1
EXHIBIT 4.2
EXECUTION COPY
Exhibit A to
Purchase Agreement
------------------
--------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of November 27, 1996
By and Among
HAWK CORPORATION,
FRICTION PRODUCTS CO.,
HAWK BRAKE, INC.,
XXXXX METAL STAMPINGS, INC.,
XXXXXX, INC.,
X.X. XXXXXXX HOLDINGS, INC.,
XXXXXXX FRICTION PRODUCTS U.K. CORP.,
X.X. XXXXXXX CORP.,
and
XXXXXXXXXX PRODUCTS CORPORATION,
and
XXXXXXXX XXXXXXXX & CO. INCORPORATED,
BT SECURITIES CORPORATION,
and
XxXXXXXX & COMPANY SECURITIES, INC.
as Initial Purchasers
10 1/4% Senior Notes due 2003
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
-----------------
PAGE
----
1. Definitions................................................................................................. 1
2. Exchange Offer.............................................................................................. 5
3. Shelf Registration.......................................................................................... 8
4. Additional Interest......................................................................................... 9
5. Registration Procedures..................................................................................... 11
6. Registration Expenses....................................................................................... 19
7. Indemnification............................................................................................. 19
8. Rules 144 and 144A.......................................................................................... 23
9. Underwritten Registrations.................................................................................. 23
10. Miscellaneous.............................................................................................. 23
(a) No Inconsistent Agreements.................................................................... 23
(b) Adjustments Affecting Registrable Notes....................................................... 24
(c) Amendments and Waivers........................................................................ 24
(d) Notices....................................................................................... 24
(e) Successors and Assigns........................................................................ 25
(f) Counterparts.................................................................................. 25
(g) Headings...................................................................................... 25
(h) Governing Law................................................................................. 25
(i) Severability.................................................................................. 25
(j) Securities Held by the Company or their Affiliates............................................ 26
(k) Third Party Beneficiaries..................................................................... 26
(l) Attorneys' Fees............................................................................... 26
(m) Entire Agreement.............................................................................. 26
Schedule I Subsidiary Guarantors
- i -
3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is dated
as of November 27, 1996, by and among HAWK CORPORATION, a Delaware corporation
(the "COMPANY"), each subsidiary of the Company named on Schedule I hereto (the
"GUARANTORS") and XXXXXXXX XXXXXXXX & CO. INCORPORATED, BT SECURITIES
CORPORATION and XxXXXXXX & COMPANY SECURITIES CORPORATION (the "INITIAL
PURCHASERS"), on the other hand.
This Agreement is entered into in connection with the Purchase
Agreement, dated as of November 22, 1996, among the Company, the Guarantors and
the Initial Purchasers (the "PURCHASE AGREEMENT"), which provides for the sale
by the Company and the Guarantors to the Initial Purchasers of $100,000,000
aggregate principal amount of the Company's 10 1/4% Senior Notes due 2003 (the
"NOTES") which Notes shall be unconditionally guaranteed on a senior unsecured
basis (the "GUARANTEES" and, together with the Notes, the "SECURITIES") by each
domestic subsidiary of the Company on the date hereof (the "ISSUE DATE") and
each domestic subsidiary of the Company (other than Unrestricted Subsidiaries,
as defined in the Purchase Agreement) created or acquired thereafter
(collectively, the "GUARANTORS"). In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company and the Guarantors have agreed to
provide the registration rights set forth in this Agreement for the benefit of
the Initial Purchasers and any subsequent holder or holders of the Notes. The
execution and delivery of this Agreement is a condition to the Initial
Purchasers' obligation to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
Section 1. DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
"ADDITIONAL INTEREST" shall have the meaning set forth in
Section 4 hereof.
"ADVICE" shall have the meaning set forth in Section 5 hereof.
"AGREEMENT" shall have the meaning set forth in the
introductory paragraphs hereto.
"APPLICABLE PERIOD" shall have the meaning set forth in
Section 2 hereof.
"BUSINESS DAY" shall mean a day that is not a Legal Holiday.
"COMPANY" shall have the meaning set forth in the preamble of
this Agreement and shall also include the Company's permitted successors and
assigns.
"COMMISSION" shall mean the Securities and Exchange
Commission.
4
2
"EFFECTIVENESS DATE" shall mean, with respect to any
Registration Statement, the 120th day after the Issue Date.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in
Section 3(a) hereof.
"EVENT DATE" shall have the meaning set forth in Section 4
hereof.
"EXCHANGE ACT" shall mean Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"EXCHANGE GUARANTEE" shall have the meaning set forth in
Section 2(a) hereof.
"EXCHANGE NOTES" shall have the meaning set forth in Section 2
hereof.
"EXCHANGE OFFER" shall have the meaning set forth in Section 2
hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall have the meaning
set forth in Section 2 hereof.
"EXCHANGE SECURITIES" shall have the meaning set forth in
Section 2(a) hereof.
"FILING DATE" shall mean, (A) if no Registration Statement has
been filed by the Company pursuant to this Agreement, the 45th day after the
Issue Date; PROVIDED, HOWEVER, that if a Shelf Notice is given within 10 days of
the Filing Date, then the Filing Date with respect to the Initial Shelf
Registration shall be the 15th calendar day after the date of the giving of such
Shelf Notice; and (B) in each other case (which may be applicable
notwithstanding the consummation of the Exchange Offer), the 45th day after the
delivery of a Shelf Notice.
"HOLDER" shall mean any holder of a Registrable Note or
Registrable Notes.
"INDEMNIFIED PERSON" shall have the meaning set forth in
Section 7(c) hereof.
"INDEMNIFYING PERSON" shall have the meaning set forth in
Section 7(c) hereof.
"INDENTURE" shall mean the Indenture, dated as of November 27,
1996, by and between the Company and Bank One Trust Company, NA, as trustee,
pursuant to which the Notes are being issued, as amended or supplemented from
time to time in accordance with the terms thereof.
"INITIAL PURCHASERS" shall have the meaning set forth in the
preamble hereof.
5
3
"INITIAL SHELF REGISTRATION" shall have the meaning set forth
in Section 3(a) hereof.
