Exhibit 4.18
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of March 25, 1998
by and among
BEAZER HOMES USA, INC.
THE GUARANTORS NAMED HEREIN
and
THE INITIAL PURCHASERS NAMED HEREIN
- --------------------------------------------------------------------------------
-1-
This Registration Rights Agreement (the "Agreement") is made and
entered into as of March 25, 1998 by and among BEAZER HOMES USA, INC., a
Delaware corporation (the "Company"), the GUARANTORS (as defined herein) and SBC
WARBURG DILLON READ INC., DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
and SALOMON SMITH BARNEY (the "Initial Purchasers"). The execution and delivery
of this Agreement is a condition to the obligations of the Initial Purchasers to
purchase $100,000,000 of the Company's 8 7/8% Senior Notes due 2008 under the
Purchase Agreement, dated as of March 20, 1998 (the "Purchase Agreement"), by
and among the Company, the Guarantors and the Initial Purchasers.
The Company, the Guarantors and the Initial Purchasers hereby agree
as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission pursuant thereto.
Action: As defined in Section 8(c) of this Agreement.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Closing Date: The date that the Notes are purchased by the Initial
Purchasers pursuant to the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Act of
-2-
the Exchange Offer Registration Statement relating to the Notes to be issued in
the Exchange Offer, (ii) the maintenance of such Registration Statement
continuously effective and the keeping of the Exchange Offer open for a period
not less than the minimum period required pursuant to Section 3(b) of this
Agreement and (iii) the delivery by the Company to the Registrar under the
Indenture of New Notes in the same aggregate principal amount as the aggregate
principal amount of Old Notes that were so tendered.
Damages Payment Date: With respect to the Notes, each Interest
Payment Date.
Effectiveness Target Date: As defined in Section 5 of this
Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission pursuant thereto.
Exchange Offer: The registration under the Act by the Company and
the Guarantors of the New Notes pursuant to a Registration Statement pursuant to
which the Company and the Guarantors offer the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such outstanding
Old Notes that are Transfer Restricted Securities held by such Holders for New
Notes in an aggregate principal amount equal to the aggregate principal amount
of the Old Notes that are Transfer Restricted Securities tendered in such
exchange offer by such Holders.
Exchange Offer Effective Date: The date on which the Exchange Offer
Registration Statement is declared effective by the Commission.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
-3-
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Notes to (i) certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act, and (ii) other eligible
purchasers pursuant to Regulation S under the Act.
Guarantors: Each Subsidiary of the Company that, pursuant to the
Indenture, is, or is required to become, a guarantor of the obligations of the
Company under the Notes and the Indenture.
Holders: As defined in Section 2(b) of this Agreement.
Indenture: The Indenture, dated as of March 25, 1998, by and among
the Company, the Guarantors and First Trust National Association, as trustee
(the "Trustee"), pursuant to which the Notes are to be issued, as such Indenture
is amended or supplemented from time to time in accordance with its terms.
Initial Purchasers: SBC Warburg Dillon Read Inc., Donaldson, Lufkin
& Jenrette Securities Corporation and Salomon Smith Barney.
Interest Payment Date: As defined in the Notes.
NASD: National Association of Securities Dealers, Inc.
New Notes: The Company's 8 7/8% Senior Notes due 2008 to be issued
pursuant to the Indenture in connection with the Exchange Offer and evidencing
the same debt as the Old Notes, including the guarantees by the Guarantors.
Notes: Old Notes and New Notes.
Old Notes: The Company's 8 7/8% Senior Notes due 2008 to be issued
pursuant to the Indenture on the Closing date, including the guarantees by the
Guarantors.
-4-
Participating Broker Dealer: As defined in Section 6(a)(iii) of this
Agreement.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
and supplements thereto, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such Prospectus.
Registration Default: As defined in Section 5 of this Agreement.
Registration Statement: Any registration statement of the Company
and the Guarantors relating to (a) an offering of New Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement that is filed pursuant
to the provisions of this Agreement, in each case, including the Prospectus
included therein, all amendments and supplements thereto (including pre- and
post-effective amendments) and all exhibits and material incorporated by
reference or deemed to be incorporated by reference, if any, therein.
Shelf Filing Deadline: As defined in Section 4(a) of this Agreement.
Shelf Registration Statement: As defined in Section 4(a) of this
Agreement.
Subsidiary: With respect to any Person, any other Person of which a
majority of the equity ownership or the voting securities is at the time owned,
directly or indirectly, by such Person or by one or more other subsidiaries of
such Person or a combination thereof.
