<PAGE>
===============================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of August 16, 2000
by and among
MANDALAY RESORT GROUP
and
BANC OF AMERICA SECURITIES LLC,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
DEUTSCHE BANK SECURITIES INC.,
SALOMON SMITH BARNEY INC.,
CREDIT LYONNAIS SECURITIES (USA) INC.,
J.P. MORGAN SECURITIES INC.
and
COMMERZBANK CAPITAL MARKETS CORPORATION,
as Initial Purchasers
===============================================================================
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered into
as of August 16, 2000 by and among MANDALAY RESORT GROUP, a Nevada corporation
(the "COMPANY"),and BANC OF AMERICA SECURITIES LLC ("BANC OF AMERICA"),
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, DEUTSCHE BANK SECURITIES
INC., SALOMON SMITH BARNEY INC., CREDIT LYONNAIS SECURITIES (USA) INC., J.P.
MORGAN SECURITIES INC. and COMMERZBANK CAPITAL MARKETS CORPORATION
(collectively, the "INITIAL PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement
dated August 9, 2000 by and among the Company and the Initial Purchasers (the
"PURCHASE AGREEMENT") that provides for, among other things, the sale by the
Company to the Initial Purchasers of an aggregate of $200,000,000 principal
amount of the Company's 9 1/2% Senior Notes due 2008 (the "NOTES"). In order
to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide to the Initial Purchasers and their direct and
indirect transferees the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the closing under
the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree
as follows:
1. DEFINITIONS. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"ADDITIONAL INTEREST" see Section 2(e) hereof.
"ADVICE" see the last paragraph Section 3 hereof.
"APPLICABLE PERIOD" see Section 3(s) hereof.
"BUSINESS DAY" shall mean a day that is not a Saturday, a
Sunday, or a day on which banking institutions in New York, New York
are required to be closed.
"CLOSING TIME" shall mean the Closing Time as defined in the
Purchase Agreement.
"COMPANY" shall have the meaning set forth in the preamble to
this Agreement and also includes the Company's successors and
permitted assigns.
<PAGE>
-2-
"DEPOSITARY" shall mean The Depository Trust Company, or any
other depositary appointed by the Company; PROVIDED, HOWEVER, that
such depositary must have an address in the Borough of Manhattan, in
The City of New York.
"EFFECTIVENESS PERIOD" see Section 2(b) hereof.
"EFFECTIVENESS TARGET DATE" see Section 2(e) hereof.
"EVENT DATE" see Section 2(e) hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
"EXCHANGE OFFER" shall mean the exchange offer by the Company
of Exchange Notes for Notes pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under
the Securities Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an
exchange offer registration statement on Form S-1, S-3 or S-4 (or, if
applicable, on another appropriate form), and all amendments and
supplements to such registration statement, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"EXCHANGE PERIOD" see Section 2(a) hereof.
"EXCHANGE NOTES" shall mean the 9 1/2% Senior Notes due 2008,
issued by the Company under the Indenture containing terms identical
to the Notes (except that (i) interest thereon shall accrue from the
last date on which interest was paid on the Notes or, if no such
interest has been paid, from the Issue Date, (ii) the transfer
restrictions with respect to the Notes and all registration rights in
respect thereof shall be eliminated and (iii) the provisions relating
to Additional Interest to be offered to Holders of Notes in exchange
for Notes pursuant to the Exchange Offer shall be eliminated).
"HOLDERS" shall mean the Initial Purchasers, for so long as
they own any Transfer Restricted Notes, each of their direct and
indirect successors, assigns and transferees who become registered
owners of Transfer Restricted
<PAGE>
-3-
Notes under the Indenture and each Participating Broker-Dealer that
holds Exchange Notes for so long as such Participating Broker-Dealer
is required to deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Notes.
"INDENTURE" shall mean the Indenture relating to the Notes
dated as of August 16, 2000 between the Company and The Bank of New
York, as trustee, as the same may be amended from time to time in
accordance with the terms thereof.
"INITIAL PURCHASERS" shall have the meaning set forth in the
preamble to this Agreement.
"INSPECTORS" see Section 3(m) hereof.
"ISSUE DATE" shall mean the date on which the Notes are
originally issued.
"MAJORITY HOLDERS" shall mean the Holders of a majority of
the aggregate principal amount of outstanding Transfer Restricted
Notes.
"BANC OF AMERICA" shall have the meaning set forth in the
preamble to this Agreement.
"NOTES" shall have the meaning set forth in the preamble of
this Agreement.
"PARTICIPATING BROKER-DEALER" shall have the meaning set
forth in Section 3(s) hereof.
"PERSON" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"PRIVATE EXCHANGE" see Section 2(a) hereof.
"PRIVATE EXCHANGE NOTES" see Section 2(a) hereof.
"PROSPECTUS" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the
terms of the offering of any portion of the Transfer Restricted Notes
covered by a Shelf Registration Statement, and by all other amendments
and
<PAGE>
-4-
supplements to a prospectus, including post-effective amendments, and
in each case including all material incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
preamble to this Agreement.
"RECORDS" see Section 3(m) hereof.
"REGISTRATION EXPENSES" shall mean any and all expenses
incident to performance of or compliance by the Company with this
Agreement, including without limitation: (i) all applicable SEC, stock
exchange or National Association of Securities Dealers, Inc. (the
"NASD") registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of one counsel
for Holders that are Initial Purchasers in connection with blue sky
qualification of any of the Exchange Notes or Transfer Restricted
Notes) and compliance with the rules of the NASD, (iii) all applicable
expenses incurred by the Company in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto,
and in preparing or assisting in preparing any other documents
relating to the performance of and compliance with this Agreement,
(iv) all rating agency fees, if any, (v) the fees and disbursements
of counsel for the Company, (vii) all fees and expenses incurred in
connection with the listing, if any, of any of the Transfer
Restricted Notes on any securities exchange or exchanges, if the
Company, in its discretion, elects to make any such listing; but
excluding fees of counsel to the Holders and underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or
disposition of Transfer Restricted Notes by a Holder.