"INSPECTORS" shall have the meaning set forth in Section 5(n)
hereof.
"ISSUE DATE" shall mean November 27, 1996, the date of
original issuance of the Notes.
"LEGAL HOLIDAY" shall mean a Saturday, a Sunday or a day on
which banking institutions in New York, New York are required by law, regulation
or executive order to remain closed.
"NASD" shall have the meaning set forth in Section 5(s)
hereof.
"PARTICIPANT" shall have the meaning set forth in Section 7(a)
hereof.
"PARTICIPATING BROKER-DEALER" shall mean any broker-dealer
that is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
of Exchange Notes received by such broker-dealer in the Exchange Offer or any
other person with similar prospectus delivery requirements for use in connection
with any resale of Exchange Notes.
"PERSON" shall mean an individual, trustee, corporation,
partnership, joint stock company, trust, unincorporated association, union,
business association, firm, government or agency or political subdivision
therefor other legal entity.
"PRIVATE EXCHANGE" shall have the meaning set forth in Section
2 hereof.
"PRIVATE EXCHANGE NOTES" shall have the meaning set forth in
Section 2 hereof.
"PROSPECTUS" shall mean the prospectus included in any
Registration Statement (including, without limitation, any prospectus subject to
completion and 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 and any term sheet
filed pursuant to Rule 434 under the Securities Act), as amended or supplemented
by any prospectus supplement, 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" shall have the meaning set forth in the
introductory paragraphs hereof.
"RECORDS" shall have the meaning set forth in Section 5(n)
hereof.
6
4
"REGISTRABLE NOTES" shall mean each Note upon its issuance and
at all times subsequent thereto, each Exchange Note as to which Section 2(c)(iv)
hereof is applicable upon original issuance and at all times subsequent thereto
and each Private Exchange Note upon original issuance thereof and at all times
subsequent thereto, until (i) a Registration Statement (other than, with respect
to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the
Exchange Offer Registration Statement) covering such Note, Exchange Note or
Private Exchange Note has been declared effective by the Commission and such
Note, Exchange Note or such Private Exchange Note, as the case may be, has been
disposed of in accordance with such effective Registration Statement, (ii) such
Note has been exchanged pursuant to the Exchange Offer for an Exchange Note or
Exchange Notes that may be resold without restriction under state and federal
securities laws, or (iii) such Note, Exchange Note or Private Exchange Note, as
the case may be, ceases to be outstanding for purposes of the Indenture.
"REGISTRATION STATEMENT" shall mean any appropriate
registration statement of the Company, including, but not limited to, the
Exchange Offer Registration Statement, filed with the Commission under the
Securities Act, and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"RULE 144" shall mean 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 Commission
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" shall mean 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 Commission.
"RULE 415" shall mean 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 Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"SHELF NOTICE" shall have the meaning set forth in Section 2
hereof.
"SHELF REGISTRATION" shall have the meaning set forth in
Section 3(b) hereof.
7
5
"SUBSEQUENT SHELF REGISTRATION" shall have the meaning set
forth in Section 3(b) hereof.
"TIA" shall mean the Trust Indenture Act of 1939, as amended.
"TRUSTEE" shall mean the trustee under the Indenture and the
trustee (if any) under any indenture governing the Exchange Notes and Private
Exchange Notes.
"UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" shall
mean a registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
Section 2. Exchange Offer
--------------
(a) The Company and the Guarantors shall file with the
Commission, no later than the Filing Date, a Registration Statement (the
"EXCHANGE OFFER REGISTRATION STATEMENT") on an appropriate registration form
with respect to a registered offer (the "EXCHANGE OFFER") to exchange any and
all of the Registrable Notes for a like aggregate principal amount of notes (the
"EXCHANGE NOTES") unconditionally guaranteed on a senior unsecured basis by the
Guarantors (the "EXCHANGE GUARANTEE" and, together with the Exchange Notes, the
"EXCHANGE SECURITIES") of the Company that are identical in all material
respects to the Notes except that the Exchange Notes shall contain no
restrictive legend thereon. The Exchange Offer shall comply with all applicable
tender offer rules and regulations under the Exchange Act and other applicable
law. The Company and the Guarantors shall use their diligent best efforts to (x)
cause the Exchange Offer Registration Statement to be declared effective under
the Securities Act on or before the Effectiveness Date; (y) keep the Exchange
Offer open for at least 20 days (or longer if required by applicable law) after
the date that notice of the Exchange Offer is mailed to Holders; and (z)
consummate the Exchange Offer on or prior to the 150th day following the Issue
Date. For purposes of this Section 2(a) only, if after the Exchange Offer
Registration Statement is initially declared effective by the Commission, the
Exchange Offer or the issuance of the Exchange Notes thereunder is interfered
with by any stop order, injunction or other order or requirement of the
Commission or any other governmental agency or court, the Exchange Offer
Registration Statement shall he deemed not to have become effective for purposes
of this Agreement.
Interest on the Exchange Notes issued pursuant to the
Registered Exchange Offer 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 date of original issue of the
Notes.
Each holder of the Notes who wishes to exchange its Notes for
Exchange Notes in the Exchange Offer will be required to make the following
representations to the Company and the Guarantors, (1) any Exchange Notes to be
received by it will be acquired in the ordinary course of its business, (2) it
has no arrangement with any person to participate in a
8
6
public distribution (within the meaning of the Securities Act) of the Exchange
Notes and (3) it is not an "affiliate," as defined in Rule 405 of the Securities
Act, of the Company or any Guarantor, or if it is such an affiliate, that it
will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable to it.
In addition, each holder who is not a broker-dealer will be
required to represent that it is not engaged in, and does not intend to engage
in, a public distribution of the Exchange Notes. Each holder who is a
broker-deal and who receives Exchange Notes for its own account in exchange will
be required to acknowledge that it will deliver a prospectus in connection with
any resale by it of such Exchange Notes.
