EXHIBIT 4.3
EXECUTION COPY
EXHIBIT A
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REGISTRATION RIGHTS AGREEMENT
Dated as of May 7, 1997
by and among
American Builders & Contractors Supply Co., Inc.
Mule-Hide Products Co., Inc.
Aircraft Building Products Co., Inc.
and
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
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This Registration Rights Agreement (this "Agreement") is made and entered
into as of May 7, 1997 by and among American Builders & Contractors Supply Co.,
Inc., a Delaware corporation (the "Company"), Amcraft Building Products Co.,
Inc., a Delaware corporation ("Amcraft"), and Mule-Hide Products Co., Inc., a
Texas corporation ("Mule-Hide" and together with Amcraft, the "Guarantors"), and
NationsBanc Capital Markets, Inc. and First Chicago Capital Markets, Inc. (each
an "Initial Purchaser" and, collectively, the "Initial Purchasers"), each of
whom has agreed to purchase the Company's 5/8% Senior Subordinated Notes due
2007 (the "Series A Notes") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated May 2,
1997 (the "Purchase Agreement"), by and among the Company, the Guarantors and
the Initial Purchasers. In order to induce the Initial Purchasers to purchase
the Series A Notes, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 2 of
the Purchase Agreement.
The parties hereby agree as follows:
Section 1. Definitions
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company
to the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Series A Notes, each Interest
Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of the
Series B Notes pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Series B Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Series A Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act, and to certain institutional
"accredited investors," as such term is defined in Rule 501(a)(1), (2), (3) and
(7) of Regulation D under the Act ("Accredited Institutions").
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of May 7, 1997, among the Company,
Norwest Bank Minnesota, National Association, as trustee (the "Trustee"), and
the Guarantors, pursuant to which the Notes are to be issued, as such Indenture
is amended or supplemented from time to time in accordance with the terms
thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series A Notes and the Series B Notes.
Person: An individual, partnership, corporation, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date relating to Notes,
each Person who is a Holder of Notes on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
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Registration Statement: Any registration statement of the Company relating
to (a) an offering of Series B Notes pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, which is filed pursuant to the provisions of this
Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Series B Notes: The Company's 10% Series B Senior Subordinated Notes due
2007 to be issued pursuant to the Indenture in the Exchange Offer.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur of
(a) the date on which such Note is exchanged in the Exchange Offer and entitled
to be resold to the public by the Holder thereof without complying with the
prospectus delivery requirements of the Act, (b) the date on which such Note has
been effectively registered under the Act and disposed of in accordance with a
Shelf Registration Statement or (c) the date on which such Note is distributed
to the public pursuant to Rule 144 under the Act or by a Broker-Dealer pursuant
to the "Plan of Distribution" contemplated by the Exchange Offer Registration
Statement (including delivery of the Prospectus contained therein).
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
Section 2. Securities Subject to this Agreement
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
Section 3. Registered Exchange Offer.
(a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a)(i)
below have been complied with), the Company and the Guarantors shall (i) cause
to be filed with the Commission as soon as
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practicable after the Closing Date, but in no event later than 45 days after the
Closing Date, a Registration Statement under the Act relating to the Series B
Notes and the Exchange Offer, (ii) use their best efforts to cause such
Registration Statement to become effective at the earliest possible time, but in
no event later than 120 days after the Closing Date, (iii) in connection with
the foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement to
become effective, (B) if applicable, a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Act and (C) cause all
necessary filings in connection with the registration and qualification of the
Series B Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit consummation of the Exchange Offer; provided, however, that
neither the Company nor the Guarantors shall be required to register or qualify
as a foreign corporation where it is not now so qualified (or was not so
qualified immediately prior to its reincorporation as a Delaware corporation) or
to take any action that would subject it to the service of process in suits or
taxation, other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject, and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of the
Series B Notes to be offered in exchange for the Transfer Restricted Securities
and to permit resales of Notes held by Broker-Dealers as contemplated by Section
3(c) below.
(b) The Company shall cause the Exchange Offer Registration Statement to be
effective continuously and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Company shall cause
the Exchange Offer to comply with all applicable federal and state securities
laws. No securities other than the Notes shall be included in the Exchange
Offer Registration Statement. The Company shall use its best efforts to cause
the Exchange Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 30 business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Series A Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such
Series A Notes pursuant to the Exchange Offer; however, such Broker-Dealer may
be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the Series B Notes received by such Broker-Dealer
in the Exchange Offer, which prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such resales by Broker-Dealers
that the Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the
date of this Agreement.
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Neither the Company nor the Guarantors shall have a duty to amend or
supplement the Prospectus contained in the Exchange Offer Registration Statement
unless the Company shall have received written notice from any Broker-Dealer
(each such Broker-Dealer so notifying the Company, a "Notifying Broker-Dealer")
of its prospectus delivery requirement under the Act within fifteen (15)
business days following the consummation of the Exchange Offer; provided, that
the Company shall prominently disclose such notice requirement in the Exchange
Offer Registration Statement and in the letter of transmittal related thereto.
In the event that the Company shall have received timely notice, the Company and
the Guarantors shall use their best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Notes acquired by Broker-Dealers for
their own accounts as a result of market-making activities or other trading
activities, and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of one year from the date on which the
Exchange Offer Registration Statement is declared effective; provided that,
following the 30th day after the Consummation of the Exchange Offer, the Company
shall not be required to amend or supplement the Exchange Offer Registration
Statement if (i) in the judgment of the Company's Board of Directors exercised
reasonably and in good faith the use of the Exchange Offer Registration
Statement and the disclosure required to be made therein would materially
interfere with a valid business purpose of the Company or the Guarantors and
(ii) the Company delivers a notice to such effect to such Broker-Dealers setting
forth the period of time (the "Prospectus Delivery Delay Period") (which shall
not be greater than 60 days) for which the Company's obligation to so amend or
supplement the Exchange Offer Registration Statement will be suspended; and
provided further that if the Company receives written notice form all Notifying
Broker-Dealers that they no longer have a prospectus delivery requirement under
the Act, the Company's obligation to keep the Exchange Offer Registration
Statement continuously effective, supplemented and amended during such one year
period shall terminate. Notwithstanding the foregoing, there shall not be more
than one Prospectus Delivery Delay Period declared in any one calendar year.
The Company shall use its reasonable efforts to minimize the length of any
Prospectus Delivery Delay Period and shall promptly notify such Broker-Dealers
upon the termination thereof.
The Company shall provide sufficient copies of the latest version of such
Prospectus to Broker-Dealers promptly upon request at any time during such one-
year period in order to facilitate such resales.
Section 4. Shelf Registration.
(a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement or to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a)(i) below have been
complied with) or (ii) if any Holder of Transfer Restricted Securities shall
notify the Company within 20 business days of the Consummation of the Exchange
Offer (A) that such Holder is prohibited by applicable law or Commission policy
from participating in the Exchange
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Offer, or (B) that such Holder may not resell the Series B Notes acquired by it
in the Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder, or (C) that such
Holder is a Broker-Dealer and holds Series A Notes acquired directly from the
Company or one of its affiliates, then the Company and the Guarantors shall:
(x) cause to be filed a shelf registration statement pursuant to Rule
415 under the Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earliest to occur of the 45th day after the
date on which (1) the Company determines that it is not required to file
the Exchange Offer Registration Statement, (2) a change in applicable law
or Commission policy occurs that renders the Company unable to file the
Exchange Offer Registration Statement or to consummate the Exchange Offer
and (3) the Company receives notice from a Holder of Transfer Restricted
Securities as contemplated by clause (ii) above, (such earliest date being
the "Shelf Filing Deadline"), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Securities the Holders of
which shall have provided the information required pursuant to Section 4(b)
hereof; and
(y) use their best efforts to cause such Shelf Registration Statement
to be declared effective by the Commission on or before the 60th day after
the Shelf Filing Deadline.
The Company and the Guarantors shall use their best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a), and
to ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of at least two years following the Closing Date.
If in the judgment of the Company's Board of Directors exercised reasonably
and in good faith the use of the Shelf Registration Statement and the disclosure
required to be made therein would materially interfere with a valid business
purpose of the Company or the Guarantors, the Company may deliver a notice to
such effect to the Holders, and upon receipt of such notice, the Holders shall
cease distribution of the Notes under a Shelf Registration Statement for the
period of time (the "Shelf Delay Period") set forth in such notice (which shall
not be greater than 60 days). Notwithstanding the foregoing, there shall not be
more than one Shelf Delay Period declared in any one calendar year. The Company
shall use its reasonable efforts to minimize the length of any Shelf Delay
Period and shall promptly notify the Holders upon the termination thereof.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any
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Shelf Registration Statement or Prospectus or preliminary Prospectus included
therein. No Holder of Transfer Restricted Securities shall be entitled to
Liquidated Damages pursuant to Section 5 hereof unless and until such Holder
shall have used its best efforts to provide all such reasonably requested
information. Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
Section 5. Liquidated Damages.
If (i) any of the Registration Statements required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any of such Registration Statements has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a post-
effective amendment to such Registration Statement that cures such failure and
that is itself immediately declared effective (each such event referred to in
clauses (i) through (iv), a "Registration Default"), the Company and the
Guarantors hereby jointly and severally agree to pay liquidated damages to each
Holder of Transfer Restricted Securities with respect to the first 90-day period
immediately following the occurrence of such Registration Default, in an amount
equal to $.05 per week per $1,000 principal amount of Transfer Restricted
Securities held by such Holder for each week or portion thereof that the
Registration Default continues. The amount of the liquidated damages shall
increase by an additional $.05 per week per $1,000 in principal amount of
Transfer Restricted Securities with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
liquidated damages of $.50 per week per $1,000 principal amount of Transfer
Restricted Securities. All accrued liquidated damages shall be paid to Record
Holders by the Company by wire transfer of immediately available funds or by
federal funds check on each Damages Payment Date, as provided in the Indenture.
Following the cure of all Registration Defaults relating to any particular
Transfer Restricted Securities, the accrual of liquidated damages with respect
to such Transfer Restricted Securities will cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Security shall have been satisfied in full.
Section 6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use
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their best efforts to effect such exchange to permit the sale of Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and shall comply with all of the following
provisions:
(i) If in the reasonable opinion of counsel to the Company there is a
question as to whether the Exchange Offer is permitted by applicable law,
the Company and the Guarantors hereby agree to seek a no-action letter or
other favorable decision from the Commission allowing the Company and the
Guarantors to Consummate an Exchange Offer for such Series A Notes. The
Company and the Guarantors each hereby agrees to pursue the issuance of
such a decision to the Commission staff level, but shall not be required to
take commercially unreasonable action to effect a change of Commission
policy. The Company and the Guarantors each hereby agrees, however, to (A)
participate in telephonic conferences with the Commission, (B) deliver to
the Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursue a
resolution (which need not be favorable) by the Commission staff of such
submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate of
the Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to participate in,
a distribution of the Series B Notes to be issued in the Exchange Offer and
(C) it is acquiring the Series B Notes in its ordinary course of business.
In addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any Broker-Dealer and any
such Holder using the Exchange Offer to participate in a distribution of
the securities to be acquired in the Exchange Offer (1) could not under
Commission policy as in effect on the date of this Agreement rely on the
position of the Commission enunciated in Xxxxxx Xxxxxxx and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation (available
May 13, 1988), as interpreted in the Commission's letter to Shearman &
Sterling dated July 2, 1993, and similar no-action letters (including any
no-action letter obtained pursuant to clause (i) above), and (2) must
comply with the registration and prospectus delivery requirements of the
Act in connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective registration
statement containing the selling security holder information required by
Item 507 or 508, as applicable, of Regulation S-K if the resales are of
Series B Notes obtained by such Holder in exchange for Series A Notes
acquired by such Holder directly from the Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in
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reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Xxxxxx Xxxxxxx and Co., Inc.
(available June 5, 1991) and, if applicable, any no-action letter obtained
pursuant to clause (i) above and (B) including a representation that
neither the Company nor any Guarantor has entered into any arrangement or
understanding with any Person to distribute the Series B Notes to be
received in the Exchange Offer and that, to the best of the Company's and
each Guarantor's information and belief, each Holder participating in the
Exchange Offer is acquiring the Series B Notes in its ordinary course of
business and has no arrangement or understanding with any Person to
participate in the distribution of the Series B Notes received in the
Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company and the Guarantors will as expeditiously as
possible prepare and file with the Commission a Registration Statement relating
to the registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance with
the intended method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration Statement and
any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes by
Broker-Dealers), the Company and each Guarantor shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
(including, if required by the Act or any regulation thereunder, financial
statements of the Guarantors) for the period specified in Section 3 or 4 of
this Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B) not to be
effective and usable for resale of Transfer Restricted Securities during
the period required by this Agreement, the Company and the Guarantors shall
file promptly an appropriate amendment to such Registration Statement, in
the case of clause (A), correcting any such misstatement or emission, and,
in the case of either clause (A) or (B), use its best efforts to cause such
amendment to be declared effective and such Registration Statement and the
related Prospectus to become usable for their intended purpose(s) as soon
as practicable thereafter;
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 hereof, as applicable, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424
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under the Act, and to comply fully with the applicable provisions of Rules
424 and 430A under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to
the Prospectus;
(iii) advise the underwriters), if any, and selling Holders promptly
and, if requested by such Persons, to confirm such advice in writing, (A)
when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to any Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, and (D) of the existence
of any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes
in the Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities
or Blue Sky laws, the Company and the Guarantors shall use their best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) furnish to each of the selling Holders and each of the
underwriters), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or Prospectus (including
all documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review of
such Holders and underwriters), if any, for a period of at least five
business days, and the Company and each Guarantor will not file any such
Registration Statement or Prospectus or any amendment or supplement to any
such Registration Statement or Prospectus (including all such documents
incorporated by reference) to which a selling Holder of Transfer Restricted
Securities covered by such Registration Statement or the underwriters), if
any, shall reasonably object within five business days after the receipt
thereof. A selling Holder or underwriter, if any, shall be deemed to have
reasonably objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to
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the selling Holders and to the underwriters), if any, make the Company's
and the Guarantors' representatives available for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such selling
Holders or underwriters), if any, reasonably may request;
(vi) make available at reasonable times for inspection by the selling
Holders, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant retained by such
selling Holders or any of the underwriters), all financial and other
records, pertinent corporate documents and properties of the Company and
the Guarantors and cause the Company's and the Guarantors' officers,
directors and employees to supply all information reasonably requested by
any such Holder, underwriter, attorney or accountant in connection with
such Registration Statement subsequent to the filing thereof and prior to
its effectiveness;
(vii) if requested by any selling Holders or the underwriters), if
any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriters), if any, may
reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriters), the
purchase price being paid therefor and any other terms of the offering of
the Transfer Restricted Securities to be sold in such offering; and make
all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(viii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies, if
so requested by the Holders of a majority in aggregate principal amount of
Notes covered thereby or the underwriters), if any;
(ix) furnish to each selling Holder and each of the underwriters), if
any, without charge, at least one copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto, including
all documents incorporated by reference therein and all exhibits (including
exhibits incorporated by reference therein);
(x) deliver to each selling Holder and each of the underwriters), if
any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company and the Guarantors hereby
consent to the use of the Prospectus and any amendment or supplement
thereto by each of the selling Holders and each of the underwriters), if
any, in connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;
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(xi) enter into such agreements (including an underwriting
agreement), and make such representations and warranties, and take all such
other actions in connection therewith in order to expedite or facilitate
the disposition of the Transfer Restricted Securities pursuant to any
Registration Statement contemplated by this Agreement, all to such extent
as may be requested by any Initial Purchaser or by any Holder of Transfer
Restricted Securities or underwriter in connection with any sale or resale
pursuant to any Registration Statement contemplated by this Agreement; and
whether or not an underwriting agreement is entered into and whether or not
the registration is an Underwritten Registration, the Company and the
Guarantors shall:
(A) furnish to each Initial Purchaser, each selling Holder and
each underwriter, if any, in such substance and scope as they may
request and as are customarily made by issuers to underwriters in
primary underwritten offerings, upon the date of the effectiveness of
the Shelf Registration Statement:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed by (y) the
Chief Executive Officer and (z) Chief Financial Officer of the
Company confirming, as of the date thereof, the matters set
forth in paragraphs (a), (b), (c) and (d) of Section 7 of the
Purchase Agreement and such other matters as such parties may
reasonably request;
(2) an opinion, dated the date of consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors, covering the matters set forth in
paragraph (g) of Section 7 of the Purchase Agreement and such
other matters as such parties may reasonably request, and in any
event including a statement to the effect that such counsel has
participated in conferences with officers and other
representatives of the Company and the Guarantors,
representatives of the independent public accountants for the
Company and the Guarantors, the Initial Purchasers'
representatives and the Initial Purchasers' counsel in
connection with the preparation of such Registration Statement
and the related Prospectus and have considered the matters
required to be stated therein and the statements contained
therein, although such counsel has not independently verified
the accuracy, completeness or fairness of such statements; and
that such counsel advises that, on the basis of the foregoing
(relying as to materiality to a large extent upon facts provided
to such counsel by officers and other representatives of the
Company and the Guarantors and without independent check or
verification), no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any post-
effective amendment thereto became effective, and, in the case
of the Exchange Offer Registration Statement, as
-12-
of the date of consummation, 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 therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer, as
of the date of Consummation, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Without limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial data included in or omitted from any Registration
Statement contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated as of the date of
Consummation of the Exchange Offer or the date of effectiveness
of the Shelf Registration Statement, as the case may be, from
the Company's and the Guarantors' independent accountants, in
the customary form and covering matters of the type customarily
covered in comfort letters by underwriters in connection with
primary underwritten offerings, and affirming the matters set
forth in the comfort letters delivered pursuant to Section 7(l)
of the Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
or the Guarantors pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Company
and the Guarantors set forth in the certificate contemplated in clause
(A)(1) above cease to be true and correct, the Company or the Guarantors
shall so advise the Initial Purchasers and the underwriter(s), if any, and
each selling Holder promptly and, if requested by such Persons, shall
confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s) may request and
-13-
do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities
covered by the Shelf Registration Statement; provided, however, that
neither the Company nor the Guarantors shall be required to register or
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;
(xiii) shall issue, upon the request of any Holder of Series A Notes
covered by the Shelf Registration Statement, Series B Notes, having an
aggregate principal amount equal to the aggregate principal amount of
Series A Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Series B Notes to be registered
in the name of such Holder or in the name of the purchaser(s) of such
Notes, as the case may be; in return, the Series A Notes held by such
Holder shall be surrendered to the Company for cancellation;
(xiv) cooperate with the selling Holders and the underwriters, if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to any
sale of Transfer Restricted Securities made by such underwriter(s);
(xv) use its best efforts to cause the Transfer Restricted Securities
covered by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities, subject
to the proviso contained in clause (xii) above;
(xvi) if any fact or event contemplated by clause (c)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement, and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit
with The Depository Trust Company;
(xviii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the
-14-
rules and regulations of the NASD, and use its reasonable best efforts to
cause such Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xix) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal quarter
in which Transfer Restricted Securities are sold to underwriters in a firm
or best efforts Underwritten Offering or (B) if not sold to underwriters in
such an offering, beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of the Registration
Statement;
(xx) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the 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 best efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to
enable such Indenture to be so qualified in a timely manner;
(xxi) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which
similar securities issued by the Company are then listed if requested by
the Holders of a majority in aggregate principal amount of Series A Notes
or the managing underwriters), if any; and
(xxii) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security that,
upon receipt of any notice from the Company of the existence of any fact of the
kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant
-15-
to Section 6(c)(iii)(D) hereof to and including the date when each selling
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof
or shall have received the Advice.
Section 7. Registration Expenses
(a) All expenses incident to the Company's or the Guarantors' performance
of or compliance with this Agreement will be borne by the Company or the
Guarantors, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
(including filings made by any Initial Purchaser or Holder with the NASD (and,
if applicable, the fees and expenses of any "qualified independent underwriter"
and its counsel that may be required by the rules and regulations of the NASD));
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including printing
certificates for the Series B Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company, the Guarantors and,
subject to Section 7(b) below, the Holders of Transfer Restricted Securities;
(v) all application and filing fees in connection with listing Notes on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Xxxxxx & Xxxxxxx or such other counsel as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
Section 8. Indemnification.
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder, (ii) the directors, officers,
employees and agents of each Holder and (iii) each person who controls any
Holder within the meaning of either the Securities Act or the Exchange Act (any
person referred to in clause (i), (ii) or (iii) may hereinafter be referred to
as an "Indemnified Holder"), against any and all losses, claims, damages,
liabilities, joint and several, or
-16-
judgments (including, without limitation, the reasonable legal and other
expenses incurred in connection with any action, suit or proceeding or any claim
asserted) to which any Indemnified Holder may become subject, insofar as such
losses, claims, damages, liabilities or judgments (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus (or any amendment or supplement thereto), or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
agree to reimburse each such Indemnified Holder, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company and the Guarantors will not be liable in any such case to any
Indemnified Holder to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information relating to any of the Holders furnished in writing
to the Company or the Guarantors by any of the Holders expressly for use in any
Registration Statement or Prospectus.
