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EXHIBIT 4.2
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
Dated as of May 7, 1999
by and among
Metal Management, Inc.,
as Issuer,
Aerospace Metals, Inc., American Scrap Processing, Inc., C
Shredding Corp., California Metals Recycling, Inc., CIM Trucking, Inc., Cometco
Corp., ▇▇▇▇▇ Building Corporation, ▇▇▇▇▇ Iron & Metal, Inc., EMCO Trading, Inc.,
Ferrex Trading Corporation, FPX, Inc., Firma, Inc., Firma Plastic Co., Inc.,
Houston Compressed Steel Corp., HouTex Metals Company, Inc., The ▇▇▇▇▇
Corporation, ▇. ▇▇▇▇▇▇ Iron & Metal, Inc., Kankakee Scrap Corporation, ▇▇▇▇▇▇▇▇▇
Acquisition Corp., ▇▇▇▇▇▇▇ Metals Co., Metal Management Arizona, Inc., Metal
Management Gulf Coast, Inc., Metal Management Pittsburgh, Inc., Metal Management
Realty, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Sons, Inc., Naporano Iron & Metal Co., ▇▇▇▇▇▇
Recycling West, Inc., NIMCO Shredding Co., 138 Scrap Acquisition Corp., PerlCo,
L.L.C., Proler Southwest Inc., Proler Steelworks L.L.C., R&P Holdings, Inc.,
Reserve Iron & Metal Limited Partnership, Salt River Recycling, L.L.C., Scrap
Processing, Inc., Torrington Scrap Company, Trojan Trading Co., USA Southwestern
Carriers, Inc.,
as Guarantors,
and
BT Alex. ▇▇▇▇▇ Incorporated,
as Initial Purchaser
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This Exchange and Registration Rights Agreement (this
"Agreement") is made and entered into as of May 7, 1999, by and among Metal
Management, Inc., (the "Company"); Aerospace Metals, Inc., American Scrap
Processing, Inc., C Shredding Corp., California Metals Recycling, Inc., CIM
Trucking, Inc., Cometco Corp., ▇▇▇▇▇ Building Corporation, ▇▇▇▇▇ Iron & Metal,
Inc., EMCO Trading, Inc., Ferrex Trading Corporation, FPX, Inc., Firma, Inc.,
Firma Plastic Co., Inc., Houston Compressed Steel Corp., HouTex Metals Company,
Inc., The ▇▇▇▇▇ Corporation, ▇. ▇▇▇▇▇▇ Iron & Metal, Inc., Kankakee Scrap
Corporation, ▇▇▇▇▇▇▇▇▇ Acquisition Corp., ▇▇▇▇▇▇▇ Metals Co., Metal Management
Arizona, Inc., Metal Management Gulf Coast, Inc., Metal Management Pittsburgh,
Inc., Metal Management Realty, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Sons, Inc., Naporano
Iron & Metal Co., ▇▇▇▇▇▇ Recycling West, Inc., NIMCO Shredding Co., 138 Scrap
Acquisition Corp., PerlCo, LLC., Proler Southwest Inc., Proler Steelworks
L.L.C., R & P Holdings, Inc., Reserve Iron & Metal Limited Partnership, Salt
River Recycling L.L.C., Scrap Processing, Inc., Torrington Scrap Company, Trojan
Trading Co. and USA Southwestern Carriers, Inc. (each a "Subsidiary Guarantor"
and collectively, the "Guarantors"); and BT Alex. ▇▇▇▇▇ Incorporated (the
"Initial Purchaser"), who has agreed to purchase the Company's 12 3/4% Senior
Secured Notes due 2004 (the "Secured Notes") pursuant to the Purchase Agreement
dated May 5, 1999 (the "Purchase Agreement"), by and among the Company, the
Subsidiary Guarantors and the Initial Purchaser. In order to induce the Initial
Purchaser to purchase the Secured Notes, the Company and the Subsidiary
Guarantors have agreed to provide the exchange and registration rights set forth
in this Agreement. The execution and delivery of this Agreement is a condition
to the obligations of the Initial Purchaser set forth in Section 7 of the
Purchase Agreement. The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Business Day: Any day, except a Saturday, Sunday or other day
in The City of New York, or in the city of the Corporate Trust Office (as
defined in the Indenture) of the Trustee, on which banks are authorized to
close.
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Broker-Dealer Transfer Restricted Securities: Exchange Notes
that are acquired by a Broker-Dealer in the Exchange Offer in exchange for
Secured Notes that such Broker-Dealer acquired for its own account as a result
of market-making activities or other trading
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activities (other than Secured Notes acquired directly from the Company or any
of its affiliates).
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (a) the filing and
declaration of effectiveness under the Act of the Exchange Offer Registration
Statement relating to the Exchange Notes to be issued in the Exchange Offer and
the related Guarantees, (b) the maintenance of such Registration Statement
continuously effective and the keeping of the Exchange Offer open for a period
not less than the minimum period required pursuant to Section 3(b) hereof and
(c) the delivery by the Company to the registrar under the Indenture of Exchange
Notes in the same aggregate principal amount as the aggregate principal amount
of Secured Notes tendered by Holders thereof pursuant to the Exchange Offer and
the issuance of the related Guarantees by the Subsidiary Guarantors.
