Exhibit 1.1
HAWK CORPORATION
Dealer Manager Agreement
August __, 0000
Xxxx xx Xxxxxxx Securities LLC
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Hawk Corporation, a Delaware corporation (the "COMPANY"), plans to make an
offer to exchange its __% Senior Notes due 20__ (the "NEW NOTES") for its
outstanding 10.25% Senior Notes due 2003 (the "OLD NOTES"), and engage in a
related solicitation of consents from holders of Old Notes to proposed
amendments (the "PROPOSED AMENDMENTS") to the Indenture among Hawk Corporation,
the Guarantors (as defined below) and HSBC Bank USA (the "NEW TRUSTEE"),
successor to Bank One Trust Company, NA, as trustee, dated as of November 27,
1996, under which the Old Notes were issued (the "OLD INDENTURE") (such offer
and solicitation of consents, as they may be amended or supplemented from time
to time, the "EXCHANGE OFFER," and such consents received from holders of Old
Notes, the "CONSENTS"). The New Notes will be guaranteed by Allegheny
Clearfield, Inc., Friction Products Co., Hawk MIM, Inc., Hawk Motors, Inc., Hawk
Precision Components, Group, Inc., Xxxxxx, Inc., Xxxxx Metal Stampings, Inc.,
Net Shape Technologies LLC, Quarter Master Industries, Inc., X.X. Xxxxxxx
Holdings, Inc., X.X. Xxxxxxx Corp., Sinterloy Corporation and Tex Racing
Enterprises, Inc., each a wholly-owned direct or indirect subsidiary of the
Company, and any other wholly-owned direct or indirect subsidiary of the Company
that guarantees the Old Notes (the "GUARANTORS"). The New Notes are to be issued
under an indenture among the Company (as issuer), the Guarantors (as guarantors)
and the New Trustee (as trustee) (the "NEW INDENTURE"). The Company will
exchange $________ principal amount of New Notes of which $_________ in
principal amount constitutes a Consent payment that will only be made for
Consents received prior to [INSERT CONSENT PAYMENT DEADLINE] for each $1,000
principal amount of Old Notes tendered in the Exchange Offer and amend the Old
Indenture, on the terms and conditions set forth in the Exchange Offer Materials
(as defined in Section 2).
1. ENGAGEMENT. The Company hereby engages Banc of America Securities LLC as
its exclusive dealer manager and solicitation agent (the "DEALER MANAGER"),
authorizes the Dealer Manager to act as such in connection with the Exchange
Offer and agrees that the Dealer Manager shall act as an independent contractor
with duties solely to the Company. The Dealer Manager agrees, in accordance with
its customary practice, to perform those services in connection with the
Exchange Offer as are customarily performed by investment banking
concerns in connection with exchange offers and consent solicitations of like
nature, including but not limited to, advising the Company with respect to the
terms and structure of the Exchange Offer, assisting with obtaining ratings from
the ratings agencies, identifying and contacting the present holders of the Old
Notes, assisting in negotiating the terms of the Exchange Offer and assisting
with the preparation of the necessary documents.
The Company acknowledges that the Dealer Manager is a securities firm
that is engaged in securities trading and brokerage activities as well as in
providing investment banking and financial advisory services. In the ordinary
course of trading and brokerage activities, the Dealer Manager and its
affiliates may at any time hold long or short positions, and may trade or
otherwise effect transactions, for their own account or the accounts of
customers, in debt or equity securities of the Company and its affiliates or
other entities that may be involved in the transactions contemplated hereby.
2. SOLICITATION MATERIAL; WITHDRAWAL. (a) The Company agrees to furnish the
Dealer Manager, at the Company's expense, with as many copies as the Dealer
Manager may reasonably request of the exchange offer and consent solicitation
materials, including all exhibits thereto and any documents incorporated by
reference therein, including but not limited to: (a) the Registration Statement
(as defined in Section 5(a) hereof); (b) the Prospectus (as defined in Section
5(a) hereof); (c) the form of Letter of Transmittal and Consent (the "LETTER OF
TRANSMITTAL") to be used by holders to tender Old Notes and grant Consents
pursuant to the Exchange Offer; (d) the form of letter, dated the date hereof,
from the Dealer Manger to brokers, securities dealers, commercial banks, trust
companies and nominees; (e) the form of press release, dated the date hereof,
relating to the Exchange Offer; (f) the form of letter, dated the date hereof,
to holders of Old Notes relating to the Exchange Offer; (g) any other documents
or materials permitted to be used by the Company or authorized by the Company
for use in connection with the Exchange Offer (including press releases,
advertisements and other communications, whether prior to or after the execution
of this Agreement); and (h) any amendments or supplements thereto and any other
documents or materials whatsoever relating to the Exchange Offer or to be used
by the Company in connection with the Exchange Offer (as amended or supplemented
from time to time, including all exhibits thereto and any documents incorporated
by reference therein being referred to collectively as the "EXCHANGE OFFER
MATERIAL"). The Company agrees that, within a reasonable time prior to using any
Exchange Offer Material, it will submit copies of such material to the Dealer
Manager and its counsel and will not use or publish any such material to which
the Dealer Manager or its counsel reasonably objects.
(b) In the event that (i) the Company uses or permits the use of any
Exchange Offer Material (a) which has not been submitted to the Dealer Manager
for its comments or (b) which has been so submitted and with respect to which
the Dealer Manager has made reasonable comments, but which comments have not
resulted in a response reasonably satisfactory to the Dealer Manager and its
counsel to reflect their comments, (ii) the Company shall have breached, in any
material respect, any of its representations, warranties, agreements or
covenants herein or (iii) the Exchange Offer is terminated or withdrawn for any
reason, (iv) any stop order, restraining order, injunction or denial of an
application for approval has been issued and not thereafter stayed or vacated
with respect to the Exchange Offer, or (v) any proceeding, litigation
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or investigation has been initiated that is reasonably likely to have a material
adverse effect on the Company's ability to carry out the Exchange Offer, the
exchange of the New Notes for the Old Notes pursuant thereto or the performance
under this Dealer Manager Agreement (this "Agreement"), then in any such case
the Dealer Manager shall be entitled to withdraw as Dealer Manager without any
liability or penalty to the Dealer Manager or any other Indemnified Person (as
defined in Section 8 hereof) and without loss of any right to the payment of all
expenses payable hereunder. If the Dealer Manager withdraws as Dealer Manager
pursuant to this Section 2, the reimbursement for the Dealer Manager's expenses
through the date of such withdrawal shall be paid to the Dealer Manager promptly
after such date. The Company shall inform the Dealer Manager promptly after it
receives notice or becomes aware of the happening of any event, or the discovery
of any fact, that would require the making of any change in any Exchange Offer
Material then being used or would affect the truth or completeness of any
representation or warranty contained in this Agreement if such representation or
warranty were being made immediately after the happening of such event or the
discovery of such fact.
