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REGISTRATION RIGHTS AGREEMENT
AMONG
NCI BUILDING SYSTEMS, INC.,
THE GUARANTORS
NAMED HEREIN
AND
THE INITIAL PURCHASERS
NAMED HEREIN
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is dated as of
May 5, 1999, by and among NCI Building Systems, Inc., a Delaware corporation
(the "COMPANY"), the guarantors identified on the signature pages attached
hereto (the "GUARANTORS"), and Warburg Dillon Read LLC, NationsBanc Xxxxxxxxxx
Securities LLC, Bear, Xxxxxxx & Co. Inc., and First Union Capital Markets (each
an "INITIAL PURCHASER" and collectively, the "INITIAL PURCHASERS").
The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers to purchase $125,000,000 aggregate
principal amount of the Company's Notes (as defined herein) under the Purchase
Agreement (as defined herein). The Notes will be guaranteed on an unsecured
senior subordinated basis by the Guarantors and will be issued pursuant to the
Indenture (as defined herein).
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
ACTION: See Section 7(c).
ADVICE: See Section 5(c).
AFFILIATED ACCREDITED INVESTOR: A natural person who is a director or
executive officer of the Company that at the time has an individual net worth or
joint net worth with his or her spouse that exceeds $1,000,000 or had individual
income in excess of $200,000 in each of the two most recent years or joint
income with his or her spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level in the current
year.
AGREEMENT: See the introductory paragraph to this Agreement.
APPLICABLE PERIOD: See Section 2(b).
COMPANY: See the introductory paragraph to this Agreement.
CONTROLLING PERSON: See Section 7.
EFFECTIVENESS DATE: See Section 2(a).
EFFECTIVENESS PERIOD: See Section 3(a).
EQUUS SECURITIES: Certain securities of the Company issued to Equus II
Incorporated that the Company has granted certain registration rights as set
forth in the Stock Registration Agreement dated April 10, 1989 between the
Company and Equus II Incorporated.
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EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
EXCHANGE OFFER: See Section 2(a).
EXCHANGE OFFER REGISTRATION STATEMENT: See Section 2(a).
EXCHANGE SECURITIES: See Section 2(a).
EXPIRATION DATE: See Section 2(a).
FILING DATE: The date that is 60 days after the Issue Date.
GUARANTORS: See the introductory paragraph to this Agreement.
HOLDER: Any record holder of Registrable Securities.
INDEMNIFIED PERSONS: See Section 7(a).
INDENTURE: The Indenture, dated as of May 5, 1999, between the Company,
the Guarantors party thereto and Xxxxxx Trust Company of New York, as Trustee,
pursuant to which the Notes are being issued as contemplated by the terms of the
Purchase Agreement, as amended or supplemented from time to time in accordance
with the terms thereof.
INITIAL PURCHASERS: See the introductory paragraph to this Agreement.
INITIAL SHELF REGISTRATION STATEMENT: See Section 3(a).
INSPECTORS: See Section 5(o).
ISSUE DATE: The date that the Notes are issued pursuant to the
Indenture.
LOSSES: See Section 7(a).
NASD: See Section 5(t).
NOTES: The 9 1/4% Senior Subordinated Notes due 2009 to be issued by
the Company pursuant to the Indenture on the date hereof, including the related
guarantees by the Guarantors.
PARTICIPATING BROKER-DEALER: See Section 2(b).
PERSON: An individual, corporation, limited or general partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
PRIVATE EXCHANGE: See Section 2(b).
PRIVATE EXCHANGE NOTES: See Section 2(b).
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PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
PURCHASE AGREEMENT: The Notes Purchase Agreement dated as of
April 30, 1999 among the Company, the Guarantors and the Initial Purchasers.
REASONABLE BEST EFFORTS: When used herein as the applicable standard of
conduct of the Company or the Guarantors to keep the Exchange Offer Registration
Statement or any Shelf Registration Statement effective during a defined period,
it shall not be deemed to require the Company or the Guarantors to forego or
delay the taking of any action, including acquisition or divestiture of
businesses or assets, that any of them believe in good faith and for valid
business reasons (other than avoidance of their obligations hereunder) to be in
the best interests of the Company and the Guarantors.
RECORDS: See Section 5(o).
REGISTRABLE SECURITIES: The Notes upon original issuance thereof and at
all times subsequent thereto, each Exchange Security as to which Section
2(c)(iii) hereof is applicable upon original issuance and at all times
subsequent thereto, any Transfer Restricted Securities and any Private Exchange
Notes upon original issuance and at all times subsequent thereto, until in the
case of any such Notes, Exchange Securities, Transfer Restricted Securities and
Private Exchange Notes, as the case may be, (i) a Registration Statement
covering such Notes, Exchange Securities, Transfer Restricted Securities or
Private Exchange Notes has been declared effective by the SEC and such Notes,
Exchange Securities, Transfer Restricted Securities or Private Exchange Notes,
as the case may be, have been disposed of in accordance with such effective
Registration Statement, (ii) such Notes, Exchange Securities, Transfer
Restricted Securities or Private Exchange Notes, as the case may be, have been
sold in compliance with Rule 144 or are salable pursuant to Rule 144(k), (iii)
such Notes have been exchanged for Exchange Securities pursuant to the Exchange
Offer and Section 2(c)(iii) is not applicable thereto, or (iv) such Notes,
Exchange Securities, Transfer Restricted Securities or Private Exchange Notes,
as the case may be, cease to be outstanding.
REGISTRATION DEFAULT: See Section 4.
REGISTRATION DEFAULT DATE: See Section 4.
REGISTRATION STATEMENT: Any registration statement of the Company,
including, but not limited to, the Exchange Offer Registration Statement, that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all
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exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
RULE 144: Rule 144 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
RULE 144A: Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.
RULE 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
SHELF NOTICE: See Section 2(c).
SHELF REGISTRATION STATEMENT: See Section 3(b).
SHELF REGISTRATION EVENT: See Section 2(c).
SPECIAL INTEREST: See Section 4.
SPECIAL INTEREST PAYMENT DATE: With respect to the Notes, each
interest payment date as provided in the Indenture.
SUBSEQUENT SHELF REGISTRATION STATEMENT: See Section 3(b).