-5-
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section
77aaa-77bbbb), as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note until the earliest to
occur of (i) the date on which each such Old Note has been exchanged by a person
other than a Broker-Dealer for a New Note in the Exchange Offer, (ii) following
the exchange by a Broker-Dealer in the Exchange Offer of an Old Note for a New
Note, the date on which such New Note is sold to a purchaser who receives from
such Broker-Dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Note has been effectively registered under the Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration
in which securities of the Company are sold to an underwriter for reoffering to
the public pursuant to an effective Registration Statement.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person beneficially owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless, due to a change in law or Commission policy after the
date hereof, the Exchange Offer shall not be permissible under applicable
federal law or Commission policy,
-6-
the Company and the Guarantors shall (i) cause to be filed with the Commission
as soon as practicable on or prior to 45 days after the Closing Date, a
Registration Statement under the Act relating to the New Notes and the Exchange
Offer and (ii) use their best efforts to cause such Registration Statement to be
declared effective by the Commission as soon as practicable on or prior to 120
days after the Closing Date. In connection with the foregoing, the Company and
the Guarantors shall (A) file all pre-effective amendments to such Registration
Statement as may be necessary to cause such Registration Statement to become
effective, (B) if applicable, file a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Act, (C) cause all
necessary filings in connection with the registration and qualification of the
New Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer (provided, however, that
the Company and the Guarantors shall not be obligated to qualify as foreign
corporations in any jurisdiction in which they are not so qualified or to take
any action that would subject them to general service of process or taxation in
any jurisdiction where they are not so subject, except service of process with
respect to the offering and sale of the Notes and Exchange Notes) and (D) upon
the effectiveness of such Registration Statement, commence the Exchange Offer
and use their best efforts to issue on or prior to 45 days after the Exchange
Offer Effective Date, New Notes in exchange for all Old Notes tendered in the
Exchange Offer. The Exchange Offer shall be on the appropriate form permitting
registration of the New Notes to be offered in exchange for the Transfer
Restricted Securities and to permit resales of New Notes held by Broker-Dealers
as contemplated by Section 3(c) below. If, after such Exchange Offer
Registration Statement initially is declared effective by the Commission, the
Exchange Offer or the issuance of New Notes under the Exchange Offer or the
resale of New Notes received by Broker-Dealers in the Exchange Offer as
contemplated by Section 3(c) below is interfered with by any stop order,
injunction or other order or requirement of the Commission or any other
governmental agency or court, such Registration Statement shall be deemed not to
have become
-7-
effective for purposes of this Agreement during the period that such stop order,
injunction or other similar order or requirement shall remain in effect.
(b) The Company shall cause the Exchange Offer Registration
Statement to be effective continuously and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 business days. The
Company and the Guarantors shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. The Company and the Guarantors
shall only offer to exchange New Notes for Old Notes in the Exchange Offer, and
only the New Notes shall be registered under the Exchange Offer Registration
Statement.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus included in the Exchange Offer Registration
Statement that any Broker-Dealer that holds Old Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such Old
Notes pursuant to the Exchange Offer; provided, however, that such Broker-Dealer
may be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the New Notes received by such Broker-Dealer in
the Exchange Offer. Such "Plan of Distribution" section shall allow the use of
the Prospectus by all Persons subject to the prospectus delivery requirements of
the Act, including Participating Broker-Dealers, and shall also contain all
other information with respect to such resales by Broker-Dealers that the
Commission may require to permit such resales pursuant thereto, but such "Plan
of Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer except to the extent required by the
Commission
-8-
as a result of a change in policy after the date of this Agreement.
