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EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into this 28th day of January 1999, among Integrated Electrical
Services, Inc., a Delaware corporation (the "Company"), the Guarantors named on
Schedule A hereto (the "Guarantors") and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
(collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
January 25, 1999, among the Company, the Guarantors and the Initial Purchasers
(the "Purchase Agreement"), which provides for the sale by the Company and the
Guarantors to the Initial Purchasers of an aggregate of $150 million principal
amount of the Company's 9 3/8% Senior Subordinated Notes due 2009, Series A (the
"Notes"), together with the related guarantees of such Notes by the Guarantors
(the Guarantees, and together with the Notes, the "Securities"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Company
and the Guarantors have agreed to provide to the Initial Purchasers and their
direct and indirect transferees the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under
the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 Act" shall mean the Securities Exchange Act of l934, as amended
from time to time.
"Closing Date" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that such depositary
must have an address in the Borough of Manhattan, in the City of New York.
"Exchange Offer" shall mean the offer by the Company and the
Guarantors to exchange Exchange Securities for Registrable Securities pursuant
to Section 2.1 hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2.1 hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement,
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2.1
hereof.
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"Exchange Securities" shall mean the 9 3/8% Senior Subordinated Notes
due 2009, Series B and related guarantees issued by the Company and the
Guarantors under the Indenture containing terms identical to the Securities in
all material respects (except for references to certain interest rate
provisions, restrictions on transfers and restrictive legends), to be offered
to Holders of Securities in exchange for Registrable Securities pursuant to the
Exchange Offer.
"Guarantors" has the meaning set forth in the preamble, and shall
include any additional guarantors of the Notes added pursuant to the Indenture.
"Holder" shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture and each Participating Broker-Dealer that holds Exchange
Securities for so long as such Participating Broker-Dealer is required to
deliver a prospectus meeting the requirements of the 1933 Act in connection
with any resale of such Exchange Securities.
"Indenture" shall mean the Indenture relating to the Securities, dated
as of January 28, 1999, between the Company, the Guarantors and State Street
Bank and Trust Company, as trustee, as the same may be amended, supplemented,
waived or otherwise modified from time to time in accordance with the terms
thereof.
"Initial Purchaser" or "Initial Purchasers" shall have the meaning set
forth in the preamble.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indenture)
Registrable Securities; provided that whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company and other obligors on the
Securities or any Affiliate (as defined in the Indenture) of the Company shall
be disregarded in determining whether such consent or approval was given by the
Holders of such required percentage amount.
"Notes" shall have the meaning set forth in the preamble.
"Participating Broker-Dealer" shall mean any of ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation and any other broker-dealer which makes a market in the Securities
and exchanges Registrable Securities in the Exchange Offer for Exchange
Securities.
"Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated organization,
or a government or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2.1
hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2.1 hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all information incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
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"Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that the Securities and, if
issued, the Private Exchange Securities, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities
shall have been declared effective under the 1933 Act and such Securities shall
have been disposed of pursuant to such Registration Statement, (ii) such
Securities have been sold to the public pursuant to Rule l44 under the
Securities Act or have become eligible for resale without restriction pursuant
to Rule 144(k) under the Securities Act (in each case, or any similar provision
then in force, but not Rule 144A), (iii) such Securities shall have ceased to
be outstanding or (iv) such Securities have been exchanged for freely tradeable
Exchange Securities in the Exchange Offer (except in the case of Securities
purchased from the Company and continued to be held by the Initial Purchasers).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees, including,
if applicable, the fees and expenses of any "qualified independent underwriter"
(and its counsel) that is required to be retained by any holder of Registrable
Securities in accordance with the rules and regulations of the NASD, (ii) all
fees and expenses incurred in connection with compliance with state securities
or blue sky laws and compliance with the rules of the NASD (including
reasonable fees and disbursements of counsel for any underwriters or Holders in
connection with blue sky qualification of any of the Exchange Securities or
Registrable Securities and any filings with the NASD), (iii) all expenses of
any Persons in preparing or assisting in preparing, word processing, printing
and distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all fees and expenses incurred in connection with the listing,
if any, of any of the Registrable Securities on any securities exchange or
exchanges, (v) all rating agency fees, (vi) the fees and disbursements of
counsel for the Company and of the independent public accountants of the
Company, including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, (vii) the fees and
expenses of the Trustee, and any escrow agent or custodian, (viii) the
reasonable fees and expenses of the Initial Purchasers in connection with the
Exchange Offer, including the reasonable fees and expenses of counsel to the
Initial Purchasers in connection therewith, (ix) the reasonable fees and
disbursements of one counsel representing the Majority Holders and (x) any fees
and disbursements of the underwriters customarily required to be paid by
issuers or sellers of securities and the fees and expenses of any special
experts retained by the Company in connection with any Registration Statement,
but excluding underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
Company which covers any of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency or government body performing the functions currently
performed by the United States Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2.2 hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2.2 of this
Agreement which covers all of the Registrable Securities or all of the Private
Exchange Securities on an appropriate form under Rule 415 under the 1933 Act,
or any similar rule
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that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Suspension Period" shall have the meaning set forth in Section 2.2(b).
"Trustee" shall mean the trustee with respect to the Securities under
the Indenture.
