EXHIBIT 4.4
Conformed Copy
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT dated November 2, 2001 (this
"Agreement") is entered into by and among Pennzoil-Quaker State Company, a
Delaware corporation (the "Company"), the Guarantors listed on Schedule 1 hereto
(the "Guarantors"), and X.X. Xxxxxx Securities Inc., Deutsche Banc Alex. Xxxxx
Inc., Xxxxxxx Xxxxx Xxxxxx Inc. and Scotia Capital (USA) Inc. (collectively, the
"Initial Purchasers").
The Company, the Guarantors and the Initial Purchasers are parties to a
Purchase Agreement dated October 29, 2001 (the "Purchase Agreement"), which
provides for the sale by the Company to the Initial Purchasers of $250,000,000
aggregate principal amount of the Company's 10% Senior Notes due 2008 (the
"Securities") which will be fully and unconditionally guaranteed on an unsecured
senior basis by each of the Guarantors. As an inducement to the Initial
Purchasers to enter into the Purchase Agreement, the Company and the Guarantors
have agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"Closing Date" shall mean the Closing Date as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Exchange Dates" shall have the meaning set forth in Section 2(a)(ii)
hereof.
"Exchange Offer" shall mean the exchange offer by the Company and the
Guarantors of Exchange Securities for Registrable Securities pursuant to Section
2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and any
document incorporated by reference therein.
"Exchange Securities" shall mean senior notes issued by the Company and
guaranteed by the Guarantors under the Indenture containing terms identical to
the Securities (except that the Exchange Securities will not be subject to
restrictions on transfer or to any increase in annual interest rate for failure
to comply with this Agreement) and to be offered to Holders of Securities in
exchange for Securities pursuant to the Exchange Offer.
"Guarantors" shall have the meaning set forth in the preamble and shall
also include any Guarantor's successors.
"Holders" shall mean the Initial Purchasers, for so long as they own any
Registrable Securities, and each of their successors, assigns and direct and
indirect transferees who become owners of Registrable Securities under the
Indenture; provided that for purposes of Sections 4 and 5 of this Agreement, the
term "Holders" shall include Participating Broker-Dealers.
"Initial Purchasers" shall have the meaning set forth in the preamble.
"Indenture" shall mean the Indenture relating to the Securities dated as of
November 2, 2001 among the Company, the Guarantors and The Chase Manhattan Bank,
as trustee, and as the same may be amended from time to time in accordance with
the terms thereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Registrable Securities; provided that whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities owned directly or
indirectly by the Company shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage or
amount.
"Participating Broker-Dealers" shall have the meaning set forth in Section
4(a) hereof.
"Person" shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Purchase Agreement" shall have the meaning set forth in the preamble.
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"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
any document incorporated by reference therein.
"Registrable Securities" shall mean the Securities; provided that the
Securities shall cease to be Registrable Securities (i) when a Registration
Statement with respect to such Securities has been declared effective under the
Securities Act and such Securities have been exchanged or disposed of pursuant
to such Registration Statement, (ii) when such Securities have been sold
pursuant to Rule 144(k) (or any similar provision then in force, but not Rule
144A) under the Securities Act or (iii) when such Securities cease to be
outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company and the Guarantors with this
Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with blue sky
qualification of any Exchange Securities or Registrable Securities), (iii) all
expenses of any Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, any underwriting agreements, securities sales
agreements and other documents relating to the performance of and compliance
with this Agreement, (iv) all rating agency fees, (v) all fees and disbursements
relating to the qualification of the Indenture under applicable securities laws,
(vi) the fees and disbursements of the Trustee and its counsel, (vii) the fees
and disbursements of counsel for the Company and the Guarantors and, in the case
of a Shelf Registration Statement, the fees and disbursements of one counsel for
the Holders (which counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchasers) and (viii) the fees and
disbursements of the independent public accountants of the Company and the
Guarantors, including the expenses of any special audits or "comfort" letters
required by or incident to such performance and compliance, but excluding fees
and expenses of counsel to the underwriters (other than fees and expenses set
forth in clause (ii) above) or the Holders and underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
Company and the Guarantors that covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement and all
amendments and supplements to any such registration statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and any document incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
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"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shelf Registration" shall mean a registration effected pursuant to Section
2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company and the Guarantors that covers all the Registrable Securities
(but no other securities unless approved by the Holders whose Registrable
Securities are covered by such Shelf Registration Statement) on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and any document incorporated
by reference therein.