The Company and the Guarantors shall use their best efforts to keep
the Exchange Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for resales of Notes acquired by
Broker-Dealers for their own accounts as a result of market-making activities or
other trading activities, and to ensure that it conforms with the requirements
of this Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time. The Company shall provide sufficient
copies of the latest version of such Prospectus to Broker-Dealers promptly upon
request at any time during such period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company and the Guarantors are
not required to file an Exchange Offer Registration Statement or to consummate
the Exchange Offer because the Exchange Offer is not permitted by applicable law
or Commission policy or (ii) any Holder of Transfer Restricted Securities shall
notify the Company within 20 business days of the commencement of the Exchange
Offer that such Holder (A) is prohibited by applicable law or Commission policy
from participating in the Exchange Offer, or (B) may not resell the New Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
is a Broker-Dealer and holds Old Notes (including the Initial Purchasers who
hold Old Notes as part of an unsold allotment from the original offering of the
Notes) acquired directly from the Company or one of its affiliates or (iii) the
Company and the Guarantors do not consummate the Exchange Offer within 45 days
following the effectiveness date of the Exchange Offer Registration Statement,
then the Company and the Guarantors shall (x) cause to be filed a shelf
registration statement
-9-
pursuant to Rule 415 under the Act, which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "Shelf Registration
Statement"), on or prior to the earliest to occur of (1) the 45th day after the
date on which the Company determines that it is not required to file the
Exchange Offer Registration Statement or (2) the 45th day after the date on
which the Company receives notice from a Holder of Transfer Restricted
Securities as contemplated by clause (ii) above (such earliest date being the
"Shelf Filing Deadline"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities the Holders of which shall have
provided the information required pursuant to Section 4(b) of this Agreement,
and (y) use its best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission on or before the 120th day after the Shelf
Filing Deadline. The Company and the Guarantors shall use their best efforts to
keep such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) of this Agreement
to the extent necessary to ensure that it is available for resales of Notes by
the Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a) and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a continuous period of two years following the
date on which such Shelf Registration Statement becomes effective under the Act
or such shorter period that will terminate when all the Notes covered by the
Shelf Registration Statement have been sold pursuant to such Shelf Registration
Statement.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 15 business days after receipt of a request
therefor, such information regarding such Holder as the Company may reasonably
request for use in connection with any Shelf Registration Statement or
Prospectus
-10-
or preliminary Prospectus included in such Shelf Registration Statement. Each
Holder as to which any Shelf Registration Statement is being effected agrees to
furnish promptly to the Company all information required to be disclosed to make
the information previously furnished to the Company by such Holder not
materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 45 business days after the
Exchange Offer Effective Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or usable in
connection with resales of Transfer Restricted Securities during the periods
required by this Agreement (each such event referred to in clauses (i) through
(iv), a "Registration Default"), the Company and the Guarantors hereby agree to
pay liquidated damages to each Holder of Transfer Restricted Securities with
respect to the first 90-day period immediately following the occurrence of such
Registration Default, in an amount equal to $.05 per week per $1,000 principal
amount of Notes constituting Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues. The
amount of the liquidated damages shall increase by an additional $.05 per week
per $1,000 in principal amount of Notes constituting Transfer Restricted
Securities with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of liquidated damages of $.30
per week per $1,000 in principal amount of Notes constituting Transfer
Restricted Securities. Notwithstanding the foregoing, the Company and the
Guarantors shall not be required to pay liquidated damages to each Holder
-11-
of Transfer Restricted Securities if the Registration Default arises from the
failure of the Company and the Guarantors to file, or cause to become effective,
a Shelf Registration Statement within the time period required by Section 4 of
this Agreement and such Registration Default is by reason of the failure of the
Holders to provide the information regarding the Holder reasonably requested by
the Company, the NASD or any other regulatory agency having jurisdiction over
any of the Holders at least 10 business days prior to such Registration Default.
All accrued liquidated damages shall be paid by the Company on each Damages
Payment Date to the Holders by wire transfer of immediately available funds or
by federal funds check and to the Holders of certificated securities by mailing
a check to such Holders' registered addresses. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted Securities,
the accrual of liquidated damages with respect to such Transfer Restricted
Securities will cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
-12-
(i) If, due to a change in law or Commission policy after the date
hereof, in the reasonable opinion of counsel to the Company there is a
question as to whether the Exchange Offer is permitted by applicable
federal law or Commission policy, the Company hereby agrees to seek a
no-action letter or other favorable decision from the Commission allowing
the Company and the Guarantors to Consummate an Exchange Offer for such
Old Notes. The Company hereby agrees to pursue the issuance of such a
no-action letter or favorable decision to the Commission staff level but
shall not be required to take commercially unreasonable action to effect a
change of Commission policy. The Company hereby agrees, however, to (A)
participate in telephonic conferences with the Commission, (B) deliver to
the Commission an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursue a
resolution (which need not be favorable) by the Commission of such
submission. The Initial Purchasers shall be given prior notice of any
action taken by the Company under this clause (i).
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation of the Exchange Offer, a written representation
to the Company (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect
that (A) it is not an affiliate of the Company or any of the Guarantors,
(B) it is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a
distribution of the New Notes to be issued in the Exchange Offer and (C)
it is acquiring the New Notes in its ordinary course of business. In
addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's preparations for the Exchange Offer.
-13-
(iii) The Company, the Guarantors and the Initial Purchasers
acknowledge that the staff of the Commission has taken the position that
any broker-dealer that owns New Notes that were received by such
broker-dealer for its own account in the Exchange Offer (a "Participating
Broker-Dealer") may be deemed to be an "underwriter" within the meaning of
the Act and must deliver a prospectus meeting the requirements of the Act
in connection with any resale of such New Notes (other than a resale of an
unsold allotment resulting from the original offering of the Notes).