2. Registration Under the ▇▇▇▇ ▇▇▇.
2.1 Exchange Offer. The Company and the Guarantors shall, for the
benefit of the Holders, at the Company's cost, (A) prepare and, as soon as
practicable but not later than 60 days following the Closing Date, file with
the SEC an Exchange Offer Registration Statement on an appropriate form under
the 1933 Act with respect to a proposed Exchange Offer and the issuance and
delivery to the Holders, in exchange for the Registrable Securities (other than
Private Exchange Securities), of a like principal amount of Exchange
Securities, (B) use their reasonable best efforts to cause the Exchange Offer
Registration Statement to be declared effective under the 1933 Act within 120
days of the Closing Date, (C) use their reasonable best efforts to keep the
Exchange Offer Registration Statement effective until the closing of the
Exchange Offer and (D) use their reasonable best efforts to cause the Exchange
Offer to be consummated not later than 150 days following the Closing Date. The
Exchange Securities will be issued under the Indenture. Upon the effectiveness
of the Exchange Offer Registration Statement, the Company and the Guarantors
shall promptly commence the Exchange Offer, it being the objective of such
Exchange Offer to enable each Holder eligible and electing to exchange
Registrable Securities for Exchange Securities (assuming that such Holder (a)
is not an affiliate of the Company within the meaning of Rule 405 under the
1933 Act, (b) is not a broker-dealer tendering Registrable Securities acquired
directly from the Company for its own account, (c) acquired the Registrable
Securities in the ordinary course of such Holder's business and (d) has no
arrangements or understandings with any Person to participate in the Exchange
Offer for the purpose of distributing the Exchange Securities) to transfer such
Exchange Securities from and after their receipt without any limitations or
restrictions under the 1933 Act or under state securities or blue sky laws.
In connection with the Exchange Offer, the Company shall:
(a) mail as promptly as practicable to each Holder a copy of
the Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;
(b) keep the Exchange Offer open for acceptance for a period
of not less than 30 calendar days after the date notice thereof is mailed to
the Holders (or longer if required by applicable law) (such period referred to
herein as the "Exchange Period");
(c) utilize the services of the Depositary for the Exchange
Offer;
(d) permit Holders to withdraw tendered Registrable Securities
at any time prior to 5:00 p.m. (Eastern Time) on the last business day of the
Exchange Period, by sending to the institution specified in the notice a
telegram, telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Securities delivered for exchange,
and a statement that such Holder is withdrawing such Holder's election to have
such Securities exchanged;
(e) notify each Holder that any Registrable Security not
tendered will remain outstanding and continue to accrue interest, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
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(f) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Company and the Guarantors
upon the request of any Initial Purchaser shall, simultaneously with the
delivery of the Exchange Securities in the Exchange Offer, issue and deliver to
such Initial Purchaser in exchange (the "Private Exchange") for the Securities
held by such Initial Purchaser, a like principal amount of debt securities of
the Company and related guarantees by the Guarantors that are identical (except
that such securities shall bear appropriate transfer restrictions) to the
Exchange Securities (the "Private Exchange Securities").
The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture and which, in either case, has been qualified under
the Trust Indenture Act of 1939, as amended (the "TIA"), or is exempt from such
qualification and shall provide that the Exchange Securities shall not be
subject to the transfer restrictions applicable to the Registrable Securities
set forth in the Indenture but that the Private Exchange Securities shall be
subject to such transfer restrictions. The Indenture or such indenture shall
provide that the Exchange Securities, the Private Exchange Securities and the
Securities shall vote and consent together on all matters as one class and that
none of the Exchange Securities, the Private Exchange Securities or the
Securities will have the right to vote or consent as a separate class on any
matter. The Private Exchange Securities shall be of the same series as and the
Company shall use all commercially reasonable efforts to have the Private
Exchange Securities bear the same CUSIP number as the Exchange Securities. The
Company shall not have any liability under this Agreement solely as a result of
such Private Exchange Securities not bearing the same CUSIP number as the
Exchange Securities.
As soon as practicable after the close of the Exchange Offer and/or
the Private Exchange, as the case may be, the Company and the Guarantors shall:
(i) accept for exchange all Registrable Securities
duly tendered and not validly withdrawn pursuant to the
Exchange Offer in accordance with the terms of the Exchange
Offer Registration Statement and the letter of transmittal
which shall be an exhibit thereto;
(ii) accept for exchange all Securities properly
tendered pursuant to the Private Exchange;
(iii) deliver to the Trustee for cancellation all
Registrable Securities so accepted for exchange; and
(iv) cause the Trustee promptly to authenticate and
deliver Exchange Securities or Private Exchange Securities,
as the case may be, to each Holder of Registrable Securities
so accepted for exchange in a principal amount equal to the
principal amount of the Registrable Securities of such Holder
so accepted for exchange.