SUBSIDIARY GUARANTORS: See Section 10(d).
TIA: The Trust Indenture Act of 1939, as amended, as in effect on the
date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note or Exchange Security until
(i) the date on which such Note has been exchanged by a person other than a
broker-dealer for an Exchange Security in the Exchange Offer, (ii) following the
exchange by a broker-dealer in the Exchange Offer of a Note for an Exchange
Security, the date on which such Exchange Security is sold to a purchaser who
receives from such broker-dealer on or prior to the date of such sale a copy of
the Prospectus, (iii) the date on which such Note has been effectively
registered under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iv) the date on which such Note is distributed to the
public pursuant to Rule 144 under the Act.
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TRUSTEE: The trustee under the Indenture and, if applicable, the
trustee under any indenture governing the Exchange Securities and Private
Exchange Notes (if any).
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. EXCHANGE OFFER
(a) The Company and the Guarantors agree to file with the SEC on or
before the Filing Date, an offer to exchange (each, an "EXCHANGE OFFER") any and
all of the Registrable Securities (other than Private Exchange Notes, if any)
for a like aggregate principal amount of 9 1/4% Senior Subordinated Notes due
2009 of the Company (guaranteed by the Guarantors) that are identical to the
Notes (the "EXCHANGE SECURITIES") (and that are entitled to the benefits of a
trust indenture that is identical to the Indenture (other than such changes as
are necessary to comply with any requirements of the SEC to effect or maintain
the qualification of such trust indenture under the TIA) and that has been
qualified under the TIA), except that the Exchange Securities (and each
Guarantor's guarantee thereof) shall have been registered pursuant to an
effective Registration Statement under the Securities Act and shall contain no
restrictive legend thereon. The Exchange Offer will be registered under the
Securities Act on the appropriate form (an "EXCHANGE OFFER REGISTRATION
STATEMENT") and will comply with all applicable tender offer rules and
regulations under the Exchange Act and other applicable law. The Company and the
Guarantors agree to use their reasonable best efforts (i) to cause the Exchange
Offer Registration Statement to become effective on or prior to the 135th day
after the Issue Date (such date, the "EFFECTIVENESS DATE"); (ii) unless
prohibited by the SEC, to commence the Exchange Offer with respect to (A) the
Notes and (B) all Transfer Restricted Securities and to issue Exchange
Securities on or prior to 45 days after the date that the Exchange Offer
Registration Statement is declared effective by the SEC (or longer, if required
by applicable law) (the last day of any such period, an "EXPIRATION DATE") and
(iii) to exchange Exchange Securities for all Registrable Securities validly
tendered and not withdrawn pursuant to the Exchange Offer on or prior to the
fifth day following the Expiration Date.
Each Holder that participates in the Exchange Offer will be required to
represent to the Company in writing (which may be contained in the applicable
letter of transmittal) that (i) any Exchange Notes to be received by it will be
acquired in the ordinary course of its business, (ii) such Holder will have no
arrangement or understanding with any Person to participate in the distribution
of the Exchange Notes in violation of the provisions of the Securities Act,
(iii) that such Holder is not an affiliate of the Company within the meaning of
the Securities Act, (iv) if such Holder is not a broker-dealer, that it is not
engaged in, and does not intend to engage in, a distribution (within the meaning
of the Securities Act) of Exchange Notes and (v) if such Holder is a
broker-dealer that will receive Exchange Notes for its own account in exchange
for Notes that were acquired as a result of market-making or other trading
activities, that it will deliver a prospectus in connection with any resale of
such Exchange Notes.
Upon consummation of an Exchange Offer in accordance with this Section
2, the provisions of this Agreement shall continue to apply, MUTATIS MUTANDIS,
solely with respect to Registrable Securities that are Private Exchange Notes,
Exchange Securities to which Section 2(c)(iii) is applicable and Exchange
Securities held by Participating Broker-Dealers, and
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the Company shall have no further obligation to register those Registrable
Securities subject to such a valid Exchange Offer (other than Private
Exchange Notes and other than Exchange Securities as to which Section
2(c)(iii) hereof applies) pursuant to Section 3 of this Agreement. No
securities other than the Exchange Securities shall be included in any
Exchange Offer Registration Statement.
(b) To the extent required by applicable law or SEC policy, the Company
and the Guarantors shall include within the Prospectus contained in each
Exchange Offer Registration Statement a section entitled "Plan of Distribution"
reasonably acceptable to the Holders, which shall contain a summary statement of
the positions taken or policies made by the Staff of the SEC (and publicly
disseminated) with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of Exchange Securities received by such broker-dealer in the
Exchange Offer (a "PARTICIPATING BROKER-DEALER"). Subject to the next paragraph,
such "Plan of Distribution" section shall also allow the use of the Prospectus
by all persons subject to the prospectus delivery requirements of the Securities
Act, including all Participating Broker-Dealers, and include a statement
describing the means by which Participating Broker-Dealers may resell the
Exchange Securities.
The Company and the Guarantors shall use their reasonable best efforts
to keep each Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such Prospectus
to be lawfully delivered by all persons subject to the prospectus delivery
requirements of the Securities Act for at least 180 days following commencement
of the Exchange Offer under such Registration Statement (or such shorter time as
such persons must comply with such requirements in order to resell the Exchange
Securities) (each, an "APPLICABLE PERIOD").
If, prior to consummation of an Exchange Offer, any Holder holds any
Notes acquired by it and having, or which are reasonably likely to be determined
to have, the status of an unsold allotment in the initial distribution or any
Holder is not entitled to participate in the Registered Exchange Offer, the
Company upon the request of such Holder shall, simultaneously with the delivery
of the Exchange Securities in such Exchange Offer, issue and deliver to such
Holder, in exchange (each, a "PRIVATE EXCHANGE") for the Notes held by such
Holder, a like principal amount of debt securities of the Company (guaranteed by
the Guarantors) that are identical to the Exchange Securities (the "PRIVATE
EXCHANGE NOTES") (and which are issued pursuant to the same indenture as the
Exchange Securities) (except for the placement of a restrictive legend on such
Private Exchange Notes). The Private Exchange Notes shall bear the same CUSIP
number as the Exchange Securities. Interest on the Exchange Securities and
Private Exchange Notes will accrue from the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor or, if no
interest has been paid on the Notes, from the Closing Date.
