EXHIBIT 4.2
==============================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of March 30, 1999
by and among
PENTACON, INC.
and
THE GUARANTORS
named herein
and
BEAR, XXXXXXX & CO. INC.,
NATIONSBANC XXXXXXXXXX SECURITIES LLC
and
XXXXXXX XXXXXX XXXXX INC.
==============================================================================
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of March 30, 1999 by and among PENTACON, INC., a Delaware
corporation (the "COMPANY"), the companies named on Schedule A hereto and any
company which later becomes a party hereto in accordance with this Agreement,
as guarantors (collectively, the "GUARANTORS" and, together with the Company,
the "ISSUERS"), and BEAR, XXXXXXX & CO. INC. ("BEAR, XXXXXXX") NATIONSBANC
XXXXXXXXXX SECURITIES LLC and XXXXXXX XXXXXX XXXXX INC. (together with Bear,
Xxxxxxx, the "INITIAL PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement dated as
of March 25, 1999 by and among the Company, the Guarantors and the Initial
Purchasers (the "PURCHASE AGREEMENT"), which provides for, among other things,
the sale by the Company to the Initial Purchasers of an aggregate of
$100,000,000 principal amount of the Company's 12 1/4% Senior Subordinated NoteS
due 2009, Series A (the "NOTES") and the guarantees thereof by the Guarantors
(the "GUARANTEES" and, together with the Notes, the "SECURITIES"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Issuers
have 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:
"ADVICE" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"APPLICABLE PERIOD" shall have the meaning set forth in
Section 3(s) hereof.
"BEAR, XXXXXXX" shall have the meaning set forth in the preamble
of this Agreement.
"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.
"COMPANY" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted
assigns.
"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" shall have the meaning set forth in Section
2(b) hereof.
"EFFECTIVENESS TARGET DATE" shall have the meaning set forth in
Section 2(e) hereof.
"EVENT DATE" shall have the meaning set forth in 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 Issuers of
Exchange Securities for Securities 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 an appropriate form under the Securities Act,
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" shall have the meaning set forth in Section
2(a) hereof.
"EXCHANGE SECURITIES" shall mean the 12 1/4% Senior Subordinated
Notes due 2009, Series B, issued by the Company, and the guarantees
thereon of the Guarantors, issued pursuant to and entitled to the benefits
of, the Indenture (which shall be qualified under the TIA) and registered
pursuant to an effective Registration Statement under the Securities Act,
to be offered to Holders of Securities in exchange for Securities pursuant
to the Exchange Offer, which shall be substantially identical to the
Securities (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the Securities or, if no such interest
has been paid, from the Issue Date, (ii) the transfer restrictions thereon
and all registration rights in respect thereof shall be eliminated and
(iii) the provisions relating to Liquidated Damages shall be eliminated).
"HOLDERS" shall mean the Initial Purchasers, for so long as they own
any Transfer Restricted Securities, each of their direct and indirect
successors, assigns and transferees who become registered owners of
Transfer Restricted Securities under the Indenture and each Participating
Broker-Dealer that holds Exchange Securities 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 Securities.
"INDENTURE" shall mean the Indenture relating to the Securities
dated as of March 30, 1999 between the Company, the Guarantors and State
Street Bank and Trust Company, 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.
2
"INSPECTORS" shall have the meaning set forth in Section 3(m)
hereof.
"ISSUE DATE" shall mean the date on which the Securities are
originally issued.
"ISSUERS" See the preamble to this Agreement.
"LIQUIDATED DAMAGES" shall have the meaning set forth in Section
2(e) hereof.
"MAJORITY HOLDERS" shall mean, subject to Section 7(k), the Holders
of a majority of the aggregate principal amount of outstanding Transfer
Restricted Securities.
"PARTICIPATING BROKER-DEALER" shall have the meaning set forth in
Section 3(s) hereof.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
"PRIVATE EXCHANGE" shall have the meaning set forth in Section
2(a) hereof.
"PRIVATE EXCHANGE SECURITIES" shall have the meaning set forth in
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 Securities covered by a Shelf
Registration Statement, and by all other amendments and supplements to a
prospectus, including post-effective amendments, and in each case
including all material incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
preamble to this Agreement.
"RECORDS" shall have the meaning set forth in Section 3(m) hereof.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Issuers 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 Securities or Transfer Restricted Securities) and compliance with
the rules of the NASD, (iii) all applicable expenses incurred by the
Issuers 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
3
performance of and compliance with this Agreement, (iv) all rating agency
fees, if any, (v) the fees and disbursements of counsel for the Issuers,
(vii) all fees and expenses incurred in connection with the listing, if
any, of any of the Transfer Restricted Securities 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 Securities 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 Issuers which covers any of
the Exchange Securities or Transfer Restricted Securities pursuant to the
provisions of this Agreement, and all amendments and supplements to any
such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES" shall have the meaning set forth in the preamble to
this Agreement.
