REGISTRATION RIGHTS AGREEMENT
dated as of June 25, 2024
among
VERIMARK HOSPITALITY GROUP INC.,
as Issuer,
THE GUARANTORS NAMED HEREIN,
and
KENSINGTON BARROW & CO., RIDGELINE CAPITAL MARKETS LLC, and STONEBRIDGE MARVELO SECURITIES INC.,
as Initial Purchasers
Relating to
$500,000,000 Aggregate Principal Amount of 8.250% Senior Notes due 2031
and the Related Guarantees
TABLE OF CONTENTS
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is dated as of June 25, 2024, among VERIMARK HOSPITALITY GROUP INC., a Delaware corporation (the "Company" or the "Issuer"), each of the guarantors listed on the signature pages hereto (collectively, the "Guarantors"), and KENSINGTON BARROW & CO., RIDGELINE CAPITAL MARKETS LLC, and STONEBRIDGE MARVELO SECURITIES INC. (collectively, the "Initial Purchasers," and Kensington Barrow & Co., acting as representative of the Initial Purchasers, the "Representative").
RECITALS
WHEREAS, the Company has issued $500,000,000 aggregate principal amount of its 8.250% Senior Notes due 2031 (CUSIP 923847 AA 5 (Rule 144A); CUSIP U92384 AA 8 (Regulation S)) (the "Notes") and the related guarantees of the Notes (the "Guarantees") pursuant to that certain Indenture dated as of June 25, 2024 (as may be amended, supplemented, or otherwise modified from time to time, the "Indenture"), among the Company, the Guarantors, and Fidelitas Trust Company, N.A., as trustee (the "Trustee");
WHEREAS, the Notes and the Guarantees were sold to the Initial Purchasers pursuant to that certain Purchase Agreement dated as of June 18, 2024 (the "Purchase Agreement"), among the Company, the Guarantors, and the Initial Purchasers, in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Rule 144A and Regulation S promulgated thereunder;
WHEREAS, the Guarantors consist of the following subsidiaries of the Company: (i) Verimark Resort Holdings LLC, a Delaware limited liability company, (ii) VHG Properties Inc., a Delaware corporation, (iii) Bayshore Hotel Management LLC, a Florida limited liability company, (iv) Verimark Capital Holdings LLC, a Delaware limited liability company, and (v) Pinnacle Lodging Enterprises Inc., a Delaware corporation;
WHEREAS, as a condition to the Initial Purchasers' obligations under the Purchase Agreement, the Company, the Guarantors, and the Initial Purchasers agreed to enter into this Agreement to provide for the registration of the Exchange Notes (as defined herein) under the Securities Act pursuant to an Exchange Offer (as defined herein) or, if required under the circumstances described herein, for the resale of the Notes and the Guarantees under the Securities Act pursuant to a Shelf Registration Statement (as defined herein); and
WHEREAS, the parties hereto desire to set forth their respective rights and obligations with respect to such registration.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.01 — Definitions.
As used in this Agreement, the following terms shall have the meanings set forth below:
"Additional Interest" means additional interest payable on the Notes upon the occurrence and during the continuance of a Registration Default, as described in Section 5.02 of this Agreement.
"Agreement" means this Registration Rights Agreement, as it may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
"Blackout Period" has the meaning set forth in Section 4.02 of this Agreement.
"Board of Directors" means the board of directors of the Company or any committee thereof duly authorized to act on behalf of such board.
"Broker-Dealer" means any broker or dealer registered as such under the Exchange Act.
"Business Day" means any day other than a Saturday, Sunday, or any day on which banking institutions in the City of New York are authorized or required by law, regulation, or executive order to close.
"Closing Date" means June 25, 2024, the date on which the Notes were originally issued.
"Company" means Verimark Hospitality Group Inc., a Delaware corporation, and its successors and assigns.
"Consummation Deadline" means the date that is 365 days after the Closing Date (i.e., June 25, 2025, or if such day is not a Business Day, the next succeeding Business Day), which date is the date by which the Exchange Offer must be consummated or, if applicable, the Shelf Registration Statement must be declared effective; provided that, for the avoidance of doubt, such date shall be July 8, 2025 (the next Business Day following the 365th day).
"DTC" means The Depository Trust Company, or any successor thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
"Exchange Notes" means the 8.250% Senior Notes due 2031 of the Company and the related guarantees to be issued in the Exchange Offer, which shall be identical in all material respects to the Notes and the Guarantees, except that the Exchange Notes (i) shall not bear restrictive legends restricting the transfer thereof under the Securities Act, (ii) shall not contain or be entitled to additional interest provisions, and (iii) shall not contain or be entitled to registration rights under this Agreement.
"Exchange Offer" means the offer by the Company to exchange Exchange Notes for the Notes, as described in Section 2.01 of this Agreement.
"Exchange Offer Registration Statement" means the registration statement filed with the SEC on Form S-4 (or any successor form thereto) with respect to the Exchange Offer, including the Prospectus contained therein, all amendments and supplements to such registration statement, and all exhibits and all material incorporated by reference therein.
"Filing Deadline" means the date that is 180 days after the Closing Date, which date is January 4, 2025 (or, if such day is not a Business Day, the next succeeding Business Day).