The indenture under which the Exchange Securities or the Private
Exchange Notes will be issued shall provide that the holders of any of the
Exchange Securities and the Private Exchange Notes will vote and consent
together on all matters to which such holders are entitled to vote or consent as
one class and that none of the holders of the Exchange Securities and the
Private Exchange Notes will have the right to vote or consent as a separate
class on any matter.
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(c) If, (i) the Company and the Guarantors are not required to file the
Exchange Offer Registration Statement because the Exchange Offer is not
permitted by applicable law or SEC policy or (ii) any holder of Transfer
Restricted Securities (other than an Affiliated Accredited Investor) notifies
the Company that (A) it is prohibited by law or SEC policy from participating in
the Exchange Offer or (B) it may not resell the Exchange Securities acquired by
it in the Exchange Offer to the public without delivering a prospectus and the
Prospectus is not appropriate or available for such resales or (c) it is a
broker-dealer and holds Notes acquired directly from the Company or an affiliate
of the Company; or (iii) in the case of any Holder that participates in an
Exchange Offer, the Company receives within 10 business days after the
consummation of the Exchange Offer an opinion of counsel addressed to such
Holder to the effect that such Holder did not receive Exchange Securities on the
date of the exchange that may be sold to the public without delivering a
prospectus and that the Prospectus contained in the Exchange Offer Registration
Statement is not legally available for such resales by such Holder (the
occurrence of any such event, a "SHELF REGISTRATION EVENT"), then, in the case
of each of clauses (i), (ii) and (iii) of this sentence, the Company and the
Guarantors shall promptly deliver to the Holders and the Trustee notice thereof
(the "SHELF NOTICE") and shall thereafter file an Initial Shelf Registration
Statement pursuant to Section 3 of this Agreement.
3. SHELF REGISTRATION
If, at any time, Shelf Notice is delivered as contemplated by Section
2(c) hereof then:
(a) The Company and the Guarantors shall promptly prepare and file with
the SEC a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Registrable Securities not
subject to a valid Exchange Offer (each, an "INITIAL SHELF REGISTRATION
Statement"). The Company and the Guarantors shall use their reasonable best
efforts to file with the SEC an Initial Shelf Registration Statement no later
than 45 days after receipt of the Shelf Notice. The Initial Shelf Registration
Statement shall be on Form S-3 or another appropriate form if available,
permitting registration of such Registrable Securities for resale by such
holders in the manner designated by them (including, without limitation, in one
or more underwritten offerings). Except for the Equus Securities that the
Company is required to include, the Company and the Guarantors shall not permit
any securities other than the Registrable Securities to be included in any
Initial Shelf Registration Statement or any Subsequent Shelf Registration
Statement. The Company and the Guarantors shall use their reasonable best
efforts to cause each Initial Shelf Registration Statement to be declared
effective under the Securities Act as promptly as possible no later than 120
days after the occurrence of the Shelf Registration Event, and to keep such
Initial Shelf Registration Statement continuously effective under the Securities
Act until the date which is 24 months from the Issue Date, or such shorter
period ending when (i) all Registrable Securities covered by such Initial Shelf
Registration Statement have been sold in the manner set forth and as
contemplated in such Initial Shelf Registration Statement or (ii) a Subsequent
Shelf Registration Statement covering all of the Registrable Securities has been
declared effective under the Securities Act (such 24 month or shorter period,
the "EFFECTIVENESS PERIOD").
(b) If any Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because of the sale of all of the
securities registered thereunder), the Company and the
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Guarantors shall use their reasonable best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any
event the Company and the Guarantors shall use their reasonable best efforts
to amend such Initial Shelf Registration Statement within 30 days of such
cessation of effectiveness in a manner expected to obtain the withdrawal of
the order suspending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the Registrable
Securities (each, a "SUBSEQUENT SHELF REGISTRATION STATEMENT"). If a
Subsequent Shelf Registration Statement is filed, the Company and the
Guarantors shall use their reasonable best efforts to cause the Subsequent
Shelf Registration Statement to be declared effective as soon as practicable
after such filing and to keep such Registration Statement continuously
effective until the end of the Effectiveness Period relating thereto. As used
herein the term "SHELF REGISTRATION STATEMENT" means the Initial Shelf
Registration Statement and any Subsequent Shelf Registration Statement.
(c) As set forth in Section 5 hereof, the Company and the Guarantors
shall promptly supplement and amend any Shelf Registration Statement if required
by the rules, regulations or instructions applicable to the registration form
used for such Shelf Registration Statement, if required by the Securities Act,
or if reasonably requested by the Holders of a majority in aggregate principal
amount of the Registrable Securities covered by such Registration Statement or
by any underwriter of such Registrable Securities.
(d) No holder of Registrable Securities may include any of its
Registrable Securities in any Shelf Registration Statement, and will not be
entitled to Special Interest under Section 4, unless such Holder furnishes to
the Company in writing within 20 business days after receipt of a request
therefor, such information as regarding such Holder required by the Securities
Act to be included in any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. Each Holder of Registrable Securities
as to which a Shelf Registrable Statement is being effected, by its
participation in the Shelf Registration Statement, shall be deemed to agree to
furnish the Company all information required to be described in order to make
the information previously furnished to the Company by such Holder not
materially misleading.
