CLIMACHEM, INC.
$105,000,000 10 % Senior Notes due 2007
REGISTRATION RIGHTS AGREEMENT
November 26, 1997
Xxxxxxxxxxx Xxxxxxx Securities, Inc.
00 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CLIMACHEM, INC., an Oklahoma corporation (the
"Company"), is issuing and selling to Xxxxxxxxxxx Xxxxxxx
Securities, Inc. (the "Initial Purchaser"), upon the
terms set forth in a Purchase Agreement, dated as of
November 21, 1997 (the "Purchase Agreement"),
$100,000,000 aggregate principal amount of its 10 %
Senior Notes due 2007, Series A, including the guarantees
endorsed thereon (the "Notes"). As an inducement to the
Initial Purchaser to enter into the Purchase Agreement,
the Company and the guarantors (the "Guarantors") named
in the Purchase Agreement agree with the Initial Purchas-
er, for the benefit of the holders of the Securities
(defined below) (including, without limitation, the
Initial Purchaser), as follows:
1. Definitions
Capitalized terms used herein without defini-
tion shall have their respective meanings set forth in
the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:
Advice: See Section 6(s).
Agreement: This Registration Rights Agreement.
Applicable Period: See Section 2(f).
Business Days: Any day other than (i) Saturday
or Sunday, or (ii) a day on which banking institutions in
the State of New York are authorized or obligated by law
or executive order to be closed.
Closing Date: November 26, 1997.
Effectiveness Date: The 150th day following
the Closing Date.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(a).
Exchange Act: The Securities Exchange Act of
1934, as amended, and the rules and regulations of the
SEC promulgated thereunder.
Exchange Offer: See Section 2(a).
Exchange Offer Registration Statement: See
Section 2(a).
Exchange Securities: 10 % Senior Notes due
2007, Series B, of the Company, including like guarantees
endorsed thereon, identical in all respects to the Notes,
except for references to series and restrictive legends.
Filing Date: The 60th day following the
Closing Date.
Holder: Each holder of Registrable Securities.
2
Indenture: The Indenture, dated the date
hereof, between the Company and Bank One, 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 Shelf Registration: See Section 3(a).
Liquidated Damages Amount: See Section 4(a).
Losses: See Section 8(a).
NASD: The National Association of Securities
Dealers, Inc.
Participating Broker-Dealer: See Section 2(f).
Person: An individual, trustee, corporation,
limited liability company, partnership, joint stock
company, joint venture, trust, unincorporated
organization or government or any agency or political
subdivision thereof, union, business association, firm or
other entity.
Private Exchange: See Section 2(g).
Private Exchange Securities: See Section 2(g).
Prospectus: The prospectus included in any
Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registra-
tion statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of
the offering of any portion of the Securities covered by
such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospec-
tus.
Registrable Securities: (i) Notes, (ii)
Private Exchange Securities and (iii) Exchange Securities
received in the Exchange Offer that may not be sold
without restriction under federal or state securities
law.
3
Registration Statement: Any registration
statement of the Company that covers any of the Securi-
ties pursuant to the provisions of this Agreement, in-
cluding the Prospectus, amendments and supplements to
such registration statement, including post-effective
amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in
such registration statement.
Rule 144: Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or any
similar rule (other than Rule 144A) or regulation
hereafter adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act,
as such Rule may be amended from time to time, or any
similar rule (other than Rule 144) or regulation
hereafter adopted by the SEC.
Rule 415: Rule 415 under the Securities Act,
as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities: The Notes, the Private Exchange
Securities and the Exchange Securities, collectively.
Securities Act: The Securities Act of 1933, as
amended, and the rules and regulations of the SEC promul-
gated thereunder.
Shelf Notice: See Section 2(i).
Shelf Registration: The Initial Shelf Regis-
tration and any Subsequent Shelf Registration.
Special Counsel: Counsel chosen by the holders
of a majority in aggregate principal amount of Securi-
ties.
Subsequent Shelf Registration: See Section
3(b).
TIA: The Trust Indenture Act of 1939, as
amended.
4
Trustee: The trustee under the Indenture and,
if any, the trustee under any indenture governing the
Exchange Securities or the Private Exchange Securities.
Underwritten Registration or Underwritten
Offering: A registration in which securities of the
Company are sold to an underwriter for reoffering to the
public.
2. Exchange Offer
(a) The Company and the Guarantors shall (i)
prepare and file with the SEC promptly after the date
hereof, but in no event later than the Filing Date, a
registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities
Act with respect to a proposed offer (the "Exchange
Offer") to the Holders to issue and deliver to such
Holders, in exchange for the Notes, a like aggregate
principal amount of Exchange Securities, (ii) use their
best efforts to cause the Exchange Offer Registration
Statement to become effective as promptly as practicable
after the filing thereof, but in no event later than the
Effectiveness Date, (iii) keep the Exchange Offer Regis-
tration Statement effective until the consummation of the
Exchange Offer pursuant to its terms, and (iv) unless the
Exchange Offer would not be permitted by a policy of the
SEC, commence the Exchange Offer and use their best
efforts to issue, on or prior to 30 business days after
the date on which the Exchange Offer Registration State-
ment is declared effective, Exchange Securities in ex-
change for all Notes tendered prior thereto in the
Exchange Offer. The Exchange Offer shall not be subject to
any conditions, other than that the Exchange Offer does
not violate applicable law or any applicable interpreta-
tion of the Staff of the SEC.
(b) The Exchange Securities shall be issued
under, and entitled to the benefits of, the Indenture or
a trust indenture that is identical to the Indenture
(other than such changes as are necessary to comply with
any requirements of the SEC to effect or maintain the
qualification thereof under the TIA).
(c) In connection with the Exchange Offer, the
Company and the Guarantors shall:
5
(i) mail to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registra-
tion Statement, together with an appropriate letter of
transmittal that is an exhibit thereto and related
documents;
(ii) keep the Exchange Offer open for not
less than 30 days after the date notice thereof is mailed
to the Holders (or longer if required by applicable law);
(iii) utilize the services of a
depository for the Exchange Offer with an address in the
Borough of Manhattan, The City of New York;
(iv) 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
(v) otherwise comply with all laws appli-
cable to the Exchange Offer.