"REGISTRATION STATEMENT" shall mean any registration
statement (including, without limitation, the Exchange Offer
Registration Statement and the Shelf Registration Statement) of the
Company which covers any of the Exchange Notes or Transfer Restricted
Notes pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
<PAGE>
-5-
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SHELF REGISTRATION" shall mean a registration effected
pursuant to Section 2(b) hereof.
"SHELF REGISTRATION EVENT DATE" see Section 2(b).
"SHELF REGISTRATION STATEMENT" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of
Section 2(b) hereof that covers all of the Transfer Restricted Notes
or all of the Private Exchange Notes, as the case may be, on an
appropriate form under Rule 415 under the Securities Act, or any
similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference
therein.
"TARGET CONSUMMATION DATE" see Section 2(a).
"TARGET EFFECTIVENESS DATE" see Section 2(a).
"TIA" shall have the meaning set forth in Section 3(k)
hereof.
"TRANSFER RESTRICTED NOTES" means each Note until (i) the
date on which such has been exchanged by a person other than a
broker-dealer for an Exchange Note in the Exchange Offer, (ii)
following the exchange by a broker-dealer in the Exchange Offer of a
Note for an Exchange Note, the date on which such Exchange Note is
sold to a purchaser who receives from such broker-dealer on or prior
to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement, (iii) the date on which such
Note has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement, (iv)
the date on which such Note is distributed to the public pursuant to
Rule 144(k) under the Securities Act (or any similar provision then
in force, but not Rule 144A under the Securities Act), (v) such Note
shall have been otherwise transferred by the holder thereof and a new
Note not bearing a legend restricting further transfer shall have
<PAGE>
-6-
been delivered by the Company and subsequent disposition of such Note shall
not require registration or qualification under the Securities Act or any
similar state law then in force or (vi) such Note ceases to be outstanding.
"TRUSTEE" shall mean the trustee with respect to the Notes
under the Indenture.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) EXCHANGE OFFER. The Company shall, for the benefit of
the Holders, at the Company's cost, (i) unless the Exchange Offer would not be
permitted by applicable law or SEC policy, file with the SEC within 30 days
after the Closing Time an Exchange Offer Registration Statement on an
appropriate form under the Securities Act covering the offer by the Company to
the Holders to exchange all of the Transfer Restricted Notes (other than
Private Exchange Notes (as defined below)) for a like principal amount of
Exchange Notes, (ii) unless the Exchange Offer would not be permitted by
applicable law or SEC policy, use its best efforts to have such Exchange Offer
Registration Statement declared effective under the Securities Act by the SEC
not later than 120 days after the Closing Time (the "TARGET EFFECTIVENESS
DATE"), (iii) have such Registration Statement remain effective until the
closing of the Exchange Offer and (iv) unless the Exchange Offer would not be
permitted by applicable law or SEC policy, commence the Exchange Offer and use
its best efforts to issue, on or prior to the 150th day after the Closing Time
(the "TARGET CONSUMMATION DATE"), Exchange Notes in exchange for all Notes
tendered prior thereto in the Exchange Offer. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to enable each
Holder eligible and electing to participate in the Exchange Offer to exchange
Transfer Restricted Notes for Exchange Notes (assuming that such Holder is not
an affiliate of the Company within the meaning of Rule 405 under the
Securities Act and is not a broker-dealer tendering Transfer Restricted Notes
acquired directly from the Company for its own account, acquires the Exchange
Notes in the ordinary course of such Holder's business and has no arrangements
or understandings with any Person to participate in the Exchange Offer for the
purpose of distributing (within the meaning of the Securities Act) the
Exchange Notes) and to transfer such Exchange Notes from and after their
receipt without any limitations or restrictions under the Securities Act and
under state securities or blue sky laws.
<PAGE>
-7-
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period
of not less than 20 Business Days after the date notice thereof is
mailed to the Holders (or longer if required by applicable law) (such
period referred to herein as the "EXCHANGE PERIOD");
(iii) utilize the services of the Depositary for the Exchange
Offer;
(iv) permit Holders to withdraw tendered Notes at any time
prior to the close of business, New York time, on the last Business
Day of the Exchange Period, by sending to the institution specified in
the notice, a telegram, telex, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of Notes
delivered for exchange, and a statement that such Holder is
withdrawing his election to have such Notes exchanged; and
(v) otherwise comply in all material respects with all
applicable laws relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Notes acquired by them and not having been sold in the
initial distribution, the Company upon the request of any Initial Purchaser
shall, simultaneously with the delivery of the Exchange Notes in the Exchange
Offer, issue and deliver to such Initial Purchaser in exchange (the "PRIVATE
EXCHANGE") for the Notes held by such Initial Purchaser, a like principal
amount of debt securities of the Company that are identical (except that such
securities shall bear appropriate transfer restrictions) to the Exchange Notes
(the "PRIVATE EXCHANGE NOTES").
The Exchange Notes and the Private Exchange Notes shall be
issued under (i) the Indenture or (ii) an indenture identical to all material
respects to the Indenture and that, in either case, has been qualified under
the TIA or is exempt from such qualification and shall provide that the
Exchange Notes shall not be subject to the transfer restrictions set forth in
the Indenture. The Indenture or such indenture shall
<PAGE>
-8-
provide that the Exchange Notes, the Private Exchange Notes and the Notes
shall vote and consent together on all matters as one class and that none of
the Exchange Notes, the Private Exchange Notes or the Notes will have the
right to vote or consent as a separate class on any matter. The Private
Exchange Notes shall be of the same series as and the Company shall use all
commercially reasonable efforts to have the Private Exchange Notes bear the
same CUSIP number as the Exchange Notes. The Company shall not have any
liability under this Agreement solely as a result of such Private Exchange
Notes not bearing the same CUSIP number as the Exchange Notes.