4. SPECIAL INTEREST
If (i) the Company and the Guarantors fail to file within 60 days, or
cause to become effective within 135 days, the Exchange Offer Registration
Statement or (ii) the Company and the Guarantors are obligated to file the Shelf
Registration Statement and such Shelf Registration Statement is not filed within
45 days, or declared effective within 120 days of the Shelf Notice or (iii) the
Company and the Guarantors fail to consummate the Exchange Offer within 45 days
of the Effectiveness Date or (iv) the Shelf Registration Statement or the
Exchange Offer Registration Statement is declared effective but thereafter
ceases to be effective or usable in connection with resales of Registrable
Securities during the periods required by this Agreement for a period in excess
of 30 days (each such event referred to in clauses (i) through (iv), a
"REGISTRATION DEFAULT" and the date of such event, the "REGISTRATION DEFAULT
DATE"), the Company and the Guarantors hereby agree to pay interest ("SPECIAL
INTEREST") to each Holder of Registrable Securities (in the case of a
Registration Default described in clause (i) or (iii) above) or to each Holder
of Registrable Securities the resale of which is covered or intended to be
required by this Agreement to be covered by such Registration Statement (in the
case of a Registration Default described in clause (ii) or (iv) above) with
respect to the first 90-day period
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(or portion thereof) commencing on the Registration Default Date, in an
amount equal to 0.5% per annum (in addition to the stated interest on the
Notes) while the Registration Default continues. The amount of the Special
Interest shall increase by an additional 0.5% per annum during each
additional 90-day period (or a portion thereof) up to a maximum amount of
Special Interest of 1.5% per annum. All accrued Special Interest shall be
paid by the Company and the Guarantors on each Special Interest Payment Date
to the Holders in the same manner that regular interest on the Notes is paid
pursuant to the Indenture. The accrual of Special Interest with respect to
such Registrable Securities will cease on the date that the Registration
Default is cured relating to such Registrable Securities.
The amount of Special Interest will be determined by multiplying the
applicable Special Interest rate by the principal amount of such Registrable
Securities, multiplied by a fraction, the numerator of which is the number of
days such Special Interest rate was applicable during such period (determined on
the basis of a 360-day year comprised of twelve 30-day months), and the
denominator of which is 360.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any such Registrable
Security at the time such security ceases to be a Registrable Security shall
survive until such time as all such obligations with respect to such Registrable
Security shall have been satisfied in full.
The parties hereto agree that the Special Interest provided in this
Section 4 constitutes a reasonable estimate of the damages that may be incurred
by Holders by reason of the failure of the Exchange Offer Registration Statement
or Shelf Registration Statement to be filed, declared effective or to remain
effective, as the case may be.
5. REGISTRATION PROCEDURES
In connection with the registration of any Registrable Securities
pursuant to Sections 2 or 3, the Company and the Guarantors shall use their
reasonable best efforts to effect such registrations to permit the sale of such
Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company and the Guarantors shall:
(a) prepare and file with the SEC on or before the date specified in
this Agreement, a Registration Statement or Registration Statements as
prescribed by Section 2 or 3, and use its reasonable best efforts to cause
each such Registration Statement to become effective and remain effective as
provided herein; PROVIDED, HOWEVER, that, if (1) such filing is pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period relating thereto, before filing any
Registration Statement or Prospectus or any amendments or supplements
thereto, the Company and the Guarantors shall furnish to and afford the
Initial Purchasers, the Holders of the Registrable Securities and each such
Participating Broker-Dealer, as the case may be, covered by such Registration
Statement, their counsel and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits thereto)
proposed to be filed (in each case at
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least five days prior to such filing); the Company and the Guarantors shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded a
reasonable opportunity to review prior to the filing of such document, if the
Initial Purchasers, the Holders of a majority in aggregate principal amount
of the Registrable Securities covered by such Registration Statement or such
Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriters, if any, shall reasonably object on a timely basis;
(b) use its reasonable best efforts to prepare and file with the SEC
such amendments and post-effective amendments to each Shelf Registration
Statement or Exchange Offer Registration Statement, as the case may be, as may
be necessary to keep such Registration Statement continuously effective for the
Effectiveness Period relating thereto, in the case of a Shelf Registration
Statement, or until the later of the Expiration Date and the Applicable Period
relating thereto (if applicable), in the case of the Exchange Offer Registration
Statement; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to it with respect to
such Registration Statement as so amended or such Prospectus as so supplemented;
(c) if (l) a Shelf Registration Statement is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period relating thereto, notify each of the Initial Purchasers,
each of the selling Holders of Registrable Securities or each such Participating
Broker-Dealer, as the case may be, their counsel and the managing underwriters,
if any, promptly (but in any event within five business days), and confirm such
notice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective
(including in such notice a written statement that any Holder may, upon request,
obtain, without charge, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits); (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose;
(iii) if at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Securities the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 5(n) below cease
to be true and correct; (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Securities
or the Exchange Securities to be sold by any Participating Broker-Dealer for
offer or sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose; (v) of the happening of any event or any
information becoming known that makes any statement made in such Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in such Registration Statement, Prospectus or
documents so that, in the case of such Registration
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Statement, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that such notification
need not specifically identify such event if notification of the occurrence
thereof would, in the reasonable judgment of the Company, involve the
disclosure of confidential non-public information; and (vi) of the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate; PROVIDED, FURTHER, upon complying with
complying with the procedures described above in this Section 5(c) following
the occurrence of an event of the type described in clause (v) of this
Section 5(c), the Company may suspend the use of any Prospectus until such
holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k), or until it is advised in writing (the
"ADVICE") by the Company that the use of the applicable Prospectus may be
resumed, and has received copies of any amendments or supplements thereto.
