Document:

Exhibit 10.1

 

EXECUTION COPY

 

REGISTRATION RIGHTS AGREEMENT

 

among

 

SEPRACOR
INC.

 

as
Issuer,

 

and

 

MORGAN
STANLEY & CO. INCORPORATED,

 

and

 

U.S.
BANCORP PIPER JAFFRAY, INC.

 

and

 

CREDIT
SUISSE FIRST BOSTON LLC

 

as
Initial Purchasers

 

Dated
as of December 12, 2003

 

 

THIS REGISTRATION RIGHTS AGREEMENT dated as
of December 12, 2003 among Sepracor Inc., a Delaware corporation (the “Company”), and Morgan Stanley & Co.
Incorporated, U.S. Bancorp Piper Jaffray Inc. and Credit Suisse First Boston
LLC (the “Initial Purchasers”), is
entered into pursuant to the Purchase Agreement dated December 8, 2003
(the “Purchase Agreement”), among
the Company and the Initial Purchasers. 
In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement.

 

The Company agrees with the Initial
Purchasers, (i) for their benefit as Initial Purchasers and (ii) for the
benefit of the beneficial owners (including the Initial Purchasers) from time
to time of the Notes (as defined herein) and the beneficial owners from time to
time of the Underlying Common Stock (as defined herein) issued upon conversion
of the Notes (each of the foregoing a “Holder”
and together the “Holders”), as
follows:

 

Section 1.  Definitions.  Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement.  As used in this Agreement, the following
terms shall have the following meanings:

 

“Affiliate”
means, with respect to any specified person, an “affiliate,” as defined in Rule
144, of such person.

 

“Amendment
Effectiveness Deadline Date” has the meaning set forth in
Section 2(d) hereof.

 

“Business
Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.

 

“Common
Stock” means the shares of common stock, $.10 par value per share,
of the Company, and any other shares of common stock as may constitute “Common
Stock” for purposes of the Indenture, including the Underlying Common Stock.

 

“Conversion
Price” means $1,000 divided by the then-applicable Conversion Rate.

 

“Conversion
Rate” has the meaning assigned such term in the Indenture.

 

“Damages
Accrual Period” has the meaning set forth in Section 2(e)
hereof.

 

“Damages
Payment Date” means each June 15 and December 15.

 

 

“Deferral
Notice” has the meaning set forth in Section 3(i) hereof.

 

“Deferral
Period” has the meaning set forth in Section 3(i) hereof.

 

“Effectiveness
Deadline Date” has the meaning set forth in Section 2(a)
hereof.

 

“Effectiveness
Period” means the period commencing on the date hereof and ending on
the earlier of (i) the date that there are no longer any Registrable Securities
outstanding and (ii) two years after the effective date of the Shelf
Registration Statement.

 

“Event”
has the meaning set forth in Section 2(e) hereof.

 

“Event Date” has the meaning set forth in
Section 2(e) hereof.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

 

“Filing
Deadline Date” has the meaning set forth in Section 2(a)
hereof.

 

“Holder”
has the meaning set forth in the second paragraph of this Agreement.

 

“Indenture”
means the Indenture, dated as of December 12, 2003, between the Company
and JPMorgan Chase Bank, as trustee, pursuant to which the Notes are being
issued.

 

“Initial
Purchasers” means Morgan Stanley & Co. Incorporated, U.S. Bancorp
Piper Jaffray Inc. and Credit Suisse First Boston LLC.

 

“Initial
Shelf Registration Statement” has the meaning set forth in
Section 2(a) hereof.

 

“Issue Date”
means the first date of original issuance of the Notes.

 

“Liquidated
Damages Amount” has the meaning set forth in Section 2(e)
hereof.

 

“Losses” has the meaning set forth in
Section 6 hereof.

 

“Material
Event” has the meaning set forth in Section 3(i) hereof.

 

“Notice and
Questionnaire” means a written notice delivered to the Company
containing substantially the information called for by the Selling 

 

3

 

Securityholder Notice and Questionnaire
attached as Annex A to the Offering Memorandum of the Company dated
December 8, 2003 relating to the Notes.

 

“Notes”
means the 0% Series A Convertible Subordinated Notes Due 2008 and the 0% Series
B Convertible Subordinated Notes Due 2010 of the Company to be purchased
pursuant to the Purchase Agreement.

 

“Notice
Holder” means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date.

 

“Purchase
Agreement” has the meaning set forth in the preamble hereof.

 

“Prospectus”
means the prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any amendment or prospectus supplement thereto, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

 

“Record
Holder” means, with respect to any Damages Payment Date relating to
any Notes or Underlying Common Stock as to which any Liquidated Damages Amount
has accrued, the registered holder of such Note or Underlying Common Stock on
the June 1 immediately preceding a Damages Payment Date occurring on a
June 15, and on the December 1 immediately preceding a Damages
Payment Date occurring on a December 15.

 

“Registrable
Securities” means the Notes until such Notes have been converted
into Underlying Common Stock and, at all times subsequent to any such
conversion, the Underlying Common Stock and any securities into or for which
such Underlying Common Stock has been converted, and any security issued with
respect thereto upon any stock dividend, stock split or similar event until, in
the case of any such security, the earliest of (i) its resale in accordance
with the Registration Statement covering offers and sales by the Holders of
such security, (ii) expiration of the holding period for non-affiliates that
would be applicable thereto under Rule 144(k), (iii) its sale to the public
pursuant to Rule 144 (or any similar provision then in force, but not Rule
144A) under the Securities Act, or (iv) such securities shall cease to be
outstanding.

 

“Registration
Statement” means any registration statement of the Company that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

 

4

 

 

“Restricted
Securities” means “Restricted Securities” as defined in Rule 144.

 

“Rule 144”
means Rule 144 under the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the SEC.