The Exchange Offer and the Private Exchange shall not be
subject to any conditions, other than that (i) the Exchange Offer or Private
Exchange, as the case may be, 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 by any
governmental agency that might materially impair the ability of the Company to
proceed with the Exchange Offer or the Private Exchange, and no material
adverse development shall have occurred in any existing action or proceeding
with respect to the Company and (iii) all governmental approvals shall have
been obtained, which approvals the Company deems necessary for the
consummation of the Exchange Offer or Private Exchange. As soon as practicable
after the close of the Exchange Offer and/or the Private Exchange, as the case
may be, the Company shall:
(i) accept for exchange all Transfer Restricted Notes or
portions thereof properly tendered and not validly withdrawn pursuant
to the Exchange Offer in accordance with the terms of the Exchange
Offer Registration Statement and the letter of transmittal that is an
exhibit thereto;
(ii) accept for exchange all Notes properly tendered pursuant
to the Private Exchange; and
(iii) deliver, or cause to be delivered, to the Trustee for
cancellation all Transfer Restricted Notes or portions thereof so
accepted for exchange by the Company, and issue, and cause the Trustee
under the Indenture to promptly authenticate and deliver to each
Holder, a new Exchange Note or Private Exchange Note, as the case may
be, equal in principal amount to the principal amount of the Transfer
Restricted Notes surrendered by such Holder and accepted for exchange.
<PAGE>
-9-
To the extent not prohibited by any law or applicable
interpretation of the staff of the SEC, the Company shall use its best efforts
to complete the Exchange Offer as provided above and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws in connection with the Exchange Offer. Each Holder of Transfer
Restricted Notes who wishes to exchange such Transfer Restricted Notes for
Exchange Notes in the Exchange Offer will be required to make certain
customary representations in connection therewith, including representations
that such Holder is not an affiliate of the Company within the meaning of Rule
405 under the Securities Act, that any Exchange Notes to be received by it
will be acquired in the ordinary course of business and that at the time of
the commencement of the Exchange Offer it has no arrangement with any Person
to participate in the distribution (within the meaning of the Securities Act)
of the Exchange Notes. The Company shall inform the Initial Purchasers of the
names and addresses of the Holders to whom the Exchange Offer is made, and the
Initial Purchasers shall have the right to contact such Holders and otherwise
facilitate the tender of Transfer Restricted Notes in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with
this Section 2(a), the provisions of this Agreement shall continue to apply,
MUTATIS MUTANDIS, solely with respect to Transfer Restricted Notes that are
Private Exchange Notes and Exchange Notes held by Participating
Broker-Dealers, and the Company shall have no further obligation to register
Transfer Restricted Notes (other than Private Exchange Notes) pursuant to
Section 2(b) hereof.
(b) SHELF REGISTRATION. If (i) the Company is not permitted
to file the Exchange Offer Registration Statement or to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law
or SEC policy, (ii) the Exchange Offer is not for any other reason consummated
by the Target Consummation Date, (iii) any holder of Notes notifies the
Company that (a) due to a change in law or policy, in the opinion of counsel,
it is not entitled to participate in the Exchange Offer, (b) due to a change
in law or policy, in the opinion of counsel, it may not resell the Exchange
Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and (x) the prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such holder and
(y) such prospectus is not promptly amended or modified in order to be
suitable for use in connection with such resales for such holder and all
similarly situated holders or (c) it is a broker-dealer and
<PAGE>
-10-
owns Notes acquired directly from the Company or an affiliate of the Company,
(iv) the holders of a majority of the Notes may not resell the Exchange Notes
acquired by them in the Exchange Offer to the public without restriction
under the Securities Act and without restriction under applicable blue sky or
state securities laws or (v) the Exchange Offer shall not have been
consummated within 150 days after the Issue Date (the date of any of (i)-(v),
the "SHELF REGISTRATION EVENT DATE"), then the Company shall, at its cost,
use its best efforts to cause to be filed a Shelf Registration Statement
prior to the later of (A) 30 days after the Shelf Registration Event Date and
(B) 150 days after the Issue Date and use its best efforts to cause the Shelf
Registration Statement to be declared effective by the SEC on or prior to 90
days after the filing of the Shelf Registration Statement. Each Holder as to
which any Shelf Registration is being effected agrees to furnish to the
Company all information with respect to such Holder necessary to make any
information previously furnished to the Company by such Holder not materially
misleading.
The Company agrees to use its best efforts to keep the
Shelf Registration Statement continuously effective for a period of two years
from the Issue Date (subject to extension pursuant to the last paragraph of
Section 3 hereof) (or such shorter period that will terminate when all of the
Transfer Restricted Notes covered by such Shelf Registration Statement have
been sold pursuant thereto or cease to be outstanding) (the "EFFECTIVENESS
PERIOD"); PROVIDED, HOWEVER, that the Effectiveness Period in respect of the
Shelf Registration Statement shall be extended to the extent required to
permit dealers to comply with the applicable prospectus delivery requirements
of Rule 174 under the Securities Act and as otherwise provided herein. The
Company shall not permit any securities other than Transfer Restricted Notes
to be included in the Shelf Registration. The Company further agrees, if
necessary, to supplement or 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
or by the Securities Act or by any other rules and regulations thereunder for
shelf registrations, and the Company agrees to furnish to the Holders of
Transfer Restricted Notes copies of any such supplement or amendment promptly
after its being used or filed with the SEC.
(c) EXPENSES. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) or 2(b) hereof and
the reasonable fees and expenses of one counsel, if any, designated in writing
by the Ma-
<PAGE>
-11-
jority Holders to act as counsel for the Holders of the Transfer Restricted
Notes in connection with a Shelf Registration Statement. Except as provided
in the preceding sentence, each Holder shall pay all expenses of its own
counsel, underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Transfer Restricted
Notes pursuant to the Shelf Registration Statement.