(d) if (1) a Shelf Registration Statement is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period relating thereto, use its reasonable best efforts to
prevent the issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any of the
Registrable Securities or the Exchange Securities to be sold by any
Participating Broker-Dealer, for sale in any jurisdiction, and, if any such
order is issued, to use its reasonable best efforts to obtain the withdrawal of
any such order at the earliest possible moment;
(e) if a Shelf Registration Statement is filed pursuant to Section 3
and if requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount of the Registrable Securities being sold
in connection with an underwritten offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, or such Holders or their respective counsel
reasonably request to be included therein; and (ii) make all required filings of
such prospectus supplement or such post-effective amendment as soon as
reasonably practicable after the Company has received notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment, PROVIDED that the Company shall not be required to take any action
pursuant to this paragraph (e) that would, in the opinion of counsel to the
Company, violate applicable law or any agreement to which the Company and its
subsidiaries are then subject;
(f) if (1) a Shelf Registration Statement is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period relating thereto, furnish to each Initial Purchaser, each
selling Holder of Registrable Securities and to each such Participating
Broker-Dealer who so requests and upon request to their respective counsel and
each managing underwriter, if any, without charge, one conformed copy of the
Registration Statement or Statements and each post-effective amendment thereto,
including financial statements and
12
schedules, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits;
(g) if (1) a Shelf Registration Statement is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period relating thereto, deliver to each Initial Purchaser, each
selling Holder of Registrable Securities or each such Participating
Broker-Dealer, as the case may be, their counsel, and the underwriters, if any,
without charge, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by all of the Initial Purchasers, each of the selling Holders of
Registrable Securities or each such Participating Broker-Dealer, as the case may
be, and the underwriters or agents, if any, and dealers (if any), in connection
with the offering and sale of the Registrable Securities covered by or the sale
by Participating Broker-Dealers of the Exchange Securities pursuant to such
Prospectus and any amendment or supplement thereto provided such use complies
with all applicable laws and regulations;
(h) prior to any public offering of Registrable Securities or any
delivery of a Prospectus contained in an Exchange Offer Registration Statement
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period relating thereto, use its reasonable best efforts to
register or qualify, and to cooperate with the Initial Purchasers, the selling
Holders of Registrable Securities or each such Participating Broker-Dealer, as
the case may be, the underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as the Initial Purchasers, any selling Holder, Participating
Broker-Dealer, or the managing underwriters reasonably request; PROVIDED,
HOWEVER, that where Exchange Securities held by Participating Broker-Dealers or
Registrable Securities are offered other than through an underwritten offering,
the Company shall cause its counsel to (i) perform Blue Sky investigations and
file registrations and qualifications required to be filed pursuant to this
Section 5(h); (ii) use its reasonable best efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective; and (iii)
do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Securities held by
Participating Broker-Dealers or the Registrable Securities covered by the
applicable Registration Statement; PROVIDED FURTHER that the Company shall not
in any case be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to any taxation in any such
jurisdiction where it is not so subject;
(i) if a Shelf Registration Statement is filed pursuant to Section 3,
cooperate with the selling Holders of Registrable Securities and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which certificates
shall not bear any restrictive legends and shall be in a form eligible for
deposit
13
with The Depository Trust Company; and enable such Registrable Securities to
be in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or Holders may reasonably request;
(j) use its reasonable best efforts to cause the Registrable Securities
covered by any 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 underwriters, if any, to consummate the
disposition of such Registrable Securities, except as may be required solely as
a consequence of the nature of such selling Holder's business, in which case the
Company and the Guarantors will cooperate in all reasonable respects with the
filing of such Registration Statement and the granting of such approvals;
(k) if (1) a Shelf Registration Statement is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period relating thereto, upon the occurrence of any event
contemplated by paragraph 5(c)(v) or 5(c)(vi) above, as promptly as practicable
(but not earlier than such time as the Company otherwise determines it
appropriate, in good faith, to publicly disclose the event or information
requiring preparation and filing of such amendment or supplement) prepare and
(subject to Section 5(a) above) file with the SEC, solely at the expense of the
Company, a supplement or post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder or to the purchasers of the Exchange Securities to whom
such Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(l) unless previously rated, use its reasonable best efforts to cause
the Registrable Securities covered by a Registration Statement or the Exchange
Securities, as the case may be, to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate principal
amount of Registrable Securities covered by such Registration Statement or the
Exchange Securities, as the case may be, or the managing underwriters, if any;
(m) prior to the effective date of the first Registration Statement
relating to the Registrable Securities, (i) provide the Trustee with printed
certificates for the Registrable Securities in a form eligible for deposit with
The Depository Trust Company; and (ii) a CUSIP number for the Registrable
Securities;
(n) in connection with an underwritten offering of Registrable
Securities pursuant to a Shelf Registration Statement, enter into an
underwriting agreement as is customary in underwritten offerings and take all
such other actions as are reasonably requested by the managing underwriters in
order to expedite or facilitate the registration or the disposition of such
Registrable Securities, and in such connection if reasonably requested, (i) make
such representations and warranties to the underwriters, with respect to the
business of the Company and its subsidiaries and the Registration Statement,
Prospectus and documents, if any,
14
incorporated or deemed to be incorporated by reference therein, in each case,
as are customarily made by issuers to underwriters in underwritten offerings,
and confirm the same if and when reasonably requested; (ii) use its
reasonable best efforts to obtain opinions of counsel to the Company and
updates thereof in form and substance reasonably satisfactory to the managing
underwriters, addressed to the underwriters covering the matters customarily
covered in opinions requested in underwritten offerings and such other
matters as may be reasonably requested by underwriters; (iii) use its
reasonable best efforts to obtain "cold comfort" letters and updates thereof
in form and substance reasonably satisfactory to the managing underwriters
from the independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company or any
of its subsidiaries for which financial statements and financial data are, or
are required to be, included in the Registration Statement), addressed to
each of the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as reasonably
requested by underwriters; and (iv) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures
comparable to those set forth in Section 7 hereof (or such other provisions
and procedures reasonably acceptable to the Company and the Holders of a
majority in aggregate principal amount of Registrable Securities covered by
such Registration Statement and the managing underwriters or agents) with
respect to all parties to be indemnified pursuant to said Section, all of
which shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder;
(o) if (1) a Shelf Registration Statement is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period relating thereto, make available for inspection by any
