EXHIBIT 1.1
[Conformed Copy]
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REGISTRATION RIGHTS AGREEMENT
Dated as of February 23, 1999
among
LOWE'S COMPANIES, INC.
and
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.,
as the Initial Purchasers
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of February 23, 1999, by and among LOWE'S COMPANIES, INC., a
North Carolina corporation (the "Company"), and MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, GOLDMAN, SACHS & CO., and LEHMAN BROTHERS INC.
(collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated
February 18, 1999 by and among the Company and the Initial Purchasers (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $400,000,000 aggregate principal amount of the Company's 6 1/2%
Debentures due March 15, 2029 (the "Debentures"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the Initial Purchasers' obligations thereunder, the Company has
agreed to provide to the Initial Purchasers and their respective direct and
indirect transferees and assigns the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized
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defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
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to time, and the rules and regulations of the SEC promulgated thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
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from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"Closing Time" shall mean the Closing Time as defined in the Purchase
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Agreement.
"Company" shall have the meaning set forth in the preamble and also
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includes the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
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depositary appointed by the Company; provided, however, that any such
depositary must at all times have an address in the Borough of Manhattan,
in The City of New York.
"Exchange Debentures" shall mean the 6 1/2% Debentures Due 2029 issued
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by the Company under the Indenture, containing terms identical to the
Debentures (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the
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Debentures or, if no such interest has been paid, from the Closing Time,
(ii) the transfer restrictions thereon shall be eliminated and (iii)
certain provisions relating to an increase in the stated rate of interest
thereon shall be eliminated) to be offered to Holders of Registrable
Debentures in exchange for Registrable Debentures pursuant to the Exchange
Offer.
"Exchange Offer" shall mean the exchange offer by the Company of
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Exchange Debentures for Registrable Debentures pursuant to Section 2(a)
hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
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Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
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registration statement on Form S-4 (or, if applicable, on another
appropriate form), pursuant to which registration statement the Company
shall offer to exchange the Registrable Debentures for Exchange Debentures,
and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Holders" shall mean the Initial Purchasers, for so long as they own
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any Registrable Debentures, and each of their respective successors,
assigns and direct and indirect transferees who become registered owners of
Registrable Debentures under the Indenture.
"Indenture" shall mean the Amended and Restated Indenture dated as of
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December 1, 1995 by and between the Company and The First National Bank of
Chicago, as trustee, as amended by the First Supplemental Indenture dated
as of February 23, 1999, between the Company and the Trustee, in each case
relating to the Debentures and the Exchange Debentures and as the same may
be amended and supplemented from time to time in accordance with the terms
thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble
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of this Agreement.
"Majority Holders" shall mean the Holders of a majority of the
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aggregate principal amount of Registrable Debentures outstanding; provided
that whenever the consent or approval of Holders of a specified percentage
of Registrable Debentures is required hereunder, Registrable Debentures
held by the Company or any of its affiliates (as such term is defined in
Rule 405 under the 1933 Act) (other than the Initial Purchasers or
subsequent holders of Registrable Debentures if such subsequent holders are
deemed to be such affiliates solely by reason of their holding of such
Registrable Debentures)
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shall be disregarded in determining whether such consent or approval was
given by the Holders of such required percentage or amount.
"NASD" shall mean the National Association of Securities Dealers, Inc.
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"Participating Broker-Dealer" shall have the meaning set forth in
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Section 3(f).
"Person" shall mean an individual, partnership, joint venture, limited
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liability company, corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
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Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Debentures 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
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of this Agreement.
"Registrable Debentures" shall mean the Debentures; provided, however,
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that the Debentures shall cease to be Registrable Debentures when (i) a
Registration Statement with respect to such Debentures shall have been
declared effective under the 1933 Act and such Debentures shall have been
disposed of pursuant to such Registration Statement, (ii) such Debentures
shall have been sold to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the 1933 Act, (iii) such
Debentures shall have ceased to be outstanding or (iv) such Debentures have
been exchanged for Exchange Debentures upon consummation of the Exchange
Offer.