"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 STATEMENT" shall mean a "shelf" registration
statement of the Issuers relating to a "shelf" offering in accordance with
Rule 415 of the Securities Act, or any similar rule that may be adopted by
the SEC, pursuant to the provisions of Section 2(b) hereof which covers
all of the Transfer Restricted Securities or all of the Private Exchange
Securities, as the case may be, on an appropriate form under the
Securities Act, 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.
"SUBSIDIARY GUARANTORS" shall mean each of the Guarantors and each
of the Company's future subsidiaries that has executed a supplemental
indenture pursuant to the Indenture guaranteeing the Notes.
"TIA" shall have the meaning set forth in Section 3(k) hereof.
"TRANSFER RESTRICTED SECURITIES" shall mean each Security and, if
issued, each Private Exchange Security; PROVIDED, HOWEVER, that each
Security or Private Exchange Security, as the case may be, shall cease to
be a Transfer Restricted Security when (i) with respect to a Security
only, such Security has been exchanged by a person other than a
Participating Broker-Dealer for an Exchange Security in the Exchange
Offer, (ii) with respect to a Security only, following the exchange by a
Participating Broker-Dealer in the
4
Exchange Offer of a Security for an Exchange Security, which such Exchange
Security is sold to a purchaser who receives from such Participating
Broker-Dealer on or prior to the date of such sale a copy of the
Prospectus contained in the Exchange Offer Registration Statement, as
amended or supplemented, (iii) the date on which such Security or Private
Exchange Security, as the case may be, has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement, (iv) the date on which such Security or Private
Exchange Security, as the case may be, is distributed to the public
pursuant to Rule 144 under the Securities Act (or any similar provision
then in force, but not Rule 144A under the Securities Act) or has become
eligible for resale without restriction pursuant to Rule 144 under the
Securities Act, (v) such Security or Private Exchange Security, as the
case may be, shall have been otherwise transferred by the holder thereof
and a new Security not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of such new
Security shall not require registration or qualification under the
Securities Act or any similar state law then in force or (vi) such
Security or Private Exchange Security, as the case may be, ceases to be
outstanding.
"TRUSTEE" shall mean the trustee with respect to the Securities
under the Indenture.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) EXCHANGE OFFER. To the extent not prohibited by any applicable
law or applicable policy of the SEC, the Issuers shall, for the benefit of the
Holders, at the Issuers' cost, (i) cause to be filed with the SEC within 60 days
after the Issue Date an Exchange Offer Registration Statement on an appropriate
form under the Securities Act covering the offer by the Issuers to the Holders
to exchange all of the Transfer Restricted Securities (other than Private
Exchange Securities) for a like principal amount of Exchange Securities, (ii)
use their reasonable best efforts to have such Exchange Offer Registration
Statement declared effective under the Securities Act by the SEC not later than
the date which is 120 days after the Issue Date, (iii) use their reasonable best
efforts to have such Registration Statement remain effective until the closing
of the Exchange Offer and (iv) use their reasonable best efforts to commence the
Exchange Offer and, on or prior to 150 days after the Issue Date, issue Exchange
Securities in exchange for all Securities properly tendered prior thereto in the
Exchange Offer. Upon the effectiveness of the Exchange Offer Registration
Statement, the Issuers shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder eligible and electing to
exchange Transfer Restricted Securities (other than Private Exchange Securities)
for Exchange Securities (assuming that such Holder is not an affiliate of the
Issuers within the meaning of Rule 405 under the Securities Act and is not a
broker-dealer tendering Transfer Restricted Securities acquired directly from
the Issuers for its own account, acquires the Exchange Securities 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
Securities) and to transfer such Exchange Securities from and after their
receipt without any limitations or restrictions under the Securities Act and
under state securities or blue sky laws.