Upon consummation of the Exchange Offer in accordance with
this Section 2, the provisions of this Agreement shall continue to apply,
MUTATIS MUTANDIS, solely with respect to Registrable Notes that are Private
Exchange Notes, Exchange Notes as to which Section 2(c)(iv) is applicable and
Exchange Notes held by Participating Broker-Dealers, and the Company shall have
no further obligation to register Registrable Notes (other than Private Exchange
Notes and other than in respect of any Exchange Notes as to which clause
2(c)(iv) hereof applies) pursuant to Section 3 hereof.
No securities other than the Exchange Notes shall be included
in the Exchange Offer Registration Statement.
(b) The Company and the Guarantors shall include within the
Prospectus contained in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," which shall contain a summary statement of the
positions taken or policies made by the staff of the Commission with respect to
the potential "underwriter" status of any Participating Broker-Dealer, whether
such positions or policies have been publicly disseminated by the staff of the
Commission or such positions or policies represent the prevailing views of the
staff of the Commission. Such "Plan of Distribution" section shall also
expressly permit 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 Notes in compliance
with the Securities Act.
The Company and the Guarantors shall use their diligent best
efforts to keep the Exchange Offer Registration Statement effective and to amend
and supplement the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by all Persons subject to the prospectus
delivery requirements of the Securities Act for such period of time as is
necessary to comply with applicable law in connection with any resale of the
Exchange Notes covered thereby; PROVIDED, HOWEVER, that such period shall not
exceed 120 days after such Exchange Offer Registration Statement is declared
effective (or such longer period if extended pursuant to the last paragraph of
Section 5 hereof) (the "APPLICABLE PERIOD").
9
7
If, prior to consummation of the Exchange Offer, any Holder
holds any Notes acquired by it that have, or that are reasonably likely to be
determined to have, the status of an unsold allotment in an initial
distribution, or if any Holder is not entitled to participate in the Exchange
Offer, the Company upon the request of any such Holder shall simultaneously with
the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to
any such Holder, in exchange (the "PRIVATE EXCHANGE") for such Notes held by any
such Holder, a like principal amount of notes (the "PRIVATE EXCHANGE NOTES") of
the Company that are identical in all material respects to the Exchange Notes.
The Private Exchange Notes shall be issued pursuant to the same indenture as the
Exchange Notes and bear the same CUSIP number as the Exchange Notes.
In connection with the Exchange Offer, the Company and the
Guarantors shall:
(1) mail to each Holder entitled to participate in the
Exchange Offer a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(2) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of
New York;
(3) permit Holders to withdraw tendered Notes at any time
prior to the close of business, New York time, on the last
Business Day on which the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all
applicable laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer
and the Private Exchange, if any, the Company and the Guarantors shall:
(1) accept for exchange all Notes tendered and not validly
withdrawn pursuant to the Exchange Offer and the Private
Exchange;
(2) deliver to the Trustee for cancellation all Notes so
accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly
to each Holder of Notes, Exchange Notes or Private Exchange
Notes, as the case may be, equal in principal amount to the
Notes of such Holder so accepted for exchange.
The Exchange Offer and the Private Exchange shall not be
subject to any conditions, other than that (i) the Exchange Offer or Private
Exchange, as the case may be, does not violate applicable law or any applicable
interpretation of the staff of the Commission,
10
8
(ii) no action or proceeding shall have been instituted or threatened in any
court or by any governmental agency which might materially impair the ability of
the Company and the Guarantors to proceed with the Exchange Offer or the Private
Exchange, and no material adverse development shall have occurred in any
existing action or proceeding with respect to the Company and (iii) all
governmental approvals shall have been obtained, which approvals the Company
deems necessary for the consummation of the Exchange Offer or Private Exchange.
The Exchange Notes and the Private Exchange Notes shall be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture (in either case, with such changes as are necessary to
comply with any requirements of the Commission to effect or maintain the
qualification thereof under the TIA) and which, in either case, has been
qualified under the TIA and shall provide that the Exchange Notes shall not be
subject to the transfer restrictions set forth in the Indenture. The Indenture
or such indenture shall provide that the Exchange Notes, the Private Exchange
Notes and the Notes shall vote and consent together on all matters as one class
and that none of the Exchange Notes, the Private Exchange Notes or the Notes
will have the right to vote or consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently
prevailing interpretations of the staff of the Commission, the Company and the
Guarantors are not permitted to effect the Exchange Offer, (ii) the Exchange
Offer is not consummated within 150 days of the Issue Date, (iii) any holder of
Private Exchange Notes so requests, or (iv) in the case of any Holder that
either is not eligible to participate in the Exchange Offer or participates in
the Exchange Offer and does not receive Exchange Notes on the date of the
exchange that may be sold without restriction under state and federal securities
laws (other than due solely to the status of such Holder as an affiliate of the
Company within the meaning of the Securities Act), in the case of each of
clauses (i) to and including (iv) of this sentence, then the Company shall
promptly deliver to the Holders and the Trustee written notice thereof (the
"SHELF NOTICE") and shall file a Shelf Registration pursuant to Section 3
hereof.
Section 3. Shelf Registration
------------------
If at any time a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) SHELF REGISTRATION. The Company and the Guarantors shall
file with the Commission a Registration Statement for an offering to be made on
a continuous basis pursuant to Rule 415 covering all of the Registrable Notes
not exchanged in the Exchange Offer, Private Exchange Notes and Exchange Notes
as to which Section 2(c)(iv) is applicable (the "INITIAL SHELF REGISTRATION").
The Company and the Guarantors shall use their diligent best efforts to file
with the Commission the Initial Shelf Registration as promptly as practicable.
The Initial Shelf Registration shall be on Form S-1 or another appropriate form
11
9
permitting registration of such Registrable Notes for resale by Holders in the
manner or manners designated by them (including, without limitation, one or
more underwritten offerings). The Company shall not permit any securities other
than the Registrable Notes to be included in the Initial Shelf Registration or
any Subsequent Shelf Registration (as defined below).