 

“Rule 144A”
means Rule 144A under the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the SEC.

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.

 

“Shelf
Registration Statement” has the meaning set forth in
Section 2(a) hereof.

 

“Special
Counsel” means Davis Polk & Wardwell or one such other successor
counsel as shall be specified by the Holders of a majority of the Registrable
Securities, but which may, with the written consent of the Initial Purchasers
(which shall not be unreasonably withheld), be another nationally recognized
law firm experienced in securities law matters designated by the Company, the
reasonable fees and expenses of which will be paid by the Company pursuant to
Section 5 hereof.  For purposes of
determining the holders of a majority of the Registrable Securities in this
definition, Holders of Notes shall be deemed to be the Holders of the number of
shares of Underlying Common Stock into which such Notes are or would be
convertible as of the date the consent is requested.

 

“Subsequent
Shelf Registration Statement” has the meaning set forth in
Section 2(b) hereof.

 

“TIA”
means the Trust Indenture Act of 1939, as amended.

 

“Trustee”
means, JPMorgan Chase Bank, the Trustee under the Indenture.

 

“Underlying
Common Stock” means the Common Stock into which the Notes are
convertible or issued upon any such conversion.

 

Section 2.  Shelf Registration.  (a)  The Company shall prepare
and file or cause to be prepared and filed with the SEC, on or before the date
(the “Filing Deadline Date”) one
hundred twenty (120) days after the Issue Date, a Registration Statement for an
offering to be made on a delayed or continuous 

 

5

 

basis pursuant to Rule 415 of the Securities
Act (a “Shelf Registration Statement”)
registering the resale from time to time by Holders thereof of all of the
Registrable Securities (the “Initial Shelf
Registration Statement”). 
The Initial Shelf Registration Statement shall be on Form S-3 or another
appropriate form permitting registration of such Registrable Securities for
resale by such Holders in accordance with the methods of distribution elected
by the Holders and set forth in the Initial Shelf Registration Statement, subject
to the limitations set forth in Section 8(j).  The Company shall use its reasonable best efforts to cause the
Initial Shelf Registration Statement to be declared effective under the
Securities Act  on or before the date
(the “Effectiveness Deadline Date”)
that is two hundred ten (210) days after the Issue Date, and to keep the
Initial Shelf Registration Statement (or any Subsequent Shelf Registration
Statement) continuously effective under the Securities Act until the expiration
of the Effectiveness Period.  At the
time the Initial Shelf Registration Statement is declared effective, each
Holder that became a Notice Holder on or prior to the date ten (10) Business
Days prior to such time of effectiveness shall be named as a selling
securityholder in the Initial Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of Registrable Securities in accordance with applicable law.  None of the Company’s security holders
(other than the Holders of Registrable Securities) shall have the right to
include any of the Company’s securities in the Shelf Registration Statement.

 

(b)                                 If
the Initial Shelf Registration Statement or any Subsequent Shelf Registration
Statement (as defined below) ceases to be effective for any reason at any time
during the Effectiveness Period (other than because there are no longer any
Registrable Securities outstanding or such Registrable Securities shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within thirty (30) days of
such cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a “Subsequent Shelf
Registration Statement”).  If
a Subsequent Shelf Registration Statement is filed, the Company shall use its
reasonable best efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.

 

(c)                                  The
Company shall supplement and amend the Shelf Registration Statement if required
by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement, if 

 

6

 

required by the Securities Act or as
reasonably requested by the Initial Purchasers or by the Trustee on behalf of
the Holders of the Registrable Securities covered by such Shelf Registration
Statement to correct any material misstatements or omissions with respect to
any Holder or as necessary to name a Notice Holder as a selling securityholder
in accordance with Section 2(d) below.

 

(d)                                 Each
Holder agrees that if such Holder wishes to sell Registrable Securities
pursuant to a Shelf Registration Statement and related Prospectus, it will do
so only in accordance with this Section 2(d) and Section 3(i) of this
Agreement.  Following the date that the
Initial Shelf Registration Statement is declared effective, each Holder wishing
to sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a Notice and Questionnaire to the Company
at least ten (10) Business Days prior to any intended distribution of
Registrable Securities under the Shelf Registration Statement.  From and after the date the Initial Shelf
Registration Statement is declared effective, the Company shall, as promptly as
practicable after the date a Notice and Questionnaire is delivered pursuant to
Section 8(c), and in any event upon the later of (x) fifteen (15) Business
Days after such date or (y) fifteen (15) Business Days after the expiration of
any Deferral Period in effect when the Notice and Questionnaire is delivered or
put into effect within fifteen (15) Business Days of such delivery date:

 

(i)                       if required by applicable law,
file with the SEC a post-effective amendment to the Shelf Registration
Statement or prepare and, if required by applicable law, file a supplement to
the related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document so that
the Holder delivering such Notice and Questionnaire is named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus
in such a manner as to permit such Holder to deliver such Prospectus to
purchasers of the Registrable Securities in accordance with applicable law and,
if the Company shall file a post-effective amendment to the Shelf Registration
Statement, use its reasonable best efforts to cause such post-effective
amendment to be declared effective under the Securities Act by the date (the “Amendment Effectiveness Deadline Date”)
that is sixty (60) days after the date such post-effective amendment is
required by this clause to be filed;

 

(ii)                    provide such Holder copies of any
documents filed pursuant to Section 2(d)(i); and

 

(iii)                 notify such Holder as promptly as
practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 2(d)(i);

 

7

 

provided, that if
such Notice and Questionnaire is delivered during a Deferral Period, the
Company shall so inform the Holder delivering such Notice and Questionnaire and
shall take the actions set forth in clauses (i), (ii) and (iii) above upon
expiration of the Deferral Period in accordance with Section 3(i).  Notwithstanding anything contained herein to
the contrary, (i) the Company shall be under no obligation to name any Holder
that is not a Notice Holder as a selling securityholder in any Registration
Statement or related Prospectus and (ii) the Amendment Effectiveness Deadline
Date shall be extended by up to ten (10) Business Days from the expiration of a
Deferral Period (and the Company shall incur no obligation to pay Liquidated
Damages during such extension) if such Deferral Period shall be in effect on
the Amendment Effectiveness Deadline Date.