"Trust Indenture Act" shall have the meaning set forth in Section 3(l)
hereof.
"Trustee" shall mean the trustee with respect to the Securities under the
Indenture.
"Underwriter" shall have the meaning set forth in Section 3 hereof.
"Underwritten Registration" or "Underwritten Offering" shall mean a
registration in which Registrable Securities are sold to an Underwriter for
reoffering to the public.
2. Registration Under the Securities Act.
(a) To the extent not prohibited by any applicable law or applicable
interpretations of the Staff of the SEC, the Company and the Guarantors shall
use their reasonable best efforts to (i) cause to be filed an Exchange Offer
Registration Statement covering an offer to the Holders to exchange all the
Registrable Securities for Exchange Securities and (ii) have such Registration
Statement remain effective until the closing of the Exchange Offer. The Company
and the Guarantors shall commence the Exchange Offer promptly after the Exchange
Offer Registration Statement is declared effective by the SEC and shall use
their reasonable best efforts to complete the Exchange Offer not later than 60
days after such effective date. The Company and the Guarantors shall commence
the Exchange Offer by mailing the related exchange offer Prospectus and
accompanying documents to each Holder stating, in addition to such other
disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this Agreement and
that all Registrable Securities validly tendered will be accepted for
exchange;
(ii) the dates of acceptance for exchange (which shall be a period of at
least 20 business days from the date such notice is mailed) (the
"Exchange Dates");
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(iii) that any Registrable Security not tendered will remain outstanding
and continue to accrue interest but will not retain any rights under
this Agreement;
(iv) that Holders electing to have a Registrable Security exchanged
pursuant to the Exchange Offer will be required to surrender such
Registrable Security, together with the enclosed letters of
transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) and in the manner
specified in the notice, prior to the close of business on the last
Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not later
than the close of business on the last Exchange Date, by sending to
the institution and at the address (located in the Borough of
Manhattan, The City of New York) specified in the notice, a telegram,
telex, facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Registrable Securities delivered
for exchange and a statement that such Holder is withdrawing its
election to have such Securities exchanged.
As soon as practicable after the last Exchange Date, the Company and the
Guarantors shall:
(i) accept for exchange Registrable Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for cancellation all
Registrable Securities or portions thereof so accepted for exchange by
the Company and issue, and cause the Trustee to promptly authenticate
and deliver to each Holder, Exchange Securities equal in principal
amount to the principal amount of the Registrable Securities
surrendered by such Holder.
The Company and the Guarantors shall use their reasonable best efforts to
complete the Exchange Offer as provided above and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws and regulations in connection with the Exchange Offer. The
Exchange Offer shall not be subject to any conditions, other than that the
Exchange Offer does not violate any applicable law or applicable interpretations
of the Staff of the SEC. The Company shall inform the Initial Purchasers of the
names and addresses of the Holders to whom the Exchange Offer is made, and the
Initial Purchasers shall have the right, subject to applicable law, to contact
such Holders and otherwise facilitate the tender of Registrable Securities in
the Exchange Offer.
(b) In the event that (i) the Company and the Guarantors determine that the
Exchange Offer Registration provided for in Section 2(a) above is not available
or may not be completed as soon as practicable after the last Exchange Date
because it would violate any applicable law or applicable interpretations of the
Staff of the SEC, (ii) the
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Exchange Offer is not, for any other reason, completed by May 2, 2002 or (iii)
the Exchange Offer has been completed and in the opinion of counsel for the
Initial Purchasers a Registration Statement must be filed and a Prospectus must
be delivered by the Initial Purchasers in connection with any offering or sale
of Registrable Securities, the Company and the Guarantors shall use their
reasonable best efforts to cause to be filed as soon as practicable after such
determination, date or notice of such opinion of counsel is given to the
Company, as the case may be, a Shelf Registration Statement providing for the
sale of all the Registrable Securities by the Holders thereof and to have such
Shelf Registration Statement declared effective by the SEC.