The Company and the Guarantors shall use their best efforts to
cause the Initial Shelf Registration to be declared effective under the
Securities Act on or prior to the Effectiveness Date and to keep the Initial
Shelf Registration continuously effective under the Securities Act for the
period ending on the date which is three years from the Effectiveness Date,
subject to extension pursuant to the last paragraph of Section 5 hereof (the
"EFFECTIVENESS PERIOD"), or such shorter period ending when (i) all Registrable
Notes covered by the Initial Shelf Registration have been sold in the manner set
forth and as contemplated in the Initial Shelf Registration or (ii) a Subsequent
Shelf Registration covering all of the Registrable Notes covered by and not sold
under the Initial Shelf Registration or an earlier Subsequent Shelf Registration
has been declared effective under the Securities Act; PROVIDED, HOWEVER, that
the Effectiveness Period in respect of the Initial Shelf Registration shall be
extended to the extent required to permit dealers to comply with the applicable
prospectus delivery requirements of Rule 174 under the Securities Act and as
otherwise provided herein.
(b) SUBSEQUENT SHELF REGISTRATIONS. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Company and the
Guarantors shall use their diligent best efforts to obtain the prompt withdrawal
of any order suspending the effectiveness thereof, and in any event shall within
20 days of such cessation of effectiveness amend the Initial Shelf Registration
in a manner 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 Notes covered by and not sold under the
Initial Shelf Registration or an earlier Subsequent Shelf Registration (each, a
"SUBSEQUENT SHELF REGISTRATION"). If a Subsequent Shelf Registration is filed,
the Company and the Guarantors shall use their diligent best efforts to cause
the Subsequent Shelf Registration to be declared effective under the Securities
Act as soon as practicable after such filing and to keep such Registration
Statement continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the Initial
Shelf Registration or any Subsequent Shelf Registration was previously
continuously effective. As used herein the term "SHELF REGISTRATION" means the
Initial Shelf Registration and any Subsequent Shelf Registration.
(c) SUPPLEMENTS AND AMENDMENTS. The Company and the Guarantors
shall promptly supplement and amend the Shelf Registration if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement or by any underwriter
of such Registrable Notes.
12
10
Section 4. Additional Interest
-------------------
(a) The Company, the Guarantors and the Initial Purchasers
agree that the Holders will suffer damages if the Company or the Guarantors fail
to fulfill their obligations under Section 2 or Section 3 hereof and that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, the Company agrees to pay, as liquidated damages, additional
interest on the Notes ("ADDITIONAL INTEREST") under the circumstances and to the
extent set forth below (each of which shall be given independent effect):
(i) if (A) neither the Exchange Offer Registration
Statement nor the Initial Shelf Registration has been filed on or prior
to the applicable Filing Date or (B) notwithstanding that the Company
has consummated or will consummate the Exchange Offer, the Company and
the Guarantors are required to file a Shelf Registration and such Shelf
Registration is not filed on or prior to the Filing Date applicable
thereto, then, commencing on the day after any such Filing Date,
Additional Interest shall accrue on the principal amount of the Notes
at a rate of 0.50% per annum for the first 90 days immediately
following each such Filing Date, and such Additional Interest rate
shall increase by an additional 0.25% per annum at the beginning of
each subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration
Statement nor the Initial Shelf Registration is declared effective by
the Commission on or prior to the relevant Effectiveness Date or (B)
notwithstanding that the Company has consummated or will consummate the
Exchange Offer, the Company and the Guarantors are required to file a
Shelf Registration and such Shelf Registration is not declared
effective by the Commission on or prior to the Effectiveness Date in
respect of such Shelf Registration, then, commencing on the day after
such Effectiveness Date, Additional Interest shall accrue on the
principal amount of the Notes at a rate of 0.50% per annum for the
first 90 days immediately following the day after such Effectiveness
Date, and such Additional Interest rate shall increase by an
additional 0.25% per annum at the beginning of each subsequent 90-day
period; or
(iii) if (A) the Exchange Offer Registration Statement or
(B), if applicable, a Shelf Registration has been declared effective
but thereafter ceases to be effective (except as specifically permitted
in such Registration Statement) at any time during the Effectiveness
Period for period of fifteen consecutive days, then Additional Interest
shall accrue on the principal amount of the Notes at a rate of 0.50%
per annum for the first 90 days commencing on the day such Exchange
Offer Registration Statement or Shelf Registration, as the case may be,
ceases to be effective, and such Additional Interest rate shall
increase by an additional 0.25% per annum at the beginning of each such
subsequent 90-day period;
13
11
PROVIDED, HOWEVER, that the Additional Interest rate on the Notes may not exceed
at any one time in the aggregate 1.5% per annum; PROVIDED, FURTHER, HOWEVER,
that (1) upon the filing of the applicable Exchange Offer Registration Statement
or the applicable Shelf Registration as required hereunder (in the case of
clause (a)(i) above of this Section 4), (2) upon the effectiveness of the
Exchange Offer Registration Statement or the applicable Shelf Registration
Statement as required hereunder (in the case of clause (a)(ii) of this Section
4), or (3) upon the effectiveness of the applicable Exchange Offer Registration
Statement or Shelf Registration Statement which had ceased to remain effective
(in the case of (a)(iii) of this Section 4), Additional Interest on the Notes in
respect of which such events relate as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to accrue.
(b) The Company shall notify the Trustee within one Business
Day after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "EVENT DATE"). Any amounts of
Additional Interest due pursuant to clause (a)(i), (a)(ii) or (a)(iii) of this
Section 4 will be payable in cash semi-annually on each June 1 and December 1
(to the holders of record on the May 15 and November 15 immediately preceding
such dates), commencing with the first such date occurring after any such
Additional Interest commences to accrue. The amount of Additional Interest will
be determined by multiplying the applicable Additional Interest rate by the
principal amount of the Registrable Notes, multiplied by a fraction, the
numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed), and the denominator of which is 360.
Section 5. Registration Procedures
-----------------------
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, the Company and the Guarantors shall effect
such registrations to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by the
Company and the Guarantors hereunder the Company and the Guarantors shall:
(a) Prepare and file with the Commission prior to the
applicable Filing Date, a Registration Statement or Registration
Statements as prescribed by Sections 2 or 3 hereof, and use their
diligent best efforts to cause each such Registration to become
effective and remain effective as provided herein; PROVIDED, HOWEVER,
that, if (1) such filing is pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes 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 Holders of the Registrable Notes covered by such
Registration Statement or each such Participating
14
12
Broker-Dealer, as the case may be, 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 least five Business Days prior to such filing, or such
later date as is reasonable under the circumstances). The Company and
the Guarantors shall not file any Registration Statement or Prospectus
or any amendments or supplements thereto if the Holders of a majority
in aggregate principal amount of the Registrable Notes covered by such
Registration Statement, or any such Participating Broker-Dealer, as the
case may be, their counsel, or the managing underwriters, if any, shall
reasonably object.