(d) As soon as practicable after the close of
the Exchange Offer, the Company and the Guarantors shall:
(i) accept for exchange all Notes validly
tendered and not validly withdrawn pursuant to the Ex-
change Offer;
(ii) deliver to the Trustee for cancella-
tion all Notes so accepted for exchange; and
(iii) cause the Trustee promptly to
authenticate and deliver to each Holder of Notes,
Exchange Securities equal in aggregate principal amount
to the Notes of such Holder so accepted for exchange.
(e) Interest on each Exchange Security and
Private Exchange Security 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 Exchange Security and Private
Exchange Security shall bear interest at the rate set
forth thereon; provided that interest with respect to the
6
period prior to the issuance thereof shall accrue at the
rate or rates borne by the Notes from time to time during
such period.
(f) The Company and the Guarantors shall
include within the Prospectus contained in the Exchange
Offer Registration Statement a section entitled "Plan of
Distribution," containing a summary statement of the
positions taken or policies made by the Staff of the SEC
with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of Exchange Securities
received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer"). Such "Plan of
Distribution" section shall also allow the use of the
Prospectus by all Persons subject to the prospectus
delivery requirements of the Securities Act, including
(without limitation) all Participating Brokers-Dealers,
and include a statement describing the means by which
Participating Broker-Dealers may resell the Exchange
Securities. The Company shall use its best efforts to
keep the Exchange Offer Registration Statement effective
and to amend and supplement the Prospectus to be lawfully
delivered by all Persons subject to the prospectus
delivery requirement of the Securities Act for such
period of time as such Persons must comply with such
requirements in order to resell the Exchange Securities;
provided that such period shall not exceed 180 days after
consummation of the Exchange Offer (as such period may be
extended pursuant to the last paragraph of Section 6
hereof (the "Applicable Period")).
(g) If, prior to consummation of the Exchange
Offer, the Initial Purchaser holds any Notes acquired by
it and having the status as an unsold allotment in the
initial distribution, the Company shall, upon the request
of the Initial Purchaser, simultaneously with the
delivery of the Exchange Securities in the Initial Ex-
change Offer, issue (pursuant to the same indenture as
the Exchange Securities) and deliver to the Initial
Purchaser, in exchange for the Securities held by the
Initial Purchaser (the "Private Exchange"), a like
principal amount of debt securities of the Company that
are identical to the Exchange Securities (the "Private
Exchange Securities"). The Private Exchange Securities
shall bear the same CUSIP number as the Exchange
Securities.
7
(h) The Company may require each Holder
participating in the Exchange Offer to represent to the
Company that at the time of the consummation of the
Exchange Offer (i) any Exchange Securities received by
such Holder in the Exchange Offer will be acquired in the
ordinary course of its business, (ii) such Holder will
have no arrangement or understanding with any Person to
participate in the distribution of the Exchange
Securities within the meaning of the Securities Act or
resale of the Exchange Securities in violation of the
Securities Act and (iii) if such Holder is not a broker-
dealer, that it is not engaged in and does not intend to
engage in, the distribution of the Exchange Securities,
(iv) if such Holder is a broker-dealer that will receive
Exchange Securities for its own account in exchange for
Notes that were acquired as a result of market-making or
other trading activities, that it will deliver a prospec-
tus, as required by law, in connection with any resale of
such Exchange Securities, and (v) if such Holder is an
affiliate, that it will comply with the registration and
prospectus delivery requirements of the Securities Act
applicable to it.
(i) If (i) prior to the consummation of the
Exchange Offer, either the Company or the Holders of a
majority in aggregate principal amount of Registrable
Securities determines in its or their reasonable
judgment that (A) the Exchange Securities would not,
upon receipt, be tradeable by the Holders thereof
without restriction under the Securities Act and the
Exchange Act and without material restrictions under
applicable Blue Sky or state securities laws, or (B) the
interests of the Holders under this Agreement, taken as
a whole, would be materially adversely affected by the
consummation of the Exchange Offer, (ii) applicable
interpretations of the Staff of the SEC would not permit
the consummation of the Exchange Offer prior to the
Effectiveness Date, (iii) subsequent to the consummation
of the Private Exchange but within one year of the
Closing Date, the Initial Purchaser so requests, (iv)
the Exchange Offer is not consummated within 180 days of
the Closing Date for any reason or (v) in the case of
any Holder not permitted to participate in the Exchange
Offer or of any Holder participating in the Exchange
Offer that receives Exchange Securities that may not 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) and, in either case
contemplated by this clause (v), such Holder notifies
the Company within six months of consummation of the
8
Exchange Offer, then the Company shall promptly deliver
to the Holders (or in the case of any occurrence of the
event described in clause (v) hereof, to any such
Holder) and the Trustee notice thereof (the "Shelf No-
xxxx") and shall as promptly as possible thereafter file
an Initial Shelf Registration pursuant to Section 3.
3. Shelf Registration
If a Shelf Notice is required to be delivered
pursuant to Section 2(i)(i), (ii), (iii) or (iv), then
this Section 3 shall apply to all Registrable Securi-
ties. Otherwise, upon consummation of the Exchange
Offer in accordance with Section 2, the provisions of
this section shall apply solely with respect to (i)
Notes held by any Holder thereof not permitted to
participate in the Exchange Offer and (ii) Exchange
Securities that are not freely tradeable as contemplated
by Section 2(i)(v) hereof.
(a) Initial Shelf Registration. The Company
and the Guarantors shall prepare and file with the SEC a
Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of
the Registrable Securities (the "Initial Shelf
Registration"). If the Company and the Guarantors have
not yet filed an Exchange Offer, the Company and the
Guarantors shall file with the SEC the Initial Shelf
Registration on or prior to the Filing Date. Otherwise,
the Company and the Guarantors shall use their best
efforts to file the Initial Shelf Registration within 20
days of the delivery of the Shelf Notice or as promptly
as possible following the request of the Initial
Purchaser. The Initial Shelf Registration shall be on
Form S-1 or another appropriate form permitting regis-
tration of such Registrable Securities for resale by
such holders in the manner or manners designated by them
(including, without limitation, one or more underwritten
offerings). The Company and the Guarantors shall (i)
not permit any securities other than the Registrable
Securities to be included in any Shelf Registration, and
(ii) use their best efforts to cause the Initial Shelf
Registration to be declared effective under the Securi-
ties Act as promptly as practicable after the filing
thereof and to keep the Initial Shelf Registration
continuously effective under the Securities Act until
the date that is 24 months from the Effectiveness Date
(subject to extension pursuant to the last paragraph of
Section 6 hereof) (the "Effectiveness Period"), or such
shorter period ending when (i) all Registrable
9
Securities covered by the Initial Shelf Registration
have been sold or (ii) a Subsequent Shelf Registration
covering all of the Registrable Securities has been
declared effective under the Securities Act.
