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REGISTRATION RIGHTS AGREEMENT
Dated as of August 4, 1998
by and among
PENHALL ACQUISITION CORP.
and
BT ALEX. BROWN INCORPORATED
and
CREDIT SUISSE FIRST BOSTON CORPORATION
as Initial Purchasers
$100,000,000
12% Senior Notes due 2006
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TABLE OF CONTENTS
Page
1. Definitions..........................................................................................2
2. Exchange Offer.......................................................................................6
3. Shelf Registration..................................................................................10
4. Additional Interest.................................................................................13
5. Registration Procedures.............................................................................15
6. Registration Expenses...............................................................................25
7. Indemnification.....................................................................................26
8. Rules 144 and 144A..................................................................................30
9. Underwritten Registrations..........................................................................31
10. Miscellaneous.......................................................................................31
(a) No Inconsistent Agreements................................................................31
(b) Adjustments Affecting Registrable Notes...................................................31
(c) Amendments and Waivers....................................................................32
(d) Notices...................................................................................32
(e) Successors and Assigns....................................................................33
(f) Counterparts..............................................................................34
(g) Headings..................................................................................34
(h) Governing Law.............................................................................34
(i) Severability..............................................................................34
(j) Securities Held by the Issuers, or
Their Affiliates..........................................................................34
(k) Third Party Beneficiaries.................................................................34
(l) Binding Effect............................................................................34
(m) Entire Agreement..........................................................................35
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated
as of August 4, 1998, by and among Penhall Acquisition Corp., an Arizona
corporation ("Penhall"), and BT Alex. Brown Incorporated and Credit Suisse First
Boston Corporation (each individually, an "Initial Purchaser" and collectively,
the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of July 28, 1998, by and among Penhall and the Initial
Purchasers (the "Purchase Agreement"), which provides for the sale by Penhall to
the Initial Purchasers of $100,000,000 aggregate principal amount of its 12%
Senior Notes due 2006 (the "Notes"). In order to induce the Initial Purchasers
to enter into the Purchase Agreement, Penhall has agreed to provide the
registration rights set forth in this Agreement for the benefit of the Initial
Purchasers and any subsequent holder or holders of the Notes. The execution and
delivery of this Agreement is a condition to the Initial Purchasers' obligation
to purchase the Notes under the Purchase Agreement.
The Notes are being sold in connection with a recapitalization
(the "Recapitalization") of Penhall Rental Corp. (formerly Penhall
International, Inc.), a California corporation ("PRC"). The Recapitalization
will be effected through the transactions contemplated by the Agreement and Plan
of Merger (the "Merger Agreement") dated July 1, 1998 by and among PRC, the
stockholders of PRC, Phoenix Concrete Cutting, Inc., an Arizona corporation
("Phoenix"), Bruckmann, Rosser, Sherrill & Co., L.P. ("BRS") and Penhall.
Pursuant to the Merger Agreement, a newly formed, wholly owned subsidiary
("Phoenix Merger Sub") of Phoenix will be merged with and into PRC (the
"Reorganization Merger"), with PRC continuing as the surviving corporation.
Pursuant to the terms of the Merger Agreement, immediately following the
Reorganization Merger and a series of equity transfers contemplated within the
Merger Agreement, Phoenix will receive common equity in PRC such that Phoenix
will become the corporate parent and will own all the outstanding capital stock
of PRC. Immediately following the Reorganization Merger, Penhall will be merged
with and into Phoenix (the "Recapitalization Merger" and, together with the
Reorganization Merger, the "Mergers"), with Phoenix continuing as the surviving
corporation and the successor obligor on the Notes. Following the consummation
of the Recapitalization Merger, Phoenix will change its corporate name to
"Penhall International Corp." The time of the consummation of the Mergers is
referred to herein as the "Effective Time."
Immediately after the Effective Time, Phoenix will execute an
assumption agreement (the "Assumption Agreement") pursuant to which Phoenix, as
survivor of the Recapitalization Merger, will assume all of the obligations of
Penhall under this Registration Rights Agreement, and PRC and Penhall Company, a
California corporation, will become party to this Registration Rights Agreement
as guarantors (the "Guarantors") and unconditionally guarantee the Notes (the
"Guarantee") on a senior unsecured basis. As used herein, the "Issuers" shall
mean Penhall prior to the Effective Time and, at and as of the Effective Time,
Phoenix and the Guarantors.
The Notes and the Guarantees are to be issued under an
indenture (the "Indenture") to be dated as of August 1, 1998 by and between the
Issuers and United States Trust Company of New York, as Trustee (the "Trustee").
Immediately after the Effective Time, Phoenix, the Guarantors and the Trustee
will enter into a first supplemental indenture to the Indenture (the
"Supplemental Indenture") providing for the express assumption by Phoenix, as
survivor of the Merger, of the covenants, agreements and undertakings of Penhall
in the Indenture and under the Notes, and the guarantee of the Notes by the
Guarantors. References to this Agreement as of and after the Effective Time will
refer to this Registration Rights Agreement together with the Assumption
Agreement and references to the Indenture as of and after the Effective Time
will refer to the Indenture and the Supplemental Indenture.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a) hereof.
Advice: See the last paragraph of Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 2(b) hereof.
Business Day: A day that is not a Saturday, Sunday or a day on
which banking institutions in New York, New York are required by law, regulation
or executive order to remain closed.
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Effectiveness Date: With respect to (i) the Exchange Offer
Registration Statement, the 150th day after the Issue Date, (ii) the Initial
Shelf Registration Statement, the 60th day after delivery of the Shelf Notice
and (iii) all other Shelf Registration Statements, the 60th day after the filing
date thereof.
Effectiveness Period: See Section 3(a) hereof.
Event Date: See Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2(a) hereof.
Exchange Offer: See Section 2(a) hereof.
Exchange Offer Registration Statement: See Section 2(a)
hereof.
Filing Date: (A) If no Registration Statement has been filed
by the Issuers pursuant to this Agreement, the 60th day after the Issue Date;
and (B) in any other case (which may be applicable notwithstanding the
consummation of the Exchange Offer), the 60th day after the delivery of a Shelf
Notice.
Guarantors: See the introductory paragraphs hereto.
Holder: Any holder of a Registrable Note or Registrable Notes.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: See the introductory paragraphs hereto.
Initial Purchasers: See the introductory paragraphs hereto.
Initial Shelf Registration: See Section 3(a) hereof.
Inspectors: See Section 5(o) hereof.
Issue Date: August 4, 1998, the date of original issuance of
the Notes.