Interest on each Exchange Security and Private Exchange Security will
accrue from the last date on which interest was paid on the Registrable
Securities surrendered in exchange therefor or, if no interest has been paid on
the Registrable Securities, from the date of original issuance. The Exchange
Offer and the Private Exchange shall not be subject to any conditions, other
than (i) that the Exchange Offer or the Private Exchange, or the making of any
exchange by a Holder, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) the due tendering of Registrable
Securities in accordance with the
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Exchange Offer and the Private Exchange, (iii) that each Holder of Registrable
Securities exchanged in the Exchange Offer shall have represented that all
Exchange Securities to be received by it shall be acquired in the ordinary
course of its business and that at the time of the consummation of the Exchange
Offer it shall have no arrangement or understanding with any person to
participate in the distribution (within the meaning of the ▇▇▇▇ ▇▇▇) of the
Exchange Securities and shall have made such other representations as may be
reasonably necessary under applicable SEC rules, regulations or interpretations
to render the use of Form S-4 or other appropriate form under the 1933 Act
available, (iv) that no action or proceeding shall have been instituted or
threatened in any court or by or before any governmental agency with respect to
the Exchange Offer or the Private Exchange which, in the Company's judgment,
would reasonably be expected to impair the ability of the Company to proceed
with the Exchange Offer or the Private Exchange, and (v) such other conditions
that may be reasonably acceptable to the Initial Purchasers, which, in the
Company's judgment, would be reasonably expected to impair the ability of the
Company to proceed with the Exchange Offer or the Private Exchange. The Company
shall inform the Initial Purchasers of the names and addresses of the Holders to
whom the Exchange Offer is made, and the Initial Purchasers shall have the right
to contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
2.2 Shelf Registration. (i) If, because of any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the
SEC, the Company is not permitted to effect the Exchange Offer as contemplated
by Section 2.1 hereof, (ii) if for any other reason the Exchange Offer
Registration Statement is not declared effective within 120 days following the
original issue of the Registrable Securities or the Exchange Offer is not
consummated within 150 days after the original issue of the Registrable
Securities, (iii) upon the request of any of the Initial Purchasers or (iv) if
a Holder is not permitted to participate in the Exchange Offer or does not
receive fully tradeable Exchange Securities pursuant to the Exchange Offer,
then in case of each of clauses (i) through (iv) the Company and the Guarantors
shall, at the Company's cost:
(a) As promptly as practicable, file with the SEC, and
thereafter shall use their reasonable best efforts to cause to be
declared effective as promptly as practicable but no later than 120
days after the date the obligation to file the Shelf Registration
Statement arises, a Shelf Registration Statement relating to the offer
and sale of the Registrable Securities by the Holders from time to
time in accordance with the methods of distribution elected by the
Majority Holders participating in the Shelf Registration and set forth
in such Shelf Registration Statement.
(b) Use their reasonable best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period
of two years from the date the Shelf Registration Statement is
declared effective by the SEC, or for such shorter period that will
terminate when all Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding or otherwise cease to
be Registrable Securities (the "Effectiveness Period"); provided,
however, that the Effectiveness Period in respect of the Shelf
Registration Statement shall be extended to the extent required to
permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the 1933 Act and as otherwise provided
herein; and provided, further, that the Company and the Guarantors
shall not be obligated to keep the Shelf Registration Statement
effective or to permit the use of any Prospectus forming a part of the
Shelf Registration Statement if (A) the Company determines, in its
reasonable judgment, upon advice of counsel, that the continued
effectiveness and use of the Shelf Registration Statement would (x)
require the disclosure of material information which the Company has a
bona fide business reason for preserving as confidential, or (y)
interfere with any financing, acquisition, corporate reorganization or
other material transaction involving the Company or any of its
subsidiaries, and provided, further, that the failure to keep the Shelf
Registration Statement effective and usable for offers and sales of
Registrable Securities for such reasons shall last no longer than an
aggregate of 30 days in any consecutive twelve-month period
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(whereafter a Registration Default, as defined in Section 2.5, shall
occur), and (B) the Company promptly thereafter complies with the
requirements of Section 3(k) hereof, if applicable (any such period
during which the Company is excused from keeping the Shelf Registration
Statement effective and usable for offers and sales of Registrable
Securities is referred to herein as a "Suspension Period", and a
Suspension Period shall commence on and include the date that the
Company gives notice to the Holders that the Shelf Registration
Statement is no longer effective or the prospectus included therein is
no longer usable for offers and sales of Registrable Securities as a
result of the foregoing provisions and shall end on the earlier to
occur of the date on which each seller of Registrable Securities
covered by the Shelf Registration Statement either receives the copies
of the supplemented or amended prospectus contemplated by Section 3(k)
hereof or is advised in writing by the Company that use of the
prospectus may be resumed); and
(c) use their reasonable best efforts to ensure that (i) any
Shelf Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any supplement thereto complies in
all material respects with the 1933 Act and the rules and regulations
thereunder, (ii) any Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading and (iii) subject to Section 2(b) above, any Prospectus
forming part of any Shelf Registration Statement, and any supplement
to such Prospectus (as amended or supplemented from time to time),
does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements, in
light of the circumstances under which they were made, not misleading.
The Company shall not permit any securities other than Registrable
Securities to be included in the Shelf Registration Statement. The Company and
the Guarantors further agree, if necessary, to supplement or amend the Shelf
Registration Statement, as required by Section 3(b) below, and to furnish to
the Holders of Registrable Securities copies of any such supplement or
amendment promptly after its being used or filed with the SEC.
2.3 Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2.1 or 2.2. Each Holder
shall pay all underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
2.4. Effectiveness. (a) The Company and the Guarantors will be deemed
not to have used their reasonable best efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite period if they
voluntarily take any action that would, or omits to take any action which
omission would, result in any such Registration Statement not being declared
effective or in the Holders of Registrable Securities covered thereby not being
able to exchange or offer and sell such Registrable Securities during that
period as and to the extent contemplated hereby, unless such action is required
by applicable law.
(b) An Exchange Offer Registration Statement pursuant to Section 2.1
hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to an Exchange Offer Registration
Statement or a Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have become effective during the period of such interference, until the
offering of Registrable Securities pursuant to such Registration Statement may
legally resume.
