EXHIBIT 4.8
_____________________________________________
Registration Rights Agreement
Dated as of January 20, 1999
among
Federal-Mogul Corporation,
and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
and
Chase Securities, Inc.
_____________________________________________
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into this 20th day of January 1999, among Federal-Mogul Corporation, a
Michigan corporation (the "Company"), and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Chase Securities Inc. (collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated
January 14, 1999, among the Company, the Guarantors (as hereinafter defined) and
the Initial Purchasers (the "Purchase Agreement"), which provides for the sale
by the Company to the Initial Purchasers of an aggregate of $400,000,000
principal amount of the Company's 7 3/8% Notes due and an aggregate of
$600,000,000 principal amount of the Company's 7 1/2% Notes due 2009
(collectively, the "Notes"). The Notes will be guaranteed (collectively the
"Guarantees") by each of the Guarantors. The Notes and the Guarantees are
collectively referred to herein as the "Securities". In order to induce the
Initial Purchasers to enter into the Purchase Agreement, the Company has agreed
to provide to the Initial Purchasers and their direct and indirect transferees
the registration rights set forth in this Agreement. The execution 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:
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As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Closing Date" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that such depositary
must have an address in the Borough of Manhattan, in the City of New York.
"Exchange Offer" shall mean the exchange offer by the Company and the
Guarantors of Exchange Securities for Registrable Securities pursuant to Section
2.1 hereof.
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"Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2.1 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,
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2.1
hereof.
"Exchange Securities" shall mean the 7 3/8% Notes due 2006, and the
7 1/2% Notes due 2009 issued by the Company under the Indenture and guaranteed
by the Guarantors containing terms identical to the Securities in all material
respects (except for references to certain interest rate provisions,
restrictions on transfers and restrictive legends), to be offered to Holders of
Securities in exchange for Registrable Securities pursuant to the Exchange
Offer.
"Guarantee" shall mean, with respect to the Notes, the guarantees
thereof by the Guarantors, with respect to the Exchange Securities, the
guarantees thereof by the Guarantors and with respect to the Private Exchange
Securities, the guarantees thereof by the Guarantors.
"Guarantors" collectively shall mean the Company's subsidiaries listed
on the signature page of the Purchase Agreement together with any subsidiary
that in the future executes a supplemental indenture pursuant to which such
subsidiary agrees to guarantee the Notes.
"Holder" shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture and each Participating Broker-Dealer that holds Exchange
Securities for so long as such Participating Broker-Dealer is required to
deliver a prospectus meeting the requirements of the 1933 Act in connection with
any resale of such Exchange Securities.
"Indenture" shall mean the Indenture relating to the Securities, dated
as of January 20, 1999, among the Company, the Guarantors and The Bank of New
York, as trustee, as the same may be amended, supplemented, waived or otherwise
modified from time to time in accordance with the terms thereof.
"Initial Purchaser" or "Initial Purchasers" shall have the meaning set
forth in the preamble.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indenture)
Registrable Securities; provided that whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company, the Guarantors and other
obligors on the Securities or any Affiliate (as defined in the Indenture) of the
Company shall be
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disregarded in determining whether such consent or approval was given by the
Holders of such required percentage amount.
"Participating Broker-Dealer" shall mean any of Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Chase Securities Inc. and any other broker-
dealer which makes a market in the Securities and exchanges Registrable
Securities in the Exchange Offer for Exchange Securities.
"Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2.1
hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2.1 hereof.
"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 any such
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 a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
"Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that Securities and, if issued,
the Private Exchange Securities, shall cease to be Registrable Securities when
(i) a Registration Statement with respect to such Securities shall have been
declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities have
been sold to the public pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A) under the 1933 Act or are eligible to be sold to the
public pursuant to Rule 144 (k) under the 1933 Act, (iii) such Securities shall
have ceased to be outstanding, (iv) such Securities shall have been otherwise
transferred by the Holder and a new security not bearing a legend restricting
further transfer shall have been delivered by the Company and subsequent
disposition of such Note shall not require registration or qualification under
the Securities Act, or (v) the Exchange Offer is consummated (except in the case
of Securities purchased from the Company and continued to be held by the Initial
Purchasers).
"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. (the "NASD") registration and filing
fees, (ii) all fees and expenses incurred in connection with
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compliance with state securities or blue sky laws and compliance with the rules
of the NASD (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities and any filings with the NASD),
(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, and any other documents
relating to the performance of and compliance with this Agreement by the
Company, (iv) all fees and expenses incurred in connection with the listing, if
any, of any of the Registrable Securities on any securities exchange or
exchanges, (v) all rating agency fees, (vi) the fees and disbursements of
counsel for the Company and of the independent public accountants of the
Company, including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, (vii) the fees and
expenses of the Trustee, and any exchange agent or custodian, (viii) the
reasonable fees and disbursements of one firm of special counsel representing
the Holders of Registrable Securities in any Shelf Registration and (ix) the
fees and expenses of any special experts retained by the Company in connection
with any Registration Statement, but excluding 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 which 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 all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency or government body performing the functions currently performed
by the United States Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2.2 hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company and the Guarantors pursuant to the provisions of
Section 2.2 of this Agreement which covers all of the Registrable Securities or
all of the Private Exchange Securities on an appropriate form under Rule 415
under the 1933 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 all material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Securities under
the Indenture.