In the event that the Company and the Guarantors are required to file a
Shelf Registration Statement solely as a result of the matters referred to in
clause (iii) of the preceding sentence, the Company and the Guarantors shall use
their reasonable best efforts to file and have declared effective by the SEC
both an Exchange Offer Registration Statement pursuant to Section 2(a) with
respect to all Registrable Securities and a Shelf Registration Statement (which
may be a combined Registration Statement with the Exchange Offer Registration
Statement) with respect to offers and sales of Registrable Securities held by
the Initial Purchasers after completion of the Exchange Offer. The Company and
the Guarantors agree to use their reasonable best efforts to keep the Shelf
Registration Statement continuously effective until the expiration of the period
referred to in Rule 144(k) under the Securities Act with respect to the
Registrable Securities or such shorter period that will terminate when all the
Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement. The Company and the
Guarantors further agree to supplement or amend the Shelf Registration Statement
and the related Prospectus if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registration or if reasonably requested by a
Holder of Registrable Securities with respect to information relating to such
Holder, and to use their reasonable best efforts to cause any such amendment to
become effective and such Shelf Registration Statement and Prospectus to become
usable as soon as thereafter practicable. The Company and the Guarantors agree
to furnish to the Holders of Registrable Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) The Company and the Guarantors shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) and Section 2(b)
hereof. Each Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided that if, after it has been declared effective, the offering of
Registrable Securities pursuant to a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any court or other governmental or regulatory agency
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or body, such Registration Statement will be deemed not to have become effective
during the period of such interference until the offering of Registrable
Securities pursuant to such Registration Statement may legally resume.
As provided in the Indenture, in the event that either the Exchange Offer
is not completed or the Shelf Registration Statement, if required hereby, is not
declared effective on or prior to May 2, 2002, the interest rate on the
Securities will be increased by 1.00% per annum until the Exchange Offer is
completed or the Shelf Registration Statement, if required hereby, is declared
effective by the SEC or the Securities become freely tradable under the
Securities Act.
(e) Without limiting the remedies available to the Initial Purchasers and
the Holders, the Company and the Guarantors acknowledge that any failure by the
Company or the Guarantors to comply with their obligations under Section 2(a)
and Section 2(b) hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder may obtain
such relief as may be required to specifically enforce the Company's and the
Guarantors' obligations under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures.
In connection with their obligations pursuant to Section 2(a) and Section
2(b) hereof, the Company and the Guarantors shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the Securities Act, which form (x) shall be selected by
the Company and the Guarantors, (y) shall, in the case of a Shelf Registration,
be available for the sale of the Registrable Securities by the selling Holders
thereof and (z) shall comply as to form in all material respects with the
requirements of the applicable form and include or incorporate by reference
where permitted all financial statements required by the SEC to be filed
therewith; and use their reasonable best efforts to cause such Registration
Statement to become effective and remain effective in accordance with Section 2
hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and cause each
Prospectus to be supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act; and
keep each Prospectus current during the period described in Section 4(3) of, and
Rule 174 under, the Securities Act that is applicable to transactions by brokers
or dealers with respect to the Registrable Securities or Exchange Securities;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Initial Purchasers, to counsel for
such Holders and to each Underwriter of an Underwritten Offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, and
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any amendment or supplement thereto and such other documents as such Holder or
Underwriter may reasonably request, in order to facilitate the sale or other
disposition of the Registrable Securities thereunder; and the Company and the
Guarantors consent to the use of such Prospectus and any amendment or supplement
thereto in accordance with applicable law by each of the selling Holders of
Registrable Securities and any such Underwriters in connection with the offering
and sale of the Registrable Securities covered by and in the manner described in
such Prospectus or any amendment or supplement thereto in accordance with
applicable law;
(d) use their reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or blue sky laws of
such jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement shall reasonably request in writing by the time the
applicable Registration Statement is declared effective by the SEC; cooperate
with the Holders in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; and do any and all other acts
and things that may be reasonably necessary or advisable to enable each Holder
