REGISTRATION RIGHTS AGREEMENT
Dated as of September 16, 1997
among
UNITED AUTO GROUP, INC.,
THE GUARANTORS SIGNATORY HERETO
and
X.X. XXXXXX SECURITIES INC.,
and
SCOTIA CAPITAL MARKETS (USA) INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is
dated as of September 16, 1997, by and among UNITED AUTO GROUP, INC., a
Delaware corporation (the "Company"), the guarantors signatory hereto (the
"Guarantors," and together with the Company, the "Issuers"), and X.X. XXXXXX
SECURITIES INC. and SCOTIA CAPITAL MARKETS (USA) INC. (together the "Initial
Purchasers").
This Agreement is entered into in connection with the
Purchase Agreement, dated as of September 11, 1997, between the Issuers and the
Initial Purchasers (the "Purchase Agreement") relating to the sale by the
Company to the Initial Purchasers, of $50,000,000 aggregate principal amount of
its 11% Senior Subordinated Notes due 2007, Series B (the "Notes"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Issuers
have agreed to provide the registration rights set forth in this Agreement for
the equal benefit of the Initial Purchasers and their direct and indirect
transferees. The execution and delivery of this Agreement is a condition to the
Initial Purchasers' obligation to purchase the Notes under the Purchase
Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4.
Advice: See Section 5.
Applicable Period: See Section 2(b).
Company: See the introductory paragraph to this Agreement.
Consummation Date: The 165th day after the Issue Date.
Effectiveness Date: The 135th day after the Issue Date.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Exchange Securities: See Section 2(a).
Filing Date: The 60th day after the Issue Date.
Guarantor: Each Person who has executed this Agreement as a
guarantor or becomes a guarantor of the Notes.
Holder: Any record holder of Registrable Securities.
Indemnified Person: See Section 7.
Indemnifying Person: See Section 7.
Indenture: The Indenture, dated as of September 16, 1997,
among the Company, the Guarantors and The Bank of New York, as trustee,
pursuant to which the Notes are being issued, as amended or supplemented from
time to time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraph to this
Agreement.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 5(p).
Issue Date: The date of original issuance of the Notes.
Issuers: See the introductory paragraph to this Agreement.
NASD: See Section 5(t).
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Notes: See the preamble to this Agreement.
Participant: See Section 7.
Participating Broker-Dealer: See Section 2(b).
Person: An individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Private Exchange: See Section 2(b).
Private Exchange Securities: See Section 2(b).
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
Records: See Section 5(p).
Registrable Securities: The Notes upon original issuance of
the Notes and at all times subsequent thereto, each Exchange Security as to
which Section 2(c)(1)(i) hereof is applicable upon original issuance and at all
times subsequent thereto and, if issued, the Private Exchange Securities, until
in the case of any such Notes, Exchange Securities or Private Exchange
Securities, as the case may be, (i) a Registration Statement (other than, with
respect to any Exchange Security as to which Section 2(c)(1)(i) hereof is
applicable, the Exchange Registration Statement) covering such Notes, Exchange
Securities or Private Exchange Securities has been declared effective by the
SEC and such Notes, Exchange Securities or Private Exchange Securities, as the
case may be, have been disposed of in accordance with such effective
Registration Statement, (ii) such Notes, Exchange Securities or Private
Exchange Securities, as the case may be, are sold in compliance with Rule 144
or would be permitted to be sold pursuant to Rule 144(k), or (iii) such Notes,
Exchange Securities or Private Exchange Securities, as the case may be, cease
to be outstanding.
Registration Statement: Any registration statement of the
Issuers, including, but not limited to, the Exchange Registration Statement,
that covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration state-
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ment, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than
Rule 144A) or regulation hereafter adopted by the SEC providing for offers and
sales of securities made in compliance therewith resulting in offers and sales
by subsequent holders that are not affiliates of an issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule (other than
Rule 144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration: See Section 3(b).
Subsequent Shelf Registration: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee as defined in the Indenture and, if
existent, the trustee under any indenture governing the Exchange Securities
and Private Exchange Securities (if any).
Underwritten registration or underwritten offering: A
registration in which securities of the Issuers are sold to an underwriter for
reoffering to the public.
2. Exchange Offer
(a) The Issuers agree to file with the SEC as soon as
practicable after the Issue Date, but in no event later than the
Filing Date, an offer to exchange (the "Exchange Offer") any and all
of the Registrable Securities for a like aggregate principal amount of
debt securities of the Issuers which are identical in all material
respects to the Notes (the "Exchange Securities") (and which are
entitled to the benefits of the Indenture or a trust indenture which
is
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identical in all material respects to the Indenture (other than such
changes as are necessary to comply with any requirements of the SEC
to effect or maintain the qualification of such trust indenture under
the TIA) and which has been qualified under the TIA), except that the
Exchange Securities shall have been registered pursuant to an
effective Registration Statement under the Securities Act and shall
contain no legend thereon with respect to restrictions on transfer
pursuant to the Securities Act. The Issuers agree to use their
reasonable best efforts to keep the Exchange Offer open for at least
20 business days (or longer if required by applicable law) after the
date notice of the Exchange Offer is mailed to Holders and to
consummate the Exchange Offer on or prior to the Consummation Date.