3. COMPENSATION AND EXPENSES.
(a) The Company and the Dealer Manager agree that the compensation (the
"FEE") for the Dealer Manager's services as Dealer Manager hereunder will be as
set forth in the Engagement Letter, between the Company and the Dealer Manager,
dated May 6, 2002 (the "Engagement Letter").
(b) In addition to the compensation payable under Section 3(a) above,
the Company agrees to pay (i) all fees and expenses relating to the filing,
preparation, printing, mailing and publishing of the Exchange Offer Material,
including but not limited to the Registration Statement and the Prospectus
(including all exhibits, amendments and supplements thereto), (ii) all
reasonable fees, disbursements and expenses of the Company's counsel and
accountants and of the Exchange Agent and the Information Agent (each as defined
in Section 4), (iii) all advertisement charges, (iv) all other fees and expenses
in connection with the Exchange Offer, including those of any exchange agent,
information agent or other person rendering services in connection therewith,
(v) to brokers and dealers (including the Dealer Manager), commercial banks,
trust companies and other nominees the amount of their customary mailing and
handling expenses incurred in forwarding the Exchange Offer to their customers,
(vi) the cost of preparation, issuance, transfer and delivery of the New Notes,
including any transfer, withholding or other taxes payable thereon, (vii) the
costs and charges of the New Trustee, (viii) the cost of printing, if any, the
Blue Sky memorandum in connection with the Exchange Offer under state securities
laws and all expenses in connection with the qualification of the New Notes
under such state securities laws, including filing fees and reasonable fees and
disbursements of counsel for the Dealer Manager in connection with such
qualification and in connection with the Blue Sky memorandum, (ix) any fees
charged by rating agencies for the rating of the New Notes, (x) all advertising
charges, approved in advance by the Company, in connection with the Exchange
Offer, including those of any public relations firm or other person or entity
rendering services in connection therewith, and (xi) all other costs and
expenses incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section 3(b). The Company will
also reimburse the Dealer Manager for all out-of-pocket expenses reasonably
incurred by the Dealer Manager in connection with its
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services as Dealer Manager; provided, however that any expense over $25,000 must
be approved in advance by the Company except for the reasonable fees and
expenses of McGuireWoods LLP, as to which the Dealer Manager has provided an
estimate and will provide an updated estimate each month (or more frequently as
reasonably requested by the Company). The Company shall perform its obligations
set forth in this Section 3(b), whether or not the Exchange Offer is
consummated, and any payments due hereunder to the Dealer Manager or its
counsel, subject to the provisions of the Engagement Letter, shall be paid
promptly upon the earlier of (i) the successful completion or termination of the
Exchange Offer or (ii) the withdrawal by the Dealer Manager pursuant to Section
2 hereof.
4. EXCHANGE AGENT AND INFORMATION AGENT. The Company will arrange for HSBC
Bank USA to serve as exchange agent (the "EXCHANGE AGENT") in connection with
the Exchange Offer and, as such, to advise the Dealer Manager at least daily as
to such matters relating to the Exchange Offer as the Dealer Manager may
request. The Company shall provide the Dealer Manager or cause the trustee under
the Old Indenture and The Depository Trust Company ("DTC") to provide the Dealer
Manager with copies of the records or other lists showing the names and
addresses of, and principal amounts of Old Notes held by, the holders of Old
Notes as of a recent date and shall, from and after such date, use reasonable
efforts to cause the Dealer Manager to be advised from day to day during the
pendency of the Exchange Offer of any change in the information previously
provided. The Company will arrange for X.X. Xxxx & Co., Inc. to serve as
information agent (the "INFORMATION AGENT") in connection with the Exchange
Offer and, as such, to advise the Dealer Manager as to such matters relating to
the Exchange Offer as the Dealer Manager may reasonably request and to furnish
the Dealer Manager with any written reports concerning any such information as
the Dealer Manager may reasonably request.
5. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS.
The Company and each Guarantor represents and warrants to the Dealer
Manager, and agrees with the Dealer Manager, as follows:
(a) A registration statement on Form S-4, as amended by Amendment No.1
to such registration statement, (Registration No. 333-90556) (the "INITIAL
REGISTRATION STATEMENT") in respect of the New Notes has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form heretofore
delivered to the Dealer Manager, have been declared effective by the Commission
in such form; other than (i) the documents incorporated by reference in the
prospectus included therein (which have heretofore been delivered to the Dealer
Manager), (ii) the exhibits to the Initial Registration Statement and such
documents and (iii) any prospectuses filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "ACT") (which have heretofore been
delivered or made available to the Dealer Manager), no other documents with
respect to the Initial Registration Statement or documents incorporated by
reference therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration Statement or any
post-effective amendment thereto has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the
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Act, is herein called a "PRELIMINARY PROSPECTUS"); the various parts of the
Initial Registration Statement, including all exhibits (but excluding the Form
T-1), annexes and schedules thereto and including (i) the information contained
in a form of final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 2(b) hereof and (ii) the documents
incorporated by reference into the prospectus contained in the Initial
Registration Statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective, are herein collectively called the "REGISTRATION
STATEMENT"; such final prospectus, in the form included in the Registration
Statement at the time it became effective or first filed pursuant to Rule 424(b)
under the Act, is hereinafter called the "PROSPECTUS"; and any reference herein
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the relevant
item or items of Form S-4 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any document filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference into such
Preliminary Prospectus or Prospectus, as the case may be; and any reference to
any amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference into the Registration Statement.