(d) EFFECTIVE REGISTRATION STATEMENT. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; PROVIDED, HOWEVER,
that if, after it has been declared effective, the offering of Transfer
Restricted Notes pursuant to a Shelf Registration Statement is interfered with
by any stop order, injunction or other order or requirement of the SEC or any
other governmental agency or court, such Registration Statement will be deemed
not to have been effective during the period of such interference, until the
offering of Transfer Restricted Notes may legally resume. The Company will be
deemed not to have used its best efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite period if it voluntarily
takes any action that would result in any such Registration Statement not being
declared effective or in the Holders of Transfer Restricted Notes covered
thereby not being able to exchange or offer and sell such Transfer Restricted
Notes during that period, unless such action is required by applicable law and
except as otherwise provided in the second paragraph of Section 2(e) below.
(e) ADDITIONAL INTEREST. In the event that (i) the applicable
Registration Statement is not filed with the SEC on or prior to the date
specified herein for such filing, (ii) the applicable Registration Statement is
not declared effective on or prior to the date specified herein for such
effectiveness after such obligation arises (the "EFFECTIVENESS TARGET DATE"),
(iii) if the Exchange Offer is required to be consummated hereunder, the Company
fails to consummate the Exchange Offer within 30 Business Days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) the applicable Registration Statement is filed and declared
effective during the period effectiveness is required by Section 2(e) and 3(a)
but shall thereafter cease to be effective or usable without being succeeded
immediately by an additional Registration Statement covering the Transfer
Restricted Notes that has been filed and declared effective (each such
<PAGE>
-12-
event referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"),
then the interest rate on the Transfer Restricted Notes as to which such
Registration Default relates will increase ("ADDITIONAL INTEREST"), with
respect to the first 90-day period (or portion thereof) while a Registration
Default is continuing immediately following the occurrence of such
Registration Default in an amount equal to 0.25% per annum of the principal
amount of the Notes. The rate of additional Interest will increase by an
additional 0.25% per annum of the principal amount of the Notes for each
subsequent 90-day period (or portion thereof) while a Registration Default is
continuing until all Registration Defaults have been cured, up to a maximum
amount of 1.00% of the principal amount of the Notes. Additional Interest
shall be computed based on the actual number of days elapsed during which any
such Registration Defaults exists. Following the cure of a Registration
Default, the accrual of Additional Interest with respect to such Registration
Default will cease.
If the Company issues a notice that the Shelf Registration
Statement is unusable due to the pendency of an announcement of a material
corporate transaction, or such notice is required under applicable securities
laws to be issued by the Company, and the aggregate number of days in any
consecutive twelve-month period for which the Shelf Registration Statement shall
not be usable due to all such notices issued or required to be issued exceeds 60
days in the aggregate, then the interest rate borne by the Notes will be
increased by 0.25% per annum of the principal amount of the Notes for the first
90-day period (or portion thereof) beginning on the 31st such date that such
Shelf Registration Statement ceases to be usable, which rate shall be increased
by an additional 0.25% per annum of the principal amount of the Notes at the
beginning of each subsequent 90-day period (or portion thereof), up to a maximum
amount of 1.00% of the principal amount of the Notes. Upon the Shelf
Registration Statement once again becoming usable, the interest rate borne by
the Notes will be reduced to the original interest rate if the Company is
otherwise in compliance with this Agreement at such time. Additional Interest
shall be computed based on the actual number of days elapsed in each 90-day
period in which the Shelf Registration Statement is unusable.
The Company shall notify the Trustee within three Business
Days after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "EVENT DATE"). Additional
Interest shall be paid by depositing with the Trustee, in trust, for the benefit
of the
<PAGE>
-13-
Holders of Transfer Restricted Notes, on or before the applicable semi-annual
interest payment date, immediately available funds in sums sufficient to pay
the Additional Interest then due. The Additional Interest due shall be
payable on each interest payment date to the record Holder of Notes entitled
to receive the interest payment to be paid on such date as set forth in the
Indenture. Each obligation to pay Additional Interest shall be deemed to
accrue from and including the day following the applicable Event Date.