(b) Prepare and file with the Commission 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 or the Applicable Period, as the case may
be; cause the related Prospectus to be supplemented by any Prospectus
supplement required by applicable law, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions of
the Securities Act and the Exchange Act applicable to each of them with
respect to the disposition of all securities covered by such
Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any
securities being sold by a Participating Broker-Dealer covered by any
such Prospectus. The Company and the Guarantors shall be deemed not to
have used their diligent best efforts to keep a Registration Statement
effective during the Effective Period of the Applicable Period, as the
case may be, relating thereto if the Company or any Guarantor
voluntarily takes any action that would result in selling Holders of
the Registrable Notes covered thereby or Participating Broker-Dealers
seeking to sell Exchange Notes not being able to sell such Registrable
Notes or such Exchange Notes during that period unless such action is
required by applicable law.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period relating thereto, notify the selling Holders of Registrable
Notes, 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 one Business Day), and confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement
or any post-effective amendment, when the same has become effective
under the Securities Act (including in such notice a written statement
that any Holder may, upon request, obtain, at the sole expense of the
Company, one conformed copy of such
15
13
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
Commission 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 Notes or resales of Exchange Notes by Participating
Broker-Dealers the representations and warranties of the Company and
the Guarantors contained in any agreement (including any underwriting
agreement) contemplated by Section 5(m) hereof cease to be true and
correct in all material respects, (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 Notes or the Exchange Notes 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, the existence of any condition 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 or amendments or
supplements to such Registration Statement, Prospectus or documents so
that, in the case of the Registration Statement, it will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading, and (vi) of the Company's determination that
a post-effective amendment to a Registration Statement would be
appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, use their diligent 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 Notes or the Exchange Notes to be sold by any
Participating Broker-Dealer, for sale in any jurisdiction, and, if any
such order is issued, to use their diligent best efforts to obtain the
withdrawal of any such order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3
and if requested by the managing underwriter or underwriters (if any),
the Holders of a majority in
16
14
aggregate principal amount of the Registrable Notes being sold in
connection with an underwritten offering or any Participating
Broker-Dealer, (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter
or underwriters (if any), such Holders, any Participating Broker-Dealer
or counsel for any of them determine is reasonably necessary to be
included therein, (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable
after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment,
and (iii) supplement or make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, furnish to each selling Holder of Registrable Notes and to each
such Participating Broker-Dealer who so requests and to counsel and
each managing underwriter, if any, at the sole expense of the Company,
one conformed copy of the Registration Statement or Registration
Statements and each post-effective amendment thereto, including
financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all
exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, deliver to each selling Holder of Registrable Notes, or each
such Participating Broker-Dealer, as the case may be, their respective
counsel, and the underwriters, if any, at the sole expense of the
Company, 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 and the Guarantors hereby consent to the
use of such Prospectus and each amendment or supplement thereto by each
of the selling Holders of Registrable Notes 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 Notes covered by, or the sale by Participating
Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and
any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Offer Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, use its best efforts to register or
qualify, and to cooperate with the selling Holders of
17
15
Registrable Notes or each such Participating Broker-Dealer, as the case
may be, the managing underwriter or underwriters, if any, and their
respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of, such
Registrable Notes for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriter or
underwriters reasonably request; PROVIDED, HOWEVER, that where Exchange
Notes held by Participating Broker-Dealers or Registrable Notes are
offered other than through an underwritten offering, the Company agrees
to cause the Company's counsel to perform Blue Sky investigations and
file registrations and qualifications required to be filed pursuant to
this Section 5(h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective and do any and all other
acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Notes held by
Participating Broker-Dealers or the Registrable Notes covered by the
applicable Registration Statement; PROVIDED, HOWEVER, that each of the
Company and the Guarantors shall not be required to (A) qualify
generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service
of process in any such jurisdiction where it is not then so subject or
(C) subject itself to taxation in excess of a nominal dollar amount in
any such jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3
hereof, cooperate with the selling Holders of Registrable Notes and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold, which certificates shall not bear any restrictive legends
and shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Notes to be in such denominations
and registered in such names as the managing underwriter or
underwriters, if any, or Holders may request.
(j) Use their diligent best efforts to cause the Registrable
Notes covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
reasonably necessary to enable the seller or sellers thereof or the
underwriter or underwriters, if any, to consummate the disposition of
such Registrable Notes, 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 is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any
18
16
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 5(a) hereof) file with the Commission,
at the sole 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 Notes being
sold thereunder or to the purchasers of the Exchange Notes 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) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) provide the Trustee
with certificates for the Registrable Notes in a form eligible for
deposit with The Depository Trust Company and (ii) provide a CUSIP
number for the Registrable Notes.