The Company, the Guarantors and the Initial Purchasers also
acknowledge that it is the Commission staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes
a plan of distribution containing a statement to the above effect and the
means by which Participating Broker-Dealers may resell the New Notes,
without naming the Participating Broker-Dealers or specifying the amount
of New Notes owned by them, such Prospectus may be delivered by
Participating Broker-Dealers to satisfy their prospectus delivery
obligations under the Act in connection with resales of New Notes for
their own accounts, so long as the Prospectus otherwise meets the
requirements of the Act.
(b) Shelf Registration Statement. In the event that a Shelf
Registration Statement is required by this Agreement, the Company and the
Guarantors shall comply with all the provisions of Section 6(c) of this
Agreement and shall use their best efforts to effect such registration to permit
the sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution of such Transfer Restricted
Securities and, in connection therewith, the Company and the Guarantors will as
expeditiously as possible prepare and file with the Commission a Shelf
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in
-14-
accordance with the intended method or methods of distribution of such Transfer
Restricted Securities.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus, to the extent that the same
are required to be available to permit resales of Notes by Broker-Dealers), the
Company and the Guarantors shall:
(i) use their best efforts to keep such Registration Statement
continuously effective for the applicable time period required hereunder
and provide all requisite financial statements (including, if required by
the Act or any regulation thereunder, financial statements of the
Guarantors) for the period specified in Section 3 or 4 of this Agreement,
as applicable; upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain
a material misstatement or omission or (B) not to be effective and usable
for resale of Transfer Restricted Securities during the period required by
this Agreement, the Company shall promptly notify the Holders to suspend
use of the Prospectus, and the Holders shall suspend use of the
Prospectus, and such Holders shall not communicate non-public information
to any third party, in violation of the securities laws, until the Company
and the Guarantors have made an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), the Company and
the Guarantors shall use their best efforts to cause such amendment to be
declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be
necessary to keep the
-15-
Registration Statement effective for the applicable period set forth in
Section 3 or 4 of this Agreement, as applicable, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act during the applicable time
period required hereunder and to comply fully with the applicable
provisions of Rules 424 and 430A under the Act in a timely manner; and
comply with the provisions of the Act and the Exchange Act with respect to
the disposition of all Transfer Restricted Securities covered by such
Registration Statement during such period in accordance with the intended
method or methods of distribution by the sellers of such securities set
forth in such Registration Statement as so amended or in such Prospectus
as so supplemented;
(iii) advise the underwriter(s), if any, the Initial Purchasers,
and, in the case of a Shelf Registration Statement, each of the selling
Holders promptly and, if requested by such Persons, to confirm such advice
in writing, (A) when the Prospectus or any prospectus supplement or
post-effective amendment has been filed and, with respect to any
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating to such Registration
Statement or Prospectus, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement under the
Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale
in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening of
any event that makes any statement of a material fact made in the
Registration
-16-
Statement, the Prospectus, any amendment or supplement to such
Registration Statement or Prospectus, as the case may be, or any document
incorporated by reference in such Registration Statement or Prospectus
untrue in any material respect, or that requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements in such Registration Statement or Prospectus
not misleading and that in the case of the Prospectus, it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws,
the Company and the Guarantors shall use their best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the underwriter(s), if any, the Initial
Purchasers and, in the case of a Shelf Registration Statement, each of the
selling Holders before filing with the Commission, copies of any
Registration Statement or any Prospectus included in such Registration
Statement or Prospectus or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents incorporated
by reference after the initial filing of such Registration Statement),
which documents will be subject to the reasonable review of such
underwriter(s), if any, the Initial Purchasers, and such Holders for a
period of at least five business days, and the Company and the Guarantors
will not file any such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or Prospectus,
as the case may be, (including all such
-17-
documents incorporated by reference) to which any underwriter, Initial
Purchasers or selling Holder shall reasonably object within five business
days after the receipt of such Registration Statement or Prospectus. A
selling Holder or underwriter, if any, shall be deemed to have reasonably
objected to such filing if such Registration Statement, Prospectus,
amendment or supplement, as applicable, as proposed to be filed, contains
a material misstatement or omission;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, (a)
provide copies of such document to the selling Holders and to the
underwriter(s), if any, (b) make the Company's and the Guarantors'
representatives available for discussion of such document and other
customary due diligence matters; provided that such discussion and due
diligence shall be coordinated on behalf of the selling Holders by one
counsel designated by and on behalf of such selling Holders and (c)
include such information in such document prior to the filing of such
document as such selling Holders or underwriter(s), if any, may reasonably
request;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), if any, at the offices
where normally kept, during reasonable business hours, all relevant