"Guarantees" means, collectively, the guarantees of the Notes by the Guarantors pursuant to the Indenture.
"Guarantors" means, collectively, Verimark Resort Holdings LLC, a Delaware limited liability company, VHG Properties Inc., a Delaware corporation, Bayshore Hotel Management LLC, a Florida limited liability company, Verimark Capital Holdings LLC, a Delaware limited liability company, and Pinnacle Lodging Enterprises Inc., a Delaware corporation, and any future subsidiary of the Company that hereafter becomes a guarantor under the Indenture and delivers a joinder to this Agreement in accordance with the terms hereof.
"Holder" means any holder of Registrable Securities, including the Initial Purchasers, to the extent they hold Registrable Securities.
"Indenture" means the Indenture dated as of June 25, 2024, among the Company, the Guarantors, and Fidelitas Trust Company, N.A., as Trustee, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
"Initial Purchasers" means Kensington Barrow & Co., Ridgeline Capital Markets LLC, and Stonebridge Marvelo Securities Inc.
"Notes" means the Company's 8.250% Senior Notes due 2031 in the aggregate principal amount of $500,000,000, issued on June 25, 2024 pursuant to the Indenture, together with the related Guarantees.
"Participating Broker-Dealer" means any Broker-Dealer that (i) acquired Notes as a result of market-making activities or other trading activities (and not directly from the Company or any affiliate of the Company) and (ii) is eligible to participate in the Exchange Offer and receives Exchange Notes in exchange for such Notes.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization, government, or any agency or political subdivision thereof, or any other entity.
"Prospectus" means the prospectus included in any Registration Statement (including a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act), as amended or supplemented by any prospectus supplement, including all material incorporated by reference or deemed to be incorporated by reference therein.
"Purchase Agreement" means the Purchase Agreement dated as of June 18, 2024, among the Company, the Guarantors, and the Initial Purchasers.
"Registrable Securities" means the Notes (including the related Guarantees) until the earliest of (i) the date on which a Registration Statement covering such Notes has been declared effective by the SEC and such Notes have been exchanged or disposed of pursuant to such effective Registration Statement, (ii) the date on which such Notes are eligible for resale pursuant to Rule 144 under the Securities Act (or any successor provision thereto) without volume limitations or other restrictions on transfer thereunder, or (iii) the date on which such Notes cease to be outstanding.
"Registration Default" has the meaning set forth in Section 5.01 of this Agreement.
"Registration Statement" means any Exchange Offer Registration Statement or Shelf Registration Statement, as applicable, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments), all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference therein.
"Representative" means Kensington Barrow & Co., acting as representative of the Initial Purchasers.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
"Shelf Registration Statement" means a registration statement on Form S-1 or Form S-3 (or any successor form thereto), as applicable, providing for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of the Registrable Securities, pursuant to Rule 415 under the Securities Act (or any successor provision thereto), as described in Section 3.01 of this Agreement.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trustee" means Fidelitas Trust Company, N.A., in its capacity as trustee under the Indenture, or any successor trustee appointed pursuant to the terms of the Indenture.
Section 1.02 — Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
(b) The words "hereof," "herein," "hereunder," and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." The word "or" shall not be exclusive.
(c) References to Articles and Sections are to Articles and Sections of this Agreement unless otherwise indicated. References to any agreement, instrument, or other document mean such agreement, instrument, or other document as amended, supplemented, or otherwise modified from time to time, unless the context otherwise requires.
(d) The singular shall include the plural and the plural shall include the singular, and the masculine, feminine, and neuter genders shall each include the others.
(e) Headings of Articles and Sections are inserted for convenience of reference only, are not part of this Agreement, and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
(f) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including," the words "to" and "until" each mean "to but excluding," and the word "through" means "to and including."
(g) Unless the context otherwise requires, any reference to a "day" or number of "days" (without the explicit qualification of "Business") shall be interpreted as a reference to a calendar day or number of calendar days. If any action is required to be taken or any notice is required to be given on or by a particular calendar day, and such calendar day is not a Business Day, then such action or notice shall be required to be taken or given on or by the next succeeding Business Day.
ARTICLE 2 — EXCHANGE OFFER
Section 2.01 — Exchange Offer Registration Statement.
(a) The Company and each of the Guarantors shall use their commercially reasonable efforts to prepare and, no later than the Filing Deadline, file with the SEC an Exchange Offer Registration Statement on Form S-4 (or, if Form S-4 is not available, on such other form as is available under the Securities Act for such purpose) with respect to an offer to exchange the Notes and the Guarantees for the Exchange Notes. The Exchange Offer Registration Statement shall be prepared in accordance with the applicable requirements of the Securities Act, the Exchange Act, and the rules and regulations of the SEC thereunder.
(b) The Exchange Notes to be issued in the Exchange Offer shall be identical in all material respects to the Notes, except that the Exchange Notes:
(i) shall not bear legends restricting the transfer thereof under the Securities Act;
(ii) shall not contain or be entitled to the benefit of the additional interest provisions set forth in Section 5.02 of this Agreement; and
(iii) shall not contain or be entitled to registration rights under this Agreement.