Damages Payment Date: With respect to the Secured Notes, each
Interest Payment Date.
Definitive Notes: As defined in the Indenture.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The Company's 12 3/4% Senior Secured Notes due
2004 to be issued pursuant to the Indenture in the Exchange Offer that are
identical in all material respects to the Notes initially issued on the Closing
Date (other than that there shall be no restrictive legends thereon and such
Exchange Notes shall be registered under the Act) and entitled to the benefits
of the Indenture.
Exchange Offer: The registration by the Company and the
Guarantors under the Act of the Exchange Notes and the related Guarantees
pursuant to the Exchange Offer Registration Statement pursuant to which the
Company shall offer the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities for Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
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Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial
Purchaser proposes to sell the Secured Notes (i) to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act,
and/or (ii) in one or more offshore transactions complying with Rule 903 or 904
of Regulation S under the Act.
Global Note Holder: As defined in the Indenture.
Guarantees: The guarantees of the Notes to be issued by the
Guarantors pursuant to the Indenture.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of the Closing Date, among
the Company, the Subsidiary Guarantors and ▇▇▇▇▇▇ Trust and Savings Bank, as
trustee (the "Trustee"), pursuant to which the Notes and the Guarantees are to
be issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the
Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Secured Notes, the Exchange Notes and the Private
Exchange Notes.
Person: An individual, partnership, limited liability company,
corporation, trust, unincorporated organization or a government or agency or
political subdivision thereof.
Private Exchange: As defined in Section 3(d) hereof.
Private Exchange Notes: As defined in Section 3(d) hereof.
Prospectus: The prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each
Person who is a Holder of Notes on the record date with respect to the Interest
Payment Date on which such Damages Payment Date shall occur.
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Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the
Company and the Guarantors relating to (a) an offering of Exchange Notes
pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities and the related Guarantees pursuant to the Shelf
Registration Statement, in each case, (i) which is filed pursuant to the
provisions of this Agreement and (ii) including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer that holds
Broker-Dealer Transfer Restricted Securities.
Security Documents: As defined in the Indenture.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939, as in effect on the date
of the Indenture.
Transfer Restricted Securities: Each Note until (i) the date
on which such Note has been exchanged by a Person other than a Broker-Dealer for
an Exchange Note in the Exchange Offer so long as such Exchange Note may be
resold by such Person without restriction under federal and state securities
laws, (ii) following the exchange by a Broker-Dealer in the Exchange Offer of a
Note for an Exchange Note, the date on which such Exchange Note is sold to a
purchaser who receives from such Broker-Dealer on or prior to the date of such
sale a copy of the Prospectus contained in the Exchange Offer Registration
Statement, (iii) the date on which such Note has been effectively registered
under the Act and disposed of in accordance with the Shelf Registration
Statement or (iv) the date on which such Note is distributed to the public
pursuant to Rule 144 under the Act under circumstances in which any legend borne
by such Note relating to restriction of transferability thereof, under the Act
or otherwise, is removed by the Company or pursuant to the Indenture.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities
entitled to the benefits of this Agreement are the Transfer Restricted
Securities.
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(b) Holders of Transfer Restricted Securities. A Person
is deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.
3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by
applicable federal law (after the procedures set forth in Section 6(a) below
have been complied with), the Company and the Guarantors shall (i) cause to be
filed with the Commission on or prior to 90 days after the Closing Date, the
Exchange Offer Registration Statement, (ii) use their respective commercially
reasonable efforts to cause such Exchange Offer Registration Statement to be
declared effective on or prior to 180 days after the Closing Date (which 180-day
period shall be extended for a number of days equal to the number of Business
Days, if any, that the Commission is officially closed during such period),
(iii) in connection with the foregoing, (A) file all pre-effective amendments to
such Exchange Offer Registration Statement as may be necessary in order to cause
such Exchange Offer Registration Statement to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
Exchange Notes and the related Guarantees to be made under the Blue Sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange Offer
and (iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer Registration
Statement shall be on the appropriate form promulgated by the Commission under
the Act permitting registration of the Exchange Notes and the related Guarantees
to be offered in exchange for the Secured Notes that are Transfer Restricted
Securities and the related Guarantees and to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers as contemplated by
Section 3(c) below.
(b) The Company and the Guarantors shall use their
respective commercially reasonable efforts to cause the Exchange Offer
Registration Statement to be effective continuously, and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 25 Business
Days. Additionally, the Company and the Guarantors shall keep the Exchange Offer
Registration effective for the period required under Section 3(c) hereof, if
required to do so pursuant to the provisions herein. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Exchange Notes and the
related Guarantees shall be included in the Exchange Offer Registration
Statement. The Company and the Guarantors shall use their respective
commercially reasonable efforts to cause the Exchange Offer to be Consummated on
or prior to 25 Business Days after date the Exchange Offer Registration
Statement has become effective.
