REGISTRATION RIGHTS AGREEMENT
dated as of
April 19, 2022
among
TORCHLIGHT MINING CORP., as Issuer,
WOLVERINE LAKE MINING LTD., TORCHLIGHT MILLING & PROCESSING INC., and TORCHLIGHT U.S. HOLDINGS, INC., as Guarantors,
and
KELVANTIS CAPITAL MARKETS LLC, PRESTIGE BARRINGTON & CO., INC., and HALCYON SECURITIES INC., as Initial Purchasers
in respect of
$300,000,000 Aggregate Principal Amount of 8.750% Senior Secured Notes due 2029
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of April 19, 2022, by and among:
(1) TORCHLIGHT MINING CORP., a corporation incorporated under the Canada Business Corporations Act (the "Company" or the "Issuer"), with its headquarters at 2200 – 400 Burrard Street, Vancouver, British Columbia V6C 3A6, Canada, and its registered office at 1600 – 925 West Georgia Street, Vancouver, British Columbia V6C 3L2, Canada;
(2) WOLVERINE LAKE MINING LTD., a corporation incorporated under the Business Corporations Act (Ontario) ("WLML"), with its registered office at 44 Lakeshore Boulevard, Wolverine Lake, Ontario P0L 1R0, Canada;
(3) TORCHLIGHT MILLING & PROCESSING INC., a corporation incorporated under the Business Corporations Act (Ontario) ("TMPI"), with its registered office at 44 Lakeshore Boulevard, Wolverine Lake, Ontario P0L 1R0, Canada;
(4) TORCHLIGHT U.S. HOLDINGS, INC., a corporation incorporated under the General Corporation Law of the State of Delaware ("TUSHI"), with its registered office at 1209 Orange Street, Wilmington, Delaware 19801, United States (EIN: 84-3921057);
(WLML, TMPI, and TUSHI are referred to herein collectively as the "Guarantors" and each individually as a "Guarantor");
(5) KELVANTIS CAPITAL MARKETS LLC, a limited liability company organized under the laws of the State of Delaware (the "Lead Initial Purchaser"), with offices at 599 Lexington Avenue, 38th Floor, New York, NY 10022;
(6) PRESTIGE BARRINGTON & CO., INC., a corporation incorporated under the laws of the State of Delaware, with offices at 1285 Avenue of the Americas, 22nd Floor, New York, NY 10019; and
(7) HALCYON SECURITIES INC., a corporation incorporated under the laws of the State of New York, with offices at 200 Park Avenue, Suite 3100, New York, NY 10166.
(Kelvantis Capital Markets LLC, Prestige Barrington & Co., Inc., and Halcyon Securities Inc. are referred to herein collectively as the "Initial Purchasers" and each individually as an "Initial Purchaser.")
The Company, the Guarantors, and the Initial Purchasers are referred to herein each individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Company, the Guarantors, and the Initial Purchasers have entered into that certain Purchase Agreement dated as of March 29, 2022 (the "Purchase Agreement"), pursuant to which the Company agreed to issue and sell to the Initial Purchasers, and the Initial Purchasers agreed to purchase from the Company, $300,000,000 aggregate principal amount of 8.750% Senior Secured Notes due 2029 (the "Initial Notes"), and the Guarantors agreed to jointly and severally guarantee the Company's obligations under the Initial Notes;
WHEREAS, the Initial Notes were issued on the date hereof under an Indenture dated as of April 19, 2022 (the "Indenture"), among the Company, the Guarantors, and Northern Dominion Trust Company, as trustee (the "Trustee"), and bear interest at the rate of 8.750% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing October 15, 2022, and mature on April 15, 2029;
WHEREAS, the Initial Notes were issued at a price of 98.50% of par and are identified by the following CUSIP and ISIN numbers: CUSIP (144A): 891207 AA 3; CUSIP (Reg S): C89120 AA 5; ISIN (144A): US891207AA38; ISIN (Reg S): USC89120AA58;
WHEREAS, the Initial Notes and the related Guarantees were offered and sold in a transaction exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Rule 144A thereunder and Regulation S thereunder;
WHEREAS, as a condition to their obligations under the Purchase Agreement, the Initial Purchasers required the execution and delivery of this Agreement by the Company and the Guarantors; and
WHEREAS, the Company and the Guarantors desire to provide for the registration of the Exchange Notes (as defined herein) or, if applicable, the Initial Notes and the related Guarantees under the Securities Act, as set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals 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 agree as follows:
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ARTICLE 1 — DEFINITIONS
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Additional Interest" has the meaning set forth in Section 5.2 of this Agreement.
"Broker-Dealer" means any broker or dealer registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
"Closing Date" means April 19, 2022, being the date on which the Initial Notes were originally issued pursuant to the Purchase Agreement.
"Company" means Torchlight Mining Corp., a corporation incorporated under the Canada Business Corporations Act, and its successors and assigns.