(b) Each Holder of Transfer Restricted Securities, severally and not
jointly, agrees to indemnity and hold harmless the Company and the Guarantors,
their directors, officers, and each person who controls the Company and the
Guarantors within the meaning of either the Securities Act or the Exchange Act
to the same extent as the foregoing indemnity from the Company and the
Guarantors to each Indemnified Holder, but only with respect to information
relating to such Holder furnished in writing to the Company or the Guarantors
specifically for inclusion in any Registration Statement (or in any amendment or
supplement thereto). In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the proceeds received
by such Holder upon the sale of the Transfer Restricted Securities giving rise
to such indemnification obligation or if, in lieu of receiving proceeds, the
Holder receives a Series B Note in exchange for a Series A Note, the principal
amount of such Holder's Series B Note.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof,
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate
-17-
counsel (including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the indemnifying party to represent the indemnified party
would, in the opinion of legal counsel to the indemnified party, present such
counsel with a conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have been informed in writing
by legal counsel that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) (a "Settlement") unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
An indemnifying party shall be liable for any Settlement effected with the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed, and an indemnifying party shall indemnify and
hold harmless any indemnified party from and against any loss, claim, damage,
liability or expense by reason of any Settlement effected with its written
consent.
(d) In the event that the indemnify provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Guarantors and the Holders agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending the same) (collectively "Losses") to which the Company and the
Guarantors and one or more of the Holders may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand and by the Holders on the other hand from the
offering of Transfer Restricted Securities; provided, however, that in no case
shall any Holder be responsible for any amount in excess of the dollar amount of
the proceeds received by such Holder upon the sale of the Transfer Restricted
Securities or if, in lieu of receiving proceeds, the Holder receives a Series B
Note in exchange for a Series A Note, the principal amount of such Holder's
Series B Note. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company and the Guarantors on the one hand
and the Holders on the other hand shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Guarantors on the one hand and of the Holders on
the other hand in connection with the statements or emissions which resulted in
such Losses as well as any other relevant equitable considerations. Relative
fault shall be determined by reference to whether any alleged untrue statement
or omission relates to information provided by the Company and the Guarantors or
the Holder. The Company and the Guarantors and the Holders agree that it would
not be just and equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of the equitable
considerations referred to
-18-
above. Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 1l(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls a Holder within the meaning of either the Securities
Act or the Exchange Act and each director, officer, employee and agent of a
Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company and the Guarantors within the meaning of either
the Securities Act or the Exchange Act and each officer and director of the
Company and the Guarantors shall have the same rights to contribution as the
Company and the Guarantors, subject in each case to the applicable terms and
conditions of this paragraph (d).
Section 9. Rule 144A.
The Company and each Guarantor hereby agrees with each Holder, for so long
as any Transfer Restricted Securities remain outstanding, to make available to
any Holder or beneficial owner of Transfer Restricted Securities in connection
with any sale thereof and to any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
Section 10. 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, lock-up letters and other documents required under the terms of such
underwriting arrangements.
Section 11. Selection of Underwriters.
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers 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 included in
such offering; provided that such investment bankers and managers must be
reasonably satisfactory to the Company.
-19-
Section 12. Miscellaneous.
(a) Remedies. The Company and the Guarantors agree that monetary damages
(including the liquidated damages contemplated hereby) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company and the Guarantors will not
on or after the date of this Agreement enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. Neither the
Company nor any Guarantor has previously entered into any agreement granting any
registration rights with respect to its securities to any Person. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's securities
under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company and each Guarantor will
not take any action, or permit any change to occur, with respect to the Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company or any Guarantor:
American Builders & Contractors Supply Co., Inc.
Xxx XXX Xxxxxxx Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Story
-20-
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, P.C.
and
Xxx and Associates
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxx
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) 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 Transfer Restricted Securities; 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 acquired
Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
-21-
(i) 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.
(j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and 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. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-22-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
AMERICAN BUILDERS &
CONTRACTORS SUPPLY CO., INC.
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
MULE-HIDE PRODUCTS CO., INC.
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
AMCRAFT BUILDING PRODUCTS CO., INC.
By:
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
NATIONSBANC CAPITAL MARKETS, INC.
By:
--------------------------------
Name: J. Xxxxx Xxxxxx
Title: Director
FIRST CHICAGO CAPITAL MARKETS, INC.
By:
--------------------------------
Name:
Title:
-23-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
AMERICAN BUILDERS &
CONTRACTORS SUPPLY CO., INC.
By:
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
MULE-HIDE PRODUCTS CO., INC.
By:
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
AMCRAFT BUILDING PRODUCTS CO., INC.
By:
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
NATIONSBANC CAPITAL MARKETS, INC.
By:
------------------------------
Name: J. Xxxxx Xxxxxx
Title: Director
FIRST CHICAGO CAPITAL MARKETS, INC.
By:
--------------------------------
Name:
Title:
-24-
SCHEDULE A
Employee Benefit or Pension Plans (see Section 1(af))
ABC SUPPLY CO.
Name Used Type of Plan Carrier Group Number
Xxxxxxxxx Et Al Medical Insurance Unicare/Mass Mutual #114780
Xxxxxxxx Group Long-Term Disability Guardian G-306862-XX
Xxxxxxxxx Et Al Voluntary Term Life NASRA 00-0000000
ABC Supply Co. (401)k Plan Universal Life Royal Maccabees MMU05763
American Builders & Contracts STD-New York Standard Security Life 101118
Supply Co.
ABC Supply Company 401(k) Minnesota Mutual 61094
Employees' Savings &
Retirement Plan
SCHEDULE B
Material Agreements of the Issuers (see Section l(ag))
-27-
SCHEDULE B
Indenture dated as of May 6, 1997 between the Company, Mule-Hide and Amcraft and
Norwest Bank Minnesota, National Association, as trustee (including form of New
Note and Senior Subordinated Guarantees).
Purchase Agreement dated as of May 2, 1997 between the Company, Mule-Hide and
Amcraft and NationsBanc Capital Markets, Inc. and First Chicago Capital Markets,
Inc.
Registration Rights Agreement dated as of May 6, 1997 between the Company, Mule-
Hide and Amcraft and NationsBanc Capital Markets, Inc. and First Chicago Capital
Markets, Inc.
Asset Purchase Agreement dated as of April 12, 1997, by and between Viking
Aluminum Products, Inc. and the Company.
Asset Purchase Agreement, dated as of April 12, 1997, by and between Viking
Building Products, Inc. and the Company.
Employment Agreement, dated as of May 1, 1997, between the Company and Xxxxxxx
X. Xxxxxxxxx.
Tax Allocation Agreement, dated as of May , 1997, among the Company, Mule-Hide
and Amcraft and Xxxxxxx X. Xxxxxxxxx.
Form of lease agreement between the Company and Xxxxxxxxx Commercial Properties
Continuing Guarantee Agreement, dated July 20, 1996, between Mule-Hide and
Heritage Bank, N.A., for the benefit of Xxxxxxx X. Xxxxxxxxx.
Guaranty, dated December 22, 1992, between the Company and Transohio Savings
Bank, for the benefit of Xxxxxxx X. Xxxxxxxxx.
Guaranty, dated December 22, 1996, between the Company and MetLife Capital
Corporation, for the benefit of Xxxxxxx X. Xxxxxxxxx.
Amended and Restated Loan and Security Agreement among American National Bank
and Trust Company of Chicago, NationsBank of Texas, N.A. , Bankamerica Business
Credit, Inc. and the Company, as amended (the "Credit Agreement").
Amended and Restated Patent, Trademark and License Mortgage by the Company in
favor of NationsBank of Texas, N.A., as agent for the lenders under the Credit
Agreement, as amended.
Amended and Restated Limited Guaranty Agreement by Xxxxxxx X. Xxxxxxxxx, dated
as of February 8, 1996, in favor of NationsBank of Texas, N.A., individually or
as agent for the lenders under the Credit Agreement.
Third Amended and Restated Revolving Credit Note of the Company in the amount of
$25,000,000.00 made to the order of American National Bank and Trust Company of
Chicago.
Third Amended and Restated Revolving Credit Note of the Company in the amount of
$35,000,000.00 made to the order of NationsBank of Texas, N.A.
Revolving Credit Note of the Company in the amount of $32,500,000.00 made to the
order of Fleet Capital Corporation.
Revolving Credit Note of the Company in the amount of $22,500,000.00 made to the
order of Xxxxxx Trust and Savings Bank
Revolving Credit Note of the Company in the amount of $27,500,000.00 made to the
order of Sanwa Business Credit Corporation
Ninth Amendment to the Credit Agreement dated as of May 7, 1997.
SCHEDULE C
American Builders and Contractors Supply Co., Inc.
Principal
Initial Purchaser Amount
---------------------------------------------------------------- ------------
NationsBanc Capital Markets, Inc. .............................. $ 80,000,000
First Chicago Capital Markets, Inc. ............................ $ 20,000,000
$100,000,000
============
SCHEDULE D
Opinion of Xxxxxxxx & Xxxxx
May 7, 1997
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
c/o NationsBanc Capital Markets, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: American Builders & Contractors Supply Co., Inc.
------------------------------------------------
Ladies and Gentlemen:
We are issuing this opinion letter in our capacity as special legal counsel
to American Builders & Contractors Supply Co., Inc., a Delaware corporation
(the "Company"), in response to the requirement in Section 7(g) of the Purchase
Agreement (the "Purchase Agreement") dated as of May 2, 1997 among the Company,
each of the Subsidiary Guarantors (as defined below), NationsBanc Capital
Markets, Inc. ("NationsBanc") and First Chicago Capital Markets, Inc. ("First
Chicago" and, together with NationsBanc, the "Initial Purchasers").
All capitalized terms used herein and not defined herein shall have the
meanings given to such terms in the Purchase Agreement. Together, the Purchase
Agreement, the Indenture, the Registration Rights Agreement and the Securities
are referred to herein as the "Transaction Agreements." The following
subsidiaries of the Company are referred to herein as the "Subsidiaries" or
"Subsidiary Guarantors": Mule-Hide Products Co., Inc., a Texas corporation
("Mule-Hide"), and Amcraft Building Products Co., Inc., a Delaware corporation
("Amcraft").