(c) The Exchange Notes and the related exchange guarantees shall be issued under the Indenture and shall be entitled to the benefits thereof. The Exchange Notes shall be treated as the same class of securities as the Notes for all purposes under the Indenture (including with respect to waivers, amendments, redemptions, offers to purchase, and other matters).
(d) The Company and each of the Guarantors shall use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to comply in all material respects with all applicable requirements of the Securities Act, the Exchange Act, the TIA, and the rules and regulations of the SEC promulgated under each of the foregoing.
Section 2.02 — Consummation of the Exchange Offer.
(a) The Company and each of the Guarantors shall use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to be declared effective by the SEC as promptly as practicable and to consummate the Exchange Offer no later than the Consummation Deadline.
(b) The Exchange Offer shall remain open for acceptance for a period of not less than 20 Business Days (or longer if required by applicable law or the rules and regulations of the SEC) after the date on which notice of the Exchange Offer is mailed or otherwise sent to the Holders pursuant to the Exchange Offer Registration Statement. The Company shall mail or cause to be mailed to each Holder a notice of the Exchange Offer, together with an appropriate form of letter of transmittal, not less than 20 Business Days prior to the expiration date of the Exchange Offer.
(c) The Company shall accept for exchange all Notes that are validly tendered and not withdrawn prior to the close of business on the expiration date of the Exchange Offer. Delivery of Exchange Notes in exchange for Notes accepted for exchange shall be made by the Company, through the Trustee, as promptly as practicable after the expiration of the Exchange Offer.
(d) Each Holder who is eligible to participate in the Exchange Offer and who validly tenders Notes in the Exchange Offer shall receive Exchange Notes in an aggregate principal amount equal to the aggregate principal amount of Notes so tendered by such Holder.
(e) Interest on each Exchange Note issued pursuant to the Exchange Offer shall accrue from the last interest payment date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on such Notes, from the date of original issuance of the Notes (which date, for the avoidance of doubt, is June 25, 2024, with the first interest payment date under the Indenture being January 1, 2025). Under no circumstances shall any Holder who validly tenders Notes in the Exchange Offer be entitled to receive accrued and unpaid interest on both the Notes surrendered for exchange and the Exchange Notes received in the Exchange Offer with respect to the same period.
(f) The Company shall comply with all applicable requirements of Regulation 14E under the Exchange Act and all other applicable laws, rules, and regulations in connection with the Exchange Offer.
Section 2.03 — Conditions to the Exchange Offer.
The Exchange Offer shall not be subject to any conditions, other than the following:
(a) the Exchange Offer, or the making of any exchange by a Holder, shall not violate applicable law, any applicable order or ruling of any court or governmental authority, or any applicable interpretation of the staff of the SEC;
(b) no action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency or body with respect to the Exchange Offer that, in the reasonable judgment of the Company, would reasonably be expected to impair the ability of the Company to proceed with or consummate the Exchange Offer;
(c) all governmental approvals shall have been obtained that the Company, in its reasonable judgment, deems necessary or appropriate for the consummation of the Exchange Offer; and
(d) the Indenture shall have been qualified under the TIA to the extent required by applicable law in connection with the Exchange Offer.
The conditions set forth in clauses (a) through (d) above are for the sole benefit of the Company and the Guarantors and may be asserted by the Company and the Guarantors regardless of the circumstances giving rise to any such condition or may be waived by the Company and the Guarantors, in whole or in part, at any time and from time to time in their sole discretion. The failure by the Company and the Guarantors at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time.
Section 2.04 — Procedures for Tendering.
(a) Holders of Notes who wish to participate in the Exchange Offer shall tender their Notes to the exchange agent (which shall be Fidelitas Trust Company, N.A., as Trustee under the Indenture, or such other institution as the Company may appoint and as is acceptable to the Trustee) by delivering a properly completed and duly executed letter of transmittal, together with all other required documents, to the exchange agent at the address specified in the Exchange Offer documents.
(b) In the alternative, a Holder may tender Notes held through DTC by causing DTC to transfer such Notes into the exchange agent's account at DTC and by complying with the Automated Tender Offer Program ("ATOP") procedures of DTC, including transmitting to the exchange agent a computer-generated message in which such Holder acknowledges and agrees to be bound by the terms of the letter of transmittal.
(c) The Company shall make available guaranteed delivery procedures whereby a Holder who wishes to tender Notes and whose Notes are not immediately available, or who cannot deliver such Notes, the letter of transmittal, or any other required documents to the exchange agent prior to the expiration date of the Exchange Offer, may nonetheless tender such Notes.
(d) Any Holder who has tendered Notes in the Exchange Offer shall have the right to withdraw such tender at any time prior to the close of business on the expiration date of the Exchange Offer by delivering a written notice of withdrawal to the exchange agent, or by withdrawing the tender through DTC's ATOP system, as applicable.
(e) The Company shall inform the Trustee, in writing, of the terms of the Exchange Offer and shall instruct the Trustee to act as exchange agent in connection with the Exchange Offer. The Company and the Trustee shall enter into such supplemental agreements, if any, as are necessary or appropriate to effect such appointment and to set forth the duties and responsibilities of the Trustee as exchange agent.
Section 2.05 — Participating Broker-Dealers.