"Registration Expenses" shall mean any and all expenses incident to
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performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or NASD registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state or other 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 state or other
securities or blue sky qualification of any of the Exchange Debentures or
Registrable Debentures), (iii) all expenses of any Persons in preparing,
printing and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, any underwriting agreements, securities
sales agreements, certificates representing the Exchange
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Debentures and other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) all fees
and expenses incurred in connection with the listing, if any, of any of the
Exchange Debentures or such Registrable Debentures, covered by a Shelf
Registration Statement, as applicable, on any securities exchange or
exchanges, (vi) all fees and disbursements relating to the qualification of
the Indenture under applicable securities laws, (vii) the fees and
disbursements of counsel for the Company and the fees and expenses of the
independent public accountants of the Company, including the expenses of
any special audits or "cold comfort" letters required by or incident to
such performance and compliance, (viii) the fees and expenses of a
"qualified independent underwriter" as defined by Conduct Rule 2720 of the
NASD (if required by the NASD rules) in connection with the offering of the
Registrable Debentures, and (ix) the reasonable fees and expenses of the
Trustee, any registrar, any depositary and paying agent, including their
respective counsel, and any escrow agent or custodian and (x) in the case
of an underwritten offering, any fees and disbursements of the underwriter
customarily required to be paid by issuers or sellers of such securities
and the fees and expenses of any special experts retained by the Company in
connection with any Registration Statement but excluding (except as
otherwise provided herein) fees of counsel to the underwriters or the
Holders and underwriting discounts and commissions and any transfer taxes,
if any, relating to the sale or disposition of Registrable Debentures by a
Holder.
"Registration Statement" shall mean any registration statement of the
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Company relating to any offering of the Exchange Debentures or Registrable
Debentures 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.
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"Shelf Registration" shall mean a registration effected pursuant to
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Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
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statement of the Company pursuant to the provisions of Section 2(b) of this
Agreement which covers all of the Registrable Debentures 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.
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"Trustee" shall mean the trustee under the Indenture.
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2. Registration Under the 1933 Act. (a) Exchange Offer
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Registration. To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC, the Company shall (A) file with the SEC
within 150 calendar days after the Closing Time an Exchange Offer Registration
Statement covering the offer by the Company to the Holders to exchange all of
the Registrable Debentures for Exchange Debentures, (B) use its best efforts to
cause such Exchange Offer Registration Statement to be declared effective by the
SEC within 180 calendar days after the Closing Time, (C) use its best efforts to
cause such Registration Statement to remain effective until the closing of the
Exchange Offer and (D) use its reasonable best efforts to consummate the
Exchange Offer within 30 calendar days after the effective date of the Exchange
Offer Registration Statement. The Exchange Debentures will be issued under the
Indenture. Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Exchange Offer, it being the objective
of such Exchange Offer to enable each Holder (other than Participating Broker-
Dealers (as defined in Section 3(f)) eligible and electing to exchange
Registrable Debentures for Exchange Debentures (assuming that such Holder is not
an affiliate of the Company within the meaning of Rule 405 under the 1933 Act,
acquires the Exchange Debentures in the ordinary course of such Holder's
business and has no arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Debentures) to trade such Exchange Debentures from and after their receipt
without any limitations or restrictions under the 1933 Act and without material
restrictions under the securities laws of a substantial proportion of the
several states of the United States.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 20 business days
(or longer if required by applicable federal and state securities laws)
after the date notice thereof is mailed to the Holders;
(iii) use the services of the Depositary for the Exchange Offer with
respect to Debentures evidenced by global certificates;
(iv) permit Holders to withdraw tendered Registrable Debentures at
any time prior to the close of business, New York City time, on the last
business day on which the Exchange Offer shall remain open, by sending to
the institution specified in the notice a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the
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principal amount of Registrable Debentures delivered for exchange, and a
statement that such Holder is withdrawing its election to have such
Debentures exchanged; and
(v) otherwise comply in all respects with all applicable federal and
state securities laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(i) accept for exchange Registrable Debentures duly tendered and not
validly withdrawn pursuant to the Exchange Offer in accordance with the
terms of the Exchange Offer Registration Statement and the letter of
transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Debentures so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and deliver Exchange
Debentures to each Holder of Registrable Debentures equal in principal
amount to the principal amount of the Registrable Debentures of such Holder
so accepted for exchange.
Interest on each Exchange Debenture will accrue from the last date on
which interest was paid on the Registrable Debentures surrendered in exchange
therefor or, if no interest has been paid on the Registrable Debentures, from
the Closing Time. The Exchange Offer shall not be subject to any conditions,
other than (i) that the Exchange Offer, or the making of any exchange by a
Holder, does not violate applicable law or any applicable interpretation of the
staff of the SEC, (ii) that no action or proceeding shall have been instituted
or threatened in any court or before any governmental agency with respect to the
Exchange Offer which, in the Company's judgment, would impair the ability of the
Company to proceed with the Exchange Offer, (iii) that no law, rule or
regulation or applicable interpretations of the staff of the SEC has been issued
or promulgated which, in the good faith determination of the Company, does not
permit the Company to effect the Exchange Offer and (iv) that the Holders tender
the Registrable Debentures to the Company in accordance with the Exchange Offer.