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2. Registration Under the 1933 Act.
-------------------------------
2.1 Exchange Offer. (i) The Company and the Guarantors shall, for the
benefit of the Holders, at the Company's cost, unless the Exchange offer would
not be permitted by applicable law or SEC policy, (A) prepare and, as soon as
practicable but not later than 180 days following the Closing Date, file with
the SEC an Exchange Offer Registration Statement on an appropriate form under
the 1933 Act, with respect to a proposed Exchange Offer and the issuance and
delivery to the Holders, in exchange for the Registrable Securities (other than
Private Exchange Securities), of a like principal amount of Exchange Securities,
(B) use their best efforts to cause the Exchange Offer Registration Statement to
be declared effective under the 1933 Act within 240 days of the Closing Date,
(C) use their best efforts to keep the Exchange Offer Registration Statement
effective until the closing of the Exchange Offer and (D) use their best efforts
to cause the Exchange Offer to be consummated not later than 270 days following
the Closing Date. The Exchange Securities will be issued under the Indenture.
Upon the effectiveness of the Exchange Offer Registration Statement, the Company
and the Guarantors shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each holder eligible and electing to
exchange Registrable Securities for Exchange Securities (assuming that such
Holder (a) is not an affiliate of the Company within the meaning of Rule 405
under the 1933 Act, (b) is not a broker-dealer tendering Registrable Securities
acquired directly from the Company or the Guarantors for its own account, (c)
acquired the Exchange Securities in the ordinary course of such Holder's
business and (d) has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Securities) to transfer such Exchange Securities from and after their receipt
without any limitations or restrictions under the 1933 Act and under state
securities or blue sky laws other than the prospectus delivery requirement
applicable to a broker-dealer.
(ii) In connection with the Exchange Offer, the Company shall, and
shall cause each of the Guarantors as applicable, to:
(a) mail as promptly as practicable to each Holder a copy of
the Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal (including the
representations required to be made by such Holder under Section 2.1(v) below)
and related documents;
(b) keep the Exchange Offer open for acceptance for a period of
not less than 30 calendar days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law) (such period referred to
herein as the "Exchange Period");
(c) utilize the services of the Depositary for the Exchange
Offer;
(d) permit Holders to withdraw tendered Registrable Securities
at any timed prior to 5:00 p.m. (Eastern Time), on the last business day of the
Exchange Period, by sending to the institution specified in the notice in clause
(b) above, a telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of Registrable
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Securities delivered for exchange, the principal amount of Registrable
Securities that such Holder wishes to withdraw and a statement that such Holder
is withdrawing such Holder's election to have such Securities exchanged;
(e) notify each Holder that any Registrable Security not
tendered will remain outstanding and continue to accrue interest, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
(f) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
(iii) If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Company and the Guarantors
upon the request of any Initial Purchaser shall, simultaneously with the
delivery of the Exchange Securities in the Exchange Offer, issue and deliver to
such Initial Purchaser in exchange (the "Private Exchange") for the Securities
held by such Initial Purchaser, a like principal amount of debt securities of
the Company (guaranteed by the Guarantors) that are identical (except that such
securities shall bear appropriate transfer restrictions) to the Exchange
Securities (the "Private Exchange Securities").
(iv) The Exchange Securities and the Private Exchange Securities
shall be issued under (i) the Indenture or (ii) an indenture identical in all
material respects to the Indenture and which, in either case, has been qualified
under the Trust Indenture Act of 1939, as amended (the "TIA"), or is exempt from
such qualification and shall provide that the Exchange Securities shall not be
subject to the transfer restrictions set forth in the Indenture but that the
Private Exchange Securities shall be subject to such transfer restrictions. The
Indenture or such indenture shall provide that each series of the Exchange
Securities, the Private Exchange Securities and the Securities shall vote and
consent together on all matters as one class. The Private Exchange Securities
shall be of the same series as the "Exchange Securities" and the Company shall
use all commercially reasonable efforts to have the Private Exchange Securities
bear the same CUSIP numbers, Euroclear and Cedel Common Code Nos. and
International Identification Numbers ("ISIN") as the Exchange Securities. The
Company shall not have any liability under this Agreement solely as a result of
such Private Exchange Securities not bearing the same CUSIP numbers, Euroclear
and Cedel Common Code Nos and ISINs as the Exchange Securities.