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2.5 Additional Interest. The Indenture executed in connection with the
Securities will provide that in the event that either (a) the Exchange Offer
Registration Statement is not filed with the Commission on or prior to the 60th
calendar day following the date of original issue of the Securities, (b) the
Exchange Offer Registration Statement has not been declared effective on or
prior to the 120th calendar day following the date of original issue of the
Securities , (c) the Exchange Offer is not consummated on or prior to the 150th
calendar day following the date of original issue of the Securities or a Shelf
Registration Statement is not declared effective prior to the 120th day
following the date the obligation to file such Shelf Registration Statement
arises or (d) after the Shelf Registration Statement has been filed and
declared effective, the Shelf Registration Statement is unusable by the Holders
for any reason during the Effectiveness Period, and the aggregate number of
days in any consecutive twelve-month period for which the Shelf Registration
Statement shall not be usable exceeds 30 days in the aggregate (each such event
referred to in clauses (a) through (d) above, a "Registration Default"), the
interest rate borne by the Registrable Securities shall be increased
("Additional Interest") by 0.25% per annum upon the occurrence of each
Registration Default, which rate will increase by 0.25% per annum each 90-day
period that such Additional Interest continues to accrue under any such
circumstance, provided that the maximum aggregate increase in the interest rate
will in no event exceed 0.5% per annum. Additional Interest shall be computed
based on the actual number of days elapsed in each period in which a
Registration Default occurs. Following the cure of all Registration Defaults
the accrual of Additional Interest will cease and the interest rate will revert
to the original rate.
The Company shall notify the Trustee within three business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Additional Interest shall be
paid by depositing with the Trustee, in trust, for the benefit of the Holders
of Registrable Securities, on or before the applicable semiannual interest
payment date, immediately available funds in sums sufficient to pay the
Additional Interest then due. The Additional Interest due shall be payable on
each interest payment date to the record Holder of Securities entitled to
receive the interest payment to be paid on such date as set forth in the
Indenture. Each obligation to pay Additional Interest shall be deemed to accrue
from and including the day following the applicable Event Date.
3. Registration Procedures. In connection with the obligations of the
Company with respect to Registration Statements pursuant to Sections 2.1 and
2.2 hereof, the Company (and, as necessary, the Guarantors) shall:
(a) prepare and file with the SEC a Registration Statement, within the
relevant time period specified in Section 2, on the appropriate form under the
1933 Act, which form (i) shall be selected by the Company, (ii) shall, in the
case of a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof, (iii) shall comply as to form in all
material respects with the requirements of the applicable form and include or
incorporate by reference all financial statements required by the SEC to be
filed therewith or incorporated by reference therein, and (iv) shall comply in
all respects with the requirements of Regulation S-T under the 1933 Act, and use
its reasonable best efforts to cause such Registration Statement to become
effective and remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under applicable
law to keep such Registration Statement effective for the applicable period;
and cause each Prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provision then in force) under the 1933 Act and comply with the
provisions of the 1933 Act, the 1934 Act and the rules and regulations
thereunder applicable to them with respect to the disposition of all securities
covered by each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the selling
Holders thereof (including sales by any Participating Broker-Dealer);
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(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is
being filed and advising such Holders that the distribution of Registrable
Securities will be made in accordance with the method selected by the Majority
Holders participating in the Shelf Registration; (ii) furnish to each Holder of
Registrable Securities and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules, in order to
facilitate the public sale or other disposition of the Registrable Securities;
and (iii) hereby consent to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of Registrable Securities in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto;
(d) use its reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue sky" laws
of such jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement and each underwriter of an underwritten offering of
Registrable Securities shall reasonably request by the time the applicable
Registration Statement is declared effective by the SEC, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
each such Holder and underwriter to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder; provided,
however, that the Company shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), or (ii) take any
action which would subject it to general service of process or taxation in any
such jurisdiction where it is not then so subject;
(e) notify promptly each Holder of Registrable Securities included in
a Shelf Registration or any Participating Broker-Dealer who has notified the
Company that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below and, if requested by such Holder or
Participating Broker-Dealer, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) of the happening of any event or the
discovery of any facts during the period a Shelf Registration Statement is
effective which makes any statement made in such Registration Statement or the
related Prospectus untrue in any material respect or which requires the making
of any changes in such Registration Statement or Prospectus in order to make the
statements therein not misleading or to include omitted material information,
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities or the Exchange
Securities, as the case may be, for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose and (vi) of any determination
by the Company that a post-effective amendment to such Registration Statement
would be appropriate;
(f) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled "Plan
of Distribution", and which shall contain a summary statement of the positions
taken or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer that holds Registrable Securities
acquired for its own account as a result of market-making activities or other
trading activities and that will be the beneficial owner (as defined in Rule
13d-3 under the Exchange Act) of Exchange Securities to be received by such
broker-dealer in the Exchange Offer, whether such positions or policies have
been publicly disseminated by the staff of the SEC or such positions or
policies represent the prevailing views of the staff of the SEC, including a
statement that any such broker-dealer who receives Exchange Securities for
Registrable Securities pursuant to the Exchange Offer may be deemed a statutory
underwriter and must deliver a prospectus meeting the requirements of the
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1933 Act in connection with any resale of such Exchange Securities, (ii) furnish
to each Participating Broker-Dealer who has delivered to the Company the notice
referred to in Section 3(e), without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request, (iii) hereby consent to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto, by any Person subject to the prospectus
delivery requirements of the SEC, including all Participating Broker-Dealers, in
connection with the sale or transfer of the Exchange Securities covered by the
Prospectus or any amendment or supplement thereto (except during any Suspension
Period), and (iv) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the Exchange Offer
(x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of
Exchange Securities received in respect of such Registrable
Securities pursuant to the Exchange Offer;" and
(y) a statement to the effect that by a broker-dealer making the acknowledgment
described in clause (x) and by delivering a Prospectus in connection with the
exchange of Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the 1933 Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company agrees to deliver to the Initial Purchasers on behalf of the
Participating Broker-Dealers upon the effectiveness of the Exchange Offer
Registration Statement (i) an opinion of counsel or opinions of counsel
substantially in the form attached hereto as Exhibit A, (ii) officers'
certificates substantially in the form customarily delivered in a public
offering of debt securities and (iii) a comfort letter or comfort letters in
customary form to the extent permitted by Statement on Auditing Standards No.