(a) Each Participating Broker-Dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer in exchange for Notes, where such Notes were acquired by such Participating Broker-Dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. The letter of transmittal delivered to Holders in connection with the Exchange Offer shall state that, by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
(b) The Company hereby grants to each such Participating Broker-Dealer a license to use the Prospectus forming a part of the Exchange Offer Registration Statement in connection with the offer and sale of Exchange Notes received by such Participating Broker-Dealer in the Exchange Offer, subject to the conditions set forth in this Agreement.
(c) The Company and the Guarantors shall use their commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the Prospectus contained therein as necessary, in order to permit such Prospectus to be lawfully delivered by Participating Broker-Dealers in connection with resales of Exchange Notes, for a period of 180 days after the date of consummation of the Exchange Offer (or such shorter period as shall end on the date on which the last Participating Broker-Dealer has sold all Exchange Notes held by it in connection with market-making or other trading activities). A Participating Broker-Dealer that delivers such a Prospectus to purchasers in connection with resales of Exchange Notes shall be subject to certain provisions of this Agreement, including the indemnification and contribution provisions of Article 6.
(d) During the period set forth in Section 2.05(c), the Company shall promptly notify the Representative (Kensington Barrow & Co.) and each Participating Broker-Dealer who has notified the Company in writing that it is a Participating Broker-Dealer of the occurrence of any event or the existence of any fact that makes any statement in the Prospectus untrue in any material respect or that requires the making of any changes in the Prospectus in order that the Prospectus does not contain an 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 shall use its commercially reasonable efforts to prepare and furnish to each such Participating Broker-Dealer a supplement or amendment to the Prospectus so that the Prospectus, as so supplemented or amended, does not contain an 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.
ARTICLE 3 — SHELF REGISTRATION
Section 3.01 — Shelf Registration Statement.
(a) If:
(i) the Company is not permitted to file the Exchange Offer Registration Statement because the Exchange Offer is not permitted by applicable law or applicable interpretations of the staff of the SEC;
(ii) any Holder of Registrable Securities notifies the Company in writing prior to the 20th Business Day following the consummation of the Exchange Offer that:
(A) such Holder is prohibited by applicable law or applicable interpretations of the staff of the SEC from participating in the Exchange Offer;
(B) such Holder may not resell 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, or available for, such resales by such Holder; or
(C) such Holder is a Broker-Dealer and holds Notes that were acquired directly from the Company or any affiliate of the Company;
or
(iii) for any other reason the Exchange Offer is not consummated within 365 days after the Closing Date;
then the Company and the Guarantors shall:
(x) as promptly as practicable (but in any event within 60 days after the obligation to file arises under this Section 3.01(a)), file with the SEC a Shelf Registration Statement on Form S-3 (or, if the Company is not then eligible to use Form S-3, on Form S-1, or any successor forms thereto) covering the resale of all Registrable Securities on a continuous or delayed basis pursuant to Rule 415 under the Securities Act (or any similar rule that may be adopted by the SEC);
(y) use their commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the SEC on or before the later of (1) 365 days after the Closing Date and (2) 90 days after the date on which the obligation to file the Shelf Registration Statement arises; and
(z) keep such Shelf Registration Statement continuously effective, supplemented, and amended as required by the provisions of Section 4.01 of this Agreement to the extent necessary to ensure that it is available for resales of Registrable Securities by the Holders entitled to the benefit thereof, for a period ending on the earliest of (1) the second anniversary of the Closing Date, (2) the date on which all Registrable Securities covered by the Shelf Registration Statement have been sold pursuant thereto, and (3) the date on which all Registrable Securities covered by the Shelf Registration Statement become eligible for resale under Rule 144 under the Securities Act (or any successor provision thereto) without volume limitations, manner of sale requirements, or other restrictions on transfer thereunder.
(b) The Company shall use its commercially reasonable efforts to file any additional registration statements as may be necessary to register for resale all Registrable Securities held by Holders entitled to the benefit of this Section 3.01.
Section 3.02 — Provision of Information by Holders.
(a) No Holder of Registrable Securities shall be entitled to be named as a selling securityholder in a Shelf Registration Statement or to use the Prospectus forming a part thereof for resales of Registrable Securities unless such Holder has furnished to the Company in writing, within 20 Business Days after receipt of a written request therefor from the Company, such information as the Company may reasonably request for use in connection with the Shelf Registration Statement or Prospectus or any amendment or supplement thereto. Each such Holder shall be required to provide a completed and executed selling securityholder questionnaire in the form provided by the Company.
(b) Each Holder who is named as a selling securityholder in a Shelf Registration Statement agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished by such Holder to the Company not materially misleading.
Section 3.03 — Supplements and Amendments to Shelf Registration Statement.
(a) The Company shall supplement or amend the Shelf Registration Statement, including by filing post-effective amendments, as necessary or appropriate:
(i) to add or remove selling securityholders from the Shelf Registration Statement upon receipt of appropriate information from such Holders;
(ii) to update, correct, or supplement any information contained in the Shelf Registration Statement or the Prospectus forming part thereof, including to reflect any changed facts or circumstances that would render any statement therein untrue or misleading; and
(iii) to comply with the requirements of the Securities Act and the rules and regulations of the SEC thereunder relating to the registration and sale of securities.
