SEC,
and do any and all other acts and things which may be reasonably necessary
or advisable to enable each such Holder and underwriter to consummate the
disposition in each such jurisdiction of such Transfer Restricted Notes
owned by such Holder; provided, however, that the Company and the
Subsidiary Guarantors shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where they
would not otherwise be required to qualify but for this Section 3(d), or
(ii) take any action which would subject them to general service of
process or taxation in any such jurisdiction where they are not then so
subject;
(e) notify promptly each Holder of Transfer Restricted Notes under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Company that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below and, if requested by such Holder or
Participating Broker-Dealer, confirm such advice in writing promptly (i)
when a Registration Statement has become effective and when any
post-effective amendments and supplements to a Registration Statement have
become effective, (ii) of any request by the SEC or any state securities
authority for post-effective amendments and supplements to a Registration
Statement and Prospectus or for additional information after the
Registration Statement has become effective, (iii) of the issuance by the
SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) in the case of a Shelf Registration,
if, between the effective date of a Registration Statement and the closing
of any sale of Transfer Restricted Notes covered thereby, the
representations and warranties of the Company and the Subsidiary
Guarantors contained in any underwriting agreement, securities sales
agreement or other similar agreement, if any, relating to the offering
cease to be true and correct in all material respects, (v) of the
happening of any event or the discovery of any facts during the period a
Shelf Registration Statement is effective which makes any statement made
in
12
such Registration Statement or the related Prospectus untrue in any
material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements
therein not misleading, (vi) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Transfer Restricted Notes or the Exchange Notes, as the case may be, for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (vii) of any determination by the Company
that a post-effective amendment to such Registration Statement would be
appropriate;
(f) 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 in customary form, and which
shall contain a summary statement of the positions taken or policies made
by the staff of the SEC with respect to the potential "underwriter" status
of any broker-dealer that holds Transfer Restricted Notes 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 Notes 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, represent the prevailing views of the staff of the SEC,
including a statement that any such broker-dealer who receives Exchange
Notes for Transfer Restricted Notes pursuant to the Exchange Offer may be
deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such
Exchange Notes, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Company the notice referred to in Section 3(e), without
charge, as many copies of each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary prospectus, and any
amendment or supplement thereto, as such Participating Broker-Dealer may
reasonably request, (iii) do hereby consent to the use of the Prospectus
forming part of the Exchange Offer Registration Statement or any amendment
or supplement thereto, by any Person subject to the prospectus delivery
requirements of the SEC, including all Participating Broker-Dealers, in
connection with the sale or transfer of the Exchange Notes covered by the
Prospectus or any amendment or supplement thereto, and (iv) include in the
transmittal letter or similar documentation to be executed by an exchange
offeree in order to participate in the Exchange Offer (x) the following
provision:
"If the exchange offeree is a broker-dealer holding Transfer
Restricted Notes acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of Exchange Notes received in respect of
such Transfer Restricted Notes pursuant to the Exchange Offer;" and
(y) a statement to the effect that by a broker-dealer's making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Transfer Restricted Notes, the
broker-dealer will not be deemed to admit that it is an underwriter within
the meaning of the 1933 Act;
13
(g) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(h) in the case of a Shelf Registration, furnish to each Holder of
Transfer Restricted Notes, and each underwriter, if any, without charge,
at least one conformed copy of each Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules (without documents incorporated therein by reference and all
exhibits thereto, unless requested);
(i) in the case of a Shelf Registration, cooperate with the selling
Holders of Transfer Restricted Notes to facilitate the timely preparation
and delivery of certificates representing Transfer Restricted Notes to be
sold and not bearing any restrictive legends; and enable such Transfer
Restricted Notes to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling
Holders or the underwriters, if any, may reasonably request at least three
business days prior to the closing of any sale of Transfer Restricted
Notes;
(j) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Sections
3(e)(v) and 3(e)(vi) hereof, as promptly as practicable after the