(b) Subsequent Shelf Registrations. If any
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 best efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in
any event shall within 30 days of such cessation of
effectiveness amend the Shelf Registration in a manner
reasonably expected to obtain the withdrawal of the
order suspending the effectiveness thereof, or file an
additional "shelf" Registration Statement pursuant to
Rule 415 covering all of the Registrable Securities (a
"Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Company and the Guarantors
shall use their best efforts to cause the Subsequent
Shelf Registration to be declared effective as soon as
practicable after such filing and to keep such
Subsequent Shelf Registration continuously effective for
a period equal to the number of days in the Effec-
tiveness Period less the aggregate number of days during
which the Initial Shelf Registration, and any Subsequent
Shelf Registration, was previously effective.
4. Liquidated Damages.
(a) The Company and the Guarantors acknowl-
edge and agree that the holders of Registrable Securi-
ties will suffer damages, and that it would not be
feasible to ascertain the extent of such damages with
precision, if the Company and the Guarantors fail to
fulfill their obligations hereunder. Accordingly, in
the event of such failure, the Company and the
Guarantors jointly and severally agree to pay liquidated
damages to each Holder under the circumstances and to
the extent set forth below:
(i) if neither the Exchange Offer Registra-
tion Statement nor the Initial Shelf Registration has
been filed with the SEC on or prior to the Filing Date;
or
10
(ii) if neither the Exchange Offer
Registration Statement nor the Initial Shelf Registra-
tion is declared effective by the SEC on or prior to the
Effectiveness Date; or
(iii) if the Company has not exchanged
Exchange Securities for all Notes validly tendered in
accordance with the terms of the Exchange Offer within
30 business days after the date on which an Exchange
Offer Registration Statement is declared effective by
the SEC; or
(iv) if a Shelf Registration is filed and
declared effective by the SEC but thereafter ceases to
be effective without being succeeded within 30 days by a
Subsequent Shelf Registration filed and declared effec-
tive;
(each of the foregoing a "Registration Default," and the
date on which the Registration Default occurs being
referred to herein as an "Event Date").
Upon the occurrence of any Registration
Default, the Company shall pay, or cause to be paid (and
the Guarantors hereby guarantee the payment of), in
addition to amounts otherwise due under the Indenture
and the Registrable Securities, as liquidated damages,
and not as a penalty, to each holder of a Registrable
Security, an additional amount (the "Liquidated Damages
Amount") equal to one-half of one percent (0.5%) per
annum of the principal amount of the Registrable
Securities held by such Holder during the first 90-day
period immediately following such Event Date, increasing
by an additional one-half of one percent (0.5%) per
annum of the principal amount of such Registrable
Securities during each subsequent 90-day period up to a
maximum Liquidated Damages Amount equal to two percent
(2.0%) per annum of the principal amount of the
Registrable Securities; provided that such liquidated
damages will, in each case, cease to accrue (subject to
the occurrence of another Registration Default) on the
date on which all Registration Defaults have been cured.
A Registration Default under clause (i) above shall be
cured on the date that either the Exchange Offer Regis-
tration Statement or the Initial Shelf Registration is
filed with the SEC; a Registration Default under clause
(ii) above shall be cured on the date that either the
Exchange Offer Registration Statement or the Initial
Shelf Registration is declared effective by the SEC; a
11
Registration Default under clause (iii) above shall be
cured on the earlier of the date (A) the Exchange Offer
is consummated with respect to all Notes validly ten-
dered or (B) an Initial Shelf Registration is declared
effective; and a Registration Default under clause (iv)
above shall be cured on the earlier of (A) the date on
which the applicable Shelf Registration is no longer
subject to an order suspending the effectiveness thereof
or proceedings relating thereto or (B) a new Subsequent
Shelf Registration is declared effective.
(b) The Company shall notify the Trustee
within five Business Days after each Event Date. The
Company shall pay the liquidated damages due on the
Registrable Securities by depositing with the Trustee,
in trust, for the benefit of the Holders thereof, by
12:00 noon, New York City time, on or before the appli-
cable semi-annual interest payment date for the Regis-
trable Securities, immediately available funds in sums
sufficient to pay the liquidated damages then due. The
Liquidated Damages Amount due shall be payable on each
interest payment date to the record holder of Registra-
ble Securities entitled to receive the interest payment
to be made on such date as set forth in the Indenture.
5. Hold-Back Agreements
The Company and the Guarantors agree (i)
without the prior written consent of the Holders of a
majority of the aggregate principal amount of the then
outstanding Securities, not to effect any public or pri-
vate sale or distribution (including a sale pursuant to
Regulation D under the Securities Act) of any securities
(other than the Securities) the same as or substantially
similar to those covered by a Registration Statement
filed pursuant to Section 2 or 3 hereof, or any
securities convertible into or exchangeable or exercis-
able for such securities, during the 10 days prior to,
and during the 90-day period beginning on, (A) the
effective date of any Registration Statement filed
pursuant to Sections 2 and 3 hereof unless the Holders
of a majority in aggregate principal amount of
Registrable Securities to be included in such Registra-
tion Statement consent or (B) the commencement of an
underwritten public distribution of Registrable Securi-
ties, where the managing underwriter so requests; and
(ii) to cause each holder of such securities (other than
the Securities) that are the same as or substantially
12
similar to Registrable Securities issued at any time
after the date of this Agreement (other than securities
purchased in a registered public offering) to agree not
to effect any public sale or distribution of any such
securities during such periods, including a sale
pursuant to Rule 144 or Rule 144A.