72 of the American Institute of Certified Public Accountants (or if such a
comfort letter is not permitted, an agreed upon procedures letter in customary
form) from the Company's independent certified public accountants (and, if
necessary, any other independent certified public accountants of any subsidiary
of the Company or of any business acquired by the Company for which financial
statements are, or are required to be, included in the Registration Statement)
at least as broad in scope and coverage as the comfort letter or comfort letters
delivered to the Initial Purchasers in connection with the initial sale of the
Securities to the Initial Purchasers;
(g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish
counsel for the Holders of Registrable Securities copies of any comment letters
received from the SEC or any other request by the SEC or any state securities
authority for amendments or supplements to a Registration Statement and
Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, and each underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules (without
documents incorporated therein by reference and all exhibits thereto, unless
requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be
in such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders or the
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underwriters, if any, may reasonably request at least three business days prior
to the closing of any sale of Registrable Securities;
(k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Sections 3(e)(iv)
and 3(e)(v) hereof, as promptly as practicable after the occurrence of such an
event, subject to Section 2.2(b), use its reasonable best efforts to prepare a
supplement or post-effective amendment to the Registration Statement or the
related Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities or Participating Broker-Dealers, such Prospectus
will not contain at the time of such delivery any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading or will remain so qualified. At such time as such public disclosure
is otherwise made or the Company determines that such disclosure is not
necessary, in each case to correct any misstatement of a material fact or to
include any omitted material fact, the Company agrees promptly to notify each
Holder of such determination and to furnish each Holder such number of copies
of the Prospectus as amended or supplemented, as such Holder may reasonably
request;
(l) in the case of a Shelf Registration, a reasonable time prior to
the filing of any Registration Statement, any Prospectus, any amendment to a
Registration Statement or amendment or supplement to a Prospectus or any
document which is to be incorporated by reference into a Registration Statement
or a Prospectus after initial filing of a Registration Statement, provide
copies of such document to the Initial Purchasers on behalf of such Holders;
and make representatives of the Company as shall be reasonably requested by the
holders of a majority of the Registrable Securities being sold, or the Initial
Purchasers on behalf of such Holders, available for discussion of such
document;
(m) obtain a CUSIP number for all Exchange Securities, Private
Exchange Securities or Registrable Securities, as the case may be, not later
than the effective date of a Registration Statement, and provide the Trustee
with printed certificates for the Exchange Securities, Private Exchange
Securities or the Registrable Securities, as the case may be, in a form
eligible for deposit with the Depositary;
(n) (i) cause the Indenture to be qualified under the TIA in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, (ii) cooperate with the Trustee and the Holders
to effect such changes to the Indenture as may be required for the Indenture to
be so qualified in accordance with the terms of the TIA and (iii) execute, and
use its reasonable best efforts to cause the Trustee to execute, all documents
as may be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so qualified in
a timely manner;
(o) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and
appropriate actions reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities:
(i) make such representations and warranties to the Holders
of such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters
in similar underwritten offerings as may be reasonably requested by
them;
(ii) if requested by the managing underwriters, obtain
opinions of counsel to the Company and updates thereof (which counsel
and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the holders of
a majority in principal amount of the Registrable Securities being
sold) addressed to each selling Holder and the underwriters, if any,
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters;
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(iii) if requested by the managing underwriters, obtain "cold
comfort" letters and updates thereof from the Company's independent
certified public accountants (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements
are, or are required to be, included in the Registration Statement)
addressed to the underwriters, if any, and use reasonable efforts to
have such letter addressed to the selling Holders of Registrable
Securities (to the extent consistent with Statement on Auditing
Standards No. 72 of the American Institute of Certified Public
Accounts), such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters to
underwriters in connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with the Holders
and an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Registrable Securities, which agreement shall
be in form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the
same to set forth indemnification provisions and procedures
substantially equivalent to the indemnification provisions and
procedures set forth in Section 4 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to said
Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of
transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
offerings to the Holders of a majority in principal amount of the
Registrable Securities being sold and the managing underwriters, if
any.