5
In connection with the Exchange Offer, the Issuers shall:
(i) mail as promptly as practicable 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 Securities at any time prior
to 5:00 p.m. (Eastern time) on the last Business Day of the Exchange
Period, by sending to the institution specified in the notice, a facsimile
transmission or letter setting forth the name of such Holder, the
principal amount of Securities delivered for exchange, and a statement
that such Holder is withdrawing his election to have such Securities
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 Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Issuers upon the request of
any such Initial Purchaser shall, to the extent not prohibited by any applicable
law or applicable policy of the SEC, use their reasonable best efforts to
simultaneously with the delivery of the Exchange Securities in the Exchange
Offer, issue and deliver to such Initial Purchaser in exchange (the "PRIVATE
EXCHANGE") for the Securities held by such Initial Purchaser, a like principal
amount of debt securities of the Company, guaranteed by the Guarantors, that are
issued pursuant to, and entitled to the benefits of, the Indenture and are
identical in all material respects to the Exchange Securities, except that (i)
such securities shall bear appropriate transfer restrictions and (ii) the
registration rights in respect thereof (other than under this Section 2(a))
shall continue to apply (the "PRIVATE EXCHANGE SECURITIES").
The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical to all material
respects to the Indenture and which, in either case, has been qualified under
the TIA or is exempt from such qualification and shall provide that the Exchange
Securities (other than the Private Exchange Securities) shall not be subject to
the transfer restrictions set forth in the Indenture. The Indenture or such
indenture shall provide that the Exchange Securities, the Private Exchange
Securities and the Securities shall vote and consent together on all matters as
one class and that none of the Exchange Securities, the Private Exchange
Securities or the Securities will have the right to vote or consent as a
separate class on any matter. The Private Exchange Securities shall be of the
same series as, and the Issuers shall use all commercially reasonable efforts to
have the Private Exchange Securities bear the same CUSIP number as, the Exchange
Securities. The Issuers shall not have
6
any liability under this Agreement solely as a result of such Private Exchange
Securities not bearing the same CUSIP number as the Exchange Securities.
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 policy of the
SEC, (ii) no action or proceeding shall have been instituted or threatened in
any court or by any governmental agency which might materially impair the
ability of the Issuers 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 any of the Issuers, (iii) all
governmental approvals shall have been obtained, which approvals the Issuers
deem necessary for the consummation of the Exchange Offer or Private Exchange
and (iv) the due tendering of Transfer Restricted Securities in accordance with
the terms of the Exchange Offer. As soon as practicable after the close of the
Exchange Offer and/or the Private Exchange, as the case may be, the Issuers
shall:
(i) accept for exchange all Transfer Restricted Securities 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 Securities properly tendered pursuant to
the Private Exchange; and
(iii) deliver, or cause to be delivered, to the Trustee for
cancellation all Transfer Restricted Securities or portions thereof so
accepted for exchange by the Issuers, and issue, and cause the Trustee
under the Indenture to promptly authenticate and deliver to each Holder, a
new Exchange Security or Private Exchange Security, as the case may be,
equal in principal amount to the principal amount of the Transfer
Restricted Securities surrendered by such Holder and accepted for
exchange.
To the extent not prohibited by any law or applicable policy of the
SEC, the Issuers shall use their 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 Securities (other than
Private Exchange Securities) who wishes to exchange such Transfer Restricted
Securities for Exchange Securities 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 any of the Issuers
within the meaning of Rule 405 under the Securities Act, that it is not a
broker-dealer tendering Transfer Restricted Securities acquired directly from
the Company for its own account, that any Exchange Securities to be received by
it will be acquired in the ordinary course of business, that at the time of the
commencement of the Exchange Offer it has no arrangement or understanding with
any Person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Securities and such other representations as may
be necessary under applicable SEC rules, regulations or interpretations to
render the appropriate form under the Securities Act available. The Issuers
shall inform the
7
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
Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the registration provisions of this Agreement (other than the
preceding paragraphs of this Section 2(a)) shall continue to apply, MUTATIS
MUTANDIS, solely with respect to Transfer Restricted Securities that are Private
Exchange Securities, Exchange Securities held by Participating Broker-Dealers
and Transfer Restricted Securities entitled to a Shelf Registration pursuant to
the first paragraph of Section 2(b) hereof.