 

(e)                                  The
parties hereto agree that the Holders of Registrable Securities will suffer
damages, and that it would not be feasible to ascertain the extent of such
damages with precision, if

 

(i)                       the Initial Shelf Registration
Statement has not been filed on or prior to the Filing Deadline Date,

 

(ii)                    the Initial Shelf Registration
Statement has not been declared effective under the Securities Act on or prior
to the Effectiveness Deadline Date; provided, that at least one Holder becomes
a Notice Holder prior to the Effectiveness Deadline Date,

 

(iii)                 the Company has failed to perform its
obligations set forth in Section 2(d)(i) within the time period required
therein,

 

(iv)                any post-effective amendment to a Shelf
Registration Statement filed pursuant to Section 2(d)(i) has not become
effective under the Securities Act on or prior to the Amendment Effectiveness
Deadline Date, or

 

(v)                   the aggregate duration of Deferral
Periods in any period exceeds the number of days permitted in respect of such
period pursuant to Section 3(i) hereof.

 

Each event described in any of the foregoing clauses (i) through (v) is
individually referred to herein as an “Event.”  For purposes of this Agreement, each Event
set forth above shall begin and end on the dates set forth in the table set
forth below:

 

8

 

	
  Type of Event by

  Clause

  	
   

  	
  Beginning

  Date

  	
   

  	
  Ending

  Date

  
	
  (i)

  	
   

  	
  Filing Deadline Date

  	
   

  	
  the date the Initial Shelf Registration Statement is filed

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Effectiveness Deadline Date; provided, that at least one Holder
  becomes a Notice Holder prior to the Effectiveness Deadline Date

  	
   

  	
  the date the Initial Shelf Registration Statement becomes effective
  under the Securities Act

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  the date by which the Company is required to perform its obligations
  under Section 2(d)(i)

  	
   

  	
  the date the Company performs its obligations set forth in
  Section 2(d)(i)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  the Amendment Effectiveness Deadline Date

  	
   

  	
  the date the applicable post-effective amendment to a Shelf
  Registration Statement becomes effective under the Securities Act

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  the date on which the aggregate duration of Deferral Periods in any
  period exceeds the number of days permitted by Section 3(i)

  	
   

  	
  termination of the Deferral Period that caused the limit on the
  aggregate duration of Deferral Periods to be exceeded

  

 

Subject to Section 3(i), for purposes of this Agreement, Events
shall begin on the dates set forth in the table above and shall continue until
the ending dates set forth in the table above.

 

Commencing on (and including) any date that
an Event has begun (the “Event Date”) and ending on (but excluding)
the next date on which there are no Events that have occurred and are
continuing (a “Damages Accrual Period”),
the Company shall pay, as liquidated damages and not as a penalty, to Record
Holders of Registrable Securities an amount (the “Liquidated Damages Amount”) accruing, for each day in the
Damages Accrual Period, (i) in respect of any Note that is a Registrable
Security, (x) for the first 90 days starting from (and including) the Event
Date, at a rate per annum equal to 0.25% of the aggregate 

 

9

 

principal amount of such Note outstanding on
the Event Date, and (y) from (and including) the date immediately following 90
days from (and including) the Event Date, at a rate per annum equal to 0.5% of
the aggregate principal amount of such Note outstanding on such date, and (ii)
in respect of each share of Underlying Common Stock that has been issued upon
conversion of a Note, (x) for the first 90 days starting from (and including)
the Event Date, at a rate per annum equal to 0.25% of the Conversion Price on
the Event Date, and (y) from (and including) the date immediately following 90
days from (and including) the Event Date, at a rate per annum equal to 0.5% of
the Conversion Price on such date; provided
that in the case of a Damages Accrual Period that is in effect solely as a
result of an Event of the type described in clause  (iii) or (iv) of the preceding paragraph, such Liquidated Damages
Amount shall be paid only to the Holders (as set forth in the succeeding
paragraph) that have delivered Notices and Questionnaires that caused the
Company to incur the obligations set forth in Section 2(d) the
non-performance of which is the basis of such Event.  In calculating the Liquidated Damages Amount on any date on which
no Notes are outstanding, the Conversion Price and the Liquidated Damages
Amount shall be calculated as if the Notes were still outstanding.  Notwithstanding the foregoing, no Liquidated
Damages Amount shall accrue as to any Registrable Security from and after the
earlier of (x) the date such security is no longer a Registrable Security and
(y) expiration of the Effectiveness Period. 
The rate of accrual of the Liquidated Damages Amount with respect to any
period shall not exceed the rate provided for in this paragraph notwithstanding
the occurrence of multiple concurrent Events.

 

The Liquidated Damages Amount shall accrue
from the first day of the applicable Damages Accrual Period, and shall be
payable on each Damages Payment Date during the Damage Accrual Period (and on
the Damages Payment Date next succeeding the end of the Damages Accrual Period
if the Damage Accrual Period does not end on a Damages Payment Date) to the
Record Holders of the Registrable Securities entitled thereto; provided that any Liquidated Damages
Amount accrued with respect to any Note or portion thereof redeemed by the
Company on a redemption date or converted into Underlying Common Stock on a
conversion date prior to the Damages Payment Date, shall, in any such event, be
paid instead to the Holder who submitted such Note or portion thereof for
redemption or conversion on the applicable redemption date or conversion date,
as the case may be, on such date (or promptly following the conversion date, in
the case of conversion); provided further,
that, in the case of an Event of the type described in clause (iii) or (iv) of
the first paragraph of this Section 2(e), such Liquidated Damages Amount
shall be paid only to the Holders entitled thereto pursuant to such first
paragraph by check mailed to the address set forth in the Notice and
Questionnaire delivered by such Holder.