occurrence of such an event, use their best efforts to prepare a
supplement or post-effective amendment to the Registration Statement or
the related Prospectus or any document incorporated therein by reference
or file any other required document so that, as thereafter delivered to
the purchasers of the Transfer Restricted Notes or Participating
Broker-Dealers, such Prospectus will not contain at the time of such
delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or will remain so
qualified. At such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted
material fact, the Company and the Subsidiary Guarantors agree promptly to
notify each Holder of such determination and to furnish each Holder such
number of copies of the Prospectus as amended or supplemented, as such
Holder may reasonably request;
(k) in the case of a Shelf Registration, a reasonable time prior to
the filing of any Registration Statement, any Prospectus, any amendment to
a Registration Statement or amendment or supplement to a Prospectus,
provide copies of such document to the Initial Purchasers on behalf of
such Holders; and make representatives of the Company and the Subsidiary
Guarantors as shall be reasonably requested by the Holders of Transfer
Restricted Notes, or the Initial Purchasers on behalf of such Holders,
available for discussion of such document;
(1) obtain a CUSIP number for all Exchange Notes, Private Exchange
Notes or Transfer Restricted Notes, as the case may be (with the
understanding that the CUSIP number for the Exchange Notes may be the same
as the CUSIP number for an existing class of debt securities issued by the
Company under the Existing Indenture), not later than the effective date
of a Registration Statement, and provide the Trustee with
14
certificates for the Exchange Notes, Private Exchange Notes or the
Transfer Restricted Notes, as the case may be, in a form eligible for
deposit with the Depositary;
(m) (i) in the case of a Shelf Registration, cause the Indenture to
be qualified under the TIA in connection with the registration of the
Transfer Restricted Notes, and, in the case of an Exchange Offer
Registration, cause or maintain, as the case may be, the Existing
Indenture to be qualified under the TIA in connection with the
registration of the Exchange Notes, (ii) cooperate with the Trustee and
the Holders to effect such changes to the Existing Indenture and/or the
Indenture, as applicable, as may be required for the Existing Indenture
and, if applicable, the Indenture to be, or continue to be, so qualified
in accordance with the terms of the TIA and (iii) execute, and use their
best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Existing Indenture and/or
the Indenture, as applicable, to be so qualified in a timely manner;
(n) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and
appropriate actions in order to expedite or facilitate the disposition of
such Transfer Restricted Notes and if so requested by the holders of such
Transfer Restricted Notes and in such connection whether or not an
underwriting agreement is entered into and whether or not the registration
is an underwritten registration:
(i) make such representations and warranties to the Holders of
such Transfer Restricted Notes and the underwriters, if any, as the
Company and the Subsidiary Guarantors are able to make, in form,
substance and scope as are customarily made by issuers to
underwriters in similar underwritten offerings as may be reasonably
requested by them;
(ii) in connection with an underwritten registration, obtain
opinions of counsel to the Company and the Subsidiary Guarantors and
updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the holders of a majority in principal
amount of the Transfer Restricted Notes being sold) addressed to
each selling Holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in sales of
securities or underwritten offerings and such other matters as may
be reasonably requested by such Holders and underwriters;
(iii) in connection with an underwritten registration, obtain
"cold comfort" letters and updates thereof from the Company's and
the Subsidiary Guarantor's independent certified public accountants
(and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements are, or are
required to be, included in the Registration Statement) addressed to
the underwriters, if any, and use reasonable efforts to have such
letter addressed to the selling Holders of Transfer Restricted Notes
(to the extent consistent with
15
Statement on Auditing Standards No. 72 of the American Institute of
Certified Public Accountants), such letters to be in customary form
and covering matters of the type customarily covered in "cold
comfort" letters to underwriters in connection with similar
underwritten offerings;
(iv) enter into a securities sales agreement with the Holders
and an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Transfer Restricted Notes, which agreement
shall be in form, substance and scope customary for similar
offerings;
(v) if an underwriting agreement is entered into, cause the
same to set forth indemnification provisions and procedures
substantially equivalent to the indemnification provisions and
procedures set forth in Section 4 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to
said Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of
transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
offerings to the Holders of a majority in principal amount of the
Transfer Restricted Notes being sold and the managing underwriters,
if any.