"Consummation Deadline" means the date that is 365 days after the Closing Date (i.e., April 19, 2023), being the date by which the Exchange Offer must be consummated as provided in Section 2.1 of this Agreement.
"Effectiveness Deadline" means the date that is 365 days after the Closing Date (i.e., April 19, 2023), being the date by which any Shelf Registration Statement required to be filed pursuant to Article 3 of this Agreement must be declared effective by the SEC.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Exchange Guarantees" means the guarantees of the Exchange Notes by each of the Guarantors, issued under the Indenture in connection with the Exchange Offer, on substantially the same terms as the Guarantees relating to the Initial Notes.
"Exchange Notes" means the 8.750% Senior Secured Notes due 2029 to be issued by the Company under the Indenture in the Exchange Offer, with terms identical in all material respects to the Initial Notes (including, without limitation, the same principal amount, coupon rate, interest payment dates, maturity date, and collateral package), except that the Exchange Notes shall not contain transfer restrictions or registration rights provisions, and the related Exchange Guarantees.
"Exchange Offer" means the offer by the Company to exchange the Exchange Notes for the Initial Notes pursuant to this Agreement, as more fully described in Article 2 hereof.
"Exchange Offer Registration Statement" means the Registration Statement on Form F-10 (or, if Form F-10 is not available to the Company at the time of filing, such other appropriate form under the Securities Act) filed with the SEC by the Company and the Guarantors relating to the Exchange Offer, including any amendments and supplements thereto and the Prospectus included therein, together with all exhibits and other materials filed or incorporated by reference therein.
"Filing Deadline" means the date that is 270 days after the Closing Date (i.e., January 14, 2023), being the date by which the Exchange Offer Registration Statement (or, if applicable, the Shelf Registration Statement) must be filed with the SEC as provided in Section 2.1 or Section 3.1 of this Agreement, as the case may be.
"Guarantees" means the joint and several guarantees of the obligations of the Company under the Initial Notes by each of the Guarantors, as provided in the Indenture.
"Guarantors" means, collectively, Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc., together with any future subsidiary guarantor that may from time to time become a party to the Indenture and this Agreement, including any subsidiary that meets the $5,000,000 total asset threshold specified in the Indenture for purposes of the subsidiary guarantor accession provisions thereof, and their respective successors and assigns.
"Holders" means the registered holders from time to time of Registrable Securities, including the Initial Purchasers to the extent they hold Registrable Securities.
"Indenture" means the Indenture dated as of April 19, 2022, among the Company, the Guarantors, and Northern Dominion Trust Company, as Trustee, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
"Initial Notes" means the $300,000,000 aggregate principal amount of 8.750% Senior Secured Notes due 2029 issued by the Company on the Closing Date pursuant to the Purchase Agreement and the Indenture, including the Guarantees thereof.
"Initial Purchasers" means, collectively, Kelvantis Capital Markets LLC, Prestige Barrington & Co., Inc., and Halcyon Securities Inc., and their respective successors and assigns.
"Prospectus" means the prospectus included in any Registration Statement (including, without limitation, any preliminary prospectus and any 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, and all materials incorporated by reference or deemed to be incorporated by reference therein.
"Purchase Agreement" means the Purchase Agreement dated as of March 29, 2022, among the Company, the Guarantors, and the Initial Purchasers, pursuant to which the Initial Notes were sold to the Initial Purchasers.
"Registrable Securities" means the Initial Notes and the related Guarantees; provided, however, that any Initial Note or Guarantee shall cease to be a Registrable Security upon the earliest to occur of (i) the date on which an Exchange Offer Registration Statement has been declared effective by the SEC and the Exchange Offer has been consummated and such Initial Note has been exchanged for an Exchange Note in the Exchange Offer, (ii) the date on which such Initial Note or Guarantee has been effectively registered under the Securities Act and disposed of in accordance with an effective Shelf Registration Statement, or (iii) the date on which such Initial Note or Guarantee is eligible for resale without registration under the Securities Act pursuant to Rule 144 thereunder (or any successor rule thereto) without volume or manner-of-sale restrictions and without the requirement of the Company being in compliance with the current public information requirement of Rule 144(c)(1) (or any successor provision).
"Registration Default" has the meaning set forth in Section 5.1 of this Agreement.
"Registration Statement" means any registration statement of the Company and the Guarantors filed with the SEC under the Securities Act, including the Exchange Offer Registration Statement and the Shelf Registration Statement, as the case may be, together with all amendments and supplements thereto (including post-effective amendments), the Prospectus included therein, and all exhibits and other materials filed or incorporated by reference therein.
"SEC" means the U.S. Securities and Exchange Commission, or any successor agency thereto.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Shelf Registration Statement" means a Registration Statement filed by the Company and the Guarantors with the SEC providing for the resale by Holders of Registrable Securities on a continuous or delayed basis pursuant to Rule 415 under the Securities Act (or any successor rule thereto), including any amendments and supplements thereto (including post-effective amendments), the Prospectus included therein, and all exhibits and other materials filed or incorporated by reference therein.