(v) Each Holder of Registrable Securities that wishes to exchange
such Registrable Securities for Exchange Securities in the Exchange Offer will
be required to represent that:
(a) any Exchange Securities to be received by it shall be
acquired in the ordinary course of its business;
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(b) it has no arrangement or understanding with any person to
participate in the distribution (within the meaning of the 1933 Act)
of the Exchange Securities;
(c) it is not an affiliate of the Company (as defined in Rule
405 under the 1933 Act); and
(d) such other representations reasonably necessary under
applicable SEC rules, regulations or interpretations.
If such Holder is not a broker-dealer, it will be required to represent that it
is not engaged in, and does not intend to engage in, the distribution of the
Exchange Securities. If the Holder is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Registrable Securities that were
acquired as a result of market-making activities or other trading activities, it
will be required to acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities.
(vi) As soon as practicable after the close of the Exchange Offer
and/or the Private Exchange, as the case may be, the Company, and each of the
Guarantors as applicable, shall:
(a) accept for exchange all Registrable Securities duly tendered
and not validly withdrawn pursuant to the Exchange Offer in accordance
with the terms of the Exchange Offer Registration Statement and the
letter of transmittal which shall be an exhibit thereto;
(b) accept for exchange all Securities properly tendered
pursuant to the Private Exchange;
(c) deliver to the Trustee for cancellation all Registrable
Securities so accepted for exchange; and
(d) cause the Trustee promptly to authenticate and deliver
Exchange Securities or Private Exchange Securities, as the case may
be, to each Holder of Registrable Securities as so accepted for
exchange in a principal amount equal to the principal amount of the
Registrable Securities of such Holder so accepted for exchange.
(vii) Interest on each Exchange Security and Private Exchange
Security will accrue from the last date on which interest was paid on the
Registrable Securities surrendered in exchange therefor or, if no interest has
been paid on the Registrable Securities, from the date of original issuance. The
Exchange Offer and the Private Exchange shall not be subject to any conditions,
other than (i) that the Exchange Offer or the Private Exchange, or the making of
any exchange by a Holder, does not violate applicable law or any SEC policy,
(ii) the due tendering of
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Registrable Securities in accordance with the Exchange Offer and the Private
Exchange, (iii) that each Holder of Registrable Securities exchanged in the
Exchange Offer shall have represented that all Exchange Securities to be
received by it shall be acquired in the ordinary course of its business and that
at the time of the consummation of the Exchange Offer it shall have no
arrangement or understanding with any person to participate in the distribution
(within the meaning of the 1933 Act) of the Exchange Securities and shall have
made such other representations as may be reasonably necessary under applicable
SEC rules, regulations or interpretations to render the use of Form S-4 or other
appropriate form under the 1933 Act available and (iv) that no action or
proceeding shall have been instituted or threatened in any court or by or before
any governmental agency with respect to the Exchange Offer or the Private
Exchange which, in the Company's judgment would reasonably be expected to impair
the ability of the Company to proceed with the Exchange Offer or the Private
Exchange. 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 to contact such Holders and otherwise facilitate
the tender of Registrable Securities in the Exchange Offer.
2.2 Shelf Registration. (i) If, because of any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the
SEC, the Company or the Guarantors are not permitted to file the Exchange
Registration Statement or effect the Exchange Offer as contemplated by Section
2.1 hereof, (ii) if for any other reason the Exchange Offer Registration
Statement is not declared effective within 240 days following the original issue
of the Registrable Securities or the Exchange Offer is not consummated within
270 days after the original issue of the Registrable Securities, or (iii) if a
Holder (A) notifies the Company within 20 days after the commencement of the
Exchange Offer that it is not permitted to participate in the Exchange Offer or
(B) does not receive fully tradeable Exchange Securities pursuant to the
Exchange Offer, then in case of each of clauses (i) through (iii) each of the
Company, and the Guarantors as applicable, shall, at the Company's cost:
(a) As promptly as practicable, file with the SEC, and thereafter
shall use its best efforts to cause to be declared effective as
promptly as practicable but no later than the later of (1) 240 days
after the Closing Date or (2) 30 days after such filing obligation
arises (or 90 days in the event the SEC performs a full review of such
Shelf Registration Statement) a Shelf Registration Statement relating
to the offer and sale of the Registrable Securities by the Holders
from time to time in accordance with the methods of distribution
elected by the Majority Holders participating in the Shelf
Registration and set forth in such Shelf Registration Statement.
(b) Use its best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming part
thereof to be usable by Holders for a period of two years from the
Closing Date or for such shorter period that will terminate when all
Registrable Securities covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement or cease
to be outstanding or otherwise to be Registrable Securities (the
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"Effectiveness Period"); provided, however, that the Company and the
Guarantors will be permitted to suspend the use of the Prospectus
forming part of the Shelf Registration Statement if compliance with
its obligations under this Agreement to maintain the effectiveness of,
supplement or amend such Shelf Registration Statement would require
under applicable law additional disclosure of material non-public
information by the Company as to which, and so long as, the Company
has a bona fide business purpose in not disclosing; and provided
further that the maximum period of time during which the Company shall
be permitted to so suspend the use of the Prospectus forming a part of
the Shelf Registration Statement shall be a period not to exceed 30
days in any three-month period, which may be extended to 60 days in
any three-month period for reasons related to material acquisitions,
material divestitures or other significant transactions involving
Federal-Mogul, but in any event not to exceed 120 days in any twelve-
month period.