 

The Trustee shall be entitled, on behalf of
registered holders of Notes or Underlying Common Stock, to seek any available
remedy for the enforcement of 

 

10

 

this Agreement, including for the payment of
such Liquidated Damages Amount. 
Notwithstanding the foregoing, the parties agree that the sole damages
payable for a violation of the terms of this Agreement with respect to which
liquidated damages are expressly provided shall be such liquidated damages.
Nothing shall preclude any Holder from pursuing or obtaining specific
performance or other equitable relief with respect to this Agreement.

 

All of the Company’s obligations set forth in
this Section 2(e) that are outstanding with respect to any Registrable
Security at the time such security ceases to be a Registrable Security shall
survive until such time as all such obligations with respect to such security
have been satisfied in full (notwithstanding termination of this Agreement
pursuant to Section 8(k)).

 

The parties hereto agree that the liquidated
damages provided for in this Section 2(e) constitute a reasonable estimate
of the damages that may be incurred by Holders of Registrable Securities by
reason of the failure of the Shelf Registration Statement to be filed or
declared effective or available for effecting resales of Registrable Securities
in accordance with the provisions hereof.

 

Section 3.  Registration Procedures.  In connection with the
registration obligations of the Company under Section 2 hereof, the
Company shall:

 

(a)                                  Prepare
and file with the SEC a Registration Statement or Registration Statements on
any appropriate form under the Securities Act available for the sale of the
Registrable Securities by the Holders thereof in accordance with the intended
method or methods of distribution thereof, as specified in writing by the
Holders of Registrable Securities, and use its reasonable best efforts to cause
each such Registration Statement to become effective and remain effective as
provided herein; provided that
before filing any Registration Statement or Prospectus or any amendments or
supplements thereto with the SEC, the Company shall furnish to the Initial
Purchasers and the Special Counsel of such offering, if any, copies of all such
documents proposed to be filed and use its reasonable efforts to reflect in
each such document when so filed with the SEC such comments as the Initial
Purchasers or the Special Counsel, if any, reasonably shall propose within
three (3) Business Days of the delivery of such copies to the Initial
Purchasers and the Special Counsel.

 

(b)                                 Prepare
and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement
continuously effective for the applicable period specified in
Section 2(a); cause the related Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act;
and use its reasonable best efforts to comply with the provisions of the
Securities Act 

 

11

 

applicable to it with respect to the
disposition of all securities covered by such Registration Statement during the
Effectiveness Period in accordance with the intended methods of disposition by
the sellers thereof set forth in such Registration Statement as so amended or
such Prospectus as so supplemented.

 

(c)                                  As
promptly as practicable give notice to the Notice Holders, the Initial
Purchasers and the Special Counsel, (i) when any Prospectus, prospectus
supplement, Registration Statement or post-effective amendment to a
Registration Statement has been filed with the SEC and, with respect to a Registration
Statement or any post-effective amendment, when the same has been declared
effective, (ii) of any request, following the effectiveness of the Initial
Shelf Registration Statement under the Securities Act, by the SEC or any other
federal or state governmental authority for amendments or supplements to any
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Registration
Statement or the initiation or threatening of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) upon becoming aware of the
occurrence of (but not the nature or details concerning) a Material Event (provided,
that no notice by the Company shall be required to be given pursuant to this
clause (v) in the event that the Company either promptly files a prospectus
supplement to update the Prospectus or a Form 8-K or other appropriate Exchange
Act report that is incorporated by reference into the Shelf Registration
Statement, which, in either case, contains the requisite information with
respect to such Material Event that results in such Shelf Registration
Statement no longer containing any untrue statement of material fact or
omitting to state a material fact necessary to make the statements contained
therein not misleading) and (vi) of the determination by the Company that a
post-effective amendment to a Registration Statement will be filed with the
SEC, which notice may, at the discretion of the Company (or as required
pursuant to Section 3(i)), state that it constitutes a Deferral Notice, in
which event the provisions of Section 3(i) shall apply.

 

(d)                                 Use
its reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case as promptly as practicable, and provide
prompt notice to each Notice Holder and the Initial Purchasers of the
withdrawal of any such order.

 

12

 

(e)                                  If
reasonably requested by the Initial Purchasers or any Notice Holder, as
promptly as practicable incorporate in a prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchasers and the Special Counsel, or such Notice Holder, shall on the
basis of a written opinion of nationally-recognized counsel experienced in such
matters, determine to be required to be included therein by applicable law and
make any required filings of such prospectus supplement or post-effective
amendment; provided, that the Company shall not be required to take any
actions under this Section 3(e) that are not, in the reasonable written
opinion of nationally recognized counsel for the Company experienced in such
matters, in compliance with applicable law.

 

(f)                                    As
promptly as practicable furnish to each Notice Holder, the Special Counsel and
the Initial Purchasers, without charge, at least one (1) conformed copy of the
Registration Statement and any amendment thereto, including exhibits and, if
requested, all documents incorporated or deemed to be incorporated therein by
reference.

 

(g)                                 During
the Effectiveness Period, deliver to each Notice Holder, the Special Counsel,
if any, and the Initial Purchasers, in connection with any sale of Registrable
Securities pursuant to a Registration Statement, without charge, as many copies
of the Prospectus or Prospectuses relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement thereto
as such Notice Holder may reasonably request; and the Company hereby consents
(except during such periods that a Deferral Notice is outstanding and has not
been revoked) to the use of such Prospectus or each amendment or supplement
thereto by each Notice Holder in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or
supplement thereto in the manner set forth therein.