(b) SHELF REGISTRATION. In the event that (i) the Issuers are 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
within 150 days after the Issue Date, (iii) any holder of Securities notifies
the Issuers within 20 Business Days after the commencement of the Exchange Offer
that (a) due to a change in applicable law or SEC policy it is not entitled to
participate in the Exchange Offer, (b) due to a change in applicable law or SEC
policy it may not resell the Exchange Securities to be acquired by it in the
Exchange Offer to the public without delivering a prospectus and the prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such holder or (c) it is a broker-dealer and owns
Securities acquired directly from the Company for its own account or (iv) the
holders of a majority of the Securities may not resell the Exchange Securities
to be 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, then the Issuers shall, at their cost, cause to be filed
as promptly as practicable after such determination or date, as the case may be,
and, in any event, prior to the later of (A) 60 days after the Issue Date or (B)
30 days after such filing obligation arises and use their reasonable best
efforts to cause the Shelf Registration Statement to be declared effective by
the SEC on or prior to 60 days from such required filing date; PROVIDED,
HOWEVER, that if the Issuers have not consummated the Exchange Offer within 150
days of the Issue Date, then the Issuers will file with the SEC on or prior to
the 180th day after the Issue Date, a Shelf Registration Statement providing for
the sale by the Holders of all of the Transfer Restricted Securities, and shall
use their reasonable best efforts to have such Shelf Registration Statement
declared effective by the SEC as soon as practicable and, in any event, no later
than the earlier of 240 days after the Issue Date and 60 days after such Shelf
Registration Statement was first filed with the SEC. No Holder of Transfer
Restricted Securities may include any of its Transfer Restricted Securities in
any Shelf Registration pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, such information as the Company may
request, after conferring with counsel with regard to information relating to
Holders that would be required by the SEC to be included in such Shelf
Registration Statement or Prospectus included therein, reasonably request for
inclusion in any Shelf Registration Statement or Prospectus included therein.
Each Holder as to which any Shelf Registration is being effected agrees to
furnish to the Issuers all information with respect to such Holder necessary to
make any information previously furnished to the Company by such Holder not
materially misleading.
8
The Issuers agree to use their reasonable best efforts to keep the
Shelf Registration Statement continuously effective until the second anniversary
of the effective date of the Shelf Registration Statement (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 Securities covered by such
Shelf Registration Statement have been sold pursuant thereto or cease to be
outstanding or otherwise cease to be Transfer Restricted Securities) (the
"EFFECTIVENESS PERIOD"); PROVIDED, HOWEVER, that the Effectiveness Period in
respect of the Shelf Registration Statement shall be extended to the extent
reasonably required to permit dealers to comply with the applicable prospectus
delivery requirements under the Securities Act and as otherwise provided herein.
The Issuers shall not permit any securities other than Transfer Restricted
Securities to be included in the Shelf Registration. The Issuers further agree,
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 Issuers for such Shelf Registration Statement or
by the Securities Act or by any other rules and regulations thereunder for shelf
registrations, and the Issuers agree to furnish to the Holders of Transfer
Restricted Securities copies of any such supplement or amendment promptly after
its being used or filed with the SEC.
(c) EXPENSES. The Issuers 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 Majority Holders to act as counsel for the Holders of the Transfer
Restricted Securities 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
Securities 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
Securities 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 Securities may legally resume. The Issuers will be deemed
not to have used their reasonable 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 Securities covered
thereby not being able to exchange or offer and sell such Transfer Restricted
Securities during that period, unless (i) such action is required by applicable
law or (ii) such action is taken by the Issuers in good faith and for valid
business reasons (but not including avoidance of the Issuers' obligations
hereunder) including a material corporate transaction, and in any such case,
subject to the second paragraph of Section 2(e) below.
9
(e) LIQUIDATED DAMAGES. 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 Issuers
fail to consummate the Exchange Offer within 150 days of the Issue Date with
respect to the Exchange Offer Registration Statement or (iv) the applicable
Registration Statement is filed and declared effective prior to the
Effectiveness Target Date but shall thereafter cease to be effective or usable
without being succeeded within 30 days by an additional Registration Statement
covering the Transfer Restricted Securities which has been filed and declared
effective (each such event referred to in clauses (i) through (iv), a
"REGISTRATION DEFAULT"), then the Issuers shall pay liquidated damages to each
Holder of Transfer Restricted Securities as to which such Registration Default
relates ("LIQUIDATED DAMAGES"), 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
0.50% per annum of the principal amount of the Securities. The amount of
Liquidated Damages will increase by an additional 0.50% per annum of the
principal amount of the Securities for each subsequent 90-day period (or portion
thereof) while a Registration Default is continuing until all Registration
Defaults have been cured, up to an aggregate maximum amount of 2.00% per annum
of the principal amount of the Securities. Liquidated Damages 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
Liquidated Damages with respect to such Registration Default will cease.