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NASD: See Section 5(s) hereof.
Notes: See the introductory paragraphs hereto.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2(b) hereof.
Person: An individual, trustee, corporation, partnership,
joint stock company, trust, unincorporated association, union, business
association, firm, government or agency or political subdivision thereof or
other legal entity.
Private Exchange: See Section 2(b) hereof.
Private Exchange Notes: See Section 2(b) hereof.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act and any term sheet filed pursuant
to Rule 434 under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereof.
Records: See Section 5(n) hereof.
Registrable Notes: Each Note upon its original issuance and at
all times subsequent thereto, each Exchange Note as to which Section 2(c)(iv)
hereof is applicable upon original issuance and at all times subsequent thereto
and each Private Exchange Note upon original issuance thereof and at all times
subsequent thereto, until (i) a Registration Statement (other than, with respect
to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the
Exchange Offer Registration Statement) covering such Note, Exchange Note or
Private Exchange Note has been declared effective by the SEC and such Note,
Exchange Note or such Private Exchange Note, as the case may be, has been
disposed of in accordance with such effective Registration Statement, (ii) such
Note has been, or could have
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been, exchanged pursuant to the Exchange Offer for an Exchange Note or Exchange
Notes that may be resold without restriction under state and federal securities
laws, (iii) such Note, Exchange Note or Private Exchange Note, as the case may
be, ceases to be outstanding for purposes of the Indenture or (iv) such Note,
Exchange Note or Private Exchange Note, as the case may be, may be resold
without restriction pursuant to Rule 144 under the Securities Act.
Registration Statement: Any registration statement of the
Issuers that covers any of the Registrable Notes, including, but not limited to,
the Exchange Offer Registration Statement, filed with the SEC under the
Securities Act and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference or deemed to be incorporated by reference in any such registration
statement.
Rule 144: Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the Issuers of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(b) hereof.
Shelf Registration: See Section 3(b) hereof.
Shelf Registration Statement: Any Registration Statement
relating to a Shelf Registration.
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Subsequent Shelf Registration: See Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: See the introductory paragraphs hereto.
Underwritten registration or underwritten offering: A
registration in which securities of the Issuers are sold to an underwriter for
reoffering to the public.
2. Exchange Offer
(a) To the extent not prohibited by applicable law or
applicable interpretation of the staff of the Division of Corporation Finance of
the SEC, the Issuers shall file with the SEC, no later than the Filing Date, a
Registration Statement (the "Exchange Offer Registration Statement") on an
appropriate registration form with respect to a registered offer (the "Exchange
Offer") to exchange any and all of the Registrable Notes for a like aggregate
principal amount of notes (the "Exchange Notes") of Phoenix, guaranteed by the
Guarantors, that are identical in all material respects to the Notes except that
the Exchange Notes shall contain no restrictive legend thereon. The Exchange
Offer shall comply with all applicable tender offer rules and regulations under
the Exchange Act and other applicable laws. The Issuers shall use their
reasonable efforts to (x) cause the Exchange Offer Registration Statement to be
declared effective under the Securities Act on or before the Effectiveness Date;
(y) keep the Exchange Offer open for at least 20 Business Days (or longer if
required by applicable law) after the date that notice of the Exchange Offer is
mailed to Holders; and (z) consummate the Exchange Offer on or prior to the
180th day after the Issue Date. If, after the Exchange Offer Registration
Statement is initially declared effective by the SEC, the Exchange Offer or the
issuance of the Exchange Notes thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, the Exchange Offer Registration Statement shall be deemed not
to have become effective for purposes of this Agreement.
Each Holder that participates in the Exchange Offer will be
required to represent to the Issuers in writing that any Exchange Notes to be
received by it will be acquired in the ordinary course of its business, that at
the time of the consummation of the Exchange Offer such Holder will have no
arrangement or understanding with any Person to participate in the distribution
of the Exchange Notes in violation of the pro-
6
visions of the Securities Act, and that such Holder is not an affiliate of the
Issuers within the meaning of the Securities Act or, if such Holder is such an
affiliate, that it will comply with the registration and prospectus delivery
requirements of the Securities Act applicable to it, that if such Holder is a
broker-dealer, it is not engaged in, and does not intend to engage in, a
distribution of Exchange Notes, and that if such Holder is a broker-dealer that
will receive Exchange Notes for its own account in exchange for Notes that were
acquired as a result of market-making or other trading activities, it will
deliver a prospectus in connection with any resale of such Exchange Notes.
Upon consummation of the Exchange Offer in accordance with
this Section 2, the provisions of this Agreement shall continue to apply, solely
with respect to Registrable Notes that are Private Exchange Notes, Exchange
Notes as to which Section 2(c)(iv) is applicable and Exchange Notes held by
Participating Broker-Dealers, and the Issuers shall have no further obligation
to register Registrable Notes (other than Private Exchange Notes and other than
in respect of any Exchange Notes as to which clause 2(c)(iv) hereof applies)
pursuant to Section 3 hereof. No securities other than the Exchange Notes shall
be included in the Exchange Offer Registration Statement.
(b) The Issuers shall include within the Prospectus contained
in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Holders, 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
is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Notes received by such broker-dealer in the Exchange Offer or any other
Person with similar prospectus delivery requirements for use in connection with
any resale of Exchange Notes (a "Participating Broker-Dealer"), whether such
positions or policies have been publicly disseminated by the staff of the SEC or
such positions or policies represent the prevailing views of the staff of the
SEC. Such "Plan of Distribution" section shall also expressly permit, to the
extent permitted by applicable policies and regulations of the SEC, the use of
the Prospectus by all Persons subject to the prospectus delivery requirements of
the Securities Act, including, to the extent permitted by applicable policies
and regulations of the SEC, all Participating Broker-Dealers, and include a
statement describing the means by which Participating Broker-Dealers may resell
the Exchange Notes in compliance with the Securities Act.
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The Issuers shall use their reasonable efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be lawfully
delivered by all Persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as is necessary to comply with applicable
law in connection with any resale of the Exchange Notes covered thereby;
provided, however, that such period shall not exceed 180 days after such
Exchange Offer Registration Statement is declared effective (or such longer
period if extended pursuant to the last paragraph of Section 5 hereof), or such
earlier date as each Participating Broker-Dealer shall have notified the Company
in writing that such Participating Broker-Dealer has resold all Exchange Notes
acquired in the Exchange Offer (the "Applicable Period").