Each Holder of Registrable Debentures (other than Participating Broker-Dealers)
who wishes to exchange such Registrable Debentures for Exchange Debentures in
the Exchange Offer shall have represented that (i) it is not an affiliate (as
defined in Rule 405 under the 1933 Act) of the Company, (ii) any Exchange
Debentures to be received by it will be acquired in the ordinary course of
business, (iii) at the time of the commencement of the Exchange Offer, it has no
arrangement with any Person to participate in the distribution (within the
meaning of the 1933 Act) of the Exchange Debentures and (iv) it shall have made
such other representations as may be reasonably necessary under applicable SEC
rules, regulations or interpretations to render the use of Form S-4 or another
appropriate form under the 1933 Act available. To the extent permitted by law,
the Company shall inform the Initial Purchasers of the names and addresses of
the Holders to whom the
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Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of Registrable
Debentures in the Exchange Offer.
(b) Shelf Registration. (i) If, because of any change in law or
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applicable interpretations thereof by the Staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
or (ii) if for any other reason the Exchange Offer is not consummated on or
prior to the 210th calendar day following the Closing Time, or (iii) if any
Holder (other than an Initial Purchaser) is not eligible to participate in the
Exchange Offer or elects to participate in the Exchange Offer but does not
receive fully tradeable Exchange Debentures pursuant to the Exchange Offer or
(iv) upon the written request of any of the Initial Purchasers following the
consummation of the Exchange Offer, if such Initial Purchaser shall hold
Registrable Debentures that it acquired directly from the Company and if such
Initial Purchaser is not permitted, in the opinion of counsel to such Initial
Purchaser, pursuant to applicable law or applicable interpretation of the Staff
of the SEC to participate in the Exchange Offer, the Company shall, at its cost:
(A) as promptly as practicable, file with the SEC a Shelf
Registration Statement relating to the offer and sale of the Registrable
Debentures by the Holders from time to time in accordance with the methods
of distribution elected by the Majority Holders of such Registrable
Debentures and set forth in such Shelf Registration Statement;
(B) use its best efforts to cause such Shelf Registration Statement
to be declared effective by the SEC as promptly as practicable, but in no
event later than the 210th calendar day after the Closing Time (or within
60 days of a request of any Initial Purchaser); provided that, with respect
to Exchange Debentures received by a broker-dealer in exchange for any
securities that were acquired by such broker-dealer as a result of market
making or other trading activities, the Company may, if permitted by
current interpretations by the staff of the SEC, file a post-effective
amendment to the Exchange Offer Registration Statement containing the
information required by Regulation S-K Items 507 and/or 508, as applicable,
in satisfaction of its obligations under this paragraph (A) solely with
respect to broker-dealers who acquired their Securities as a result of
market making or other trading activities, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration
Statement. In the event that the Company is required to file a Shelf
Registration Statement upon the request of any Holder (other than an
Initial Purchaser) not eligible to participate in the Exchange Offer
pursuant to clause (iii) above or upon the request of any Initial Purchaser
pursuant to clause (iv) above, the Company shall file and use its best
efforts to have declared effective by the SEC both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all
Registrable Debentures and a Shelf Registration Statement (which may be a
combined
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Registration Statement with the Exchange Offer Registration Statement) with
respect to offers and sales of Registrable Debentures held by such Holder
or such Initial Purchaser, as applicable, after completion of the Exchange
Offer;
(C) use its best efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required, in order to
permit the Prospectus forming part thereof to be usable by Holders for a
period of two years after its effective date or such shorter period which
will terminate when all of the Registrable Debentures covered by the Shelf
Registration Statement (i) have been sold pursuant to the Shelf
Registration Statement, (ii) cease to be outstanding or (iii) become
eligible for resale pursuant to Rule 144 under the 1934 Act without volume
restrictions; and
(D) notwithstanding any other provisions hereof, use its 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 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 further agrees, if necessary, to supplement or amend the
Shelf Registration Statement if reasonably requested by the Majority Holders
with respect to information relating to the Holders and otherwise as required by
Section 3(b) below, to use all reasonable efforts to cause any such amendment to
become effective and such Shelf Registration Statement to become usable as soon
as practicable thereafter and to furnish to the Holders of Registrable
Debentures copies of any such supplement or amendment promptly after its being
used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
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connection with the registration pursuant to Section 2(a) and 2(b) and, in the
case of any Shelf Registration Statement, will reimburse the Holders or the
Initial Purchasers for the reasonable fees and disbursements of one counsel (in
addition to any local counsel) designated in writing by the Majority Holders to
act as counsel for the Holders of the Registrable Debentures in connection
therewith. Each Holder shall pay all expenses of its counsel other than as set
forth in the preceding sentence, underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Debentures pursuant to the Shelf Registration Statement.