The Exchange Offer will be registered under the Securities Act on the
appropriate form (the "Exchange Registration Statement") and will
comply with all applicable tender offer rules and regulations under
the Exchange Act. If after such Exchange Registration Statement is
initially declared effective by the SEC and prior to the consummation
of the Exchange Offer, the Exchange Offer or the issuance of the
Exchange Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other
governmental agency or court such Exchange Registration Statement
shall be deemed not to have become effective for purposes of this
Agreement. Each Holder who participates in the Exchange Offer will be
deemed to represent that any Exchange Securities received by it will
be acquired in the ordinary course of its business, that at the time
of the consummation of the Exchange Offer such Holder will have no
arrangement with any person to participate in the distribution of the
Exchange Securities in violation of the provisions of the Securities
Act, and that such Holder is not an affiliate of the Issuers within
the meaning of the Securities Act. Upon consummation of the Exchange
Offer in accordance with this Section 2, the provisions of this
Agreement (other than the first four sentences of this Section 2(a))
shall continue to apply, mutatis mutandis, solely with respect to
Registrable Securities that are Private Exchange Securities and
Exchange Securities held by Participating Broker-Dealers, and the
Issuers shall have no further obligation to register Registrable
Securities (other than Private Exchange Securities and other than
Exchange Securities as to which clause (c)(1)(i) hereof applies)
pursuant to Section 3 of this Agreement. No securities other than the
Exchange Securities shall be included in the Exchange Registration
Statement, except to the extent required by contractual obligations
in effect on the Issue Date.
(b) The Issuers shall include within the Prospectus contained
in the Exchange Registration Statement one or more section(s)
reasonably acceptable to the Initial Purchasers, which shall contain a
summary statement of the publicly disseminated positions of the Staff
of the SEC with respect to
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the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities received by such broker-dealer in the Exchange
Offer (a "Participating Broker-Dealer"). Such section(s) shall also
allow the use of the prospectus by all persons subject to the
prospectus delivery requirements of the Securities Act (other than a
Participating Broker Dealer (an "Excluded Participating Broker
Dealer") who either (x) acquired Notes other than for its own account
as a result of market-making activities or other trading activities
or (y) has entered into any arrangement or understanding with any
Issuer or any affiliate of any Issuer to distribute the Exchange
Securities) and include a statement describing the means by which
Participating Broker-Dealers may resell the Exchange Securities.
The Issuers shall use their reasonable best efforts to keep
the Exchange 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 exceed 120 days (or such longer period if extended
pursuant to the last paragraph of Section 5) (the "Applicable Period");
provided, further, however, that, if requested by the Company in the letter of
transmittal for the Exchange Offer, such persons shall have expressed that they
may be subject to such requirements and have undertaken to use their reasonable
best efforts to notify the Company when they are no longer subject to such
requirements (if they are no longer subject to such requirements at any time
prior to the expiration of the Applicable Period).
If, prior to consummation of the Exchange Offer, an Initial
Purchaser holds any Notes acquired by it and having the status of an unsold
allotment in the initial distribution, the Issuers upon the request of such
Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to each 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 Issuers
that are identical in all material respects to the Exchange Securities (the
"Private Exchange Securities") (and which are issued pursuant to the same
indenture as the Exchange Securities) except for the placement of a restrictive
legend on such Private Exchange Securities. If practicable, the Private
Exchange Securities shall bear the same CUSIP number as the Exchange
Securities. Interest on the Exchange Securities and Private Exchange Securities
will accrue from the last interest payment date on which interest was paid on
the Notes surrendered in exchange therefor or, if no interest has been paid on
the Notes, from the Issue Date.
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Any indenture under which the Exchange Securities or the
Private Exchange Securities will be issued shall provide that the holders of
any of the Exchange Securities and the Private Exchange Securities will vote
and consent together on all matters (to which such holders are entitled to vote
or consent) as one class and that none of the holders of the Exchange
Securities and the Private Exchange Securities will have the right to vote or
consent as a separate class on any matter (to which such holders are entitled
to vote or consent).
(c) If (1) prior to the consummation of the Exchange Offer,
the Issuers reasonably determine in good faith or Holders of a
majority in aggregate principal amount of the Registrable Securities
notify the Issuers that they have reasonably determined in good faith
that (i) in the opinion of counsel, the Exchange Securities would not,
upon receipt, be tradeable by such Holders who are not affiliates of
the Issuers or Excluded Participating Broker Dealers without
registration under the Securities Act and without registration under
applicable blue sky or state securities laws or (ii) in the opinion of
counsel, the SEC is unlikely to permit the consummation of the
Exchange Offer and/or (2) subsequent to the consummation of the
Private Exchange, any holder of Private Exchange Securities so
requests with respect to the Private Exchange Securities and/or (3)
the Exchange Offer is commenced and not consummated prior to the 60th
day following the Consummation Date for any reason, then the Issuers
shall promptly deliver to the Holders and the Trustee notice thereof
(the "Shelf Notice") and shall thereafter file an Initial Shelf Reg
istration as set forth in Section 3 (which only in the circumstances
contemplated by clause (2) of this sentence will relate solely to the
Private Exchange Securities) pursuant to Section 3. The parties hereto
agree that, following the delivery of a Shelf Notice to the Holders of
Registrable Securities (only in the circumstances contemplated by
clauses (1) and/or (3) of the preceding sentence), the Issuers shall
not have any further obligation to conduct the Exchange Offer or the
Private Exchange under this Section 2.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section
2(c), then:
(a) Initial Shelf Registration. The Issuers shall as promptly
as reasonably practicable prepare and file with the SEC a Registration
Statement for an offering to be made on a continuous basis pursuant to
Rule 415 covering all of the Registrable Securities (the "Initial
Shelf Registration"). If the Issuers shall have not yet filed an
Exchange Offer and the Shelf Notice was delivered at least 45 days
prior to the Filing Date, the Issuers shall file with the SEC the
Initial Shelf Registration on or prior to the Filing Date.