The above shall be done at (i) the effectiveness of such Shelf Registration
Statement (and each post-effective amendment thereto) and (ii) each closing
under any underwriting or similar agreement as and to the extent required
thereunder;
(o) in the case of a Shelf Registration or if a Prospectus is
required to be delivered by any Participating Broker-Dealer in the case of
an Exchange Offer, make available for inspection by representatives of the
Holders of the Transfer Restricted Notes, any underwriters participating
in any disposition pursuant to a Shelf Registration Statement, any
Participating Broker-Dealer and any counsel or accountant retained by any
of the foregoing, all non-confidential financial and other records,
pertinent corporate documents and properties of the Company or any
Subsidiary Guarantor reasonably requested by any such persons, and cause
the respective officers, directors, employees, and any other agents of the
Company and the Subsidiary Guarantors to supply all information reasonably
requested by any such representative, underwriter, special counsel or
accountant in connection with a Registration Statement, and make such
representatives of the Company and the Subsidiary Guarantors available for
discussion of such documents as shall be reasonably requested by such
persons;
(i) if so requested by the Initial Purchasers, in the case of
an Exchange Offer Registration Statement, a reasonable time prior to
filing of any Exchange Offer Registration Statement, any Prospectus
forming a part thereof, any amendment to an Exchange Offer
Registration Statement or amendment or supplement to such
Prospectus, provide copies of such document to the Initial
Purchasers and to counsel to the Holders of Transfer Restricted
Notes; and
16
(ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus
forming a part thereof, any amendment to such Shelf Registration
Statement or amendment or supplement to such Prospectus, provide
copies of such documents to the Initial Purchasers, if so requested,
to the Holders of Transfer Restricted Notes to be covered thereby,
to counsel for such Holders designated by them and to the
underwriter or underwriters of an underwritten offering of such
Transfer Restricted Notes, if any, make such changes in any such
document prior to the filing thereof relating to such Holders or
such Transfer Restricted Notes as the counsel to the Holders or the
underwriter or underwriters reasonably request and not file any such
document in a form to which the holders of a majority in aggregate
principal amount of Transfer Restricted Notes covered by such Shelf
Registration Statement, counsel for such Holders of the Transfer
Restricted Notes covered by such Shelf Registration Statement, or
any underwriter shall not have previously been advised and furnished
a copy of or to which the Majority Holders of Transfer Restricted
Notes covered by such Shelf Registration Statement, counsel to such
Holders of Transfer Restricted Notes or any underwriter shall
reasonably object, and make the representatives of the Company and
the Subsidiary Guarantors available for discussion of such document
as shall be reasonably requested by such Holders of Transfer
Restricted Notes, the counsel for such Holders of Transfer
Restricted Notes or any underwriter;
(p) in the case of a Shelf Registration, use their best efforts to
cause all Transfer Restricted Notes to be listed on any securities
exchange on which similar debt securities issued by the Company and the
Subsidiary Guarantors are then listed if requested by the Holders of a
majority in aggregate principal amount of such Transfer Restricted
Securities covered by such Shelf Registration Statement, or if requested
by the underwriter or underwriters of an underwritten offering of Transfer
Restricted Notes, if any;
(q) in the case of a Shelf Registration, use their best efforts to
cause the Transfer Restricted Notes to be rated by the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Notes covered by such Shelf
Registration Statement, or if requested by the underwriter or underwriters
of an underwritten offering of Transfer Restricted Notes, if any;
(r) otherwise comply with all applicable rules and regulations of
the SEC and make available to their security holders, as soon as
reasonably practicable, an earnings statement covering at least 12 months
which shall satisfy the provisions of Section 11 (a) of the 1933 Act and
Rule 158 thereunder; and
(s) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any
due diligence investigation by any underwriter and its counsel (including
any "qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD).
17
In the case of a Shelf Registration Statement, the Company and the
Subsidiary Guarantors may (as a condition to such Holder's participation in the
Shelf Registration) require each Holder of Transfer Restricted Notes to furnish
to the Company and Subsidiary Guarantors such information regarding the Holder
and the proposed distribution by such Holder of such Transfer Restricted Notes
as the Company and Subsidiary Guarantors may from time to time reasonably
request in writing.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company or any Subsidiary Guarantor of the
happening of any event or the discovery of any facts, each of the kind described
in Section 3(e)(v) hereof, such Holder will forthwith discontinue disposition of
Transfer Restricted Notes pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(k) hereof, and, if so directed by the Company and
Subsidiary Guarantors, such Holder will deliver to the Company and Subsidiary
Guarantors (at its expense) all copies in such Holder's possession, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Notes current at the time of receipt of such
notice.