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents when they become effective or were filed
with the Commission, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and 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 not misleading.
(c) The Registration Statement conforms, and the Prospectus, any further
amendments or supplements to the Registration Statement or the Prospectus and
the Exchange Offer Material will conform at the time of filing, in all material
respects to the requirements of the Act, the Exchange Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations promulgated
thereunder (the "TRUST INDENTURE ACT"), as applicable, and do not and will not,
as of the applicable effective date as to the Registration Statement and any
amendment thereto, as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto and as of the date of first use as to any other
Exchange Offer Material, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
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(d) Neither the Company nor any of its subsidiaries which meets the
definition of a significant subsidiary as defined in Rule 1-02 of Regulation S-X
(a "SIGNIFICANT SUBSIDIARY") has sustained, since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus,
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been any increase in long-term debt of the Company or any of its
subsidiaries (other than borrowings under the Credit Agreement, dated May 1,
1998, and any amendments thereto, by and among the Company, the lending
institutions named therein and KeyBank National Association (the "Credit
Agreement")) or any material adverse change, in the condition, financial or
otherwise, or in the earnings, management, financial position, shareholders'
equity or results of operations or prospects whether or not arising from
transactions in the ordinary course or business, of the Company and its
subsidiaries, considered as one entity (a "Material Adverse Change") or any
development involving a prospective Material Adverse Change, otherwise than as
set forth or contemplated in the Prospectus.
(e) The Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of Delaware. The Company has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and to consummate the
Exchange Offer in accordance with its terms. The Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing, could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.
(f) Each of the Significant Subsidiaries and each Guarantor has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and, in the case of each
Guarantor, to consummate the Exchange Offer in accordance with its terms. Each
of the Significant Subsidiaries and each Guarantor is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change. All of the issued and outstanding capital stock of each
of the Significant Subsidiaries and each Guarantor has been duly authorized and
validly issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim other than the Credit Agreement.
(g) The Company and each Guarantor has the corporate power and authority
to take, and has taken, all necessary corporate action to authorize (i) the
making and consummation of the Exchange Offer, (ii) the Proposed Amendments to
the Old Indenture; (iii)
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the execution, delivery and performance of the New Indenture and the New Notes
and (iv) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby; and the Company has the
corporate power and authority to take, and has taken, all necessary corporate
action to authorize the payment for Consents by the Company pursuant to the
Exchange Offer; and the Company and each Guarantor has taken or will take all
necessary corporate action to authorize any amendments or supplements to, or
modification of, the Exchange Offer and the Exchange Offer Materials.
(h) This Agreement has been duly executed and delivered by, and is a
valid and binding agreement of, the Company and each Guarantor, enforceable
against the Company and each Guarantor in accordance with its terms, except as
the enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles (the
"ENFORCEABILITY EXCEPTIONS").
(i) The supplemental indenture to the Old Indenture, effecting the
Proposed Amendments (the "SUPPLEMENTAL INDENTURE"), when duly executed and
delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to the Enforceability Exceptions; and on the
date the Company completes the Exchange Offer (the "Closing Date"), the Old
Indenture as supplemented by the Supplemental Indenture will conform in all
material respects to the requirements of the Trust Indenture Act and the rules
and regulations of the Commission applicable to an indenture that is qualified
thereunder.
(j) On or prior to the Closing Date, the New Indenture shall have been
duly executed and delivered by the Company and each of the Guarantors and
qualified under the Trust Indenture Act and, assuming due authorization,
execution and delivery thereof by the New Trustee, will constitute a valid and
binding agreement of the Company and each Guarantor, enforceable against the
Company and each Guarantor in accordance with its terms, subject to the
Enforceability Exceptions.
(k) The New Notes, when executed, authenticated, issued in accordance
with the terms of the New Indenture and delivered to the holders of the Old
Notes who tender their Old Notes in accordance with the terms of the Exchange
Offer, will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, and be entitled to the
benefits of the New Indenture; and the guarantees of the New Notes issued by the
Guarantors, as of the Closing Date, will be in the respective forms contemplated
by the New Indenture, will have been duly authorized by the Guarantors and, when
executed, authenticated and issued in accordance with the terms of the New
Indenture, upon endorsement of the New Notes by each of the Guarantors and when
delivered to the holders of the Old Notes who tender their Old Notes, in
accordance with the terms of the Exchange Offer, will constitute valid and
binding obligations of each of the Guarantors, enforceable against each
Guarantor in accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the New Indenture.
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(l) The Old Notes, the Old Indenture, the New Notes, the Guarantees and
the New Indenture conform or will conform in all material respects to the
respective statements relating thereto contained in the Prospectus.
(m) Except as otherwise disclosed in the Prospectus as of the date
hereof (the "Commencement Date") and except as otherwise disclosed in the
Prospectus as amended and supplemented as of the Closing Date, subsequent to the
respective dates as of which information is given in the Prospectus: (i) there
has been no Material Adverse Change, or any development that could reasonably be
expected to result in a Material Adverse Change; (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material liability
or obligation, indirect, direct or contingent, not in the ordinary course of
business nor entered into any material transaction or agreement not in the
ordinary course of business; (iii) there has been no dividend or distribution of
any kind declared, paid or made by the Company or any of its subsidiaries (other
than dividends paid to the Company or other subsidiaries of the Company) on any
class of capital stock or repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock other than regular quarterly
dividends payable on the Company's Series D Preferred Stock; and (iv) there has
been no material change in the capital stock, short-term debt or long-term debt
of the Company and its subsidiaries, considered as one entity, except in each
case described in the Prospectus.
(n) Complete and correct copies of the Exchange Offer Material have been
furnished to the Dealer Manager or will be furnished to the Dealer Manager no
later than the Commencement Date.