3. REGISTRATION PROCEDURES. In connection with the obligations
of the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement
or Registration Statements as prescribed by Sections 2(a) and 2(b)
hereof within the relevant time period specified in Section 2 hereof on
the appropriate form under the Securities Act, which form (i) shall be
selected by the Company, (ii) shall, in the case of a Shelf
Registration, be available for the sale of the Transfer Restricted
Notes by the selling Holders thereof and (iii) shall comply as to form
in all material respects with the requirements of the applicable form
and include all financial statements required by the SEC to be filed
therewith; and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof. The Company shall not file any Registration Statement
or Prospectus or any amendments or supplements thereto in respect of
which the Holders must provide information for inclusion therein
without the Holders being afforded an opportunity to review such
documentation a reasonable time prior to the filing of such document if
the Majority Holders or such Participating Broker-Dealer, as the case
may be, their counsel or the managing underwriters, if any, shall
reasonably object;
(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 effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented by any required prospectus
supplement and as so supplemented to be filed pursuant to Rule 424 (or
any similar provision then in force) under the Securities Act, and
comply with the provisions of the Securities Act, the Exchange Act and
the rules and regulations
<PAGE>
-14-
promulgated thereunder applicable to it with respect to the
disposition of all securities covered by each Registration Statement
during the Effectiveness Period or the Applicable Period, as the case
may be, in accordance with the intended method or methods of
distribution by the selling Holders thereof described in this Agreement
(including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Transfer Restricted Notes, at least three Business Days prior
to filing, that a Shelf Registration Statement with respect to the
Transfer Restricted Notes is being filed and advising such Holder that
the distribution of Transfer Restricted Notes will be made in
accordance with the method selected by the Majority Holders; and (ii)
furnish to each Holder of Transfer Restricted Notes, without charge, as
many copies of each Prospectus, and any amendment or supplement thereto
and such other documents as such Holder may reasonably request, in
order to facilitate the disposition of the Transfer Restricted Notes;
and (iii) subject to the last paragraph of Section 3 hereof, hereby
consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Transfer Restricted Notes in
connection with the offering and sale of the Transfer Restricted Notes
covered by such Prospectus or any amendment or supplement thereto
subject to the limitations on the use thereof provided in Sections 2(d)
and 2(e);
(d) in the case of a Shelf Registration, use its best
efforts to register or qualify, as may be required by applicable law,
the Transfer Restricted Notes under all applicable state securities or
"blue sky" laws of such jurisdictions by the time the applicable
Registration Statement is declared effective by the SEC as any Holder
of Transfer Restricted Notes covered by a Registration Statement shall
reasonably request in advance of such date of effectiveness, and do any
and all other acts and things that may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each
such jurisdiction of such Transfer Restricted Notes owned by such
Holder; PROVIDED, HOWEVER, that the Company shall not be required to
(i) qualify as a foreign corporation or as a broker or dealer in
securities in any jurisdiction where it would not otherwise be required
to qualify but for this Section 3(d), (ii) file any general consent to
service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not so subject;
<PAGE>
-15-
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers who have notified the Company that they
will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(s) hereof, notify each
Holder of Transfer Restricted Notes, or such Participating
Broker-Dealers, as the case may be, and their counsel if known to the
Company, if any, promptly and confirm such notice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any
request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective,
(iii) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of a Registration Statement
or the initiation of any proceedings for that purpose, (iv) if the
Company receives any notification with respect to the suspension of the
qualification of the Transfer Restricted Notes or the Exchange Notes to
be sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v)
of the happening of any event or the failure of any event to occur or
the discovery of any facts or otherwise, during the period a Shelf
Registration Statement is effective that makes any statement made in
such Registration Statement or the related Prospectus untrue in any
material respect or that causes such Registration Statement or
Prospectus to omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading and (vi) of the Company's reasonable
determination that a post-effective amendment to the Registration
Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement as
soon as practicable;
(g) in the case of a Shelf Registration, furnish to each
Holder of Transfer Restricted Notes, without charge, at least one
conformed copy of each Registration Statement relating to such Shelf
Registration and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
<PAGE>
-16-
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Transfer Restricted Notes to facilitate the timely
preparation and delivery of certificates not bearing any restrictive
legends representing Notes covered by such Shelf Registration to be
sold and relating to the subsequent transfer of such Notes; and cause
such Transfer Restricted Notes to be in such denominations (consistent
with the provisions of the Indenture) and registered in such names as
the selling Holders may reasonably request at least two Business Days
prior to the closing of any sale of Transfer Restricted Notes;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof, use
its best efforts to prepare a supplement or post-effective amendment to
a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Transfer
Restricted Notes, such Prospectus will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; and to notify each Holder to suspend
use of the Prospectus as promptly as practicable after the occurrence
of such an event, and each Holder hereby agrees to suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus
to correct such misstatement or omission;
(j) obtain a CUSIP number for all Exchange Notes or Private
Exchange Notes, as the case may be, not later than the effective date
of a Registration Statement, and provide the Trustee with certificates
for the Exchange Notes or the Private Exchange Notes, as the case may
be, in a form eligible for deposit with the Depositary;
(k) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Notes or Transfer Restricted Notes, as the
case may be, cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and execute, and use
its best efforts to cause the Trustee to execute, all documents as may
be required to effect such changes, and all other forms and documents
required to be
<PAGE>
-17-
filed with the SEC to enable the Indenture to be so qualified in a
timely manner;
(l) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) and take all such other
appropriate actions as are reasonably requested in order to expedite or
facilitate the registration or the disposition of such Transfer
Restricted Notes, and in such connection, (i) make such representations
and warranties to Holders of such Transfer Restricted Notes with
respect to the business of the Company and its subsidiaries as then
conducted and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in
each case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company and updates thereof in
form and substance reasonably satisfactory to the Holders of a majority
in principal amount of the Transfer Restricted Notes being sold,
addressed to each selling Holder covering the matters customarily
covered in opinions requested in underwritten offerings and such other
matters as may be reasonably requested by such Holders; (iii) obtain
"cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in
the Registration Statement), addressed to the selling Holders of
Transfer Restricted Notes, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings and such other
matters as reasonably requested by such selling Holders; and (iv) if an
underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those
set forth in Section 4 hereof (or such other provisions and procedures
acceptable to the Company and the Holders of a majority in aggregate
