EXHIBIT 4.7
PLIANT CORPORATION
$100,000,000
13% Senior Subordinated Notes due 2010
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
April 10, 2002
J.P. MORGAN SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
c/o J.P. Morgan Securities Inc.
270 Park Avenue, 4th floor
New York, New York 10017
Ladies and Gentlemen:
Pliant Corporation, a Utah corporation (the "Company"), proposes to
issue and sell to J.P. Morgan Securities Inc. ("JPMorgan") and Deutsche Bank
Securities Inc. ("DBSI" and, together with JPMorgan, the "Initial Purchasers"),
upon the terms and subject to the conditions set forth in a purchase agreement
dated April 5, 2002 (the "Purchase Agreement"), $100,000,000 principal amount of
the Company's 13% Senior Subordinated Notes due 2010 (the "Notes") to be
guaranteed on a senior subordinated basis by certain of the Company's
subsidiaries signatory hereto (the "Note Guarantors"). Capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the
Purchase Agreement and in satisfaction of a condition to the obligations of the
Initial Purchasers thereunder, the Company and the Note Guarantors agree with
the Initial Purchasers, for the benefit of the holders (including the Initial
Purchasers and the Market-Maker (as defined herein)) of the Notes, the Exchange
Notes (as defined herein) and the Private Exchange Notes (as defined herein)
(collectively, the "Holders"), as follows:
1. Registered Exchange Offer. Unless, because of any change in law
or applicable interpretations thereof by the Commission's staff, the Company and
the Note Guarantors determine in good faith after consultation with counsel that
they are not permitted to effect the Registered Exchange Offer (as defined
herein), the Company and the Note Guarantors shall (i) prepare and, not later
than 75 days following the date of original issuance of the Notes (the "Issue
Date"), file with the Commission a registration statement (the "Exchange Offer
Registration Statement") on an appropriate form under the Securities Act with
respect to a proposed offer to the Holders of the Notes (the "Registered
Exchange Offer") to issue and deliver to such Holders, in exchange for the
Notes, a like aggregate principal amount of debt securities of the Company (the
"Exchange Notes") that are identical in all material respects to the Notes,
except for the transfer restrictions relating to the Notes, (ii) use their
reasonable best efforts to cause the Exchange Offer Registration Statement to
become effective under the Securities Act no later than 150 days after the Issue
Date and the Registered Exchange Offer to be consummated no later than 180 days
after the Issue Date and (iii) keep the Registered Exchange Offer open for not
less than 30 days (or longer, if required by applicable law) after the date on
which notice of the Registered Exchange Offer is mailed to the Holders
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(such period being called the "Exchange Offer Registration Period"). The
Exchange Notes will be issued under the Indenture or an indenture (the "Exchange
Notes Indenture") among the Company, the Note Guarantors and the Trustee or such
other bank or trust company that is reasonably satisfactory to the Initial
Purchasers, as trustee (the "Exchange Notes Trustee"), such indenture to be
identical in all material respects to the Indenture, except for the transfer
restrictions relating to the Notes (as described above). All references in this
Agreement to "prospectus" shall, except where the context otherwise requires,
include any prospectus (or amendment or supplement thereto) filed with the
Commission pursuant to Section 6 of this Agreement.
Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Notes for Exchange Notes (assuming that such Holder (a) is not an
affiliate of the Company or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not an Initial
Purchaser holding Notes that have, or that are reasonably likely to have, the
status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Notes in the ordinary course of such Holder's business, (d) has no
arrangements or understandings with any person to participate in the
distribution of the Exchange Notes and (e) if such Holder is not an Exchanging
Dealer (as defined below), it is not engaged in, and does not intend to engage
in, a distribution of the Exchange Notes) and to trade such Exchange Notes from
and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. The Company, the Note Guarantors, the
Initial Purchasers and each Exchanging Dealer acknowledge that, pursuant to
current interpretations by the Commission's staff of Section 5 of the Securities
Act, each Holder that is a broker-dealer electing to exchange Notes, acquired
for its own account as a result of market-making activities or other trading
activities, for Exchange Notes (an "Exchanging Dealer"), is required to deliver
a prospectus containing substantially the information set forth in Annex A
hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures"
section and the "Purpose of the Exchange Offer" section (if any) and in Annex C
hereto in the "Plan of Distribution" section of such prospectus in connection
with a sale of any such Exchange Notes received by such Exchanging Dealer
pursuant to the Registered Exchange Offer.
If, prior to the consummation of the Registered Exchange Offer, any
Holder shall notify the Company in writing that it holds any Notes acquired by
it that have, or that are reasonably likely to be determined to have, the status
of an unsold allotment in an initial distribution, or any Holder notifies the
Company in writing that it believes that it is not entitled to participate in
the Registered Exchange Offer (other than because it has an understanding or
arrangement with any person to participate in the distribution of the Exchange
Notes) and such Holder has not received a written opinion from counsel to the
Company, reasonably acceptable to such Holder to the effect that such Holder is
legally permitted to participate in the Registered Exchange Offer, the Company
shall, upon the request of any such Holder, simultaneously with the delivery of
the Exchange Notes in the Registered Exchange Offer, issue and deliver to any
such Holder, in exchange for the Notes held by such Holder (the "Private
Exchange"), a like aggregate principal amount of debt securities of the Company
(the "Private Exchange Notes") that are identical in all material respects to
the Exchange Notes, except for the transfer restrictions relating to such
Private Exchange Notes. The Private Exchange Notes will be issued under the same
indenture as the Exchange Notes, and, if permitted
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under the policies established at such time by the CUSIP Service Bureau of
Standard & Poor's Corporation, the Company shall use its reasonable best efforts
to cause the Private Exchange Notes to bear the same CUSIP number as the
Exchange Notes.