(b) Each Holder of Registrable Securities agrees to suspend, upon receipt of any notice from the Company of the filing of a supplement or amendment as contemplated by this Section 3.03, the use of the Prospectus until such Holder has received copies of the supplemented or amended Prospectus, which the Company shall furnish as promptly as practicable to each Holder following the filing thereof.
ARTICLE 4 — REGISTRATION PROCEDURES
Section 4.01 — General Obligations of the Company.
In connection with any Registration Statement contemplated by this Agreement (whether an Exchange Offer Registration Statement or a Shelf Registration Statement), the Company and each of the Guarantors shall:
(a) prepare and file with the SEC the applicable Registration Statement and the Prospectus forming a part thereof, together with all exhibits thereto, in such form as is required by applicable law, and use their commercially reasonable efforts to cause such Registration Statement to become effective under the Securities Act as promptly as practicable; prepare and file with the SEC such amendments (including post-effective amendments) and supplements to such Registration Statement and the Prospectus included therein as may be necessary to keep such Registration Statement continuously effective and the Prospectus usable for the applicable period required under this Agreement; and respond as promptly as practicable to any comments received from the SEC or its staff with respect to such Registration Statement or any amendment or supplement thereto;
(b) furnish to each Holder of Registrable Securities, the Representative, and counsel to the Initial Purchasers (Whitfield, Crane & Aldrich LLP, Attention: Nathaniel R. Bosch), without charge, as many copies of the applicable Prospectus (including each preliminary prospectus and each amendment or supplement thereto) in conformity with the requirements of the Securities Act as such Persons may reasonably request, and the Company hereby consents to the use of such Prospectus (and each amendment or supplement thereto) by each such Holder and each Participating Broker-Dealer in connection with the offering and sale of the Registrable Securities covered by such Prospectus (and any amendment or supplement thereto) in the manner set forth therein;
(c) use their commercially reasonable efforts to register or qualify the Registrable Securities under the securities or blue sky laws of such jurisdictions within the United States as any Holder of Registrable Securities, the Representative, or counsel to the Initial Purchasers reasonably requests in writing; use their commercially reasonable efforts to keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be effective; and do any and all other acts or things that may be reasonably necessary or advisable to enable the disposition of the Registrable Securities in such jurisdictions; provided, however, that the Company and the Guarantors shall not be required to (i) qualify generally to do business in any jurisdiction where they would not otherwise be required to qualify, (ii) subject themselves to general taxation in any such jurisdiction where they are not then so subject, or (iii) consent to general service of process in any such jurisdiction where they are not then subject to such service;
(d) notify each Holder of Registrable Securities, the Representative, and counsel to the Initial Purchasers promptly and, if requested, confirm such notification in writing:
(i) when the applicable Registration Statement or any amendment thereto has been filed with the SEC, and when such Registration Statement or any post-effective amendment thereto has become effective;
(ii) of any request by the SEC or its staff for amendments or supplements to the Registration Statement or the Prospectus or for additional information relating thereto;
(iii) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement under the Securities Act or of the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the making of any changes in the Registration Statement or the Prospectus so that, as of such date, the Registration Statement does not 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 that the Prospectus does not 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, in light of the circumstances under which they were made, not misleading;
(e) use their commercially reasonable efforts to prevent the issuance of any stop order suspending the effectiveness of any Registration Statement or of any order suspending or preventing the use of the related Prospectus and, if any such order is issued, to obtain the withdrawal thereof as promptly as practicable;
(f) prior to any public offering of the Registrable Securities pursuant to any Registration Statement, cooperate with the Holders and their counsel in performing any customary due diligence investigation, including making available senior officers and other appropriate representatives of the Company for participation in "road show" presentations, due diligence sessions, and drafting sessions, as reasonably requested;
(g) provide a CUSIP number for the Exchange Notes and the Registrable Securities registered under any Registration Statement, and provide the Trustee with printed certificates for the Exchange Notes and the Registrable Securities (if applicable) in a form eligible for deposit with DTC;
(h) enter into and perform under such customary agreements (including, if applicable, an underwriting agreement with terms that are customary for similar offerings, containing customary representations, warranties, covenants, conditions, indemnification, and contribution provisions) and take all such other commercially reasonable actions in connection therewith as are reasonably required in order to facilitate the registration and disposition of the Registrable Securities, including, in the case of a Shelf Registration Statement covering an underwritten offering by any Holder, making available members of senior management of the Company for participation in customary marketing efforts (including "road show" presentations);
