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Freedom Group, Inc.
|
S-1
Oct 20, 8:13 PM ET
Freedom Group, Inc. S-1
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Contents
63
1. Definitions.
2. Registration Under the 1933 Act.
2.1 Exchange Offer.
(a) To the extent not prohibited by any applicable law or applicable interpretations of the staff of the SEC, with respect to any Notes, if any, that on the Registration Trigger Date are Transfer Restricted Notes, the Company and the Subsidiary Guarantors shall use commercially reasonable efforts to (X) cause to be filed and to become effective an Exchange Offer Registration Statement covering an offer to the Holders to exchange all the Transfer Restricted Notes for Exchange Notes and (Y) have such Registration Statement remain effective until 90 days after the last Exchange Date for use by one or more Participating Broker Dealers if one or more broker dealers notify the Company in writing that they anticipate that they will be Participating Broker
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Dealers. The Company and the Subsidiary Guarantors shall commence the Exchange Offer promptly after the Exchange Offer Registration Statement is declared effective by the SEC and use commercially reasonable efforts to complete the Exchange Offer not later than 45 days after such effective date.
(b) The Company and the Subsidiary Guarantors shall, for the benefit of the Holders, at the Company’s and Subsidiary Guarantors’ cost, commence the Exchange Offer, if any, by mailing the related Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law, substantially the following:
(i) that the Exchange Offer is being made pursuant to this Agreement and that all Transfer Restricted Notes validly tendered and not properly withdrawn will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a period of at least 20 Business Days from the date such notice is mailed) (the “Exchange Dates”);
(iii) that any Transfer Restricted Notes not tendered will remain outstanding and continue to accrue interest but will not retain any rights under this Agreement, except as otherwise specified herein;
(iv) that any Holder electing to have a Transfer Restricted Note exchanged pursuant to the Exchange Offer will be required to (A) surrender such Transfer Restricted Note, together with the appropriate letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) and in the manner specified in the notice, or (B) effect such exchange otherwise in compliance with the applicable procedures of the Depositary, in each case prior to the close of business on the last Exchange Date; and
(v) that any Holder will be entitled to withdraw its election, not later than the close of business on the last Exchange Date, by (A) sending to the institution and at the address specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Transfer Restricted Notes delivered for exchange and a statement that such Holder is withdrawing its election to have such Transfer Restricted Notes exchanged or (B) effecting such withdrawal in compliance with the applicable procedures of the Depositary.
(c) Upon the effectiveness of the Exchange Offer Registration Statement, if any, the Company and the Subsidiary Guarantors shall promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder eligible and electing to exchange Transfer Restricted Notes for Exchange Notes (assuming that such Holder makes representations and warranties to the Company that (a) it is not an affiliate of the Company within the meaning of Rule 405 under the 1933 Act or, if an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the 1933 Act and will provide information to be included in a Shelf Registration Statement in order to have its Exchange Notes included in such Shelf Registration Statement, (b) any Exchange Notes to be received by it will be acquired in the
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ordinary course of its business, (c) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Notes, (d) if such Holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Transfer Restricted Notes acquired as a result of market-making or other trading activities, then such broker-dealer will deliver a prospectus (or, to the extent permitted by law, make available a Prospectus) in connection with any resale of such Exchange Notes, and (e) it has no arrangements or understandings with any Person to participate in the distribution of the Transfer Restricted Notes or the Exchange Notes) to transfer such Exchange Notes from and after their receipt without any limitations or restrictions under the 1933 Act and under state securities or blue sky laws.
(d) The Exchange Notes, if any, 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 Notes shall not be subject to the transfer restrictions set forth in the Indenture. The Exchange Notes and the Notes shall vote and consent together on all matters as one class and none of the Exchange Notes or the Notes will have the right to vote or consent as a separate class on any matter.
(e) As soon as practicable after the close of the Exchange Offer, the Company and the Subsidiary Guarantors shall:
(i) accept for exchange all Transfer Restricted Notes 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) deliver to the Trustee for cancellation all Transfer Restricted Notes so accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver Exchange Notes to each Holder of Transfer Restricted Notes so accepted for exchange in a principal amount equal to the principal amount of the Transfer Restricted Notes of such Holder so accepted for exchange.
(f) Interest on each Exchange Note, including Additional Interest, will accrue (a) from the later of (i) the last date on which interest was paid on the Transfer Restricted Notes surrendered in exchange therefor or (ii) if the Transfer Restricted Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (b) if no interest has been paid on the Transfer Restricted Notes, from the date of issuance. If requested in writing 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, but not the obligation, to contact such Holders and otherwise facilitate the tender of Transfer Restricted Notes in the Exchange Offer.