to complete the disposition in each such jurisdiction of the Registrable
Securities owned by such Holder; provided that neither the Company nor any
Guarantor shall be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) file any general consent to
service of process or (iii) subject itself to taxation in any such jurisdiction
if it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of Registrable
Securities, counsel for such Holders and counsel for the Initial Purchasers
promptly and, if requested by any such Holder, confirm such advice in writing
(i) when a Registration Statement has become effective and when any post-
effective amendment thereto has been filed and becomes effective, (ii) of any
request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the Company or any
Guarantor contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to an offering of such Registrable
Securities cease to be true and correct in all material respects or if the
Company or any Guarantor receives any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v) of the
happening of any event during the period a Shelf Registration Statement is
effective that makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or that requires the making of
any changes in such Registration Statement or Prospectus in order to make the
statements therein not misleading and (vi) of any determination by the Company
or any Guarantor that a post-effective amendment to a Registration Statement
would be appropriate;
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(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment and provide prompt notice to each Holder of the withdrawal of
any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without any
document incorporated therein by reference or exhibits thereto, unless requested
in writing);
(h) in the case of a Shelf Registration, cooperate with the selling Holders
of Registrable Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends and enable such Registrable Securities to be in such
denominations and registered in such names (consistent with the provisions of
the Indenture) as the selling Holders may reasonably request at least two
business days prior to the closing of any sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any event
contemplated by Section 3(e)(v) hereof, use their reasonable best efforts to
prepare and file with the SEC a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company and the Guarantors
shall notify the Holders of Registrable Securities to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an event, and
such Holders hereby agree to suspend use of the Prospectus until the Company and
the Guarantors have amended or supplemented the Prospectus to correct such
misstatement or omission;
(j) a reasonable time prior to the filing of any Registration Statement,
any Prospectus, any amendment to a Registration Statement or amendment or
supplement to a Prospectus or of any document that is to be incorporated by
reference into a Registration Statement or a Prospectus after initial filing of
a Registration Statement, provide copies of such document to the Initial
Purchasers and their counsel (and, in the case of a Shelf Registration
Statement, to the Holders of Registrable Securities and their counsel) and make
such of the representatives of the Company and the Guarantors as shall be
reasonably requested by the Initial Purchasers or their counsel (and, in the
case of a Shelf Registration Statement, the Holders of Registrable Securities or
their counsel) available for discussion of such document; and the Company and
the Guarantors shall not at any time file or make any amendment to the
Registration Statement, any Prospectus or any amendment of or supplement to a
Registration Statement or a Prospectus or any document that is to be
incorporated by reference into a Registration Statement or a Prospectus, of
which the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, the Holders of Registrable Securities and their counsel)
shall not have previously been advised and furnished a copy or to which the
Initial Purchasers or
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their counsel (and, in the case of a Shelf Registration Statement, the Holders
or their counsel) shall reasonably object;
(k) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement;
(l) cause the Indenture to be qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), in connection with the
registration of the Exchange Securities or Registrable Securities, as the case
may be; cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in accordance
with the terms of the Trust Indenture Act; and execute, and use their reasonable
best efforts to cause the Trustee to execute, all documents as may be required
to effect such changes and all other forms and documents required to be filed
with the SEC to enable the Indenture to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for inspection by a
representative of the Holders of the Registrable Securities, any Underwriter
participating in any disposition pursuant to such Shelf Registration Statement,
and attorneys and accountants designated by a representative of the Holders, at
reasonable times and in a reasonable manner, all financial and other records,
pertinent documents and properties of the Company and the Guarantors, and cause
the respective officers, directors and employees of the Company and the
Guarantors to supply all information reasonably requested by any such
representative, Underwriter, attorney or accountant in connection with a Shelf
Registration Statement;
(n) in the case of a Shelf Registration, use their reasonable best efforts
to cause all Registrable Securities to be listed on any securities exchange or