(i) make available for inspection by any Holder of Registrable Securities, any underwriter participating in any disposition of Registrable Securities, and any attorney, accountant, or other agent retained by any such Holder or underwriter, all financial and other records and pertinent corporate and business documents and properties of the Company and its subsidiaries as shall be reasonably requested, and cause the Company's officers, directors, employees, and independent registered public accounting firm (Palladian & Howe LLP) to respond to such reasonable inquiries as may be necessary for such Holder or underwriter to conduct a reasonable investigation within the meaning of Section 11(b) of the Securities Act; provided that any information that is designated by the Company in writing as confidential at the time of delivery of such information shall be kept confidential by such Holder or underwriter, attorney, accountant, or agent, unless (A) disclosure of such information is required by court or administrative order or is necessary in connection with a court or administrative proceeding, (B) disclosure of such information is, in the reasonable opinion of counsel to such Holder or underwriter, required by applicable law (including any disclosure requirements under the Securities Act or the Exchange Act), or (C) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by such Holder or underwriter, attorney, accountant, or agent in violation of this proviso;
(j) use their commercially reasonable efforts to cause the Indenture to be qualified under the TIA in connection with the registration of the Exchange Notes or the Registrable Securities, as applicable, and cooperate with the Trustee in connection with any required filings and procedures necessary to effect such qualification, including the preparation and filing of any required statements of eligibility and qualification under the TIA;
(k) obtain and deliver to each Holder, the Representative, and counsel to the Initial Purchasers one or more comfort letters from the Company's independent registered public accounting firm, Palladian & Howe LLP (Engagement Partner: Kenneth W. Sturgis), in customary form and covering matters of the type customarily covered by comfort letters delivered to underwriters in connection with primary offerings of debt securities, including a statement as to the independence of such accountants within the meaning of the Securities Act and the rules and regulations of the SEC promulgated thereunder and the applicable requirements of the Public Company Accounting Oversight Board, addressed to the Holders and the Initial Purchasers; provided that if such comfort letters are delivered in connection with an underwritten offering pursuant to a Shelf Registration Statement, such comfort letters shall be addressed to the underwriters; and
(l) obtain and deliver to each Holder, the Representative, and counsel to the Initial Purchasers one or more legal opinions from the Company's counsel in customary form, addressed to the Holders and the Initial Purchasers, covering such matters as are customarily covered by legal opinions delivered to underwriters in connection with primary offerings of debt securities.
Section 4.02 — Suspension Period.
(a) Notwithstanding any other provision of this Agreement, the Company may, upon the occurrence of any event described in Section 4.02(b), by written notice to each Holder of Registrable Securities (a "Blackout Notice"), suspend the use of the Prospectus forming a part of any Registration Statement for a reasonable period of time (a "Blackout Period"); provided, however, that:
(i) no Blackout Period shall exceed 30 consecutive days;
(ii) no more than one Blackout Period shall occur in any 90-day period; and
(iii) the aggregate number of days included in all Blackout Periods during any 12-month period shall not exceed 60 days.
(b) A Blackout Period may be invoked only if the Board of Directors of the Company (or a duly authorized committee thereof) has determined in good faith that the filing of an amendment or supplement to the Registration Statement or the Prospectus, or the making of any changes therein, would require the disclosure of material non-public information which disclosure at such time, in the good faith judgment of the Board of Directors, would be seriously detrimental to the Company and its subsidiaries, taken as a whole.
(c) Upon receipt of a Blackout Notice, each Holder of Registrable Securities shall immediately discontinue the offer and sale of Registrable Securities pursuant to the Registration Statement until such Holder receives copies of a supplemented or amended Prospectus or is notified in writing by the Company that the Holder may resume offers and sales pursuant to the Registration Statement, whichever is earlier.
(d) The Company shall, as promptly as practicable following the termination of any Blackout Period, (i) prepare and file such amendments and supplements to the Registration Statement and the Prospectus as may be necessary to correct any untrue statement of a material fact or omission to state a material fact and (ii) provide written notice to each Holder that the Blackout Period has ended and that the Holder may resume offers and sales of Registrable Securities pursuant to the Registration Statement and the Prospectus, as so amended or supplemented.
Section 4.03 — Holder Obligations.
(a) Each Holder of Registrable Securities that sells or proposes to sell Registrable Securities pursuant to a Registration Statement shall furnish to the Company, on a timely basis, such information as the Company may reasonably request and as is required by applicable law for inclusion in or in connection with such Registration Statement. If any such information furnished by such Holder to the Company in writing specifically for use in the Registration Statement or the related Prospectus is untrue or incomplete in any material respect, such Holder shall promptly advise the Company thereof and furnish to the Company such corrected or supplemental information as may be necessary to make the statements in the Registration Statement or Prospectus not misleading.
(b) Each Holder of Registrable Securities that sells Registrable Securities pursuant to a Registration Statement shall comply with all applicable provisions of the Securities Act, the Exchange Act, and the rules and regulations promulgated thereunder, including the prospectus delivery requirements of Section 5(b)(2) of the Securities Act, and shall not take any action that would result in the loss of the availability of any Registration Statement or Prospectus under this Agreement.
(c) Each Holder shall promptly notify the Company of the completion of the sale of all Registrable Securities for which such Holder is named as a selling securityholder in a Shelf Registration Statement, so that the Company may comply with its obligations under this Agreement with respect to the duration of the effectiveness of the Shelf Registration Statement.
ARTICLE 5 — REGISTRATION DEFAULTS AND ADDITIONAL INTEREST
Section 5.01 — Registration Defaults.