"Suspension Period" has the meaning set forth in Section 3.3 of this Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, and the rules and regulations promulgated thereunder.
"Trustee" means Northern Dominion Trust Company, in its capacity as trustee under the Indenture, and any successor trustee appointed in accordance with the terms of the Indenture.
Section 1.2 — Rules of Construction
(a) Unless the context otherwise requires, references herein to the Securities Act, the Exchange Act, the Trust Indenture Act, and any other statute or law shall be deemed to include all amendments thereto, successor statutes, and all rules and regulations promulgated thereunder from time to time.
(b) When used herein, words importing the singular number shall include the plural and vice versa, words importing any gender shall include all genders, and words importing persons shall include individuals, corporations, partnerships, limited liability companies, joint ventures, trusts, unincorporated organizations, governmental authorities, and other entities of whatever nature.
(c) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."
(d) References to "Articles," "Sections," and "Annexes" are to articles, sections, and annexes of this Agreement unless otherwise specified.
(e) The headings of Articles, Sections, and Annexes are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.
(f) References to "herein," "hereof," "hereunder," and similar words refer to this Agreement as a whole and not to any particular Article, Section, or other subdivision.
(g) References to "dollars" or "$" are to lawful money of the United States of America unless otherwise specified.
(h) References to any agreement or instrument shall mean such agreement or instrument as from time to time amended, restated, supplemented, or otherwise modified in accordance with its terms.
(i) The terms "commercially reasonable efforts" shall not require the Company or any Guarantor to undertake extraordinary measures or to incur costs disproportionate to the expected benefits thereof, nor shall such term be interpreted to require litigation against the SEC or any governmental authority.
ARTICLE 2 — EXCHANGE OFFER
Section 2.1 — Exchange Offer Registration Statement
(a) The Company and the Guarantors shall use their commercially reasonable efforts to prepare and, no later than the Filing Deadline (being January 14, 2023, the date that is 270 days after the Closing Date), file with the SEC an Exchange Offer Registration Statement on Form F-10 (or, if Form F-10 is not available to the Company at the time of filing, on such other appropriate form under the Securities Act as shall permit the Exchange Offer to be effected in accordance with this Agreement and applicable law) relating to the Exchange Offer, which Exchange Offer Registration Statement shall comply in all material respects with the requirements of the Securities Act, the Exchange Act, and the Trust Indenture Act.
(b) The Company and the Guarantors shall use their commercially reasonable efforts to cause such Exchange Offer Registration Statement to be declared effective by the SEC as promptly as practicable following filing.
(c) The Company and the Guarantors shall use their commercially reasonable efforts to consummate the Exchange Offer no later than the Consummation Deadline (being April 19, 2023, the date that is 365 days after the Closing Date). For purposes of this Agreement, the Exchange Offer shall be deemed to have been "consummated" upon the date on which the Company has accepted for exchange all Initial Notes validly tendered and not withdrawn pursuant to the Exchange Offer and has issued the Exchange Notes to the tendering Holders in exchange therefor.
(d) The Exchange Notes and the Exchange Guarantees shall be issued under the Indenture dated as of April 19, 2022 with Northern Dominion Trust Company as Trustee, and shall have the same terms in all material respects as the Initial Notes, including, without limitation:
(i) a coupon rate of 8.750% per annum;
(ii) semi-annual interest payments on April 15 and October 15 of each year;
(iii) a maturity date of April 15, 2029;
(iv) the same collateral package as the Initial Notes, including first-priority liens on substantially all of the assets of the Company and the Guarantors as described in the Indenture; and
(v) the same covenants, events of default, redemption provisions, and other terms as set forth in the Indenture;
provided, however, that the Exchange Notes shall not contain transfer restrictions or registration rights provisions applicable to the Initial Notes, and the legends restricting transfer that appear on the Initial Notes shall not appear on the Exchange Notes.
(e) The Exchange Offer Registration Statement shall include a Prospectus that may be used by Broker-Dealers in connection with resales of Exchange Notes received in the Exchange Offer for a period of 180 days (or such longer period as may be required by applicable SEC interpretations) following consummation of the Exchange Offer, as more fully described in Section 4.3 of this Agreement.
Section 2.2 — Exchange Offer Procedures
In connection with the Exchange Offer, the Company and the Guarantors shall comply with the following procedures:
(a) The Exchange Offer shall remain open for a period of not less than 20 business days (or such longer period as may be required by applicable law, regulation, or SEC interpretation) from the date on which notice of the Exchange Offer is mailed or otherwise delivered to the Holders.
(b) The Company shall accept for exchange all Initial Notes validly tendered and not validly withdrawn pursuant to the Exchange Offer, and shall issue and cause to be delivered to the tendering Holders the Exchange Notes in exchange therefor, promptly following the expiration of the Exchange Offer.
(c) Interest on the Exchange Notes shall accrue from the last interest payment date on which interest was paid on the tendered Initial Notes (or, if no interest has been paid on the Initial Notes prior to the date of exchange, from the Closing Date). No additional interest shall accrue or be payable to the Holders as a result of the exchange.