In arriving at the opinions expressed herein, among other things, we have
examined the following:
(a) the Offering Memorandum of the Company, dated May 2, 1997, covering the
offering and sale of the Securities (the "Offering Memorandum");
(b) an executed original of the Purchase Agreement;
(c) executed originals of the Indenture and the Securities to. be delivered
on the date hereof,
(d) an executed original of the Registration Rights Agreement; and
(e) copies of all certificates and other documents delivered in connection
with the sale of the Securities on the date hereof and the consummation of the
other transactions contemplated by the Purchase Agreement.
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 2
In preparing this letter, we have relied without any independent
verification upon the assumptions recited in Schedule A to this letter and upon:
(i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Purchase
Agreement and the other Transaction Agreements; (iii) factual information
provided to us in the support certificate (the "Support Certificate") signed by
the Company and the Subsidiary Guarantors and attached hereto; and (iv) factual
information we have obtained from such other sources as we have deemed
reasonable. We have assumed without investigation that there has been no
relevant change or development between the dates as of which the information
cited in the preceding sentence was given and the date of this letter and that
the information upon which we have relied is accurate and does not omit
disclosures necessary to prevent such information from being misleading. For
purposes of each opinion in paragraph 1, we have relied exclusively upon
certificates issued by a governmental authority in each relevant jurisdiction,
and such opinion is not intended to provide any conclusion or assurance beyond
that conveyed by that certificate.
While we have not conducted any independent investigation to determine
facts upon which our opinions are based, we confirm that we do not have any
actual knowledge which has caused us to conclude that our reliance and
assumptions cited in the preceding paragraph are unwarranted or that any
information supplied in this letter is wrong. The term "actual knowledge"
whenever it is used in this letter with respect to our firm means conscious
awareness at the time this letter is delivered on the date it bears by the
following Xxxxxxxx & Xxxxx lawyers, who constitute all of the Xxxxxxxx & Xxxxx
lawyers who have devoted a significant amount of time to the negotiation or
preparation of the Transaction Agreements, the Offering Memorandum and the due
diligence associated therewith (herein called "our Designated Transaction
Lawyers"): Xxxxxx X. Xxxxxxx, P.C., Xxxxxx X. Xxxxx and Xxxxx X. Xxxxxxx.
Subject to the assumptions, qualifications, exclusions and other
limitations which are identified in this letter and in the schedules attached to
this letter, we advise you that:
1. The Company is a corporation existing and in good standing under the
General Corporation Law of the State of Delaware. The merger of American
Builders & Contractors Supply Co., Inc., a Texas corporation, with and into
the Company has become effective in accordance with the General Corporation
Law of the State of Delaware. The merger of Xxxxxxxxx Real Estate
Properties, Inc., a Wisconsin corporation, with and into the Company has
become effective in accordance with the General Corporation Law of the
State of Delaware. Each of the Company and each Subsidiary Guarantor is
qualified as a foreign corporation in good standing in each of the
jurisdictions set forth on Schedule B hereto.
2. The Company was duly incorporated under the General Corporation Law of the
State of Delaware.
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 3
3. No registration under the Securities Act of the Securities is required in
connection with the offer and sale of the Securities to the Initial
Purchasers in the manner contemplated by the Purchase Agreement and the
Offering Memorandum or in connection with the initial resale of the
Securities by the Initial Purchasers in accordance with Section 3 of the
Purchase Agreement, and prior to the commencement of the Exchange Offer or
the effectiveness of the Shelf Registration Statement, the Indenture is not
required to be qualified under the TIA, in each case assuming (i) that the
purchasers who buy such Securities in the initial resale thereof are, or
the Initial Purchasers reasonably believe them to be, Qualified
Institutional Buyers or Accredited Investors, (ii) the accuracy and
completeness of the Initial Purchasers' representations in Section 3 and
those of the Issuer contained in the Purchase Agreement regarding the
absence of a general solicitation in connection with the sale of such
Securities to the Initial Purchasers and the initial resale thereof, (iii)
the due performance by the Initial Purchasers of the agreements set forth
in Section 3 of the Purchase Agreement and (iv) the accuracy of the
representations made by each Accredited Investor who purchased Securities
in the initial resale as set forth in the Offering Memorandum.
4. Each of the Company and each Subsidiary Guarantor has the corporate power
to enter into and perform its obligations under the Transaction Agreements
to which it is a party, including without limitation the corporate power to
issue, sell and deliver the Notes and the Guarantees, respectively, as
contemplated by the Purchase Agreement.
5. Each of the Company and each Subsidiary Guarantor has duly executed and
delivered the Purchase Agreement, the Indenture and the Registration Rights
Agreement. The Company's execution, delivery and performance of the
Transaction Agreements to which it is a party have been duly authorized by
all necessary corporate action on the part of the Company. Each Subsidiary
Guarantees execution, delivery and performance of the Transaction
Agreements to which it is a party have been duly authorized by all
necessary corporate action on the part of such Subsidiary Guarantor. Each
of the Purchase Agreement, the Indenture and the Registration Rights
Agreement is a valid and binding obligation of each of the Company and each
Subsidiary Guarantor and (assuming the due authorization, execution and
delivery thereof by the other parties thereto) is enforceable against each
of the Company and each Subsidiary Guarantor in accordance with its terms.
6. The Company's execution, delivery and performance of the Notes have been
duly authorized by all necessary corporate action on the part of the
Company. The Notes have been duly executed and delivered by the Company
and, when paid for by the Initial Purchasers in accordance with the terms
of the Purchase Agreement (assuming the due authorization, execution and
delivery of the Indenture by the Trustee and due authentication and
delivery of the Notes by the Trustee in accordance with the Indenture),
will constitute the valid and
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 4
binding obligations of the Company, entitled to the benefits of the
Indenture, and enforceable against the Company in accordance with their
terms.
7. Each Subsidiary Guarantor's execution, delivery and performance of the
Guarantees have been duly authorized by all necessary corporate action on
the part of such Subsidiary Guarantor. The Guarantees have been duly
executed and delivered by each of the Subsidiary Guarantors and, when the
Notes are duly and validly authorized, executed, issued and authenticated
in accordance with the terms of the Indenture and delivered against payment
therefor in accordance with the terms of the Purchase Agreement, will be
the valid and binding obligations of each of the Subsidiary Guarantors,
enforceable against each of the Subsidiary Guarantors in accordance with
their terms and entitled to the benefits of the Indenture.
8. The Company's execution, delivery and performance of the Exchange Notes
have been duly authorized by all necessary corporate action on the part of
the Company. When the Exchange Notes have been duly executed and delivered
by the Company in accordance with the terms of the Registration Rights
Agreement, the Exchange Offer and the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee and
due authentication and delivery of the Exchange Notes by the Trustee in
accordance with the Indenture), the Exchange Notes will constitute the
valid and binding obligations of the Company, entitled to the benefits of
the Indenture, and enforceable against the Company in accordance with their
terms.
9. The Company's authorized equity capitalization is as set forth on Schedule
C attached hereto. To our actual knowledge, there are no outstanding (A)
options, warrants or other rights to purchase, (B) agreements or other
obligations of the Company to issue or (C) other fights to convert any
obligation into, or exchange any securities for, shares of capital stock of
or ownership interests in the Company. The Company is the sole owner of
record, and to our actual knowledge is the sole beneficial owner, of all
the capital stock of each Subsidiary Guarantor.
10. The execution and delivery of the Purchase Agreement, the Registration
Rights Agreement and the Indenture, and the contamination of the
transactions contemplated thereby (including, without limitation, the
issuance and sale of the Securities to the Initial Purchasers and the use
of the proceeds therefrom as set forth in the Offering Memorandum under the
caption "Use of Proceeds") do not and will not conflict with or constitute
or result in a breach or default under (or an event which with notice or
the passage of time or both would constitute a default under) or violation
of any of (i) the certificate of incorporation or bylaws of the Company or
any Subsidiary Guarantor, (ii) any statute or governmental rule or
regulation which, in our
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 5
experience, is normally applicable both to general business corporations
that are not engaged in regulated business activities and to transactions
of the type contemplated by the Offering Memorandum (but without our having
made any special investigation as to other laws and provided that we
express no opinion in this paragraph with respect to (a) any laws, rules or
regulations to which the Company or any Subsidiary Guarantor may be subject
as a result of any of the Initial Purchasers! legal or regulatory status or
the involvement of any of the Initial Purchasers in such transactions or
(b) any laws, rules or regulations relating to disclosure,
misrepresentations or fraud), or (iii) the terms or provisions of any
contract set forth on Schedule D attached hereto, except (in the case of
clauses (ii) and (iii) above) for any such conflict, break, violation,
default or event which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. We do not have
actual knowledge that any provision in any Court Order would be breached or
otherwise violated by the Company's or any Subsidiary Guarantor's execution
or delivery of the Transaction Agreements to which it is a party or by the
Company's or any Subsidiary Guarantees performance of any of its agreements
in such Transaction Agreements. For purposes of this letter, the term
"Court Order" means a court or administrative order, writ, judgment or
decree that names the Company or any Subsidiary Guarantor and is
specifically directed to it or its property. For purposes of this letter,
our Designated Transaction Lawyers have not undertaken any investigation to
identify Court Orders to which the Company or any Subsidiary Guarantor may
be subject other than our inquiry with respect thereto of officers of the
Company and the Subsidiary Guarantors reflected in their statement set
forth in the Support Certificate.
11. To our actual knowledge, no consent, waiver, approval, authorization or
order of, or registration or filings with, any court or governmental
authority is required in connection with the execution and delivery by the
Issuers of the Transaction Agreements, for the issuance and sale by the
Company and the Subsidiary Guarantors of the Securities to the Initial
Purchasers, for the consummation by the Issuer and the Subsidiary
Guarantors of the other transactions contemplated by the Transaction
Agreements or for the issuance by the Company and the Subsidiary Guarantors
of the Exchange Securities, except such as may be required under the
Securities Act, the Exchange Act, the TIA and the security or Blue Sky laws
of the various states (and the rules and regulations thereunder), as to
which we express no opinion in this paragraph.
12. To our actual knowledge, (i) there are no legal or governmental proceedings
pending to which any Issuer is a party that would be required under the
Securities Act to be disclosed in a registration statement or a prospectus
delivered at the time of the confirmation of the sale of any offering of
securities registered under the Securities Act that are not described in
the Offering Memorandum and (ii) there are no legal or governmental
proceedings pending to
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 6
which the Company or any Subsidiary Guarantor is a party or to which the
property or assets of the Company or the Subsidiary Guarantors is subject
which seek to restrain, enjoin or prevent the consummation of or otherwise
challenge the issuance or sale of the Securities to be sold to the Initial
Purchasers or the consummation of the other transactions contemplated by
the Transaction Agreements or under the caption "Use of Proceeds" in the
Offering Memorandum.