A "Registration Default" shall be deemed to have occurred if:
(a) the Exchange Offer Registration Statement has not been filed with the SEC on or prior to the Filing Deadline (i.e., January 4, 2025);
(b) the Exchange Offer has not been consummated, or, if a Shelf Registration Statement is required to be filed pursuant to Section 3.01, such Shelf Registration Statement has not been declared effective by the SEC, in either case on or prior to the Consummation Deadline (i.e., July 8, 2025); or
(c) after the applicable Registration Statement (whether the Exchange Offer Registration Statement or the Shelf Registration Statement) has been declared effective by the SEC, such Registration Statement thereafter ceases to be effective or the Prospectus contained therein ceases to be usable for its intended purpose (other than during a permitted Blackout Period as described in Section 4.02) at any time during the period such Registration Statement is required to be effective pursuant to this Agreement, and such failure continues for more than 30 days (whether or not consecutive) in any 12-month period.
For the avoidance of doubt, a Registration Default under clause (c) above shall be deemed cured at such time as the Registration Statement again becomes effective and the Prospectus again becomes usable, and no further Additional Interest shall accrue during any permitted Blackout Period.
Section 5.02 — Additional Interest.
(a) If and for so long as a Registration Default shall have occurred and be continuing, additional interest (the "Additional Interest") shall accrue on the Notes (in addition to the stated interest rate of 8.250% per annum) from and including the date on which such Registration Default first occurs at a rate equal to:
(i) 0.25% per annum for the first 90-day period immediately following the date on which such Registration Default occurs; and
(ii) an additional 0.25% per annum with respect to each subsequent 90-day period that such Registration Default continues, up to a maximum Additional Interest rate of 0.50% per annum.
(b) Notwithstanding anything to the contrary in this Section 5.02, the maximum aggregate rate of Additional Interest payable on the Notes at any time, regardless of the number of Registration Defaults that have occurred and are continuing simultaneously, shall not exceed 1.00% per annum.
(c) Additional Interest shall be payable semi-annually in arrears on each interest payment date under the Indenture (i.e., January 1 and July 1 of each year), to the Holders of record on the immediately preceding record date established under the Indenture for the payment of regular interest on the Notes. The amount of Additional Interest payable for any period shall be computed on the basis of a 360-day year consisting of twelve 30-day months.
(d) Additional Interest shall accrue on the Notes in addition to, and shall not reduce or otherwise affect, the stated interest of 8.250% per annum payable on the Notes under the Indenture.
(e) Upon the cure of all Registration Defaults, the accrual of Additional Interest shall cease as of the date of such cure. For the avoidance of doubt, (i) Additional Interest shall not continue to accrue after all Registration Defaults have been cured, even if Additional Interest accrued during a Registration Default has not yet been paid, and (ii) the Company's obligation to pay all accrued and unpaid Additional Interest shall survive the cure of any Registration Default.
(f) All obligations of the Company and the Guarantors to pay Additional Interest shall be satisfied in full upon (i) the consummation of the Exchange Offer (with respect to a Registration Default under clause (a) or (b) of Section 5.01) or (ii) the effectiveness of the Shelf Registration Statement and the maintenance of its effectiveness for the required period (with respect to any Registration Default), in each case provided that no Registration Default is then continuing.
Section 5.03 — Payment Mechanism.
(a) Additional Interest shall be paid by the Company to Fidelitas Trust Company, N.A. (acting in its capacity as paying agent under the Indenture), and the Trustee shall distribute such Additional Interest to Holders of the Notes in the same manner and subject to the same procedures as the distribution of regular interest payments under the Indenture.
(b) For all purposes of the Indenture, references therein to "interest" on the Notes shall be deemed to include any Additional Interest that may be payable pursuant to this Agreement. The obligation to pay Additional Interest shall be deemed to be an obligation of the Company and the Guarantors under the Indenture, and any failure by the Company to pay Additional Interest when due shall constitute a default under the Indenture to the same extent as a failure to pay regular interest on the Notes.
(c) The Company shall notify the Trustee in writing of the occurrence of any Registration Default and of the rate and amount of Additional Interest payable in respect thereof, and shall deliver to the Trustee, on or prior to each interest payment date, the funds necessary to pay all Additional Interest then due and payable.
ARTICLE 6 — INDEMNIFICATION AND CONTRIBUTION
Section 6.01 — Indemnification by the Company.
(a) The Company and each Guarantor, jointly and severally, shall indemnify and hold harmless each Holder of Registrable Securities, each Participating Broker-Dealer, and each Person, if any, who controls any such Holder or Participating Broker-Dealer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the respective directors, officers, partners, members, employees, agents, and affiliates of each such Holder, Participating Broker-Dealer, and controlling Person (each, an "Indemnified Holder Party"), from and against any and all losses, claims, damages, liabilities, and expenses (including reasonable and documented costs of investigation and reasonable and documented fees and disbursements of legal counsel) (collectively, "Losses"), joint or several, to which such Indemnified Holder Party may become subject under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise, insofar as such Losses arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any amendment or supplement thereto, or in any Prospectus or any amendment or supplement thereto, or in any preliminary prospectus or "free writing prospectus" (as defined in Rule 405 under the Securities Act), or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; or
(ii) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus or any amendment or supplement thereto, or arising out of or based upon any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(b) Notwithstanding the foregoing, the Company and the Guarantors shall not be liable under this Section 6.01 to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or an omission or alleged omission that was made in any Registration Statement, Prospectus, or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Indemnified Holder Party specifically for inclusion therein.