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(d) Effective Registration Statement. (i) The Company shall be
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deemed not to have used its 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 periods set forth herein
if the Company voluntarily takes any action that could reasonably be expected to
result in any such Registration Statement not being declared effective or
remaining effective or in the Holders of Registrable Debentures covered thereby
not being able to exchange or offer and sell such Registrable Debentures during
that period unless (A) such action is required by applicable law or (B) such
action is taken by the Company in good faith and for valid business reasons (but
not including avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of assets or a material corporate transaction or
event so long as the Company promptly complies with the requirements of Section
3(k) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant to Section
2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof
shall 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 Registrable Debentures pursuant to a 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 shall be deemed not to have been effective during the
period of such interference, until the offering of Registrable Debentures
pursuant to such Registration Statement may legally resume.
(iii) During any 365-day period, the Company may suspend the
availability of a Shelf Registration Statement and the use of the related
Prospectus, as provided in Section 3(e)(vi) and the last paragraph of Section 3
hereof, for up to two periods of up to 45 consecutive days (except for the
consecutive 45-day period immediately prior to maturity of the Debentures), but
no more than an aggregate 90 days during any 365-day period, if any event shall
occur (A) as set forth in Section 2(d)(i) or (B) as a result of which it shall
be necessary, in the good faith determination of the board of directors of the
Company, to amend the Shelf Registration Statement or amend or supplement any
prospectus or prospectus supplement thereunder in order that each such document
not include any untrue statement of fact or omit to state a material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made.
(e) Increase in Interest Rate. In the event that (i) the Exchange
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Offer Registration Statement is not filed with the SEC on or prior to the 150th
calendar day following the date hereof, (ii) the Exchange Offer Registration
Statement is not declared effective on or prior to the 180th calendar day
following the date hereof, (iii) the Exchange Offer is not consummated on or
prior to the 30/th/ calendar day following the date of effectiveness of the
Exchange Offer Registration Statement, or (iv) if required, a Shelf Registration
Statement with respect to the Registrable Debentures is not declared effective
on or prior to the 210/th/ calendar
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day following the Closing Time, the per annum interest rate borne by the
Registrable Debentures shall be increased by one-quarter of one percent (0.25%)
per annum following such 150-day period in the case of clause (i) above,
following such 210-day period in the case of clause (ii) above, following such
30-day period in the case of clause (iii) above, or following such 210-day
period in the case of (iv) above, which rate will be increased by an additional
quarter of one percent (0.25%) per annum for each 90-day period that any
additional interest continues to accrue; provided that the aggregate increase in
such annual interest rate may in no event exceed one-half of one percent (0.50%)
per annum. Upon (w) the filing of the Exchange Offer Registration Statement
after the 150-day period described in clause (i) above, (x) the effectiveness of
the Exchange Offer Registration Statement after the 180-day period described in
clause (ii) above, (y) the consummation of the Exchange Offer after the 30-day
period described in clause (iii) above, or (z) the effectiveness of a Shelf
Registration Statement after the 210-day period described in clause (iv) above,
the interest rate borne by the Debentures from the date of such filing,
effectiveness or consummation, as the case may be, shall be reduced to the
original interest rate if the Company is otherwise in compliance with this
paragraph; provided, however, that, if after any such reduction in interest
rate, a different event specified in clause (i), (ii), (iii) or (iv) above
occurs, the interest rate shall again be increased pursuant to the foregoing
provisions.
(f) Specific Enforcement. Without limiting the remedies available to
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the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Sections 2(a) and
2(b) 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 will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Company's obligations under
Sections 2(a) and 2(b).