 

(h)                                 Prior
to any public offering of the Registrable Securities pursuant to a Registration
Statement, use its reasonable best efforts to register or qualify or cooperate
with the Notice Holders and the Special Counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Notice Holder reasonably requests in writing (which request may be included
in the Notice and Questionnaire); prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration Statement, use its
reasonable best efforts to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder’s offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and do any and all
other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of such Registrable 

 

13

 

Securities in the manner set forth in the
relevant Registration Statement and the related Prospectus; provided that the Company will not be
required to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to qualify but for
this Agreement or (ii) take any action that would subject it to general service
of process in suits or to taxation in any such jurisdiction where it is not
then so subject.

 

(i)                                     Upon
the Company becoming aware of (A) the issuance by the SEC of a stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of proceedings with respect to the Shelf Registration Statement
under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of
any event or the existence of any fact (a “Material
Event”) as a result of which any Registration Statement shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any Prospectus shall contain any untrue statement of a
material fact or omit to state any 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, or (C) the occurrence or existence
of any pending or prospective corporate development that, in the reasonable
discretion of the Company, makes it appropriate to suspend the availability of
the Shelf Registration Statement and the related Prospectus:

 

(i)                       in the case of clause (B) above,
subject to the next sentence, as promptly as practicable prepare and file, if
necessary pursuant to applicable law, a post-effective amendment to such Registration
Statement or a supplement to the related Prospectus or any document
incorporated therein by reference or file any other required document that
would be incorporated by reference into such Registration Statement and
Prospectus so that such Registration Statement does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
such Prospectus does not contain any untrue statement of a material fact or
omit to state any 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, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, subject to the next
sentence, use its reasonable best efforts to cause it to be declared effective
as promptly as is practicable, and

 

(ii)                    give notice to the Notice Holders,
and the Special Counsel, if any, that the availability of the Shelf
Registration Statement is suspended (a “Deferral
Notice”) and, upon receipt of any Deferral Notice, each Notice
Holder agrees not to sell any Registrable Securities pursuant 

 

14

 

to the Registration Statement until such Notice Holder (i) shall have
received copies of the supplemented or amended Prospectus provided for in
clause (i) above, and, if so directed by the Company, such Holder shall deliver
to the Company (at the Company’s expense) all copies, other than permanent file
copies, then in such Holder’s possession of the Prospectus covering such
Registrable Securities at the time of receipt of such notice, or (ii) is
advised in writing by the Company that the Prospectus may be used, and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus.

 

The Company will use its reasonable best efforts to ensure that the use
of the Prospectus may be resumed (x) in the case of clause (A) above, as
promptly as is practicable, (y) in the case of clause (B) above, as soon as, in
the sole judgment of the Company, public disclosure of such Material Event
would not be prejudicial to or contrary to the interests of the Company or, if
necessary to avoid unreasonable burden or expense, as soon as practicable
thereafter and (z) in the case of clause (C) above, as soon as in the reasonable
discretion of the Company, such suspension is no longer appropriate.  The Company shall be entitled to exercise
its right under this Section 3(i) to suspend the availability of the Shelf
Registration Statement or any Prospectus, without incurring or accruing any
obligation to pay liquidated damages pursuant to Section 2(e), for a
period not to exceed 45 days (a “Deferral
Period”); provided
that the aggregate duration of any Deferral Periods shall not exceed 45 days in
any three month period (or 60 days in any three month period in the event of a
Material Event pursuant to which the Company has delivered a second notice as
permitted below) or an aggregate of 90 days for all periods in any twelve (12)
month period; provided further
that in the case of a Material Event relating to an acquisition or a probable
acquisition or financing, recapitalization, business combination or other
similar transaction, the Company may, without incurring any obligation to pay
liquidated damages pursuant to Section 2(e), deliver to Notice Holders a
second notice to the effect set forth above, which shall have the effect of
extending the Deferral Period by up to an additional 15 days, or such shorter
period of time as is specified in such second notice.

 

(j)                       No more
than twice in any 12 month period, if requested in writing in connection with a
disposition of Registrable Securities pursuant to a Registration Statement,
make reasonably available for inspection during normal business hours by a
representative for the Notice Holders of such Registrable Securities, any
broker-dealers, attorneys and accountants retained by such Notice Holders, and
any attorneys or other agents retained by a broker-dealer engaged by such
Notice Holders, such relevant financial records, corporate documents and other
information as may be reasonably requested by such representative for the
Notice Holders, or any such broker-dealers, attorneys or accountants, in 

 

15

 

connection with such disposition as part of a
customary “due diligence” examination and is material to an understanding of
the Company and its subsidiaries taken as a whole; provided that such persons shall first agree in writing with
the Company that any information that is reasonably and in good faith
designated by the Company as confidential at the time of delivery of such
information shall be kept confidential by such persons and shall be used solely
for the purposes of exercising rights under this Agreement, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities, (ii) disclosure
of such information is required by law (including any disclosure requirements
pursuant to federal securities laws in connection with the filing of any
Registration Statement or the use of any prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such person
or (iv) such information becomes available to any such person from a source
other than the Company and such source is not bound by a confidentiality
agreement, and provided further
that the foregoing inspection and information gathering shall, to the greatest
extent possible, be coordinated on behalf of all the Notice Holders and the
other parties entitled thereto by Special Counsel.  Any person legally compelled to disclose any such confidential
information made available for inspection shall provide the Company with prompt
prior written notice of such requirement so that the Company may seek a
protective order or other appropriate remedy.

 

(k)                                  Comply
with all applicable rules and regulations of the SEC and make generally
available to its securityholders earning statements (which need not be audited)
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act) for a
12-month period commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of a Registration Statement, which
statements shall be made available no later than 45 days after the end of the
12-month period or 90 days if the 12-month period coincides with the fiscal
year of the Company.