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Otherwise, the Issuers shall file with the SEC the Initial Shelf
Registration within 60 days of the delivery of the Shelf Notice. The
Initial Shelf Registration shall be on Form S-1 or another
appropriate form permitting registration of such Registrable
Securities for resale by such holders in the manner or manners
designated by them (including, without limitation, one or more
underwritten offerings). The Issuers may permit securities other than
the Registrable Securities to be included in the Initial Shelf
Registration or any Subsequent Shelf Registration to the extent
required by contractual obligations of the Company in effect on the
Issue Date. The Issuers shall use their reasonable best efforts to
cause the Initial Shelf Registration to be declared effective under
the Securities Act on or prior to the 135th day after the filing
thereof with the SEC and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the date which
is 24 months from the Issue Date (subject to extension pursuant to
the last paragraph of Section 5 hereof) (the "Effectiveness Period"),
or such shorter period ending when (i) all Registrable Securities
covered by the Initial Shelf Registration have been sold in the
manner set forth and as contemplated in the Initial Shelf
Registration or (ii) a Subsequent Shelf Registration covering all of
the Registrable Securities has been declared effective under the
Securities Act.
Notwithstanding any other provision of this Agreement, the
Issuers may postpone or suspend the filing or effectiveness of a
Registration Statement (or any amendments or supplements thereto) if
(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 (not
including the avoidance of the Issuers' obligations hereunder),
including the acquisition or divestiture of assets, other pending
corporate developments, public filings with the SEC or other similar
events, so long as the Issuers promptly thereafter comply with the
requirements of Section 5(b) hereof, if applicable. Notwithstanding
the occurrence of any event referred to in the immediately preceding
sentence, such event shall not suspend, postpone or in any other
manner affect the running of any time periods for the purpose of
determining the entitlement of the Holders to Additional Interest
under Section 4 hereof.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be
effective for any reason at any time during the Effectiveness Period
(other than because of the sale of all of the securities registered
thereunder), the Issuers shall use their reasonable best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within 45 days of such cessation of
effectiveness amend the Shelf Registration in a manner reasonably
expected to obtain the withdrawal of the order sus-
- 8 -
pending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the
Registrable Securities (a "Subsequent Shelf Registration"). If a
Subsequent Shelf Registration is filed, the Issuers shall use their
reasonable best efforts to cause the Subsequent Shelf Registration to
be declared effective as soon as practicable after such filing and to
keep such Registration Statement continuously effective for a period
equal to the number of days in the Effectiveness Period less the
aggregate number of days during which the Initial Shelf Registration
or any Subsequent Shelf Registration was previously continuously
effective. As used herein the term "Shelf Registration" means the
Initial Shelf Registration and any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Issuers shall promptly
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used
for such Shelf Registration or if required by applicable law.
4. Additional Interest
(a) The Issuers and the Initial Purchasers agree that the
Holders of Registrable Securities will suffer damages if the Issuers
fail to fulfill their obligations under Section 2 or Section 3 hereof
and that it would not be feasible to ascertain the extent of such
damages with precision. Accordingly, the Issuers agree to pay, as
liquidated damages, additional interest on the Registrable Securities
("Additional Interest") under the circumstances and to the extent set
forth below (each of which shall be given independent effect and shall
not be duplicative):
(i) if the Exchange Registration Statement has not been filed
on or prior to the Filing Date or the Initial Shelf Registration has
not been filed on or prior to the date by which it is required to be
filed pursuant to Section 3(a) hereof, Additional Interest shall
accrue on the Registrable Securities over and above the stated
interest at a rate of 25 basis points per annum for the first 90 days
immediately following the Filing Date or such required date, as the
case may be, such Additional Interest rate increasing by an additional
25 basis points per annum at the beginning of each subsequent 90-day
period;
(ii) if Additional Interest is not then accruing pursuant to
Section 4(a)(i) and the Exchange Registration Statement is not
declared effective by the SEC on or prior to the Effectiveness Date or
the Initial Shelf Registration is not declared effective on or prior
to the 135th day after filing thereof, Additional Interest shall
accrue on the Registrable Securities included or which should have
been included in such Registration Statement over and above the stated
inter-
- 9 -
est at a rate of 25 basis points per annum for the first 90 days
immediately following the day after the Effectiveness Date, such
Additional Interest rate increasing by an additional 25 basis points
per annum at the beginning of each subsequent 90-day period; and
(iii) if Additional Interest is not then accruing pursuant to
Section 4(a)(i) and 4(a)(ii) and (A) the Issuers have not exchanged
Exchange Securities for all Notes validly tendered in accordance with
the terms of the Exchange Offer on or prior to the Consummation Date
(including by reason of the Exchange Registration Statement ceasing to
be effective) or (B) if applicable, the Shelf Registration has been
declared effective and such Shelf Registration ceases to be effective
at any time during the Effectiveness Period, then Additional Interest
shall be accrued on the Registrable Securities (over and above any
interest otherwise payable on the Registrable Securities) at a rate of
25 basis points per annum for the first 90 days commencing on the (x)
165th day after the Issue Date, in the case of (A) above, or (y) the
day such Shelf Registration ceases to be effective in the case of (B)
above, such Additional Interest rate increasing by an additional 25
basis points per annum at the beginning of each such subsequent 90-day
period;
provided, however, that the Additional Interest rate on the Registrable
Securities may not exceed at any one time in the aggregate 100 basis points per
annum; and provided, further, that (1) upon the filing of the Exchange
Registration Statement or a Shelf Registration as required hereunder (in the
case of clause (a)(i) of this Section 4), (2) upon the effectiveness of the
Exchange Registration Statement or the Shelf Registration as required hereunder
(in the case of clause (a)(ii) of this Section 4), or (3) upon the exchange of
Exchange Securities for all Notes tendered (in the case of clause (a)(iii)(A)
of this Section 4), or upon the effectiveness of the Shelf Registration which
had ceased to remain effective (in the case of clause (a)(iii)(B) of this
Section 4), Additional Interest on the Registrable Securities as a result of
such clause (or the relevant subclause thereof), as the case may be, shall
cease to accrue. It is understood and agreed that, notwithstanding any
provision to the contrary, so long as any Registrable Security is then covered
by an effective Shelf Registration Statement, no Additional Interest shall
accrue on such Registrable Security. Payment of any Additional Interest shall
be subject to Section 9 and the penultimate paragraph of Section 5.