(m) In connection with any underwritten offering of
Registrable Notes pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in underwritten offerings of
debt securities similar to the Notes and take all such other actions as
are reasonably requested by the managing underwriter or underwriters in
order to expedite or facilitate the registration or the disposition of
such Registrable Notes and, in such connection, (i) make such
representations and warranties to, and covenants with, the underwriters
with respect to the business of the Company and its subsidiaries
(including any acquired business, properties or entity, if applicable)
and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each
case, as are customarily made by issuers to underwriters in
underwritten offerings of debt securities similar to the Notes, and
confirm the same in writing if and when requested; (ii) obtain the
written opinions of counsel to the Company and the Guarantors and
written updates thereof in form, scope and substance reasonably
satisfactory to the managing underwriter or 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 the managing underwriter or underwriters; (iii)
obtain "cold comfort" letters and updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriter or
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 for which financial statements and financial
data are, or are required to be, included or incorporated by reference
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
19
17
offerings and such other matters as reasonably requested by the
managing underwriter or underwriters as permitted by the Statement on
Auditing Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 7 hereof
(or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Registrable Notes covered by
such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing under
such underwriting agreement, or as and to the extent required
thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, make available for inspection by any selling Holder of such
Registrable Notes being sold, or each such Participating Broker-Dealer,
as the case may be, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant
or other agent retained by any such selling Holder or each such
Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "INSPECTORS"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and instruments of the Company and its
subsidiaries (collectively, the "RECORDS") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of
the Company and its subsidiaries to supply all information reasonably
requested by any such Inspector in connection with such Registration
Statement and Prospectus. Each Inspector shall agree in writing that it
will not disclose any records that the Company determines, in good
faith, to be confidential and that it notifies the Inspectors in
writing are confidential unless (i) the disclosure of such Records is
necessary or advisable to avoid or correct a misstatement or omission
in such Registration Statement or Prospectus, (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction, (iii) disclosure of such information is
necessary or advisable in connection with any action, claim, suit or
proceeding, directly or indirectly, involving or potentially involving
such Inspector and arising out of, based upon, relating to, or
involving this Agreement or the Purchase Agreement, or any transactions
contemplated hereby or thereby or arising hereunder or thereunder, or
(iv) the information in such Records has been made generally available
to the public; PROVIDED, HOWEVER, that such Inspector shall take such
actions as are reasonably necessary to protect the confidentiality of
such information (if practicable) to the extent such action is
otherwise not inconsistent with, an impairment of or in derogation of,
the rights and interests of the Holder or any Inspector.
20
18
(o) Provide an indenture trustee for the Registrable Notes or
the Exchange Notes, as the case may be, and cause the Indenture or the
trust indenture provided for in Section 2(a) hereof, as the case may
be, to be qualified under the TIA not later than the effective date of
the first Registration Statement relating to the Registrable Notes; and
in connection therewith, cooperate with the trustee under any such
indenture and the Holders of the Registrable Notes, 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 their respective 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 Commission to enable
such indenture to be so qualified in a timely manner.
(p) Comply with all applicable rules and regulations of the
Commission and make generally available to its securityholders earnings
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Notes are sold to underwriters in a firm commitment
or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the date of a Registration
Statement, which statement shall cover said 12-month periods.
(q) Upon consummation of the Exchange Offer or a Private
Exchange, obtain an opinion of counsel to the Company and the
Guarantors, in a form customary for underwritten transactions,
addressed to the Trustee for the benefit of all Holders of Registrable
Notes participating in the Exchange Offer or the Private Exchange, as
the case may be, that the Exchange Notes or Private Exchange Notes, as
the case may be, and the related indenture constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with its respective terms, subject to customary exceptions
and qualifications.
(r) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the
Company (or to such other Person as directed by the Company) in
exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be, xxxx, or cause to be marked, on such Registrable Notes
that such Registrable Notes are being cancelled in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be; in no
event shall such Registrable Notes be marked as paid or otherwise
satisfied.
(s) Cooperate with each selling Holder of Registrable Notes
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Notes and their
respective counsel in connection with any filings
21
19
required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(t) Use their respective diligent best efforts to take all
other steps necessary or advisable to effect the registration of the
Exchange Notes and/or Registrable Notes covered by a Registration
Statement contemplated hereby.
The Company may require each seller of Registrable Notes as to
which any registration is being effected to furnish to the Company such
information regarding such seller and the distribution of such Registrable Notes
as the Company may, from time to time, reasonably request. The Company may
exclude from such registration the Registrable Notes of any seller so long as
such seller fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration 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 seller not materially misleading.
If any such Registration Statement refers to any Holder by
name or otherwise as the holder of any securities of the Company, then such
Holder shall have the right to require (i) the insertion therein of language, in
form and substance reasonably satisfactory to such Holder, to the effect that
the holding by such Holder of such securities is not to be construed as a
recommendation by such Holder of the investment quality of the securities
covered thereby and that such holding does not imply that such Holder will
assist in meeting any future financial requirements of the Company, or (ii) in
the event that such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force, the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes
to be sold by such Participating Broker-Dealer, as the case may be, that, upon
actual 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), 5(c)(v), or 5(c)(vi) hereof,
such Holder will forthwith discontinue disposition of such Registrable Notes
covered by such Registration Statement or Prospectus or Exchange Notes to be
sold by such Holder or Participating Broker-Dealer, as the case may be, until
such Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, 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. In the event that the Company shall give any such
notice, each of the Effectiveness Period and the Applicable Period shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Notes covered by such Registration State-
22
20
ment or Exchange Notes to be sold by such Participating Broker Dealer, as the
case may be, shall have received (x) the copies of the supplemented or amended
Prospectus contemplated by Section 5(k) hereof or (y) the Advice.
Section 6. Registration Expenses
---------------------
All fees and expenses incident to the performance of or compliance with
this Agreement by the Company and the Guarantors shall be borne by the Company
and the Guarantors, whether or not the Exchange Offer Registration Statement or
any Shelf Registration is filed or becomes effective or the Exchange Offer is
consummated, including, without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of counsel in connection
with Blue Sky qualifications of the Registrable Notes or Exchange Notes and
determination of the eligibility of the Registrable Notes or Exchange Notes for
investment under the laws of such jurisdictions (x) where the holders of
Registrable Notes are located, in the case of the Exchange Notes, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange
Notes to be sold by a Participating Broker-Dealer during the Applicable
Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes 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 underwriter or
underwriters, if any, by the Holders of a majority in aggregate principal amount
of the Registrable Notes included in any Registration Statement or in respect of
Registrable Notes or Exchange Notes to be sold by any Participating
Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and the Guarantors and reasonable fees and disbursements of one special
counsel for all of the sellers of Registrable Notes (exclusive of any counsel
retained pursuant to Section 7 hereof), (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(m)(iii) hereof
(including, without limitation, the expenses of any special audit and "cold
comfort letters" required by or incident to such performance), (vi) Securities
Act liability insurance, if the Company desires such insurance, (vii) fees and
expenses of all other Persons retained by the Company, (viii) internal expenses
of the Company (including, without limitation, all salaries and expenses of
officers and employees of the Company performing legal or accounting duties),
(ix) the expense of any annual audit, (x) the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange, and the obtaining of a rating of the securities, in each case, if
applicable, and (xi) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, indentures
and any other documents necessary in order to comply with this Agreement.