13. The statements in the Offering Memorandum under the headings "Description
of the Notes," "Description of the Credit Agreement" and "Certain
Transactions" insofar as such statements purport to summarize certain
provisions of the Indenture, the Notes, the Guarantees, the Registration
Rights Agreement, the Credit Agreement, the Employment Agreement and the
Tax Allocation Agreement and subject to the limitations contained in such
statements, provide a fair and accurate summary in all material respects of
such provisions of such agreements.
14. Neither the Company nor any Subsidiary Guarantor is, or immediately after
the sale of the Notes to the Initial Purchasers and application of the net
proceeds therefrom as described in the Offering Memorandum under the
caption "Use of Proceeds" will be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
15. As of the date hereof none of the Securities are of the same class (within
the meaning of Rule 144A under the Securities Act) as securities of the
Company or any Subsidiary Guarantor t at are listed on a national
securities exchange registered under Section 6 of the Exchange Act or that
are quoted in a United States automated inter-dealer quotation system.
16. Neither the sale, issuance, execution or delivery of the Notes nor the
application of the net proceeds therefrom as described in the Offering
Memorandum under the caption "Use of Proceeds" will contravene Regulation G
(12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System.
Because the primary purpose of our professional engagement was not to
establish factual matters and because of the nonlegal character of many
determinations involved in the preparation of the Offering Memorandum, we are
not passing upon, do not assume responsibility for and make no representation
that we have independently verified the accuracy, completeness or fairness of
the statements contained in the Offering Memorandum, other than as set forth in
paragraph 13 above. However, we have participated in conferences, in person or
by telephone, with directors, officers and other representatives of the Company
and the Subsidiary Guarantors, representatives of the independent public
accountants for the Company and the Subsidiary Guarantors, representatives of
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 7
the Initial Purchasers and counsel for the initial Purchasers, at which
conferences the contents of the Offering Memorandum and related matters were
discussed and, on the basis of such participation (relying as to materiality to
the extent we deemed appropriate upon the views of officers and other
representatives of the Company and the Subsidiary Guarantors), we advise you
that we have no actual knowledge that the Offering Memorandum (other than the
financial statements and related notes and the other financial, statistical and
accounting data included in or omitted from the Offering Memorandum, as to which
no advice is given) as of its date or as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading.
Our advice on every legal issue addressed in this letter is based
exclusively on the internal law of New York or the federal law of the United
States except that certain of the opinions in paragraphs 1 and 2 and 4 through
11 are based on the Delaware General Corporation Law. Certain of the opinions
in paragraph 1 are based on the Delaware General Corporation Law and (i) the
Wisconsin Business Corporation Act (the "Wisconsin Act") or (ii) the Texas
Business Corporation Act (the "Texas Act"). We have reviewed the Prentice Hall
Law & Business Corporation Guide as supplemented through March 17, 1997 (the
"Guide"). To the extent any opinion in paragraph I is based on the Wisconsin
Act or the Texas Act, we have assumed that the Guide accurately sets forth the
provisions of the Wisconsin Act and the Texas Act as in effect on the date
hereof and such opinion is based solely on such review and assumption. Issues
addressed by this letter may be governed in whole or in part by other laws, but
we express no opinion as to whether any relevant difference exists between the
laws upon which our opinions are based and any other laws which may actually
govern. Our opinions are subject to all qualifications in Schedule E and do not
cover or otherwise address any provision in the Purchase Agreement or any of the
other Transaction Agreements of any type identified in Schedule F. Furthermore,
our opinion expressed in paragraph 10 does not cover or otherwise address any
law or legal issue which is identified in the attached Schedule G. Provisions
in the Transaction Agreements which are not excluded by Schedule F or any other
part of this letter or its attachments are called the "Relevant Agreement
Terms."
Our advice on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based. The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case, and this letter is not intended to guarantee the outcome of any legal
dispute which may arise in the future.
This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 8
our Designated Transaction Lawyers did not have actual knowledge at that time,
by reason of any change subsequent to that time in any law covered by any of our
opinions, or for any other reason. The attached schedules are an integral part
of this letter, and any term defined in this letter or any schedule has that
defined meaning wherever it is used in this letter or in any schedule to this
letter.
You may rely upon this letter only for the purpose served by the provision
in the Purchase Agreement cited in the initial paragraph of this letter in
response to which it has been delivered. Without our written consent: (i) no
person other than you may rely on this letter for any purpose; (ii) this letter
may not be cited or quoted in any financial statement, prospectus, private
placement memorandum or other similar document; (iii) this letter may not be
cited or quoted in any other document or communication which night encourage
reliance upon this letter by any person or for any purpose excluded by the
restrictions in this paragraph; and (iv) copies of this letter may not be
furnished to anyone for purposes of encouraging such reliance.
Sincerely,
XXXXXXXX & XXXXX
Schedule A
Assumptions
For purposes of our letter, we have relied, without investigation, upon each
of the following assumptions:
1. The Initial Purchasers have purchased the Notes pursuant to the Purchase
Agreement and have paid the consideration therefor to the Company.
2. With respect to the enforceability of any Transaction Agreement by any
Initial Purchaser or the Trustee, such Initial Purchaser or the Trustee, as
the case may be, has satisfied those legal requirements that are applicable
to it to the extent necessary for such Transaction Agreement to be a binding
obligation of such party.
3. Each document submitted to us for review is accurate and complete, each such
document that is an original is authentic, each such document that is a copy
conforms to an authentic original, and all signatures (other than those of
or on behalf of the Company or the Subsidiary Guarantors) on each such
document are genuine.
Schedule B
Good Standing
American Builders & Contractors Supply Co., Inc.
------------------------------------------------
Delaware
Mule-Hide Products Co., Inc.
----------------------------
California
Florida
Illinois
Louisiana
New York
North Carolina
Pennsylvania
Texas
Wisconsin
Amcraft Building Products Co., Inc.
-----------------------------------
Delaware
Alabama
Wisconsin
Schedule C
Capitalization
American Builders & Contractors Supply Co., Inc., a Delaware
corporation, 1,000 shares authorized, 147.04 shares issued and
outstanding.
Schedule D
Specified Contracts
Indenture dated as of May 6, 1997 between the Company, Mule-Hide and Amcraft and
Norwest Bank Minnesota, National Association, as trustee (including form of New
Note and Senior Subordinated Guarantees).
Purchase Agreement dated as of May 2, 1997 between the Company, Mule-Hide and
Amcraft and NationsBanc Capital Markets, Inc. and First Chicago Capital Markets,
Inc.
Registration Rights Agreement dated as of May 6, 1997 between the Company, Mule-
Hide and Amcraft and NationsBanc Capital Markets, Inc. and First Chicago Capital
Markets, Inc.
Asset Purchase Agreement, dated as of April 12, 1997, by and between Viking
Aluminum Products, Inc. and the Company.
Asset Purchase Agreement, dated as of April 12, 1997, by and between Viking
Building Products, Inc. and the Company.
Employment Agreement, dated as of May 1, 1997, between the Company and Xxxxxxx
X. Xxxxxxxxx.
Tax Allocation Agreement, dated as of May 1, 1997, among the Company, Mule-Hide
and Amcraft and Xxxxxxx X. Xxxxxxxxx.
Form of lease agreement between the Company and Xxxxxxxxx Commercial Properties
Continuing Guarantee Agreement, dated July 20, 1996, between Mule-Hide and
Heritage Bank, N.A., for the benefit of Xxxxxxx X. Xxxxxxxxx.
Guaranty, dated December 22, 1992, between the Company and Transohio Savings
Bank, for the benefit of Xxxxxxx X. Xxxxxxxxx.
Guaranty, dated December 22, 1996, between the Company and MetLife Capital
Corporation, for the benefit of Xxxxxxx X. Xxxxxxxxx.
Amended and Restated Loan and Security Agreement among American National Bank
and Trust Company of Chicago, NationsBank of Texas, N.A., Bankamerica Business
Credit, Inc. and the Company, as amended (the "Credit Agreement").
Amended and Restated Patent, Trademark and License Mortgage by the Company in
favor of NationsBank of Texas, N.A., as agent for the lenders under the Credit
Agreement, as amended.
Amended and Restated Limited Guaranty Agreement by Xxxxxxx X. Xxxxxxxxx, dated
as of February 8, 1996, in favor of NationsBank of Texas, N.A., individually or
as agent for the lenders under the Credit Agreement.
Third Amended and Restated Revolving Credit Note of the Company in the amount of
$25,000,000.00 made to the order of American National Bank and Trust Company of
Chicago.
Third Amended and Restated Revolving Credit Note of the Company 'in the amount
of $35,000,000.00 made to the order of NationsBank of Texas, N.A.
Revolving Credit Note of the Company in the amount of $32,500,000.00 made to the
order of Fleet Capital Corporation.
Revolving Credit Note of the Company in the amount of $22,500,000.00 made to the
order of Xxxxxx Trust and Savings Bank
Revolving Credit Note of the Company in the amount of $27,500,000.00 made to the
order of Sanwa Business Credit Corporation
Ninth Amendment to the Credit Agreement dated as of May 7, 1997.
Schedule E
General Qualifications
All of our opinions ("our opinions") in the letter to which this Schedule
is attached ("our letter") are subject to each of the qualifications set forth
in this Schedule.
1. Bankruptcy and Insolvency Exception. Each of our opinions is subject to
the effect of:
a. all Federal and state bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws that affect the rights of
creditors generally or that have reference to or affect only creditors
of specific types of debtors (which comprehends, among others, matters
of turnover, automatic stay, avoiding powers, preference, discharge,
conversion of a non-recourse obligation into a recourse claim,
limitations on ipso facto and anti-assignment clauses and the coverage
of pre-petition security agreements applicable to property acquired
after a petition is filed);
b. fraudulent transfer and conveyance laws; and
c. judicially developed doctrines in this area, such as substantive
consolidation of entities and equitable subordination.