3. Registration Procedures. In connection with the obligations of
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the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement, within the
time periods specified in Section 2, on the appropriate form under the 1933
Act, which registration statement (i) shall be filed on a form selected by
the Company and shall, in the case of a Shelf Registration Statement, be
available for the sale of the Registrable Debentures by the selling Holders
thereof and (ii) shall comply as to form in all material respects with the
requirements of the applicable form and include or incorporate by reference
all financial statements required by the SEC to be filed therewith, and use
its best efforts to cause such Registration Statement to become effective
and remain effective in accordance with Section 2 hereof;
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(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; cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule
424 under the 1933 Act; and comply with the provisions of the 1933 Act with
respect to the disposition of all Debentures covered by each Registration
Statement during the applicable period in accordance with the intended
method or methods of distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Debentures, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Debentures is
being filed and advising such Holders that the distribution of Registrable
Debentures will be made in accordance with the method elected by the
Majority Holders; (ii) furnish to each Holder of Registrable Debentures, to
counsel for the Initial Purchasers, to counsel for the Holders and to each
underwriter of an underwritten offering of Registrable Debentures, 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 (including those incorporated by reference) in order
to facilitate the public sale or other disposition of the Registrable
Debentures; and (iii) subject to the last paragraph of this Section 3,
hereby consent to the use of the Prospectus, including each preliminary
Prospectus, or any amendment or supplement thereto by each of the selling
Holders of Registrable Debentures in connection with the offering and sale
of the Registrable Debentures covered by the Prospectus or any amendment or
supplement thereto;
(d) use its best efforts to register or qualify the Registrable
Debentures under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Debentures covered by a
Registration Statement and each underwriter of an underwritten offering of
Registrable Debentures shall reasonably request by the time the applicable
Registration Statement is declared effective by the SEC, to cooperate with
the Holders in connection with any filings required to be made with the
NASD, keep each such registration or qualification effective during the
period such Registration Statement is required to be effective and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Debentures owned by such Holder; provided,
however, that the Company shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3(d) or (ii) take
any action which would subject it to general service of process or taxation
in any such jurisdiction if it is not then so subject;
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(e) in the case of a Shelf Registration, notify each Holder of
Registrable Debentures promptly and, if requested by such Holder, confirm
such advice in writing promptly (i) when a Registration Statement has
become effective and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the SEC or any state
securities authority for post-effective amendments and supplements to a
Registration Statement and Prospectus or for additional information after
the Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Debentures covered thereby, the representations and warranties of the
Company contained in any underwriting agreement, securities sales agreement
or other similar agreement, if any, relating to such offering cease to be
true and correct in all material respects, (v) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Debentures for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose, (vi) of
the happening of any event or the discovery of any facts during the period
a Shelf Registration Statement is effective (including as contemplated in
Section 2(d)(iii) hereof) which (A) is contemplated in Section 2(d)(i) or
(B) makes any statement made in such Shelf Registration Statement or the
related Prospectus untrue in any material respect or which requires the
making of any changes in such Shelf Registration Statement or Prospectus in
order to make the statements therein not misleading and (vii) of any
determination by the Company that a post-effective amendment to a
Registration Statement would be appropriate;
(f) (A) in the case of an Exchange Offer, (i) include in the Exchange
Offer Registration Statement a "Plan of Distribution" section covering the
use of the Prospectus included in the Exchange Offer Registration Statement
by broker-dealers who have exchanged their Registrable Debentures for
Exchange Debentures for the resale of such Exchange Debentures, (ii)
furnish to each broker-dealer who desires to participate in the Exchange
Offer, without charge, as many copies of each Prospectus included in the
Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such broker-dealer
may reasonably request, (iii) include in the Exchange Offer Registration
Statement a statement that any broker-dealer who holds Registrable
Debentures acquired for its own account as a result of market-making
activities or other trading activities (a "Participating Broker-Dealer"),
and who receives Exchange Debentures for Registrable Debentures pursuant to
the Exchange Offer, may be a statutory underwriter and must deliver a
prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Debentures, (iv) subject to the last paragraph of
this Section 3, hereby consent to the use
13
of the Prospectus forming part of the Exchange Offer Registration Statement
or any amendment or supplement thereto, by any broker-dealer in connection
with the sale or transfer of the Exchange Debentures covered by the
Prospectus or any amendment or supplement thereto, and (v) include in the
transmittal letter or similar documentation to be executed by an exchange
offeree in order to participate in the Exchange Offer the following
provision:
"If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Debentures. If the undersigned is a broker-
dealer that will receive Exchange Debentures for its own account in
exchange for Registrable Debentures, it represents that the
Registrable Debentures to be exchanged for Exchange Debentures were
acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale
of such Exchange Debentures pursuant to the Exchange Offer; however,
by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the
meaning of the 1933 Act;"
(B) to the extent any Participating Broker-Dealer participates in
the Exchange Offer, the Company shall use its best efforts to cause to
be delivered at the request of an entity representing the
Participating Broker-Dealers (which entity shall be Merrill Lynch,