(o) Ernst & Young LLP (the "INDEPENDENT ACCOUNTANTS"), who have
expressed their opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) and supporting
schedules included or incorporated by reference in the Exchange Offer Material
are independent public or certified public accountants within the meaning of the
AICPA Rules of Practice.
(p) The statements set forth in the Prospectus as amended or
supplemented under the caption "Description of the New Notes", insofar as they
purport to constitute a summary of the terms of the New Notes, and as set forth
under the captions "Risk Factors", "Summary Comparison of the Key Differences
between the Old Indenture and the New Indenture", "The Consent Solicitation",
"Description of the New Notes" and "Material United States Federal Income Tax
Consequences", insofar as they purport to constitute a summary of the provisions
of the laws and documents referred to therein, are accurate in all material
respects.
(q) The financial statements, together with the related schedules and
notes, included or incorporated by reference in the Exchange Offer Material
present fairly in all material respects the consolidated financial position of
the Company and its subsidiaries considered as one entity, as of and at the
dates indicated and the results of their operations and cash flows for the
periods specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles as applied in the United States
applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto.
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(r) All of the outstanding shares of the capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable
and have been issued in compliance with federal and state securities laws. None
of the outstanding shares of capital stock of the Company were issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries and equity interests in any firm, partnership, joint venture
or other entities, other than those described in the Prospectus.
(s) Neither the Company nor any of its subsidiaries is in violation of
its charter or by-laws or is in default (or, with the giving of notice or lapse
of time, would be in default) ("Default") under any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease or other instrument to which
the Company or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any of
its subsidiaries is subject (each such foregoing document being referred to as
an "EXISTING INSTRUMENT"), except for such Defaults as could not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Change. The Company's and each Guarantor's execution, delivery and performance
of this Agreement, the New Indenture, the Supplemental Indenture and any other
agreements or documents relating to any of the foregoing, and the exchange of
the New Notes for the Old Notes pursuant to the Exchange Offer, and payment for
Consents by the Company pursuant to the Exchange Offer, and the consummation of
the transactions contemplated hereby and thereby and by the Exchange Offer
Material: (i) will not result in any violation of the provisions of the charter
or by-laws of the Company or any of its subsidiaries; (ii) will not conflict
with or constitute a breach of, or Default or a Debt Repayment Triggering Event
(as defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except as anticipated by the Exchange Offer, and [the new
credit facility] and for such conflicts, breaches, Defaults, liens, charges or
encumbrances as could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change; and (iii) will not result in
any violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any of its subsidiaries. As used herein, a
"DEBT REPAYMENT TRIGGERING EVENT" means any event or condition which gives, or
with the giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its subsidiaries.
(t) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company's or the Guarantor's execution,
delivery and performance of this Agreement, the New Indenture, the Supplemental
Indenture and any other agreements or documents relating to any of the
foregoing, and the exchange of the New Notes for the Old Notes pursuant to the
Exchange Offer, payment for Consents by the Company pursuant to the Exchange
Offer and the consummation of the transactions contemplated hereby and by the
Exchange Offer Material, except such as have been obtained or made by the
Company or the Guarantors and are in full
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force and effect under the Securities Act, applicable state securities laws or
applicable blue sky laws.
(u) On or prior to the Commencement Date, the Company will have made
appropriate arrangements, to the extent applicable, with DTC or any other
"qualified" securities depositary to allow for the book-entry movement of the
tendered notes representing the Old Notes between depositary participants and
the Exchange Agent.
(v) Except as contemplated by this Agreement, the Company has not paid
or agreed to pay to any person any compensation for (i) soliciting another to
purchase any of the Company's securities or (ii) the solicitation of tenders by
holders of the Old Notes pursuant to the Exchange Offer.
(w) Neither the Company nor any of its subsidiaries nor any of their
respective directors, officers or controlling persons has taken, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Company to
(i) facilitate the Exchange Offer or (ii) encourage tenders by holders of the
Old Notes pursuant to the Exchange Offer.
(x) Other than as set forth in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge: (i) threatened against or affecting the Company or any of
its subsidiaries; or (ii) which have as the subject thereof any property owned
or leased by, the Company or any of its subsidiaries, where in any such case
there is a reasonable possibility that such action, suit or proceeding might be
determined adversely to the Company or such subsidiary and any such action, suit
or proceeding, if so determined adversely, could reasonably be expected to
result in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement and by the Exchange Offer Material.
No material labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is threatened or
imminent.
(y) The Company and its subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals, trade
secrets and other similar rights (collectively, "INTELLECTUAL PROPERTY RIGHTS")
reasonably necessary to conduct their businesses as now conducted; and the
expected expiration of any of such Intellectual Property Rights could not
reasonably be expected to result in a Material Adverse Change. Neither the
Company nor any of its subsidiaries has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision, ruling or
finding would result in a Material Adverse Change.
(z) The Company and each of its subsidiaries possesses such valid and
current certificates, authorizations, permits or licenses issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such certificate, authorization,
permit
10
or license which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could reasonably be expected to result in a
Material Adverse Change.
(aa) The Company and each of its subsidiaries has good and marketable
title to all the properties and assets reflected as owned in the financial
statements described in the Exchange Offer Material, in each case, except as
disclosed in the Prospectus, free and clear of any security interests,
mortgages, liens, encumbrances, equities, claims and other defects, except such
as do not materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such property
by the Company or such subsidiary. The real property, improvements, equipment
and personal property held under lease by the Company or any of its subsidiaries
are held under valid and enforceable leases, with such exceptions as are not
material and do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by the
Company or such subsidiary.
(bb) The Company and its subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns and have paid all taxes
required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them except as may be
being contested in good faith and by appropriate proceedings and except, where
the failure so to file and pay could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change. The Company and
its subsidiaries have made adequate charges, accruals and reserves in the
applicable financial statements described in the Exchange Offer Material in
respect of all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its subsidiaries
has not been finally determined.
(cc) The Company is not, and after giving effect to the exchange of the
New Notes for the Old Notes will not be, an "investment company" within the
meaning of Investment Company Act of 1940, as amended.