In connection with the Registered Exchange Offer, the Company shall:
(a) mail 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 Registered Exchange Offer open for not less than 30
days (or longer, if required by applicable law) after the date on which
notice of the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York City time, on the last business day on
which the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are
applicable to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange
Offer and any Private Exchange, as the case may be, the Company shall:
(a) accept for exchange all Notes tendered and not validly withdrawn
pursuant to the Registered Exchange Offer and the Private Exchange;
(b) deliver to the Trustee for cancelation all Notes so accepted for
exchange; and
(c) cause the Trustee or the Exchange Notes Trustee, as the case may
be, promptly to authenticate and deliver to each Holder, Exchange Notes or
Private Exchange Notes, as the case may be, equal in principal amount to
the Notes of such Holder so accepted for exchange.
The Company and the Note Guarantors shall use their reasonable best
efforts to keep the Exchange Offer Registration Statement effective and to amend
and supplement the prospectus contained therein in order to permit such
prospectus to be used by all persons (including Exchanging Dealers) subject to
the prospectus delivery requirements of the Securities Act for 180 days after
the consummation of the Registered Exchange Offer (such 180 days, the
"Applicable Period").
The Indenture or the Exchange Notes Indenture, as the case may be,
shall provide that the Notes, the Exchange Notes and the Private Exchange Notes
shall vote and consent together on all matters as one class and that none of the
Notes, the Exchange Notes or the Private Exchange Notes will have the right to
vote or consent as a separate class on any matter.
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Interest on each Exchange Note and Private Exchange Note issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Notes surrendered in exchange therefor or, if no interest has been paid on the
Notes, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company and the Note Guarantors in writing (which
may be contained in the applicable letter of transmittal) that at the time of
the consummation of the Registered Exchange Offer (i) any Exchange Notes
received by such Holder will be acquired in the ordinary course of business,
(ii) such Holder will have no arrangements or understanding with any person to
participate in the distribution of the Notes or the Exchange Notes within the
meaning of the Securities Act, (iii) such Holder is not an affiliate of the
Company or, if it is such an affiliate, such Holder will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable and (iv) if such Holder is a broker-dealer, that it will
deliver a prospectus in connection with any resale of such Exchange Notes during
the Applicable Period.
Notwithstanding any other provisions hereof, the Company and the
Note Guarantors will ensure that (i) any Exchange Offer Registration Statement
and any amendment thereto and any prospectus forming part thereof and any
supplement thereto complies in all material respects with the Securities Act and
the rules and regulations of the Commission thereunder, (ii) any Exchange Offer
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 Exchange
Offer Registration Statement, and any supplement to such prospectus, does not,
as of the consummation of the Registered Exchange Offer, include an untrue
statement of a material fact or omit 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.
2. Shelf Registration. If (i) because of any change in law or
applicable interpretations thereof by the Commission's staff the Company and the
Note Guarantors determine in good faith after consultation with counsel that
they are not permitted to effect the Registered Exchange Offer as contemplated
by Section 1 hereof, or (ii) any Notes validly tendered pursuant to the
Registered Exchange Offer are not exchanged for Exchange Notes within 180 days
after the Issue Date, or (iii) the Initial Purchasers so request with respect to
Notes or Private Exchange Notes not eligible to be exchanged for Exchange Notes
in the Registered Exchange Offer and held by them following the consummation of
the Registered Exchange Offer, or (iv) any applicable law or interpretations do
not permit any Holder to participate in the Registered Exchange Offer (other
than because such Holder has an understanding or arrangement with any person to
participate in the distribution of the Exchange Notes), or (v) any Holder that
participates in the Registered Exchange Offer notifies the Company in writing
within 30 days following the consummation of the Registered Exchange Offer that
such Holder may not resell the Exchange Notes acquired by it in the Registered
Exchange Offer to the public without delivering a prospectus and the prospectus
contained in the Exchange Offer Registration Statement is not legally available
for such resales by such Holder, or (vi) the Company so elects, then the
following provisions shall apply:
(a) The Company and the Note Guarantors shall use their reasonable
best efforts to file as promptly as practicable (but in no event more than
60 days after
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so required or requested pursuant to this Section 2; provided that in the
case of any filing in response to clause (i), (iii) or (iv) of the
preceding paragraph, the Company and the Note Guarantors shall not be
required to make any such filing earlier than 75 days following the Issue
Date (the date of such filing, the "Shelf Filing Date")) with the
Commission, and thereafter shall use their reasonable best efforts to
cause to be declared effective on or prior to 105 days after the Shelf
Filing Date (but, in the case of any filing in response to clause (i),
(iii), (iv) or (vi) of the preceding paragraph, in no event earlier than
the 180th day after the Issue Date), a shelf registration statement on an
appropriate form under the Securities Act relating to the offer and sale
of the Transfer Restricted Notes (as defined below) by the Holders thereof
from time to time in accordance with the methods of distribution set forth
in such registration statement (hereafter, a "Shelf Registration
Statement" and, together with any Exchange Offer Registration Statement, a
"Registration Statement").
(b) The Company and the Note Guarantors shall use their reasonable
best efforts to keep the Shelf Registration Statement continuously
effective in order to permit the prospectus forming part thereof to be
used by Holders of Transfer Restricted Notes for a period ending on the
earlier of (i) two years from the Issue Date or such shorter period that
will terminate when all the Transfer Restricted Notes covered by the Shelf
Registration Statement have been sold pursuant thereto and (ii) the date
on which the Notes become eligible for resale without volume restrictions
pursuant to Rule 144 under the Securities Act (in any such case, such
period being called the "Shelf Registration Period"). The Company and the
Note Guarantors shall be deemed not to have used their reasonable best
efforts to keep the Shelf Registration Statement effective during the
requisite period if any of them voluntarily take any action that would
result in Holders of Transfer Restricted Notes covered thereby not being
able to offer and sell such Transfer Restricted Notes during that period,
unless (A) such action is required by applicable law or (B) such action
was permitted by Section 2(c).