any automated quotation system on which similar securities issued or guaranteed
by the Company or any Guarantor are then listed if requested by the Majority
Holders, to the extent such Registrable Securities satisfy applicable listing
requirements;
(o) if reasonably requested by any Holder of Registrable Securities covered
by a Registration Statement, promptly incorporate in a Prospectus supplement or
post-effective amendment such information with respect to such Holder as such
Holder reasonably requests to be included therein and make all required filings
of such Prospectus supplement or such post-effective amendment as soon as the
Company has received notification of the matters to be incorporated in such
filing; and
(p) in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith (including
those requested by the Holders of a majority of the Registrable Securities being
sold) in order to expedite or facilitate the disposition of such Registrable
Securities including, but not limited to, an Underwritten Offering and in such
connection, (i) to the extent possible, make such representations and warranties
to the Holders and any Underwriters of such Registrable Securities with respect
to the business of the Company and its subsidiaries, the
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Registration Statement, Prospectus and documents incorporated by reference or
deemed incorporated by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings and confirm the same if and when requested, (ii) obtain opinions of
counsel to the Company and the Guarantors (which counsel and opinions, in form,
scope and substance, shall be reasonably satisfactory to the Holders and such
Underwriters and their respective counsel) addressed to each selling Holder and
Underwriter of Registrable Securities, covering the matters customarily covered
in opinions requested in underwritten offerings, (iii) obtain "comfort" letters
from the independent certified public accountants of the Company and the
Guarantors (and, if necessary, any other certified public accountant of any
subsidiary of the Company or any Guarantor, or of any business acquired by the
Company or any Guarantor for which financial statements and financial data are
or are required to be included in the Registration Statement) addressed to each
selling Holder and Underwriter of Registrable Securities, such letters to be in
customary form and covering matters of the type customarily covered in "comfort"
letters in connection with underwritten offerings and (iv) deliver such
documents and certificates as may be reasonably requested by the Holders of a
majority in principal amount of the Registrable Securities being sold or the
Underwriters, and which are customarily delivered in underwritten offerings, to
evidence the continued validity of the representations and warranties of the
Company and the Guarantors made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company may require each
Holder of Registrable Securities to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company and the Guarantors may from time to time
reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder of Registrable
Securities agrees that, upon receipt of any notice from the Company and the
Guarantors of the happening of any event of the kind described in Section
3(e)(v) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(i) hereof and, if so directed by the Company and the Guarantors, such
Holder will deliver to the Company and the Guarantors all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities that is current at the
time of receipt of such notice.
If the Company and the Guarantors shall give any such notice to suspend the
disposition of Registrable Securities pursuant to a Registration Statement, the
Company and the Guarantors shall extend the period during which the Registration
Statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from and including the date of the giving of such
notice to and including the date when the Holders shall have received copies of
the supplemented or amended Prospectus necessary to resume such dispositions.
The Company and the Guarantors may give any such notice only twice during any
365-day period and any such suspensions shall not
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exceed 30 days for each suspension and there shall not be more than three
suspensions in effect during any 365-day period.
The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "Underwriters") that will
administer the offering will be selected by the Majority Holders of the
Registrable Securities included in such offering.
4. Participation of Broker-Dealers in Exchange Offer.
(a) The Staff of the SEC has taken the position that any broker-dealer that
receives Exchange Securities for its own account in the Exchange Offer in
exchange for Securities that were acquired by such broker-dealer as a result of
market-making or other trading activities (a "Participating Broker-Dealer") may
be deemed to be an "underwriter" within the meaning of the Securities Act and
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities.
The Company and the Guarantors understand that it is the Staff's position
that if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to the above effect and
the means by which Participating Broker-Dealers may resell the Exchange
Securities, without naming the Participating Broker-Dealers or specifying the
amount of Exchange Securities owned by them, such Prospectus may be delivered by
Participating Broker-Dealers to satisfy their prospectus delivery obligation
under the Securities Act in connection with resales of Exchange Securities for
their own accounts, so long as the Prospectus otherwise meets the requirements
of the Securities Act.