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(c) The Company shall include a "Plan of Distribution"
section in the Prospectus contained in the Exchange Offer Registration Statement
which is reasonably acceptable to the Initial Purchaser (the costs, if any,
associated with such Initial Purchaser's review to be borne by the Initial
Purchaser) and indicate therein that any Restricted Broker-Dealer who holds
Secured Notes that are Transfer Restricted Securities and that were acquired for
the account of such Broker-Dealer as a result of market-making activities or
other trading activities may exchange such Secured Notes (other than Transfer
Restricted Securities acquired directly from the Company or any affiliate of the
Company) pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and must, therefore,
deliver a prospectus meeting the requirements of the Act in connection with its
initial sale of each Exchange Note received by such Broker-Dealer in the
Exchange Offer, which prospectus delivery requirement may be satisfied by the
delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement. Such "Plan of Distribution" section shall also contain
all other information with respect to such sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer, except to the extent required by the
Commission.
The Company and the Guarantors shall use their respective
commercially reasonable efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented and amended as required by the
provisions of Section 6(c) below to the extent necessary to ensure that it is
available for sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers, and to ensure that such Registration Statement
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time for a
period of one year from the date on which the Exchange Offer is declared
effective.
The Company and the Guarantors shall provide sufficient copies
of the latest version of the Prospectus included in the Exchange Offer
Registration Statement to such Restricted Broker-Dealers promptly upon request
at any time during such one-year period in order to facilitate such sales.
(d) If, prior to Consummation of the Exchange Offer, the
Initial Purchaser holds any Secured Notes acquired by them that have the status
of an unsold allotment in the initial distribution, the Company upon the request
of the Initial Purchaser shall simultaneously with the delivery of the Exchange
Notes issue and deliver to the Initial Purchaser, in exchange (the "Private
Exchange") for such Notes held by the Initial Purchaser, a like principal amount
of notes (the "Private Exchange Notes") of the Company, guaranteed by the
Guarantors, that are identical in all material respects to the Exchange Notes
except for the placement of a restrictive legend on such Private Exchange Notes.
The Private Exchange Notes shall be issued
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pursuant to the same indenture as the Exchange Notes and bear the same CUSIP
number as the Exchange Notes. The Exchange Notes, the Private Exchange Notes and
the Secured Notes shall all be treated as one class (for voting, consenting and
otherwise) under the Indenture.
(e) Interest on the Exchange Notes and the Private
Exchange Notes will accrue (A) from the last Interest Payment Date on which
interest was paid on the Secured Notes surrendered in exchange therefor or (B)
if no interest has been paid on the Secured Notes, from the Closing Date.
(f) Upon consummation of the Exchange Offer in accordance
with this Section 3, the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to Transfer Restricted Securities that are
Private Exchange Notes, Exchange Notes held by Broker-Dealers and Transfer
Restricted Securities as to which Section 4(a)(iii) or (iv) apply and the
Company and the Guarantors shall have no further obligation to register Transfer
Restricted Securities pursuant to Section 4 hereof.
4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not
permitted to Consummate the Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy (after the procedures set forth
in Section 6(a) below have been complied with), (ii) the Exchange Offer is not
Consummated on or prior to the 25th Business Day after the day which is 180 days
after the Closing Date (the "Target Date"), (iii) any Holder of Transfer
Restricted Securities shall notify the Company within 10 Business Days following
the Consummation of the Exchange Offer that (A) such Holder was prohibited by
law or Commission policy from participating in the Exchange Offer or (B) such
Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker-Dealer and holds Secured
Notes acquired directly from the Company or one of its affiliates or (iv) the
Holders of not less than a majority in aggregate principal amount of the
Transfer Restricted Securities shall notify the Company that they reasonably
determine that the interests of the Holders would be adversely affected by
Consummation of the Exchange Offer, then the Company and the Guarantors shall
(x) use their respective best efforts to cause to be filed on or prior to (I) 90
days after the date on which the Company determines that it is not permitted to
file the Exchange Offer Registration Statement pursuant to clause (i) above,
(II) 90 days after the Target Date, if the Exchange Offer has not been
Consummated on or prior to the Target Date pursuant to clause (ii) above or
(III) 90 days after the date on which the Company receives the notice specified
in clauses (iii) or (iv) above, a shelf registration statement pursuant to Rule
415 under the Act (which may be an amendment to the Exchange Offer Registration
Statement) (in any case, the "Shelf Registration Statement") relating to all
Transfer Restricted
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Securities the Holders of which shall have provided the information required
pursuant to Section 4(b) hereof and shall (y) use their respective commercially
reasonable efforts to cause such Shelf Registration Statement to become
effective as promptly as possible, but in no event later than 180 days after the
date on which the Company becomes obligated to file such Shelf Registration
Statement. The Company and the Guarantors shall use their respective
commercially reasonable efforts to keep such Shelf Registration Statement
continuously effective, supplemented and amended as required by and subject to
the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for sales of Transfer Restricted Securities by the Holders
thereof entitled to the benefit of this Section 4(a) and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time for a
period of at least two years following the Closing Date or such shorter period
that will terminate when all Transfer Restricted Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement; provided, however, the Shelf Registration Statement shall be extended
to permit Broker-Dealers to comply with prospectus delivery requirements as
provided herein.
(b) Provision by Holders of Certain Information in
Connection with the Shelf Registration Statement. No Holder of Transfer
Restricted Securities may include any of its Transfer Restricted Securities in
any Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 10 Business Days after
receipt of a request therefor, such information specified in item 507 of
Regulation S-K under the Act for use in connection with any Shelf Registration
statement or Prospectus or preliminary Prospectus included therein. Each Holder
as to which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Company all information so required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading. No Holder as to which any Shelf Registration Statement is
being effected shall be entitled to the benefits of Section 5 below unless it
has complied with its obligations under this Section 4(b).