(d) The Exchange Offer shall not be subject to any conditions other than the following:
(i) the Exchange Offer does not violate applicable law or any applicable interpretation of the staff of the SEC;
(ii) no action or proceeding shall have been instituted or threatened in any court or before any governmental agency 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 or the Guarantors to proceed with the Exchange Offer; and
(iii) all governmental approvals necessary for the consummation of the Exchange Offer shall have been obtained, which approvals the Company and the Guarantors shall use their commercially reasonable efforts to obtain.
(e) The Company and the Guarantors shall inform each Holder of the terms of the Exchange Offer by means of a letter of transmittal substantially in the form attached hereto as Annex A (or such other form as may be customary for exchange offers of this nature), which letter of transmittal shall be delivered to each Holder in connection with the Exchange Offer.
(f) Each Holder participating in the Exchange Offer shall be required to represent and warrant in the letter of transmittal or otherwise in writing that:
(i) such Holder is acquiring the Exchange Notes in the ordinary course of its business;
(ii) such Holder is not engaged in, does not intend to engage in, and has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the Exchange Notes;
(iii) such Holder is not an "affiliate" of the Company or any Guarantor, within the meaning of Rule 405 under the Securities Act; and
(iv) if such Holder is a Broker-Dealer that will receive Exchange Notes for its own account in exchange for Initial Notes that were acquired as a result of market-making activity or other trading activity, such Holder acknowledges that it will deliver a Prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes.
Section 2.3 — Conditions to Shelf Registration Obligation
Notwithstanding the foregoing provisions of this Article 2, the Company and the Guarantors shall file a Shelf Registration Statement in accordance with Article 3 of this Agreement if:
(a) applicable interpretations of the staff of the SEC do not permit the Company to effect the Exchange Offer as contemplated by this Article 2;
(b) for any reason the Exchange Offer is not consummated within the time period specified in Section 2.1(c) (i.e., on or before the Consummation Deadline);
(c) any Initial Purchaser so requests in writing with respect to Initial Notes held by such Initial Purchaser that are not eligible to be exchanged for Exchange Notes in the Exchange Offer; or
(d) any Holder that is not eligible to participate in the Exchange Offer (including, without limitation, any Holder that is an "affiliate" of the Company or any Guarantor within the meaning of Rule 405 under the Securities Act) or that participates in the Exchange Offer but does not receive fully freely transferable Exchange Notes in exchange for Initial Notes tendered in the Exchange Offer (other than by reason of such Holder being an affiliate of the Company or any Guarantor);
provided that, in the case of clauses (c) and (d) above, the Company and the Guarantors shall be required to file a Shelf Registration Statement only with respect to the Registrable Securities held by the requesting Initial Purchaser or the affected Holder, as the case may be, and not with respect to all of the Registrable Securities, unless the Company and the Guarantors determine in their discretion to include all Registrable Securities in such Shelf Registration Statement.
ARTICLE 3 — SHELF REGISTRATION
Section 3.1 — Shelf Registration Statement
If the Company and the Guarantors are required to file a Shelf Registration Statement pursuant to Section 2.3 of this Agreement, the Company and the Guarantors shall:
(a) Use their commercially reasonable efforts to prepare and file with the SEC a Shelf Registration Statement covering the resale of all Registrable Securities (or such portion thereof as is required by Section 2.3) on a continuous or delayed basis pursuant to Rule 415 under the Securities Act (or any successor rule thereto), no later than the Filing Deadline (being January 14, 2023, the date that is 270 days after the Closing Date); provided, however, that if the obligation to file a Shelf Registration Statement arises after the Filing Deadline (as a result of circumstances described in Section 2.3 that occur after such date), the Company and the Guarantors shall file such Shelf Registration Statement as promptly as practicable, and in any event no later than 90 days after the date on which the obligation to file such Shelf Registration Statement arises.
(b) Use their commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the SEC no later than the Effectiveness Deadline (being April 19, 2023, the date that is 365 days after the Closing Date); provided, however, that if the obligation to file a Shelf Registration Statement arises after the Effectiveness Deadline (as a result of circumstances described in Section 2.3 that occur after such date), the Company and the Guarantors shall use their commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective as promptly as practicable, and in any event no later than 90 days after the date on which such Shelf Registration Statement is filed.
(c) Keep the Shelf Registration Statement continuously effective and usable for the resale of Registrable Securities until the earlier to occur of:
(i) the second anniversary of the effective date of such Shelf Registration Statement (or such shorter period as permits all Registrable Securities covered thereby to have been sold thereunder in accordance with the intended methods of distribution set forth therein); and
(ii) the date on which all Registrable Securities covered by such Shelf Registration Statement have been sold pursuant thereto or have otherwise ceased to be Registrable Securities (as determined in accordance with the definition of "Registrable Securities" in Section 1.1).