6. Registration Procedures
In connection with the registration of any
Securities pursuant to Sections 2 or 3 hereof, each of
the Company and the Guarantors shall effect such
registrations pursuant to the terms of this Agreement to
permit the sale of such Securities in accordance with
the intended method or methods of disposition thereof,
and pursuant thereto the Company and the Guarantors
shall:
(a) Prepare and file with the SEC, as soon as
practicable after the date hereof but in any event on or
prior to the Filing Date, a Registration Statement or
Registration Statements as prescribed by Section 2 or 3,
and use its best efforts to cause each such Registration
Statement to become effective and remain effective as
provided herein; provided, that, if (i) such filing is
pursuant to Section 3 or (ii) a Prospectus contained in
an Exchange Offer Registration Statement filed pursuant
to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Securities during the Applicable
Period, before filing any Registration Statement or Pro-
spectus or any amendments or supplements thereto, the
Company and the Guarantors shall, if requested, furnish
to and afford the Holders of the Registrable Securities
covered by such Registration Statement, their Special
Counsel, each Participating Broker-Dealer, the managing
underwriters, if any, and their counsel a reasonable
opportunity to review and make available for inspection
by such Persons copies of all such documents (including
copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed,
such financial and other information and books and re-
cords of the Company and the Guarantors, and cause the
officers, directors and employees of the Company and the
Guarantors, Company counsel and independent certified
public accountants of the Company, to respond to such
inquiries, as shall be necessary, in the opinion of
respective counsel to such Holders, Participating
Broker-Dealer and underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act.
13
The Company may require each Holder to agree to keep
confidential any non-public information relating to the
Company received by such Holder and not disclose such
information (other than to an Affiliate or prospective
purchaser who agrees to respect the confidentiality
provisions of this Section 6(a)) until such information
has been made generally available to the public unless
the release of such information is required by law or
necessary to respond to inquiries of regulatory authori-
ties (including the National Association of Insurance
Commissioners, or similar organizations or their
successors). Neither the Company nor the Guarantors
shall file any Registration Statement or Prospectus or
any amendments or supplements thereto in respect of
which the Holders must be afforded an opportunity to
review prior to the filing of such document, if the
Holders of a majority in aggregate principal amount of
the Registrable Securities covered by such Registration
Statement, their Special Counsel, any Participating
Broker-Dealer or the managing underwriters, if any, or
their counsel shall reasonably object.
(b) Provide an indenture trustee for the
Registrable Securities or the Exchange Securities, as
the case may be, and cause the Indenture (or other
indenture relating to the Registrable Securities) to be
qualified under the TIA not later than the effective
date of the first Registration Statement; and in connec-
tion therewith, to effect such changes to such indenture
as may be required for such indenture to be so qualified
in accordance with the terms of the TIA; and execute,
and use its best efforts to cause such trustee to
execute, all documents as may be required to effect such
changes, and all other forms and documents required to
be filed with the SEC to enable such indenture to be so
qualified in a timely manner.
(c) Prepare and file with the SEC such amend-
ments and post-effective amendments to the Registration
Statement as may be necessary to keep such Registration
Statement continuously effective for the time periods
required hereby; 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) under the Securities Act; and comply in all
material respects with the provisions of the Securities
Act and the Exchange Act applicable thereto with respect
to the disposition of all securities covered by such
Registration Statement, as so amended, or in such
14
Prospectus, as so supplemented, in accordance with the
intended methods of distribution set forth in such
Registration Statement or Prospectus as so amended.
(d) Furnish to such selling Holders and
Participating Broker-Dealers who so request (i) upon the
Company's receipt, a copy of the order of the SEC xx-
xxxxxxx such Registration Statement and any post-effec-
tive amendment thereto effective and (ii) such
reasonable number of copies of such Registration State-
ment and of each amendment and supplement thereto (in
each case including any documents incorporated therein
by reference and all exhibits), (iii) such reasonable
number of copies of the Prospectus included in such
Registration Statement (including each preliminary Pro-
spectus), and such reasonable number of copies of the
final Prospectus as filed by the Company pursuant to
Rule 424(b) under the Securities Act, in conformity with
the requirements of the Securities Act, and (iv) such
other documents (including any amendments required to be
filed pursuant to clause (c) of this Section), as any
such Person may reasonably request. The Company and the
Guarantors hereby consent to the use of the Prospectus
by each of the selling Holders of Registrable Securities
or each such Participating Broker-Dealer, as the case
may be, and the underwriters or agents, if any, and
dealers (if any), in connection with the offering and
sale of the Registrable Securities covered by, or the
sale by Participating Broker-Dealers of the Exchange
Securities pursuant to, such Prospectus and any amend-
ment thereto.
(e) If (A) a Shelf Registration is filed
pursuant to Section 3 or (B) a Prospectus contained in
an Exchange Offer Registration Statement filed pursuant
to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Securities during the Applicable
Period, notify the selling Holders of Registrable
Securities, their Special Counsel, each Participating
Broker-Dealer and the managing underwriters, if any,
promptly (but in any event within two Business Days),
and confirm such notice in writing, (i) when a Prospec-
tus 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, (ii) of
the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or of any
order preventing or suspending the use of any Prospectus
15
or the initiation of any proceedings for that purpose,
(iii) if, at any time when a Prospectus is required by
the Securities Act to be delivered in connection with
sales of the Registrable Securities, the representations
and warranties of the Company or any of the Guarantors
contained in any agreement (including any underwriting
agreement) contemplated by Section 6(n) below cease to
be true and correct in any material respect, (iv) of the
receipt by the Company or any of the Guarantors of any
notification with respect to the suspension of the
qualification or exemption from qualification of a
Registration Statement or any of the Registrable Securi-
ties or the Exchange Securities to be sold by any
Participating Broker-Dealer for offer or sale in any
jurisdiction, or the contemplation, initiation or
threatening of any proceeding for such purpose, (v) of
the happening of any event that makes any statement made
in such Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or
that requires the making of any changes in such
Registration Statement, Prospectus or documents so that
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
reasonable determination that a post-effective amendment
to a Registration Statement would be appropriate.