2. Equitable Principles Limitation. Each of our opinions is subject to the
effect of general principles of equity, whether applied by a court of law
or equity. This limitation includes principles:
a. governing the availability of specific performance, injunctive relief
or other equitable remedies, which generally place the award of such
remedies, subject to certain guidelines, in the discretion of the
court to which application for such relief is made;
b. affording equitable defenses (e.g., waiver, laches and estoppel)
against a party seeking enforcement;
c. requiring good faith and fair dealing in the performance and
enforcement of a contract by the party seeking its enforcement;
d. requiring reasonableness in the performance and enforcement of an
agreement by the party seeking enforcement of the contract;
e. requiring consideration of the materiality of (i) a breach and (ii)
the consequences of the breach to the party seeking enforcement;
f. requiring consideration of the impracticability or impossibility of
performance at the
E-1
time of attempted enforcement; and
g. affording defenses based upon the unconscionability of the enforcing
party's conduct after the parties have entered into the contract.
3 . Other Common Qualifications. Each of our opinions is subject to the effect
of rules of law that:
a. provide a time limitation after which a remedy may not be enforced;
b. Unit the enforceability of provisions releasing, exculpating or
exempting a party from, or requiring indemnification of a party for,
liability for its own action or inactior4 to the extent the action or
inaction involves negligence, violation of public policy or litigation
against another party determined adversely to such party;
c. may, where less than all of a contract may be unenforceable, limit the
enforceability of the balance of the contract to circumstances in
which the unenforceable portion is not an essential part of the agreed
exchange;
d. govern and afford judicial discretion regarding the determination of
damages; and
e. may render waivers of suretyship defenses ineffective under certain
circumstances.
4. Cross-Default Provisions. With respect to our opinion in paragraph 10
above, we express no opinion with respect to violations under cross-default
provisions referring to or based upon agreements that are not included on
Schedule D. For purposes of the preceding sentence, agreements which are
attached as exhibits, schedules or attachments to or are otherwise referred
to in agreements fisted on Schedule D, but are not directly listed on
Schedule D, shall not be deemed to be included on Schedule D.
E-2
Schedule F
Excluded Provisions
None of the opinions in the letter to which this Schedule is attached
covers or otherwise addresses any of the following types of provisions which may
be contained in the Transaction Agreements:
1. Provisions mandating contribution towards judgments or settlements among
various parties.
2. Provisions which might require indemnification or contribution with respect
to any litigation by the Trustee under the Indenture against the Company
and the Subsidiary Guarantors determined adversely to the Trustee under the
Indenture, or with respect to any loss, cost or expense arising out of such
Trustee's negligence or bad faith.
3. Requirements in the Transaction Agreements specifying that provisions
thereof may only be waived in writing (these provisions may not be valid,
binding or enforceable to the extent that an oral agreement or an implied
agreement by trade practice or course of conduct has been created modifying
any provision of such documents).
F-1
Schedule G
Excluded Law and Legal Issues
In addition to the limitations and exclusions otherwise set forth in
xxxxxxxxx 00, xxxx of the opinions or advice set forth in paragraph 10 of our
letter covers or otherwise addresses any of the following laws, regulations or
other governmental requirements or legal issues:
1. State "Blue Sky" laws and regulations; and
2. the statutes and ordinances, the administrative decisions and the rules and
regulations of counties, towns, municipalities and special political
subdivisions (whether created or enabled through legislative action at the
Federal, state or regional level) and judicial decisions to the extent that
they deal with any of the foregoing.
We have not undertaken any research for purposes of determining whether the
Company and Subsidiary Guarantors or any of the transactions which may occur in
connection with the Purchase Agreement or any of the other Transaction
Agreements is subject to any law or other governmental requirement other than to
those laws and requirements which in our experience would generally be
recognized as applicable, and none of our opinions covers any such law or other
requirement unless (i) one of our Designated Transaction Lawyers had actual
knowledge of its applicability at the time our letter was delivered on the date
it bears and (ii) it is not excluded from coverage by other provisions in our
letter or in any Schedule to our letter.
G-1
Support Certificate
American Builders & Contractors Supply Co., Inc., a Delaware corporation (the
"Company"), Amcraft Building Products Co., Inc., a Delaware corporation
("Amcraft") and Mule-Hide Products Co., Inc., a Texas corporation ("Mule-Hide,"
and together with Amcraft, the "Subsidiary Guarantors") all hereby certify and
agree that:
1. Introduction. Xxxxxxxx & Xxxxx has acted as special legal counsel to the
Company and the Subsidiary Guarantors in connection with the negotiation
and preparation of the Purchase Agreement (the "Purchase Agreement") dated
as of May 2, 1997, among the Company, each of the Subsidiary Guarantors,
NationsBanc Capital Markets, Inc. ("NationsBanc") and First Chicago Capital
Markets, Inc. ("First Chicago" and, together with NationsBanc, the "Initial
Purchasers"). Section 7(g) of the Purchase Agreement provides that as a
condition to closing Xxxxxxxx & Xxxxx delivers an opinion letter to the
Initial Purchasers (the "Opinion Recipients"). The term "Xxxxxxxx Opinion"
whenever it is used in this certificate means the opinion letter which
Xxxxxxxx & Xxxxx will actually deliver at the closing in response to this
closing condition. Each term which is defined or given a special meaning in
the Xxxxxxxx Opinion has the same meaning whenever it is used in this
certificate.
2. Purpose. The Company and the Subsidiary Guarantors have provided this
certificate in order to provide Xxxxxxxx & Xxxxx with factual information
needed by Xxxxxxxx & Xxxxx in order to issue the Xxxxxxxx Opinion. The
Company and the Subsidiary Guarantors have made inquiries and
investigations reasonably calculated to assure that the information
provided in this certificate is accurate and complete, including (i)
inquiries of appropriate personnel responsible for legal matters, financial
matters and compliance with governmental requirements and (ii)
identification and review of relevant documents. After performing such
inquiries and reviewing the Xxxxxxxx Opinion, the Company and the
Subsidiary Guarantors are satisfied that the Xxxxxxxx Opinion does not
contain any untrue statements. The Company and the Subsidiary Guarantors
understand that Xxxxxxxx & Xxxxx will not check, audit or otherwise attempt
to verify the information in this certificate. The Company and the
Subsidiary Guarantors intend and agree that Xxxxxxxx & Xxxxx and the
Opinion Recipients may rely upon this certificate and all information
provided in this certificate.
3. Charters. The copies of the Company's Certificate of Incorporation,
Amcraft's Certificate of Incorporation and Mule-Hide's Articles of
Incorporation (each a "Charter") in the versions certified by the
responsible governmental office in the Company's and the Subsidiary
Guarantors' states of incorporation and delivered to the Opinion Recipients
in connection with the closing are accurate and complete and represent the
terms of the Company's and the Subsidiary Guarantors' Charters as
constituted at all times since the date of the latest amendment thereto
indicated in that certificate.
4. Bylaws. The copy of the Bylaws of the Company in the version attached to
the certificate issued by the Company's Secretary to the Opinion Recipients
at the closing is accurate and
-1-
complete and represents the terms of the Company's Bylaws as constituted at
all times since prior to the adoption of the initial resolution authorizing
the transactions specified in the Transaction Agreements. The copies of the
Bylaws of the Subsidiary Guarantors in the versions attached to the
certificates issued by the Subsidiary Guarantors' Secretaries to the
Opinion Recipients at the closing are accurate and complete and represent
the terms of the Subsidiary Guarantors' Bylaws as constituted at all times
since prior to the adoption of the initial resolution authorizing the
transactions specified in the Transaction Agreements.
5. Good Standing. The practice of the Company and each Subsidiary Guarantor
is to make on a timely basis all filings and tax payments they were
required to make under the statute under which they are organized and under
the statutes under which they have qualified to do business in other
states. Neither the Company nor any Subsidiary Guarantor has received
notice from any governmental authority that any such filing or tax payment
which the Company or any Subsidiary Guarantor has made is delinquent or due
or that the Company or any Subsidiary Guarantor is not in good standing in
its state of incorporation or in any state in which it has qualified as a
foreign corporation. Neither the Company nor any Subsidiary Guarantor has
reason to believe that it is not in existence or good standing in its
respective state of incorporation, that it has ceased to be qualified to do
business or in good standing in any state in which it was previously
qualified, or that it has not qualified in any state in which such
qualification is required.
6. Authorizing Resolutions.
a. Attached hereto as Exhibit A is a complete and accurate copy of
resolutions adopted by the Company's Board of Directors on May 1, 1997
by Consent in Lieu of Special Meeting of Board of Directors. Such
resolutions have not been amended -or rescinded and remain in full
force and effect on the date hereof.
b. Attached hereto as Exhibit B is a complete and accurate copy of
resolutions adopted by Mule-Hide's Board of Directors on May 1, 1997
by Consent in Lieu of Special Meeting of Board of Directors. Such
resolutions have not been amended or rescinded and remain in full
force and effect on the date hereof.
c. Attached hereto as Exhibit C is a complete and accurate copy of
resolutions adopted by Amcraft's Board of Directors on May 1, 1997 by
Consent in Lieu of Special Meeting of Board of Directors. Such
resolutions have not been amended or rescinded and remain in full
force and effect on the date hereof.
d. At the time the Boards of Directors of the Company, Amcraft, and Mule-
Hide adopted the resolutions cited in the preceding paragraphs, no
vacancies existed on any of the Boards of Directors and each director
then on such Board of Directors was elected or appointed to such Board
of Directors in accordance with the requirements in the respective
Charter and Bylaws.
-2-
e. Attached hereto as Exhibit D is a complete and accurate copy of the
resolutions adopted by the sole shareholder of Mule-Hide on May 1,
1997 by Consent in Lieu of Special Meeting of Shareholders. Such
resolutions have not been amended or rescinded and remain in full
force and effect on the date hereof.
f. Attached hereto as Exhibit E is a complete and accurate copy of the
resolutions adopted by the sole shareholder of Amcraft on May 1, 1997
by Consent in Lieu of Special Meeting of Board of Shareholders. Such
resolution ' s have not been amended or rescinded and remain in full
force and effect on the date hereof.
g. Attached hereto as Exhibit F is a complete and accurate copy of the
resolutions adopted by the sole shareholder of the Company on May 6,
1997 by Consent in Lieu of Special Meeting of Shareholders. Such
resolutions have not been amended or rescinded and remain in fall
force and effect on the date hereof
h. None of the Boards of Directors or the sole shareholders of the
Company or the Subsidiary Guarantors have adopted any other
resolutions which (i) restrict the authority of the Company or any
Subsidiary Guarantor to enter into any the Transaction Agreements or
to engage in any actions to be taken under or by reason of the
Transaction Agreements or (ii) restrict the Boards of Directors'
authority to approve any such action or activity or (iii) otherwise
relate to the execution or delivery by the Company or any Subsidiary
Guarantor of any of the Transaction Agreements or any activity to be
taken under or by reason of the Transaction Agreements.