(b) In light of the above, notwithstanding the other provisions of this
Agreement, the Company and the Guarantors agree that the provisions of this
Agreement as they relate to a Shelf Registration shall also apply to an Exchange
Offer Registration to the extent, and with such reasonable modifications thereto
as may be, reasonably requested by the Initial Purchasers or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above; provided that:
(i) the Company and the Guarantors shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement, as
would otherwise be contemplated by Section 3(i), for a period exceeding 180
days after the last Exchange Date (as such period may be extended pursuant
to the penultimate paragraph of Section 3 of this Agreement) and
Participating Broker-Dealers shall not be authorized by the Company and the
Guarantors to deliver and shall not deliver such Prospectus after such
period in connection with the resales contemplated by this Section 4; and
12
(ii) the application of the Shelf Registration procedures set forth in Section
3 of this Agreement to an Exchange Offer Registration, to the extent not
required by the positions of the Staff of the SEC or the Securities Act
and the rules and regulations thereunder, will be in conformity with the
reasonable request in writing to the Company by the Initial Purchasers or
with the reasonable request in writing to the Company by one or more
broker-dealers who certify to the Initial Purchasers, the Company and the
Guarantors in writing that they anticipate that they will be Participating
Broker-Dealers; and provided, further, that in connection with such
application of the Shelf Registration procedures set forth in Section 3 to
an Exchange Offer Registration, the Company and the Guarantors shall be
obligated (x) to deal only with one entity representing the Participating
Broker-Dealers, which shall be X.X. Xxxxxx Securities Inc. unless it
elects not to act as such representative, (y) to pay the fees and expenses
of only one counsel representing the Participating Broker-Dealers, which
shall be counsel to the Initial Purchasers unless such counsel elects not
to so act and (z) to cause to be delivered only one, if any, "comfort"
letter with respect to the Prospectus in the form existing on the last
Exchange Date and with respect to each subsequent amendment or supplement,
if any, effected during the period specified in clause (i) above.
(c) The Initial Purchasers shall have no liability to the Company, any
Guarantor or any Holder with respect to any request that it may make pursuant to
Section 4(b) above.
5. Indemnification and Contribution.
(a) The Company and each Guarantor, jointly and severally, agree to
indemnify and hold harmless each Initial Purchaser and each Holder, their
respective affiliates and each Person, if any, who controls any Initial
Purchaser or any Holder within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted), joint or several, caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or any
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the 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 any
information relating to any Initial Purchaser or any Holder furnished to the
Company in writing through X.X. Xxxxxx Securities Inc. or any selling Holder
expressly for use therein. In connection with any Underwritten Offering
permitted by Section 3, the Company and the Guarantors will also indemnify the
Holders, if any, selling brokers, dealers and similar securities industry
professionals participating in the distribution, their respective affiliates and
each Person who controls such Persons (within the meaning of the Securities Act
and the Exchange Act) to the same extent as provided above with
13
respect to the indemnification of the Holders, if requested in connection with
any Registration Statement.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Guarantors, the Initial Purchasers and the other
selling Holders, their respective affiliates, the directors of the Company and
the Guarantors, each officer of the Company and the Guarantors who signed the
Registration Statement and each Person, if any, who controls the Company, the
Guarantors, any Initial Purchaser and any other selling Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the indemnity set forth in paragraph (a) above, but only with
respect to any losses, claims, damages or liabilities caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to such Holder furnished to
the Company in writing by such Holder expressly for use in any Registration
Statement and any Prospectus.
(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 indemnification may be sought pursuant to either
paragraph (a) or (b) above, such Person (the "Indemnified Person") shall
promptly notify the Person against whom such indemnification may be sought (the
"Indemnifying Person") in writing; provided that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have
under this Section 5 except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and
provided, further, that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have to an Indemnified Person
otherwise than under this Section 5. If any such proceeding shall be brought or
asserted against an Indemnified Person and it shall have notified the
Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 5
that the Indemnifying Person may designate in such proceeding and shall pay the
fees and expenses of such counsel related to such proceeding. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person; (iii) the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it that are different
from or in addition to those available to the Indemnifying Person; or (iv) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood and agreed that
the Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm (x) for any Initial Purchaser, its
14
affiliates and any control Persons of such Initial Purchaser shall be designated
in writing by X.X. Xxxxxx Securities Inc., (y) for any Holder, its affiliates
and any control Persons of such Holder shall be designated in writing by the
Majority Holders and (z) in all other cases shall be designated in writing by
the Company. The Indemnifying Person shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by the Indemnifying Person of such request and (ii) the Indemnifying
Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement. No Indemnifying Person shall,
without the written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (i) includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding and (ii) does not include any
statement as to or any admission of fault, culpability or a failure to act by or
on behalf of any Indemnified Person.