selling Holder of such Registrable Securities being sold pursuant to such Shelf
Registration Statement, or each such Participating Broker-Dealer, as the case
may be, any underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney, accountant or other agent retained by any
such selling holder or each such Participating Broker-Dealer, as the case may
be, or underwriter (collectively, the "INSPECTORS"), at the offices where
normally kept, during reasonable business hours, all relevant financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries (collectively, the "RECORDS") as shall be necessary to enable
them to exercise any applicable due diligence responsibilities, and cause the
officers, directors and employees of the Company and its subsidiaries to supply
all information in each case requested by any such Inspector in connection with
such Registration Statement; however, Records which the Company determines, in
good faith, to be confidential and which the Company notifies the Inspectors in
writing are confidential shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement; (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction; PROVIDED that to the extent practicable the Company shall be
provided the right to challenge the subpoena or order before providing such
records; or (iii) the information in such Records has been made otherwise
generally available to the public;
(p) provide for an indenture trustee for the Registrable Securities or
the Exchange Securities, as the case may be, and cause the Indenture or the
trust indenture provided for in
15
Section 2(a), as the case may be, to be qualified under the TIA not later
than the effective date of the Exchange Offer or the first Registration
Statement relating to the Registrable Securities; and in connection
therewith, cooperate with the trustee under any such indenture and the
holders of the Registrable Securities, to effect such changes to such
indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use its reasonable
best efforts to cause such trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required
to be filed with the SEC to enable such indenture to be so qualified in a
timely manner;
(q) comply with all applicable rules and regulations of the SEC to the
extent and so long as they are applicable to any Exchange Offer Registration
Statement or Shelf Registration Statement and make generally available to its
securityholders earning statements satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder (or any similar rule promulgated
under the Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter of the Company in
which Registrable Securities are sold to underwriters in a firm commitment or
best efforts underwritten offering; and (ii) if not sold to underwriters in such
an offering, commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of a Registration Statement, which
statements shall cover said 12-month periods;
(r) upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company in customary form, relating to the
Exchange Securities or the Private Exchange Notes, as the case may be, addressed
to the Trustee for the benefit of all Holders of Registrable Securities
participating in the Exchange Offer or the Private Exchange, as the case may be,
and which includes an opinion that (i) the Company has duly authorized, executed
and delivered the Exchange Securities and Private Exchange Notes and the related
indenture; (ii) each of the Exchange Securities or the Private Exchange Notes,
as the case may be, and related indenture constitute legal, valid and binding
obligations of the Company and the Guarantors, enforceable against each of the
Company and the Guarantors in accordance with their respective terms (with
customary exceptions); and (iii) the Guarantors have duly authorized, executed
and delivered the guarantees endorsed on the Exchange Securities and the Private
Exchange Notes and the related indentures;
(s) if an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Securities by Holders to the Company (or to
such other Person as directed by the Company) in exchange for the Exchange
Securities or the Private Exchange Notes, as the case may be, xxxx, or caused to
be marked, on such Registrable Securities that such Registrable Securities are
being canceled in exchange for the Exchange Securities or the Private Exchange
Notes, as the case may be; in no event shall such Registrable Securities be
marked as paid or otherwise satisfied;
(t) cooperate with each seller of Registrable Securities covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD"); and
16
(u) use its reasonable best efforts to take all other steps necessary
to effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
as required by the Securities Act to be included in the applicable Registration
Statement. The Company may exclude from such registration the Registrable
Securities of any seller or Participating Broker-Dealer who fails to furnish
such information within a reasonable time after receiving such request.
Each Holder of Registrable Securities and each Participating
Broker-Dealer agrees by acquisition of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 5(c)(ii), 5(c)(iv), or 5(c)(vi), such Holder
will forthwith discontinue disposition of such Registrable Securities covered by
such Registration Statement or Prospectus or Exchange Securities to be sold by
such Participating Broker-Dealer, as the case may be, until such holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 5(k), or until it has received the Advice by the Company that the use of
the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto.
6. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
any Exchange Offer Registration Statement or Shelf Registration Statement is
filed or becomes effective, including, without limitation, (i) all registration
and filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of counsel) in
such jurisdictions (x) where the holders of Registrable Securities are located,
in the case of the Exchange Securities, or (y) as provided in Section 5(h), in
the case of Registrable Securities to be sold in a public offering or Exchange
Securities to be sold by a Participating Broker-Dealer during the Applicable
Period)); (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities or Exchange Securities in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriters, if any, or, in respect of Registrable Securities or Exchange
Securities to be sold by any Participating Broker-Dealer during the Applicable
Period, by the Holders of a majority in aggregate principal amount of the
Registrable Securities included in any Registration Statement or of such
Exchange Securities, as the case may be); (iii) messenger, telephone and
delivery expenses incurred by the Company; (iv) fees and disbursements of
counsel for the Company and (subject to the provisions of Section 6(b))
reasonable fees and disbursements of special counsel for the sellers of
Registrable Securities; (v) fees and disbursements of all independent certified
public accountants referred to in
17
Section 5(n)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such
performance); (vi) the reasonable fees and expenses of any "qualified
independent underwriter" or other independent appraiser participating in an
offering pursuant to Rule 2710 of the Conduct Rules of the NASD; (vii) rating
agency fees; (viii) Securities Act liability insurance, if the Company
desires such insurance; (ix) fees and expenses of all other Persons retained
by the Company; (x) internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees of the
Company performing legal or accounting duties); (xi) the expense of any
annual audit of the Company; (xii) the fees and expenses incurred by the
Company in connection with the listing of the Registrable Securities on any
securities exchange; and (xiii) the expenses relating to printing, word
processing and distributing all Registration Statements, underwriting
agreements, securities sales agreements, indentures and any other documents
necessary in order to comply with this Agreement. Anything contained herein
to the contrary notwithstanding, the Company shall not have any obligation
whatsoever in respect of any underwriters' discounts or commissions,
brokerage commissions, dealers' selling concessions or transfer taxes
incurred in connection with the underwriting, offering or sale of Registrable
Securities or Exchange Securities by or on behalf of any Person.
(b) In connection with any Shelf Registration Statement or Exchange
Offer Registration Statement hereunder, the Company shall reimburse the Initial
Purchasers and Holders of the Registrable Securities being registered in such
registration for the reasonable fees and disbursements of not more than one
counsel (in addition to appropriate local counsel) chosen by the Holders of a
majority in aggregate principal amount of the Registrable Securities to be
included in such Registration Statement.