7. Authorized Officers. Each individual who has executed any of the
Transaction Agreements or other document delivered at closing on behalf of
the Company and the Subsidiary Guarantors were validly appointed to the
officership position or other position with the respective company
indicated in connection with such execution and held that office at the
time of such person's execution and delivery of the relevant Transaction
Agreement(s) and/or other documents(s).
8. No Required Governmental Approvals. Neither the Company nor any
Subsidiary Guarantor engages in any banking, insurance, common carrier,
broadcasting, utility or other regulated activities to a degree which
requires it to obtain approval from any governmental authority as a
condition to executing or delivering any of the Transaction Agreements or
to performing any of its obligations under the Transaction Agreements.
Neither the Company nor any Subsidiary Guarantor is aware of any filing
required to be made or any governmental permit or authorization required to
be obtained in connection, with the execution or delivery of any of the
Transaction Agreements or the performance of any obligations of the Company
or any Subsidiary Guarantor under those Agreements which has not been made
or obtained on or prior to the date hereof.
-3-
9. No Known Breach. Neither the Company nor any Subsidiary Guarantor is aware
of any contract or other obligation which would be breached by the
execution or delivery by the Company or any Subsidiary Guarantor of any of
the Transaction Agreements or any activity to be taken under or by reason
of the Transaction Agreements.
10. No Omissions. Neither the Company nor any Subsidiary Guarantor knows of
any other fact or development which indicates that any advice given in the
Xxxxxxxx Opinion is inaccurate or misleading.
11. Outstanding Judgments. Neither the Company nor any Subsidiary Guarantor is
aware of any judgment, decree or Court Order applicable to or binding upon
it or its respective assets or properties which would be breached by the
execution or delivery by the Company or any Subsidiary Guarantor of any of
the Transaction Agreements or any activity to be taken under or by xxxxx of
the Transaction Agreements. For purposes of this certificate, the term
"Court Order" means a court or administrative order, writ, judgment or
decree that names the Company or any Subsidiary Guarantor and is
specifically directed to it or its property.
* * * * *
-4-
IN WITNESS WHEREOF, the undersigned have executed this Support Certificate
as of the 7th day of May, 1997.
AMERICAN BUILDERS &
CONTRACTORS SUPPLY CO., INC.
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President, Chief Executive
Officer
By:
-------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President,
Secretary and Director
AMCRAFT BUILDING PRODUCTS CO., INC.
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
By:
-------------------------------------
Name: Xxxxxx Story
Title: Chief Financial Officer
MULE-HIDE PRODUCTS CO., INC.
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
By:
-------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: President
-5-
SCHEDULE E
Opinion of Xxx and Associates
-1-
May 7, 1997
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
c/o NationsBanc Capital Markets, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: American Builders & Contractors Supply Co., Inc.
Ladies and Gentlemen:
We are issuing this opinion letter in our capacity as general legal counsel
to American Builders & Contractors Supply Co., Inc., a Delaware corporation (the
"Company"), in response to the requirement in Section 7(g) of the Purchase
Agreement (the "Purchase Agreement") dated as of May 7, 1997 among the Company,
each of the Subsidiary Guarantors (as defined below), NationsBanc Capital
Markets, Inc. ("NationsBanc") and First Chicago Capital Markets, Inc. ("First
Chicago" and, together with NationsBanc, the "Initial Purchasers").
All capitalized terms used herein and not defined herein shall have the
meanings given to such terms in the Purchase Agreement. Together, the Purchase
Agreement, the Indenture, the Registration Rights Agreement and the Securities
are referred to herein as the "Transaction Agreements". The following
subsidiaries of the Company together are referred to herein as the
"Subsidiaries" or "Subsidiary Guarantors": Mule-Hide Products Co., Inc., a Texas
corporation ("Mule-Hide") and Amcraft Building Products Co., Inc., a Delaware
corporation ("Amcraft").
In arriving at the opinions expressed herein, among other things, we have
examined the following:
(a) the Offering Memorandum of the Company, dated May 2, 1997, covering the
offering and sale of the Securities (the "Offering Memorandum");
(b) an executed copy of the Purchase Agreement;
(c) executed copies of the Indenture and the Securities to be delivered on
the date hereof,
(d) an executed copy of the Registration Rights Agreement;
(e) an executed original of the Asset Purchase Agreement between the
Company and Viking Building Products, Inc. and between the Company and
Viking Aluminum Products, Inc., each dated April 12, 1997 (together
"Asset Purchase Agreements"); and
(f) executed copies of the Amended and Restated Loan and Security Agreement
dated
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 2
July 1, 1993 (the "Loan Agreement"); the First Amendment to the
Amended and Restated Loan Agreement dated September 2, 1994; the
Waiver and Second Amendment to the Amended and Restated Loan Agreement
dated June 19, 1995; the Third Amendment to the Amended and Restated
Loan Agreement dated September 18, 1995; the Waiver and Fourth
Amendment to the Amended and Restated Loan Agreement dated September
30, 1995; the Waiver and Fifth Amendment to the Amended and Restated
Loan Agreement dated December 29, 1995; the Waiver and Sixth Amendment
to the Amended and Restated Loan Agreement dated February 8, 1996; the
Waiver and Seventh Amendment to the Loan Agreement dated September 3,
1996; the Waiver and Eighth Amendment to the Loan Agreement dated
March 27, 1997; and the Ninth Amendment to the Loan Agreement dated
May 7, 1997 (together, the "Credit Agreement").
In preparing this letter, we have relied without any independent
verification upon the assumptions recited in Schedule A to this letter and upon:
(i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Purchase
Agreement and the other Transaction Agreements; (iii) factual information
provided to us in the Support Certificate signed by the Company and the
Subsidiary Guarantors and attached hereto; and (iv) factual information we have
obtained from such other sources as we have deemed reasonable. We have assumed
without investigation that there has been no relevant change or development
between the dates as of which the information cited in the preceding sentence
was given and the date of this letter and that the information upon which we
have relied is accurate and does not omit disclosures necessary to prevent such
information from being materially and adversely misleading. For purposes of
each opinion expressed in paragraph 1 below, we have relied exclusively upon
certificates issued by a governmental authority in each relevant jurisdiction,
and such opinion is not intended to provide any conclusion or assurance beyond
that conveyed by that certificate.
While we have not conducted any independent investigation to determine
facts upon which our opinions are based, we confirm that we do not have any
actual knowledge which has caused us to conclude that our reliance and
assumptions cited in the preceding paragraph are unwarranted or that any
information supplied to or used by us in connection with this letter is wrong.
The term "actual knowledge" whenever it is used in this letter with respect to
our firm means conscious awareness at the time this letter is delivered on the
date it bears by the following Xxx and Associates lawyers, who constitute all of
the Xxx and Associates lawyers who have devoted a significant amount of time to
the negotiation or preparation of the Transaction Agreements, the Offering
Memorandum and the due diligence associated therewith (herein called "our
Designated Transaction Lawyers"): Xxxx Xxx.
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 3
. Subject to the assumptions, qualifications, exclusions and other
limitations which are identified in this letter and in the schedules attached to
this letter, we advise you that:
1. Each Subsidiary Guarantor is a corporation existing and in good standing
under the laws of its jurisdiction of incorporation.
2. The Subsidiary Guarantors' authorized shares are as set forth on Schedule B
hereto. To our actual knowledge, there are no outstanding (A) options,
warrants or other rights to purchase, (B) agreements or other obligations
of the Company or any Subsidiary Guarantor to issue or (C) other rights to
convert any obligation into, or exchange any securities for, shares of
capital stock of or ownership interests in any of the Subsidiary
Guarantors. All shares of capital stock of the Subsidiary Guarantors have
been duly authorized, validly issued, nonassessable, to our knowledge
without inquiry are fully paid and, except as disclosed in the Final
Memorandum, to the knowledge of such counsel without inquiry, all such
shares are owned by the Company or a subsidiary of the Company free and
clear of any security interests, liens, pledges or encumbrances.
3. The execution and delivery of the Credit Agreement and the Asset Purchase
Agreements, and the consummation of the transactions contemplated thereby
do not and will not conflict with or constitute or result in a breach or
default under (or an event which with notice or the passage of time or both
would constitute a default under) or violation of any of, (i) the
certificate of incorporation or bylaws of the Company or any Subsidiary
Guarantor, (ii) any statute or governmental rule or regulation which, in
our experience, is normally applicable both to general business
corporations that are not engaged in regulated business activities and to
transactions of the type conducted by the Company (but without our having
made any special investigation as to other laws, rules or regulations and
provided that we express no opinion in this paragraph with respect to (a)
any laws, rules or regulations to which the Company or any Subsidiary
Guarantor may be subject as a result of the legal or regulatory status or
the involvement of any parties to the Credit Agreement or the Asset
Purchase Agreements or (b) any laws, rules or regulations relating to
disclosure, misrepresentations or fraud) or (iii) the terms or provisions
of any contract set forth on Schedule C attached hereto, except (in the
case of clauses (ii) and (iii) above) for any such conflict, breach,
violation, default or event which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, after
giving effect to the Offering and the application of the net proceeds
therefrom as described in the Offering Memorandum.
4. To our actual knowledge without additional inquiry, none of the Company and
the Subsidiary Guarantors is in violation of its corporate charter or by-
laws, or is in default under any of the agreements set forth on Schedule C
attached hereto, which default could, singly or in the
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 4
aggregate, reasonably be expected to have a Material Adverse Effect; to our
actual knowledge without additional inquiry, none of the Company and the
Subsidiary Guarantors is in violation of any law, ordinance, governmental
rule or regulation or court order or decree to which it may be subject, and
each has obtained each license, permit, or other governmental authorization
(collectively, "permits") necessary to the ownership of its properties or
to the conduct of its business as described in the Offering Memorandum,
other than permits being applied for in the ordinary course of business,
permits relating to the consummation of the Asset Purchase Agreements and
permits, the violation of which or the failure to obtain would not, singly
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
Because the primary purpose of our professional engagement was not to
establish factual matters and because of the nonlegal character of many
determinations involved in the preparation of the Offering Memorandum, we are
not passing upon, do not assume responsibility for and make no representation
that we have independently verified the accuracy, completeness or fairness of
the statements contained in the Offering Memorandum. However, we have
participated in conferences, in person or by telephone, with directors, officers
and other representatives of the Company and the Subsidiary Guarantors,
representatives of the independent public accountants for the Company and the
Subsidiary Guarantors, representatives of the Initial Purchasers and counsel for
the Initial Purchasers, at which conferences the contents of the Offering
Memorandum and related matters were discussed and, on the basis of such
participation (relying as to materiality to the extent we deemed appropriate
upon the statements of officers and other representatives of the Company and the
Subsidiary Guarantors), we advise you that we have no actual knowledge that the
Offering Memorandum (other than the financial statements and related notes and
the other financial, statistical and accounting data included in or omitted from
the Offering Memorandum, as to which no advice is given, and information
furnished to the auditors of the Company and the Subsidiary Guarantors regarding
pending litigation and unasserted claims which information has been made
available to your counsel in connection with the Transaction Agreements, as to
which no further advice is given) as of its date or as of the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
materially adversely misleading.