(c) Notwithstanding the provisions of Section 2(b) (but subject to
the provisions of Section 3(b)), the Company and the Note Guarantors may
for valid business reasons, including without limitation, a potential
acquisition, divestiture of assets or other material corporate
transaction, issue a notice that the Shelf Registration Statement is no
longer effective or the prospectus included therein is no longer usable
for offers and sales of Transfer Restricted Notes and may issue any notice
suspending use of the Shelf Registration Statement required under
applicable securities laws to be issued. The provisions of this Section
2(c) shall also be applicable to the Exchange Offer Registration Statement
during the Applicable Period; provided that the Applicable Period shall be
extended for the number of days (which shall not exceed 60) that the use
of the Exchange Offer Registration Statement is suspended.
(d) Notwithstanding any other provisions hereof, the Company and the
Note Guarantors shall 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 Securities
Act and the rules and regulations of the Commission thereunder, (ii) any
Shelf Registration Statement and any amendment thereto (in either case,
other than with respect to information included therein in reliance upon
or in conformity with written information
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furnished to the Company by or on behalf of any Holder specifically for
use therein (the "Holders' Information")) does not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (iii) any prospectus forming part of any Shelf Registration
Statement, and any supplement to such prospectus (in either case, other
than with respect to Holders' Information), does not include an untrue
statement of a material fact or omit 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.
3. Liquidated Damages. (a) The parties hereto agree that the Holders
of Transfer Restricted Notes will suffer damages if the Company and the Note
Guarantors fail to fulfill their obligations under Section 1 or Section 2, as
applicable, and that it would not be feasible to ascertain the extent of such
damages. Accordingly, if (i) the applicable Registration Statement is not filed
with the Commission on or prior to the date specified in this Agreement, (ii)
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, is not declared effective on or prior to the date specified
in this Agreement, (iii) the Registered Exchange Offer is not consummated on or
prior to 180 days after the Issue Date (other than in the event the Company is
requested or required or elected to file a Shelf Registration Statement), or
(iv) the Shelf Registration Statement is filed and declared effective on or
prior to the date specified in this Agreement but shall thereafter cease to be
effective (at any time that the Company and the Note Guarantors are obligated to
maintain the effectiveness thereof) without being succeeded within 60 days by an
additional Registration Statement or a post- effective amendment to the Shelf
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Company and the Note
Guarantors will be jointly and severally obligated to pay liquidated damages to
each Holder of Transfer Restricted Notes, during the period of one or more such
Registration Defaults, in an amount equal to $ 0.192 per week per $1,000
principal amount of Transfer Restricted Notes held by such Holder until (i) the
applicable Registration Statement is filed, (ii) the Exchange Offer Registration
Statement is declared effective and the Registered Exchange Offer is
consummated, (iii) the Shelf Registration Statement is declared effective or
(iv) the Shelf Registration Statement again becomes effective, an additional
Registration Statement becomes effective or a post-effective amendment to the
Shelf Registration Statement becomes effective, as the case may be. Following
the cure of all Registration Defaults, the accrual of liquidated damages will
cease. As used herein, the term "Transfer Restricted Notes" means (i) each Note
until the date on which such Note has been exchanged for a freely transferable
Exchange Note in the Registered Exchange Offer (it being understood that the
requirement that an Exchanging Dealer deliver a prospectus in connection with
sales of Exchange Notes acquired in the Registered Exchange Offer shall not mean
that the Exchange Note is not freely transferable for purposes of this Section
3), (ii) each Note or Private Exchange Note until the date on which it has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iii) each Note or Private Exchange
Note until the date on which it is distributed to the public pursuant to Rule
144 under the Securities Act or is saleable pursuant to Rule 144(k) under the
Securities Act. Notwithstanding anything to the contrary in this Section 3(a),
the Company shall not be required to pay liquidated damages to a Holder of
Transfer Restricted Notes if such Holder failed to comply with its obligations
to make the representations set forth in the second to last paragraph of Section
1 or failed to provide the information required to be provided by it, if any,
pursuant to Section 4(n).
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(b) Notwithstanding the foregoing provisions of Section 3(a), the
Company and the Note Guarantors may for valid business reasons, including
without limitation, a potential acquisition, divestiture of assets or other
material corporate transaction, issue a notice that the Shelf Registration
Statement is no longer effective or the prospectus included therein is no longer
usable for offers and sales of Transfer Restricted Notes and may issue any
notice suspending use of the Shelf Registration Statement required under
applicable securities laws to be issued and, in the event that the aggregate
number of days in any consecutive twelve-month period for which all such notices
are issued and effective exceeds 60 days in the aggregate, then the Company and
the Note Guarantors will be jointly and severally obligated to pay liquidated
damages to each Holder of Transfer Restricted Notes covered by the Shelf
Registration Statement in an amount equal to $0.192 per week per $1,000
principal amount of Notes constituting Transfer Restricted Notes covered by the
Shelf Registration Statement held by such Holder. Upon the Company and the Note
Guarantors declaring that the Shelf Registration Statement is useable after the
period of time described in the preceding sentence, accrual of liquidated
damages shall cease; provided, however, that if after any such cessation of the
accrual of liquidated damages the Shelf Registration Statement again ceases to
be useable beyond the period permitted above, liquidated damages will again
accrue pursuant to the foregoing provisions.
(c) The Company shall notify the Trustee and the Paying Agent under
the Indenture immediately upon the happening of each and every Registration
Default. The Company and the Note Guarantors shall pay the liquidated damages
due on the Transfer Restricted Notes by depositing with the Paying Agent (which
may not be the Company for these purposes), in trust, for the benefit of the
Holders thereof, prior to 10:00 a.m., New York City time, on the next interest
payment date specified by the Indenture and the Notes, sums sufficient to pay
the liquidated damages then due. The liquidated damages due shall be payable on
each interest payment date specified by the Indenture and the Notes to the
record holder entitled to receive the interest payment to be made on such date.