(c) Notwithstanding any other provisions hereof, use its best efforts
to ensure that (i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any supplement
thereto complies in all material respects with the 1933 Act and the
rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes
effective, 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 not misleading and (iii) any Prospectus
forming part of any Shelf Registration Statement, and any supplement
to such Prospectus (as amended or supplemented from time to time),
does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements, in
light of the circumstances under which they were made, not misleading.
(d) No Holder of Securities may include any of its Registrable
Securities in any Shelf Registration pursuant to this Agreement unless
and until such Holder furnishes to the Company in writing, within 30
days after receipt of the first request from the Company therefor, the
information relating to such Holder that would be required by the SEC
to be included in such Shelf Registration Statement or any Prospectus
included therein, provided that, the Company delivers two requests for
such information, each of which states that such Holder's Registrable
Securities will not be included in the Shelf Registration unless the
required information is provided within the allotted time period and
provided further, that the second request for such information is
delivered by the Company between 5 and 15 days after delivery of the
first such request. Each Holder as to which any Shelf Registration is
being effected agrees to timely furnish to the Company all information
necessary to be disclosed in the applicable Shelf Registration
Statement or Prospectus included therein in order to make the
information previously furnished to the Company by such Holder not
materially misleading.
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(e) The Company and the Guarantors shall not permit any securities
other than Registrable Securities to be included in the Shelf
Registration Statement. The Company and the Guarantors further agree,
if necessary, to supplement or amend the Shelf Registration Statement,
as required by Section 3(b) below, and 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.
2.3 Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2.1 or 2.2. 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.
2.4 Effectiveness. (a) The Company and the Guarantors will be deemed
not have used their best efforts to cause the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, to become, or
to remain, effective during the requisite period if the Company or any Guarantor
voluntarily takes any action that would, or omits to take any action which
omission would, result in any such Registration Statement not being declared
effective or in the Holders of Registrable Securities covered thereby not being
able to exchange or offer and sell such Registrable Securities during that
period as and to the extent contemplated hereby, unless such action is required
by applicable law or otherwise permitted under Section 2.2(i)(b).
(b) An Exchange Offer Registration Statement pursuant to Section 2.1
hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not
be deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to an Exchange Offer Registration
Statement or a Shelf Registration Statement subject to any stop order,
injunction or other order or requirement of the SEC, or any other governmental
agency or court, such Registration Statement will be deemed not to have become
effective during the period in which it was so subject, until the offering of
Registrable Securities pursuant to such Registration Statement may legally
resume.
2.5 Interest. In the event that either (a) unless the Exchange Offer
would not be permitted by applicable law or SEC policy, the Exchange Offer
Registration Statement is not filed with the Commission on or prior to the 180th
calendar day following the date of original issue of the Securities, (b) unless
the Exchange Offer would not be permitted by applicable law or SEC policy, the
Exchange Offer Registration Statement has not been declared effective on or
prior to the 240th calendar day following the date of original issue of the
Securities, (c) unless the Exchange Offer would not be permitted by applicable
law or SEC policy, the Exchange Offer is not consummated on or prior to the
270th calendar day following the date of original issue of the Securities, or
(d) in the event a Shelf Registration Statement is required to be filed
hereunder and such Shelf Registration Statement is not declared effective by the
SEC on or before the date specified in 2.2(i)(a) above (each such event referred
to in clauses (a) through (d) above, a "Registration Default"), then the
interest rate borne by the Securities as to which a Registration
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Default exists will be increased ("Additional Interest") by one-quarter of one
percent (0.25%) per annum with respect to the first 90-day period (or portion
thereof) during which a Registration Default is continuing immediately following
the occurrence of such Registration Default and such interest rate shall
increase by an additional one-quarter of one percent (0.25%) per annum at the
beginning of each subsequent 90-day period while a Registration Default is
continuing until all Registration Defaults have been cured, up to a maximum rate
of Additional Interest of 1.00% per annum. Following the cure of all
Registration Defaults, Additional Interest shall cease to accrue (but any
accrued interest shall be payable) and the interest rate on the Securities as to
which a Registration Default existed will revert to the original rate.
Additional Interest shall be computed based on the actual number of days elapsed
in each 90-day period during which a Registration Default exists and is
continuing.