If, prior to consummation of the Exchange Offer, any Initial
Purchaser holds any Notes acquired by it that have, or that are reasonably
likely to be determined to have, the status of an unsold allotment in an initial
distribution, or if any Holder is not entitled to participate in the Exchange
Offer, the Issuers upon the request of any such Holder shall simultaneously with
the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to
any such Holder, in exchange (the "Private Exchange") for such Notes held by any
such Holder, a like principal amount of notes (the "Private Exchange Notes") of
Phoenix, guaranteed by the Guarantors, that are identical in all material
respects to the Exchange Notes (except that they may bear a customary legend
with respect to restrictions on transfer). The Private Exchange Notes shall be
issued pursuant to the same indenture as the Exchange Notes and bear the same
CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes
will accrue from (A) the later of (i) the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor or (ii) if the
Notes are surrendered for exchange on a date subsequent to the record date for
an interest payment date to occur on or after the date of such exchange and as
to which interest will be paid, the date of such interest payment or (B) if no
interest has been paid on the Notes, from the date of the original issuance of
the Notes.
In connection with the Exchange Offer, the Issuers shall:
(1) mail, or cause to be mailed, to each Holder entitled to
participate in the Exchange Offer a copy of the Prospectus forming part
of the Exchange Offer Registration
8
Statement, together with an appropriate letter of transmittal and
related documents;
(2) keep the Exchange Offer open for not less than 20 Business
Days after the date that notice of the Exchange Offer is mailed to
Holders (or longer if required by applicable law);
(3) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of New
York;
(4) permit Holders to withdraw tendered Notes at any time
prior to the close of business, New York time, on the last Business Day
on which the Exchange Offer shall remain open; provided, however, that
withdrawal rights may be terminated upon any extension of the Exchange
Offer; and
(5) otherwise comply in all material respects with all
applicable laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer
and the Private Exchange, if any, the Issuers shall:
(1) accept for exchange all Notes validly tendered and not
validly withdrawn pursuant to the Exchange Offer and the Private
Exchange, if any;
(2) deliver to the Trustee for cancellation all Notes so
accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to
each Holder of Notes, Exchange Notes or Private Exchange Notes, as the
case may be, equal in principal amount to the Notes of such Holder so
accepted for exchange.
The Exchange Offer and the Private Exchange shall not be
subject to any conditions, other than that (i) the Exchange Offer or Private
Exchange, as the case may be, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) no action or proceeding shall have
been instituted or threatened in any court or by any governmental agency which
might materially impair the ability of the Issuers to proceed with the Exchange
Offer or the Private Exchange, and no material adverse development shall have
occurred in any existing action or proceeding with respect to the Issuers, and
(iii) all governmental approvals shall have been obtained,
9
which approvals the Issuers deem necessary for the consummation of the Exchange
Offer or Private Exchange.
The Exchange Notes and the Private Exchange Notes shall be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture and which, in either case, has been qualified under
the TIA or is exempt from such qualification and shall provide that the Exchange
Notes shall not be subject to the transfer restrictions set forth in the
Indenture. The Indenture or such indenture shall provide that the Exchange
Notes, the Private Exchange Notes and the Notes shall vote and consent together
on all matters as one class and that none of the Exchange Notes, the Private
Exchange Notes or the Notes will have the right to vote or consent as a separate
class on any matter.
(c) If (i) because of any change in law or in currently
prevailing interpretations of the staff of the SEC, the Issuers are not
permitted to effect the Exchange Offer, (ii) the Exchange Offer is not
consummated within 180 days of the Issue Date, (iii) the Initial Purchasers or
any holder of Private Exchange Notes so requests in writing to the Issuers at
any time after the consummation of the Exchange Offer with respect to Private
Exchange Notes that are not eligible for resale without restriction under
federal securities laws, or (iv) in the case of any Holder that participates in
the Exchange Offer, such Holder does not receive Exchange Notes on the date of
the exchange that may be sold without restriction under federal securities laws
(other than due solely to the status of such Holder as an affiliate of any of
the Issuers within the meaning of the Securities Act) and so notifies the
Issuers within 30 days after such Holder first becomes aware of such
restrictions, in the case of each of clauses (i) to and including (iv) of this
sentence, then the Issuers shall promptly deliver to the Holders and the Trustee
written notice thereof (the "Shelf Notice") and shall file a Shelf Registration
pursuant to Section 3 hereof.
3. Shelf Registration
If at any time a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. The Issuers shall file with the SEC a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Registrable Notes not permitted to be exchanged
in the Exchange Offer in accordance with the terms of this Agreement, Private
Exchange Notes and Exchange Notes as to which Section 2(c)(iv)
10
is applicable (the "Initial Shelf Registration"). The Issuers shall use their
reasonable efforts to file with the SEC the Initial Shelf Registration on or
before the applicable Filing Date. The Initial Shelf Registration shall be on
Form S-1 or another appropriate form permitting registration of such Registrable
Notes for resale by Holders in the reasonable manner or manners designated by
them (including, without limitation, one or more underwritten offerings). The
Issuers shall not permit any securities other than the Registrable Notes to be
included in the Initial Shelf Registration or any Subsequent Shelf Registration
(as defined below).
The Issuers shall use their reasonable efforts to cause the
Initial Shelf Registration to be declared effective under the Securities Act on
or prior to the Effectiveness Date and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the date which is two
years from the Issue Date, subject to extension pursuant to the last paragraph
of Section 5 hereof (the "Effectiveness Period"), or such shorter period ending
when all Registrable Notes covered by the Shelf Registration have been sold in
the manner set forth and as contemplated in the Initial Shelf Registration or,
if applicable, a Subsequent Shelf Registration covering all of the Registrable
Notes covered by and not sold under the Initial Shelf Registration Statement or
an earlier Subsequent Shelf Registration has been declared effective under the
Securities Act; provided, however, that the Effectiveness Period in respect of
the Initial Shelf Registration shall be extended to the extent required to
permit dealers to comply with the applicable prospectus delivery requirements of
Rule 174 under the Securities Act and as otherwise provided herein and shall be
reduced to the extent that the applicable provisions of Rule 144(k) are amended
or revised to reduce the two year holding period set forth therein or any
similar rule providing for a shorter holding period; provided, further, that the
Issuers may suspend the availability or effectiveness of a Shelf Registration
Statement by written notice to the Holders for a period not to exceed 40
calendar days in any consecutive 365-day period if (i) an event occurs and is
continuing as a result of which such Shelf Registration Statement would, in the
Issuers' good faith judgment, contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading and (ii) (a) the Issuers determine in good faith that the
disclosure of such event at such time would have a material adverse effect on
the business, operations or prospects of the Issuers, taken as a whole, or (b)
the disclosure otherwise relates to a previously undisclosed pending material
business transaction, the disclosure of which would impede the Issuers' ability
to consummate such
11
transaction; provided, further, however, that if at the end of the Effectiveness
Period, all of the Registrable Notes covered by the Shelf Registration Statement
have not been sold, the Issuers will cause the effectiveness to be extended by
the number of days during which the Shelf Registration Statement was not usable
pursuant to the preceding proviso.