(b) The Issuers shall notify the Trustee within five 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").
The Issuers shall pay the Additional Interest due on the Registrable
Securities by depositing with the Trustee, in trust, for the benefit
of the Holders thereof, on or before the applicable semi-annual
in-
- 10 -
terest payment date, immediately available funds in sums sufficient
to pay the Additional Interest then due to Holders of Registrable
Securities. The Additional Interest amount due shall be payable on
each interest payment date to the record Holder of Registrable
Securities entitled to receive the interest payment to be made on
such date as set forth in the Indenture. The amount of Additional
Interest will be determined by applying the applicable Additional
Interest rate to the principal amount of the affected Registrable
Securities of such Holders, (determined on the basis of a 360-day
year comprised of twelve 30-day months and, in the case of a partial
month, the actual number of days elapsed). Each obligation to pay
Additional Interest shall be deemed to accrue immediately following
the occurrence of the applicable Event Date provided, however, that
if the applicable Event Date is not a business day, Additional
Interest shall not begin to accrue or increase, as the case may be,
until the next succeeding business day. The parties hereto agree that
the Additional Interest provided for in this Section 4 constitutes
the sole and exclusive remedy for a breach of Section 2 or 3 and is a
reasonable estimate of the damages that may be incurred by Holders of
Registrable Securities by reason of the failure of a Shelf
Registration or Exchange Registration Statement to be filed or
declared effective, an Exchange Offer to be consummated or a Shelf
Registration to remain effective, as the case may be, in accordance
with this Section 4.
5. Registration Procedures
In connection with the registration of any Registrable
Securities pursuant to Sections 2 or 3 hereof, the Issuers shall effect such
registrations to permit the sale of such Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant
thereto the Issuers shall:
(a) Use their reasonable best efforts to prepare and file
with the SEC a Registration Statement or Registration Statements, as
soon as practicable after the date hereof but in any event prior to
the applicable date prescribed by Section 2 or 3, and to use their
reasonable best efforts to cause each such Registration Statement to
become effective and remain effective as provided herein; provided,
however, that, if (1) such filing is pursuant to Section 3, or (2) a
Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, before filing any
Registration Statement or Prospectus or any amendments or supplements
thereto, the Issuers shall upon written request furnish to and afford
the Holders of the Registrable Securities (which in the case of
Registrable Securities in the form of global certificates shall be The
Depository Trust Company ("DTC")) and each such
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Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters,
if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange
Registration Statement, as the case may be, as may be necessary to
keep such Registration Statement continuously effective for the
Effectiveness Period or the Applicable Period, as the case may be;
cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such
Prospectus as so supplemented and with respect to the subsequent
resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus; the Issuers shall not be deemed to
have used their reasonable best efforts to keep a Registration
Statement effective during the Applicable Period if the Issuers
voluntarily take any action that would result in selling Holders of
the Registrable Securities covered thereby or Participating
Broker-Dealers seeking to sell Exchange Securities not being able to
sell such Registrable Securities or such Exchange Securities during
that period unless such action is required by applicable law or unless
the Issuers comply with this Agreement, including without limitation,
the provisions of paragraph 5(k) hereof and the last paragraph of this
Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, notify the selling
Holders of Registrable Securities, or each such Participating
Broker-Dealer, as the case may be, their counsel and the managing
underwriters, if any, who have provided the Issuers with their names
and addresses promptly (but in any event within two business days),
and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any Holder may,
upon request, obtain, without charge, one conformed copy of such
Registration Statement or post-effective amendment including financial
statements and schedules,
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documents incorporated or deemed to be incorporated by reference and
exhibits), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus
or the initiation of any proceedings for that purpose, (iii) of the
receipt by the Issuers of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Securities or the
Exchange Securities to be sold by any Participating Broker-Dealer for
offer or sale in any jurisdiction, or the initiation or threatening
of any proceeding for such purpose, (iv) of the happening of any
event or any information becoming known that makes any statement made
in such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in
such Registration Statement, Prospectus or documents so that, in the
case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or neces sary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and (v) of the Issuers'
reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, use its reasonable
best efforts to oppose the issuance of any order suspending the
effectiveness of a Registration Statement or of any order preventing
or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities
or the Exchange Securities to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is
issued, to use its reasonable best efforts to obtain the withdrawal of
any such order at the earliest possible moment.
(e) If a Shelf Registration is required pursuant to Section
3, before filing any Registration Statement or prospectus or any
amendment or supplement thereto (including any document that would be
incorporated by reference therein) furnish counsel for the Holders of
Registrable Securities covered by such Shelf Registration a reasonable
op-
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portunity to review copies of all such documents proposed to be
filed.
(f) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, furnish to each
selling Holder of Registrable Securities and to each such
Participating Broker-Dealer who so requests and to counsel and each
managing underwriter, if any, without charge, one conformed copy of
the Registration Statement or Statements and each post-effective
amendment thereto, including financial statements and schedules, and
if requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, deliver to each
selling Holder of Registrable Securities, or each such Participating
Broker-Dealer, as the case may be, their counsel, and the
underwriters, if any, without charge, as many copies of the Prospectus
or Prospectuses (including each form of preliminary prospectus) and
each amendment or supplement thereto and any documents incorporated by
reference therein as such Persons may reasonably request; and, subject
to the last paragraph of this Section 5, the Issuers hereby consent to
the use of such Prospectus and each amendment or supplement thereto by
each of the selling holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, and the underwriters
or agents, if any, and dealers (if any), in connection with the
offering and sale of the Registrable Securities covered by or the sale
by Participating Broker-Dealers of the Exchange Securities pursuant to
such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities or
any delivery of a Prospectus contained in the Exchange Registration
Statement by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, to use its
reasonable best efforts to register or qualify, and to cooperate with
the selling Holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, the underwriters, if
any, and their respective counsel in connection with the registration
or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions within the
United States as any selling
- 14 -
Holder, Participating Broker-Dealer, or the managing underwriters
reasonably request in writing; provided, however, that where Exchange
Securities held by Participating Broker-Dealers or Registrable
Securities are offered other than through an underwritten offering,
the Issuers agree to cause their counsel to perform Blue Sky
investigations and file registrations and qualifications required to
be filed pursuant to this Section 5(h); keep each such registration
or qualification (or exemption therefrom) effective during the period
such Registration Statement is required to be kept effective and do
any and all other reasonable acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Exchange
Securities held by Participating Broker-Dealers or the Registrable
Securities covered by the applicable Registration Statement;
provided, however, that no Issuer shall be required to (A) qualify
generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general
service of process in any such jurisdiction where it is not then so
subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction.