Each obligation to pay liquidated damages shall be deemed to accrue from and
including the date of the applicable Registration Default.
(d) The parties hereto agree that the liquidated damages provided
for in this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Notes by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement to be filed, (ii) the
Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to the Initial Purchasers, prior
to the filing thereof with the Commission, a copy of the Exchange Offer
Registration Statement and each amendment thereof and each supplement, if
any, to the prospectus included therein and shall use its reasonable best
efforts to reflect in each such document, when so filed with the
Commission, such comments as the Initial Purchasers may reasonably
propose; (ii) include information substantially as set forth in Annex A
hereto on the cover, in Annex B hereto in the "Exchange
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Offer Procedures" section and the "Purpose of the Exchange Offer" section
(if any) and in Annex C hereto in the "Plan of Distribution" section of
the prospectus forming a part of the Exchange Offer Registration
Statement, and include information substantially as set forth in Annex D
hereto in the Letter of Transmittal delivered pursuant to the Registered
Exchange Offer; and (iii) if requested in writing by any Initial
Purchaser, include the information required by Items 507 or 508 of
Regulation S-K, as applicable, in the prospectus forming a part of the
Exchange Offer Registration Statement.
(b) The Company shall advise the Initial Purchasers, each Exchanging
Dealer and the Holders (if applicable) and, if requested by any such
person, confirm such advice in writing (which advice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use
of the prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment thereto
has been filed with the Commission and when such Registration
Statement or any post-effective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes, the
Exchange Notes or the Private Exchange Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(v) of the happening of any event that requires the making of
any changes in any Registration Statement or the prospectus included
therein in order that the statements therein are not misleading and
do not omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
(c) The Company and the Note Guarantors will make every reasonable
effort to obtain the withdrawal at the earliest possible time of any order
suspending the effectiveness of any Registration Statement.
(d) The Company will furnish to each Holder of Transfer Restricted
Notes included within the coverage of any Shelf Registration Statement,
without charge, at least one conformed copy of such Shelf Registration
Statement and any post- effective amendment thereto, including financial
statements and schedules and, if any such Holder so requests in writing,
all exhibits thereto (including those, if any, incorporated by reference).
(e) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Notes included within the
coverage
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of any Shelf Registration Statement, without charge, as many copies of the
prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such
Holder may reasonably request; and the Company consents to the use of such
prospectus or any amendment or supplement thereto by each of the selling
Holders of Transfer Restricted Notes in connection with the offer and sale
of the Transfer Restricted Notes covered by such prospectus or any
amendment or supplement thereto.
(f) The Company will furnish to the Initial Purchasers, each
Exchanging Dealer who so requests in writing, and to any other Holder who
so requests in writing, without charge, at least one conformed copy of the
Exchange Offer Registration Statement and any post-effective amendment
thereto, including financial statements and schedules and, if the Initial
Purchasers or Exchanging Dealer or any such Holder so requests in writing,
all exhibits thereto (including those, if any, incorporated by reference).
(g) The Company will, during the Exchange Offer Registration Period
or the Shelf Registration Period, as applicable, promptly deliver to the
Initial Purchasers, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the
Exchange Offer Registration Statement or the Shelf Registration Statement
and any amendment or supplement thereto as the Initial Purchasers, such
Exchanging Dealer or other persons may reasonably request in writing; and
the Company and the Note Guarantors consent to the use of such prospectus
or any amendment or supplement thereto by the Initial Purchasers, such
Exchanging Dealer or other persons, as applicable, as aforesaid.
(h) Prior to the effective date of any Registration Statement, the
Company and the Note Guarantors will use their reasonable best efforts to
register or qualify, or cooperate with the Holders of Notes, Exchange
Notes or Private Exchange Notes included therein and their respective
counsel in connection with the registration or qualification of, such
Notes, Exchange Notes or Private Exchange Notes for offer and sale under
the securities or blue sky laws of such jurisdictions as any such Holder
reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions
of the Notes, Exchange Notes or Private Exchange Notes covered by such
Registration Statement; provided that the Company and the Note Guarantors
will not be required to qualify generally to do business in any
jurisdiction where they are not then so qualified or to take any action
which would subject them to general service of process or to taxation in
any such jurisdiction where they are not then so subject.
(i) The Company and the Note Guarantors will cooperate with the
Holders of Notes, Exchange Notes or Private Exchange Notes to facilitate
the timely preparation and delivery of certificates representing Notes,
Exchange Notes or Private Exchange Notes to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as the Holders thereof may
request in writing prior to sales of Notes, Exchange Notes or Private
Exchange Notes pursuant to such Registration Statement.
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(j) If any event contemplated by Sections 2(c), 3(b) or 4(b)(ii)
through (v) occurs during the period for which the Company and the Note
Guarantors are required to maintain an effective Registration Statement,
the Company and the Note Guarantors will, to the extent required after the
end of the applicable periods referred to in Sections 2(c) and 3(b),
promptly prepare and file with the Commission a post-effective amendment
to the Registration Statement or a supplement to the related prospectus or
file any other required document so that, as thereafter delivered to
purchasers of the Notes, Exchange Notes or Private Exchange Notes from a
Holder, the prospectus will not include an untrue statement of a material
fact or omit 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.
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Notes, the
Exchange Notes and the Private Exchange Notes, as the case may be, and
provide the applicable trustee with certificates for the Notes, the
Exchange Notes or the Private Exchange Notes, as the case may be, in a
form eligible for deposit with The Depository Trust Company.
(l) The Company and the Note Guarantors will comply with all
applicable rules and regulations of the Commission and the Company and the
Note Guarantors will make generally available to their security holders as
soon as practicable after the effective date of the applicable
Registration Statement an earning statement of the Company satisfying the
provisions of Section 11(a) of the Securities Act; provided that in no
event shall such earning statement be delivered later than 45 days after
the end of a 12-month period (or 90 days, if such period is a fiscal year)
beginning with the first month of the Company's first fiscal quarter
commencing after the effective date of the applicable Registration
Statement, which statement shall cover such 12-month period.