(f) Use its reasonable efforts to register or
qualify, and, if applicable, to cooperate with the
selling Holders of Registrable Securities, the
underwriters, if any, and their respective counsel in
connection with the registration or qualification (or
exemption from such registration or qualification) of,
Securities to be included in a Registration Statement
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 underwriters reasonably request in writing;
and, if Securities are offered other than through an
Underwritten Offering, the Company shall cause its
counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed
pursuant to this Section 6(f) at the expense of the
Company; 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
necessary or advisable to enable the disposition in such
jurisdictions of the Securities covered by the
16
applicable Registration Statement, provided, however,
that none of the Company or the Guarantors shall be
required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified, (ii) to
take action that would subject it to general service of
process in any jurisdiction where it is not so subject
or (iii) subject it to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not
then subject.
(g) Use its reasonable 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 Securities for sale in any jurisdiction, and, if
any such order is issued, to use its best efforts to
obtain the withdrawal of any such order at the earliest
possible time.
(h) If (A) a Shelf Registration is filed
pursuant to Section 3 or (B) a Prospectus contained in
an Exchange Offer Registration Statement filed pursuant
to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Securities during the Applicable
Period, and if requested by the managing underwriters,
if any, or the Holders of a majority in aggregate
principal amount of the Registrable Securities, (i)
promptly incorporate in a Prospectus or post-effective
amendment such information as the managing underwriters,
if any, or such Holders reasonably request to be
included therein required to comply with any applicable
law and (ii) make all required filings of such Pro-
spectus or such post-effective amendment as soon as
practicable after the Company has received notification
of such matters required by Applicable Law to be
incorporated in such Prospectus or post-effective
amendment.
(i) If (A) a Shelf Registration is filed
pursuant to Section 3 or (B) a Prospectus contained in
an Exchange Offer Registration Statement filed pursuant
to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Securities during the Applicable
Period, cooperate with the selling Holders and the
managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates
shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust
17
Company ("DTC"); and enable such Registrable Securities
to be in such denominations and registered in such names
as the managing underwriters, if any, or Holders may
reasonably request.
(j) If (i) a Shelf Registration is filed
pursuant to Section 3 or (ii) a Prospectus contained in
an Exchange Offer Registration Statement filed pursuant
to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Securities during the Applicable
Period, upon the occurrence of any event contemplated by
paragraph 6(e)(v) or 6(e)(vi) above, as promptly as
practicable prepare a supplement or post-effective
amendment to the Registration Statement or a supplement
to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter
delivered to the purchasers of the Registrable
Securities being sold thereunder or to the purchasers of
the Exchange Securities to whom such Prospectus will be
delivered by a Participating Broker-Dealer, 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 light of the circumstances under which they
were made, not misleading.
(k) Use its reasonable efforts to cause the
Securities covered by a Registration Statement to be
rated with the appropriate rating agencies, if appro-
priate, if so requested by the Holders of a majority in
aggregate principal amount of Securities covered by such
Registration Statement or the managing underwriters, if
any.
(l) Prior to the effective date of the first
Registration Statement relating to the Securities, (i)
provide the applicable trustee with printed certificates
for the Securities in a form eligible for deposit with
DTC and (ii) provide a CUSIP number for each of the
Securities.
(m) Use its reasonable efforts to cause all
Securities covered by such Registration Statement to be
listed on each securities exchange, if any, on which
similar debt securities issued by the Company are then
listed.
18
(n) If a Shelf Registration is filed pursuant
to Section 3, enter into such agreements (including an
underwriting agreement in form, scope and substance as
is customary in Underwritten Offerings) and take all
such other actions in connection therewith (including
those reasonably requested by the managing underwriters,
if any, or the Holders of a majority in aggregate
principal amount of the Registrable Securities being
sold) in order to expedite or facilitate the regis-
tration or the disposition of such Registrable
Securities, and in such connection, whether or not an
underwriting agreement is entered into and whether or
not the registration is an Underwritten Registration,
(i) make such representations and warranties to the
Holders and the underwriters, if any, with respect to
the business of the Company and its subsidiaries, and
the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by
reference therein, 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 reasonably requested; (ii) obtain an opinion of
counsel to the Company (which counsel and opinion (in
form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and
the Holders of a majority in principal amount of the
Registrable Securities being sold), addressed to each
selling Holder and each of the underwriters, if any,
covering the matters customarily covered in opinions
requested in Underwritten Offerings; (iii) obtain "cold
comfort" letters and updates thereof (which letters and
updates (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters)
from the independent certified public accountants of the
Company (and, if necessary, any other independent certi-
fied public accountants of any subsidiary of the Company
or of any business acquired by the Company for which
financial statements and financial data are, or are
required to be, included in the Registration Statement),
addressed to each of the underwriters and each selling
Holder, such letters to be in customary form and
covering matters of the type customarily covered in
"cold comfort" letters in connection with Underwritten
Offerings and such other matters as reasonably requested
by underwriters; and (iv) deliver such documents and
certificates as may be reasonably requested by the
Holders of a majority in principal amount of the Regis-
trable Securities being sold and the managing under-
writers, if any, to evidence the continued validity of
the representations and warranties of the Company and
its subsidiaries made pursuant to clause (i) above and
to evidence compliance with any conditions contained in
19
the underwriting agreement or other similar agreement
entered into by the Company.
(o) Comply with all applicable rules and
regulations of the SEC and make generally available to
its security holders 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 on the first day of the fiscal quarter
following each fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment
or best efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on
the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement,
which statements shall cover said 12-month periods.
(p) Upon consummation of an Exchange Offer or
Private Exchange, obtain an opinion of counsel to the
Company (in form, scope and substance reasonably satis-
factory to the Initial Purchaser), addressed to all
Holders participating in the Exchange Offer or Private
Exchange, as the case may be, to the effect that (i) the
Company and the Guarantors have duly authorized,
executed and delivered the Exchange Securities or the
Private Exchange Securities, as the case may be, and the
Indenture and (ii) the Exchange Securities or the
Private Exchange Securities, as the case may be, and the
Indenture constitute legal, valid and binding obliga-
tions of the Company and the Guarantors, enforceable
against the Company and the Guarantors in accordance
with their respective terms, except as such enforcement
may be subject to (x) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies
generally and (y) general principles of equity (regard-
less of whether such enforcement is sought in a proceed-
ing in equity or at law).