If the Shelf Registration Statement ceases to be effective or is
unusable by the Holders for any other reason, and the aggregate number of days
in any consecutive twelve-month period for which the Shelf Registration
Statement ceases to be effective or shall not be usable exceeds 30 days in the
aggregate (other than as permitted under Section 2.2(i)(b) above) (a "Default"),
then the interest rate borne by the Securities as to which the Default exists
will be increased by one-quarter of one percent (0.25%) per annum with respect
to the first 90-day period (or portion thereof) beginning on the 31st day after
the Shelf Registration Statement ceases to be effective or otherwise usable, and
such interest rate shall increase by an additional one-quarter of one percent
(0.25%) per annum at the beginning of each subsequent 90-day period during which
the Shelf Registration Statement ceases to be effective or otherwise usable,
provided that the maximum aggregate increase in the interest rate will in no
event exceed one percent (1.00%) per annum. Any amounts payable under this
paragraph shall also be deemed "Additional Interest" for purposes of this
Agreement. Upon the Shelf Registration Statement once again becoming usable.
Additional Interest as a result of the Default shall cease to accrue (but any
accrued amount shall be payable) and the interest rate borne by the Securities
as to which the Default existed will be reduced to the original interest rate if
the Company is otherwise in compliance with this Agreement at such time.
Additional Interest shall be computed based on the actual number of days elapsed
in each 90-day period in which the Shelf Registration Statement is unusable.
The Company shall notify the Trustee within three business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Additional Interest shall be
paid by depositing with the Trustee, in trust, for the benefit of the Holders of
Registrable Securities entitled thereto, on or before the applicable semiannual
interest payment date, immediately available funds in sums sufficient to pay the
Additional Interest then due. The Additional Interest due shall be payable on
each interest payment date to the record Holder of Securities entitled to
receive the interest payment to be paid on such date as set forth in the
Indenture. Each obligation to pay Additional Interest shall be deemed to accrue
from and including the day following the applicable Event Date.
Notwithstanding anything to the contrary in this Section 2.5, the
Company and the Guarantors shall not be required to pay Additional Interest to a
Holder of Registrable Securities if
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(i) the Company is in compliance with Section 2.1(ii)(a) hereof and, with
respect to such Registrable Securities, such Holder failed to comply with its
obligations to make the representations set forth in Section 2.1(v) hereof or
(ii) the Company is in compliance with the first Sentence of Section 2.2(d)
hereof and such Registrable Securities are not included in a Shelf Registration
because such Holder failed to provide the information required to be furnished
by it pursuant to the first sentence of Section 2.2(d) hereof.
3. Registration Procedures.
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In connection with the obligations of the Company with respect to
Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Company
shall:
(a) prepare and file with the SEC, a Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form under
the 1933 Act, which form (i) shall be selected by the Company, (ii) shall, in
the case of a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof, (iii) shall comply as to form in all
material respects with the requirements of the applicable form and include or
incorporate by reference all financial statements required by the SEC to be
filed therewith or incorporated by reference therein, and (iv) shall comply in
all respects with the requirements of Regulation S-T under the 1933 Act, and use
their 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 under applicable
law 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 (or any similar
provision then in force) under the 1933 Act and comply with the provisions of
the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable
to them with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the selling Holders thereof
(including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable Securities
will be made in accordance with the method selected by the Majority Holders
participating in the Shelf Registration; (ii) furnish to each Holder of
Registrable Securities 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 any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if the
Holder so requests, all exhibits in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) hereby consent to the use
of the Prospectus or any amendment or supplement thereto by each
13
of the selling Holders of Registrable Securities in connection with the offering
and sale of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto;
(d) use its 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 and each underwriter of an underwritten offering of Registrable
Securities shall reasonably request by the time the applicable Registration
Statement is declared effective by the SEC, and do any and all other acts and
things which may be reasonably necessary or advisable to enable each such Holder
and underwriter to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that none of the
Company or 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), or (ii) take any
action which would subject it to general service of process of taxation in any
such jurisdiction where it is not then so subject;
(e) notify promptly each holder of Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Company that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below and, if requested by such Holder or
Participating Broker-Dealer, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective 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) in the case of a Shelf Registration, if,
between the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warrantees of the Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to the offering
cease to be true and correct in all material respects, (v) of the happening of
any event or the discovery of any facts during the period a Shelf Registration
Statement is effective which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or which
requires the making of any changes in such Registration Statement or Prospectus
in order to make the statements therein not misleading, (vi) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities or the Exchange Securities, as the
case may be, for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose and (vii) of any determination by the Company
that a post-effective amendment to such Registration Statement would be
appropriate;
(f) in the case of the Exchange Offer Registration Statement (i)
include the Exchange Offer Registration Statement a section entitled "Plan of