(d) The Shelf Registration Statement shall be on Form F-10 or such other form under the Securities Act as is available to the Company for such purpose, and shall provide for the resale of the Registrable Securities by the Holders thereof from time to time, including, without limitation, in ordinary brokerage transactions, in negotiated transactions, through the writing of options on the Registrable Securities, or through a combination of such methods.
Section 3.2 — Provision of Information by Holders
(a) Each Holder of Registrable Securities that wishes to have its Registrable Securities included in the Shelf Registration Statement shall furnish to the Company such information as the Company may reasonably request in writing and as is reasonably necessary to effect the registration of such Holder's Registrable Securities and to permit the Company to comply with the requirements of the Securities Act, the Exchange Act, and the rules and regulations promulgated thereunder. Such information shall include, without limitation, the Holder's name, address, the aggregate principal amount of Registrable Securities held, and the intended method of distribution.
(b) Each such Holder shall furnish the requested information within 10 business days after receipt of such request from the Company. If any Holder fails to furnish such information within such 10-business-day period, the Company may exclude such Holder's Registrable Securities from the Shelf Registration Statement without liability to such Holder, and Additional Interest shall not accrue with respect to the Registrable Securities held by such non-complying Holder during the period of such non-compliance.
(c) Each Holder whose Registrable Securities are included in the Shelf Registration Statement shall promptly notify the Company in writing of any change in the information previously furnished by such Holder that would require an amendment or supplement to the Shelf Registration Statement or the Prospectus included therein.
Section 3.3 — Suspension Periods
(a) Notwithstanding any other provision of this Agreement, the Company may suspend the use of any Prospectus included in the Shelf Registration Statement for a period not to exceed 60 days (whether or not consecutive) in any 365-day period (each such period of suspension, a "Suspension Period") if the Company's Board of Directors (or a duly authorized committee thereof) determines in good faith, after consultation with outside counsel, that:
(i) the continued use of such Prospectus would require the disclosure of material non-public information that the Company has a bona fide business purpose for preserving as confidential; and
(ii) such disclosure at such time would be materially adverse to the Company or its business, operations, prospects, or financial condition.
(b) The Company shall promptly deliver written notice to each Holder of Registrable Securities whose securities are covered by the Shelf Registration Statement upon the commencement of any Suspension Period. Such notice shall state that a Suspension Period has commenced and that the Holders should cease use of the Prospectus, but need not specify the reason for or nature of the Suspension Period. The Company shall promptly deliver written notice to each such Holder upon the termination of any Suspension Period, stating that the Suspension Period has ended and that the Prospectus may again be used in connection with resales of Registrable Securities.
(c) Any Suspension Periods that extend beyond the aggregate limit of 60 days in any 365-day period shall constitute a Registration Default as provided in Section 5.1(c) of this Agreement.
(d) During any Suspension Period, each Holder of Registrable Securities shall not offer or sell any Registrable Securities pursuant to the Shelf Registration Statement and shall not deliver, use, or refer to the Prospectus in connection with any offer or sale of Registrable Securities until the Suspension Period has been terminated and the Holder has received the written notice described in clause (b) above confirming such termination.
ARTICLE 4 — REGISTRATION PROCEDURES
Section 4.1 — General Obligations of the Company
In connection with any Registration Statement filed pursuant to this Agreement (whether an Exchange Offer Registration Statement or a Shelf Registration Statement), the Company and the Guarantors shall:
(a) Prepare and file with the SEC all amendments (including post-effective amendments) and supplements to the Registration Statement and the Prospectus included therein as may be necessary to keep such Registration Statement effective and usable for the applicable period as required by this Agreement, and to comply in all material respects with the provisions of the Securities Act with respect to the disposition of the Registrable Securities or Exchange Notes, as applicable, covered by such Registration Statement.
(b) Furnish to each participating Holder and each Initial Purchaser, prior to the filing of the Registration Statement and any amendment or supplement thereto (other than documents incorporated by reference therein after the initial filing of the Registration Statement), copies of the Registration Statement, including all documents incorporated by reference therein and all exhibits, and each such amendment or supplement thereto, in such form as is proposed to be filed, and afford each such Holder and Initial Purchaser a reasonable opportunity (and in any event not less than five business days) to review and comment on such documents, and consider in good faith any comments received from such persons or their counsel.
(c) Include in each Registration Statement and Prospectus all material information required by the Securities Act, the Exchange Act, the Trust Indenture Act, and the rules and regulations of the SEC thereunder for the registration of the Exchange Notes or the resale of the Registrable Securities, as applicable, and ensure that each Registration Statement and Prospectus conforms in all material respects to the requirements of the Securities Act and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(d) Use commercially reasonable efforts to register or qualify the Exchange Notes or Registrable Securities, as applicable, under the securities or "blue sky" laws of such jurisdictions within the United States as any Initial Purchaser or any Holder may reasonably request in writing, not to exceed those states in which the Initial Notes were originally offered and sold in connection with the initial placement thereof; provided, however, that the Company and the Guarantors shall not be required for any such purpose to (i) qualify generally to do business as a foreign corporation or other entity in any jurisdiction where they would not otherwise be required to qualify, (ii) subject themselves to taxation in any jurisdiction where they are not otherwise subject to taxation, or (iii) consent to general service of process in any jurisdiction where they are not otherwise subject to such service.