(g) The Company and the Subsidiary Guarantors shall use commercially reasonable efforts to complete the Exchange Offer as provided above and shall comply with the applicable
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requirements of the 1933 Act, the 1934 Act and other applicable laws and regulations in connection with the Exchange Offer. The Offer shall not be subject to any conditions, other than (1) the Exchange Offer does not violate any applicable law or applicable interpretations of the staff of the SEC, (2) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency with respect to the Exchange Offer and (3) all governmental approvals shall have been obtained that the Company deems necessary for the consummation of the Exchange Offer.
2.2 Shelf Registration.
(a) If,
(i) the Company and the Subsidiary Guarantors would otherwise be required to consummate an Exchange Offer Registration pursuant to Section 2.1 but determine that such Exchange Offer Registration is not available or the Exchange Offer may not be completed as soon as practicable after the last Exchange Date because it would violate any applicable law, SEC rules and regulations or any interpretation of the staff of the SEC,
(ii) the Exchange Offer is not for any other reason completed by the 45th day following the date the Exchange Offer Registration Statement is declared effective, or
(iii) any Initial Purchaser notifies the Company that it holds Transfer Restricted Notes that, in the opinion of counsel for such Holder, are not Freely Tradable on the Registration Trigger Date (a “Shelf Request”),
(b) In the event that the Company and the Subsidiary Guarantors are required to file a Shelf Registration Statement pursuant to a Shelf Request, the Company and the Subsidiary Guarantors shall use commercially reasonable efforts to file and have become effective a Shelf Registration Statement with respect to offers and sales of Transfer Restricted Notes after the completion of the Exchange Offer and an Exchange Offer Registration Statement if otherwise required pursuant to this Agreement. In the event that the Company and the Subsidiary Guarantors are required to file a Shelf Registration Statement, the Company and the Subsidiary Guarantors agree to use commercially reasonable efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended (including through post-effective amendments on Form S-3 if the Company is eligible to use such Form) until the date that is one year from the date the Shelf Registration Statement is declared effective or such shorter period ending when no Notes covered by such Shelf Registration Statement constitute Transfer Restricted Notes (the “Effectiveness Period”).
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(c) Notwithstanding any other provisions hereof, the Company and the Subsidiary Guarantors shall use commercially reasonable efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming a 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) 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.
(d) The Company and the Subsidiary Guarantors shall not permit any securities other than Transfer Restricted Notes to be included in the Shelf Registration Statement; provided, however, that if the offer and sale of the Transfer Restricted Notes is registered pursuant to an Automatic Shelf Registration Statement, the foregoing prohibition shall apply only to the supplement or amendment covering such registration. The Company and the Subsidiary Guarantors agree, if necessary, to supplement or amend the Shelf Registration Statement, as required by Section 3(b) below.
(e) If the Company is obligated to file a Shelf Registration Statement pursuant to this Section 2.2, and at the time such obligation arises, the Company is a WKSI, then, in lieu of filing such Shelf Registration Statement, the Company shall file an Automatic Shelf Registration Statement or supplement or amend an existing Automatic Shelf Registration Statement, as appropriate, to include the offer and sale of the Transfer Restricted Notes by the Holders from time to time in accordance with the methods of distribution elected by the Holders of a majority in aggregate principal amount of Transfer Restricted Notes participating in such registration and set forth in such Automatic Shelf Registration Statement (or supplement or amendment thereto), within the time frame specified in this Section 2.2.
2.3 Expenses. The Company and the Subsidiary Guarantors shall pay all Registration Expenses in connection with the registration pursuant to Sections 2.1 and 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 Transfer Restricted Notes pursuant to the Shelf Registration Statement.
2.4 Effectiveness.
(a) The Company and the Subsidiary Guarantors will be deemed not to have used commercially reasonable 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 either the Company or any Subsidiary Guarantor voluntarily takes 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 Transfer Restricted Notes covered thereby not being able to exchange or offer and sell such Transfer Restricted Notes during that period as and to the extent contemplated hereby, unless such action is required by applicable law, in each case other than under the circumstances described in Sections 3(e)(iii), (iv), (v) or (vi) below.
(b) Neither an Exchange Offer Registration Statement pursuant to Section 2.1 hereof nor a Shelf Registration Statement pursuant to Section 2.2 hereof, if not otherwise effective upon filing with the SEC as provided by Rule 462, will be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it becomes effective, the offering of Transfer Restricted Notes 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 not be effective during the period of such interference, until the offering of Transfer Restricted Notes pursuant to such Registration Statement may legally resume.