Section 7. Indemnification
---------------
23
21
(a) The Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless each Holder of Registrable Notes and each
Participating Broker-Dealer selling Exchange Notes during the Applicable Period,
the officers and directors of each such Person, and each Person, if any, who
controls any such Person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "PARTICIPANT"), from
and against any and all losses, claims, damages and liabilities (including,
without limitation, the reasonable legal fees and other expenses actually
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) or Prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) or
any preliminary prospectus, or caused by, arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the case of the
Prospectus in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
any Participant furnished to the Company in writing by such Participant
expressly for use therein; PROVIDED, FURTHER HOWEVER, that the foregoing
indemnification with respect to the Preliminary Offering Memorandum shall not
inure to the benefit of any Initial Purchaser if a copy of the Final Offering
Memorandum (as then amended or supplemented) was not sent or given by or on
behalf of the Initial Purchasers to the person asserting any Losses, if required
by law so to have been delivered, and if the Final Offering Memorandum (as
amended or supplemented) would have cured the defect giving rise to such Losses.
(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless each of the Company and the Guarantors, each of
their respective directors, officers who sign the Registration Statement and
each Person who controls each of the Company and the Guarantors within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent (but on a several, and not joint, basis) as the foregoing
indemnity from the Company and the Guarantors to each Participant, but only with
reference to information relating to such Participant furnished to the Company
or the Guarantors in writing by such Participant expressly for use in any
Registration Statement or Prospectus, any amendment or supplement thereto, or
any preliminary prospectus. The liability of any Participant under this
paragraph shall in no event exceed the proceeds received by Participant from
sales of Registrable Notes or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such Person (the
"INDEMNIFIED PERSON") shall promptly notify the Persons against whom such
indemnity may be sought (the "INDEMNIFYING PERSONS") in writing, and the
Indemnifying
24
22
Persons, upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Persons may reasonably designate in such proceeding
and shall pay the fees and expenses actually incurred by such counsel related to
such proceeding; PROVIDED, HOWEVER, that the failure to so notify the
Indemnifying Persons shall not relieve any of them of any obligation or
liability which any of them may have hereunder or otherwise except to the extent
they were unaware of such proceeding and have been materially prejudiced in any
material respect by such failure. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Persons and the Indemnified Person shall have mutually agreed to
the contrary, (ii) the Indemnifying Persons shall have failed within a
reasonable period of time to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding (including
any impleaded parties) include both any Indemnifying Person and the Indemnified
Person or any affiliate thereof and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that, unless there exists a conflict among
Indemnified Persons, the Indemnifying Persons shall not, in connection with any
one such proceeding or separate but substantially similar related proceedings in
any jurisdiction arising out of the same general allegations, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed promptly as they are incurred. Any such separate firm for the
Participants and such control Persons of Participants shall be designated in
writing by Participants who sold a majority in interest of Registrable Notes and
Exchange Notes sold by all such Participants and shall be reasonably acceptable
to the Company and any such separate firm for the Company and the Guarantors,
their respective directors, their respective officers and such control Persons
of the Company and the Guarantors shall be designated in writing by the Company
and shall be reasonably acceptable to the Holders. The Indemnifying Persons
shall not be liable for any settlement of any proceeding effected without their
prior written consent (which consent shall not be unreasonably withheld or
delayed), but if settled with such consent or if there be a final judgment for
the plaintiff for which the Indemnified Persons are entitled to indemnification
pursuant to this Agreement, each of the Indemnifying Persons agrees to indemnify
and hold harmless each Indemnified Person from and against any loss or liability
by reason of such settlement or judgment. No Indemnifying Person shall, without
the prior written consent of the Indemnified Persons (which consent shall not be
unreasonably withheld or delayed), effect any settlement or compromise of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party, or indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement (A) includes an unconditional
written release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of such
Indemnified Person.
25
23
(d) If the indemnification provided for in the first and
second paragraphs of this Section 7 is for any reason unavailable to, or
insufficient to hold harmless, an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraphs, in lieu of indemnifying such Indemnified Person
thereunder and in order to provide for just and equitable contribution, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect (i) the relative benefits received by the Indemnifying
Person or Persons on the one hand and the Indemnified Person or Persons on the
other from the offering of the Notes or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such relative
benefits but also the relative fault of the Indemnifying Person or Persons on
the one hand and the Indemnified Person or Persons on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof) as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Participants on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (net of discounts but before deducting expenses) of the Notes
received by the Company bears to the total proceeds received by such Participant
from the sale of Registrable Notes or Exchange Notes, as the case may be. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Guarantors on the one hand or such Participant or
such other Indemnified Person, as the case may be, on the other, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
26
24
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the Indemnifying Party to the Indemnified Party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company and the Guarantors set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Holder or any person who
controls a Holder, the Company or any Guarantor, their respective directors or
officers or any person controlling the Company or any Guarantor, and (ii) any
termination of this Agreement.
(g) The indemnity and contribution agreements contained in
this Section 7 will be in addition to any liability which the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.
Section 8. Rules 144 and 144A
------------------
The Company and the Guarantors covenant that, whether or not
required to do so by the rules and regulations of the Commission, for so long as
any of the Exchange Notes remain outstanding, they will furnish to the holders
of the Exchange Notes and file with the Commissions (unless the Commission will
not accept such a filing) (1) all quarterly and annual financial information
that would be required to be contained in a filing with the Commission on Forms
10-Q and 10-K if the Company and the Guarantors were required to file such
forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants, and (2) all
reports that would be required to be filed with the Commission on Form 8-K if
the Company and the Guarantors were required to file such reports and (3) any
other information, documents and other reports which the Company and the
Guarantors would be required to file with the Commission if it were subject to
Section 13 or 15(d) of the Exchange Act. In addition, for so long as any of the
Notes remain outstanding, the Company and the Guarantors agree to make available
to any prospective purchaser of the Notes or beneficial owner of the Notes in
connection with any sale thereof the information required by Rule 144A(d)(4)
under the Securities Act. Each of the Company and the Guarantors further
covenants that it will take such further action as any Holder of Registrable
Notes may reasonably request, all to the extent required from time to time to
enable such holder to sell Registrable Notes without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule
144(k) and Rule 144A under the Securities Act, as such Rules may be amended from
time to time, or (b) any similar rule or regulation hereafter adopted by the
Commission.