(d) If the indemnification provided for in paragraphs (a) and (b) above is
unavailable to an Indemnified Person or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors from the offering of the Securities, on the one hand,
and by the Holders from receiving Securities or Exchange Securities registered
under the Securities Act, on the other hand, or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company and the Guarantors on the one hand
and the Holders on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company and the
Guarantors on the one hand and the Holders on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Guarantors or by the
Holders and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company, the Guarantors and the Holders agree that it would not be
just and equitable if contribution pursuant to this Section 5 were determined by
pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any
15
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by
an Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 5, in no event shall a
Holder be required to contribute any amount in excess of the amount by which the
total price at which the Securities or Exchange Securities sold by such Holder
exceeds the amount of any damages that such Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(f) The remedies provided for in this Section 5 are not exclusive and shall
not limit any rights or remedies that may otherwise be available to any
Indemnified Person at law or in equity.
(g) The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchasers, any Holder or any Person controlling any Initial
Purchaser or any Holder, or by or on behalf of the Company, the Guarantors or
the officers or directors of or any Person controlling the Company or the
Guarantors, (iii) acceptance of any of the Exchange Securities and (iv) any sale
of Registrable Securities pursuant to a Shelf Registration Statement.
6. Miscellaneous.
(a) No Inconsistent Agreements. The Company and the Guarantors represent,
warrant and agree that (i) 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 any other outstanding securities issued or guaranteed by the Company
or any Guarantor under any other agreement and (ii) neither the Company nor any
Guarantor has entered into, or on or after the date of this Agreement will enter
into, any agreement that is inconsistent with the rights granted to the Holders
of Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company and the Guarantors have obtained the written consent of
Holders of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or consent; provided that no amendment, modification, supplement, waiver
or consent to any departure from the provisions of Section 5 hereof shall be
effective as against any Holder of Registrable Securities unless consented to in
writing by such Holder.
16
(c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if
to a Holder, at the most current address given by such Holder to the Company by
means of a notice given in accordance with the provisions of this Section 6(c),
which address initially is, with respect to the Initial Purchasers, the address
set forth in the Purchase Agreement; and (ii) if to the Company and the
Guarantors, initially at the Company's address set forth in the Purchase
Agreement and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 6(c). All such notices and
communications shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
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 specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Registrable Securities in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all
the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof. The Initial Purchasers
(in their capacity as Initial Purchasers) shall have no liability or obligation
to the Company or the Guarantors with respect to any failure by a Holder to
comply with, or any breach by any Holder of, any of the obligations of such
Holder under this Agreement.
(e) Purchases and Sales of Securities. The Company and the Guarantors shall
not, and shall use their reasonable best efforts to cause their affiliates (as
defined in Rule 405 under the Securities Act) not to, purchase and then resell
or otherwise transfer any Securities.
(f) Third Party Beneficiaries. Each Holder shall be a third party
beneficiary to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
other Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
17
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by the laws of the
State of New York.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
18
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
PENNZOIL-QUAKER STATE COMPANY
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Group Vice President and
Chief Financial Officer
JIFFY LUBE INTERNATIONAL, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
JIFFY LUBE INTERNATIONAL OF MARYLAND, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
MEDO INDUSTRIES, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
Q LUBE, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
RAIN-X CORPORATION
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
BLUE CORAL, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
BLUE CORAL-SLICK 50, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
BLUE CORAL-SLICK 50, LTD.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
PENNZOIL-QUAKER STATE
INTERNATIONAL CORPORATION
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
PENNZOIL-QUAKER STATE CANADA
HOLDING COMPANY
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
PENNZOIL-QUAKER
STATE INVESTMENT COMPANY
/s/ Xxxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxxxx
President
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the
several Initial Purchasers
/s/ Xxxxxx Tulip
------------------
Authorized Signatory
SCHEDULE 1
GUARANTORS
Blue Coral, Inc.
Blue Coral-Slick 50, Inc.
Blue Coral -Slick 50, Ltd.
Jiffy Lube International, Inc.
Jiffy Lube International of Maryland, Inc.
Medo Industries, Inc.
Pennzoil-Quaker State Canada Holding Company
Pennzoil-Quaker State Investment Company
Pennzoil-Quaker State International Corporation
Q Lube, Inc.
Rain-X Corporation