If the Company has determined, in its reasonable judgment, upon
advice of counsel, that the continued effectiveness and use of the Shelf
Registration Statement would require the disclosure of material information
concerning, or interfere with, any financing, acquisition, corporate
reorganization or other material transaction involving the Issuers, and the
aggregate number of days in any consecutive twelve-month period for which the
Shelf Registration Statement is unusable exceeds 45 days per occurrence or more
than 60 days in the aggregate, then the Issuers shall pay Liquidated Damages in
an amount equal to 0.50% per annum of the principal amount of the Securities for
the first 90-day period (or portion thereof) beginning on the 45th such date
that such Shelf Registration Statement ceases to be usable, which Liquidated
Damages shall be increased by an additional 0.50% per annum of the principal
amount of the Securities at the beginning of each subsequent 90-day period, up
to a maximum amount (aggregated with Liquidated Damages accruing pursuant to the
first paragraph of this Section 2(e)) of 2.00% of the principal amount of the
Securities. Upon the Shelf Registration Statement once again becoming usable,
the accrual of Liquidated Damages shall cease if the Issuers are otherwise in
compliance with this Agreement at such time; PROVIDED, HOWEVER, that if the
Shelf Registration Statement ceases to be usable beyond the period permitted
above, Liquidated Damages will again accrue and thereafter cease to accrue when
the Shelf Registration Statement becomes usable. Notwithstanding the foregoing,
the Issuers shall cause the Registration Statement to be effective for the
requisite period set forth hereinafter.
The Issuers shall notify the Trustee within three Business Days
after each and every date on which an event occurs in respect of which
Liquidated Damages is required to be
10
paid (an "EVENT DATE"). Liquidated Damages shall be paid in arrears by
depositing with the Trustee, in trust, for the benefit of the Holders of
Transfer Restricted Securities, on or before the applicable semiannual interest
payment date, immediately available funds in sums sufficient to pay the
Liquidated Damages then due. The Liquidated Damages due shall be payable in
arrears on each interest payment date to the record Holder of Securities
entitled to receive the interest payment to be paid on such date as set forth in
the Indenture. Each obligation to pay Liquidated Damages 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 Issuers with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Issuers 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 Issuers, (ii) shall, in the case of a Shelf Registration,
be available for the sale of the Transfer Restricted Securities 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
their reasonable best efforts to cause such Registration Statement to
become effective and remain effective in accordance with Section 2 hereof.
The Issuers 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 or 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 under applicable law 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 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 Securities, at least three Business Days prior to
filing, that a Shelf Registration Statement with respect to the Transfer
Restricted Securities is being filed and advising
11
such Holder that the distribution of Transfer Restricted Securities will
be made in accordance with the method selected by the Majority Holders
participating in the Shelf Registration; (ii) furnish to each Holder of
Transfer Restricted Securities, 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 Securities, (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 Securities in connection with the offering
and sale of the Transfer Restricted Securities covered by such Prospectus
or any amendment or supplement thereto subject to the limitations on the
use thereof provided in Sections 2(b) and 2(c);
(d) in the case of a Shelf Registration, use their reasonable best
efforts to register or qualify, as may be required by applicable law, the
Transfer Restricted Securities 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 Securities covered by a Registration Statement shall
reasonably request in advance of such date of effectiveness, and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Transfer Restricted Securities owned by such Holder;
PROVIDED, HOWEVER, that the Issuers 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 or subject itself to any general consent to
service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not so subject;
(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
Securities, or such Participating Broker-Dealers, as the case may be,
their counsel, if any, promptly and confirm such notice in writing (which
notices, in the case of (i) below, may take the form of a press release)
(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 Issuers receives any notification with respect to the suspension of
the qualification of the Transfer Restricted Securities or the Exchange
Securities 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 which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material
12
respect or which 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) the Issuers' 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 Securities, 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);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Transfer Restricted Securities to facilitate the timely
preparation and delivery of certificates not bearing any restrictive
legends representing Securities covered by such Shelf Registration to be
sold and relating to the subsequent transfer of such Securities; and cause
such Transfer Restricted Securities 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 three
Business Days prior to the closing of any sale of Transfer Restricted
Securities;
(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
their reasonable 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 Securities, 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 Issuers have amended or
supplemented the Prospectus to correct such misstatement or omission;
(j) obtain a CUSIP number for all Exchange Securities or Private
Exchange or Securities, as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with
certificates for the Exchange Securities or the Private Exchange
Securities, 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 Securities or Transfer Restricted Securities, as the case
may be, cooperate with the Trustee and the
13
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 their reasonable best efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and all
other forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner;
(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 Securities,
and in such connection, (i) make such representations and warranties to
Holders of such Transfer Restricted Securities with respect to the
business of the Issuers and their respective 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)
if requested by the managing underwriters, obtain opinions of counsel to
the Issuers and updates thereof in form and substance reasonably
satisfactory to the Holders of a majority in principal amount of the
Transfer Restricted Securities covered by such Registration Statement,
addressed to each selling Holder and the managing underwriters covering
the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
Holders; (iii) if requested by the managing underwriters obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Issuers (and, if necessary, any other independent
certified public accountants of any subsidiary of the Issuers or of any
business acquired by any of the Issuers for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to the Issuers and the selling Holders of Transfer
Restricted Securities, such letters to be in customary form (meeting the
requirement of Statement of Accounting Standards No. 72) 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 substantially identical to those set forth in
Section 4 hereof (or such other provisions and procedures acceptable to
the Issuers and the Holders of a majority in aggregate principal amount of
Transfer Restricted Securities covered by such Registration Statement)
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
Securities, or as and to the extent required thereunder;
(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 Securities during the Applicable Period, make available for
inspection by each such person who would be an "underwriter" as a result
of
14
either (i) the sale by such person of Securities covered by such Shelf
Registration Statement or (ii) the sale during the Applicable Period by a
Participating Broker-Dealer of Exchange Securities (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 Securities) 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 Issuers and their respective 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 Issuers and their respective
subsidiaries to supply all information in each case reasonably requested
by any such Inspector in connection with such Registration Statement.