Our advice on every legal issue addressed in this letter is based
exclusively on the internal law of Alabama or the federal law of the United
States except that certain of the opinions in paragraphs 1 are based on the
Delaware General Corporation Law or Texas Business Corporation Law. Issues
addressed by this letter may be governed in whole or in part by other laws, but
we express no opinion as to whether any relevant difference exists between the
laws upon which our opinions are based and any other laws which may actually
govern. Our opinions are subject to all qualifications in Schedule D.
Furthermore, our opinions expressed in paragraphs 3 and 4 do not cover or
otherwise address any law or legal issue which is identified in the attached
Schedule E.
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
May 7, 1997
Page 5
Without current inquiry or research, our advice on each legal issue
addressed in this letter represents our opinion as to how that issue would be
resolved were it to be considered by the highest court of the jurisdiction upon
whose law our opinion on that issue is based. The manner in which any
particular issue would be treated in any actual court case would depend in part
on facts circumstances particular to the case, and this letter is not intended
to guarantee the outcome of any legal dispute which may arise in the future.
This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which our Designated Transaction Lawyers did
not have actual knowledge at that time, by reason of any change subsequent to
that time in any law covered by any of our opinions, or for any other reason.
The attached schedules are an integral part of this letter, and any term defined
in this letter or any schedule has that defined meaning wherever it is used in
this letter or in any schedule to this letter.
You may rely upon this letter only for the purpose served by Section 7(g)
in the Purchase Agreement and it has been delivered solely in response to such
provision. Without our written consent: (i) no person other than you may rely
on this letter for any purpose; (ii) this letter may not be used, reproduced,
cited or quoted in any financial statement, prospectus, private placement
memorandum or other similar document; (iii) this letter may not be used,
reproduced, cited or quoted in any other document or communication which might
encourage reliance upon this letter by any person or for any purpose excluded by
the restrictions in this paragraph; and (iv) copies of this letter may not be
furnished to anyone for purposes of encouraging reliance hereon.
Sincerely,
XXX AND ASSOCIATES
Schedule A
Assumptions
For purposes of our letter, we have relied, without investigation, upon each
of the following assumptions:
1. The Initial Purchasers have purchased the Notes pursuant to the Purchase
Agreement and have paid the consideration therefor to the Company.
2. With respect to the enforceability of any Transaction Agreement by any
Initial Purchaser or the Trustee, such Initial Purchaser or the Trustee, as
the case may be, has satisfied those legal requirements that are applicable
to it to the extent necessary for such Transaction Agreement to be a binding
obligation of such party.
3. With respect to the enforceability of the Credit Agreement and the Asset
Purchase Agreements by any party thereto, such party has satisfied those
legal requirements which are applicable to it to the extent necessary for
such agreement to be a binding obligation of such party.
4. Each document submitted to us for review is accurate and complete, each such
document that is an original is authentic, each such document that is a copy
conforms to an authentic original, and all signatures (on each such document
are genuine.
Schedule B
Capitalization
MULE-HIDE PRODUCTS CO., INC.
Common Stock Authorized: 10,000, no par
Common Stock Outstanding: 100
Other Stock Authorized: None
Ownership of Outstanding Stock: American Builders & Contractors Supply Co.,
Inc. owns 100 shares
AMCRAFT BUILDING PRODUCTS CO., INC.
Common Stock Authorized: 100,000, $0.01 per share par value
Common Stock Outstanding: 100
Other Stock Authorized: None
Ownership of Outstanding Stock: American Builders & Contractors Supply Co.,
Inc. owns 100 shares
Schedule C
Specified Contracts
Indenture dated as of May 6, 1997 between the Company, Mule-Hide and Amcraft and
Norwest Bank Minnesota, National Association, as trustee (including form of New
Note and Senior Subordinated Guarantees).
Purchase Agreement dated as of May 2, 1997 between the Company, Mule-Hide and
Amcraft and NationsBanc Capital Markets, Inc. and First Chicago Capital Markets,
Inc.
Registration Rights Agreement dated as of May 6, 1997 between the Company, Mule-
Hide and Amcraft and NationsBanc Capital Markets, Inc. and First Chicago Capital
Markets, Inc.
Asset Purchase Agreement, dated as of April 12, 1997, by and between Viking
Aluminum Products, Inc. and the Company.
Asset Purchase Agreement, dated as of April 12, 1997, by and between Viking
Building Products, Inc. and the Company.
Employment Agreement, dated as of May 1, 1997, between the Company, Mule-Hide
and Amcraft and Xxxxxxx X. Xxxxxxxxx.
Tax Allocation Agreement, dated as of May 1, 1997, among the Company and Xxxxxxx
X. Xxxxxxxxx.
Form of lease agreement between the Company and Xxxxxxxxx Commercial Properties.
Continuing Guaranty Agreement, dated July 20, 1996, between Mule-Hide and
Heritage Bank, N.A.
Amended and Restated Loan and Security Agreement among American National Bank
and Trust Company of Chicago, NationsBank of Texas, N.A., Bankamerica Business
Credit, Inc, and the Company, as amended including the Ninth Amendment dated May
7, 1997 (the "Credit Agreement").
Amended and Restated Patent, Trademark and License Mortgage by the Company in
favor of NationsBank of Texas, N.A., as agent for the lenders under the Credit
Agreement, as amended.
Third Amended and Restated Revolving Credit Note of the Company in the amount of
$25,000,000.00 made to the order of American National Bank and Trust Company of
Chicago.
Third Amended and Restated Revolving Credit Note of the Company in the amount of
$35,000,000.00 made to the order of NationsBank of Texas, N.A.
Revolving Credit Note of the Company in the amount of $32,500,000.00 made to the
order of Fleet Capital Corporation.
Revolving Credit Note of the Company in the amount of $22,500,000.00 made to the
order of Xxxxxx Trust and Savings Bank.
Revolving Credit Note of the Company in the amount of $27,500,000.00 made to the
order of Sanwa Business Credit Corporation.
Schedule D
General Qualifications
All of our opinions ("Our Opinions") in the letter to which this Schedule
is attached ("Our Letter") are subject to each of the qualifications set forth
in this Schedule.
1. Bankruptcy and Insolvency Exception. Each of Our Opinions is subject to the
effect of:
a. all Federal and state bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws that affect the rights of
creditors generally or that have reference to or affect only creditors
of specific types of debtors (which comprehends, among others, matters
of turn-over, automatic stay, avoiding powers, preference, discharge,
conversion of a non-recourse obligation into a recourse claim,
limitations on ipso facto and anti-assignment clauses and the coverage
of pre-petition security agreements applicable to property acquired
after a petition is filed);
b. fraudulent transfer and conveyance laws; and
c. judicially developed doctrines in this area, such as substantive
consolidation of entities and equitable subordination.
2. Equitable Principles Limitation. Each of Our Opinions is subject to the
effect of general principles of equity, whether applied by a court of law
or equity. This limitation includes principles:
a. governing the availability of specific performance, injunctive relief
or other equitable remedies, which generally place the award of such
remedies, subject to certain guidelines, in the discretion of the court
to which application for such relief is made;
b. affording equitable defenses (e.g., waiver, laches and estoppel)
against a party seeking enforcement;
c. requiring good faith and fair dealing in the performance and
enforcement of a contract by the party seeking its enforcement;
d. requiring reasonableness in the performance and enforcement of an
agreement by the party seeking enforcement of the contract;
e. requiring consideration of the materiality of (i) a breach and (ii) the
consequences of the breach to the party seeking enforcement;
f. requiring consideration of the impracticability or impossibility of
performance at the time of attempted enforcement; and
g. affording defenses based upon the unconscionability of the enforcing
party's conduct after the parties have entered into the contract.
3. Other Common Qualifications. Each of Our Opinions is subject to the effect
of the rules of law that:
a. limit the enforceability of provisions releasing, exculpating or
exempting a party from, or requiring indemnification of a party for,
liability for its own action or inaction, to the extent the action or
inaction involves negligence, violation of public policy or litigation
against another party determined adversely to such party;
b. may, where less than all of a contract may be unenforceable, limit the
enforceability of the balance of the contract to circumstances in which
the unenforceable portion is not an essential part of the agreed
exchange;
c. govern and afford judicial discretion regarding the determination of
damages and entitlement to attorney's fees and other costs;
d. may render waivers of suretyship defenses ineffective under certain
circumstances.
5. Cross-Default Provisions. With respect to Our Opinions in paragraphs 3 and
4 above, we express no opinion with respect to violations under cross-
default provisions referring to or based upon agreements that are not
included on Schedule C. For purposes of the preceding sentence, agreements
which are attached as exhibits, schedules or attachments to or are otherwise
referred to in agreements listed on Schedule C, but are not directly listed
on Schedule C, shall not be deemed to be included on Schedule C.
Schedule E
Excluded Law and Legal Issues
In addition to the limitations and exclusions otherwise set forth in
paragraphs 3 and 4, none of the opinions or advice set forth in paragraphs 3 and
4 of our letter covers or otherwise addresses any of the following laws,
regulations or other governmental requirements or legal issues:
1. State "Blue Sky" laws and regulations;
2. the statutes and ordinances, the administrative decisions and the rules and
regulations of counties, towns, municipalities and special political
subdivisions (whether created or enabled through legislative action at the
Federal, state or regional level) and judicial decisions to the extent that
they deal with any of the foregoing.
We have not undertaken any research for purposes of determining whether the
Company and the Subsidiary Guarantors or any of the Transactions which may occur
in connection with the Purchase Agreement or any of the other Transaction
Agreements is subject to any law or other governmental requirement other than to
those laws and requirements which in our experience would generally be
recognized as applicable, and none of our opinions covers any such law or other
requirement unless (i) one of our Designated Transaction Lawyers had actual
knowledge of its applicability at the time our letter was delivered on the date
it bears and (ii) it is not excluded from coverage by other provisions in our
letter or in any Schedule to our letter.