(dd) Each of the Company and its subsidiaries are insured by recognized,
financially sound institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate and
customary for their businesses including, but not limited to, policies covering
real and personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism, floods and earthquakes.
The Company has no reason to believe that: (i) it or any of its subsidiaries
will not be able to renew its existing insurance coverage as and when such
policies expire; or (ii) it or any of its subsidiaries will not obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that could not reasonably
be expected to result in a Material Adverse Change. Neither of the Company nor
any of its subsidiaries has been denied any insurance coverage which it has
sought or for which it has applied.
(ee) The Company maintains a system of accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorization; (ii) transactions are
recorded as necessary to
11
permit preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ff) Except as could not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Change: neither the Company nor any
of its subsidiaries is in violation of any federal, state, local or foreign law
or regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, "MATERIALS OF ENVIRONMENTAL CONCERN"), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"ENVIRONMENTAL LAWS"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any written
communication, whether from a governmental authority, citizens group, employee
or otherwise, that alleges that the Company or any of its subsidiaries is in
violation of any Environmental Law; there is no claim, action or cause of action
filed with a court or governmental authority, no investigation with respect to
which the Company or any Guarantor has received written notice, and no written
notice by any person or entity alleging potential liability for investigatory
costs, cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys' fees or penalties arising out
of, based on or resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location owned, leased or operated
by the Company or any of its subsidiaries, now or in the past (collectively,
"ENVIRONMENTAL CLAIMS"), pending or, to the best of the Company's or any
Guarantor's knowledge, threatened against the Company or any of its subsidiaries
or any person or entity whose liability for any Environmental Claim the Company
or any of its subsidiaries has retained or assumed either contractually or by
operation of law; and to the best of the Company's or the Guarantor's knowledge,
there are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental Concern, that
reasonably could result in a violation of any Environmental Law or form the
basis of a potential Environmental Claim against the Company or any of its
subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law.
(gg) The Company and its subsidiaries and any employee benefit plan (as
defined under the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder (collectively,
"ERISA")) established or maintained by the Company, its subsidiaries or their
"ERISA Affiliates" (as defined below) (an "Employee Benefit Plan") are in
compliance in all material respects with ERISA, and any
12
Employee Benefit Plan is in compliance in all material respects with the
Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "CODE"). "ERISA Affiliate" means, with respect
to the Company or a subsidiary, any member of any group of organizations
described in Section 414 of the Code of which the Company or such subsidiary is
a member. No "reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that could reasonably be expected to result in a Material Adverse
Change. Neither the Company, its subsidiaries nor any of their ERISA Affiliates
has any intention to terminate an "employee benefit plan" established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates,
that if terminated would have any "amount of unfunded benefit liabilities" (as
defined under ERISA) that could reasonably be expected to result in a Material
Adverse Change. Neither the Company, its subsidiaries nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any liability under Title
IV of ERISA with respect to termination of, or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be qualified
under Section 401 of the Code is so qualified and nothing has occurred, whether
by action or failure to act, which would reasonably be likely to cause the loss
of such qualification, except where such failure to be qualified or loss of such
qualification could not reasonably be expected to result in a Material Adverse
Change.
Any certificate signed by an officer of the Company or any Guarantor and
delivered to the Dealer Manager or to counsel for the Dealer Manager pursuant
hereto shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Dealer Manager as to the matters set forth therein.
6. CONDITIONS AND OBLIGATIONS. The obligation of the Dealer Manager to act
as a Dealer Manager hereunder shall at all times be subject, in its discretion,
to the conditions that:
(a) All representations and warranties of the Company and each of the
Guarantors contained herein or in any certificate or writing delivered hereunder
at all times during the Exchange Offer shall be true and correct in all material
respects.
(b) Each of the Company and each Guarantor at all times during the
Exchange Offer shall have performed, in all material respects, all of its
obligations hereunder required as of such time to have been performed by it.
(c) No stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with.
(d) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or
13
operations, of the Company and its subsidiaries, taken as a whole, from that set
forth in the Exchange Offer Material (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in the Dealer Manager's
judgment, is material and adverse and that makes it, in the Dealer Manager's
judgment, impracticable to market the New Notes on the terms and in the manner
contemplated in the Exchange Offer Material.
(e) On or before the Closing Date, the Company shall have completed the
refinancing of the Credit Agreement.
(f) On the Closing Date, the Dealer Manager shall have received a
letter, dated the date of delivery thereof, in form and substance satisfactory
to the Dealer Manager, from Ernst & Young LLP containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement.
(g) On the Closing Date, the Dealer Manager shall have received a
certificate, dated the respective date of delivery thereof, signed by an
executive officer of the Company, to the effect set forth in Section 6(c) above
and further to the effect that the representations and warranties of the Company
and each Guarantor set forth in Section 5 of this Agreement are true and correct
as of the respective date of delivery thereof and that the Company and each
Guarantor have complied with, or received waivers from the Dealer Manager with
respect to, all of the agreements and satisfied all of the conditions contained
herein on their part to be performed or satisfied hereunder on or before the
Commencement Date and the Closing Date, as applicable. The officer signing and
delivering such certificate may rely upon the best of his or her knowledge as to
any proceedings threatened.
(h) On the Closing Date, the Dealer Manager shall have received the
favorable opinion of Xxxxxxx, Xxxxxxx & Xxxxxx P.L.L., counsel for the Company
and the Guarantors, dated as of the respective date of delivery thereof,
substantially in the form of Exhibit A. The opinion of Xxxxxxx Xxxxxxx & Xxxxxx
P.L.L shall be rendered to the Dealer Manager at the request of the Company and
shall so state therein.
(i) On the Closing Date, the Dealer Manager shall have received the
favorable opinion of McGuireWoods LLP, counsel for the Dealer Manager, dated as
of the respective date of delivery thereof, with respect to the matters covered
in paragraphs of 11, 12, 14 and the last paragraph of the form of opinion
contained in Exhibit A as well as such other related matters as the Dealer
Manager may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon such
matters.
(j) On the Closing Date, the Dealer Manager shall be satisfied with the
terms and conditions of the New Indenture.