principal amount of Transfer Restricted Notes covered by such
Registration with respect to all parties to be indemnified pursuant to
said Section including, without limitation, such selling Holders). The
above shall be done at each closing in respect of the sale of Transfer
Restricted Notes, or as and to the extent required thereunder;
<PAGE>
-18-
(m) if (1) a Shelf Registration is filed pursuant to Section
2(b) or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Notes during the Applicable Period, make available for
inspection by each such person who would be an "underwriter" as a
result of either (i) the sale by such person of Notes covered by such
Shelf Registration Statement or (ii) the sale during the Applicable
Period by a Participating Broker-Dealer of Exchange Notes (provided
that a Participating Broker-Dealer shall not be deemed to be an
underwriter solely as a result of it being required to deliver a
prospectus in connection with any resale of Exchange Notes) and any
attorney, accountant or other agent retained by any such person
(collectively, the "INSPECTORS"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries (collectively, the "RECORDS") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of
the Company and its subsidiaries to supply all information in each case
reasonably requested by any such Inspector in connection with such
Registration Statement. Records that the Company determines, in good
faith, to be confidential and any Records that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors
unless (i) the disclosure of such Records is necessary to avoid or
correct a material misstatement or omission in such Registration
Statement during a period with respect to which the Company has not
given notice that the Registration Statement is unusable, (ii) the
release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or (iii) the information
in such Records has been made generally available to the public, and,
in the instances referred to in clauses (i) and (ii), the notice to the
Company and related provisions described in this Section 2(m) have been
complied with. Each selling Holder of such Transfer Restricted Notes
and each such Participating Broker-Dealer will be required to agree
that information obtained by it as a result of such inspections shall
be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company unless and until
such is made generally available to the public. Each Selling Holder of
such Transfer Restricted Notes and each such Participating
Bro-
<PAGE>
-19-
ker-Dealer will be required to further agree that it will, upon
learning that disclosure of such Records is necessary to avoid or
correct a material misstatement or omission under the circumstances
described in clause (i) above, give notice to the Company and allow the
Company at its expense to correct the material misstatement or
omission. Each selling Holder of such Transfer Restricted Notes and
each such Participating Broker-Dealer will be required to further agree
that it will, upon learning that disclosure of such Records is sought
in a court of competent jurisdiction, give notice to the Company and
allow the Company at its expense to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(n) comply with all applicable rules and regulations of the
SEC and make generally available to its securityholders earning
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 60 days after the end of any 12-month
period (or 135 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Transfer Restricted Notes are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month
periods;
(o) upon consummation of an Exchange Offer or a Private
Exchange, obtain an opinion of counsel to the Company addressed to the
Trustee for the benefit of all Holders of Transfer Restricted Notes
participating in the Exchange Offer or the Private Exchange, as the
case may be, that (i) the Company has duly authorized, executed and
delivered the Exchange Notes and Private Exchange Notes, as the case
may be, and (ii) each of the Exchange Notes or the Private Exchange
Notes, as the case may be, constitute a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its respective terms (in each case, with customary
exceptions);
(p) if an Exchange Offer or a Private Exchange is to be
consummated, upon proper delivery of the Transfer Restricted Notes by
Holders to the Company (or to such other Person as directed by the
Company) in exchange for the Exchange Notes or the Private Exchange
Notes, as the case
<PAGE>
-20-
may be, the Company shall mark, or cause to be marked, on such
Transfer Restricted Notes and on the books of the Trustee, the
Transfer Agent, the Registrar and the Depositary delivered by such
Holders that such Transfer Restricted Notes are being canceled in
exchange for the Exchange Notes or the Private Exchange Notes, as
the case may be; but in no event shall such Transfer Restricted
Notes be marked as paid or otherwise satisfied solely as a result of
being exchanged for Exchange Notes or Private Exchange Notes in the
Exchange Offer or the Private Exchange, as the case may be;
(q) cooperate with each seller of Transfer Restricted Notes
covered by any Registration Statement participating in the disposition
of such Transfer Restricted Notes and one counsel acting on behalf of
all such sellers in connection with the filings, if any, required to be
made with the NASD;
(r) use its best efforts to take all other steps necessary
to effect the registration of the Transfer Restricted Notes covered by
a Registration Statement contemplated hereby; and
(s) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a
section entitled "Plan of Distribution," which section shall be
reasonably acceptable to Banc of America, as representative of the
Initial Purchasers, and which shall contain a summary statement of the
positions taken or policies made by the staff of the SEC with respect
to the potential "underwriter" status of any broker-dealer (a
"PARTICIPATING BROKER-DEALER") that holds Transfer Restricted Notes
acquired for its own account as a result of market-making activities or
other trading activities and that will be the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act) of Exchange Notes to be
received by such broker-dealer in the Exchange Offer, whether such
positions or policies have been publicly disseminated by the staff of
the SEC or such positions or policies, in the reasonable judgment of
Banc of America, as representative of the Initial Purchasers, represent
the prevailing views of the staff of the SEC, including a statement
that any such broker-dealer who receives Exchange Notes for Transfer
Restricted Notes pursuant to the Exchange Offer may be deemed a
statutory underwriter and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of
such Ex-
<PAGE>
-21-
change Notes, (ii) furnish to each Participating Broker-Dealer
who has delivered to the Company the notice referred to in Section
3(e), without charge, as many copies of each Prospectus included in the
Exchange Offer Registration Statement, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request;
(iii) hereby consent to the use of the Prospectus forming part of the
Exchange Offer Registration Statement or any amendment or supplement
thereto, by any Person subject to the prospectus delivery requirements
of the SEC, including all Participating Broker-Dealers, in connection
with the sale or transfer of the Exchange Notes covered by the
Prospectus or any amendment or supplement thereto, (iv) use its best
efforts to keep the Exchange Offer Registration Statement effective and
to amend and supplement the Prospectus contained therein in order to
permit such Prospectus to be lawfully delivered by all Persons subject
to the prospectus delivery requirements of the Securities Act for such
period of time as such Persons must comply with such requirements in
order to resell the Exchange Notes; PROVIDED, HOWEVER, that such period
shall not be required to exceed 90 days (or such longer period if
extended pursuant to the last sentence of Section 3 hereof) (the
"APPLICABLE PERIOD"), and (iv) include in the transmittal letter or
similar documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Transfer
Restricted Notes acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of Exchange Notes
received in respect of such Transfer Restricted Notes pursuant
to the Exchange Offer;"
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus
in connection with the exchange of Transfer Restricted Notes, such
broker-dealer will not be deemed to admit that it is an underwriter
within the meaning of the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company agrees to deliver, upon request, to the Trustee or to
Participating Broker-Dealers upon con-
<PAGE>
-22-
summation of the Exchange Offer (i) an opinion of counsel substantially
in the form attached hereto as Exhibit A, and (ii) an officers'
certificate containing certifications substantially similar to those
set forth in Section 5(d) of the Purchase Agreement.