5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (ii) any such Registration Statement has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 25 Business Days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) subject to the provisions of Section 6(d) below, any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective during the period required
pursuant to the applicable provisions of this Agreement or fail to be usable for
its in-
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tended purpose without being succeeded immediately by a post-effective amendment
to such Registration Statement that cures such failure and that is itself
declared effective immediately (each such event referred to in clauses (i)
through (iv), a "Registration Default"), then the Company and the Guarantors
hereby jointly and severally agree to pay liquidated damages to each Holder of
Transfer Restricted Securities affected by such Registration Default with
respect to the first 90-day period immediately following the occurrence of such
Registration Default, in an amount equal to $.05 per week per $1,000 principal
amount of Transfer Restricted Securities affected by such Registration Default
held by such Holder for each week or portion thereof that the Registration
Default continues. The amount of the liquidated damages shall increase by an
additional $.05 per week per $1,000 in principal amount of Transfer Restricted
Securities affected by such Registration Default with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of liquidated damages of $.50 per week per $1,000 principal amount of
Transfer Restricted Securities. All accrued Liquidated Damages will be paid by
the Company in cash on each Damages Payment Date to the Global Note Holder (and
any Holder of Definitive Notes who has given wire transfer instructions to the
Company prior to the Damages Payment Date) by wire transfer of immediately
available funds and to all other Holders of Definitive Notes by mailing checks
to their registered addresses. Following the cure of all Registration Defaults
relating to any particular Transfer Restricted Securities, the accrual of
liquidated damages with respect to such Transfer Restricted Securities will
cease.
All obligations of the Company and the Guarantors set forth in
the preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to
such security shall have been satisfied in full.
6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection
with the Exchange Offer, the Company and the Guarantors shall comply with all
applicable provisions of Section 6(c) below, shall use their respective
commercially reasonable efforts to effect such exchange and to permit the sale
of Broker-Dealer Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof, and shall comply with
all of the following provisions:
(i) If, following the date hereof there has been
promulgated a change in Commission policy with respect to
exchange offers such as the Exchange Offer, such that in the
reasonable opinion of counsel to the Company the Exchange
Offer is not permitted by applicable federal law, the Company
and the Guarantors hereby agree to seek a no-action letter or
other favorable decision from the Commission allowing the
Company and the Guarantors to Consummate an Exchange Offer for
such Secured
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Notes. The Company and the Guarantors hereby agree to pursue
the issuance of such a decision to the Commission staff level,
but shall not be required to take commercially unreasonable
action to obtain such no-action letter or favorable decision.
In connection with the foregoing, the Company and the
Guarantors hereby agree to take all such other actions as are
reasonably requested by the Commission or otherwise reasonably
required in connection with the issuance of such decision,
including, without limitation, (A) participating in telephonic
conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the
Company setting forth the legal bases, if any, upon which such
counsel believes that such an Exchange Offer should be
permitted and (C) diligently pursuing a resolution by the
Commission staff of such submission.
(ii) As a condition to its participation in the
Exchange Offer pursuant to the terms of this Agreement, each
Holder of Transfer Restricted Securities shall furnish, upon
the request of the Company, prior to the Consummation of the
Exchange Offer, a written representation to the Company and
the Guarantors (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration
Statement) to the effect that (A) it is not an affiliate of
the Company or, if it is an affiliate of the Company, it will
comply with the registration and prospectus delivery
requirements of the Act to the extent applicable, (B) it is
not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any Person to participate
in, a distribution of the Exchange Notes to be issued in the
Exchange Offer, (C) it is acquiring the Exchange Notes in its
ordinary course of business and (D) if it is a Broker-Dealer
holding Secured Notes acquired for its own account as a result
of market-making activities or other trading activities, then
it will deliver a prospectus meeting the requirements of the
Act in connection with any resale of Exchange Notes received
in respect of such Secured Notes pursuant to the Exchange
Offer; provided, however, that by so representing and by
delivering a prospectus, such Broker-Dealer will not be deemed
to admit that it is an "underwriter" of the Notes within the
meaning of the Act. Each Holder hereby acknowledges and agrees
that any Broker-Dealer and any such Holder using the Exchange
Offer to participate in a distribution of the securities to be
acquired in the Exchange Offer (1) could not under Commission
policy as in effect on the date of this Agreement rely on the
position of the Commission enunciated in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted
in the Commission's letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters (including, if
applicable, any no-action letter obtained pursuant to clause
(i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Act in connection with
a secondary resale transaction and that such a secondary
resale transaction must be covered by an effective
registration statement containing required
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information with respect to the selling securityholder if the
resales are of Exchange Notes obtained by such Holder in
exchange for Secured Notes acquired by such Holder directly
from the Company or an affiliate thereof or as a result of
market-making activities or other trading activities.
(iii) In connection with the Exchange Offer, the
Company and the Guarantors 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
Registration Statement, together with an appropriate letter of
transmittal and related documents; (2) utilize the services of
a depositary for the Exchange Offer with an address in the
Borough of Manhattan, The City of New York; (3) permit Holders
to withdraw tendered Secured Notes at any time prior to the
close of business, New York time, on the last Business Day on
which the Exchange Offer shall remain open; and (4) otherwise
comply in all material respects with all applicable laws,
rules and regulations.