(m) The Company and the Note Guarantors will cause the Indenture or
the Exchange Notes Indenture, as the case may be, to be qualified under
the Trust Indenture Act as required by applicable law in a timely manner.
(n) The Company may require each Holder of Transfer Restricted Notes
to be registered pursuant to any Shelf Registration Statement to furnish
to the Company such information concerning the Holder and the distribution
of such Transfer Restricted Notes as the Company may from time to time
reasonably require for inclusion in such Shelf Registration Statement, and
the Company may exclude from such registration the Transfer Restricted
Notes of any Holder that fails to furnish such information within a
reasonable time after receiving such request. Each Holder of Transfer
Restricted Notes as to which a Shelf Registration Statement is being
effected, by its participation in the Shelf Registration Statement, shall
be deemed to agree to furnish the Company and the Note Guarantors all
information concerning such Holder required to be described in order to
make the information previously furnished by such Holder to the Company
and the Note Guarantors not materially misleading.
(o) In the case of (A) a Shelf Registration Statement, each Holder
of Transfer Restricted Notes to be registered pursuant thereto agrees by
acquisition
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of such Transfer Restricted Notes that, and (B) the Exchange Offer
Registration Statement during the Applicable Period only, each Holder of
Exchange Notes subject to the prospectus delivery requirements of the
Securities Act agrees that, upon receipt of any notice from the Company
pursuant to Sections 2(c), 3(b) or 4(b)(ii) through (v), such Holder will
discontinue disposition of such Transfer Restricted Notes or Exchange
Notes, as applicable, until such Holder's receipt of copies of the
supplemental or amended prospectus contemplated by Section 4(j) or until
advised in writing (the "Advice") by the Company that the use of the
applicable prospectus may be resumed. If the Company shall give any notice
under Sections 2(c), 3(b) or 4(b)(ii) through (v) during the period that
the Company is required to maintain an effective Registration Statement
(the "Effectiveness Period"), such Effectiveness Period shall be extended
by the number of days during such period from and including the date of
the giving of such notice to and including the date when each seller of
Transfer Restricted Notes or Exchange Notes, as applicable, covered by
such Registration Statement shall have received (x) the copies of the
supplemental or amended prospectus contemplated by Section 4(j) (if an
amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).
(p) In the case of a Shelf Registration Statement, the Company and
the Note Guarantors shall enter into such customary agreements (including,
if requested, an underwriting agreement in customary form) and take all
such other action, if any, as Holders of a majority in aggregate principal
amount of the Notes, Exchange Notes and Private Exchange Notes covered by
the Shelf Registration Statement or the managing underwriters (if any)
shall reasonably request in order to facilitate any disposition of Notes,
Exchange Notes or Private Exchange Notes pursuant to such Shelf
Registration Statement. Notwithstanding anything to the contrary contained
in this Agreement, the Company and the Note Guarantors shall not be
required to engage in more than one underwritten offering pursuant to this
Agreement.
(q) In the case of a Shelf Registration Statement, the Company shall
(i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Notes, Exchange Notes and Private
Exchange Notes covered by the Shelf Registration Statement and any
underwriter participating in any disposition of Notes, Exchange Notes or
Private Exchange Notes pursuant to such Shelf Registration Statement, all
relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries and (ii) use its reasonable
best efforts to have its officers, directors, employees, accountants and
counsel supply all relevant information reasonably requested by such
representative, Special Counsel or any such underwriter (an "Inspector")
in connection with such Shelf Registration Statement.
(r) In the case of a Shelf Registration Statement, the Company
shall, if requested by Holders of a majority in aggregate principal amount
of the Notes, Exchange Notes and Private Exchange Notes covered by the
Shelf Registration Statement, its Special Counsel or the managing
underwriters (if any) in connection with such Shelf Registration
Statement, use its reasonable best efforts to cause (i) its counsel to
deliver an opinion relating to the Shelf Registration
12
Statement and the Notes, Exchange Notes or Private Exchange Notes, as
applicable, in customary form, (ii) its officers to execute and deliver
all customary documents and certificates requested by Holders of a
majority in aggregate principal amount of the Notes, Exchange Notes and
Private Exchange Notes being sold, its Special Counsel or the managing
underwriters (if any) and (iii) its independent public accountants to
provide a comfort letter or letters in customary form, subject to receipt
of appropriate documentation as contemplated, and only if permitted, by
Statement of Auditing Standards No. 72.
5. Registration Expenses. The Company and the Note Guarantors will
jointly and severally bear all expenses incurred in connection with the
performance of their obligations under Sections 1, 2, 3 and 4 and the Company
will reimburse the Initial Purchasers or the Holders, as applicable, for the
reasonable fees and disbursements of one firm of attorneys (in addition to any
local counsel) chosen by the Holders of a majority in aggregate principal amount
of the Notes, the Exchange Notes and the Private Exchange Notes covered by each
Registration Statement (the "Special Counsel") acting for the Initial Purchasers
or Holders in connection therewith. The Company and the Note Guarantors are not
required to pay any commissions or concessions of any broker- dealers.