No Holder of Registrable Notes may include any of its
Registrable Notes in any Shelf Registration Statement pursuant to this Agreement
unless and until (i) such Holder (other than an Initial Purchaser) agrees in
writing to be bound by all of the provisions of this Agreement applicable to
such Holder, and (ii) such Holder furnishes to the Issuers in writing, within 15
Business Days after receipt of a request therefor, such information as the
Issuers may reasonably request for use in connection with any Shelf Registration
Statement or Prospectus or preliminary prospectus included therein. No Holder of
Registrable Notes shall be entitled to Additional Interest pursuant to Section 4
hereof unless and until such Holder shall have provided all such reasonably
requested information. Each Holder of Registrable Notes as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Issuers all information required to be disclosed in order to make information
previously furnished to the Issuers by such Holder not a material misstatement
or omission.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Issuers shall use
their reasonable efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall as soon as practicable after
such cessation of effectiveness amend the Initial Shelf Registration in a manner
to obtain the withdrawal of the order suspending the effectiveness thereof, or
file an additional Shelf Registration Statement pursuant to Rule 415 covering
all of the Registrable Notes covered by and not sold under the Initial Shelf
Registration or an earlier Subsequent Shelf Registration (each, a "Subsequent
Shelf Registration"). If a Subsequent Shelf Registration is filed, the Issuers
shall use their reasonable efforts to cause the Subsequent Shelf Registration to
be declared effective under the Securities Act as soon as practicable after such
filing and to keep such Shelf Registration continuously effective for a period
equal to the number of days in the Effectiveness Period (subject to reduction as
provided herein) less the aggregate number of days during which the Initial
Shelf Registration or
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any Subsequent Shelf Registration was previously continuously effective. As used
herein the term "Shelf Registration" means the Initial Shelf Registration and
any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Issuers shall promptly
supplement and amend any Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement or by any underwriter
of such Registrable Notes.
4. Additional Interest
(a) The Issuers and the Initial Purchasers agree that the
Holders will suffer damages if the Issuers fail to fulfill their obligations
under Section 2 or Section 3 hereof and that it would not be feasible to
ascertain the extent of such damages with precision. Accordingly, the Issuers
agree to pay, as liquidated damages, additional interest on the Notes
("Additional Interest") under the circumstances and to the extent set forth
below (each of which shall be given independent effect):
(i) if (A) neither the Exchange Offer Registration Statement nor
the Initial Shelf Registration has been filed on or prior to the
applicable Filing Date or (B) notwithstanding that the Issuers have
consummated or will consummate the Exchange Offer, the Issuers are
required to file a Shelf Registration and such Shelf Registration is
not filed on or prior to the Filing Date applicable thereto, then,
commencing on the day after any such Filing Date, Additional Interest
shall accrue on the principal amount of the Notes at a rate of 0.5% per
annum for the first 90 days immediately following such applicable
Filing Date, and such Additional Interest rate shall increase by an
additional 0.5% per annum at the beginning of each subsequent 90-day
period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor
the Initial Shelf Registration is declared effective by the SEC on or
prior to the Effectiveness Date applicable thereto or (B)
notwithstanding that the Issuers have consummated or will consummate
the Exchange Offer, the Issuers are required to file a Shelf
Registration and such Shelf Registration is not declared effective by
the SEC on or prior to the Effectiveness Date applicable to
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such Shelf Registration, then, commencing on the day after such
Effectiveness Date, Additional Interest shall accrue on the principal
amount of the Notes at a rate of 0.5% per annum for the first 90 days
immediately following the day after such Effectiveness Date, and such
Additional Interest rate shall increase by an additional 0.5% per
annum at the beginning of each subsequent 90-day period; or
(iii) if (A) the Issuers have not exchanged Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange
Offer on or prior to the 30th day after the Exchange Offer Registration
Statement is declared effective or (B) if applicable, a Shelf
Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period for
a period of ten consecutive days without being succeeded by an
effective Shelf Registration Statement, then Additional Interest shall
accrue on the principal amount of the Notes at a rate of 0.5% per annum
for the first 90 days commencing on the (x) 31st day after the Exchange
Offer Registration Statement is declared effective, in the case of (A)
above, or (y) the 11th day after such Shelf Registration ceases to be
effective, in the case of (B) above, and such Additional Interest rate
shall increase by an additional 0.5% per annum at the beginning of each
such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may not exceed
at any one time in the aggregate 2.0% per annum; provided, further, however,
that (1) upon the filing of the applicable Exchange Offer Registration Statement
or the applicable Shelf Registration as required hereunder (in the case of
clause (i) above of this Section 4), (2) upon the effectiveness of the Exchange
Offer Registration Statement or the applicable Shelf Registration Statement as
required hereunder (in the case of clause (ii) of this Section 4), or (3) upon
the exchange of the Exchange Notes for all Notes tendered (in the case of clause
(iii)(A) of this Section 4), or upon the effectiveness of the applicable Shelf
Registration Statement which had ceased to remain effective (in the case of
(iii)(B) of this Section 4), Additional Interest on the Notes in respect of
which such events relate as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue. Additional Interest will
not accrue with respect to a Shelf Registration Statement during any period in
which the Issuers suspend the effectiveness or use of such Shelf Registration
Statement in accordance with the terms of Section 3(a) hereof.