Pierce, Fenner & Smith Incorporated, unless it elects not to act as
such representative) any "cold comfort" letters with respect to the
Prospectus in the form existing on the last date for which exchanges
are accepted pursuant to the Exchange Offer and with respect to each
subsequent amendment or supplement, if any, effected during the period
specified in clause (C) below;
(C) to the extent any Participating Broker-Dealer participates in
the Exchange Offer, the Company shall use its best efforts to maintain
the effectiveness of the Exchange Offer Registration Statement for a
period of 120 days following the closing of the Exchange Offer or such
shorter period which will terminate when the Participating Broker-
Dealers have completed all resales subject to applicable prospectus
delivery requirements; and
(D) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as
would otherwise be contemplated by Section 3(b) hereof, or take any
other
14
action as a result of this Section 3(f), for a period exceeding
120 days after the last date for which exchanges are accepted pursuant
to the Exchange Offer (as such period may be extended by the Company)
and Participating Broker-Dealers shall not be authorized by the
Company to, and shall not, deliver such Prospectus after such period
in connection with resales contemplated by this Section 3;
(g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish
counsel for the Holders of Registrable Debentures copies of any request by
the SEC or any state securities authority for amendments or supplements to
a Registration Statement and Prospectus or for additional information;
(h) make every effort to obtain the withdrawal of any order suspending
the effectiveness of a Registration Statement as soon as practicable and
provide immediate notice to each Holder of the withdrawal of any such
order;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Debentures, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Debentures to facilitate the timely preparation and
delivery of certificates representing Registrable Debentures to be sold and
not bearing any restrictive legends; and cause such Registrable Debentures
to be in such denominations (consistent with the provisions of the
Indenture) in a form eligible for deposit with the Depositary and
registered in such names as the selling Holders or the underwriters, if
any, may reasonably request in writing at least one business day prior to
the closing of any sale of Registrable Debentures;
(k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Section
3(e)(vi) hereof, use its best efforts to prepare a supplement or post-
effective amendment to a Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Debentures, such Prospectus will not contain at the time of
such delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company
agrees to notify each Holder to suspend use of the Prospectus as promptly
as practicable after the occurrence of such an event, and each Holder
hereby
15
agrees to suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission. At
such time as such public disclosure is otherwise made or the Company
determines that such disclosure is not necessary, in each case to correct
any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such
determination and to furnish each Holder such numbers of copies of the
Prospectus, as amended or supplemented, as such Holder may reasonably
request;
(l) obtain CUSIP numbers for all Exchange Debentures, or
Registrable Debentures, as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Debentures or Registrable Debentures, as the
case may be, in a form eligible for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration of
the Exchange Debentures, or Registrable Debentures, as the case may be,
(ii) cooperate with the Trustee and the Holders to effect such changes to
the Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and (iii) execute, and use its 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 Indenture 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 (including those reasonably requested by the holders of
a majority in principal amount of the Registrable Debentures being sold) in
order to expedite or facilitate the disposition of such Registrable
Debentures and in such connection, whether or not an underwriting agreement
is entered into and whether or not the registration is an underwritten
registration, in a manner that is reasonable and customary:
(i) make such representations and warranties to the Holders of
such Registrable Debentures and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters
in similar underwritten offerings as may be reasonably requested by
such Holders and underwriters;
(ii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if any,
and the Holders of a majority in principal amount of the Registrable
Debentures being sold) addressed to each selling Holder and the
underwriters, if any, covering the matters customarily
16
covered in opinions requested in sales of securities or underwritten
offerings and such other matters as may be reasonably requested by
such Holders and underwriters;
(iii) obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to the
underwriters, if any, and will use best efforts to have such letters
addressed to the selling Holders of Registrable Debentures, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to underwriters in
connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with the Holders
and an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Registrable Debentures, which agreement shall
be in form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into in the case
of an underwritten offering, cause the same to set forth
indemnification provisions and procedures substantially equivalent to
the indemnification provisions and procedures set forth in Section 5
hereof with respect to the underwriters and all other parties to be
indemnified pursuant to Section 5 hereof; and
(vi) deliver such documents and certificates as may be reasonably
requested and as are customarily delivered in similar offerings.
The above shall be done at (i) the effectiveness of such Registration
Statement (and, if appropriate, each post-effective amendment thereto) and
(ii) each closing under any underwriting or similar agreement as and to the
extent required thereunder. In the case of any underwritten offering, the
Company shall provide written notice to the Holders of all Registrable
Debentures of such underwritten offering at least 30 days prior to the
filing of a prospectus supplement for such underwritten offering. Such
notice shall (x) offer each such Holder the right to participate in such
underwritten offering, (y) specify a date, which shall be no earlier than
10 days following the date of such notice, by which such Holder must inform
the Company of its intent to participate in such underwritten offering and
(z) include the instructions such Holder must follow in order to
participate in such underwritten offering;
(o) in the case of a Shelf Registration, make available for inspection
by representatives of the Holders of the Registrable Debentures and any
underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any U.S.