Records which the Issuers determine, in good faith, to be confidential and
any Records which they notify the Inspectors are confidential shall not be
disclosed by the Inspectors to any other Person unless (i) the disclosure
of such Records is necessary to avoid or correct a material misstatement
or omission in such Registration Statement, (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 through no fault or action of any
selling Holder of such Transfer Restricted Securities, any such
Participating Broker-Dealer or any Inspector. Each such Holder 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 Issuers unless and until such is
made generally available to the public through no fault or action of such
Holder, such Participating Broker-Dealer or any Inspector. Each selling
Holder of such Transfer Restricted Securities and each such Participating
Broker-Dealer will be required to further agree that it will, upon
learning that disclosure of such Records is necessary under (i) or (ii)
above, give notice to the Issuers and allow the Issuers at their 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 earnings 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 45 days after the end of any 12-month period (or 90 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
Securities 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 a customary opinion of counsel to the Issuers addressed to the
Trustee for the benefit of all Holders of Transfer Restricted Securities
participating in the Exchange Offer or the
15
Private Exchange, as the case may be, and which includes an opinion that
(i) the Issuers have duly authorized, executed and delivered the Exchange
Securities and Private Exchange Securities, and (ii) each of the Exchange
Securities or the Private Exchange Securities, as the case may be,
constitute a legal, valid and binding obligation of the Issuers,
enforceable against the Issuers 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 Securities by
Holders to the Issuers (or to such other Person as directed by the
Issuers) in exchange for the Exchange Securities or the Private Exchange
Securities, as the case may be, the Issuers shall xxxx, or cause to be
marked, on such Transfer Restricted Securities and on the books of the
Trustee, the Note Registrar (as defined in the Indenture) and, if
necessary, the Depositary, delivered by such Holders that such Transfer
Restricted Securities are being canceled in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be; but in
no event shall such Transfer Restricted Securities be marked as paid or
otherwise satisfied solely as a result of being exchanged for Exchange
Securities or Private Exchange Securities in the Exchange Offer or the
Private Exchange, as the case may be;
(q) cooperate with each seller of Transfer Restricted Securities
covered by any Registration Statement participating in the disposition of
such Transfer Restricted Securities 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 their reasonable best efforts to take all other steps
necessary to effect the registration of the Transfer Restricted Securities
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 Bear, Xxxxxxx, 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 Securities 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 Securities 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 Bear, Xxxxxxx, as
representative of the Initial Purchasers or such other representative,
represent the prevailing views of the staff of the SEC, including a
statement that any such Participating Broker-Dealer who receives Exchange
Securities for Transfer Restricted Securities 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 Exchange Securities, (ii) furnish to each Participating
Broker-
16
Dealer who has delivered to the Issuers 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 Securities covered by the Prospectus or any
amendment or supplement thereto, (iv) use their reasonable 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 Securities; PROVIDED, HOWEVER, that such period shall not be
required to exceed 180 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 Securities 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 Securities received in
respect of such Transfer Restricted Securities 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 Securities, 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
Issuers agree to deliver, upon request, to the Trustee and to
Participating Broker-Dealers upon consummation 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(c) of the Purchase
Agreement.
The Issuers may require each seller of Transfer Restricted
Securities as to which any registration is being effected to furnish to the
Issuers such information regarding such seller and the proposed distribution of
such Transfer Restricted Securities, as the Issuers may from time to time
reasonably request in writing. The Issuers may exclude from such registration
the Transfer Restricted Securities 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 Issuers' decision to exclude such seller.