As soon as practicable after the close of the Exchange Offer
or the Private Exchange, as the case may be, the Company shall: (1) accept for
exchange all Secured Notes properly tendered and not validly withdrawn pursuant
to the Exchange Offer or the Private Exchange; (2) deliver to the Trustee for
cancellation all Secured Notes so accepted for exchange; and (3) cause the
Trustee to authenticate and deliver promptly to each Holder of Secured Notes,
Exchange Notes or Private Exchange Notes, as the case may be, equal in principal
amount to the Secured Notes of such Holder so accepted for exchange.
(b) Shelf Registration Statement. In connection with any Shelf
Registration Statement required to be filed by the Company and the Guarantors,
the Company and the Guarantors shall comply with all the provisions of Section
6(c) below and shall use their respective commercially reasonable efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the Company
pursuant to Section 4(b) hereof), and pursuant thereto the Company and the
Guarantors will prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the Act, which form
shall be available for the sale of the Transfer Restricted Securities in
accordance with the intended method or methods of distribution thereof within
the time periods and otherwise in accordance with the provisions hereof. The
Company shall not permit any securities other than the Transfer Restricted
Securities to be included in the Shelf Registration Statement.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement to permit the
sale or resale of Transfer Restricted Securities (including, without limitation,
any Exchange Offer Registration Statement
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and the related Prospectus, to the extent that the same are required to be
available to permit sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers), the Company and the Guarantors shall:
(i) use their respective commercially reasonable
efforts to keep such Registration Statement continuously
effective and provide all requisite financial statements
(including, if required by the Act or any regulation
thereunder, financial statements of any Guarantor) for the
period specified in Section 3 or 4 of this Agreement, as
applicable. Upon the occurrence of any event that would cause
any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or
(B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this
Agreement, the Company and the Guarantors shall file promptly
an appropriate amendment to such Registration Statement, (1)
in the case of clause (A), correcting any such misstatement or
omission and (2) in the case of clauses (A) and (B), use their
respective commercially reasonable efforts to cause such
amendment or Registration Statement to be declared effective
and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as
practicable thereafter.
(ii) prepare and file with the Commission such
amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 of this
Agreement, as applicable or such shorter period as will
terminate when all Transfer Restricted Securities covered by
such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus
supplement and, as so supplemented, filed pursuant to Rule 424
under the Act, and to comply fully with Rules 424, 430A and
462, as applicable, under the Act in a timely manner; and
comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) advise the Trustee and, if requested,
confirming such advice in writing, when the Prospectus or any
Prospectus supplement or post-effective amendment has been
filed and, with respect to any Registration Statement or any
post-effective amendment thereto, when the same has become
effective; and advise the underwriter(s), if any, and selling
Holders promptly and, if requested by such Persons, confirming
such advice in writing, (A) of any request by the Commission
for any post-effective amendment to the Registration Statement
or any amendment or supplement to the Prospectus, (B) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or
of the suspension by
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any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of
the preceding purposes or (C) of the happening of any event or
the existence of any state of facts that makes any statement
of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any
document incorporated by reference therein untrue (which has
not been corrected by the filing of a document incorporated by
reference therein), or that requires the making of any
additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that
requires the making of any additions to or changes in the
Prospectus in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. If at anytime the Commission shall issue any stop
order suspending the effectiveness of the Registration
Statement under the Act, or any state securities commission or
other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws,
the Company and the Guarantors shall use their respective
commercially reasonable efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) furnish to each selling Holder specifically
named in any Registration Statement or Prospectus and each of
the underwriter(s) in connection with such sale, if any, on or
before filing with the Commission, copies of any Registration
Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference
after the initial filing of such Registration Statement),
which documents will be subject to the review and comment of
such Holders and underwriter(s) in connection with such sale,
if any, for a period of at least five Business Days, and the
Company will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such
documents incorporated by reference) to which such selling
Holders of the Transfer Restricted Securities covered by such
Registration Statement or the underwriter(s) in connection
with such sale, if any, shall reasonably object within five
Business Days after the receipt thereof;
(v) promptly prior to the filing of any document that
is to be incorporated by reference into a Shelf Registration
Statement or related Prospectus, provide copies of such
document to each selling Holder specifically named therein and
to the underwriter(s) in connection with such sale, if any,
make the Company's and the Guarantors' representatives
available for discussion of such document and other customary
due diligence matters, and include such information in such
document prior to the filing thereof as such selling Holders
or underwriter(s), if any, reasonably may request;
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(vi) make available at reasonable times for
inspection by any Restricted Broker-Dealers, any selling
Holders named in any Shelf Registration Statement, any
underwriter participating in any disposition pursuant to such
Registration Statement and any attorney or accountant retained
by such selling Holders, Restricted Broker-Dealers or any of
such underwriter(s) all relevant financial and other records,
pertinent corporate documents and properties of the Company
and the Guarantors and cause the Company's and the Guarantors'
officers, directors and employees to supply all relevant
information reasonably requested by any such Holder,
Restricted Broker-Dealer, underwriter, attorney or accountant
in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness;
(vii) if requested by any selling Holders named in
any Shelf Registration Statement or the underwriter(s) in
connection with such sale, if any, promptly include in any
such Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if
any, may reasonably request to have included therein relating
to such Holders and underwriter(s), if any, and the
disposition of the related Transfer Restricted Securities,
including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer
Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the
offering of the Transfer Restricted Securities to be sold in
such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be
included in such Prospectus supplement or post-effective
amendment;
(viii) deliver to each selling Holder and each of the
underwriter(s) in connection with such sale, if any, without
charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request in writing; the
Company and the Guarantors hereby consent to the use of any