Distribution" which section shall be reasonably acceptable to Merrill Lynch on
behalf of the Participating Broker-Dealers, and which shall contain 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 holds
Registrable
14
Securities acquired for its own account as a result of market-making activities
or other trading activities and that will be the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of Exchange Securities to be received by such
broker-dealer in the Exchange Offer, whether such positions or policies have
been publicly disseminated by the staff of the SEC or such positions or
policies, in the reasonable judgment of Merrill Lynch on behalf of the
Participating Broker-Dealers and its counsel, represent the prevailing views of
the staff of the SEC, including a statement that any such broker-dealer who
receives Exchange Securities for Registrable Securities pursuant to the Exchange
Offer may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale of such
Exchange Securities, (ii) furnish, for a period of 180 days after the
consummation of the Exchange offer, to each Participating Broker-Dealer who has
delivered to the Company the notice referred to in Section 3(e), without charge,
as many copies of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request, (iii)
hereby consent to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto, by any Person
subject to the prospectus delivery requirements of the SEC, including all
Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement
thereto, and (iv) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the Exchange Offer
(x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable Securities
acquired for its own account as a result of market-making activities or
other trading activities, it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of Exchange
Securities received in respect of such Registrable Securities pursuant to
the Exchange Offer;" and
(y) a statement to the effect that a broker-dealer by making the acknowledgment
described in clause (x) and by delivering a Prospectus in connection with the
exchange of Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the 1933 Act;
(g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish counsel
for the Holders of Registrable Securities copies of any comment letters received
from the SEC or any other request by the SEC or any state securities authority
for amendments or supplements to a Registration Statement and Prospectus or for
additional information;
(h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon as
practicable;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, and each underwriter, if any, without charge, at least
one conformed copy of each
15
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules (without documents incorporated therein by
reference and all exhibits thereto, unless requested);
(j) in the case of a Shelf Registration, to the extent that any
Registrable Securities are held in certificated form and not represented by
global certificates, 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
(consistent with the provisions of the Indenture) and registered in such names
as the selling Holders or the underwriters, if any, may reasonably request at
least three business days prior to the closing of any sale of Registrable
Securities;
(k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Sections 3(e)(v)
and 3(e)(vi) hereof, as promptly as practicable after the occurrence of such an
event, use its best efforts to prepare a supplement or post-effective amendment
to the Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other document so that, as
thereafter delivered to the purchasers of the Registrable Securities or
Participating Broker-Dealers, such Prospectus will not contain at the time of
such delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or will remain so
qualified. At such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such determination
and furnish each Holder such number of copies of the Prospectus as amended or
supplemented, as such Holder may reasonably request;
(l) in the case of a Shelf Registration, 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, provide
copies of such document to the Initial Purchasers on behalf of such Holders; and
make representatives of the Company as shall be reasonably requested by the
Holders of Registrable Securities, or the Initial Purchasers on behalf of such
Holders, available for discussion of such document;
(m) obtain CUSIP numbers, Euroclear and Cedel Common Code Nos. and
ISINs for all Exchange Securities, Private Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with certificates for the
Exchange Securities, Private Exchange Securities or the Registrable Securities,
as the case may be, in a form eligible for deposit with the Depositary;
(n) (i) cause the Indenture to be qualified under the TIA in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, (ii) cooperate with the Trustee and the Holders
to effect such changes to the Indenture as may be
16
required for the Indenture to be so qualified in accordance with the terms of
the TIA and (iii) execute, and use its best efforts to cause the Trustee to
execute, all documents as may 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;
(o) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and appropriate
actions in order to expedite or facilitate 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 of
such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters
in similar underwritten offerings as may be reasonably requested by
them;
(ii) obtain opinions of counsel to the Company and the
Guarantors in customary form, substance and scope;
(iii) obtain "cold comfort" letters from the Company's
independent certified public accountants (and, if necessary, any other
independent certified public accountants of any Guarantor or
subsidiary of the Company or of any business acquired by the Company
for which financial statements are, or are required to be, included in
the Registration Statement) in customary form, only if permitted by
and subject to the receipt of documentation contemplated by the
Statement on Auditing Standards No. 72 of the American Institute of
Certified Public Accounts), covering matters of the type customarily
covered in "cold comfort" letters to underwriters in connection with
similar underwritten offerings;
(iv) enter into a securities sales agreement with the Holders
and an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Registrable Securities, which agreement shall
be in form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the
same to set forth indemnification provisions and procedures
substantially equivalent to the indemnification provisions and
procedures set forth in Section 4 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to said
Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of
transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
offerings to the Holders of a
17
majority in principal amount of the Registrable Securities being sold
and the managing underwriters, if any.