17
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Issuers 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 Securities
and are required to deliver Prospectuses, each Holder agrees that, upon receipt
of any notice from the Issuers 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
Securities 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 Issuers that
the use of the applicable Prospectus may be resumed, and, if so directed by the
Issuers, such Holder will deliver to the Issuers (at the Issuers' 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
Securities or Exchange Securities, as the case may be, current at the time of
receipt of such notice. If the Issuers shall give any such notice to suspend the
disposition of Transfer Restricted Securities or Exchange Securities, as the
case may be, pursuant to a Registration Statement, the Issuers shall use their
reasonable best efforts to file and have declared effective (if an amendment) as
soon as practicable an amendment or supplement to the Registration Statement
and, in the case of an amendment, have such amendment declared effective as soon
as practicable and shall extend the 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 Issuers 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) Each of the Issuers shall
indemnify and hold harmless each Initial Purchaser, each Holder, each
Participating Broker-Dealer, each underwriter who participates in an offering of
Transfer Restricted Securities, 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 Securities or Exchange Securities, 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
18
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 as provided in Section 4(c) below) 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 Issuers 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 or the final Prospectus if such Initial Purchaser, such
Holder, such Participating Broker-Dealer or such underwriter failed to send or
deliver a copy of the final Prospectus (or any amendment or supplement thereto)
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 Issuers 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 Securities to such Person and the untrue statement contained in or
the omission from the preliminary Prospectus or the final Prospectus was
corrected in the final Prospectus (or any amendment or supplement thereto). Any
amounts advanced by the Issuers to an indemnified party pursuant to this Section
4 as a result of such losses shall be returned to the Issuers 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 any of the Issuers.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Issuers, each Initial Purchaser, each underwriter who
participates in an offering of Transfer Restricted Securities and the other
selling Holders and each of their respective directors and each Person, if any,
who controls any of the Issuers, the Initial Purchasers, 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
19
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Issuers 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
Securities pursuant to the Shelf Registration Statement.
(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 which 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 Bear, Xxxxxxx, 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 (in addition to any local 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 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 is
sought under this Section 4, 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 Securities 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)
20
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 reasonable fees and expenses of counsel
pursuant to 4(a)(iii) above, an indemnifying party shall not be liable for a
settlement of the nature contemplated by Section 4(a)(ii) effected without its
consent if such indemnifying party, prior to the date of such settlement (i)
reimburses such indemnified party in accordance with such request to the extent
it believes such request is, in good faith, reasonable and (ii) provides written
notice to the indemnified party that the indemnifying party disputes in good
faith the reasonableness of the unpaid balance of such fees and expenses and
substantiates the unreasonableness of such fees and expenses.
(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 Issuers, 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 Issuers, 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 Issuers 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 Issuers, on the one hand, and of the Holder of Transfer
Restricted Securities, the Participating Broker-Dealer or Initial Purchasers, 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 Issuers, on the one hand, and the Holder
of Transfer Restricted Securities, 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 Issuers, or by the Holder
of Transfer Restricted Securities, 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 Issuers and the Holders of the Transfer Restricted Securities
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 method of allocation which does not take account of the
equitable considerations referred to above in this Section 4.
21
For purposes of this Section 4, each affiliate of any Person, if
any, who controls a Holder of Transfer Restricted Securities, 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 each of the Issuers,
each affiliate of each of the Issuers, each executive officer of each of the
Issuers who signed the Registration Statement, and each Person, if any, who
controls any of the Issuers 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 each of the Issuers.
5. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Transfer Restricted Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements. The Issuers shall be under no obligation to
compensate any Holder for lost income, interest or other opportunity foregone,
or other liability incurred, as a result of the Issuers' decision to exclude
such Holder from any underwritten registration if such Holder has not complied
with the provisions of this Section 5 in all material respects following 15
Business Days' written notice of non-compliance and the Issuers' decision to
exclude such Holder.
6. SELECTION OF UNDERWRITERS. The Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of the Transfer Restricted
Securities covered by the Shelf Registration Statement; PROVIDED, HOWEVER, that
such underwriters and managers must be reasonably satisfactory to the Issuers.
7. MISCELLANEOUS.
(a) REPORTING REQUIREMENT. So long as any of the Transfer Restricted
Securities are outstanding, the Issuers will comply with the provisions of
Section 10.10 of the Indenture.
(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 Issuers' other issued
and outstanding securities under any other agreements entered into by the
Issuers.