preliminary prospectus, the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of
the underwriter(s), if any, in connection with the offering
and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto but only
in a manner consistent with the matters set forth under "Plan
of Distribution" therein;
(ix) enter into such agreements (including, in the
case of an Underwritten Registration, an underwriting
agreement) and make such representations and warranties and
take all such other actions in connection therewith in order
to expedite or fa-
16
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cilitate the disposition of the Transfer Restricted Securities pursuant
to any Registration Statement contemplated by this Agreement as may be
reasonably requested by any Holder of Transfer Restricted Securities or
underwriter in connection with any sale or resale pursuant to any
Registration Statement contemplated by this Agreement, and in such
connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Registration,
the Company and the Guarantors shall upon request:
(A) furnish to each selling Holder specifically named in any
Shelf Registration Statement and each underwriter, if any, in such
substance and scope as they may reasonably request and (in the case of
any Underwritten Registration) as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the effectiveness
of any Shelf Registration Statement and to any Restricted Broker-Dealer
who so requests upon Consummation of the Exchange Offer:
(1) a certificate, dated the date of Consummation of
the Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed on behalf
of the Company and each Guarantor by (x) the Chief Executive
Officer, the President or any Vice President and (y) a
principal financial or accounting officer of the Company and
such Guarantor, confirming, as of the date thereof, the
matters set forth in subsection (h) of Section 7 of the
Purchase Agreement, as the same apply to any Registration
Statement or Prospectus and the other matters addressed in
such subsection, and such other similar matters as such
Holders, underwriter(s) and/or Restricted Broker-Dealers may
reasonably request;
(2) opinions, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors covering matters similar to those
set forth in subsections (a) and (b) of Section 7 of the
Purchase Agreement, as the same apply to any Registration
Statement or Prospectus and the other matters addressed in
such subsections, and such other matters as such Holders,
underwriter(s) and/or Restricted Broker-Dealers may reasonably
request, and
(3) a customary comfort letter, dated as of the date
of effectiveness of the Shelf Registration Statement or the
date of Consummation of the Exchange Offer, as the case may
be, from the Company's
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and the Guarantors' independent accountants, in the customary
form and covering matters of the type customarily covered in
comfort letters to underwriters in connection with primary
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to subsection (e) of
Section 7 of the Purchase Agreement, without exception, as the
same apply to any Registration Statement or Prospectus and the
other matters addressed in such subsection;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, in connection with any sale or resale
pursuant to any Shelf Registration Statement relating to an
Underwritten Offering the indemnification provisions and procedures of
Section 8 hereof with respect to all parties to be indemnified pursuant
to said Section; and
(C) deliver such other documents and certificates as may
be reasonably requested by the selling Holders specifically named in
any Shelf Registration Statement, the underwriter(s), if any, and
Restricted Broker-Dealers, if any, to evidence compliance with clause
(A) above and with any customary conditions contained in any
underwriting agreement or other agreement entered into by the Company
and the Guarantors pursuant to this clause (ix). The above shall be
done at each closing under such underwriting or similar agreement, as
and to the extent required thereunder, and if at any time the
representations and warranties of the Company and the Guarantors
contemplated in (A)(1) above cease to be true and correct, the Company
and the Guarantors shall so advise the underwriter(s), if any, the
selling Holders and any Restricted Broker-Dealer promptly and, if
requested by such Persons, shall confirm such advice in writing;
(x) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of the
Transfer Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s), if any, may request and
do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities covered
by the applicable Registration Statement; provided, however, that neither the
Company nor any Guarantor shall be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that would
subject it to the service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
18
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(xi) issue, upon the request of any Holder of Secured Notes
covered by any Shelf Registration Statement contemplated by this
Agreement and the surrender for cancellation of the Secured Notes held
by such Holder, Exchange Notes having an aggregate principal amount
equal to the aggregate principal amount of Secured Notes surrendered to
the Company by such Holder in exchange therefor or being sold by such
Holder; such Exchange Notes to be registered in the name of such Holder
or in the name of the purchaser(s) of such Notes, as the case may be;
(xii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities (other than with respect to the consummation of
the Exchange Offer), cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as
the Holders or the underwriter(s), if any, may request at least two
Business Days prior to such sale of Transfer Restricted Securities;
(xiii) use their respective commercially reasonable efforts to
cause the disposition of the Transfer Restricted Securities covered by
the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities;
(xiv) if any fact or event contemplated by Section
6(c)(iii)(C) above shall exist or have occurred, prepare a supplement
or post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain 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 under which they we remade, not misleading;
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with The
Depository Trust Company;
(xvi) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation
by any underwriter (including any "qualified independent underwriter")
that is required to be retained in
19
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accordance with the rules and regulations of the NASD, and use their
respective commercially reasonable efforts to cause such Registration
Statement to become effective and approved by such governmental
agencies or authorities as may be necessary to enable the Holders
selling Transfer Restricted Securities to consummate the disposition of
such Transfer Restricted Securities;
(xvii) otherwise use their respective commercially reasonable
efforts to comply with all applicable rules and regulations of the
Commission and make generally available to its security holders with
regard to any applicable Registration Statement, a consolidated
earnings statement meeting the requirements of Rule 158 covering a
twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of
Rule 158 under the Act);
(xviii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders of Notes to effect such changes to the
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
commercially reasonable efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner; and
(xix) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of any notice from the Company
of the happening of any event or the existence of any state of facts of the kind
described in Section 6(c)(iii)(C) hereof, such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof, or
until it is advised in writing by the Company (the "Advice") that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of any such notice. In the
event the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
20
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6(c)(iii)(C) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof or
shall have received the Advice.