(k) The Dealer Manager shall have received such other documents and
certificates as are reasonably requested by the Dealer Manager or its counsel.
14
7. COVENANTS. In further consideration of the Dealer Manager's agreements
herein contained, the Company covenants with the Dealer Manager as follows:
(a) The Company will furnish to the Dealer Manager and to counsel for
the Dealer Manager, without charge, as many copies of the Exchange Offer
Material and any amendments and supplements thereto as they may reasonably
request.
(b) Prior to amending or supplementing the Exchange Offer Material
(including any amendment or supplement through incorporation by reference of any
report filed under the Exchange Act), the Company shall furnish to the Dealer
Manager for review a copy of each such proposed amendment or supplement, and the
Company shall not use any such proposed amendment or supplement to which the
Dealer Manager reasonably object.
(c) The Company will advise the Dealer Manager promptly of (i) the
occurrence of any event which could cause the Company to withdraw or terminate
the Exchange Offer or would permit the Company to exercise any right not to
exchange the New Notes for the tendered Old Notes, (ii) any proposal or
requirement to make, amend or supplement the Exchange Offer Material, (iii) the
issuance of any order or the taking of any other action by any administrative or
judicial tribunal or other governmental agency or instrumentality which would
delay, prevent or adversely affect the Exchange Offer (and, if in writing, will
furnish the Dealer Manager a copy thereof), (iv) any Material Adverse Change, or
any development involving a prospective Material Adverse Change, in the
condition, financial or otherwise, or in the earnings, business and operations
of the Company and its subsidiaries, taken as a whole, (v) any material
developments in connection with the Exchange Offer, including, without
limitation, the commencement of any action, suit or proceeding concerning the
Exchange Offer, and (vi) any other information relating to the Exchange Offer
which the Dealer Manager may from time to time reasonably request. In the event
of the issuance of any order as described in clause (iii), the Company shall
promptly use its best efforts to obtain the withdrawal of the same.
(d) The Company agrees that if any event occurs or condition exists as a
result of which the Exchange Offer Material would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances when the Exchange Offer
Material are delivered to a holder of the Old Notes, not misleading, or if, in
the opinion of the Company, after consultation with the Dealer Manager, it is
necessary at any time to amend or supplement the Exchange Offer Material to
comply with applicable law, the Company shall immediately notify the Dealer
Manager, prepare an amendment or supplement to the Exchange Offer Material that
will correct such statement or omission or effect such compliance, and supply
such amended or supplemented Exchange Offer Material to the Dealer Manager
without charge in such quantities as the Dealer Manager may reasonably request.
(e) Prior to the Closing Date, the Company shall file, on a timely
basis, with the Commission and the New York Stock Exchange all reports and
documents required to be filed under Section 13 or 15 of the Exchange Act.
15
(f) The Company will cooperate with the Dealer Manager and use its best
efforts to permit the New Notes to be eligible for clearance and settlement
through the facilities of DTC.
(g) During a period of three years from the effective date of the
Registration Statement, the Company shall furnish to the Dealer Manager all such
information concerning the business and financial condition of the Company as
the Dealer Manager may from time to time reasonably request.
(h) The Company shall make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act) an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act (including, at the
Company's option, Rule 158 thereunder).
(i) Neither the Company nor any entity controlled, directly or
indirectly, by the Company shall take, directly or indirectly, any action which
is designed to or which has constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of New Notes in connection with the
Exchange Offer.
8. INDEMNIFICATION. The Company and each Guarantor, jointly and severally,
agree to indemnify and hold harmless the Dealer Manager and its affiliates and
officers, directors, employees, agents and controlling persons (each a "DEALER
MANAGER INDEMNIFIED PERSON") from and against any and all losses, claims,
damages, liabilities and expenses, joint or several, to which any such Dealer
Manager Indemnified Person may become subject arising out of or based upon (A)
any untrue statement or alleged untrue statement of a material fact contained in
the Exchange Offer Material or any of the documents incorporated by reference
therein or in any amendment or supplement to any of the foregoing, or the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, (B) any breach by the Company of any
representation or warranty or failure to comply with any of the agreements of
the Company and the Guarantors set forth in this Agreement, (C) any withdrawal,
termination, rescission or modification of, or failure to make or consummate,
the Exchange Offer or to exchange any of the New Notes for the Old Notes
pursuant to the Exchange Offer or (D) the transactions contemplated by this
Agreement or the performance by the Dealer Manager hereunder, or any claim,
litigation, investigation or proceedings relating to the foregoing ("DEALER
MANAGER PROCEEDINGS") regardless of whether any Dealer Manager Indemnified
Person is a party thereto, and to reimburse such Dealer Manager Indemnified
Persons for any reasonable legal or other reasonable out-of-pocket expenses in
connection with investigating or defending any of the foregoing; provided that
the foregoing indemnification will not, as to any Dealer Manager Indemnified
Person, apply to losses, claims, damages, liabilities or expenses to the extent
that they have resulted from the gross negligence or willful misconduct of any
Dealer Manager Indemnified Person or from an untrue statement of a material fact
or omission to state a material fact in the information furnished by the Dealer
Manager in writing for inclusion in the Exchange
16
Offer Material. This indemnity agreement shall be in addition to any liability
which the Company or any Guarantor may otherwise have.
The Company and the Guarantors shall not be liable for any settlement of
any lawsuit, claim or proceeding effected without their written consent (which
consent shall not be unreasonably withheld or delayed), but if settled with such
consent, the Company and each of the Guarantors, jointly and severally, agree,
subject to the provisions of this Section 8, to indemnify the Dealer Manager
Indemnified Person from and against any loss, damage or liability by reason of
such settlement.