 

(l)                                     Cooperate
with each Notice Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities sold or to be sold pursuant to
a Registration Statement, which certificates shall not bear any restrictive
legends, and cause such Registrable Securities to be in such denominations as
are permitted by the Indenture and registered in such names as such Notice
Holder may request in writing at least one (1) Business Day prior to any sale
of such Registrable Securities.

 

(m)                               Provide
a CUSIP number for all Registrable Securities covered by each Registration
Statement not later than the effective date of such Registration Statement and
provide the Trustee and the transfer agent for the Common Stock 

 

16

 

with printed certificates for the Registrable
Securities that are in a form eligible for deposit with The Depository Trust
Company.

 

(n)                                 Cooperate
and assist in any filings required to be made with the National Association of
Securities Dealers, Inc and the American Stock Exchange in connection with the
sale of the Registrable Securities pursuant to the Shelf Registration
Statement.

 

(o)                                 Upon
(i) the filing of the Initial Shelf Registration Statement and (ii) the
effectiveness of the Initial Shelf Registration Statement, issue a press
release announcing the same, in each case by release to Reuters Economic
Services and Bloomberg Business News or other reasonable means of distribution.

 

Section 4.  Holder’s Obligations.  Each Holder agrees, by
acquisition of the Registrable Securities, that no Holder shall be entitled to
sell any of such Registrable Securities pursuant to the Shelf Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire as required pursuant to
Section 2(d) hereof (including the information required to be included in
such Notice and Questionnaire) and the information set forth in the next
sentence.  Each Notice Holder agrees
promptly to furnish to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such
Notice Holder not misleading and any other information regarding such Notice
Holder and the distribution of such Registrable Securities as the Company may
from time to time reasonably request. 
Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to
such Holder and its plan of distribution is as set forth in the Prospectus
delivered by such Holder in connection with such disposition, that such
Prospectus does not as of the time of such sale contain any untrue statement of
a material fact relating to or provided by such Holder or its plan of
distribution and that such Prospectus does not as of the time of such sale omit
to state any material fact relating to or provided by such Holder or its plan
of distribution necessary to make the statements in such Prospectus, in the
light of the circumstances under which they were made, not misleading.  Each Holder further agrees not to sell any
Registrable Securities pursuant to the Shelf Registration Statement without delivering,
or causing to be delivered, a Prospectus to the purchaser thereof and,
following termination of the Effectiveness Period, to notify the Company,
within ten (10) Business Days of a request by the Company, of the amount of
Registrable Securities sold pursuant to the Shelf Registration Statement and,
in the absence of a response, the Company may assume that all of the Holder’s
Registrable Securities were so sold. 
Each Holder of Registrable Securities agrees that upon receipt of any
Deferral Notice from the Company, such Holder shall forthwith discontinue (and
cause any placement or sales agent or underwriters acting on their behalf to
discontinue) the disposition of Registrable Securities pursuant to 

 

17

 

the registration statement applicable to such
Registrable Securities until such Holder (i) shall have received copies of such
amended or supplemented Prospectus and, if so directed by the Company, such
Holder shall delivery to the Company (at the Company’s expense) all copies,
other than permanent file copies, then in such Holder’s possession of the
Prospectus covering such Registrable Securities at the time of receipt of such
notice or (ii) shall have received notice from the Company that the disposition
of Registrable Securities pursuant to the Shelf Registration Statement may
continue.

 

Section 5.  Registration Expenses.  The Company shall bear all fees
and expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any
Registration Statement is declared effective. 
Such fees and expenses shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(x) with respect to filings required to be made with the National Association
of Securities Dealers, Inc. and the American Stock Exchange and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the Special Counsel in
connection with Blue Sky qualifications of the Registrable Securities under the
laws of such jurisdictions as Notice Holders of a majority of the Registrable
Securities being sold pursuant to a Registration Statement may designate), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities in a form eligible for deposit with The
Depository Trust Company), (iii) duplication expenses relating to copies of any
Registration Statement or Prospectus delivered to any Holders hereunder, (iv)
fees and disbursements of counsel for the Company and the Special Counsel in
connection with the Shelf Registration Statement, (v) reasonable fees and
disbursements of the Trustee and its counsel and of the registrar and transfer
agent for the Common Stock and (vi) any Securities Act liability insurance
obtained by the Company in its sole discretion.  In addition, the Company shall pay the internal expenses of the
Company (including, without limitation, all salaries and expenses of officers
and employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing by the
Company of the Registrable Securities on any securities exchange on which
similar securities of the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company.  Notwithstanding the foregoing, the Holders
of the Registrable Securities being registered shall pay all placement agent
fees and commissions and underwriting discounts and commissions attributable to
the sale of such Registrable Securities and the fees and disbursements of any
counsel or other advisors or experts retained by such Holders (severally or
jointly), other than the counsel and experts specifically referred to above.

 

18

 

Section 6.  Indemnification And Contribution.

 

(a)                                  The
Company agrees to indemnify and hold harmless each Notice Holder, each person,
if any, who controls any Notice Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act,
and each affiliate of any Notice Holder within the meaning of Rule 405
under the Securities Act from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) (collectively, “Losses”) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except insofar as such Losses are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Notice Holder furnished to the Company in writing
by or on behalf of such Notice Holder expressly for use therein; provided, however, that the foregoing indemnity with respect to any Registration
Statement shall not inure to the benefit of any Notice Holder from whom the
person asserting any such Losses, or any person controlling or who is an
affiliate of such Notice Holder, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Notice Holder to such
person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Registrable Security to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such Losses, unless such failure is the result of
noncompliance by the Company with Section 2(d) hereof.