(i) If a Shelf Registration is filed pursuant to Section 3,
reasonably cooperate with the selling Holders of Registrable
Securities and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates shall not bear
any legends with respect to restrictions on transfer pursuant to the
Securities Act and shall be in a form eligible for deposit with DTC;
and enable such Registrable Securities to be registered in such names
as the managing underwriter or under writers, if any, or Holders may
request.
(j) Use its reasonable best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with
or approved by such other United States governmental agencies or
authorities of the United States as may be necessary to enable the
seller or sellers thereof or the underwriters, if any, to consummate
the disposition of such Registrable Securities, except as may be
required solely as a consequence of the nature of such selling
Holder's business, in which case the Issuers will cooperate in all
reasonable respects with the filing of such Registration Statement and
the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, upon the occurrence
of any event contemplated by paragraph 5(c)(iv) or 5(c)(v) above, as
promptly as practicable prepare and (subject to Section 5(a)
- 15 -
and the second paragraph of Section 3(a) above) file with the SEC,
solely at the expense of the Issuers, a supplement or post-effective
amendment to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder or to the purchasers of
the Exchange Securities to whom such Prospectus will be delivered by
a Participating Broker-Dealer, any such Prospectus will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(l) Use its reasonable best efforts to cause the Registrable
Securities covered by a Registration Statement or the Exchange
Securities, as the case may be, to be rated with the appropriate
rating agencies, if so requested by the Holders of a majority in
aggregate principal amount of Registrable Securities covered by such
Registration Statement or the Exchange Securities, as the case may be,
or the managing underwriters, if any.
(m) Prior to the effective date of the first Registration
Statement relating to the Registrable Securities, (i) provide the
Trustee with certificates for the Registrable Securities in a form
eligible for deposit with DTC and (ii) provide a CUSIP number for the
Registrable Securities.
(n) Use its reasonable best efforts to cause all Registrable
Securities covered by such Registration Statement or the Exchange
Securities, as the case may be, to be (i) listed on each securities
exchange, if any, on which similar securities issued by the Issuers
are then listed, or (ii) authorized to be quoted on the National
Association of Securities Dealers Automated Quotation System
("NASDAQ") or the National Market System of NASDAQ if similar
securities of the Issuers are so authorized.
(o) In connection with an underwritten offering of
Registrable Securities pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in underwritten offerings and
take all such other actions as are reasonably requested by the
managing underwriters in order to expedite or facilitate the
registration or the disposition of such Registrable Securities, and in
such connection, (i) make such representations and warranties to the
underwriters, with respect to the business of the Company and its
subsidiaries, if any, 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 of-
- 16 -
ferings, and confirm the same if and when requested; (ii) obtain an
opinion of counsel to the Issuers and updates thereof in form and
substance reasonably satisfactory to the managing underwriters,
addressed to the underwriters covering the matters customarily
covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by underwriters; (iii)
obtain "cold comfort" letters and updates thereof in form and
substance reasonably satisfactory to the managing underwriters from
the independent certified public accountant(s) 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
each of the underwriters, 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 may be reasonably requested by underwriters; 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 7 hereof (or such other provisions and
procedures acceptable to Holders of a majority in aggregate principal
amount of Registrable Securities covered by such Registration
Statement and the managing underwriters or agents) with respect to
all parties to be indemnified pursuant to said Section. The above
shall be done at each closing under such underwriting agreement, or
as and to the extent required thereunder.
(p) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 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 any selling Holder of such Registrable Securities being
sold, or each such Participating Broker-Dealer, as the case may be,
any underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney, accountant or other agent
retained by any such selling holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (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 (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 to supply all information in
each case reasonably requested by any such Inspector in connection
with such Registration Statement. Records determined in good faith by
the Issuers to be confidential shall not be disclosed by any In-
- 17 -
xxxxxxx notified of such determination unless (i) the disclosure of
such Records is necessary to avoid or correct a 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 by the Company. Each
selling Holder of such Registrable Securities 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 by the Company. Each
selling Holder of such Registrable Securities 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 Issuers and allow
them at their own expense to undertake appropriate action to prevent
disclosure of the Records deemed confidential.
(q) Provide an indenture trustee for the Registrable
Securities or the Exchange Securities, as the case may be, and cause
the Indenture or the trust indenture provided for in Section 2(a), as
the case may be, to be qualified under the TIA not later than the
effective date of the Exchange Offer or the first Registration
Statement relating to the Registrable Securities; and in connection
therewith, cooperate with the trustee under any such indenture and the
holders of the Registrable Securities, to effect such changes to such
indenture as may be required for such indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use its
reasonable best efforts to cause such 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 such
indenture to be so qualified in a timely manner.
(r) Comply in all material respects 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 promul gated under the Securities Act) no later than 90
days after the end of any 12-month period (i) commencing at the end of
any fiscal quarter in which Registrable 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 Issuers
after the effective date of a Shelf Registration Statement, which
statements shall cover said 12-month periods.