14
(b) The Issuers shall notify the Trustee within one Business
Day after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). Any amounts of
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section
4 will be payable in cash semi-annually on the interest payment dates specified
in the Indenture and the Notes to the holders of record as specified in the
Indenture, commencing with the first such interest payment date occurring after
any such Additional Interest commences to accrue. The amount of Additional
Interest will be determined by multiplying the applicable Additional Interest
rate by the principal amount of the Registrable Notes, multiplied by a fraction,
the numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
composed of twelve 30-day months and, in the case of a partial month, the actual
number of days elapsed), and the denominator of which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, the Issuers shall effect such registrations
to permit the sale of the securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Issuers hereunder the
Issuers shall:
(a) Prepare and file with the SEC prior to the applicable
Filing Date, a Registration Statement or Registration Statements as
prescribed by Sections 2 or 3 hereof, and use its reasonable efforts to
cause each such Registration Statement to become effective and remain
effective as provided herein; provided, however, that, if (1) such
filing is pursuant to Section 3 hereof or (2) a Prospectus contained in
the Exchange Offer Registration Statement filed pursuant to Section 2
hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the
Issuers shall furnish to and afford the Holders of the Registrable
Notes covered by such Registration Statement or BT Alex. Brown
Incorporated (the "Representative") on behalf of such Participating
Broker-Dealer, as the case may be, their or its counsel and the
managing underwriters, if any, a reasonable opportunity to review
copies of all such documents (including
15
copies of any documents to be incorporated by reference therein and
all exhibits thereto) proposed to be filed (in each case at least five
business days prior to such filing, or such later date as is
reasonable under the circumstances). The Issuers shall not file any
Registration Statement or Prospectus or any amendments or supplements
thereto if the Holders of a majority in aggregate principal amount of
the Registrable Notes covered by such Registration Statement, their
counsel, or the managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration Statement or
Exchange Offer Registration Statement, as the case may be, as may be
necessary to keep such Registration Statement continuously effective
for the Effectiveness Period or the Applicable Period or until
consummation of the Exchange Offer, as the case may be; cause the
related Prospectus to be supplemented by any Prospectus supplement
required by applicable law, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) promulgated under
the Securities Act; and comply with the provisions of the Securities
Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as
so amended or in such Prospectus as so supplemented and with respect to
the subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus. The Issuers shall be
deemed not to have used their reasonable efforts to keep a Registration
Statement effective during the Effective Period or the Applicable
Period, as the case may be, relating thereto if the Issuers voluntarily
take any action that would result in selling Holders of the Registrable
Notes covered thereby or Participating Broker-Dealers seeking to sell
Exchange Notes not being able to sell such Registrable Notes or such
Exchange Notes during that period unless (i) such action is required by
applicable law or (ii) the Issuers comply with this Agreement,
including without limitation, the provisions of Section 5(k) or the
last paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period relating thereto from whom the Issuers have received written
notice
16
that it will be a Participating Broker-Dealer in the Exchange Offer,
notify the selling Holders of Registrable Notes, or the Representative
on behalf of such Participating Broker-Dealer, as the case may be,
their or its counsel and the managing underwriters, if any, promptly
(but in any event within two Business Days), and, if requested by any
such Person, confirm such notice in writing, (i) when a Prospectus or
any Prospectus supplement or post-effective amendment has been filed,
and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any
Holder may, upon request, obtain, at the sole expense of the Issuers,
one conformed copy of such Registration Statement or post-effective
amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference therein and
exhibits), (ii) of the issuance by the SEC of any stop order suspending
the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii) if at any time
when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange
Notes by Participating Broker-Dealers the representations and
warranties of the Issuers contained in any agreement (including any
underwriting agreement) contemplated by Section 5(m) hereof cease to be
true and correct in all material respects, (iv) of the receipt by the
Issuers of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration
Statement or any of the Registrable Notes or the Exchange Notes to be
sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction, or the initiation or threatening of any proceeding for
such purpose, (v) of the happening of any event, the existence of any
condition or any information becoming known to the Issuers that makes
any statement made in such Registration Statement or related Prospectus
or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of
any changes in or amendments or supplements to such Registration
Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that in the case of the Prospectus, it will not contain any untrue
statement of a material fact
17
or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (vi) of
the Issuers' determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, use its reasonable efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending
the qualification (or exemption from qualification) of any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is
issued, to use its reasonable efforts to obtain the withdrawal of any
such order at the earliest possible date.
(e) If a Shelf Registration is filed pursuant to Section 3
hereof and if requested by the managing underwriter or underwriters (if
any), the Holders of a majority in aggregate principal amount of the
Registrable Notes being sold in connection with an underwritten
offering or any Participating Broker-Dealer, (i) as promptly as
practicable incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriter or underwriters
(if any), such Holders, any Participating Broker-Dealer or counsel for
any of them reasonably request to be included therein, (ii) make all
required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Issuers have received
notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment; provided, however, that the
Issuers shall not be required to take any action hereunder that would
in the written opinion of counsel to the Issuers violate applicable
law, and (iii) supplement or make amendments to such Registration
Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Secu-
18
rities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, furnish to each selling
Holder of Registrable Notes and the Representative on behalf of such
Participating Broker-Dealer and to counsel and each managing
underwriter, if any, at the sole expense of the Issuers, one conformed
copy of the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and
schedules, and, if requested, all documents incorporated or deemed to
be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, deliver to each selling Holder of Registrable Notes, or each
such Participating Broker-Dealer, as the case may be, their respective
counsel, and the underwriters, if any, at the sole expense of the
Issuers, as many copies of the Prospectus or Prospectuses (including
each form of preliminary prospectus) and each amendment or supplement
thereto and any documents incorporated by reference therein as such
Persons may reasonably request; and, subject to the last paragraph of
this Section 5, the Issuers hereby consent to the use of such
Prospectus and each amendment or supplement thereto by each of the
selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if
any, and dealers (if any), in connection with the offering and sale of
the Registrable Notes covered by, or the sale by Participating
Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and
any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Offer Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, to use its reasonable efforts to
register or qualify, and to cooperate with the selling Holders of
Registrable Notes or the Representative on behalf of such Participating
Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and their respective counsel in connection with
the registration or qualification (or exemption from such registration
or qualification) of such Registrable Notes for offer and
19
sale under the securities or Blue Sky laws of such jurisdictions
within the United States as any selling Holder, Participating
Broker-Dealer, or the managing underwriter or underwriters reasonably
request in writing; provided, however, that where Exchange Notes held
by Participating Broker-Dealers or Registrable Notes are offered other
than through an underwritten offering, the Issuers agree to cause
their counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective and do any and all other
acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Notes held by
Participating Broker-Dealers or the Registrable Notes covered by the
applicable Registration Statement; provided, however, that the Issuers
shall not be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action
that would subject it to general service of process in any such
jurisdiction where it is not then so subject or (C) subject itself to
taxation in excess of a nominal dollar amount in any such jurisdiction
where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3
hereof, cooperate with the selling Holders of Registrable Notes and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold, which certificates shall not bear any restrictive legends
and shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Notes to be in such denominations
and registered in such names as the managing underwriter or
underwriters, if any, or Holders may reasonably request at least two
Business Days prior to any sale of such Registrable Notes.