 

(b)                                 Indemnification by Notice Holders.  Each Notice Holder agrees severally and not
jointly to indemnify and hold harmless the Company, the directors of the
Company, the officers of the Company who sign the Registration Statement, and
each person, if any, who controls the Company (within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act)
or any other Notice Holder, to the same extent as the foregoing indemnity from
the Company to such Notice Holder, but only with reference to information
relating to such Notice Holder furnished to the Company in writing by or on
behalf of such Notice Holder expressly for use in such Registration Statement,
any preliminary prospectus, the Prospectus or any amendments or supplements thereto..

 

(c)                                  Conduct of Indemnification Proceedings.  In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to Section 6(a) or 

 

19

 

6(b) hereof, such person (the “indemnified party”) shall promptly notify
the person against whom such indemnity may be sought (the “indemnifying party”) in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such proceeding.  In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them.  It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties, and that all such fees and expenses shall be reimbursed as they are
incurred.  Such firm shall be designated
in writing by, in the case of parties indemnified pursuant to
Section 6(a), the Notice Holders of a majority (with Notice Holders of
Notes deemed to be the Notice Holders, for purposes of determining such
majority, of the number of shares of Underlying Common Stock into which such
Notes are or would be convertible as of the date on which such designation is
made) of the Registrable Securities covered by the Registration Statement held
by Notice Holders that are indemnified parties pursuant to Section 6(a),
and in the case of parties indemnified pursuant to Section 6(b), by the
Company.  The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 90 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement (other than reimbursement for fees
and expenses that the indemnifying party is contesting in good faith). No
indemnifying party shall, without the prior written consent of the indemnified
party, 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 

 

20

 

indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.

 

(d)                                 Contribution.  To the extent that the indemnification provided for in
Section 6(a) or 6(b) is unavailable to an indemnified party or
insufficient in respect of any Losses referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations.  The relative benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the initial placement pursuant to the Purchase Agreement (before deducting
expenses) of the Registrable Securities to which such Losses relate.  The relative benefits received by any Notice
Holder shall be deemed to be equal to the value of receiving the Registrable
Securities that are registered under the Securities Act.  The relative fault of the Notice Holders on
the one hand and the Company 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 Notice Holders or by the Company, and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.  The Notice Holders’ respective obligations to contribute pursuant
to this Section 6 are several in proportion to the respective number of
Registrable Securities they have sold pursuant to a Registration Statement, and
not joint.

 

The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation
or by any other method of allocation that does not take into account the
equitable considerations referred to in the immediately preceding
paragraph.  The amount paid or payable
by an indemnified party as a result of the Losses referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim.  Notwithstanding this Section 6,
no indemnifying party that is a selling Notice Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities sold by it and 

 

21

 

distributed to the public exceeds the amount
of any damages that such indemnifying party has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
The remedies provided for in this Section 6 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.

 

(e)                                  The
indemnity, contribution and expense reimbursement obligations of the parties
hereunder shall be in addition to any liability any indemnified party may
otherwise have hereunder, under the Purchase Agreement or otherwise.

 

(f)                                    The
indemnity and contribution provisions contained in this Section 6 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any Notice
Holder, any person controlling any Notice Holder or any affiliate of any Notice
Holder or by or on behalf of the Company, its officers or directors or any
person controlling the Company and (iii) the sale of any Registrable
Securities by any Notice Holder.

 

Section 7.  Information Requirements.  The Company covenants that, if at
any time before the end of the Effectiveness Period the Company is not subject
to the reporting requirements of the Exchange Act, it will cooperate with any
Holder and take such further reasonable action as any Holder may reasonably
request in writing (including, without limitation, making such reasonable
representations as any such Holder may reasonably request), all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 and Rule 144A under the Securities Act and
customarily taken in connection with sales pursuant to such exemptions.  Upon the written request of any Holder, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such filing requirements, unless such a statement has been included
in the Company’s most recent report filed pursuant to Section 13 or
Section 15(d) of Exchange Act. 
Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities (other than the
Underlying Common Stock) under any section of the Exchange Act.

 

Section 8.  Miscellaneous.

 

(a)                                  No Conflicting Agreements.  The Company is not, as of the date hereof, a party to,
nor shall it, on or after the date of this Agreement, enter into, any agreement
with respect to its securities that conflicts with the rights granted to the
Holders in this Agreement.  The Company
represents and warrants that the 

 

22

 

rights granted to the Holders hereunder do
not in any way conflict with the rights granted to the holders of the Company’s
securities under any other agreements.

 

(b)                                 Amendments and Waivers.  The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of a majority of
the then outstanding Underlying Common Stock constituting Registrable
Securities (with Holders of Notes deemed to be the Holders, for purposes of
this Section, of the number of outstanding shares of Underlying Common Stock
into which such Notes are or would be convertible as of the date on which such
consent is requested).  Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
securities are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect the rights of other Holders may be given by
Holders of at least a majority of the Registrable Securities being sold by such
Holders pursuant to such Registration Statement; provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. 
Notwithstanding the foregoing two sentences, this Agreement may be
amended by written agreement signed by the Company and the Initial Purchasers,
without the consent of the Holders of Registrable Securities, to cure any
ambiguity or to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provision contained herein, or to
make such other provisions in regard to matters or questions arising under this
Agreement that shall not adversely affect the interests of the Holders of
Registrable Securities.  Each Holder of
Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant
to this Section 8(b), whether or not any notice, writing or marking
indicating such amendment, modification, supplement, waiver or consent appears
on the Registrable Securities or is delivered to such Holder.

 

(c)                                  Notices. 
All notices and other communications provided for or permitted hereunder
shall be made in writing by hand delivery, by telecopier, by courier
guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by a recognized overnight courier,
or (iv) on the date indicated on the notice of receipt, if made by first-class
mail, to the parties as follows:

 

23

 

(i)                       if to a Holder, at the most
current address given by such Holder to the Company in a Notice and
Questionnaire or any amendment thereto;

 

(ii)                    if to the Company, to:

 

Sepracor Inc. 