(c) The indemnification provided in this Section 6.01 shall remain in full force and effect regardless of any investigation made by or on behalf of any Indemnified Holder Party and shall survive the transfer of any Registrable Securities by any Holder.
Section 6.02 — Indemnification by Holders.
(a) Each Holder of Registrable Securities that has been included as a selling securityholder in a Shelf Registration Statement or that has received Exchange Notes in the Exchange Offer shall, severally and not jointly, indemnify and hold harmless the Company, each Guarantor, each of the Initial Purchasers, and the respective directors, officers, employees, agents, and affiliates of each of the foregoing, and each Person, if any, who controls the Company, any Guarantor, or any Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, an "Indemnified Company Party"), from and against any and all Losses to which such Indemnified Company Party may become subject under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise, insofar as such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus, or any amendment or supplement thereto, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in light of the circumstances under which they were made) not misleading, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder specifically for inclusion therein.
(b) The liability of each such Holder under this Section 6.02 shall be limited in amount to the net proceeds (after deducting underwriting discounts and commissions) actually received by such Holder from the sale of Registrable Securities pursuant to the applicable Registration Statement giving rise to such indemnification obligation.
Section 6.03 — Procedures.
(a) Promptly after receipt by any Person entitled to indemnification under this Article 6 (an "Indemnified Party") of notice of the commencement of any action, claim, suit, or proceeding (a "Proceeding") against such Indemnified Party in respect of which indemnity may be sought under this Article 6, such Indemnified Party shall notify the party or parties from which indemnification is being sought (the "Indemnifying Party") in writing of the commencement thereof; provided, however, that the failure to so notify the Indemnifying Party shall not relieve it from any liability which it may have to any Indemnified Party under this Article 6 (except to the extent that such failure materially prejudices the Indemnifying Party's ability to defend such Proceeding).
(b) If any Proceeding is brought against an Indemnified Party and the Indemnified Party notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to participate therein and, to the extent that it may wish, to assume the defense thereof with counsel reasonably satisfactory to such Indemnified Party. After notice from the Indemnifying Party to such Indemnified Party of its election to so assume the defense thereof, the Indemnifying Party shall not be liable to such Indemnified Party under this Article 6 for any fees and expenses of legal counsel subsequently incurred by such Indemnified Party in connection with the defense thereof; provided, however, that if (i) the Indemnifying Party fails to take reasonable steps necessary to defend diligently the Proceeding within 20 days after receiving notice of such Proceeding, (ii) the Indemnified Party shall have been advised by its counsel in writing that there exists a conflict of interest between the Indemnifying Party and the Indemnified Party, or (iii) the Indemnified Party who is a defendant in any Proceeding that is also brought against the Indemnifying Party reasonably shall have concluded that there may be one or more legal defenses available to such Indemnified Party that are different from or in addition to those available to the Indemnifying Party, then, in any such case, the Indemnified Party shall have the right to retain its own counsel at the reasonable expense of the Indemnifying Party; provided, further, that the Indemnifying Party shall not be required to pay the fees and expenses of more than one separate counsel (together with one local counsel in each applicable jurisdiction) for all Indemnified Parties who are defendants in any such Proceeding.
(c) No Indemnifying Party shall, without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned, or delayed), effect any settlement of any pending or threatened Proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party unless such settlement (i) includes an unconditional release of such Indemnified Party from all liability on all claims that are the subject matter of such Proceeding and (ii) does not include any statement as to or an admission of fault, culpability, or failure to act by or on behalf of such Indemnified Party.
(d) Each Indemnified Party shall cooperate in good faith with the Indemnifying Party in the defense of any Proceeding and shall furnish such records, information, and testimony, and shall attend such conferences, discovery proceedings, hearings, trials, and appeals, as may be reasonably requested by the Indemnifying Party in connection with such defense.
Section 6.04 — Contribution.
(a) If the indemnification provided for in this Article 6 is unavailable to, or insufficient to hold harmless, an Indemnified Party in respect of any Losses referred to herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the Company and the Guarantors on the one hand and the Holders of Registrable Securities (or, as applicable, the Participating Broker-Dealers) on the other hand in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations.
(b) The relative fault of the Company and the Guarantors on the one hand and of the Holders (or, as applicable, the Participating Broker-Dealers) on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Holders and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. The amount paid or payable by an Indemnified Party as a result of the Losses referred to above shall be deemed to include, subject to the limitations set forth in this Article 6, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any Proceeding.
(c) Notwithstanding the foregoing, no Holder of Registrable Securities shall be required to contribute, in the aggregate, any amount in excess of the net proceeds (after deducting underwriting discounts and commissions) actually received by such Holder from the sale of Registrable Securities pursuant to the applicable Registration Statement giving rise to such contribution obligation.
(d) No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
(e) The Company, the Guarantors, and the Holders of Registrable Securities agree that it would not be just and equitable if contribution pursuant to this Section 6.04 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 6.04. The obligations of the Company, the Guarantors, and the Holders under this Section 6.04 shall survive the termination of this Agreement.
ARTICLE 7 — MISCELLANEOUS