The above shall be done at each closing of any sale of Registrable Securities,
whether under any underwriting or similar agreement or otherwise;
(p) in the case of a Shelf Registration or if a Prospectus is required
to be delivered by any Participating Broker-Dealer in the case of an Exchange
Offer, make available at reasonable times for inspection by representatives
appointed by the Majority Holders, any underwriters participating in any
disposition pursuant to a Shelf Registration Statement, any Participating
Broker-Dealer and any counsel or accountant retained by any of the foregoing,
all financial and other records, pertinent corporate documents and properties
of the Company reasonably requested by any such persons, and cause the
respective officers, directors, employees, and any other agents of the Company
to supply all information reasonably requested by any such representative,
underwriter, special counsel or accountant in connection with a Registration
Statement, and make such representatives of the Company available for
discussion of such documents as shall be reasonably requested by the Initial
Purchasers;
(q) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to such Prospectus,
provide copies of such document to the Initial Purchasers and to counsel to the
Majority Holders and make such changes in any such document prior to the filing
thereof as the Initial Purchasers may reasonably request and, except as
otherwise required by applicable law, not file any such document in a form to
which the Initial Purchasers on behalf of the Holders of Registrable Securities
and counsel to the Majority Holders shall not have previously been advised and
furnished a copy of or to which the Initial Purchasers on behalf of the Holders
of Registrable Securities or counsel to the Majority Holders shall reasonably
object, and make the representatives of the Company available for discussion of
such documents as shall be reasonably requested by the Initial Purchasers; and
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(ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus
forming a part thereof, any amendment to such Shelf Registration
Statement or amendment or supplement to such Prospectus, provide
copies of such document to the Holders of Registrable Securities, to
the Initial Purchasers, to counsel for the Holders and to the
underwriter or underwriters of an underwritten offering of Registrable
Securities, if any, make such changes in any such document prior to
the filing thereof as the Initial Purchasers, the counsel to the
Holders or the underwriter or underwriters reasonably request and not
file any such document in a form to which the Majority Holders, the
Initial Purchasers on behalf of the Holders of Registrable Securities,
counsel for the Holders of Registrable Securities or any underwriter
shall not have previously been advised and furnished a copy of or to
which the Majority Holders, the Initial Purchasers of behalf of the
Holders of Registrable Securities, counsel to the Holders of
Registrable Securities or any underwriter shall reasonably object, and
make the representatives of the Company available for discussion of
such document as shall be reasonably requested by the Holders of
Registrable Securities, the Initial Purchasers on behalf of such
Holders, counsel for the Holders of Registrable Securities or any
underwriter.
(r) otherwise comply with all applicable rules and regulations of the
SEC and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
thereunder;
(s) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any due
diligence investigation by any underwriter and its counsel (including any
"qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD); and
(t) upon consummation of an Exchange Offer or a Private Exchange,
obtain a customary opinion of counsel to the Company and the Guarantors
addressed to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer or Private Exchange, and which
includes an opinion that (i) the Company and the Guarantors have duly
authorized, executed and delivered the Exchange Securities and/or Private
Exchange Securities, as applicable, and the related indenture, and (ii) each of
the Exchange Securities and related indenture constitute a legal, valid and
binding obligation of the Company and the Guarantors, enforceable against the
Company and the Guarantors in accordance with its respective terms (with
customary exceptions).
In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require
each Holder of Registrable Securities to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder
of such Registrable Securities as the Company may from time to time reasonably
request in writing.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of (a) the happening of any
event or the discovery of any facts, each of the kind described in Section
3(e)(iv) hereof or (b) the Company's election to begin a Suspension Period
pursuant to Section 2.2(b), such Holder will forthwith discontinue disposition
of Registrable Securities pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(k) hereof or written notice from the Company of
termination of such Suspension Period, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense) all copies in
such Holder's possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
If any of the Registrable Securities covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage such offering
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will be selected by the Majority Holders of such Registrable Securities included
in such offering and shall be acceptable to the Company. No Holder of
Registrable Securities may participate in any underwritten registration
hereunder unless such Holder (a) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
4. Indemnification; Contribution.
(a) The Company and the Guarantors jointly and severally agree to
indemnify and hold harmless the Initial Purchasers, each Holder, each
Participating Broker-Dealer, each Person who participates as an underwriter
(any such Person being an "Underwriter") and each Person, if any, who controls
any Holder or Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto)
pursuant to which Exchange Securities or Registrable Securities were
registered under the 1933 Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 4(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any
indemnified party), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written
information furnished to the Company by the Holder or Underwriter
expressly for use in a Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto).
(b) Each Holder severally, but not jointly, agrees to indemnify and
hold harmless the Company, the Guarantors, the Initial Purchasers, each
Underwriter and the other selling Holders, and each of their respective
directors and officers, and each Person, if any, who controls the Company, any
Guarantor, any Initial Purchaser, any Underwriter or any other selling Holder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 4(a) hereof, as incurred, but only with respect
to untrue statements or
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omissions, or alleged untrue statements or omissions, made in any Registration
Statement (or any amendment thereto) or any Prospectus included therein (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information with respect to such Holder furnished to the Company by such Holder
expressly for use in such Registration Statement (or any amendment thereto) or
such Prospectus (or any amendment or supplement thereto); provided, however,
that no such Holder shall be liable for any claims hereunder in excess of the
amount of net proceeds received by such Holder from the sale of Registrable
Securities pursuant to such Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced
against it in respect of which indemnity may be sought hereunder, but failure
so to notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying party or parties be
liable for the fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement; provided,
that an indemnifying party shall not be liable for any such settlement effected
without its consent if such indemnifying party, prior to the date of such
settlement, (1) reimburses such indemnified party in accordance with such
request for the amount of such fees and expenses of counsel as the indemnifying
party believes in good faith to be reasonable, and (2) provides written notice
to the indemnified party that the indemnifying party disputes in good faith the
reasonableness of the unpaid balance of such fees and expenses.