(q) If an Exchange Offer or Private Exchange
is to be consummated, upon delivery of the Registrable
Securities by such Holders to the Company (or to such
other Person as directed by the Company) in exchange for
the Exchange Securities or the Private Exchange Securi-
ties, as the case may be, the Company shall xxxx, or
caused to be marked, on such Registrable Securities that
20
such Registrable Securities are being cancelled in ex-
change for the Exchange Securities or the Private Ex-
change Securities, as the case may be; in no event shall
such Registrable Securities be marked as paid or other-
wise satisfied.
(r) Cooperate with each seller of Registrable
Securities covered by any Registration Statement and
each underwriter, if any, participating in the disposi-
tion of such Registrable Securities and their respective
counsel in connection with any filings required to be
made with the NASD.
(s) Use its best efforts to take all other
steps necessary to effect the registration of the Regis-
trable Securities covered by a Registration Statement
contemplated hereby.
The Company may require each seller of Regis-
trable Securities or Participating Broker-Dealer as to
which any registration is being effected to furnish to
the Company such information regarding such seller or
Participating Broker-Dealer and the distribution of such
Registrable Securities or Exchange Securities as the
Company may, from time to time, reasonably request in
writing. The Company may exclude from such registration
the Registrable Securities of any seller or Exchange
Securities of any Participating Broker-Dealer who unrea-
sonably fails to furnish such information.
Each Holder and each Participating Broker-
Dealer agrees by acquisition of such Registrable
Securities or Exchange Securities of any Participating
Broker-Dealer that, upon receipt of written notice from
the Company of the happening of any event of the kind
described in Section 6(e)(ii), 6(e)(iv), 6(e)(v) or
6(e)(vi), such Holder will forthwith discontinue
disposition (in the jurisdictions specified in a notice
of a 6(e)(iv) event, and elsewhere in a notice of a
6(e)(ii), 6(e)(v) or 6(e)(vi) event) of such Securities
covered by such Registration Statement or Prospectus
until such Holder's receipt of the copies of the supple-
mented or amended Prospectus contemplated by Section
6(j), or until it is advised in writing (the "Advice")
by the Company that offers or sales in a particular
jurisdiction may be resumed or that the use of the
applicable Prospectus may be resumed, as the case may
be, and has received copies of any amendments or
supplements thereto. If the Company shall give such
21
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 such Securities covered by such
Registration Statement shall have received (x) the
copies of the supplemented or amended Prospectus contem-
plated by Section 6(j) or (y) the Advice.
7. Registration Expenses
Subject to the terms of this Agreement, 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 or a Shelf
Registration is filed or becomes effective, including,
without limitation:
(i) all registration and filing
fees (including, without limitation, (A) fees with
respect to filings required to be made with the
NASD and (B) fees and expenses of compliance with
state securities or Blue Sky laws (including,
without limitation, reasonable fees and disburse-
ments of counsel in connection with Blue Sky
qualifications of the Registrable Securities or Ex-
change Securities and determination of the eligi-
bility of the Registrable Securities or Exchange
Securities for investment under the laws of such
jurisdictions (x) where the Holders are located, in
the case of the Exchange Securities, or (y) as pro-
vided in Section 6(f), in the case of Registrable
Securities or Exchange Securities to be sold by a
Participating Broker-Dealer during the Applicable
Period);
(ii) printing expenses (including,
without limitation, expenses of printing certifi-
xxxxx for Registrable Securities or Exchange
Securities in a form eligible for deposit with DTC
and of printing Prospectuses if the printing of
Prospectuses is requested by the managing under-
writers, if any, or, in respect of Registrable
Securities or Exchange Securities to be sold by a
Participating Broker-Dealer during the Applicable
Period, by the Holders of a majority in aggregate
principal amount of the Registrable Securities
included in any Registration Statement or of such
Exchange Securities, as the case may be);
22
(iii) messenger, telephone,
duplication, word processing and delivery expenses
incurred by the Company in the performance of its
obligations hereunder;
(iv) fees and disbursements of
counsel for the Company;
(v) fees and disbursements of all
independent certified public accountants referred
to in Section 6(n)(iii) (including, without
limitation, the expenses of any special audit and
"cold comfort" letters required by or incident to
such performance);
(vi) fees and expenses of any
"qualified independent underwriter" or other
independent appraiser participating in an offering
pursuant to the rules and regulation of the NASD,
but only where the Company determines the need for
such a "qualified independent underwriter" arises
due to a relationship with the Company;
(vii) Securities Act liability
insurance, if the Company so desires such
insurance;
(viii) fees and expenses of all
other Persons retained by the Company; internal
expenses of the Company (including, without
limitation, all salaries and expenses of officers
and employees of the Company performing legal or
accounting duties); and the expense of any annual
audit; and
(ix) rating agency fees and the
fees and expenses incurred in connection with the
listing of the Securities to be registered on any
securities exchange.
8. Indemnification
(a) Indemnification by the Company. The
Company and the Guarantors, jointly and severally,
shall, without limitation as to time, indemnify and hold
harmless each Holder and each Participating Broker-
Dealer selling Exchange Securities during the Applicable
Period, each Person who controls each such Holder (with-
in the meaning of Section 15 of the Securities Act or
23
Section 20(a) of the Exchange Act) and the officers,
directors, partners, employees, representatives and
agents of each such Holder, Participating Broker-Dealer
and controlling person, to the fullest extent lawful,
from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation,
reasonable costs of preparation and reasonable
attorneys' fees) and expenses (including, without
limitation, reasonable costs and expenses incurred in
connection with investigating, preparing, pursuing or
defending against any of the foregoing) (collectively,
"Losses"), as incurred, directly or indirectly caused
by, related to, based upon, arising out of or in
connection with any untrue or alleged untrue statement
of a material fact contained in any Registration State-
ment, Prospectus or form of prospectus, or in any amend-
ment or supplement thereto, or in any preliminary
prospectus, or 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 light
of the circumstances under which they were made, not
misleading, except insofar as such Losses are based upon
information relating to such Holder or Participating
Broker-Dealer and furnished in writing to the Company
(or reviewed and approved in writing) by such Holder or
Participating Broker-Dealer expressly for use therein;
provided, however, that none of the Company or the
Guarantors shall be liable to any indemnified party to
the extent that any such Losses arise solely out of an
untrue statement or alleged untrue statement or omission
or alleged omission made in any preliminary prospectus
if (i) such indemnified party or related Holder of a
Registrable Security failed to send or deliver a copy of
the Prospectus with or prior to the delivery of written
confirmation of the sale by such indemnified party or
the related Holder of a Registrable Security to the
person asserting the claim from which such Losses arise,
(ii) the Prospectus would have corrected such untrue
statement or alleged untrue statement or omission or
alleged omission, and (iii) the Company and the
Guarantors have complied with their obligations under
Section 6(e) hereof. The Company and the Guarantors
shall also indemnify underwriters, their officers,
directors, agents and employees and each Person who
controls such Persons (within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange
Act) to the same extent as provided above with respect
to the indemnification of the Holders or the Partici-
pating Broker-Dealer.