The above shall be done at (i) the effectiveness of such Registration Statement
(and each post-effective amendment thereto) and (ii) each closing under any
underwriting or similar agreement as and to the extent required thereunder, or
as otherwise provided under any underwriting or similar agreement;
(p) in the case of a Shelf Registration or if a Prospectus is
required to be delivered by any Participating Broker-Dealer in the case of an
Exchange Offer, subject to appropriate confidentiality agreements, make
available for reasonable inspection by representatives of the Holders of the
Registrable Securities, any underwriters participating in any disposition
pursuant to a Shelf Registration Statement and any counsel or accountant
retained by any of the foregoing, all financial and other records, pertinent
corporate documents and properties of the Company and the Guarantors reasonably
requested by any such persons, and cause the respective officers, directors,
employees, and any other agents of the Company and the Guarantors to supply all
information reasonably requested by any such representative, underwriter,
special counsel or accountant in connection with a Registration Statement, and
make such representatives of the Company and any of the Guarantors available for
discussion of such documents as shall be reasonably requested by the Initial
Purchasers;
(q) in the case of a Shelf Registration, a reasonable time prior to
filing any Shelf Registration Statement, any Prospectus forming a part thereof,
any amendment to such Shelf Registration Statement or amendment or supplement to
such Prospectus, provide copies of such document to the Holders of Registrable
Securities, to the Initial Purchasers, to counsel for the Holders and to the
underwriter or underwriters of an underwritten offering of Registrable
Securities, if any, make such changes in any such document prior to the filing
thereof as the Initial Purchasers, the counsel to the Holders or the underwriter
or underwriters reasonably request and not file any such document in a form to
which the Majority Holders, the Initial Purchasers on behalf of the Holders of
Registrable Securities, counsel for the Holders of Registrable Securities or any
underwriter shall not have previously been advised and furnished a copy of or to
which the Majority Holders, the Initial Purchasers on behalf of the Holders of
Registrable Securities, counsel to the Holders of Registrable Securities or any
underwriter shall reasonably object, and make the representatives of the Company
and the Guarantors available for discussion of such document as shall be
reasonably requested by the Holders of Registrable Securities, the Initial
Purchasers on behalf of such Holders, counsel for the Holders of Registrable
Securities or any underwriter.
(r) in the case of the Shelf Registration, use its best efforts to
cause all Registrable Securities to be listed on any securities exchange on
which similar debt securities issued by the Company are then listed if requested
by the Majority Holders, or if requested by the underwriter or underwriters of
an underwritten offering of Registrable Securities, if any;
(s) in the case of a Shelf Registration, use its best efforts to
cause the Registrable Securities to be rated by the appropriate rating agencies,
if so requested by the
18
Majority Holders, or if requested by the underwriter or underwriters of an
underwritten offering of Registrable Securities, if any;
(t) otherwise comply with all applicable rules and regulations of the
SEC and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;
(u) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any due
diligence investigation by any underwriter and its counsel (including any
"qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD); and
In the case of a Shelf Registration Statement or the notification of
the Company by Participating Broker-Dealers seeking to sell Exchange Securities
and required to deliver Prospectuses that will be utilizing the Prospectus
contained in the Exchange Offer Registration Statement as provided in Section
3(f) hereof, each Holder agrees that, upon receipt of any notice from the
Company of (i) the happening of any event of the kind described in clause (iii),
(v) or (vi) of Section 3(e) hereof or (ii) the exercise of the Company's right,
under Section 2.2(b), to postpone the effectiveness, supplementing or amending
of any such Registration Statement, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the applicable Registration
Statement until such Holder receives the copies of the supplemented or amended
prospectus contemplated by Section 3(k) hereof or until such Holder is advised
in writing (the "Advice") by the Company that the use of the applicable
prospectus may be resumed, and, if so directed by the Company, such Holder will
deliver to the Company (at the Company's expense) all copies in such Holder's
possession, other than permanent file copies, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice; provided
that, with respect to the happening of any event of the kind described in
Section 3(e)(iii) or (vi) hereof that relates to a state securities authority
or authorities or a particular jurisdiction or jurisdictions, respectively, the
restrictions contained in this paragraph on a Holder shall apply only with
respect to the disposition of Registrable Securities in the jurisdiction
governed by such state securities authority or authorities (with respect to
events under Section 3(e)(iii) hereof) or in the jurisdiction with respect to
which the Company has received a notice of suspension of the qualification of
Registrable Securities or Exchange Securities for sale, or the initiation or
threatening thereof, (with respect to events under Section 3(e)(vi), and
provided further, that in such cases, such Holder shall not be required to
return to the Company copies of the Prospectus covering the Registrable
Securities.
If any of the Registrable Securities covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage such offering will be
selected by the Majority Holders of such Registrable Securities included in such
offering and shall be acceptable to the Company. No Holder of Registrable
Securities may participate in any underwritten registration hereunder unless
such Holder (a) agrees to sell such Holder's Registrable Securities on the basis
provided in any
19
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such underwriting arrangements.