(e) If the indemnification provided for in this Section 4 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the Company and the Guarantors on the one hand and the
Holders and the Initial Purchasers on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company and the Guarantors on the one hand
and the Holders and the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether any such untrue
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or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company, the
Guarantors, the Holders or the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Guarantors, the Holders and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this
Section 4 were determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section 4. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 4 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 4, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities sold by it were offered exceeds the amount
of any damages which such Initial Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.
No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Company or any Guarantor,
and each Person, if any, who controls the Company or any Guarantor within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company and the Guarantors. The Initial
Purchasers' respective obligations to contribute pursuant to this Section 4 are
several in proportion to the principal amount of Securities set forth opposite
their respective names in Schedule A to the Purchase Agreement and not joint.
5. Miscellaneous.
5.1 Rule 144 and Rule 144A. For so long as the Company is subject to
the reporting requirements of Section 13 or 15 of the 1934 Act, the Company
covenants that it will file the reports required to be filed by it under the
1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. If the Company ceases to be so
required to file such reports, the Company covenants that it will upon the
request of any Holder of Registrable Securities (a) make publicly available
such information as is necessary to permit sales pursuant to Rule 144 under the
1933 Act, (b) deliver such information to a prospective purchaser as is
necessary to permit sales pursuant to Rule 144A under the 1933 Act and it will
take such further action as any Holder of Registrable Securities may reasonably
request, and (c) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
1933 Act within the limitation of the exemptions provided by (i) Rule 144 under
the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A
under the 1933 Act, as such Rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.
5.2 No Inconsistent Agreements. The Company has not entered into and
the Company will not after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the
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Holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not and
will not for the term of this Agreement in any way conflict with the rights
granted to the holders of the Company's other issued and outstanding securities
under any such agreements.
5.3 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure.
5.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 5.4, which address initially is the address set forth in the
Purchase Agreement with respect to the Initial Purchasers; and (b) if to the
Company or any Guarantor, initially at the Company's address set forth in the
Purchase Agreement, and thereafter at such other address of which notice is
given in accordance with the provisions of this Section 5.4.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.
5.5 Successor and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such person shall be entitled
to receive the benefits hereof.
5.6 Third Party Beneficiaries. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, and shall
have the right to enforce such agreements directly to the extent they deem such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights hereunder.
5.7. Specific Enforcement. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company and the Guarantors
acknowledge that any failure by the Company and the Guarantors to comply with
their obligations under Sections 2.1 through 2.4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that
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it would not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the obligations of
the Company and the Guarantors under Sections 2.1 through 2.4 hereof.
5.8. Restriction on Resales. Until the expiration of two years after
the original issuance of the Securities, the Company and the Guarantors will
not resell any Securities which are "restricted securities" (as such term is
defined under Rule 144(a)(3) under the ▇▇▇▇ ▇▇▇) that have been reacquired by
any of them and shall immediately upon any purchase of any such Securities
submit such Securities to the Trustee for cancellation.
5.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
5.10 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.12 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
INTEGRATED ELECTRICAL SERVICES, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
EACH OF THE GUARANTORS NAMED ON SCHEDULE A
HERETO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Acting in his capacity as (i) Vice President of
the Guarantors listed in Part I of Schedule A;
(ii) Vice President of the general partners of
the Guarantors listed in Part II of Schedule A
(such general partners acting on behalf of such
Guarantors) and (iii) President of the
Guarantors (or general partner thereof) listed
in Part III of Schedule A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Acting in his capacity as President of the
Guarantors listed in Part IV of Schedule C.
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Confirmed and accepted as of the first
date first above written:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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SCHEDULE A
LIST OF GUARANTORS
PART I Primo Electric Company
▇▇▇▇▇▇ Electric Co., Inc.
Ace Electric, Inc. ▇▇▇▇▇▇ Management LLC
Aladdin-▇▇▇▇ Electric & Air, Inc. ▇▇▇▇▇▇▇▇ Electric Corp.
Amber Electric, Inc. RKT Electric, Inc.
ARC Electric, Incorporated Rockwell Electric, Inc.
▇▇▇▇▇▇▇▇▇ Electric, Inc. ▇▇▇▇▇▇▇ Electric Company, Inc.
Brink Electric Construction Co. Spectrol, Inc.
BW/BEC, Inc. ▇▇▇▇▇ Electric, Inc.
BW/BEC, L.L.C. Summit Electric of Texas, Incorporated
BW/CEC, Inc. T&H Electrical Corporation
BW/CEC, L.L.C. ▇▇▇▇▇▇ ▇▇▇▇ & Company
BW Consolidated, Inc. ▇▇▇▇▇▇▇ & ▇'▇▇▇▇▇▇▇ Corporation
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Co., Inc. ▇▇▇▇▇▇ Electrical Contracting, Inc.
Commercial Electrical Contractors, Inc.
Cypress Electrical Contractors, Inc. PART II
▇▇▇▇▇▇ Electrical of Treasure Coast, Inc.
▇▇▇▇▇▇ Electrical Contractors, Inc. Bexar Electric Company, Ltd.
▇▇▇▇▇ Electrical Constructors, Inc. (GP is BW/BEC, Inc.)
East Coast Electric Co. ▇▇▇▇▇▇▇ Electric Company, Ltd.
Electro-Tech, Inc. (GP is BW/CEC, Inc.)
Florida Industrial Electric, Inc. ▇▇▇▇▇▇▇▇ Electric, Ltd.