24
(b) Indemnification by Holder of Registrable
Securities. In connection with any Registration State-
ment, Prospectus or form of prospectus, any amendment or
supplement thereto, or any preliminary prospectus in
which a Holder in which a Holder is participating, such
Holder shall furnish to the Company in writing such
information as the Company reasonably requests for use
in connection with any Registration Statement,
Prospectus or form of prospectus, any amendment or
supplement thereto, or any preliminary prospectus and
shall, without limitation as to time, indemnify and hold
harmless the Company and the Guarantors, their direc-
tors, officers, agents and employees, each Person, if
any, who controls the Company and the Guarantors (within
the meaning of Section 15 of the Securities Act and
Section 20(a) of the Exchange Act), and the directors,
officers, agents or employees of such controlling per-
sons, to the fullest extent lawful, from and against all
Losses arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in
any Registration Statement, Prospectus or form of
prospectus or in any amendment or supplement thereto or
in any preliminary prospectus, or 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 light of the circumstances
under which they were made, not misleading to the
extent, but only to the extent, that such untrue state-
ment or alleged untrue statement of a material fact or
omission or alleged omission of a material fact is con-
tained in any information so furnished in writing by
such Holder to the Company expressly for use therein.
In no event shall the liability of any selling Holder be
greater in amount than the dollar amount of the proceeds
(net of payment of all expenses) received by such Holder
upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
(c) Conduct of Indemnification Proceedings.
If any proceeding shall be brought or asserted against
any Person entitled to indemnity hereunder (an
"indemnified party"), such indemnified party shall
promptly notify the party or parties from which such
indemnity is sought (the "indemnifying parties") in
writing; provided, that the failure to so notify the
indemnifying parties shall not relieve the indemnifying
parties from any obligation or liability except to the
extent (but only to the extent) that it shall be finally
determined by a court of competent jurisdiction (which
25
determination is not subject to appeal) that the
indemnifying parties have been prejudiced materially by
such failure.
The indemnifying party shall have the right,
exercisable by giving written notice to an indemnified
party, within 20 business days after receipt of written
notice from such indemnified party of such proceeding,
to assume, at its expense, the defense of any such
proceeding, provided, that an indemnified party shall
have the right to employ separate counsel in any such
proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless:
(1) the indemnifying party has agreed to pay such fees
and expenses; or (2) the indemnifying party shall have
failed promptly to assume the defense of such proceeding
or employ counsel; or (3) the named parties to any such
proceeding (including any impleaded parties) include
both such indemnified party and the indemnifying party
or any of its affiliates or controlling persons, and
such indemnified party shall have been advised by
counsel that representation of such indemnified party
and any indemnifying party by the same counsel would be
inappropriate under applicable standards of professional
conduct due to actual or potential differing interest
between them (in which case, if such indemnified party
notifies the indemnifying parties in writing that it
elects to employ separate counsel at the expense of the
indemnifying parties, the indemnifying parties shall not
have the right to assume the defense thereof and the
reasonable fees and expenses of such counsel shall be at
the expense of the indemnifying party; it being under-
stood, however, that, the indemnifying party shall not,
in connection with any one such proceeding or separate
but substantially similar or related proceedings in the
same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time
for such indemnified party).
No indemnifying party shall be liable for any
settlement of any such proceeding effected without its
written consent, but if settled with its written
consent, or if there be a final judgment for the
plaintiff in any such proceeding, each indemnifying
party jointly and severally agrees, subject to the
exceptions and limitations set forth above, to indemnify
and hold harmless each indemnified party from and
against any and all Losses by reason of such settlement
or judgment. The indemnifying party shall not consent
26
to the entry of any judgment or enter into any
settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to
each indemnified party of a release, in form and
substance reasonably satisfactory to the indemnified
party, from all liability in respect of such proceeding
for which such indemnified party would be entitled to
indemnification hereunder (whether or not any indem-
nified party is a party thereto).
(d) Contribution. If the indemnification
provided for in this Section 8 is unavailable to an
indemnified party or is insufficient to hold such
indemnified party harmless for any Losses in respect of
which this Section 8 would otherwise apply by its terms
(other than by reason of exceptions provided in this
Section 8), then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have
a joint and several obligation to contribute to the
amount paid or payable by such indemnified party as a
result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with
the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying
party, on the one hand, and indemnified party, on the
other hand, shall be determined by reference to, among
other things, whether any untrue or alleged untrue
statement of a material fact or omission or alleged
omission to state a material fact relates to information
supplied by such indemnifying party or indemnified
party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or
prevent any such statement or omission. The amount paid
or payable by an indemnified party as a result of any
Losses shall be deemed to include any legal or other
fees or expenses incurred by such party in connection
with any Proceeding, to the extent such party would have
been indemnified for such fees or expenses if the
indemnification provided for in Section 8(a) or 8(b) was
available to such party.
The parties hereto agree that it would not be
just and equitable if contribution pursuant to this
Section 8(d) were determined by pro rata allocation or
by any other method of allocation that does not take
account of the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the
provisions of this Section 8(d), an indemnifying party
27
that is a selling Holder shall not be required to
contribute, in the aggregate, any amount in excess of
such Holder's Maximum Contribution Amount. A selling
Holder's "Maximum Contribution Amount" shall equal the
excess of (i) the aggregate proceeds received by such
Holder pursuant to the sale of such Registrable Securi-
ties over (ii) the aggregate amount of 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.
The indemnity and contribution agreements
contained in this Section 8 are in addition to any
liability that the indemnifying parties may have to the
indemnified parties.