financial and other records, pertinent corporate documents and properties
of the Company and the Guarantors and cause the Company's and the
Guarantors' officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney or
accountant in connection with such Registration Statement subsequent to
the filing thereof and prior to its effectiveness; provided, however, that
such persons shall first agree in writing with the Company that any
information that is
-18-
reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons, unless and to the extent that (i) disclosure
of such information is required by court or administrative order or is
necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any
disclosure requirements pursuant to federal securities laws in connection
with the filing of the Shelf Registration Statement or the use of any
Prospectus), (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard such
information by such person or (iv) such information becomes available to
such person from a source other than the Company and its Subsidiaries and
such source is not bound by a confidentiality agreement;
(vii) if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the principal
amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid for Transfer Restricted
Securities and any other terms of the offering of the Transfer Restricted
Securities to be sold in such offering; and make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any
action pursuant to this Section 6(c)(vii) that would, in the opinion of
counsel for the Company, violate applicable law;
-19-
(viii) furnish to each underwriter, if any, the Initial Purchasers
and upon request to the Company to a selling Holder without charge, at
least one conformed copy of the Registration Statement, as first filed
with the Commission, and of each amendment thereto, including, upon the
request of such Person, all documents incorporated by reference therein
and all exhibits to the extent requested (including exhibits incorporated
therein by reference);
(ix) deliver to each selling Holder, each of the underwriter(s), if
any, and the Initial Purchasers, without charge, such number of copies of
the Prospectus (including each preliminary prospectus) and any amendment
or supplement thereto as such Persons may reasonably request; the Company
and the Guarantors hereby consent to the use of the Prospectus and any
amendment or supplement to the Prospectus by each of the selling Holders
and each of the underwriter(s), if any, in connection with the offering
and the sale of the Transfer Restricted Securities in accordance with the
terms thereof and with U.S. Federal securities laws and Blue Sky laws
covered by the Prospectus or any amendment or supplement thereto;
(x) enter into such agreements (including an underwriting agreement
in form, scope and substance as is customary in underwritten offerings of
securities of this type) and take all such other reasonable actions in
connection therewith in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to any Registration Statement
contemplated by this Agreement, all as may be reasonably requested by any
Holder of Transfer Restricted Securities or the underwriter(s), if any, in
connection with any sale or resale of Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement; and
whether or not an underwriting agreement is entered into and whether or
not the registration is an Underwritten Registration, the Company and the
Guarantors shall (i) make such representations and warranties to the
Holders of such Transfer Restricted Securities and the
-20-
underwriters, if any, with respect to the business of the Company and its
Subsidiaries (including with respect to businesses or assets acquired or
to be acquired by any of them), and the Shelf 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 customarily requested; (ii)
obtain opinions of counsel to the Company and the Guarantors and updates
thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the underwriters, if any, and special
counsel to the Holders of the Transfer Restricted Securities being sold),
addressed to each selling Holder of Transfer Restricted Securities and
each of the underwriters, if any, covering the matters customarily covered
in opinions requested in underwritten offerings and such other matters as
may be reasonably requested by such underwriters, if any, and special
counsel to Holders of Transfer Restricted Securities; (iii) use their best
efforts to obtain customary "cold comfort" letters and updates thereof
from the independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company or
any such subsidiary for which financial statements and financial data is,
or is required to be, included in the Registration Statement), addressed
(where reasonably possible) to each selling Holder of Transfer Restricted
Securities and each of the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings; (iv) if
an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable to the selling
Holders and the underwriters, if any, than those set forth in Section 8
hereof (or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Transfer
-21-
Restricted Securities covered by such Shelf Registration Statement and the
underwriters, if any); and (v) deliver such documents and certificates as
may be reasonably requested by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Securities being sold and the
underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
If at any time the representations and warranties of the Company and
the Guarantors contemplated in clause (A)(1) above cease to be true and
correct, the Company shall so advise the Initial Purchasers and the
underwriter(s), if any, and each selling Holder promptly and, if requested
by any of them, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted Securities,
cooperate with and cause the Guarantors to cooperate with the selling
Holders, the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification (or exemption from such
registration or qualification) of the Transfer Restricted Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
as the selling Holders and underwriter(s), if any, may reasonably request
in writing and do any and all other acts or things necessary or advisable
to enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Registration Statement; provided, however, that
neither the Company nor the Guarantors shall be required to register or
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
-22-
(xii) if a Shelf Registration is filed pursuant to Section 2(b),
cooperate with the selling Holders of Registrable Securities and the