6. Market-Making. (a) For so long as any of the Notes, Exchange
Notes or Private Exchange Notes are outstanding and JPMorgan (in such capacity,
the "Market- Maker") or any of its affiliates (as defined in the rules and
regulations of the Commission) owns any equity securities of the Company, the
Note Guarantors or any of their affiliates and proposes to make a market in the
Notes, Exchange Notes or Private Exchange Notes as part of its business in the
ordinary course, the following provisions shall apply for the sole benefit of
the Market Maker:
(i) The Company and the Note Guarantors shall (A) on the date that
the Exchange Offer Registration Statement is filed with the Commission,
file a registration statement (the "Market-Making Registration Statement")
(which may be the Exchange Offer Registration Statement or the Shelf
Registration Statement if permitted by the rules and regulations of the
Commission) and use their best efforts to cause such Market-Making
Registration Statement to be declared effective by the Commission on or
prior to the consummation of the Exchange Offer; (B) periodically amend
such Market-Making Registration Statement so that the information
contained therein complies with the requirements of Section 10(a) under
the Securities Act; (C) within 45 days following the end of each of the
Company's fiscal quarters (other than the fourth quarter), file a
supplement to the prospectus contained in the Market-Making Registration
Statement that sets forth the financial results of the Company for such
quarter; (D) amend the Market- Making Registration Statement or supplement
the related prospectus when necessary to reflect any material changes in
the information provided therein; and (E) amend the Market-Making
Registration Statement when required to do so in order to comply with
Section 10(a)(3) of the Securities Act; provided, however, that (1) prior
to filing the Market-Making Registration Statement, any amendment thereto
or any supplement to the related prospectus (other than a supplement filed
pursuant to clause (C) of this paragraph unless the Market-Maker
reasonably requests), the Company will furnish to the Market-Maker copies
of all such documents proposed to be filed, which documents will be
subject to the review of the Market-Maker and its counsel, (2) the Company
and the Note Guarantors will not file the Market-Making Registration
Statement, any amendment thereto or any
13
supplement to the related prospectus (other than a supplement filed
pursuant to clause (C) of this paragraph unless the Market-Maker
reasonably requests) to which the Market-Maker and its counsel shall
reasonably object unless the Company is advised by counsel that such
Market-Making Registration Statement, amendment or supplement is required
to be filed and (3) the Company will provide the Market-Maker and its
counsel with copies of the Market-Making Registration Statement and each
amendment and supplement filed.
(ii) The Company shall notify the Market-Maker and, if requested by
the Market-Maker, confirm such advice in writing, (A) when any
post-effective amendment to the Market-Making Registration Statement or
any amendment or supplement to the related prospectus has been filed, and,
with respect to any post-effective amendment, when the same has become
effective; (B) of any request by the Commission for any post-effective
amendment to the Market-Making Registration Statement, any supplement or
amendment to the related prospectus or for additional information; (C) the
issuance by the Commission of any stop order suspending the effectiveness
of the Market-Making Registration Statement or the initiation of any
proceedings for that purpose; (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Notes or Exchange Notes for sale in any jurisdiction or the initiation or
threatening of any proceedings for such purpose; (E) of the happening of
any event that makes any statement made in the Market- Making Registration
Statement, the related prospectus or any amendment or supplement thereto
untrue or that requires the making of any changes in the Market-Making
Registration Statement, such prospectus or any amendment or supplement
thereto, in order to make the statements therein not misleading; and (F)
of any advice from a nationally recognized statistical rating organization
that such organization has placed the Company under surveillance or review
with negative implications or has determined to downgrade the rating of
the Notes, Exchange Notes or Private Exchange Notes or any other debt
obligation of the Company whether or not such downgrade shall have been
publicly announced.
(iii) If any event contemplated by Section 6(a)(ii)(B) through (E)
occurs during the period for which the Company and the Note Guarantors are
required to maintain an effective Market-Making Registration Statement,
the Company and the Note Guarantors shall promptly prepare and file with
the Commission a post- effective amendment to the Market-Making
Registration Statement or a supplement to the related prospectus or file
any other required document so that the prospectus will not include an
untrue statement of a material fact or omit 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.
(iv) In the event of the issuance of any stop order suspending the
effectiveness of the Market-Making Registration Statement or of any order
suspending the qualification of the Notes, Exchange Notes or Private
Exchange Notes for sale in any jurisdiction, the Company and the Note
Guarantors shall use promptly their reasonable best efforts to obtain its
withdrawal.
(v) The Company shall furnish to the Market-Maker, without charge,
(i) at least one conformed copy of the Market-Making Registration
Statement and any post-effective amendment thereto; and (ii) as many
copies of the related
14
prospectus and any amendment or supplement thereto as the Market-Maker may
reasonably request.
(vi) The Company and the Note Guarantors shall consent to the use of
the prospectus contained in the Market-Making Registration Statement or
any amendment or supplement thereto by the Market-Maker in connection its
market making activities.
(vii) For so long as the Notes, Exchange Notes or Private Exchange
Notes shall be outstanding, the Company shall furnish to the Market-Maker
(A) as soon as practicable after the end of each of the Company's fiscal
years, the number of copies reasonably requested by the Market-Maker of
the Company's annual report for such year, (B) as soon as available, the
number of copies reasonably requested by the Market-Maker of each report
(including, without limitation, reports on Forms 10-K, 10-Q and 8-K) or
definitive proxy statements of the Company filed under the Exchange Act or
mailed to stockholders and (C) all public reports and all reports and
financial statements furnished by the Company to the Nasdaq National
Market System or any U.S. national securities exchange or quotation
service upon which the Notes or Exchange Notes may be listed pursuant to
requirements of or agreements with such exchange or quotation service or
to the Commission pursuant to the Exchange Act or any rule or regulation
of the Commission thereunder.
(viii) Notwithstanding the foregoing provisions of Section 6, the
Company and the Note Guarantors may for valid business reasons, including
without limitation, a potential acquisition, divestiture of assets or
other material corporate transaction, issue a notice that the
Market-Making Registration Statement is no longer effective or the
prospectus included therein is no longer usable for offers and sales of
Notes, Exchange Notes or Private Exchange Notes and may issue any notice
suspending use of the Market-Making Registration Statement required under
applicable securities laws to be issued; provided that the use of the
Market-Making Registration Statement shall not be suspended for more than
60 days in the aggregate in any consecutive 12 month period. The Market-
Maker agrees that upon receipt of any notice from the Company pursuant to
this Section 6(a)(viii), it will discontinue use of the Market-Making
Registration Statement until receipt of copies of the supplemented or
amended prospectus relating thereto or until advised in writing by the
Company that the use of the Market-Making Registration Statement may be
resumed.