7. INDEMNIFICATION
(a) The Company, and each of the Guarantors, on a joint and several
basis, agrees to indemnify and hold harmless (i) each Initial Purchaser, each
Holder of Registrable Securities and each Participating Broker Dealer, (ii) each
person, if any, who controls any of the foregoing within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act (any of the
persons referred to in this clause (ii) being hereinafter referred to as a
"CONTROLLING PERSON") and (iii) its agents, employees, officers and directors
and the agents, employees, officers and directors of any such controlling person
(collectively, the "INDEMNIFIED PERSONS") from and against any and all losses,
liabilities, claims, damages and expenses whatsoever (including but not limited
to reasonable attorneys' fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation) (collectively, "LOSSES") to which they
or any of them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Losses (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 the Registration Statement or Prospectus, or in any amendment
thereof 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; PROVIDED, HOWEVER, that the Company
and the Guarantors will not be liable in any such case to the extent, but only
to the extent, that any such Loss arises out of or is based upon any such untrue
statement
18
or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Indemnified Person relating to such
Indemnified Person expressly for use therein; and PROVIDED, FURTHER, that
with respect to any such untrue statement in or omission from any related
preliminary prospectus, the indemnification provided in this Section 7(a)
shall not inure to the benefit of any Indemnified Person from whom the
Indemnified Person asserting any Loss received Notes or Exchange Securities
to the extent that the Loss of or with respect to such Indemnified Person
results from the fact that both (A) a copy of the final prospectus was not
sent or given to such Indemnified Person at or prior to the written
confirmation of the sale of such Notes, or Exchange Securities to such
Indemnified Person and (B) the untrue statement in or omission from the
related preliminary prospectus was corrected in the final prospectus unless,
in either case, such failure to deliver the final prospectus was a result of
the non-compliance by the Company with Section 5(g). This indemnity agreement
will be in addition to any liability that the Company and the Guarantors may
otherwise have, including, but not limited to, liability under this Agreement.
(b) In connection with any Registration Statement pursuant to which a
Holder of Registrable Securities offers or sells Registrable Securities, such
Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company, the Guarantors, and each person controlling the Company or the
Guarantors within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, and each of their respective agents, employees,
officers and directors and the agents, employees, officers and directors of such
controlling person from and against any Losses to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise insofar
as such Losses (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
the Registration Statement or Prospectus, or in any amendment thereof 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, in each case to the extent, but only
to the extent, that any such Loss arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information relating to
such Holder furnished to the Company by or on behalf of such Holder expressly
for use therein. This indemnity agreement will be in addition to any liability
that such Holder may otherwise have, including, but not limited to, liability
under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
7(a) or 7(b) above of notice of the commencement of any action, suit or
proceeding (collectively, an "action"), such indemnified party shall, if a claim
in respect thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to be sought in
writing of the commencement of such action (but the failure so to notify an
indemnifying party shall not relieve such indemnifying party from any liability
that it may have under this Section 7 except to the extent that it has been
prejudiced in any material respect by such failure or from any liability which
it may otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement of
such action, the indemnifying party will be entitled to participate in such
action, and to the extent it may elect by written notice delivered to the
indemnified party
19
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense of such action with counsel satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
action, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
the named parties to such action (including any impleaded parties) include
such indemnified party and the indemnifying parties (or such indemnifying
parties have assumed the defense of such action), and such indemnified party
or parties shall have reasonably concluded that there may be defenses
available to it or them that are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such reasonable fees and expenses of counsel shall be borne by the
indemnifying parties. In no event shall the indemnifying party be liable for
the fees and expenses of more than one counsel (together with appropriate
local counsel) at any time for all indemnified parties in connection with any
one action or separate but substantially similar or related actions arising
in the same jurisdiction out of the same general allegations or
circumstances. An indemnifying party shall not be liable for any settlement
of any claim or action effected without its written consent; PROVIDED,
HOWEVER, that such consent was not unreasonably withheld. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by paragraph (a) or (b) of this Section
7, then the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in Section 7 of this Agreement is for any reason
held to be unavailable from the indemnifying party, or is insufficient to hold
harmless a party indemnified under Section 7 of this Agreement, the indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such aggregate Losses of the nature contemplated by such
indemnification provision (but after deducting in the case of aggregate Losses
suffered by the indemnifying party, any contribution received by the
indemnifying party from persons other than the indemnified party who may also be
liable for contribution, including persons who control the indemnified party
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act) to which the Company, the Guarantors and the Indemnified Persons
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party, on the other hand, in connection
20
with the statements or omissions that resulted in such losses, liabilities,
claims damages and expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantors, on the one hand, and a Holder, on the other hand, shall be deemed
to be in the same proportion as (A) the total net proceeding from the
offering and sale (before deducting expenses) received by or on behalf of the
Company and the Guarantors and (B) the total proceeds received by such Holder
with respect to the sale of Notes, Exchange Securities, or Private Exchange
Securities. The relative fault of the Company and the Guarantors, on the one
hand, and the Indemnified Persons, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, the Guarantors
or the Indemnified Persons and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this paragraph (d)
of this Section 7 were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to above. Notwithstanding the provisions of paragraph (d) of this
Section 7, (i) in no case shall an Indemnified Person be required to contribute
any amount in excess of the amount by which the total received by such
Indemnified Person with respect to its sale of its Registrable Securities
exceeds the amount of any damages that such Indemnified Person has otherwise
been required to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d) of this
Section 7, each person, if any, who controls an Indemnified Person within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act shall have the same rights to contribution as such Indemnified Person,
and each person, if any, who controls the Company and the Guarantors within
the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as the Company and
the Guarantors. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action against such party in respect
of which a claim for contribution may be made against another party or
parties under this paragraph 7(d), notify such party or parties from whom
contribution may be sought, but, except to the extent that the indemnifying
party shall be materially prejudiced thereby, the omission to so notify such
party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
paragraph (d) or otherwise; PROVIDED, HOWEVER, that no additional notice
shall be required with respect to any action for which notice has been given
under Section 7 for purposes of indemnification. Anything in this section to
the contrary notwithstanding, no party shall be liable for contribution with
respect to any action or claim settled without its written consent, PROVIDED,
HOWEVER, that such written consent was not unreasonably withheld.
8. RULE 144 AND RULE 144A
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner and, if at any time
the Company is not required to file such
21
reports, it will, upon the request of any Holder of Registrable Securities,
make publicly available other information so long as necessary to permit
sales pursuant to Rule 144 and Rule 144A under the Securities Act. The
Company further covenants that it will take such further action as any Holder
of Registrable Securities may reasonably request, to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 and Rule 144A under the Securities Act.
9. UNDERWRITTEN REGISTRATIONS
If any of the Registrable Securities covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will manage the offering will be
selected by the Holders of a majority in aggregate principal amount of such
Registrable Securities included in such offering and reasonably acceptable to
the Company.