Section 9. Underwritten Registrations
--------------------------
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or
27
25
managers that will manage the offering will be selected by the Holders of a
majority in aggregate principal amount of such Registrable Notes included in
such offering and shall be reasonably acceptable to the Company.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
Section 10. Miscellaneous
-------------
(a) NO INCONSISTENT AGREEMENTS. Neither the Company nor the
Guarantors has, as of the date hereof, nor shall the Company or the Guarantors,
after the date of this Agreement, enter into any agreement with respect to any
of its securities that is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof. 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 other issued and outstanding securities under any such agreements.
Neither the Company nor the Guarantors has entered, nor will enter into, any
agreement with respect to any of its securities which will grant to any Person
piggy-back registration rights with respect to any Registration Statement.
(b) ADJUSTMENTS AFFECTING REGISTRABLE NOTES. Neither the
Company nor the Guarantors shall, directly or indirectly, take any action with
respect to the Registrable Notes as a class that would adversely affect the
ability of the Holders of Registrable Notes to include such Registrable Notes in
a registration undertaken pursuant to this Agreement.
(c) AMENDMENTS AND WAIVERS. 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 except pursuant to a
written agreement duly signed and delivered by (i) the Company, (ii) the
Guarantors and (iii)(A) the Holders of not less than a majority in aggregate
principal amount of the then outstanding Registrable Notes and (B) in
circumstances that would adversely affect the Participating Broker-Dealers, the
Participating Broker-Dealers holding not less than a majority in aggregate
principal amount of the Exchange Notes held by all Participating Broker-Dealers;
PROVIDED, HOWEVER, that Section 7 and this Section 10(c) may not be amended,
modified or supplemented except pursuant to a written agreement duly signed and
delivered by each Holder and each Participating Broker-Dealer (including any
person who was a Holder or Participating Broker-Dealer of Registrable Notes or
Exchange Notes, as the case may be, disposed of pursuant to any Registration
Statement) affected by any such amendment, modification or supplement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates
28
26
exclusively to the rights of Holders of Registrable Notes 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 Notes may be given by Holders of at least a majority in aggregate
principal amount of the Registrable Notes being sold pursuant to such
Registration Statement.
(d) NOTICES. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
(i) If to a Holder of the Registrable Notes or any
Participating Broker-Dealer, at the most current address of such Holder
or Participating Broker-Dealer, as the case may be, set forth on the
records of the registrar under the Indenture.
(ii) If to the Company or the Guarantors, at the address
as follows:
Hawk Corporation
000 Xxxxxx Xxxxxx, Xxxxx 00-0000
(or after December 20, 1996, Suite 30-5000)
Xxxxxxxxx, Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Executive Officer
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address and in the manner specified in such Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, the Holders and the Participating Broker-Dealers; PROVIDED, HOWEVER,
that this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor or
assign holds Registrable Notes.
(f) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so
29
27
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
(i) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) SECURITIES HELD BY THE COMPANY OR THEIR AFFILIATES.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the Company,
the Guarantors or any of their respective affiliates (as such term is defined in
Rule 405 under the Securities Act) shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.
(k) THIRD PARTY BENEFICIARIES. Holders and beneficial owners
of Registrable Notes and Participating Broker-Dealers are intended third party
beneficiaries of this Agreement, and this Agreement may be enforced by such
Persons.
(l) ATTORNEYS' FEES. As between the parties to this Agreement,
in any action or proceeding brought to enforce any provision of this Agreement,
or where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to its
costs and expenses and any other available remedy.
(m) ENTIRE AGREEMENT. This Agreement, together with the
Purchase Agreement and the Indenture, is intended by the parties as a final and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained
30
28
herein and therein and any and all prior oral or written agreements,
representations, or warranties, contracts, understandings, correspondence,
conversations and memoranda between the Holders on the one hand and the Company
and the Guarantors on the other, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest with respect to the subject matter hereof and thereof are
merged herein and replaced hereby.
(n) JOINT AND SEVERAL LIABILITY. Each subsidiary of the
Company, by its execution and delivery of a counterpart to this Agreement,
agrees that it shall be jointly and severally liable for all obligations and
liabilities of the Company hereunder.
31
29
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
HAWK CORPORATION
By: /S/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman
FRICTION PRODUCTS CO.
By: /S/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman
HAWK BRAKE, INC.
By: /S/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman
XXXXX METAL STAMPINGS, INC.
By: /S/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman
XXXXXX, INC.
By: /S/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman
X.X. XXXXXXX HOLDINGS, INC.
BY: /S/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman
32
30
XXXXXXX FRICTION PRODUCTS U.K.
CORP.
By: /S/ Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman
X.X. XXXXXXX CORP.
By: /S/ Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman
XXXXXXXXXX PRODUCTS CORPORATION
By: /S/ Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman
XXXXXXXX XXXXXXXX & CO.
INCORPORATED
BT SECURITIES CORPORATION
XxXXXXXX & COMPANY SECURITIES,
INC.
By: XXXXXXXX XXXXXXXX & CO.
INCORPORATED
By: /s/ Xxxxx X. Amine
------------------------------
Name: Xxxxx X. Amine
Title: Director
33
Schedule I to
Registration Rights Agreement
Subsidiary Guarantors
---------------------
Friction Products Co.
Hawk Brake, Inc.
Xxxxx Metal Stampings, Inc.
Xxxxxx, Inc.
X.X. Xxxxxxx Holdings, Inc.
X.X. Xxxxxxx Corp.
Xxxxxxx Friction Products U.K. Corp.
Xxxxxxxxxx Products Corporation