2.5 Additional Interest.
(a) In the event that (i) an Exchange Offer Registration Statement is required pursuant to Section 2.1 and (x) such Exchange Offer Registration Statement does not become effective on or prior to the two year anniversary of the date hereof or (y) the Exchange Offer is not completed within 45 days after the date on which the Exchange Offer Registration Statement becomes effective, or (ii) a Shelf Registration Statement is required in accordance with Section 2.2 and such Shelf Registration Statement (x) does not become effective on or prior to the 90th day following (A) the date of such determination, in the case of a Shelf Registration Statement required pursuant to Section 2.2(a)(i), (B) such date, in the case of a Shelf Registration Statement required pursuant to Section 2.2(a)(ii) (which in no event shall be earlier than the date the Exchange Offer Registration Statement is required to be declared effective pursuant to clause 2.5(a)(i)(x) above) or (C) the date of such Shelf Request, in the case of a Shelf Registration Statement required pursuant to Section 2.2(a)(iii), or (y) becomes effective but ceases to be effective or the corresponding Prospectus ceases to be usable at any time during the Effectiveness Period, and such failure to remain effective or usable exists for more than 60 days (whether or not consecutive) in any 12-month period (any event referred to in the foregoing clauses (i) or (ii) a “Registration Default”), then, in each case, the interest rate on the Transfer Restricted Notes will be increased by (i) 0.25% per annum for the first 90-day period immediately following such Registration Default and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum of 1.00% per annum, in each case until the earlier of the date such Registration Default is cured or the date on which no Notes constitute Transfer Restricted Notes. Any amounts payable under this paragraph shall also be deemed “Additional Interest” for purposes of this Agreement.
(b) 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”). Any Additional Interest due shall be payable on each interest payment date to the Holder of Notes with respect to which Additional Interest is due and owing. Each obligation to pay Additional Interest shall be deemed to accrue from and including the day following the applicable Event Date.
3. Registration Procedures.
4. Indemnification; Contribution.
(a) The Company and the Subsidiary Guarantors agree to indemnify, jointly and severally, and hold harmless the Initial Purchasers and each of their affiliates and any other Person under common control with 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 (collectively the “Company Indemnitees”) 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 Notes or Transfer Restricted Notes were registered under the 1933 Act, including all documents incorporated therein by reference, any Free Writing Prospectus used in violation of this Agreement or any “issuer information” (“Issuer Information”) filed or required to be filed pursuant to Rule 433(d) under the 1933 Act, 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 the Subsidiary Guarantors; 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 for (ii) above;
(b) Each Company Indemnitee, severally, but not jointly, agrees to indemnify and hold harmless the Company, the Subsidiary Guarantors, 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 Subsidiary Guarantor, 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 omissions, or alleged untrue statements or omissions, made in the Shelf 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 Company Indemnitee furnished to the Company and the Subsidiary Guarantors by such Company Indemnitee expressly for use in the Shelf Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto); provided, however, that no such Company Indemnitee shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Company Indemnitee from the sale of Transfer Restricted Notes pursuant to such Shelf 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 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 Subsidiary Guarantors, on the one hand, and the Company Indemnitees, 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.
5. Miscellaneous.
5.1 Rule 144 and Rule 144A. For so long as the Company and the Subsidiary Guarantors are subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the Company and the Subsidiary Guarantors covenant that they will file and furnish the reports required to be filed by them 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 and the Subsidiary Guarantors cease to be so required to file and furnish such reports, the Company and Subsidiary Guarantors covenant that they will upon the request of any Holder of Transfer Restricted Notes (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 take such further action as any Holder of Transfer Restricted Notes 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 Transfer Restricted Notes 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 Transfer Restricted Notes, the Company and the Subsidiary Guarantors will deliver to such Holder a written statement as to whether they have complied with such requirements.
5.2 No Inconsistent Agreements. The Company and the Subsidiary Guarantors have not entered into, and the Company and the Subsidiary Guarantors will not after the date of this Agreement enter into, any agreement which is inconsistent with the rights granted to the Holders of Transfer Restricted Notes 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 or Subsidiary Guarantors’ 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 and the Subsidiary Guarantors have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Transfer Restricted Notes 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, and until so changed, is the address set forth in the Purchase Agreement with respect to the Initial Purchasers; and (b) if to the Company and the Subsidiary Guarantors, 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.
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 Transfer Restricted Notes in violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Transfer Restricted Notes, in any manner, whether by operation of law or otherwise, such Transfer Restricted Notes shall be held subject to all of the terms of this Agreement, and by taking and holding such Transfer Restricted Notes 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. The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Company of the Subsidiary Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement
5.6 Third Party Beneficiaries. The Initial Purchasers (even if the Initial Purchasers are not Holders of Transfer Restricted Notes) shall be third party beneficiaries to the agreements made hereunder between the Company and the Subsidiary 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 Transfer Restricted Notes shall be a third party beneficiary to the agreements made hereunder between the Company and the Subsidiary 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.
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5.7 Remedies. Each of the Company and the Subsidiary Guarantors hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.
5.8 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. This Agreement may be executed by facsimile signature.
5.9 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
5.10 Governing Law. This Agreement shall be governed by and construed in accordance with the law of the state of New York without regard to the principles of conflict of laws thereof.
5.11 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.