17
counsel or accountant retained by such Holders or underwriters, all
financial and other records, pertinent corporate documents and properties
of the Company reasonably requested by any such Persons, and cause the
respective officers, directors, employees, and any other agents of the
Company to supply all information reasonably requested by any such
representative, underwriter, special counsel or accountant in connection
with a Registration Statement;
(p) (i) in the case of an Exchange Offer, a reasonable time prior to
the filing of any Exchange Offer Registration Statement, any Prospectus
forming a part thereof, any amendment to an Exchange Offer Registration
Statement or amendment or supplement to a Prospectus, provide copies of
such document to the Initial Purchasers, and make such changes in any such
document prior to the filing thereof as the Initial Purchasers or their
counsel may reasonably request; (ii) in the case of a Shelf Registration, a
reasonable time prior to filing any Shelf Registration Statement, any
Prospectus forming a part thereof, any amendment to such Shelf Registration
Statement or amendment or supplement to such Prospectus, provide copies of
such document to the Holders of Registrable Debentures, to the Initial
Purchasers, to counsel on behalf of the Holders and to the underwriter or
underwriters of an underwritten offering of Registrable Debentures, if any,
and make such changes in any such document prior to the filing thereof as
counsel to the Initial Purchasers or any underwriter may reasonably
request; and (iii) cause the representatives of the Company to be available
for discussion of such document as shall be reasonably requested by the
Holders of Registrable Debentures, the Initial Purchasers on behalf of such
Holders or any underwriter, and shall not at any time make any filing of
any such document of which such Holders, the Initial Purchasers on behalf
of such Holders, their counsel or any underwriter shall not have previously
been advised and furnished a copy or to which such Holders, the Initial
Purchasers on behalf of such Holders, their counsel or any underwriter
shall reasonably object within a reasonable time period;
(q) in the case of a Shelf Registration, use its best efforts to cause
all Registrable Debentures to be listed on any securities exchange on which
similar debt securities issued by the Company are then listed if requested
by the Majority Holders or by the underwriter or underwriters of an
underwritten offering of Registrable Debentures, if any;
(r) in the case of a Shelf Registration, use its best efforts to cause
the Registrable Debentures to be rated with the appropriate rating
agencies, if so requested by the holders of a majority in principal amount
of Registrable Debentures or by the underwriter or underwriters of an
underwritten offering, unless the Registrable Debentures are already so
rated;
18
(s) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering at least 12
months which shall satisfy the provisions of Section 11(a) of the 1933 Act
and Rule 158 thereunder; and
(t) 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 and its counsel.
In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Registrable Debentures to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Debentures as the Company may from time to time reasonably request.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
or the discovery of any facts, each of the kind described in Sections 2(d)(i)
and 3(e)(ii)-(vii) hereof, such Holder will forthwith discontinue disposition of
Registrable Debentures pursuant to a Registration Statement until such Holder's
receipt of (i) the copies of the supplemented or amended Prospectus contemplated
by Section 3(k) hereof or (ii) written notice from the Company that the Shelf
Registration Statement is once again effective and that no supplement or
amendment is required. If so directed by the Company, such Holder will deliver
to the Company (at the Company's expense) all copies in its possession, other
than permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Debentures current at the time of receipt of such
notice.
If the Company shall give any such notice to suspend the disposition
of Registrable Debentures pursuant to a Shelf Registration Statement as a result
of the happening of any event or the discovery of any facts, each of the kind
described in Sections 2(d)(i) and 3(e)(vi) hereof, the Company shall be deemed
to have used its best efforts to keep the Shelf Registration Statement effective
during such period of suspension; provided that (i) such period of suspension
shall not exceed the time periods provided in Section 2(d)(iii) hereof and (ii)
the Company shall, if necessary, use its best efforts to file and have declared
effective (if an amendment) as soon as practicable an amendment or supplement to
the Shelf Registration Statement and shall extend the period during which the
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions.
4. Underwritten Registrations. If any of the Registrable Debentures
--------------------------
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by
19
the Majority Holders of such Registrable Debentures included in such offering
and shall be reasonably acceptable to the Company.
No Holder of Registrable Debentures may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Debentures on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter who participates in an offering of Registrable Debentures and each
Person, if any, who controls any of such parties within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all 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 thereto) pursuant to which Exchange Debentures or
Registrable Debentures 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
an untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or 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
5(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expenses whatsoever, as incurred (including
the reasonable fees and disbursements of one counsel chosen by an
indemnified party or, in the case of the Holders, by a majority of the
Holders), reasonably incurred in investigating, preparing or defending
against any litigation, or 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
20
or omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 5(a);
provided, however, that this indemnity shall not apply to any loss, liability,
claim, damage or expense to the extent (A) arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by and relating to
any Initial Purchaser through the Representative, or by and relating to any
Holder or underwriter who participates in an offering of Registrable Debentures,
in each case expressly for use in the Registration Statement (or any amendment
or supplement thereto) or the Prospectus (or any amendment or supplement
thereto), or (B) resulting from the use of the Prospectus during a period when
the use of the Prospectus has been suspended in accordance with Sections
2(d)(i), 2(d)(iii), Section 3(e)(vi) and the last paragraph of Section 3 hereof;
provided, in each case, that Holders received prior notice of such suspension.