- 18 -
(s) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable 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 caused to
be marked, on such Registrable Securities that such Registrable
Securities are being cancelled in exchange for the Exchange Securities
or the Private Exchange Securities, as the case may be; in no event
shall such Registrable Securities be marked as paid or otherwise
satisfied.
(t) Reasonably cooperate with each seller of Registrable
Securities covered by any Registration Statement and each underwriter,
if any, participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings
required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(u) Use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities
covered by a Registration Statement contemplated hereby.
The Issuers may require each seller of Registrable Securities
or Participating Broker-Dealer as to which any registration is being effected
to furnish to the Issuers such information regarding such seller or
Participating Broker-Dealer and the distribution of such Registrable Securities
or Exchange Securities to be sold by such Participating Broker-Dealer, as the
case may be, as the Issuers may, from time to time, reasonably request. The
Issuers may exclude from such registration the Registrable Securities of any
seller or Participating Broker-Dealer who fails to furnish such information
within a reasonable time after receiving such request and, notwithstanding
anything to the contrary in this Agreement, such Seller or Participating Broker
Dealer shall not be entitled to receive any Additional Interest pursuant to
Section 4. Each seller as to which any Shelf Registration is being effected is
deemed to agree to furnish promptly to the Issuers all information required to
be disclosed in order to make the information previously furnished to the
Issuers by such seller not materially misleading.
Each Holder of Registrable Securities and each Participating
Broker-Dealer agrees by acquisition of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
that, upon receipt of any notice from the Issuers of the happening of any event
of the kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv), or 5(c)(v),
such Holder shall forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
until such holder's
- 19 -
receipt of the copies of the supplemented or amended Prospectus contemplated
by Section 5(k), or until it is advised in writing (the "Advice") by the
Issuers that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto. In the event the
Issuers shall give any such notice, each of the Effectiveness Period and the
Applicable Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Securities covered by such Registration
Statement or Exchange Securities to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) or (y) the
Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Issuers shall be borne by the
Issuers whether or not the Exchange Offer or a Shelf Registration is
filed or becomes effective, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees
with respect to filings required to be made with the NASD in
connection with an underwritten offering and (B) fees and expenses of
compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection
with Blue Sky qualifications of the Registrable Securities or Exchange
Securities and determination of the eligibility of the Registrable
Securities or Exchange Securities for investment under the laws of
such jurisdictions in the United States (x) where the holders of
Registrable Securities are located, in the case of the Exchange
Securities, or (y) as provided in Section 5(h), in the case of
Registrable Securities or Exchange Securities to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities or Exchange Securities in a
form eligible for deposit with DTC and of printing prospectuses if the
printing of prospectuses is requested by the managing underwriters, if
any, or, in respect of Registrable Securities or Exchange Securities
to be sold by any Participating Broker-Dealer during the Applicable
Period, by the Holders of a majority in aggregate principal amount of
the Registrable Securities included in any Registration Statement or
of such Exchange Securities, as the case may be), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Issuers and fees and disbursements of special counsel
for the sellers of Registrable Securities (subject to the provisions
of Section 6(b)), (v) fees and disbursements of all independent
certified public accountants referred to in Section 5(o)(iii)
(including, without limitation, the expenses of any special audit and
"cold comfort" letters required by or incidental to such perform-
- 20 -
ance), (vi) rating agency fees, (vii) Securities Act liability
insurance, if the Issuers desires such insurance, (viii) fees and
expenses of all other Persons retained by the Issuers, (ix) internal
expenses of the Issuers (including, without limitation, all salaries
and expenses of officers and employees of the Issuers performing
legal or accounting duties), (x) the expense of any annual audit,
(xi) the fees and expenses incurred in connection with the listing of
the securities to be registered on any securities exchange, if
applicable and (xii) the expenses relating to printing, word
processing and distributing all Registration Statements, underwriting
agreements, securities sales agreements, indentures and any other
documents necessary in order to comply with this Agreement; provided,
however, that notwithstanding the foregoing, the Issuers will not be
responsible for any underwriter's discounts, commissions or fees
attributable to the sale of Registrable Securities.
(b) In connection with any Shelf Registration hereunder, the
Issuers shall reimburse the Holders of the Registrable Securities
being registered in such registration for the reasonable fees and
disbursements of not more than one counsel (in addition to local
counsel, if appropriate) chosen by the Holders of a majority in
aggregate principal amount of the Registrable Securities to be
included in such Registration Statement, subject to the reasonable
approval of the Issuers. Such Holders shall be responsible for any and
all other out-of-pocket expenses of the Holders of Registrable
Securities incurred in connection with the registration of the
Registrable Securities.
7. Indemnification
The Issuers agree to indemnify and hold harmless each Holder
of Registrable Securities and each Participating Broker-Dealer selling Exchange
Securities during the Applicable Period, the officers and directors of each
such person, and each person, if any, who controls any such person within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, the reasonable
legal fees and other expenses actually incurred in connection with any suit,
action or proceeding or any claim asserted) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) or Prospectus (as amended or supplemented
if the Issuers shall have furnished any amendments or supplements thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance
- 21 -
upon and in conformity with information relating to any Participant furnished
to the Company in writing by such Participant expressly for use therein;
provided, however, that the foregoing indemnity with respect to any
preliminary prospectus shall not inure to the benefit of any Participant (or
to the benefit of any person controlling such Participant) from whom the
person asserting any such losses, claims, damages or liabilities purchased
Registrable Securities or Exchange Securities if such untrue statement or
omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the related Prospectus (as amended or
supplemented if the Issuers shall have furnished any amendments or supplements
thereto) and a copy of the related Prospectus (as so amended or supplemented)
shall not have been furnished to such person at or prior to the sale of such
Registrable Securities or Exchange Securities, as the case may be, to such
person.