The Dealer Manager agrees to indemnify and hold harmless each of the
Company and the Guarantors and their affiliates and officers, directors,
employees, agents and controlling persons (each a "COMPANY INDEMNIFIED PERSON")
from and against any and all losses, claims, damages, liabilities and reasonable
expenses, joint or several, to which any such Company Indemnified Person may
become subject arising out of or based upon the transactions contemplated by
this Agreement or the performance by the Company hereunder, or any claim,
litigation, investigation or proceedings relating to the foregoing ("Company
Proceedings") regardless of whether any Company Indemnified Person is a party
thereto, and to reimburse such Company Indemnified Persons for any reasonable
legal or other reasonable out-of-pocket expenses as they are incurred in
connection with investigating or defending any of the foregoing, but only to the
extent such losses, claims, damages, liabilities or expenses have resulted from
or arise out of (x) the gross negligence or willful misconduct of the Dealer
Manager or (y) an untrue statement of a material fact or omission to state a
material fact in the information furnished by the Dealer Manager in writing for
inclusion in the Exchange Offer Materials. The Company acknowledges that such
information in clause (y) above refers solely to (i) the identity, address and
phone number of the Dealer Manager appearing on the cover page and the back
cover page of the Offering Memorandum and (ii) the statement set forth in the
last paragraph under the caption "The Exchange Offer - Dealer Manager." The
terms "Dealer Manager Indemnified Person" and "Company Indemnified Person" are
herein collectively referred to as an "Indemnified Person" and the terms "Dealer
Manager Proceedings" and "Company Proceedings" are herein collectively referred
to as "Proceedings."
The Dealer Manager shall not be liable for any settlement of any lawsuit,
claim or proceeding effected without its written consent (which consent shall
not be unreasonably withheld or delayed), but if settled with such consent, the
Dealer Manager agrees, subject to the provisions of this Section 8, to indemnify
the Company Indemnified Person from and against any loss, damage or liability by
reason of such settlement.
Promptly after receipt by an Indemnified Person of notice of the
commencement of any Proceedings, such Indemnified Person will, if a claim in
respect thereof is to be made against the Dealer Manager, the Company or any
Guarantor, as the case may be, as indemnifying party (the "INDEMNIFYING PARTY")
for indemnification hereunder, notify such Indemnifying Party in writing of the
commencement thereof; provided that (i) the omission so to notify the
Indemnifying Party will not relieve any Indemnifying Party from any liability
which it may have hereunder except to the extent it has been materially
prejudiced by such failure and (ii) the omission so to notify such Indemnifying
Party will not relieve it from any liability which it may have to such
Indemnified
17
Person otherwise than on account of this indemnity agreement. In case any such
Proceedings are brought against any Indemnified Person and it notifies the
applicable Indemnifying Party of the commencement thereof, such Indemnifying
Party will be entitled to participate therein, and, to the extent that it may
elect by written notice delivered to such Indemnified Person, to assume the
defense thereof, with counsel reasonably satisfactory to such Indemnified
Person; provided that if the defendants in any such Proceeding include both such
Indemnified Person and the Indemnifying Party and counsel to such Indemnified
Person shall have reasonably concluded that there may be legal defenses
available to such Indemnified Person which are different from or additional to
those available to the Indemnifying Party, such Indemnified Person shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such Proceedings on behalf of such
Indemnified Person. Upon receipt of notice from the Indemnifying Party to such
Indemnified Person of its election so to assume the defense of such Proceedings
and approval by such Indemnified Person of counsel, the Indemnifying Party shall
not be liable to such Indemnified Person for expenses incurred by such
Indemnified Person in connection with the defense thereof (other than reasonable
costs of investigation) unless (i) such Indemnified Person shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the Indemnifying Party shall not be liable for the expenses of
more than one separate counsel, approved by the Indemnifying Party, representing
the Indemnified Persons who are parties to such Proceedings), (ii) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
such Indemnified Person to represent such Indemnified Person within a reasonable
time after notice of commencement of the Proceedings or (iii) the Indemnifying
Party shall have authorized in writing the employment of counsel for such
Indemnified Person; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). The Indemnifying Party shall not effect, without the prior written
consent of the Indemnified Person, any settlement of any pending or threatened
proceeding unless such settlement includes an unconditional release from the
party bringing such proceeding of such Indemnified Person and does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any Indemnified Person.
If for any reason the foregoing indemnification is unavailable to any
Indemnified Person or insufficient to hold it harmless, then the applicable
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Person as a result of such loss, claim, damage, liability or expense
in such proportion as is appropriate to reflect not only the relative benefits
received by the Indemnifying Party on the one hand and such Indemnified Person
on the other hand, but also the relative fault of Indemnifying Party on the one
hand, and such Indemnified Person, on the other hand, as well as any relevant
equitable considerations. It is hereby agreed that the relevant benefits to the
Company (including its affiliates, officers, directors, employees, agents and
controlling persons) on the one hand and the Dealer Manager (including its
affiliates, officers, directors employees, agents and controlling persons) on
the other hand shall be deemed to be in the same proportion as (i) the aggregate
principal amount of the New Notes outstanding bears to (ii) the fee paid or
proposed to be paid to the Dealer Manager pursuant to Section 3(a) of this
Agreement. The relative fault of the Indemnifying Party on the one hand and the
Indemnified Person on the other hand relating to an untrue or alleged untrue
statement of material fact or the omission or alleged omission to state a
material fact shall be determined by
18
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, or relating to, the Indemnifying Party and
its affiliates or the Indemnified Person and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The indemnity, reimbursement and contribution obligations of an
Indemnifying Party under this Section 8 shall be in addition to any liability
which such Indemnifying Party may otherwise have to an Indemnified Party, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of such Indemnifying Party and any such Indemnified
Person. Notwithstanding the foregoing, in no event shall the Dealer Manager be
liable under the foregoing indemnity, reimbursement and contribution provisions
in an amount in excess of the fees actually received by the Dealer Manager in
connection with the Agreement.