managing Underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted 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 Company; and
enable such Transfer Restricted Securities to be in such denominations and
registered in such names as the managing underwriters, if any, or Holders
may reasonably request;
(xiii) in connection with any sale or transfer of Transfer
Restricted Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with and cause the Guarantors to
cooperate with the selling Holders and the underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
(xiv) use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers of such Transfer Restricted
Securities or the underwriter(s), if any, to consummate the disposition of
such Transfer Restricted Securities, subject to the proviso contained in
clause (xi) above;
(xv) if any fact or event contemplated by Section 6(c)(iii)(D) of
this Agreement shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related
Prospectus or any
-23-
document incorporated in such Registration Statement or Prospectus by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Registration Statement will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading and the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading;
(xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities that are in a form eligible for deposit
with The Depository Trust Company;
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is
required to be retained in accordance with the rules and regulations of
the NASD);
(xviii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission in regards to any Registration
Statement, and make generally available to its securityholders, as soon as
practicable, a consolidated earning statement of the Company meeting the
requirements of Rule 158 (which need not be audited) for the twelve-month
period (A) commencing at the end of any fiscal quarter in which Transfer
Restricted Securities are sold to underwriters in a firm commitment or
reasonable best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter
-24-
commencing after the effective date of the Registration Statement;
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders to effect such changes to the Indenture, if any, 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 the
Trustee to execute, all customary documents that may be required to effect
such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely
manner.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) of this Agreement, such Holder
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) of this Agreement, or until it is advised in writing (the "Advice") by
the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice. In the event that the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 of this Agreement, as applicable, shall be
extended by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 6(c)(iii)(D) of this Agreement to
and including the date when each selling Holder covered by such
-25-
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 6(c)(xv) of this Agreement or shall
have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All fees and expenses incident to the Company's and the
Guarantors' performance of or compliance with this Agreement will be borne by
the Company regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
(including filings made with the NASD (and, if applicable, the reasonable fees
and expenses of any "qualified independent underwriter" and its counsel that may
be required by the rules and regulations of the NASD)); (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
New Notes to be issued in the Exchange Offer and printing of Prospectuses); (iv)
all reasonable fees and disbursements of counsel for the Company, the Guarantors
and, subject to Section 7(b) below, the Holders of Transfer Restricted
Securities; and (v) all reasonable fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company and the Guarantors will, in any event, bear their
internal expenses (including, without limitation, all salaries and expenses of
their officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by them.
Notwithstanding the foregoing or anything in this Agreement to the
contrary, each Holder of Transfer Restricted Notes shall pay all underwriting
discounts and commissions of any underwriters with respect to any Notes sold by
or on behalf of it.
-26-
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Cahill Gordon & Reindel or such other counsel as may be chosen by the Holders of
a majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) Each of the Company and the Guarantors, on a joint and several
basis, agrees to indemnify and hold harmless (i) the Initial Purchasers, each
Holder of Transfer Restricted Securities and each Participating Broker Dealer,
(ii) each person, if any, who controls any of the foregoing within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person") and (iii) its agents, employees, officers and directors and the agents,
employees, officers and directors of any such controlling person (collectively,
the "Indemnified Persons") from and against any and all losses, liabilities,
claims, damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all reasonable amounts paid in
settlement of any claim or litigation) to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or
-27-
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company and the Guarantors will not be liable in any
such case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission (i) made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Indemnified Person relating to such
Indemnified Person expressly for use therein or (ii) contained in any
preliminary prospectus or any Prospectus if the Initial Purchasers, such Holder,
such Participating Broker-Dealer or such underwriter, if any, failed to send or
deliver a copy of the Prospectus (as then amended or supplemented if the Company
shall have timely furnished any amendments or supplements thereto) to the Person
asserting such losses, liabilities, claims or damages on or prior to the
delivery of written confirmation of any sale of securities covered thereby to
such Person in any case where such delivery is required by the Act and a court
of competent jurisdiction in a judgment not subject to appeal or final review
shall have determined that such Prospectus (as so amended or supplemented) would
have corrected such untrue statement or omission and the delivery thereof would
have eliminated such losses, claims, damages or liabilities. This indemnity
agreement will be in addition to any liability that the Company and the
Guarantors may otherwise have, including, but not limited to, liability under
this Agreement.