Each Participant will be required to agree, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers and each person who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Issuers to each Participant, but only with
reference to information relating to such Participant furnished to the Company
in writing by such Participant expressly for use in any Registration Statement
or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus. The liability of any Participant under this paragraph shall in no
event exceed the proceeds received by such Participant from sales of
Registrable Securities giving rise to such obligations.
If any suit, action, proceeding (including any governmental
or regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "Indemnified Person")
shall promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses actually incurred by such counsel related to such
proceeding; provided, however, that the failure to so notify the Indemnifying
Person shall not relieve it of any obligation or liability which it may have
hereunder or otherwise (unless and only to the extent that such failure results
in the loss or compromise of any rights or defenses). In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indem-
- 22 -
nified Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for the
Participants and such control persons of Participants shall be designated in
writing by Participants who sold a majority in interest of Registrable
Securities sold by all such Participants and any such separate firm for the
Issuers, their directors, officers and such control persons of the Issuers
shall be designated in writing by the Issuers. The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
non-appealable judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested an Indemnifying
Person to reimburse the Indemnified Person for reasonable fees and expenses
actually incurred by counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement; provided, how ever, that the
Indemnifying Person shall not be liable for any settlement effected without
its consent pursuant to this sentence if the Indemnifying Party is contesting,
in good faith, the request for reimbursement. No Indemnifying Person shall,
without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes
an unconditional release of such Indemnified Person from all liability on
claims that are the subject matter of such proceeding.
If the Indemnification provided for in the first and second
paragraphs of this Section 7 is unavailable to an Indemnified Person in respect
of any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable
by such Indemnified Person as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Issuers on the one hand and the
- 23 -
Participants on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Issuers on the
one hand and the Participants on the other 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 Participants and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses actually incurred by such Indemnified Person
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable
Securities exceeds the amount of any damages that such Participant has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rule 144 and Rule 144A
The Issuers covenant that they will file the reports required
to be filed by them under the Securities Act and the Exchange Act in a timely
manner and, if at any time the Issuers are not required to file such reports,
they will, upon the request of any Holder of Registrable Securities, make
publicly available other information so long as necessary to permit sales
pursuant to Rule 144 and Rule 144A under the Securities Act. The Issuers
further covenant that they will take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by
- 24 -
(a) Rule 144 and Rule 144A under the Securities Act, as such Rules may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the SEC.
9. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering
will be selected by the Holders of a majority in aggregate principal amount of
such Registrable Securities included in such offering, subject to the
reasonable approval of the Issuers. No Additional Interest shall be payable as
a result of any delay directly caused by the selection of or any action by such
underwriters.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Issuers and the Holders of a majority in aggregate
principal amount of the Registrable Securities included in such offering and
(b) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements. Any Holder who fails to comply with such
requirements within a reasonable period after notice shall not be entitled to
receive any Additional Interest.
10. Miscellaneous
(a) No Inconsistent Agreements. The Issuers have not, as of
the date hereof, entered and shall not, after the date of this
Agreement, enter into any agreement with respect to any of their
securities that is inconsistent with the rights granted to the Holders
of Registrable Securities in this Agreement or otherwise conflicts
with the provisions hereof.
(b) Adjustments Affecting Registrable Securities. Except as
may be required by the Indenture, the Issuers shall not, directly or
indirectly, take any action with respect to the Registrable Securities
as a class that would adversely affect the ability of the Holders of
Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Issuers have
obtained the written consent of Holders of at least a majority of the
then outstanding aggregate principal amount of Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to depart
- 25 -
from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and
that does not directly or indirectly affect, impair, limit or
compromise the rights of other Holders of Registrable Securities may
be given by Holders of at least a majority in aggregate principal
amount of the Registrable Securities being sold by such Holders
pursuant to such Registration Statement, provided that the provisions
of this sentence may not be amended, modified or supplemented except
in accordance with the provisions of the immediately preceding
sentence.
(d) Notices. All notices and other communications (including
without limitation any notices or other communications to the
Trustee) provided for or permitted hereunder shall be made in writing
by hand-delivery, registered first-class mail, next-day air courier
or telecopier:
(i) if to a Holder of Registrable Securities, at the most
current address given by the Trustee to the Issuers; and
(ii) if to the Issuers, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (telecopy 212/648-5121 or 212/648-5951), Attention: Chief
Executive Officer.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered;
five business days after being deposited in the mail, postage
prepaid, if mailed; one business day after being timely delivered to
a next-day air courier; and when telephonic confirmation of receipt
is obtained, if telecopied.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee
under the Indenture at the address specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of
the parties, including without limitation and without the need for an
express assignment, subsequent Holders of Registrable Securities;
provided, that, with respect to the indemnity and contribution
agreements in Section 7, each Holder of Registrable Securities
subsequent to the Initial Purchasers shall be bound by the terms
thereof if such Holder elects to include Registrable Securities in a
Shelf Registration; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a
Holder unless and to the extent such successor or assign holds
Registrable Securities.
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(f) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use
their reasonable best efforts to find and employ an alternative means
to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(j) Entire Agreement. This Agreement, together with the
Purchase Agreement, is intended by the parties as a final expression
of their agreement, and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein.
(k) Securities Held by the Issuers or Its Affiliates.
Whenever the consent or approval of holders of a specified percentage
of Registrable Securities is required hereunder, Registrable
Securities held by the Issuers 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.
(l) Subsidiary Guarantor a Party. Notwithstanding Section
10(c), immediately upon the designation of any subsidiary of the
Company as a Guarantor (as defined in the In-
- 27 -
denture), the Company shall cause such Guarantor to guarantee the
obligations of the Issuers hereunder (including, without limitation,
the obligation to pay Additional Interest, if any, pursuant to the
terms of Section 4 hereof), by executing and delivering to the
Initial Purchaser an appropriate amendment to this Agreement.