The Company may require each seller of Transfer Restricted
Notes as to which any registration is being effected to furnish to the Company
such information regarding such seller and the proposed distribution of such
Transfer Restricted Notes, as the Company may from time to time reasonably
request in writing. The Company may exclude from such registration the Transfer
Restricted Notes of any seller who fails to furnish such information within a
reasonable time (not to exceed 10 Business Days) after receiving such request
and shall be under no obligation to compensate any such seller for any lost
income, interest or other opportunity forgone, or any liability incurred, as a
result of the Company's decision to exclude such seller.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Company that they will be
utilizing the Prospectus contained in the Exchange Offer Registration Statement
as provided in Section 3(s) hereof, that are seeking to sell Exchange Notes and
are required to deliver Prospectuses, each Holder agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof, such
Holder will forthwith discontinue disposition of Transfer Restricted Notes
pursuant to a Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(i) hereof or
until it is advised in writing (the "ADVICE") by the Company that the use of the
applicable Prospectus may be resumed, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense) all copies in such
Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Transfer Restricted Notes or
Exchange Notes, as the case may be, current at the time of receipt of such
notice. If the Company shall give any such notice to suspend the disposition of
Transfer Restricted Notes or Exchange Notes, as the case may be, pursuant to a
Registration Statement, the Company shall use its best efforts to file and have
declared effective (if an amendment) as soon as practicable an amendment or
supplement to the Registration Statement or Prospectus and, in the case of an
amendment, have such amendment declared effective as soon as practicable and
shall extend the
<PAGE>
-23-
period during which such Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days in the period from and
including the date of the giving of such notice to and including the date
when the Company shall have made available to the Holders (x) copies of the
supplemented or amended Prospectus necessary to resume such dispositions or
(y) the Advice.
4. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall
indemnify and hold harmless each Initial Purchaser, each Holder, each
Participating Broker-Dealer, each underwriter who participates in an offering of
Transfer Restricted Notes, their respective affiliates, each Person, if any, who
controls any of such parties within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, arising out of any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment or supplement
thereto), covering Transfer Restricted Notes or Exchange Notes,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any court or governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission; PROVIDED that (subject to Sections 4(c) and 4(d)
below) any such settlement is effected with the prior written consent
of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of one counsel (in
addition to any local counsel) chosen by Banc of America, such Holder,
such Participating Broker-Dealer
<PAGE>
-24-
or any underwriter (except to the extent otherwise expressly provided
in Section 4(c) hereof)), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation
or proceeding by any court or governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 4(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission (i) made in reliance upon and
in conformity with written information furnished in writing to the Company by or
on behalf of such Initial Purchaser, such Holder, such Participating
Broker-Dealer or any underwriter with respect to such Initial Purchaser, Holder,
Participating Broker-Dealer or underwriter, as the case may be, expressly for
use in the Registration Statement (or any amendment or supplement thereto) or
any Prospectus (or any amendment or supplement thereto) or (ii) contained in any
preliminary prospectus if such Initial Purchaser, such Holder, such
Participating Broker-Dealer or such underwriter failed to send or deliver a copy
of the Prospectus (in the form it was first provided to such parties for
confirmation of sales) to the Person asserting such losses, claims, damages or
liabilities on or prior to the delivery of written confirmation of any sale of
securities covered thereby to such Person in any case where the Company shall
have previously furnished copies thereof to such Initial Purchaser, such Holder,
such Participating Broker-Dealer or such underwriter, as the case may be, in
accordance with this Agreement, at or prior to the written confirmation of the
sale of such Notes to such Person and the untrue statement contained in or the
omission from the preliminary prospectus was corrected in the Final Prospectus
(or any amendment or supplement thereto). Any amounts advanced by the Company to
an indemnified party pursuant to this Section 4 as a result of such losses shall
be returned to the Company if it shall be finally determined by a court of
competent jurisdiction in a judgment not subject to appeal or final review that
such indemnified party was not entitled to indemnification by the Company.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, each Initial Purchaser, each
underwriter who participates in an offering of Transfer Restricted Notes and the
other selling Holders and
<PAGE>
-25-
each of their respective directors and each Person, if any, who controls any
of the Company, any Initial Purchaser, any underwriter or any other selling
Holder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, against any and all loss, liability, claim, damage and expense
whatsoever described in the indemnity contained in Section 4(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment or supplement thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such selling Holder
with respect to such Holder expressly for use in the Registration Statement
(or any supplement thereto), or any such Prospectus (or any amendment
thereto); PROVIDED, HOWEVER, that, in the case of the Shelf Registration
Statement, no such Holder shall be liable for any claims hereunder in excess
of the amount of net proceeds received by such Holder from the sale of
Transfer Restricted Notes pursuant to the Shelf Registration Statement;
PROVIDED, FURTHER, HOWEVER, that for purposes of Section 4(a)(iii), such
counsel shall (subject to Section 4(c) hereof) be chosen by the Company.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability that it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 4(a) above, one counsel to all the
indemnified parties shall be selected by Banc of America, and, in the case of
parties indemnified pursuant to Section 4(b) above, counsel to all the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; PROVIDED,
HOWEVER, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party.