If any action is brought against any Indemnified Persons or any such
person in respect of which indemnity may be sought against the Company and the
Guarantors pursuant to the foregoing paragraph, such Indemnified Persons or such
person shall promptly notify the indemnifying party in writing of the
institution of such action and the indemnifying party shall assume the defense
of such action, including the employment of
-28-
counsel reasonably satisfactory to such indemnified party and payment of all
fees and expenses, provided, however, except to the extent that the indemnifying
party shall be materially prejudiced thereby (through the forfeiture of
substantive rights or defenses), that the omission to so notify the indemnifying
party shall not relieve the indemnifying party from any liability which they may
have to the Indemnified Persons or any such person or otherwise. Such
Indemnified Persons shall have the right to employ its own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
Indemnified Persons unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action or the indemnifying party shall not have employed counsel to have
charge of the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the indemnifying
party (in which case the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the indemnifying
party and paid as incurred (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel
(together with appropriate local counsel) in any one action or series of related
actions in the same jurisdiction representing the indemnified parties who are
parties to such action). The indemnifying party shall not be liable for any
settlement of any such claim or action effected without its written consent but
if settled with the written consent of the indemnifying party, the indemnifying
party agrees to indemnify and hold harmless any Indemnified Persons and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without
-29-
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(b) In connection with any Registration Statement pursuant to which
a Holder of Transfer Restricted Securities offers or sells Transfer Restricted
Securities, such Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company and the Guarantors, their respective directors and officers
and any person controlling the Company or a Guarantor within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and each of
their agents, employees, officers and directors and the agents, employees,
officers and directors of such controlling person from and against any losses,
liabilities, claims, damages and expenses whatsoever (including but not limited
to reasonable attorneys' fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever and any and all reasonable
amounts paid in settlement of any claim or litigation) to which they or either
of them may become subject under the Act, the Exchange Act or otherwise insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a
-30-
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
relating to such Holder furnished to the Company by or on behalf of such Holder
expressly for use in such Registration Statement. This indemnity agreement will
be in addition to any liability that such Holder may otherwise have, including,
but not limited to, liability under this Agreement.
If any action is brought against the Company or the Guarantors or
any such person in respect of which indemnity may be sought against any Holder
of Transfer Restricted Securities pursuant to foregoing paragraph, the Company,
the Guarantors or such person shall promptly notify such Holder in writing of
the institution of such action and such Holder shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses, provided, however,
except to the extent that the indemnifying party shall be materially prejudiced
thereby (through the forfeiture of substantive rights or defenses), that the
omission to so notify such Holder shall not relieve such Holder from any
liability which they may have to the Company, the Guarantors or any such person
or otherwise. The Company, the Guarantors or such person shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless the
employment of such counsel shall have been authorized in writing by such Holder
of Transfer Restricted Securities in connection with the defense of such action
or such Holder shall not have employed counsel to have charge of the defense of
such action or such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different from or
additional to those available to such Holder (in which case such Holder shall
not have the right to direct
-31-
the defense of such action on behalf of the indemnified party or parties, but
such Holder may employ counsel and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Holder), in
any of which events such fees and expenses shall be borne by such Holder and
paid as incurred (it being understood, however, that such Holder shall not be
liable for the expenses of more than one separate counsel in any one action or
series of related actions in the same jurisdiction representing the indemnified
parties who are parties to such action). Anything in this paragraph to the
contrary notwithstanding, any Holder of Transfer Restricted Securities shall not
be liable for any settlement of any such claim or action effected without the
written consent of such Holder but if settled with the written consent of such
Holder, such Holder agrees to indemnify and hold harmless the Company, the
Guarantors and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnifying party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
-32-
(c) In order to provide for contribution in circumstances in which
the indemnification provided for in paragraphs (a) and (b) of this Section 8 is
for any reason held to be unavailable from the indemnifying party, or is
insufficient to hold harmless a party indemnified under this Section 8, the
Company, the Guarantors and the Indemnified Parties shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action or any claims asserted) to which the Company, and/or
the Guarantors and the Indemnified Parties may be subject, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Indemnified Parties, on the
other hand, from the offering of the Old Notes or, (ii) if such allocation is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Guarantors, on the one hand, and the
Indemnified Parties, on the other hand, in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Guarantors, on the one hand, and the
Indemnified Parties, on the other hand, shall be deemed to be in the same
proportion as the total proceeds from the offering of Old Notes (net of
discounts but before deducting expenses) received by the Company as set forth in
the table on the cover page of the Offering Memorandum bear to the total
proceeds received by such Holder with respect to its sale of Transfer Restricted
Securities or New Notes. The relative fault of the Company and the Guarantors,
on the one hand, and the Indemnified Parties, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Guarantors
or the Indemnified Parties and the parties'
-33-
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this paragraph (c)
of this Section 8 were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to above. Notwithstanding the provisions of paragraph (c) of this
Section 8, (i) in no case shall an Indemnified Party be required to contribute
any amount in excess of the amount by which the total received by such
Indemnified Party with respect to its sale of its Transfer Restricted Securities
or New Notes, as the case may be, exceeds the amount of any damages that such
Indemnified Party has otherwise been required to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this paragraph (c) of this
Section 8, each person, if any, who controls an Indemnified Party within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Indemnified Party, and each person, if
any, who controls the Company or the Guarantors within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company or the Guarantors, subject in each case to clauses
(i) and (ii) of this paragraph. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any Action against such
party in respect of which a claim for contribution may be made against another
party or parties under this paragraph 8(c), notify such party or parties from
whom contribution may be sought, but, except to the extent that the indemnifying
party shall be materially prejudiced thereby (through the forfeiture of
substantive rights and defenses), the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this
-34-
paragraph (c) or otherwise. No party shall be liable for contribution with
respect to any action or claim settled without its written consent; provided,
however, that such written consent was not unreasonably withheld.