If any of the Transfer Restricted Notes covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage such offering will be
selected by the Majority Holders of such Transfer Restricted Notes to be
included in such offering and shall be acceptable to the Company and Subsidiary
Guarantors. No Holder of Transfer Restricted Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Transfer Restricted Notes on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
4. INDEMNIFICATION; CONTRIBUTION.
(a) The Company and the Subsidiary Guarantors agree to indemnify,
jointly and severally, and hold harmless the Initial Purchasers and each
of their affiliates and any other Person under common control with the
Initial Purchasers, each Holder, each Participating Broker-Dealer, each
Person who participates as an underwriter (any such Person being an
"UNDERWRITER") and each Person, if any, who controls any Holder or
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto)
pursuant to which Exchange Notes or Transfer Restricted Notes were
registered under the 1933 Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to
make the statements therein not misleading, or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto)
or the omission or alleged omission therefrom
18
of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 4(d) below) any such
settlement is effected with the written consent of the Company and
the Subsidiary Guarantors; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any
indemnified party), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information concerning any Holder or
Underwriter furnished to the Company by the Holder or Underwriter expressly for
use in a Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto); and provided, further, that the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Holder or Participating Broker-Dealer from whom the person asserting any such
losses, claims, damages or liabilities purchased the Notes concerned, to the
extent that a prospectus relating to such Notes was required to be delivered by
such Holder or Participating Broker-Dealer under the 1933 Act in connection with
such purchase and any such loss, claim, damage or liability of such Holder or
Participating Broker-Dealer results from the fact that there was not sent or
given to such person, at or prior to the sale of such Notes to such person, a
copy of such prospectus if the Company had previously furnished copies thereof
to such Holder or Participating Broker-Dealer.
(b) Each Holder, severally, but not jointly, agrees to indemnify and
hold harmless the Company, the Subsidiary Guarantors, each Underwriter and
the other selling Holders, and each of their respective directors and
officers, and each Person, if any, who controls the Company, any
Subsidiary Guarantor, any Underwriter or any other selling Holder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described
in the indemnity contained in Section 4(a) hereof, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Shelf Registration
19
Statement (or any amendment thereto) or any Prospectus included therein
(or any amendment or supplement thereto) in reliance upon and in
conformity with written information with respect to such Holder furnished
to the Company and the Subsidiary Guarantors by such Holder expressly for
use in the Shelf Registration Statement (or any amendment thereto) or such
Prospectus (or any amendment or supplement thereto); provided, however,
that no such Holder shall be liable for any claims hereunder in excess of
the amount of net proceeds received by such Holder from the sale of
Transfer Restricted Notes pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure so to notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent
it is not materially prejudiced as a result thereof and in any event shall
not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party may participate
at its own expense in the defense of such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of
the indemnified party) also be counsel to the indemnified party. In no
event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution
could be sought under this Section 4 (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this Section 4 is for any
reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative fault of the Company and the
Subsidiary Guarantors, on the one hand, and the Holders and the Initial
Purchasers, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative fault of the Company and the Subsidiary Guarantors on
the one hand and the Holders and the Initial Purchasers on the other hand
shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of
20
a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company, the Subsidiary Guarantors,
the Holders or the Initial Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Subsidiary Guarantors, the Holders and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 4. The
aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 4
shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue or alleged untrue statement or omission or alleged
omission.
No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Company or any Subsidiary
Guarantor, and each Person, if any, who controls the Company or any Subsidiary
Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company and the
Subsidiary Guarantors. The Initial Purchasers' respective obligations to
contribute pursuant to this Section 4 are several in proportion to the principal
amount of Notes set forth opposite their respective names in Schedule A to the
Purchase Agreement and not joint. Notwithstanding the provisions of this Section
4, in no event shall a Holder be required to contribute any amount in excess of
the amount by which the total price at which all of the Notes sold by such
Holder exceeds the amount of any damages that such Holder has otherwise been
required to pay under Section 4(b) hereof.
5. MISCELLANEOUS.
5.1 RULE 144 AND RULE 144A. For so long as the Company and the
Subsidiary Guarantors are subject to the reporting requirements of Section 13 or
15 of the 1934 Act, the Company and the Subsidiary Guarantors covenant that they
will file and furnish the reports required to be filed by them under the 1933
Act and Section 13(a) or 15(d) of the 1934 Act and the rules and regulations
adopted by the SEC thereunder. If the Company and the Subsidiary Guarantors
cease to be so required to file and furnish such reports, the Company and
Subsidiary Guarantors covenant that they will upon the request of any Holder of
Transfer Restricted Notes (a) make publicly available such information as is
necessary to permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver
such information to a prospective purchaser as is necessary to permit sales
pursuant to Rule 144A under the 1933 Act and take such further
21
action as any Holder of Transfer Restricted Notes 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
Transfer Restricted Notes without registration under the 1933 Act within the
limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act,
as such Rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Transfer Restricted Notes, the Company and the Subsidiary Guarantors will
deliver to such Holder a written statement as to whether they have complied with
such requirements.