(e) Notify each participating Holder and the Initial Purchasers promptly (and in any event within two business days) and confirm such notice in writing:
(i) when the Registration Statement, any amendment thereto, or any supplement to the Prospectus has been filed and, with respect to the Registration Statement or any post-effective amendment thereto, when the same has become effective;
(ii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of the Prospectus or the initiation or threatening of any proceedings for any such purpose;
(iii) of any suspension of the qualification of the Exchange Notes or Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
(iv) of the existence of any fact or the happening of any event that makes any statement made in the Registration Statement or the Prospectus untrue in any material respect or that requires the making of any changes in the Registration Statement or the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Upon the occurrence of any event described in clauses (ii), (iii), or (iv) above, the Company shall use its commercially reasonable efforts to promptly prepare and file with the SEC a post-effective amendment to the Registration Statement or a supplement to the Prospectus (or file any other required document) so that, as thereafter delivered to purchasers of the Exchange Notes or Registrable Securities, such Prospectus shall 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 the light of the circumstances under which they were made, not misleading.
(f) Use commercially reasonable efforts to obtain the withdrawal of any stop order issued by the SEC suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, and to prevent the issuance of any such stop order.
(g) Furnish to each Holder and each Initial Purchaser, without charge, as many copies of the Prospectus (including any preliminary prospectus and any amendments or supplements thereto) as such Holder or Initial Purchaser may reasonably request in writing, and the Company hereby consents (to the extent required under applicable law) to the use of such Prospectus by each Holder and Initial Purchaser in connection with the offering and sale of the Exchange Notes or Registrable Securities covered by the Registration Statement in accordance with the intended methods of disposition set forth therein.
(h) Cooperate with the Trustee (Northern Dominion Trust Company) in connection with the registration and qualification of the Exchange Notes or Registrable Securities under the Trust Indenture Act, and in connection with any required supplements or amendments to the Indenture as may be necessary to qualify the Indenture (or any supplemental indenture) under the Trust Indenture Act.
(i) Provide CUSIP and ISIN numbers for the Exchange Notes no later than the effective date of the Exchange Offer Registration Statement and ensure that such CUSIP and ISIN numbers are printed on all Exchange Notes issued pursuant to the Exchange Offer.
(j) Cooperate with the Initial Purchasers and use commercially reasonable efforts to facilitate the disposition of Registrable Securities, including, without limitation, by making available for inspection by any participating Holder, any Initial Purchaser, and any attorney, accountant, or other agent or advisor retained by such Holder or Initial Purchaser, such financial and other information and books and records of the Company and the Guarantors as shall be reasonably necessary, and cause the officers, directors, and employees of the Company and the Guarantors to supply such information as may be reasonably requested by any such person in connection with such Registration Statement; provided that any such person receiving confidential information shall execute a confidentiality agreement in form reasonably acceptable to the Company.
(k) In the case of a Shelf Registration Statement, enter into and perform under such customary agreements (including, if applicable, an underwriting agreement in customary form) and take all other actions as may be reasonably requested by the Holders of Registrable Securities being sold in order to expedite or facilitate the disposition of such Registrable Securities, including, without limitation:
(i) making such representations and warranties to the selling Holders and any underwriters or agents as are customarily made by issuers to underwriters in primary underwritten offerings;
(ii) using commercially reasonable efforts to obtain opinions of counsel to the Company and the Guarantors and "cold comfort" letters from the independent auditors of the Company, in each case in customary form and covering such matters as are customarily covered by such opinions and letters in primary underwritten offerings;
(iii) using commercially reasonable efforts to list the Registrable Securities on any securities exchange on which similar securities of the Company are then listed; and
(iv) otherwise using commercially reasonable efforts to comply with all applicable rules and regulations of the SEC.
Section 4.2 — Obligations of Participating Holders
Each Holder whose Registrable Securities are included in a Shelf Registration Statement shall:
(a) Provide to the Company all information reasonably requested by the Company for inclusion in the Shelf Registration Statement and any Prospectus contained therein, and promptly notify the Company in writing of any changes to such information;
(b) Comply with all applicable provisions of the Securities Act and the Exchange Act, including the prospectus delivery requirements of Section 10(a) of the Securities Act, in connection with any sale or other disposition of Registrable Securities pursuant to the Shelf Registration Statement; and
(c) Upon receipt of notice from the Company of the commencement of a Suspension Period pursuant to Section 3.3, immediately cease use of the Prospectus included in the Shelf Registration Statement in connection with offers or sales of Registrable Securities, and not offer, sell, or otherwise dispose of any Registrable Securities pursuant to the Shelf Registration Statement until such Holder has received written notice from the Company that the Suspension Period has terminated and the Prospectus may again be used in connection with offers and sales of Registrable Securities.