7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company
and the Guarantors, regardless of whether a Registration Statement becomes
effective, including, without limitation: (i) all registration and filing fees
and expenses (other than filings made by the Initial Purchaser or any Holder
with the NASD and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules and
regulations of the NASD); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing certificates for the Exchange Notes to be issued in the
Exchange Offer and printing of Prospectuses), messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Company, the
Guarantors and, subject to Section 7(b) below, the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
causing the Notes to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.; and (vi) all fees and disbursements of
independent certified public accountants of the Company and the Guarantors
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchaser and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or resold pursuant to the
"Plan of Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel chosen by the
Holders of a majority in principal amount of the Transfer Restricted Securities
for whose benefit such Registration Statement is being prepared.
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8. INDEMNIFICATION
(a) The Company and the Guarantors will, jointly and
severally, indemnify and hold harmless each Holder against any losses,
claims, damages, liabilities or expenses, joint or several, to which it
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) (i) arise out of or are based upon an untrue statement or
alleged untrue statement of material fact contained in any Registration
Statement or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading
or (ii) arise out of or are based upon an untrue statement or alleged
untrue statement of material fact contained in any preliminary
Prospectus or Prospectus or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and will reimburse each Holder for any legal or other
expenses reasonably incurred by it in connection with investigating or
defending any such action or claim as such expenses are incurred;
provided, however, that neither the Company nor any of the Guarantors
shall be liable in any such case to the extent that any such loss,
claim, damage, liability or expenses arise out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Registration Statement, preliminary Prospectus or
Prospectus, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company or any of
the Guarantors by or on behalf of any of the Holders expressly for
inclusion therein.
(b) Each Holder and each underwriter named in any underwriting
agreement entered into in connection with an Underwritten Offering
will, severally and not jointly, indemnify and hold harmless the
Company and the Guarantors against any losses, claims, damages,
liabilities or expenses to which the Company or any of the Guarantors
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) (i) arise out of or are based upon an untrue statement or
alleged untrue statement of material fact contained in any Registration
Statement or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading
or (ii) arise out of or are based upon an untrue statement or alleged
untrue statement of material fact contained in any preliminary
Prospectus or Prospectus or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Registration Statement, preliminary
Prospectus or Prospectus, or any
22
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such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company or any of the Guarantors
by such Holder or such underwriter expressly for use therein; and will
reimburse the Company and the Guarantors for any legal or other
expenses reasonably incurred by the Company or the Guarantors in
connection with investigating or defending any such action or claim as
such expenses are incurred. The liability of any Person under this
paragraph shall in no event exceed the proceeds received by such Person
from sales of Transfer Restricted Securities or Exchange Notes giving
rise to such obligations.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action
or proceeding (including any governmental or regulatory investigation)
such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought thereunder unless such
settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such
action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf
of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the
Company and the Guarantors, on the one hand, and of such Holder, on the
other, in connection with the
23
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statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company and the Guarantors, on the one hand, or the Holders, on the
other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company, the Guarantors and each Holder agree that it
would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Holder shall be
required to contribute any amount in excess of the amount by which the
dollar amount of the proceeds received by such Holder from the sale of
any Transfer Restricted Securities (after deducting any fees, discounts
and commissions applicable thereto) exceeds the amount of any damages
which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission, and
no underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Transfer Restricted
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. The
Holders' and any underwriters' obligations in this Section 8(d) to
contribute shall be several in proportion to the respective principal
amounts of Transfer Restricted Securities held or underwritten, as the
case may be, by them and not joint. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
(e) The obligations of the Company and the Guarantors under
this Section 8 shall be in addition to any liability that the Company
and the Guarantors may otherwise have and shall extend, upon the same
terms and conditions, to each officer, director and partner of each
Holder, agent and underwriter, if any, and each Person, if any, who
controls any Holder, agent or underwriter within the meaning of the
Act; and the obligations of the Holders and any underwriters
contemplated by this Section 8 shall be in addition to any liability
which the respective Holder or underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each officer and
director of the Company or any Guarantor and to
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each Person, if any, who controls the Company or any Guarantor within the
meaning of the Act.