9. Rule 144 and Rule 144A
Each of the Company and the Guarantors
covenants that it shall (a) file the reports required to
be filed by it (if so required) under the Securities Act
and the Exchange Act in a timely manner and, if at any
time any such Person is not required to file such
reports, it will, upon the request of any Holder, make
publicly available other information necessary to permit
sales pursuant to Rule 144 and Rule 144A and (b) take
such further action as any Holder may reasonably
request, all to the extent required from time to time to
enable such Holder to sell Registrable Securities
without registration under the Securities Act pursuant
to the exemptions provided by Rule 144 and Rule 144A.
Upon the request of any Holder, the Company and the
Guarantors shall deliver to such holder a written state-
ment as to whether they have complied with such informa-
tion and requirements.
10. Underwritten Registrations
If any of the Registrable Securities covered
by any Shelf Registration are to be sold in an
Underwritten Offering, the investment banker or invest-
ment bankers and manager or managers that will manage
the offering will be selected by the Holders of a
majority in aggregate principal amount of such
Registrable Securities included in such offering.
28
No holder of Registrable Securities may
participate in any Underwritten Registration hereunder
unless such holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, underwriting
agreements and other documents reasonably required under
the terms of such underwriting arrangements.
11. Miscellaneous
(a) Remedies. In the event of a breach by
the Company or any of the Guarantors of any of their
respective obligations under this Agreement, each
Holder, in addition to being entitled to exercise all
rights provided herein, in the Indenture or, in the case
of the Initial Purchaser, in the Purchase Agreement, or
granted by law, including recovery of damages, will be
entitled to specific performance of its rights under
this Agreement. The Company and the Guarantors agree
that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further
agree that, in the event of any action for specific
performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company
has not entered into, as of the date hereof, and shall
not enter into, after the date of this Agreement, any
agreement with respect to any of its securities that is
inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof.
(c) Amendments and Waivers. The provisions
of this Agreement, including the provisions of this sen-
tence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained
the written consent of Holders of at least a majority of
the then outstanding aggregate principal amount of
Registrable Securities; provided, that Sections 4, 6(a)
and 8 shall not be amended, modified or supplemented,
and waivers or consents to departures from this proviso
may not be given, unless the Company has obtained the
written consent of each Holder. Notwithstanding the
29
foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose securities
are being sold pursuant to a Registration Statement and
that does not directly or indirectly affect the rights
of other Holders may be given by Holders of at least a
majority in aggregate principal amount of the
Registrable Securities being sold by such Holders
pursuant to such Registration Statement, provided that
the provisions of this sentence may not be amended,
modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(d) Notices. All notices and other
communications (including, without limitation, any
notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by
hand-delivery, certified first-class mail, return
receipt requested, next-day air courier or facsimile:
(i) if to a Holder, at the most
current address given by such holder to the Company
in accordance with the provisions of this Section
11(d), which address initially is, with respect to
each holder, the address of such holder maintained
by the Registrar under the Indenture, with a copy
to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, telecopy
number (000) 000-0000, Attention: Xxxxxxx X.
Xxxxxx; and
(ii) if to the Company or the
Guarantors, initially ClimaChem, Inc., X.X. Xxx
000, 00 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx 00000, telecopy number (000) 000-0000,
Attention: Xxxx X. Xxxxxx, with a copy to Xxxxxx &
Xxxxxxx, One Leadership Square, Suite 1700, 000
Xxxxx Xxxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxxxxx, and thereafter at
such other address, notice of which is given in
accordance with the provisions of this Section
11(d).
All such notices and communications shall be
deemed to have been duly given: when delivered by hand,
if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; one
business day after being timely delivered to a next-day
30
air courier; and when receipt is acknowledged by the
addressee, if telecopied.
Copies of all such notices, demands or other
communications shall be concurrently delivered by the
Person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.
(e) Successors and Assigns. This Agreement
shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties,
including, without limitation and without the need for
an express assignment, subsequent Holders.
(f) Counterparts. This Agreement may be
executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the
same agreement.
(g) Headings. The headings in this Agreement
are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE COMPANY AND THE GUAR-
ANTORS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MAN-
XXXXXX IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SIT-
TING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS. EACH OF THE COMPANY AND THE GUAR-
ANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY
AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT
31
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH
OF THE COMPANY AND THE GUARANTORS IRREVOCABLY CONSENT,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTI-
FIED MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS SAID
ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMIT-
XXX BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE COMPANY OR THE GUARANTORS IN ANY
OTHER JURISDICTION.
(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) Entire Agreement. This Agreement is in-
tended by the parties as a final expression of their
agreement, and is intended to be a complete and
exclusive statement of the agreement and understanding
of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration
rights granted by the Company in respect of securities
sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
32
(k) Attorneys' Fees. In any proceeding
brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a
defense, the prevailing party, as determined by the
courts, shall be entitled to recover reasonable
attorneys' fees in addition to its costs and expenses
and any other available remedy.
(l) Securities Held by the Company or its
Affiliates. Whenever the consent or approval of Holders
of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the
Company or its affiliates (as such term is defined in
Rule 405 under the Securities Act) (other than Holders
deemed to be such affiliates solely by reason of their
holdings of such Registrable Securities) shall not be
counted in determining whether such consent or approval
was given by the holders of such required percentage.
33
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first written above.
CLIMACHEM, INC.
By:_______________________
Name: Xxxx X. Xxxxxx
Title: Vice President
34
THE GUARANTORS:
International Environmental
Corporation
Climate Master, Inc.
CHP Corporation
KOAX Corporation
APR Corporation
LSB Chemical Corp.
Slurry Explosive Corporation
Universal Tech Corporation
Total Energy Systems Limited
Northwest Financial Corporation
DSN Corporation
By:____________________________
Name: Xxxx X. Xxxxxx
Title: Vice President
Climate Mate, Inc.
The Environmental Group
International
Limited
By:_____________________________
Name: Xxxxx X. Xxxx
Total Energy Systems (NZ) Ltd.
T.E.S. Mining Services Pty. Ltd.
El Dorado Chemical Company
By:_____________________________
Name: Xxxxx X. Xxxxxx
35
The Environmental Group, Inc.
By:________________________________
Name: Xxxxx X. Xxxxxx
ACCEPTED AND AGREED TO:
XXXXXXXXXXX XXXXXXX SECURITIES, INC.
By:_________________________________
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
36