- 28 -
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
UNITED AUTO GROUP, INC.
By:______________________________
Name:
Title:
GUARANTORS:
DIFEO PARTNERSHIP, INC.
DIFEO PARTNERSHIP RCT, INC.
DIFEO PARTNERSHIP RCM, INC.
DIFEO PARTNERSHIP HCT, INC.
DIFEO PARTNERSHIP SCT, INC.
DIFEO PARTNERSHIP VIII, INC.
DIFEO PARTNERSHIP IX, INC.
DIFEO PARTNERSHIP X, INC.
UAG NORTHEAST, INC.
UAG NORTHEAST (NY), INC.
XXXXXX TOYOTA, INC.
SOMERSET MOTORS, INC.
UAG WEST, INC.
SA AUTOMOTIVE, LTD.
SL AUTOMOTIVE, LTD.
SPA AUTOMOTIVE, LTD.
LRP, LTD.
SUN BMW, LTD.
6725 DEALERSHIP, LTD.
SCOTTSDALE MANAGEMENT GROUP, LTD.
SK MOTORS, LTD.
SCOTTSDALE AUDI, LTD.
UNITED XXXXXXX, INC.
XXXXXXX AUTO SALES, INC.
XXXXXXX UNITED AUTO GROUP, INC.
XXXXXXX UNITED AUTO GROUP NO. 2, INC.
XXXXXXX UNITED AUTO GROUP NO. 3, INC.
XXXXXXX UNITED AUTO GROUP NO. 4, INC.
XXXXXXX BUICK-PONTIAC, INC.
UAG ATLANTA, INC.
ATLANTA TOYOTA, INC.
UAG ATLANTA II, INC.
UNITED NISSAN, INC.,
a Georgia corporation
UAG ATLANTA III, INC.
PEACHTREE NISSAN, INC.
UAG ATLANTA IV, INC.
UAG ATLANTA IV MOTORS, INC.
UAG ATLANTA V, INC.
XXXXXXX NISSAN, INC.
- 29 -
UAG TENNESSEE, INC.
UNITED NISSAN, INC.,
a Tennessee corporation
UAG TEXAS, INC.
UAG TEXAS II, INC.
UAG EAST, INC.
AMITY AUTO PLAZA, LTD.
AMITY NISSAN OF MASSAPEQUA, LTD.
AUTO MALL PAYROLL SERVICES, INC.
AUTOMALL STORAGE, INC.
FLORIDA CHRYSLER PLYMOUTH, INC.
J&S AUTO REFINISHING, LTD.
NORTHLAKE AUTO FINISH, INC.
PALM AUTO PLAZA, INC.
WEST PALM AUTO MALL, INC.
WEST PALM INFINITI, INC.
WEST PALM NISSAN, INC.
WESTBURY NISSAN, LTD.
WESTBURY SUPERSTORE, LTD.
UAG CAROLINA, INC.
XXXX XXXX CHEVROLET, INC.
XXXXXXX CHEVROLET-OLDSMOBILE, INC.
XXXX XXXXXXX CHEVROLET, INC.
UAG NEVADA, INC.
UNITED NISSAN, INC.,
a Nevada corporation
UNITED AUTOCARE, INC.
UNITED AUTOCARE PRODUCTS, INC.
UAG CAPITAL MANAGEMENT, INC.
UAG FINANCE COMPANY, INC.
UAG ATLANTA VI, INC.
UNITED JEEP EAGLE CHRYSLER
PLYMOUTH OF STONE MOUNTAIN, INC.
By:______________________________
Name:
Title:
- 30 -
FAIR HYUNDAI PARTNERSHIP
FAIR CHEVROLET-GEO PARTNERSHIP
DANBURY AUTO PARTNERSHIP
DANBURY CHRYSLER
PLYMOUTH PARTNERSHIP
J&F OLDSMOBILE PARTNERSHIP
DIFEO HYUNDAI PARTNERSHIP
DIFEO LEASING PARTNERSHIP
DIFEO NISSAN PARTNERSHIP
DIFEO CHEVROLET-GEO PARTNERSHIP
DIFEO CHYRSLER PLYMOUTH JEEP
EAGLE PARTNERSHIP
DIFEO BMW PARTNERSHIP
By: DIFEO PARTNERSHIP, INC.,
a general partner
By:______________________________
Name:
Title:
XXXXXX MOTORS PARTNERSHIP
By: DIFEO PARTNERSHIP HCT, INC.,
a general partner
By:______________________________
Name:
Title:
OCT PARTNERSHIP
By: DIFEO PARTNERSHIP VIII, INC.,
a general partner
By:______________________________
Name:
Title:
- 31 -
OCM PARTNERSHIP
By: DIFEO PARTNERSHIP IX, INC.,
a general partner
By:______________________________
Name:
Title:
SOMERSET MOTORS PARTNERSHIP
By: DIFEO PARTNERSHIP SCT, INC.,
a general partner
By:______________________________
Name:
Title:
COUNTY AUTO GROUP PARTNERSHIP
By: DIFEO PARTNERSHIP RCT, INC.,
a general partner
By:______________________________
Name:
Title:
ROCKLAND MOTORS PARTNERSHIP
By: DIFEO PARTNERSHIP RCM, INC.,
a general partner
By:______________________________
Name:
Title:
- 32 -
6725 AGENT PARTNERSHIP
By: SCOTTSDALE AUDI, LTD.,
a general partner
By:______________________________
Name:
Title:
XXXXXXX AUTOMOTIVE, LTD.
By: UAG TEXAS II, INC.,
its general partner
By:______________________________
Name:
Title:
- 33 -
X.X. XXXXXX SECURITIES INC.
SCOTIA CAPITAL MARKETS (USA) INC.
By: X.X. XXXXXX SECURITIES INC.
By: _____________________________
Name:
Title:
- 34 -