5.2 NO INCONSISTENT AGREEMENTS. The Company and the Subsidiary
Guarantors have not entered into, and the Company and the Subsidiary Guarantors
will not after the date of this Agreement enter into, any agreement which is
inconsistent with the rights granted to the Holders of Transfer Restricted Notes
in this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not and will not for the term of this
Agreement in any way conflict with the rights granted to the holders of the
Company's or Subsidiary Guarantors' other issued and outstanding securities
under any such agreements.
5.3 AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company and the Subsidiary Guarantors have obtained
the written consent of Holders of at least a majority in aggregate principal
amount of the outstanding Transfer Restricted Notes affected by such amendment,
modification, supplement, waiver or departure.
5.4 NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 5.4, which address initially, and until so changed, is the address set
forth in the Purchase Agreement with respect to the Initial Purchasers; and (b)
if to the Company and the Subsidiary Guarantors, initially at the Company's
address set forth in the Purchase Agreement, and thereafter at such other
address of which notice is given in accordance with the provisions of this
Section 5.4.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two business days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and on the next
business day if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the
Existing Indenture and the Indenture, as applicable, at the address specified
therein.
5.5 SUCCESSOR AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without
22
limitation and without the need for an express assignment, subsequent Holders;
provided that nothing herein shall be deemed to permit any assignment, transfer
or other disposition of Transfer Restricted Notes in violation of the terms of
the Purchase Agreement or the Existing Indenture or the Indenture, as
applicable. If any transferee of any Holder shall acquire Transfer Restricted
Notes, in any manner, whether by operation of law or otherwise, such Transfer
Restricted Notes shall be held subject to all of the terms of this Agreement,
and by taking and holding such Transfer Restricted Notes such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
person shall be entitled to receive the benefits hereof.
5.6 THIRD PARTY BENEFICIARIES. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Transfer Restricted Notes) shall be third
party beneficiaries to the agreements made hereunder between the Company and the
Subsidiary Guarantors, on the one hand, and the Holders, on the other hand, and
shall have the right to enforce such agreements directly to the extent they deem
such enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder. Each Holder of Transfer Restricted Notes shall be a third
party beneficiary to the agreements made hereunder between the Company and the
Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, and shall have the right to enforce such agreements directly to the extent
it deems such enforcement necessary or advisable to protect its rights
hereunder.
5.7 SPECIFIC ENFORCEMENT. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company and the Subsidiary
Guarantors acknowledge that any failure by the Company or the Subsidiary
Guarantors to comply with their obligations under Sections 2.1 through 2.4
hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it would not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Company's and Subsidiary
Guarantors' obligations under Sections 2.1 through 2.4 hereof.
5.8 RESTRICTION ON RESALES. Until the expiration of two years after
the original issuance of the Notes and the Guarantees, the Company and the
Subsidiary Guarantors will not, and will cause their "affiliates" (as such term
is defined in Rule 144(a)(1) under the 1933 Act) not to, resell any Notes and
Guarantees which are "restricted securities" (as such term is defined under Rule
144(a)(3) under the 1933 Act) that have been reacquired by any of them and shall
immediately upon any purchase of any such Notes and Subsidiary Guarantees submit
such Notes and Subsidiary Guarantees to the Trustee for cancellation.
5.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
5.10 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
23
5.11 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the state of Nevada without regard to
the principles of conflict of laws thereof.
5.12 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
5.13 AGREEMENT REGARDING TRACINDA. The Initial Purchasers hereby
agree that in the event (i) there is any breach or default or alleged breach or
default by the Company under this Agreement or (ii) the Initial Purchasers have
or may have any claim arising from or relating to the terms hereof, the Initial
Purchasers shall not commence any lawsuit or otherwise seek to impose any
liability whatsoever against Kirk Kerkorian or Tracinda Corporation
(collectively, "TRACINDA"), unless Tracinda shall have commenced a lawsuit or
otherwise initiated any claim against the Initial Purchasers arising from or
relating to this Agreement (a "TRACINDA ACTION"). The Initial Purchasers hereby
further agree that unless a Tracinda Action has been commenced: (i) Tracinda
shall not have any liability whatsoever with respect to this Agreement or any
matters relating to or arising from this Agreement, including any alleged breach
of or default under this Agreement by the Company; and (ii) the Initial
Purchasers shall not assert or permit any party claiming through it to assert a
claim or impose any liability against Tracinda as to any matter or thing arising
out of or relating to this Agreement or any alleged breach or default under this
Agreement by the Company. In addition, the Initial Purchasers agree that
Tracinda is not a party to this Agreement.