No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements (however
the terms applicable to each Holder shall be identical in all respects) and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements applicable to all Holders.
10. MISCELLANEOUS
(a) REMEDIES. In the event of a breach by the Company or any Guarantor
of any of their obligations under this Agreement, each Holder of Registrable
Securities, in addition to being entitled to exercise all rights provided in
this Agreement, in the Indenture, in the Purchase Agreement or granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and the Guarantors agree that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by them of any of the provisions of this Agreement and hereby further
agree that, in the event of any action for specific performance in respect of
such breach, they shall waive the defense that a remedy at law would be
adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company and the Guarantors have
not, as of the date hereof, entered into and shall not, after the date of this
Agreement, enter into any agreement with respect to any of their securities that
is inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement or otherwise conflicts with the provisions hereof. Except
under the Stock Registration Agreement dated April 10, 1989 between the Company
and Equus II Incorporated, the Company will not have previously entered into any
agreement granting any registration rights with respect to its securities to any
person. The rights granted to the Holders under this Agreement 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 of this
Agreement.
22
(c) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. Without the written
consent of the Holders of a majority in principal amount of outstanding
Registrable Securities, the Company shall not, directly or indirectly, take any
action with respect to the Registrable Securities as a class that would
adversely affect the ability of the Holders of Registrable Securities to include
such Registrable Securities in a registration undertaken pursuant to this
Agreement.
(d) SUBSIDIARY GUARANTORS. So long as any Registrable Securities remain
outstanding, the Company shall cause each of its subsidiaries that becomes a
guarantor of the Notes under the Indenture to execute and deliver a counterpart
to this Agreement which subjects such subsidiary to the provisions of this
agreement as a guarantor (all such subsidiaries, the "SUBSIDIARY GUARANTORS").
Each of the Subsidiary Guarantors agrees to join the Company in all of its
undertakings hereunder to effect the Exchange Offer for the Exchange Securities
(which will be guaranteed by each of the Subsidiary Guarantors with terms
identical to such Subsidiary Guarantors' guaranties of the Notes) and the filing
of any Shelf Registration Statement required hereunder (including, without
limitation, the undertakings in Section 5 hereof).
(e) AMENDMENTS AND WAIVERS. Except as provided in paragraph (d) above,
the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, otherwise than with the prior written consent of the Holders of not less
than a majority in aggregate principal amount of the then outstanding
Registrable Securities as to which the provisions of this Agreement set forth in
Sections 2 or 3 remain applicable. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Securities may be given by Holders of at least a majority
in aggregate principal amount of the Registrable Securities being sold by such
Holders pursuant to such Registration Statement.
(f) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, air courier guaranteeing overnight delivery or telecopier:
(i) if to a Holder of Registrable Securities, 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, at 0000 Xxxxxxxx, Xxxxxxx, Xxxxx
00000, telephone: (000) 000-0000, telecopy: (000) 000-0000), Attention:
Chief Financial Officer.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to an air courier guaranteeing overnight delivery; and
when receipt is acknowledged by the addressee, if telecopied.
23
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.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Registrable Securities.
(h) 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.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
(k) SUBMISSION TO JURISDICTION. The Company and the Guarantors
irrevocably submit to the nonexclusive jurisdiction of any State or Federal
court sitting in New York over any suit, action or proceeding arising out of or
relating to this Agreement. The Company and the Guarantors irrevocably waive, to
the fullest extent permitted by law, any objection they may now or thereafter
have to the laying of venue of any such court and any claim that any such suit,
action or proceeding brought in such a court has been brought in an inconvenient
forum. The Company and the Guarantors agree that a final nonappealable judgment
in any such suit, action or proceeding brought in any such court shall be
conclusive and binding upon each of them and may be enforced in any other courts
to the jurisdiction of which the Company and the Guarantors are or may be
subject, by suit upon such judgment. The Company and the Guarantors hereby
appoint, without power of revocation, CT Corporation System as their agent to
accept and acknowledge on their behalf service of any and all process which may
be served in any suit, action or proceeding arising out of or relating to this
letter.
(l) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(m) ENTIRE AGREEMENT. This Agreement, together with the other Operative
Documents (as defined in the Purchase Agreement), is intended by the parties as
a final expression of their agreement, and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein.
24
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to in this Agreement with respect to the
registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(n) SECURITIES HELD BY THE COMPANY, THE GUARANTORS OR THEIR AFFILIATES.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company, the Guarantors or their affiliates (as such term is defined in Rule 405
under the Securities Act) shall not be deemed to be outstanding for purposes of
determining whether such consent or approval was given by the Holders of such
required percentage.
[SIGNATURE PAGES FOLLOW]
25
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
NCI BUILDING SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
NCI OPERATING CORP.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
NCI HOLDING CORP.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
A&S BUILDING SYSTEMS, L.P.
By: NCI Operating Corp.
a Nevada corporation,
its general partner
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
NCI BUILDING SYSTEMS, L.P.
By: NCI Operating Corp.
a Nevada corporation,
its general partner
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
METAL BUILDING COMPONENTS, L.P.
By: NCI Operating Corp.
a Nevada corporation,
its general partner
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
METAL COATERS OPERATING, L.P.
By: NCI Operating Corp.
a Nevada corporation,
its general partner
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
METAL BUILDING COMPONENTS HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
METAL COATERS HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
METAL COATERS OF CALIFORNIA, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
Accepted and agreed as of the date first above written:
WARBURG DILLON READ LLC NATIONSBANC XXXXXXXXXX SECURITIES LLC
By: /s/ Xxxxx Xxxxx By: /s/ X. X. Xxxxxxxx, Xx.
--------------------------------- ---------------------------------
Name: Xxxxx Xxxxx Name: X. X. Xxxxxxxx, Xx.
Title: Director Title: Managing Director
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Director
BEAR, XXXXXXX & CO. INC. FIRST UNION CAPITAL MARKETS
By: /s/ Xxxx X. Xxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxx
-------------------------------- -------------------------------
Name: Xxxx X. Xxxxxx, Xx. Name: Xxxxxxx X. Xxxx
Title: Managing Director Title: Managing Director