9. RULE 144A
The Company and the Guarantors hereby agree and
covenant that it will file reports required to be filed by it under the Act and
the Exchange Act and the rules and regulations thereunder in a timely manner in
accordance with the requirements of the Act and the Exchange Act. The Company
and the Guarantors hereby agree with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period during which the
Company or any Guarantor is not subject to Section 13 or 15(d) of the Exchange
Act, to make available, upon request of any Holder of Transfer Restricted
Securities, to any Holder or beneficial owner of Transfer Restricted Securities
in connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities designated by such Holder or beneficial owner,
the information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.
10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten
Registration hereunder unless such Holder (a) agrees to sell such Holder's
Transfer Restricted Securities on the basis provided in customary underwriting
arrangements entered into in connection therewith and (b) completes and executes
all reasonable questionnaires, powers of attorney and other documents required
under the term of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker
or investment bankers and manager or managers for any Underwritten Offering that
will administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company. Such investment bankers and managers are
referred to herein as the "underwriters." Neither the Company nor any Guarantor
shall be liable for the payment of any underwriting fee or commission in
connection with any Underwritten Offering.
12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being
entitled to exercise all rights provided herein, in the Indenture, the Purchase
Agreement, Security Documents or granted by law, including recovery of
liquidated or other damages, will be entitled to specific
25
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performance of its rights under this Agreement. The Company and the Guarantors
agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by them of the provisions of this Agreement and
hereby agree to waive the defense in any action for specific performance that a
remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company
nor any Guarantor will, on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions 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
the Company's and the Guarantors' securities under any agreement in effect on
the date hereof.
(c) Adjustments Affecting the Notes. Neither the
Company nor any Guarantor will take any action intended to materially and
adversely affect the ability of the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof may not be given, unless (i) in the
case of Section 5 hereof and this Section 12(d)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted Securities and
(ii) in the case of all other provisions hereof, the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect, directly or indirectly, the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities subject to such Exchange Offer.
(e) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt requested), telex,
telecopier or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth
on the records of the Registrar under the Indenture,
with a copy to the Registrar under the Indenture; and
(ii) if to the Company or the Guarantors:
c/o Metal Management, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇
-▇▇-
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: T. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged orally by recipient, if telecopied; and on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation, and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties 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.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflict of laws rules thereof. Each of the parties hereto agrees to
submit to the non-exclusive jurisdiction of the courts of the State of New York
in any action or proceeding arising out of or relating to this Agreement.
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(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby and the
parties hereto shall use their best efforts to find and employ alternative means
to achieve the same or substantially the same result as that contemplated by
such provision.
(k) Entire Agreement. Except as to those matters governed,
expressly as set forth herein, by the Indenture, the Security Documents or the
Purchase Agreement, this Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings other than those set forth or referred to herein with
respect to the exchange and registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
(l) Securities Held by Any of the Company or Any Guarantor or
Any of Their Respective Affiliates. Whenever the consent or approval of Holders
of a specified percentage of Transfer Restricted Securities is required
hereunder, Transfer Restricted Securities held by the Company or any Guarantor
or any of their respective 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.
(m) Subsidiary Guarantor a Party. Immediately upon the
designation of any subsidiary of the Company as a Guarantor under the Indenture,
the Company shall cause such subsidiary to become a party hereto as a Guarantor
by executing and delivering to the Initial Purchaser a counterpart hereof.
(n) Third Party Beneficiary. Each Holder shall be a third
party beneficiary of the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchaser, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
METAL MANAGEMENT, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary
AEROSPACE METALS, INC.
AMERICAN SCRAP PROCESSING, INC.
C SHREDDING CORP.
CALIFORNIA METALS RECYCLING, INC.
CIM TRUCKING, INC.
COMETCO CORP.
▇▇▇▇▇ BUILDING CORPORATION
▇▇▇▇▇ IRON & METAL, INC.
EMCO TRADING, INC.
FERREX TRADING CORPORATION
FPX, INC.
FIRMA, INC.
FIRMA PLASTIC CO., INC.
HOUSTON COMPRESSED STEEL CORP.
HOUTEX METALS COMPANY, INC.
THE ▇▇▇▇▇ CORPORATION
▇. ▇▇▇▇▇▇ IRON & METAL, INC.
KANKAKEE SCRAP CORPORATION
▇▇▇▇▇▇▇▇▇ ACQUISITION CORP.
MAC LEOD METALS CO.
METAL MANAGEMENT ARIZONA, INC.
METAL MANAGEMENT GULF COAST, INC.
METAL MANAGEMENT PITTSBURGH, INC.
METAL MANAGEMENT REALTY, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & SONS, INC.
NAPORANO IRON & METAL CO.
▇▇▇▇▇▇ RECYCLING WEST, INC.
NIMCO SHREDDING CO.
138 SCRAP, INC.
PERLCO, L.L.C.
29
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PROLER SOUTHWEST INC.
PROLER STEELWORKS L. L. C.
R&P HOLDINGS, INC.
SALT RIVER RECYCLING, L.L.C.
SCRAP PROCESSING, INC.
TORRINGTON SCRAP COMPANY
TROJAN TRADING CO.
USA SOUTHWESTERN CARRIER, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
RESERVE IRON & METAL LIMITED PARTNERSHIP
By: ▇. ▇▇▇▇▇▇ IRON & METAL, INC.,
its general partner
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
30
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BT ALEX. ▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