(j) Use its reasonable efforts to cause the Registrable Notes
covered by the Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be reasonably
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Notes, except as may be required solely as a consequence of the nature
of such selling Holder's business, in which case the Issuers will
cooperate in all
20
reasonable respects with the filing of such Registration Statement and
the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, upon the occurrence of any event contemplated by paragraph
5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and
(subject to Section 5(a) hereof) file with the SEC, at the sole expense
of the Issuers, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Notes being sold
thereunder or to the purchasers of the Exchange Notes to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(l) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) provide the Trustee
with certificates for the Registrable Notes or Exchange Notes, as the
case may be, in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Registrable Notes or
Exchange Notes, as the case may be.
(m) In connection with any underwritten offering of
Registrable Notes pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in underwritten offerings of
debt securities similar to the Notes in form and substance reasonably
satisfactory to the Issuers and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in
order to expedite or facilitate the registration or the disposition of
such Registrable Notes and, in such connection, (i) make such
representations and warranties to, and covenants with, the underwriters
with respect to the business of the Issuers and their subsidiaries and
the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference
21
therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings of debt securities similar to
the Notes, and confirm the same in writing if and when requested in
form and substance reasonably satisfactory to the Issuers; (ii) obtain
the written opinions of counsel to the Issuers and written updates
thereof in form, scope and substance reasonably satisfactory to the
managing underwriter or underwriters, addressed to the underwriters
covering the matters customarily covered in opinions reasonably
requested in underwritten offerings and such other matters as may be
reasonably requested by the managing underwriter or underwriters;
(iii) use its reasonable efforts to obtain "cold comfort" letters and
updates thereof in form, scope and substance reasonably satisfactory
to the managing underwriter or underwriters from the independent
certified public accountants of the Issuers (and, if necessary, any
other independent certified public accountants of any subsidiary of
the Issuers or of any business acquired by the Issuers for which
financial statements and financial data are, or are required to be,
included or incorporated by reference in the Registration Statement),
addressed to the underwriter, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings of debt securities
similar to the Notes and such other matters as reasonably requested by
the managing underwriter or underwriters as permitted by the Statement
on Auditing Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable to the sellers and underwriters, if any,
than those set forth in Section 7 hereof (or such other provisions and
procedures acceptable to Holders of a majority in aggregate principal
amount of Registrable Notes covered by such Registration Statement and
the managing underwriter or underwriters or agents, if any). The above
shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, make available for inspection by any selling Holder of such
Registrable Notes being sold, or each such Participating Broker-Dealer,
as the case may be, any underwriter par-
22
ticipating in any such disposition of Registrable Notes, if any,
and any attorney, accountant or other agent retained by any such
selling Holder or each such Participating Broker-Dealer, as the case
may be, or underwriter (collectively, the "Inspectors"), at the
offices where normally kept, during reasonable business hours, all
financial and other records, pertinent corporate documents and
instruments of the Issuers and their subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise
any applicable due diligence responsibilities, and cause the officers,
directors and employees of the Issuers and their subsidiaries to
supply all information reasonably requested by any such Inspector in
connection with such Registration Statement and Prospectus. Each
Inspector shall agree in writing that it will keep the Records
confidential and that it will not disclose any of the Records unless
(i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such Registration Statement or Prospectus,
(ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, or (iii) the
information in such Records has been made generally available to the
public; provided, however, that such Inspector shall take such actions
as are reasonably necessary to protect the confidentiality of such
information (if practicable) to the extent such action is otherwise
not inconsistent with, an impairment of or a derogation of the rights
and interests of the Holder or any Inspector. Each selling Holder of
such Registrable Notes and each such Participating Broker-Dealer will
be required to agree that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by
it as the basis for any market transactions in the securities of the
Issuers unless and until such information is made generally available
to the public. Each selling Holder of such Registrable Notes and each
such Participating Broker-Dealer will be required to further agree
that it will, upon learning that disclosure of such Records is sought
in a court of competent jurisdiction, give notice to the Issuers and
allow the Issuers to undertake appropriate action to prevent
disclosure of the Records deemed confidential at the Issuers' expense.
(o) Provide an indenture trustee for the Registrable Notes or
the Exchange Notes, as the case may be, and cause the Indenture or the
trust indenture provided for in Section 2(a) hereof, as the case may
be, to be qualified under the TIA not later than the effective date of
the first
23
Registration Statement relating to the Registrable Notes; and in
connection therewith, cooperate with the trustee under any such
indenture and the Holders of the Registrable Notes, to effect such
changes to such indenture as may be required for such indenture to be
so qualified in accordance with the terms of the TIA; and execute, and
use its reasonable efforts to cause such trustee to execute, all
documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable such
indenture to be so qualified in a timely manner.
(p) Comply with all applicable rules and regulations of the
SEC and make generally available to their respective securityholders
earnings statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated
under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if
such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Notes are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Issuers after the effective date of a
Registration Statement, which statements shall cover said 12-month
periods.
(q) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the
Issuers (or to such other Person as directed by the Issuers) in
exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be, the Issuers shall mark, or cause to be marked, on such
Registrable Notes that such Registrable Notes are being cancelled in
exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be; in no event shall such Registrable Notes be marked as paid
or otherwise satisfied.
(r) Use its reasonable efforts to cause the Registrable Notes
covered by a Registration Statement to be rated with the appropriate
rating agencies, if so requested by the managing underwriter or
underwriters, if any.
(s) Cooperate with the managing underwriter, if any,
participating in the disposition of Registrable Notes and its counsel
in connection with any filings required to be
24
made with the National Association of Securities Dealers, Inc.
(the "NASD").
(t) Use its reasonable efforts to take all other steps
reasonably necessary to effect the registration of the Exchange Notes
and/or Registrable Notes covered by a Registration Statement
contemplated hereby.