(b) In the case of a Shelf Registration, each Holder severally agrees
to indemnify and hold harmless the Company, each Initial Purchaser, each
underwriter who participates in an offering of Registrable Debentures and the
other selling Holders and each Person, if any, who controls the Company, any
Initial Purchaser, 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 whatsoever described in the
indemnity contained in Section 5(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Holder, expressly for use
in the Registration Statement (or any amendment thereto), or the Prospectus (or
any amendment or supplement thereto); provided, however, that no such Holder
shall be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Debentures pursuant to such
Shelf Registration Statement.
(c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to either paragraph (a) or (b)
above, such Person (the "indemnified party") shall give notice as promptly as
reasonably practicable to each Person against whom such indemnity may be sought
(the "indemnifying party"), but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability hereunder to the extent
it is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 5(a) hereof, counsel to the indemnified parties shall be selected by the
Representative if such indemnified parties include the Initial Purchasers (or,
in the case of the Holders only, by a majority of the Holders), and, in the case
of parties indemnified pursuant to Section 5(b) hereof, counsel to the
indemnified parties shall be selected
21
by the Company. An indemnifying party may participate at its own expense in the
defense of any 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 5 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 5(a)(ii) hereof effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement. The
indemnified party shall promptly reimburse the indemnifying party for all
amounts advanced to it pursuant to this Section 5(d) hereof (unless it is
entitled to such amounts under Section 5(e) hereof) if it shall be finally
judicially determined that such indemnified party was not entitled to
indemnification hereunder and such loss, liability, claim, damage or expense
arose out of (i) an untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information
furnished to the Company by the indemnified party expressly for use in the
Registration Statements (or any amendment thereto), a preliminary prospectus or
the final Prospectus (or any amendment or supplement thereto) or (ii) a
fraudulent misrepresentation (within the meaning of Section 11 of the 1933 Act)
by the indemnified party.
(e) If the indemnification provided for in this Section 5 is for any
reason held to be unavailable 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
22
relative fault of such indemnifying party or parties on the one hand, and such
indemnified party or parties 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, the Initial Purchasers and the Holders,
respectively, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Initial Purchasers or the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Initial Purchasers and the Holders agree that it
would not be just and equitable if contribution pursuant to this Section 5(e)
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity, and 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 above in this Section 5(e). The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 5(e) 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 an 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 5(e), 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, each officer of
the Company who signed the Registration Statement, and each Person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
6. Miscellaneous. (a) Rule 144 and Rule 144A. For so long as the
------------- ----------------------
Company is subject to the reporting requirements of Section 13 or 15 of the 1934
Act, the Company covenants that it will file the reports required to be filed by
it under Section 13(a) or 15(d) of the 1934 Act and the rules and regulations
adopted by the SEC thereunder, that if it ceases to be so required to file such
reports, it will upon the request of any Holder of Registrable Debentures (i)
make publicly available or cause to be made publicly available such information
as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii)
deliver or cause to be delivered such information to a prospective purchaser as
is necessary to permit sales pursuant to
23
Rule 144A under the 1933 Act and it will take such further action as any Holder
of Registrable Debentures may reasonably request, and (iii) take such further
action that is reasonable in the circumstances, in each case, to the extent
required from time to time to enable such Holder to sell its Registrable
Debentures without registration under the 1933 Act within the limitation of the
exemptions provided by (x) Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, (y) Rule 144A under the 1933 Act, as such Rule may be
amended from time to time, or (z) any similar rules or regulations hereafter
adopted by the SEC. Upon the written request of any Holder of Registrable
Debentures, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered into nor
--------------------------
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Debentures 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
other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Debentures affected by such amendment, modification, supplement,
waiver or departure.
(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telecopier, or any courier guaranteeing overnight delivery (i) if to
a Holder (other than an Initial Purchaser), at the most current address set
forth on the records of the Registrar under the Indenture, (ii) if to an Initial
Purchaser, at the most current address given by such Initial Purchaser to the
Company by means of a notice given in accordance with the provisions of this
Section 6(d), which address initially is the address set forth in the Purchase
Agreement; and (iii) if to the Company, initially at the address set forth in
the Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 6(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next business day if timely delivered
to an air courier 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.
24
(e) Successors and Assigns. This Agreement shall inure to the benefit
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of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Debentures
in violation of the terms hereof or of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Debentures, in any
manner, whether by operation of law or otherwise, such Registrable Debentures
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Debentures, 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.
(f) Third Party Beneficiary. The Holders shall be third party
-----------------------
beneficiaries to the agreements made hereunder between the Company 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 or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
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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
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reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
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IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the provisions
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contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
LOWE'S COMPANIES, INC.
By: Marshall A. Croom
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Name: Marshall A. Croom
Title: Assistant Treasurer
Attest:
By: William C. Warden, Jr.
----------------------
Name: William C. Warden, Jr.
Title: Executive Vice President and
Secretary
Confirmed and Accepted,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: Lani Martin
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Name: Lani Martin
Title: Vice President