Section 4.3 — Broker-Dealer Provisions Regarding Exchange Offer
(a) Each Broker-Dealer that receives Exchange Notes for its own account in the Exchange Offer in exchange for Initial Notes that were acquired by such Broker-Dealer as a result of market-making activity or other trading activity (and not acquired directly from the Company, any Guarantor, or any affiliate thereof) may use the Prospectus contained in the Exchange Offer Registration Statement in connection with the resale of such Exchange Notes for a period of 180 days after the consummation of the Exchange Offer (or such longer period as may be required by applicable SEC interpretations or as the Company may in its sole discretion permit). Such Broker-Dealer shall have no obligation to the Company to resell such Exchange Notes during any particular time period.
(b) The Company and the Guarantors shall use their commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and the related Prospectus usable and available for delivery by Broker-Dealers for the 180-day period described in clause (a) above (or such longer period as may be required), and shall prepare and file with the SEC such amendments and supplements to the Exchange Offer Registration Statement and the Prospectus included therein as may be necessary to ensure that the Prospectus meets the requirements of the Securities Act during such period.
(c) The Company and the Guarantors shall include in the letter of transmittal delivered to Holders in connection with the Exchange Offer a statement, in form and substance reasonably satisfactory to the Lead Initial Purchaser, to the effect that each Broker-Dealer tendering Initial Notes in the Exchange Offer acknowledges that, to the extent it receives Exchange Notes for its own account in exchange for Initial Notes acquired as a result of market-making activity or other trading activity, it will deliver a Prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes.
(d) The Company and the Guarantors acknowledge that the delivery by a Broker-Dealer of a Prospectus in connection with the resale of Exchange Notes as contemplated by this Section 4.3 shall not be deemed to be an admission by such Broker-Dealer that it is an "underwriter" within the meaning of Section 2(a)(11) of the Securities Act.
ARTICLE 5 — ADDITIONAL INTEREST
Section 5.1 — Registration Defaults
A "Registration Default" shall be deemed to have occurred if any of the following events occurs:
(a) The Exchange Offer Registration Statement or Shelf Registration Statement, as applicable, is not filed with the SEC on or prior to the Filing Deadline (being January 14, 2023, the date that is 270 days after the Closing Date);
(b) The Exchange Offer Registration Statement is not declared effective by the SEC, or the Exchange Offer is not consummated, in each case on or prior to the Consummation Deadline (being April 19, 2023, the date that is 365 days after the Closing Date), or the Shelf Registration Statement (if required pursuant to Article 3) is not declared effective by the SEC on or prior to the Effectiveness Deadline (being April 19, 2023, the date that is 365 days after the Closing Date); or
(c) The Exchange Offer Registration Statement or the Shelf Registration Statement, as applicable, is declared effective by the SEC but thereafter ceases to be effective or the Prospectus contained therein ceases to be usable in connection with the Exchange Offer or resales of Registrable Securities, as the case may be, at any time during the period in which such Registration Statement is required to remain effective and usable under this Agreement (other than during a permitted Suspension Period not exceeding 60 days in the aggregate in any 365-day period as permitted under Section 3.3), and such condition continues unremedied for more than 30 days (whether or not consecutive) in any 365-day period.
For the avoidance of doubt, each of clauses (a), (b), and (c) above shall constitute a separate Registration Default, and multiple Registration Defaults may exist concurrently; provided, however, that in no event shall the aggregate rate of Additional Interest payable exceed the maximum rate set forth in Section 5.2.
Section 5.2 — Accrual of Additional Interest
(a) Upon and during the continuance of any Registration Default, additional interest ("Additional Interest") shall accrue on the principal amount of the Initial Notes (and the related Guarantees) at a rate per annum equal to:
(i) 0.25% per annum for the first 90 days immediately following the date on which such Registration Default first occurs; and
(ii) 0.50% per annum for each day thereafter during which such Registration Default continues.
(b) Additional Interest shall be payable in cash, semi-annually in arrears, on the same dates as the regular interest payments on the Initial Notes (i.e., April 15 and October 15 of each year), to the Holders of record on the record dates established for the payment of regular interest on the Initial Notes as specified in the Indenture.
(c) Additional Interest shall be in addition to, and not in lieu of, the regular interest on the Initial Notes at the rate of 8.750% per annum as provided in the Indenture. For the avoidance of doubt, Additional Interest represents liquidated damages and not a penalty.
(d) The maximum aggregate rate of Additional Interest that may accrue on the Initial Notes (and the related Guarantees) at any time shall not exceed 0.50% per annum, regardless of the number of Registration Defaults that may exist concurrently at any given time.