Notwithstanding the foregoing, if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action (which approval shall not be unreasonably withheld),
unless such indemnified parties reasonably object to such assumption on the
<PAGE>
-26-
ground that there may be legal defenses available to them which are different
from or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes a full and unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
the offer and sale of any Notes and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel pursuant to Section 4(a)(iii) above, then such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 4(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement. Notwithstanding the immediately preceding 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, an
indemnifying party shall not be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its consent if such
indemnifying party (i) reimburses the indemnified party in accordance with such
request to the extent it considers such request to be reasonable and (ii)
pro-
<PAGE>
-27-
vides written notice to the indemnified party which states the indemnifying
party's basis for its belief that any unpaid balance of such request is
unreasonable, in each case prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Initial
Purchasers and the Holders, as applicable, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement incurred by the Company, the Initial Purchasers and the
Holders; PROVIDED, HOWEVER, that 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 that was not guilty of such
fraudulent misrepresentation. As between the Company and the Initial Purchasers
and the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company on the one hand and of the Holder of Transfer
Restricted Notes, the Participating Broker-Dealer or Initial Purchaser, as the
case may be, on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative fault of the Company on the one hand and the
Holder of Transfer Restricted Notes, the Participating Broker-Dealer or the
Initial Purchasers, as the case may be, on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, or by the Holder of Transfer
Restricted Notes, the Participating Broker-Dealer or the Initial Purchasers, as
the case may be, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders of the Transfer Restricted Notes
and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 4 were determined by pro rata allocation
or by any other
<PAGE>
-28-
method of allocation which does not take account of the equitable
considerations referred to above in this Section 4.
For purposes of this Section 4, each affiliate of any Person,
if any, who controls a Holder of Transfer Restricted Notes, an Initial Purchaser
or a Participating Broker-Dealer within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such other Person, and each director of the Company, each
affiliate of the Company, each executive officer of the Company who signed the
Registration Statement, and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Company.
5. MISCELLANEOUS.
(a) RULE 144 AND RULE 144A. The Company shall provide to each
Holder such reports as are required under Section 4.07 of the Indenture and,
upon the request of any Holder of Transfer Restricted Notes (a) make publicly
available such information as is necessary to permit sales pursuant to Rule 144
under the Securities Act, (b) deliver such information to a prospective
purchaser as is necessary to permit sales pursuant to Rule 144A under the
Securities Act and it will take such further action as any Holder of Transfer
Restricted Notes may reasonably request, and (c) take such further action, if
any, that is reasonable in the circumstances, in each case, to the extent
required from time to time to enable such Holder to sell its Transfer Restricted
Notes without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such rule may
be amended from time to time, (ii) Rule 144A under the Securities Act, as such
rule may be amended from time to time, or (iii) any similar rules or regulations
hereafter adopted by the SEC. Upon the reasonable request of any Holder of
Transfer Restricted Notes, the Company will deliver to such Holder a written
statement as to whether they have complied with such requirements.
(b) NO INCONSISTENT AGREEMENTS. The rights granted to the
Holders hereunder do not, and will not for the term of this Agreement in any way
conflict with and are not, and will not during the term of this Agreement be
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any other agreements entered into by the
Company.
<PAGE>
-29-
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including 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, otherwise than with the prior written consent of the Company
and the Majority Holders; PROVIDED, HOWEVER, that no amendment, modification, or
supplement or waiver or consent to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Transfer
Restricted Notes or the Company unless consented to in writing by such Holder of
Transfer Restricted Notes or the Company, as the case may be.
(d) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 5(d), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; and (ii) if to the
Company, initially at the Company's address set forth in the Purchase Agreement
and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 5(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; PROVIDED, HOWEVER, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Transfer Restricted Notes in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Notes, in any manner, whether by operation of law or otherwise,
<PAGE>
-30-
such Transfer Restricted Notes shall be held subject to all of the terms of
this Agreement, and by taking and holding such Transfer Restricted Notes,
such Person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such Person
shall be entitled to receive the benefits hereof.
(f) THIRD PARTY BENEFICIARY. Each of the Initial Purchasers
and each Holder shall be a third party beneficiary of the agreements made
hereunder between the Company, on the one hand, and the Initial Purchasers, on
the other hand, and shall have the right to enforce such agreements directly to
the extent it deems such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. Specified times of
day refer to New York City time.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) NOTES HELD BY THE COMPANY OR ANY OF ITS AFFILIATES.
Whenever the consent or approval of Holders of a specified percentage of
Transfer Restricted Notes is required hereunder, Transfer Restricted Notes held
by the Company or any of their affiliates (as such term is defined in Rule 405
under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
MANDALAY RESORT GROUP
By: /s/ GLENN SCHAEFFER
--------------------------------
Name: Glenn Schaeffer
Title: President
Confirmed and accepted as of
the date first above written:
BANC OF AMERICA SECURITIES LLC
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEUTSCHE BANK SECURITIES INC.
SALOMON SMITH BARNEY INC.,
as Representatives of the Initial Purchasers
By: Banc of America Securities LLC
By: /s/ BRUCE R. THOMPSON
------------------------------------
Name: Bruce R. Thompson
Title: Managing Director
<PAGE>
EXHIBIT A
FORM OF OPINION OF COUNSEL
1. Each of the Exchange Offer Registration Statement and the
Prospectus (other than the financial statements, notes and schedules thereto and
other financial and statistical information and supplemental schedules included
or referred to therein or omitted therefrom and the Form T-1, as to which such
counsel need express no opinion), complies as to form in all material respects
with the applicable requirements of the Securities Act and the applicable rules
and regulations promulgated under the Securities Act.
2. In the course of such counsel's review and discussion of
the contents of the Exchange Offer Registration Statement and the Prospectus
with certain officers and other representatives of the Company and
representatives of the independent certified public accountants of the Company,
but without independent check or verification or responsibility for the
accuracy, completeness or fairness of the statements contained therein, on the
basis of the foregoing (relying as to materiality to a large extent upon
representations and opinions of officers and other representatives of the
Company), no facts have come to such counsel's attention which cause such
counsel to believe that the Exchange Offer Registration Statement (other than
the financial statements, notes and schedules thereto and other financial and
statistical information contained or referred to therein and the Form T-1, as to
which such counsel need express no belief), at the time the Exchange Offer
Registration Statement became effective and at the time of the consummation of
the Exchange Offer, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading, or that the Prospectus (other than
the financial statements, notes and schedules thereto and other financial and
statistical information contained or referred to therein, as to which such
counsel need express no belief) contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