9. CONFIDENTIALITY. The Dealer Manager shall use all information provided
to it by or on behalf of the Company hereunder solely for the purpose of
providing the services which are the subject of this Agreement and the
transactions contemplated hereby and shall treat confidentially all such
information; provided that nothing herein shall prevent the Dealer Manager from
disclosing any such information (i) pursuant to the order of any court or
administrative or similar proceeding, (ii) upon the request of any regulatory
authority having jurisdiction over the Dealer Manager or any of its affiliates,
(iii) to the extent that such information becomes publicly available other than
by reason of disclosure by the Dealer Manager and (iv) to its employees, legal
counsel, independent auditors and other experts or agents who need to know such
information and are informed of the confidential nature of such information. The
Dealer Manager shall be responsible for compliance by any such disclosee with
this Section 9. With respect to clause (i) or (ii) above, prior to making any
such disclosure, the Dealer Manager shall promptly notify the Company of such
order or request and use commercially reasonable efforts to cooperate with the
Company, at the Company's expense, in seeking a protective order or taking such
action as the Company may reasonably request consistent with applicable law.
10. SURVIVAL. The agreements contained in Sections 3, 8, 9 and 11 hereof
and the representations and warranties of the Company and the Guarantor set
forth in Section 5 hereof shall remain operative and in full force and effect,
regardless of (i) any failure to commence, or the withdrawal, termination or
consummation of, the Exchange Offer or the termination or assignment of this
Agreement, (ii) any investigation made by or on behalf of the Company or any an
Indemnified Person and (iii) any withdrawal by the Dealer Manager pursuant to
Section 2 hereof.
11. NO LIABILITY FOR ACTS OF DEALERS, BANKS AND TRUST COMPANIES. The Dealer
Manager shall have no liability to the Company or any other person for any
losses, claims, damages, liabilities and expenses (each a "Loss" and
collectively, the "LOSSES") arising from any act or omission on the part of any
broker or dealer in securities (a "DEALER") or any bank or trust company, or any
other person, and neither the Dealer Manager nor any of its affiliates shall be
liable for any Losses arising from its own acts or omissions in performing its
obligations as Dealer Manager or as a Dealer hereunder or otherwise in
connection with the Exchange Offer,
19
except as expressly set forth in Section 8 and for any such Losses which are
finally judicially determined to have resulted from the Dealer Manager's gross
negligence or willful misconduct (it being understood that any such liability of
any Dealer Manager shall be several and not joint). In soliciting or obtaining
tenders of Old Notes or delivery of Consents, no Dealer, bank or trust company
shall be deemed to be acting as the agent of the Company or any of its
affiliates, and the Dealer Manager shall be deemed the agent of any Dealer, bank
or trust company or the agent or fiduciary of the Company or any of its
affiliates, equity holders, creditors or of any other person. In soliciting or
obtaining tenders of Old Notes or delivery of Consents, the Dealer Manager shall
not be nor shall the Dealer Manager be deemed for any purpose to act as partners
or joint venturers of or members of a syndicate or group with the Company or any
of its affiliates in connection with the Exchange Offer or otherwise, and
neither the Company nor any of its affiliates shall be deemed to act as the
Dealer Manager's agents. The Company shall have sole authority for the
acceptance or rejection of any and all tenders of Old Notes or deliveries of
Consents.
12. GOVERNING LAW; JURISDICTION; JUDGMENT CURRENCY. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts to be performed wholly within the State of New York. Any
litigation based hereon, or arising out of, or in connection with this
Agreement, the Exchange Offer or any related matter shall be brought and
maintained exclusively in the courts of the State of New York and the Company
hereby expressly and irrevocably submits to the jurisdiction of such courts. All
judgments arising from such litigation or settlements related thereto shall be
paid in United States Dollars.
13. NOTICES. Except as otherwise expressly provided in this Agreement,
whenever notice is required by the provisions of this Agreement to be given to
(i) the Company or any Guarantor, such notice shall be in writing addressed to
Hawk Corporation, Attention: Xxxxxx X. Xxxxxxxx, Chief Executive Officer,
facsimile number: 000-000-0000 with a copy to Xxxx X. Xxxxxx, Esq., Xxxxxxx
Xxxxxxx & Xxxxxx P.L.L., facsimile number: 000-000-0000 and (ii) the Dealer
Manager, such notice shall be in writing addressed to Banc of America Securities
LLC, Bank of America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, facsimile number: (000) 000-0000, Attention:
Xxxxxx Xxxx.
14. MISCELLANEOUS. This Agreement and the Engagement Letter contain the
entire agreement between the parties relating to the subject matter hereof and
supersede all oral statements and prior writings with respect thereto. This
Agreement may not be amended or modified except by a writing executed by each of
the parties hereto. Section headings herein are for convenience only and are not
a part of this Agreement.
(a) This Agreement is solely for the benefit of the Company, the
Guarantors and the Dealer Manager, and no other person (except for a Indemnified
Persons, to the extent set forth in Section 8 hereof) shall acquire or have any
rights under or by virtue of this Agreement.
(b) The Dealer Manager may (subject to Section 9 hereof) share any
information or matters relating to the Company, the Guarantors or the Exchange
Offer, and the transactions contemplated hereby with its affiliates, and such
affiliates may likewise share
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information relating to the Company with the Dealer Manager; PROVIDED, however,
that the Dealer Manager will not, and will ensure its employees and affiliates
do not, share any such information with any of its or its affiliates' employees
on the public side of the Dealer Manager's information wall. The Dealer Manager
shall be responsible for compliance by its affiliates with Section 9 and this
Section 14(b) hereof.
(c) If any term, provision, covenant or restriction contained in this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable or against public policy, the remainder of the terms, provisions,
covenants and restrictions contained herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. The Company and
the Dealer Manager shall endeavor in good faith negotiations to replace the
invalid, void or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, void or
unenforceable provisions.
(d) This Agreement may be executed in counterparts, each of which will
be deemed an original, but all of which, taken together, will constitute one and
the same instrument.
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Please indicate Banc of America Securities LLC's willingness to act as
Dealer Manager on the terms set forth herein and its acceptance of the foregoing
provisions by signing in the space provided below for that purpose and returning
to the Company a copy of this letter, whereupon this letter shall constitute a
binding agreement between the Company and Banc of America Securities LLC.
Very truly yours,
HAWK CORPORATION, for itself and each
of the Guarantors
By:________________________________
Name:
Title:
Accepted and agreed to as of the date
first written above:
BANC OF AMERICA SECURITIES LLC
By:________________________________
Name: Xxxxxx X. Xxxx
Title: Managing Director