(b) In connection with the Market-Making Registration Statement, the
Company shall (i) make reasonably available for inspection by a representative
of, and counsel acting for, the Market-Maker all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries and (ii) use its reasonable best efforts to have its officers,
directors, employees, accountants and counsel supply all relevant information
reasonably requested by such representative or counsel or the Market-Maker.
(c) Prior to the effective date of the Market-Making Registration
Statement, the Company and the Note Guarantors will use their reasonable best
efforts to register or qualify, or cooperate with the Market-Maker and its
counsel in connection with the registration or qualification of, such Notes,
Exchange Notes or Private Exchange
15
Notes for offer and sale under the securities or blue sky laws of such
jurisdictions as the Market-Maker reasonably requests in writing and do any and
all other acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Notes, Exchange Notes or Private Exchange Notes
covered by the Market-Making Registration Statement; provided that the Company
and the Note Guarantors will not be required to qualify generally to do business
in any jurisdiction where they are not then so qualified or to take any action
which would subject them to general service of process or to taxation in any
such jurisdiction where they are not then so subject.
(d) The Company represents that the Market-Making Registration
Statement, any post-effective amendments thereto, any amendments or supplements
to the related prospectus and any documents filed by them under the Exchange Act
will, when they become effective or are filed with the Commission, as the case
may be, conform in all respects to the requirements of the Securities Act and
the Exchange Act and the rules and regulations of the Commission thereunder and
will not, as of the effective date of such Market-Making Registration Statement
or post-effective amendments and as of the filing date of amendments or
supplements to such prospectus or filings under the Exchange Act, contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Market-Making Registration Statement or the related prospectus in
reliance upon and in conformity with written information furnished to the
Company by the Market-Maker specifically for inclusion therein, which
information the parties hereto agree will be limited to the statements
concerning the Market-Making activities of the Market-Maker to be set forth on
the cover page and in the "Plan of Distribution" section of the prospectus (the
"Market-Maker's Information").
(e) At the time of effectiveness of the Market-Making Registration
Statement (unless it is the same as the time of effectiveness of the Exchange
Offer Registration Statement) and concurrently with each time the Market-Making
Registration Statement or the related prospectus shall be amended or such
prospectus shall be supplemented, the Company shall (if requested in writing by
the Market-Maker) furnish the Market-Maker and its counsel with a certificate of
its Chairman of the Board of Directors or Chief Financial Officer to the effect
that:
(i) the Market-Making Registration Statement has been declared
effective; (ii) in the case of an amendment or supplement, such amendment
has become effective under the Securities Act as of the date and time
specified in such certificate, if applicable; if required, such amendment
or supplement to the prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) under the Securities Act specified in such
certificate on the date specified therein; (iii) to the knowledge of such
officers, no stop order suspending the effectiveness of the Market-Making
Registration Statement has been issued and no proceeding for that purpose
is pending or threatened by the Commission; (iv) such officers have
carefully examined the Market-Making Registration Statement and the
prospectus (and, in the case of an amendment or supplement, such amendment
or supplement) and as of the date of such Market-Making Registration
Statement, amendment or supplement, as applicable, the Market- Making
Registration Statement and the prospectus, as amended or supplemented, if
applicable, did not include any untrue statement of a material fact and
did not
16
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(f) At the time of effectiveness of the Market-Making Registration
Statement (unless it is the same as the time of effectiveness of the Exchange
Offer Registration Statement) and concurrently with each time the Market-Making
Registration Statement or the related prospectus shall be amended or such
prospectus shall be supplemented, the Company shall (if requested in writing by
the Market-Maker) furnish the Market-Maker and its counsel with the written
opinion of counsel for the Company satisfactory to the Market-Maker to the
effect that:
(i) the Market-Making Registration Statement has been declared
effective; (ii) in the case of an amendment or supplement, such amendment
has become effective under the Securities Act as of the date and time
specified in such opinion, if applicable; if required, such amendment or
supplement to the prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Securities Act specified in such
opinion on the date specified therein; (iii) to the knowledge of such
counsel, no stop order suspending the effectiveness of the Market-Making
Registration Statement has been issued and no proceeding for that purpose
is pending or threatened by the Commission; and (iv) such counsel has
reviewed the Market-Making Registration Statement and the prospectus (and,
in the case of an amendment or supplement, such amendment or supplement)
and participated with officers of the Company and independent public
accountants for the Company in the preparation of such Market-Making
Registration Statement and prospectus (and, in the case of an amendment or
supplement, such amendment or supplement) and has no reason to believe
that (except for the financial statements and other financial and
statistical data contained therein as to which no belief is required) as
of the date of such Market-Making Registration Statement, amendment or
supplement, as applicable, the Market-Making Registration Statement and
the prospectus, as amended or supplemented, if applicable, contained any
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.
(g) At the time of effectiveness of the Market-Making Registration
Statement (unless it is the same as the time of effectiveness of the Exchange
Offer Registration Statement) and concurrently with each time the Market-Making
Registration Statement or the related prospectus shall be amended or such
prospectus shall be supplemented to include audited annual financial
information, the Company shall (if requested in writing by the Market-Maker)
furnish the Market-Maker and its counsel with a letter of Arthur Andersen LLP
(or other independent public accountants for the Company or the Note Guarantors
of nationally recognized standing) in form satisfactory to the Market-Maker,
addressed to the Market-Maker and dated the date of delivery of such letter, (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission and, (ii) in all other respects, substantially in the form of
the letter delivered to the Initial Purchasers pursuant to Section 5(f) of the
Purchase Agreement, with, in the case of an amendment or supplement to include
audited financial information, such changes as may be necessary to reflect the
amended or supplemented financial information.