(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 Issuers
and the Majority Holders; PROVIDED, HOWEVER, that no amendment, modification, or
supplement or waiver or consent to the departure with respect to the provisions
22
of Section 4 hereof shall be effective as against any Holder of Transfer
Restricted Securities or any of the Issuers unless consented to in writing by
such Holder of Transfer Restricted Securities or the Issuers, 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, facsimile, or any courier guaranteeing overnight delivery (i)
if to a Holder, at the most current address given by such Holder to the Issuers
by means of a notice given in accordance with the provisions of this Section
7(d), which address initially is, with respect to the Initial Purchasers, the
address set forth in the Purchase Agreement; and (ii) if to the Issuers,
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 7(d).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; three
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt is confirmed, if sent by facsimile; 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 Securities in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Transfer Restricted Securities, in any manner, whether by operation of law or
otherwise, such Transfer Restricted Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Transfer Restricted
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) THIRD PARTY BENEFICIARY. Each of the Initial Purchasers and each
Holder shall be a third party beneficiary of the agreements made hereunder
between the Issuers, 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.
23
(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. All 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) SECURITIES HELD BY ANY OF THE ISSUERS OR ANY OF THEIR RESPECTIVE
AFFILIATES. Whenever the consent or approval of Holders of a specified
percentage of Transfer Restricted Securities is required hereunder, Transfer
Restricted Securities held by the Issuers or any of their respective 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.
(l) SUBSIDIARY GUARANTOR A PARTY. Immediately upon the designation
of any subsidiary of the Company as a Guarantor under the Indenture, the Company
shall cause such subsidiary to become a party hereto as a Subsidiary Guarantor
by executing and delivering to the Initial Purchasers a counterpart hereof.
24
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
PENTACON, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
GUARANTORS:
ALATEC PRODUCTS, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
AXS SOLUTIONS, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
ASI AEROSPACE GROUP, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
CAPITOL BOLT & SUPPLY, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
S-1
MAUMEE INDUSTRIES, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
PACE PRODUCTS, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
SALES SYSTEMS, LIMITED
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
TEXAS INTERNATIONAL AVIATION, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
WEST COAST AERO PRODUCTS HOLDING
CORPORATION, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
XXXXXXX ACQUISITION CORP.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
S-2
ALATEC RACE, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
TRACE ALATEC SUPPLY COMPANY, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
ALATEC CABLE HARNESS & ASSEMBLY
DIVISION, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
ALATEC FASTENER AND COMPONENT GROUP,
INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
ALATEC INTERNATIONAL SALES, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
PENTACON AEROSPACE GROUP, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
S-3
PENTACON INDUSTRIAL GROUP, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
TIA INTERNATIONAL, INC.
By: /S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
S-4
Confirmed and accepted as of the date first above written:
BEAR, XXXXXXX & CO. INC.
By:/S/ XXXXX X. XXXX
Name: Xxxxx X. Xxxx
Title: Senior Managing Director
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
By:/S/ X. X. XXXXXXXX, XX.
Name: X. X. Xxxxxxxx
Title: Managing Director
XXXXXXX XXXXXX XXXXX INC.
By:/S/ XXX X. XXXXXX
Name: Xxx X. Xxxxxx
Title: President
S-5
EXHIBIT A
FORM OF OPINION OF COUNSEL
1. Each of the Exchange Offer Registration Statement and the Prospectus
(other than the financial statements, notes or 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. We have participated in conferences with officers and other
representatives of the Issuers, your representatives and representatives of the
independent accountants for the Issuers at which conferences the contents of the
Exchange Offer Registration Statement and related matters were discussed.
Although such counsel has not verified and does not pass upon or assume any
responsibility for the accuracy, completeness or fairness of the statements
contained therein, on the basis of the foregoing participation (relying as to
materiality to a large extent upon representations and opinions of officers and
other representatives of the Issuers), no facts have come to such counsel's
attention that lead such counsel to believe that the Exchange Offer Registration
Statement (other than the financial statements, notes and schedules thereto
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 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.
SCHEDULE A
GUARANTORS
Alatec Products, Inc.
Alatec Cable Harness & Assembly Division, Inc.
Alatec Fastener and Component Group, Inc.
Alatec International Sales, Inc.
Alatec Race, Inc.
Trace Alatec Supply Company, Inc.
Pentacon Aerospace Group, Inc.
Pentacon Industrial Group, Inc.
AXS Solutions, Inc.
Capitol Bolt & Supply, Inc.
Maumee Industries, Inc.
Sales Systems, Limited
Texas International Aviation, Inc.
TIA International, Inc.
Pace Products, Inc.
West Coast Aero Products Holding Corporation, Inc.
ASI Aerospace Group, Inc.
Xxxxxxx Acquisition Corp.