4. Indemnification; Contribution.
-----------------------------
(a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder, each Participating Broker-Dealer, each Person who
participates as an underwriter (any such Person being an "Underwriter") and each
Person, if any, who controls any Holder of Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment or supplement thereto) pursuant to which
Exchange Securities or Registrable Securities were registered under the
1933 Act, including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading,
or arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
4(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any indemnified
party), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished
20
to the Company by the Holder or Underwriter expressly for use in a Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto), and provided further, that the Company will not be liable
to any Person with respect to any preliminary Prospectus to the extent that the
Company shall sustain the burden of proving that any such loss, liability,
claim, damage or expense resulted from the fact that such Person failed to send
or give, at or prior to the closing of the underwritten offering of Registrable
Securities, a copy of the final Prospectus, as then amended or supplemented if
the Company has previously furnished copies thereof (sufficiently in advance of
such closing to allow for distribution by such closing) to such Person and the
loss, liability, claim, damage or expense of such Person resulted solely from an
untrue statement or omission of a material fact contained in or omitted from the
preliminary Prospectus which was corrected in the final Prospectus as, if
applicable, amended or supplemented prior to such closing and the final
Prospectus was required by law to be delivered by such Person at or prior to the
written confirmation of a sale.
(b) Each Holder severally, but not jointly, agrees to indemnify and
hold harmless the Company, the Guarantors, the Initial Purchasers, each
Underwriter and the other selling Holders, and each of their respective
directors and officers, and each Person, if any, who controls the Company, the
Guarantors, the Initial Purchasers, any Underwriter or any other selling Holder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 4(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus included therein (or any amendment or supplement thereto) in reliance
upon and in conformity with written information with respect to such Holder
furnished to the Company by such Holder expressly for use in the Shelf
Registration Statement (or any amendment thereto) or such Prospectus (or any
amendment or supplement thereto); provided, however, that no such Holder shall
be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Securities pursuant to such
Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure so to notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying party or parties be liable
for the fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any
21
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request; (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 4 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute, to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Holders and the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand and the Holders and
the Initial Purchasers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Guarantors, the Holders or the
Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors, the Holders and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this
Section 4 were determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 4. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 4 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
22
Notwithstanding the provisions of this Section 4, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities sold by it were offered exceeds the amount
of any damages which such Initial Purchaser 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 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Company or any of the
Guarantors, and each Person, if any, who controls the Company or any of the
Guarantors within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company and the
Guarantors. The Initial Purchasers' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the principal amount of
Securities set forth opposite their respective names in Schedule A to the
Purchase Agreement and not joint.
5. Miscellaneous.
-------------
5.1 Rule 144 and Rule 144A. For so long as the Company is subject to
the reporting requirements of Section 13 or 15 of the 1934 Act, the Company
covenants that it will file the reports required to be filed by it under the
1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. If the Company ceases to be so
required to file such reports, the Company covenants that it will upon the
request of any Holder of Registrable Securities (a) make publicly available such
information as is necessary to permit sales pursuant to Rule 144 under the 1933
Act, (b) deliver such information to a prospective purchaser as is necessary to
permit sales pursuant to Rule 144A under the 1933 Act and it will take such
further action as any Holder of Registrable Securities may reasonably request,
and (c) take such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the 1933 Act within
the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act,
as such Rule may be amended from time to time, or (iii) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
5.2 No Inconsistent Agreements. None of the Company or any of the
Guarantors have entered into and the Company and the Guarantors will not after
the date of this Agreement enter into any agreement which is inconsistent with
the rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. The
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rights granted to the Holders hereunder do not and will not for the term of this
Agreement in any way conflict with the rights granted to the holders of the
Company's or any of the Guarantors' other issued and outstanding securities
under any such agreements.
5.3 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 has 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 departure.
5.4 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
(a) 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 5.4, which address initially is the address set forth in the Purchase
Agreement with respect to the Initial Purchasers; and (b) if to the Company, or
any of the Guarantors, initially at the Company's address set forth in the
Purchase Agreement, and thereafter at such other address of which notice is
given in accordance with the provisions of this Section 5.4.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two 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 under the
Indenture, at the address specified in such Indenture.
5.5 Successor 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 or the Indenture. 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 of 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, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such person shall be entitled to
receive the benefits hereof.
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5.6 Third Party Beneficiaries. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder among the Company, on the
one hand, and the Holders, on the other hand, and shall have the right to
enforce such agreements directly to the extent they deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder among the Company, 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 hereunder.
5.7 Specific Enforcement. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Sections 2.1 through
2.4 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 would 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 obligations
under Sections 2.1 through 2.4 hereof.
5.8 Restriction on Resales. Until the expiration of two years after
the original issuance of the Securities, the Company and the Guarantors will
not, and will cause their "affiliates" (as such term is defined in Rule
144(a)(1) under the 1933 Act) not to, resell any Securities which are
"restricted securities" (as such term is defined under Rule 144(a)(3) under the
1933 Act) that have been reacquired by any of them and shall immediately upon
any purchase of any such Securities submit such Securities to the Trustee for
cancellation.
5.9 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.
5.10 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.12 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is hold
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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
FEDERAL-MOGUL CORPORATION
By: /s/ David A. Bozynski
--------------------------------------------
Name: David A. Bozynski
Title: Vice President and Treasurer
Confirmed and accepted as
of the date first above
written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CHASE SECURITIES INC.
BY: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Robert J. Schmiedeler
--------------------------
Name: Robert J. Schmiedeler
Title: Director
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