General Partner, Inc. (GP is General Partner, Inc.)
▇▇▇▇ Electric Company, Inc. ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Electrical Contractors, LP
▇. ▇. ▇▇▇▇▇, Inc. (GP is Houston ▇▇▇▇▇▇▇▇ Management LLC)
▇▇▇▇▇▇▇▇ Electric, Inc. ICS Integrated Communication Services ▇▇
▇▇▇▇▇▇▇ Electrical Systems, Inc. (GP is ICS Management LLC)
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Electric, Inc. IES Management ▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Management LLC (GP is Integrated Electrical Finance, Inc.)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Electric Co., Inc. ▇. ▇. ▇▇▇▇ Electrical Contractors LP
ICS Management LLC (GP is ▇▇ ▇▇▇▇ Management LLC)
Integrated Communication Services, Inc. ▇▇▇▇▇ Electric LP
Integrated Electrical Finance, Inc. (GP is ▇▇▇▇▇ Management LLC)
▇. ▇. ▇▇▇▇ Electric Co., Inc. ▇▇▇▇▇▇▇ Summit Electric LP
▇. ▇. ▇▇▇▇ Management LLC (GPs are ▇▇▇▇▇▇▇ Electric, Inc and Summit
▇▇▇▇▇▇ Electric, Inc. Electric of Texas, Inc.)
Key Electrical Supply, Inc. ▇▇▇▇▇▇ Electric LP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Incorporated (GP is ▇▇▇▇▇▇ Management LLC)
▇▇▇▇▇▇▇▇ Electric, Inc.
Mid-States Electric Company, Inc.
▇▇▇▇▇ Electrical Contractors, Inc.
▇▇▇▇▇ Management LLC
▇▇▇▇ Electric, Inc.
▇▇▇▇▇▇ Electric Company, Inc.
PCX Acquisition Corporation
▇▇▇▇▇▇▇ Electric Inc.
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PART III
IES Contractors Management LLC
IES Contractors LP
(GP is IES Contractors Management LLC)
PART IV
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holdings LLC
IES Contractors Holdings LLC
ICS Holdings LLC
IES Holdings LLC
▇. ▇. ▇▇▇▇ Holdings LLC
▇▇▇▇▇ Electrical Holdings LLC
▇▇▇▇▇▇▇ Summit Holdings, Inc.
▇▇▇▇▇▇ Holdings LLC
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EXHIBIT A
FORM OF OPINION OF COUNSEL
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel for Integrated Electrical Services, Inc., a
Delaware corporation (the "Company") and the Guarantors described below in
connection with the sale by the Company to the Initial Purchasers (as defined
below) of $150,000,000 aggregate principal amount of 9 3/8% Senior Subordinated
Notes due 2009 (the "Notes") of the Company together with the related
guarantees of the obligation of the Company under such Notes, pursuant to the
Purchase Agreement dated January 25, 1999 (the "Purchase Agreement") among the
Company, the Guarantors named therein (the "Guarantors") and ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation (collectively, the "Initial Purchasers") and the filing by the
Company and the Guarantors of an Exchange Offer Registration Statement (the
"Registration Statement") in connection with an Exchange Offer to be effected
pursuant to the Registration Rights Agreement (the "Registration Rights
Agreement"), dated January 28, 1999 between the Company, the Guarantors and the
Initial Purchasers. This opinion is furnished to you pursuant to Section
3(f)(B) of the Registration Rights Agreement. Unless otherwise defined herein,
capitalized terms used in this opinion that are defined in the Registration
Rights Agreement are used herein as so defined.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion. In rendering this opinion, as to
all matters of fact relevant to this opinion, we have assumed the completeness
and accuracy of, and are relying solely upon, the representations and
warranties of the Company and the Guarantors set forth in the Purchase
Agreement and the statements set forth in certificates of public officials and
officers of the Company and the Guarantors, without making any independent
investigation or inquiry with respect to the completeness or accuracy of such
representations, warranties or statements, other than a review of the
certificate of incorporation, by-laws and relevant minute books of the Company
and the Guarantors.
Based on and subject to the foregoing, we are of the opinion that:
1. The Exchange Offer Registration Statement and the Prospectus (other
than the financial statements, notes or schedules thereto and other financial
data and supplemental schedules included or incorporated by reference therein
or omitted therefrom and the Form T-1, as to which such counsel need express no
opinion), comply as to form in all material respects with the requirements of
the 1933 Act and the applicable rules and regulations promulgated under the
1933 Act.
2. We have participated in the preparation of the Registration
Statement and the Prospectus and in the course thereof have had discussions
with representatives of the Underwriters, officers and other
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representatives of the Company and the Company's independent public accountants,
during which the contents of the Registration Statement and the Prospectus were
discussed. We have not, however, independently verified and are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus. Based on our participation as described above, nothing has come to
our attention that would lead us to believe that the Registration Statement
(except for financial statements and schedules and other financial data included
therein as to which we make no statement) 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 or that the
Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein, as to which
such counsel need make no statement), at the time the Prospectus was issued, at
the time any such amended or supplemented Prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
This opinion is being furnished to you solely for your benefit in
connection with the transactions contemplated by the Registration Rights
Agreement, and may not be used for any other purpose or relied upon by any
person other than you. Except with our prior written consent, the opinions
herein expressed are not to be used, circulated, quoted or otherwise referred
to in connection with any transactions other than those contemplated by the
Registration Rights Agreement by or to any other person.
Very truly yours,
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