SECTION 9. RULE 144A
The Company and the Guarantors shall use their best efforts, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale of such securities and any prospective purchaser of
such Transfer Restricted Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration under
this Agreement unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled under this Agreement to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorneys, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that
-35-
such investment bankers and managers must be reasonably satisfactory to the
Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided in this Agreement, in the Indenture, the Purchase Agreement
or granted by law, including recovery of liquidated or other 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 the provisions
of this Agreement and hereby agree to waive the defense in any Action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Each of the Company and the
Guarantors will not on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions of this Agreement. The Company has not previously entered into any
agreement granting any registration rights with respect to its securities to any
Person. The rights granted to the Holders under this Agreement do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's securities under any agreement in effect on the date of this
Agreement.
(c) Adjustments Affecting the Notes. Without the written consent of
the Holders of a majority in aggregate principal amount of outstanding Transfer
Restricted Notes, the Company and the Guarantors will not take any action, or
permit any change to occur, with respect to the Notes that would materially and
adversely affect the ability of the Holders to Consummate any Exchange Offer.
-36-
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions of this Agreement may not be given unless the Company has
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions of this
Agreement that relates exclusively to the rights of Holders whose securities are
being sold or tendered pursuant to a Registration Statement and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being sold or tendered pursuant to such Registration Statement may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities being so sold or tendered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivering, first-class
mail (registered or certified, return receipt requested), telecopier or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company or the Guarantors, at:
Beazer Homes USA, Inc.
5775 Peachtree Dunwoody Road
Suite C-550
Atlanta, Georgia 30342
Facsimile: (404) 250-3428
Attention: President
with a copy to:
Paul, Hastings, Janofsky & Walker LLP
399 Park Avenue
31st Floor
-37-
New York, New York 10022
Facsimile: (212) 319-4090
Attention: William F. Schwitter
All such notices and communications shall be deemed to have been
duly given: (i) at the time delivered by hand, if personally delivered; (ii)
five business days after being deposited in the mail, postage prepaid, if
mailed; (iii) when receipt acknowledged, if telecopied; and (iv) on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties to this Agreement 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.
(h) Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
-38-
(j) Submission to Jurisdiction. The Company and the Guarantors
irrevocably submit to the nonexclusive jurisdiction of any Federal court sitting
in New York over any suit, action or proceeding arising out of or relating to
this agreement. The Company and the Guarantors irrevocably waive, to the fullest
extent permitted by law, any objection it may now or thereafter have to the
laying of venue of any such court and any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
The Company and the Guarantors agree that a final judgment in any such suit,
action or proceeding brought in any such court shall be conclusive and binding
upon the Company and the Guarantors and may be enforced in any other courts to
the jurisdiction of which the Company and the Guarantors are or may be subject,
by suit upon such judgment.
(k) Severability. In the event that any one or more of the
provisions contained in this Agreement, or the application of any such provision
in any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained in this Agreement shall not be affected or
impaired thereby.
(l) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties to
this Agreement in respect of the subject matter contained in this Agreement.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to in this Agreement with respect to the
registration rights granted by the Company with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[Signatures on Next Page]
-39-
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
BEAZER HOMES USA, INC.
By:*
-----------------------
Name:
Title:
GUARANTORS:
BEAZER HOMES CORP.
By:*
-----------------------
BEAZER/SQUIRES REALTY, INC.
By:*
-----------------------
BEAZER HOMES SALES ARIZONA INC.
By:*
-----------------------
BEAZER REALTY CORP.
By:*
-----------------------
PANITZ HOMES REALTY, INC.
-40-
By:*
-----------------------
BEAZER MORTGAGE CORPORATION
By:*
-----------------------
BEAZER HOMES HOLDINGS CORP.
By:*
-----------------------
BEAZER HOMES TEXAS HOLDINGS, INC.
By:*
-----------------------
BEAZER HOMES TEXAS, L.P.
By:*
-----------------------
* Executed by David S. Weiss as an authorized officer of each of the Company
and the Guarantors.
-41-
Confirmed and Accepted and agreed
as of the date first above
written:
SBC WARBURG DILLON READ INC.
By:/s/ Allan P. Merrill
--------------------------------
Name: Allan P. Merrill
Title: Executive Director
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:/s/ Eric A. Anderson
--------------------------------
Name: Eric A. Anderson
Title: Managing Director
SALOMON SMITH BARNEY
By:/s/ Richard L. Moriarty
--------------------------------
Name: Richard L. Moriarty
Title: Managing Director