[signature page follows]
24
Exhibit 4.2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
MGM MIRAGE,
a Delaware corporation
By: /s/ Bryan L. Wright
------------------------------------------
Name: Bryan Wright
Title: Vice President - Assistant General
Counsel and Assistant Secretary
Joined in and agreed to and accepted by the
following Subsidiary Guarantors as of the date first above written:
AC Holding Corp., a Nevada corporation
AC Holding Corp. II, a Nevada corporation
Beau Rivage Distribution Corp., a Mississippi corporation
Beau Rivage Resorts, Inc., a Mississippi corporation
Bellagio, LLC, a Nevada limited liability company
Bellagio II, LLC, a Nevada limited liability company
Boardwalk Casino, Inc., a Nevada corporation
Bungalow, Inc., a Mississippi corporation
Country Star Las Vegas, LLC, a Nevada limited liability company
Destron, Inc., a Nevada corporation
EGARIM, Inc., an Alabama corporation
Grand Laundry, Inc., a Nevada corporation
LV Concrete Corp., a Nevada corporation
M.I.R. Travel, a Nevada corporation
MAC, CORP., a New Jersey corporation
Metropolitan Marketing, LLC, a Nevada limited liability company
MGM Grand Atlantic City, Inc., a New Jersey corporation
MGM Grand Condominiums, LLC, a Nevada limited liability company
MGM Grand Detroit, Inc., a Delaware corporation
MGM Grand Hotel, LLC, a Nevada limited liability company
MGM Grand New York, LLC, a Nevada limited liability company
MGM Grand Resorts, LLC, a Nevada limited liability company
MGM MIRAGE Advertising, Inc., a Nevada corporation
MGM MIRAGE Acquisition Co. # 61, a Nevada corporation
MGM MIRAGE Aviation Corp., a Nevada corporation
MGM MIRAGE Corporate Services, a Nevada corporation
MGM MIRAGE Design Group, a Nevada Corporation
MGM MIRAGE Development, Inc., a Nevada corporation
MGM MIRAGE Entertainment and Sports, a Nevada corporation
MGM MIRAGE International, a Nevada corporation
MGM MIRAGE Manufacturing Corp., a Nevada corporation
MGM MIRAGE Operations, Inc., a Nevada corporation
MGM MIRAGE Retail, a Nevada corporation
MH, Inc., a Nevada corporation
Mirage Laundry Services Corp., a Nevada corporation
Mirage Leasing Corp., a Nevada corporation
Mirage Resorts, Incorporated, a Nevada corporation
MMNY Land Company, Inc., a New York corporation
MRGS Corp., a Nevada corporation
New PRMA Las Vegas, Inc., a Nevada corporation
New York-New York Hotel & Casino, LLC, a Nevada limited liability company
New York-New York Tower, LLC, a Nevada limited liability company
PRMA Land Development Company, a Nevada corporation
PRMA, LLC, a Nevada limited liability company
Restaurant Ventures of Nevada, Inc., a Nevada corporation
The April Cook Companies, a Nevada corporation
The Mirage Casino-Hotel, a Nevada corporation
The Primadonna Company, LLC, a Nevada limited liability company
Treasure Island Corp., a Nevada corporation
VidiAd, a Nevada corporation
By: /s/ Bryan L. Wright
----------------------------------------------
Name: Bryan Wright
Title: Assistant Secretary
CONFIRMED AND ACCEPTED, as of the date first above written:
J.P. MORGAN SECURITIES INC.
By: /s/ Thomas Bergen
-------------------------------------
Name: Thomas Bergen
Title: Vice President
For itself and as representative of the other Initial Purchasers
S-2
SCHEDULE A
- --------------------------------------
INITIAL PURCHASER
- --------------------------------------
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Barclays Capital Inc.
Wachovia Capital Markets, LLC
Banc of America Securities LLC
Citigroup Global Markets Inc.
Deutsche Bank Securities Inc.
Wells Fargo Securities, LLC
Greenwich Capital Markets, Inc.
Commerzbank Capital Markets Corp.
Scotia Capital (USA) Inc.
SG Americas Securities, LLC
BNP Paribas Securities Corp.
Daiwa Securities SMBC Europe Limited
Piper Jaffray & Co.
S-3