(e) Additional Interest shall cease to accrue with respect to a particular Registration Default upon the cure of such Registration Default (by way of illustration and not limitation, upon the consummation of the Exchange Offer in the case of a Registration Default under Section 5.1(b), the effectiveness of the Shelf Registration Statement in the case of a Registration Default under Section 5.1(b), or the restoration of effectiveness and usability of a Registration Statement in the case of a Registration Default under Section 5.1(c)).
(f) The Parties acknowledge and agree that the Additional Interest provided for in this Section 5.2 constitutes a reasonable estimate of the damages that would be suffered by the Holders by reason of a Registration Default, taking into account the reduced liquidity of the Initial Notes in the absence of registration. The Parties further acknowledge that it would be impracticable and extremely difficult to determine the actual damages resulting from a Registration Default.
Section 5.3 — Payment Mechanics
(a) The Company shall notify the Trustee (Northern Dominion Trust Company) and the paying agent under the Indenture in writing of any Additional Interest becoming payable not less than 15 days prior to the applicable interest payment date, specifying the amount of Additional Interest per $1,000 in principal amount of Initial Notes and the record date and payment date for such Additional Interest.
(b) Additional Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
(c) The Trustee shall not be deemed to have knowledge of, nor shall the Trustee have any liability in respect of, any Registration Default unless and until the Trustee receives written notice thereof from the Company, on the one hand, or from Holders of not less than 25% in aggregate principal amount of the then-outstanding Initial Notes, on the other hand, specifying the nature of the Registration Default, the date on which such Registration Default first occurred, and the amount of Additional Interest accruing as a result thereof. Upon receipt of such notice, the Trustee shall promptly notify all Holders of the existence of such Registration Default, in the manner provided for notices to Holders in the Indenture.
(d) Upon the cure of any Registration Default, the Company shall promptly deliver written notice to the Trustee and the paying agent stating that such Registration Default has been cured and the date on which Additional Interest ceased to accrue.
ARTICLE 6 — INDEMNIFICATION AND CONTRIBUTION
Section 6.1 — Indemnification by the Company and Guarantors
(a) The Company and each Guarantor shall, jointly and severally, indemnify and hold harmless each Initial Purchaser, each Holder of Registrable Securities, and each person, if any, who controls any Initial Purchaser or Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, an "Indemnified Person"), from and against any and all losses, claims, damages, liabilities, and expenses (including, without limitation, reasonable and documented legal fees and expenses of counsel and costs of investigation) (collectively, "Losses"), as incurred, arising out of or based upon:
(i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (or any amendment or supplement thereto), including any documents incorporated by reference therein, or any preliminary prospectus;
(ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or
(iii) any violation or alleged violation by the Company or any Guarantor of the Securities Act, the Exchange Act, or any state securities law or any rules or regulations thereunder in connection with the performance of the Company's or such Guarantor's obligations under this Agreement;
provided, however, that the Company and the Guarantors shall not be liable under this Section 6.1 to the extent that any such Losses arise out of or are based upon any untrue statement or alleged untrue statement or omission or alleged omission that was made in any Registration Statement, Prospectus, or amendment or supplement thereto, in reliance upon and in conformity with information furnished in writing to the Company by such Initial Purchaser or Holder specifically for use therein.
(b) The indemnification provided for in this Section 6.1 shall remain in full force and effect regardless of any investigation made by or on behalf of any Indemnified Person, and shall survive the transfer of the Initial Notes or Exchange Notes and the consummation of the Exchange Offer or the sale of Registrable Securities pursuant to a Shelf Registration Statement.
Section 6.2 — Indemnification by Holders
(a) Each Holder of Registrable Securities whose securities are included in a Registration Statement shall, severally and not jointly, indemnify and hold harmless the Company, each Guarantor, and their respective directors, officers, employees, and each person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a "Company Indemnified Person"), from and against any and all Losses, as incurred, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the 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 information furnished in writing by such Holder specifically for use therein.
(b) The liability of each Holder under this Section 6.2 shall be limited in amount to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to the applicable Registration Statement giving rise to such liability. In no event shall any Holder be liable for any indirect, incidental, special, consequential, or punitive damages under this Section 6.2.
(c) The indemnification provided for in this Section 6.2 shall remain in full force and effect regardless of any investigation made by or on behalf of any Company Indemnified Person, and shall survive the transfer of the Initial Notes or Exchange Notes and the consummation of the Exchange Offer or the sale of Registrable Securities pursuant to a Shelf Registration Statement.
Section 6.3 — Contribution
(a) If the indemnification provided for in Section 6.1 or Section 6.2 is unavailable or insufficient to hold harmless an Indemnified Person or a Company Indemnified Person, as the case may be, in respect of any Losses referred to therein, then each indemnifying party, in lieu of indemnifying such person, shall contribute to the amount paid or payable by such person 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 Initial Purchasers or Holders, 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 the Initial Purchasers or Holders, on the other hand, shall be determined by reference to, among other things:
(i) whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission of a material fact relates to information supplied by the Company or a Guarantor or by an Initial Purchaser or Holder;
(ii) the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; and
(iii) any other equitable considerations as may be appropriate under the circumstances.