The Issuers may require each seller of Registrable Notes as to
which any registration is being effected to furnish to the Issuers such
information regarding such seller and the distribution of such Registrable Notes
as the Issuers may, from time to time, reasonably request. The Issuers may
exclude from such registration the Registrable Notes of any seller so long as
such seller fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Issuers all information required to
be disclosed in order to make the information previously furnished to the
Issuers by such seller not to contain a material misstatement or omission.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by its acquisition of such Registrable Notes or Exchange
Notes to be sold by such Participating Broker-Dealer, as the case may be, that,
upon actual receipt of any notice from the Issuers of the happening of any event
of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi)
hereof, such Holder will forthwith discontinue disposition of such Registrable
Notes covered by such Registration Statement or Prospectus or Exchange Notes to
be sold by such Holder or Participating Broker-Dealer, as the case may be, and
the dissemination of the applicable Prospectus until such Holder's or
Participating Broker-Dealer's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) hereof, or until it is advised
in writing (the "Advice") by the Issuers that the use of the applicable
Prospectus may be resumed. In the event that the Issuers shall give any such
notice, each of the Effectiveness Period and the Applicable Period shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Notes covered by such Registration Statement or Exchange Notes to be
sold by such Participating Broker-Dealer, as the case may be, shall have
received (x) the copies of the supplemented or amended Prospectus contemplated
by Section 5(k) hereof or (y) the Advice.
25
6. Registration Expenses
All fees and expenses incident to the performance of or
compliance with this Agreement by the Issuers shall be borne by the Issuers
whether or not the Exchange Offer Registration Statement or any Shelf
Registration Statement is filed or becomes effective or the Exchange Offer is
consummated, including, without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of counsel in connection
with Blue Sky qualifications of the Registrable Notes or Exchange Notes and
determination of the eligibility of the Registrable Notes or Exchange Notes for
investment under the laws of such jurisdictions (x) where the holders of
Registrable Notes are located, in the case of the Exchange Notes, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange
Notes to be sold by a Participating Broker-Dealer during the Applicable
Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes in a form eligible
for deposit with The Depository Trust Company and of printing prospectuses if
the printing of prospectuses is requested by the managing underwriter or
underwriters, if any, by the Holders of a majority in aggregate principal amount
of the Registrable Notes included in any Registration Statement or in respect of
Exchange Notes to be sold by any Participating Broker-Dealer during the
Applicable Period, as the case may be, (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Issuers and, in the
case of a Shelf Registration, reasonable fees and disbursements of one special
counsel for all of the sellers of Registrable Notes (exclusive of any counsel
retained pursuant to Section 7 hereof), (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(m)(iii) hereof
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (vi) Securities
Act liability insurance, if the Issuers desire such insurance, (vii) fees and
expenses of all other Persons retained by the Issuers, (viii) internal expenses
of the Issuers (including, without limitation, all salaries and expenses of
officers and employees of the Issuers performing legal or accounting duties),
(ix) the expense of any annual audit, (x) the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange, and the obtaining of a rating of the securities, in each case, if
applicable, and (xi) the expenses relat-
26
ing to printing, word processing and distributing all Registration Statements,
underwriting agreements, indentures and any other documents necessary in order
to comply with this Agreement. Notwithstanding the foregoing, each Holder shall
pay any underwriting discounts and commissions incurred in connection with
Registrable Notes sold on such Holder's behalf.
7. Indemnification
(a) Each of the Issuers, jointly and severally, agree to
indemnify and hold harmless each Holder of Registrable Notes and each
Participating Broker-Dealer selling Exchange Notes during the Applicable Period,
the officers and directors of each such Person, and each Person, if any, who
controls any such Person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "Participant"), from
and against any and all losses, claims, damages, judgments, liabilities and
expenses (including, without limitation, the reasonable legal fees and other
expenses actually incurred in connection with any suit, action or proceeding or
any claim asserted) caused by, arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) or Prospectus (as amended or supplemented
if the Issuers shall have furnished any amendments or supplements thereto) or
any preliminary prospectus, or caused by, arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the case of the
Prospectus in the light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses are caused by, arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Participant furnished to the Issuers
in writing by such Participant expressly for use therein; provided, however,
that the Issuers will not be liable if such untrue statement or omission or
alleged untrue statement or omission was contained or made in any preliminary
prospectus and corrected in the final Prospectus or any amendment or supplement
thereto and any such loss, liability, claim, or damage or expense suffered or
incurred by the Participants resulted from any action, claim or suit by any
Person who purchased Registrable Notes or Exchange Notes which are the subject
thereof from such Participant and such Participant failed to deliver or provide
a copy of the final Prospectus (as amended or supplemented) to such Person with
or prior to the confirmation of the sale of such Registrable Notes or Exchange
Notes sold to such Person if required by applicable law, unless such failure to
27
deliver or provide a copy of the final Prospectus (as amended or supplemented)
was a result of material noncompliance by the Issuers with Section 5 of this
Agreement.
(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless the Issuers, their respective directors, their
respective officers who sign the Registration Statement and each Person who
controls the Issuers within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuers to each Participant, but only with reference to information
relating to such Participant furnished to the Issuers in writing by such
Participant expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary prospectus. The liability of
any Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Notes or Exchange Notes
giving rise to such obligations.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such Person (the "Indemnified
Person") shall promptly notify the Persons against whom such indemnity may be
sought (the "Indemnifying Persons") in writing, and the Indemnifying Persons
shall be entitled to, and upon request of the Indemnified Person shall, retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Persons may reasonably
designate in such proceeding and shall pay the reasonable fees and expenses
actually incurred by such counsel related to such proceeding; provided, however,
that the failure to so notify the Indemnifying Persons shall not relieve any of
them of any obligation or liability which any of them may have hereunder or
otherwise except to the extent it is materially prejudiced by such failure. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Persons and the
Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Persons shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both any Indemnifying Person and the Indemnified Person or any affiliate thereof
and representation of both parties by the same counsel would be inappropriate
due to actual or potential
28
conflicting interests between them. It is understood that, unless there exists a
conflict among Indemnified Persons, the Indemnifying Persons shall not, in
connection with such proceeding or separate but substantially similar related
proceeding in the same jurisdiction arising out of the same general allegations,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed promptly as they are incurred. Any such separate
firm for the Participants and such control Persons of Participants shall be
designated in writing by Participants who sold a majority in interest of
Registrable Notes and Exchange Notes sold by all such Participants and shall be
reasonably acceptable to the Issuers and any such separate firm for the Issuers,
their respective directors, their respective officers and such control Persons
of the Issuers shall be designated in writing by the Issuers and shall be
reasonably acceptable to the Holders. The Indemnifying Persons shall not be
liable for any settlement of any proceeding effected without its prior written
consent (which consent shall not be unreasonably withheld or delayed), but if
settled with such consent or if there be a final non-appealable judgment for the
plaintiff for which the Indemnified Person is entitled to indemnification
pursuant to this Agreement, each of the Indemnifying Persons agrees to indemnify
and hold harmless each Indemnified Person from and against any loss or liability
by reason of such settlement or judgment. No Indemnifying Person shall, without
the prior written consent of the Indemnified Persons (which consent shall not be
unreasonably withheld or delayed), effect any settlement or compromise of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party, or indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement (A) includes an unconditional
written release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of such
Indemnified Person.