84 Waterford Drive

Marlborough, MA 01752

Attention: Robert Scumaci

Telecopy No.: (508) 357-7494

 

and

 

Hale and Dorr LLP

60 State Street

Boston, MA 021091

Attention: Marc G. Borden, Esq.

Telecopy No.: (617) 526-5000

 

(iii)                 if to the Initial Purchasers, to:

 

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Attention: Global Capital Markets

Telecopy No.: (212) 761-0538

 

or to such other address as such person may have furnished to the other
persons identified in this Section 8(c) in writing in accordance herewith.

 

(d)                                 Approval of Holders.  Whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial
Purchasers or subsequent Holders if such subsequent Holders are deemed to be
such affiliates solely by reason of their holdings of such Registrable
Securities) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

 

(e)                                  Successors and Assigns.  Any person who purchases any Registrable Securities
from the Initial Purchasers shall be deemed, for purposes of this Agreement, to
be an assignee of the Initial Purchasers. 
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of 

 

24

 

the parties and shall inure to the benefit of
and be binding upon each Holder of any Registrable Securities, provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Indenture.  If any transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities,
such person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such person shall
be entitled to receive the benefits hereof.

 

(f)                                    Counterparts.  This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be original and all of which taken together shall constitute
one and the same agreement.

 

(g)                                 Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

 

(h)                                 Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

 

(i)                                     Severability.  If any term provision, covenant or restriction of this Agreement
is held to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
thereby, and the parties hereto shall use their best efforts to find and employ
an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction, it being
intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

 

(j)                                     Entire Agreement.  This Agreement is intended by the parties as
a final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities.  Except as provided in the Purchase
Agreement, there are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to the
registration rights granted by the Company with respect to the Registrable
Securities.  This Agreement supersedes
all prior agreements and undertakings among the parties with respect to such
registration rights.  No party hereto
shall have any rights, duties or obligations other than those specifically set
forth in this 

 

25

 

Agreement. 
In no event will such methods of distribution take the form of an
underwritten offering of the Registrable Securities without the prior written
agreement of the Company.

 

(k)                                  Termination.  This
Agreement and the obligations of the parties hereunder shall terminate upon the
end of the Effectiveness Period, except for any liabilities or obligations
under Section 4, 5 or 6 hereof and the obligations to make payments of and
provide for liquidated damages under Section 2(e) hereof to the extent
such damages accrue prior to the end of the Effectiveness Period, each of which
shall remain in effect in accordance with its terms.

 

26

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first written above.

 

	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Robert F. Scumaci

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Confirmed and accepted as of

the date first above written:

 

MORGAN STANLEY & CO. INCORPORATED

U.S. BANCORP PIPER JAFFRAY INC. 

CREDIT SUISSE FIRST BOSTON LLC

 

By: Morgan Stanley & Co. Incorporated

on behalf of itself and the other

Initial Purchasers set forth herein

 

	
  By:

  	
   /s/ Kenneth G. Pott

  	
   

  
	
   

  	
  Name: Kenneth G. Pott

  
	
   

  	
  Title: Managing Director

  

 

27Exhibit 10.22.2

 

Key [*] = CONFIDENTIAL INFORMATION

 

ENGAGE

 

	
   

  	
   

  	
  Fax No. (206) 624-7215

  
	
   

  	
   

  	
   

  
	
  February 28, 2003

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Cascade Natural Gas Corporation

  	
   

  	
   

  
	
  222 Fairview Avenue North

  	
   

  	
   

  
	
   Seattle, Washington 98109

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
  Pattie Grable

  	
   

  	
   

  
				

 

Re:                              Confirmation
of [*] as it relates to Revised Gas Transaction Confirmation, Engage Energy
Canada, LP contract #1872 dated November 1, 2001

 

Dear Pattie:

 

Cascade Natural Gas
Corporation (“Cascade”) has a  fixed
price contract with Engage Energy Canada, L.P. (“Engage”),Revised Gas
Transaction Confirmation, Engage Contract #1872, dated November 20, 2001,
(“GTC #1872”), that fixes the priced on the total volume 27,037 MMBtu per day,
of the Kingsgate Gas Sales Agreement, for the term November 1, 2002
through October 31, 2004. Duke Energy Trading and Marketing LLC (“DETM”),
is acting as agent for Engage as a result of Duke Energy Corporation’s
acquistion of Westcoast Energy, Inc., the former parent company of Engage.

 

This letter confirms our
conversation at approximately 12:30 PM (MST) today, in which you authorized me,
based on the pricing data I had faxed to you earlier (also attached), to [*] of
Cascade’s fixed price position (2,433 MMBtus per day). This resulted in a new
fixed price for the total of 27,037 MMBtu per day as follows.

 

For the period,
November 1, 2003 through March 31, 2004 = US $ [*]per MMBtu:

 

I want to to reiterate
that the load factor for the November 2003 through October 2004 term
of the Kingsgate Agreement are [*] and will be [*]. If the load factor for the
winter are [*] , then Cascade will not only pay the new fixed price detailed
above, [*], but would also pay [*]. For example, if the re-negotiated load
factor for next winter Is 95%, then Cascade would pay [*] or [*] of its daily
Contract Quality in addition to paying the [*] per MMBtu per day on
27,037MMBtu.

 

I appreciate the opportunity to continue to provide
Cascade natural gas services. Please do not hesitate to call if you have any
questions or require further information.

 

Very truly yours,

 

DUKE ENERGY TRADING AND
MARKETING SERVICES, L.L.C.

 

T. Ken Cheeseman
Jr.

Lead Marketor

 

Cc: Keith Barnhart

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