(d) If the indemnification provided for in clauses (a) and (b)
of this Section 7 is for any reason unavailable to, or insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims,
29
damages, liabilities or expenses in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person or Persons on the
one hand and the Indemnified Person or Persons on the other from the offering of
the Notes or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also the
relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the misstatements
or omissions or alleged misstatements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative fault of the parties shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuers, on the one hand
or such Participant or such other Indemnified Person, as the case may be, on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such misstatement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages, judgments, liabilities and expenses referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any reasonable legal or other expenses actually
incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall a Participant be required to contribute any amount
in excess of the amount by which proceeds received by such Participant from
sales of Registrable Notes or Exchange Notes, as the case may be, exceeds the
amount of any damages that such Participant has otherwise been required to pay
or has paid by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
30
(f) Any losses, claims, damages, liabilities or expenses for
which an Indemnified Person is entitled to indemnification or contribution under
this Section 7 shall be paid by the Indemnifying Person to the Indemnified
Person as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Issuers set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Holder or any person who controls a
Holder, the Issuers, and their respective directors, officers, employees or
agents or any person controlling the Issuers, and (ii) any termination of this
Agreement.
(g) The indemnity and contribution agreements contained in
this Section 7 will be in addition to any liability which the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
The Issuers covenant and agree that, so long as Registrable
Notes remain outstanding, it will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if at any time the
Issuers are not required or permitted to file such reports, the Issuers will,
upon the request of any Holder or beneficial owner of Registrable Notes, make
available such information necessary to permit sales pursuant to Rules 144 and
144A under the Securities Act. The Issuers further covenant for so long as any
Registrable Notes remain outstanding, to make available to any Holder or
beneficial owner of Registrable Notes in connection with any sale thereof and
any prospective purchaser of such Registrable Notes from such Holder or
beneficial owner the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Registrable Notes pursuant to
Rule 144A. Notwithstanding the foregoing, nothing in this Section 8 shall be
deemed to require any of the Issuers to register any of the Securities pursuant
to the Exchange Act.
9. Underwritten Registrations
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the Issuers
31
and shall be reasonably acceptable to the Holders of a majority in aggregate
principal amount of such Registrable Notes included in such offering.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. As of the date hereof, the
Issuers have not, and after the date hereof, shall not enter into any agreement
with respect to any of its securities that is inconsistent with the rights
granted to the Holders of Registrable Notes in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of any of the Issuers' other issued and
outstanding securities. As of the date hereof, the Issuers have not entered and
the Issuers will not enter into any agreement with respect to any of its
securities which will grant to any Person piggy-back registration rights with
respect to any Registration Statement required to be filed by the Issuers
pursuant to this Agreement.
(b) Adjustments Affecting Registrable Notes. The Issuers shall
not, directly or indirectly, take any action with respect to the Registrable
Notes as a class that would adversely affect the ability of the Holders of
Registrable Notes to include such Registrable Notes in a registration undertaken
pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, otherwise than with the
prior written consent of (I) the Issuers and (II)(A) the Holders of not less
than a majority in aggregate principal amount of the then outstanding
Registrable Notes and (B) in circumstances that would adversely affect the
Participating Broker-Dealers, the Participating Broker-Dealers holding not less
than a majority in aggregate principal amount of the Exchange Notes held by all
Participating Broker-Dealers; provided, however, that Section 7 and this Section
10(c) may not be amended, modified or supple-
32
mented without the prior written consent of each Holder and each Participating
Broker-Dealer (including any person who was a Holder or Participating
Broker-Dealer of Registrable Notes or Exchange Notes, as the case may be,
disposed of pursuant to any Registration Statement) affected by any such
amendment, modification or supplement. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Notes whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being sold pursuant to such
Registration Statement.
(d) Notices. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or
Participating Broker-Dealer, as the case may be, set forth on the
records of the registrar under the Indenture, with a copy in like
manner to the Initial Purchasers as follows:
BT Alex. Brown Incorporated
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Facsimile No: (212) 250-7200
Attention: Corporate Finance
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No: (212) 269-5420
Attention: Daniel J. Zubkoff, Esq.
(ii) if to the Initial Purchasers, at the address specified
in Section 10(d)(i);
(iii) if to the Issuers, at the address as follows:
33
c/o Penhall International, Inc.
1801 Penhall Way
P.O. Box 4609
Anaheim, California 92803
Facsimile No.: (215) 994-2222
Attention: Chief Financial Officer
with a copy to:
Dechert Price & Rhoads
30 Rockefeller Plaza
New York, New York 10112
Facsimile No.: (212) 698-3599
Attention: Bruce B. Wood, Esq.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; three Business
Days after being deposited in the mail, postage prepaid, if mailed; one Business
Day after being timely delivered to a next-day air courier; and upon receiving
confirmation of receipt by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address and in the manner specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, the Holders and the Participating Broker-Dealers, provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Registrable Notes in violation of the terms of the Purchase Agreement or the
Indenture.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY
34
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(i) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Issuers, or Their Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the Issuer,
the Issuers or any of their affiliates (as such term is defined in Rule 405
under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(k) Third Party Beneficiaries. Holders of Registrable Notes
and Participating Broker-Dealers are intended third party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
(l) Binding Effect. The provisions of this Agreement will not
be binding upon the Company or any of the Guarantors prior to the consummation
of the Mergers (as defined in the Purchase Agreement).
(m) Entire Agreement. This Agreement, together with the
Purchase Agreement, the Assumption Agreement, the Indenture and the Supplemental
Indenture, is intended by the parties as a final and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein and any and all prior oral or written
agreements, representations or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Initial Purchasers on
the one hand and the Issuers on the other, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
35
successors in interest with respect to the subject matter hereof and thereof are
merged herein and replaced hereby.
36
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
PENHALL ACQUISITION CORP.
By: /s/ Paul D. Kaminski
-------------------------------------------
Name: Paul D. Kaminski
Title: Vice President
BT ALEX. BROWN INCORPORATED
CREDIT SUISSE FIRST BOSTON
CORPORATION
as Initial Purchasers
By: BT ALEX. BROWN INCORPORATED
By: /s/ Keith Stimson
-------------------------------------------
Name: Keith Stimson
Title: Vice President