17
(h) The Company and the Note Guarantors, on the one hand, and the
Market-Maker, on the other hand, hereby agree to indemnify each other, and, if
applicable, contribute to the other, in accordance with Sections 7 and 8 of this
Agreement.
(i) The Company will comply with the provisions of this Section 6 at
its own expense and will reimburse the Market-Maker for its expenses associated
with this Section 6 (including reasonable fees of counsel).
(j) The agreements contained in this Section 6 and the
representations, warranties and agreements contained in this Agreement shall
survive all offers and sales of the Notes and Exchange Notes and shall remain in
full force and effect, regardless of any termination or cancelation of this
Agreement or any investigation made by or on behalf of any indemnified party.
(k) For purposes of this Section 6, any reference to the terms
"amend", "amendment" or "supplement" with respect to the Market-Making
Registration Statement or the prospectus contained therein shall be deemed to
refer to and include the filing under the Exchange Act of any document deemed to
be incorporated therein by reference.
7. Indemnification. (a) In the event of a Shelf Registration
Statement or in connection with any prospectus delivery pursuant to an Exchange
Offer Registration Statement by the Initial Purchasers or Exchanging Dealer, as
applicable, or in connection with any prospectus delivery by the Market-Maker,
the Company and the Note Guarantors shall jointly and severally indemnify and
hold harmless each Holder (including, without limitation, each of the Initial
Purchasers, the Market-Maker or such Exchanging Dealer), its affiliates, its
respective officers, directors, employees, representatives and agents, and each
person, if any, who controls such Holder within the meaning of the Securities
Act or the Exchange Act (collectively referred to for purposes of this Section 7
and Section 8 as a Holder) from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of Notes, Exchange Notes or Private Exchange Notes), to
which that Holder may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or Market-Making Registration Statement or any prospectus forming part
thereof or in any amendment or supplement thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (iii) in the case of
the Market-Maker, any material breach by the Company of the representations,
warranties and agreements contained in Section 6, and shall reimburse each
Holder promptly upon demand for any legal or other expenses reasonably incurred
by that Holder in connection with investigating or defending or preparing to
defend against or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company and the Note Guarantors shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with any Holders' Information or
18
Market-Maker's Information; and provided, further, that with respect to any such
untrue statement in or omission from any related preliminary prospectus, the
indemnity agreement contained in this Section 7(a) shall not inure to the
benefit of any Holder from whom the person asserting any such loss, claim,
damage, liability or action received Notes, Exchange Notes or Private Exchange
Notes to the extent that such loss, claim, damage, liability or action of or
with respect to such Holder results from the fact that both (A) a copy of the
final prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such Notes, Exchange Notes or Private Exchange Notes
to such person and (B) the untrue statement in or omission from the related
preliminary prospectus was corrected in the final prospectus unless, in either
case, such failure to deliver the final prospectus was a result of
non-compliance by the Company with Section 4(d), 4(e), 4(f), 4(g) or 6(a)(vi),
as applicable.
(b) In (i) the event of a Shelf Registration Statement, each Holder
or (ii) connection with any prospectus delivery by the Market-Maker, the
Market-Maker, as applicable, shall indemnify and hold harmless the Company, its
affiliates, its respective officers, directors, employees, representatives and
agents, and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act (collectively referred to for purposes of
this Section 7(b) and Section 8 as the Company), from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company may become subject, whether commenced or threatened, under
the Securities Act, the Exchange Act, any other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or Market-Making Registration Statement or any prospectus forming part
thereof or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with any
Holders' Information or Market-Maker's Information furnished to the Company by
such Holder, and shall reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that no such Holder shall be liable
for any indemnity claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Notes, Exchange Notes or Private
Exchange Notes pursuant to such Shelf Registration Statement or prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 7(a) or 7(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 7 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 7. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party
19
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 7 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than the
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based upon advice of counsel
to the indemnified party) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based upon advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 7(a) and 7(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
8. Contribution. If the indemnification provided for in Section 7 is
unavailable or insufficient to hold harmless an indemnified party under Section
7(a) or 7(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (a) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company from the initial offering and sale of the
Notes, on the one hand, and by a Holder from receiving Notes, Exchange Notes or
Private Exchange Notes, as applicable, registered under the Securities Act, on
the other, or (b) if the allocation provided by clause (a) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits
20
referred to in clause (a) above but also the relative fault of the Company and
the Note Guarantors, on the one hand, and such Holder, on the other, with
respect to the statements or omissions that resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to the Company and the Note Guarantors or information supplied by the
Company and the Note Guarantors, on the one hand, or to any Holders' Information
or Market-Maker's Information supplied by such Holder, on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 8 were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8 shall be deemed to include, for
purposes of this Section 8, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 8, an indemnifying party that is a Holder of Notes, Exchange Notes
or Private Exchange Notes shall not be required to contribute any amount in
excess of the amount by which the total price at which the Notes, Exchange Notes
or Private Exchange Notes sold by such indemnifying party to any purchaser
exceeds the amount of any damages which such indemnifying party has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
9. Rules 144 and 144A. The Company and the Note Guarantors shall use
their reasonable best efforts to file the reports required to be filed by them
under the Securities Act and the Exchange Act in a timely manner and, if at any
time the Company and the Note Guarantors are not required to file such reports,
they will, upon the written request of any Holder of Transfer Restricted Notes
or the Market-Maker, make publicly available other information so long as
necessary to permit sales of such Holder's or the Market-Maker's securities
pursuant to Rules 144 and 144A. The Company and the Note Guarantors covenant
that they will take such further action as any Holder of Transfer Restricted
Notes or the Market-Maker may reasonably request, all to the extent required
from time to time to enable such Holder or the Market-Maker to sell Transfer
Restricted Notes without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including, without
limitation, the requirements of Rule 144A(d)(4)). Upon the written request of
any Holder of Transfer Restricted Notes, the Company and the Note Guarantors
shall deliver to such Holder or the Market-Maker a written statement as to
whether they have complied with such requirements. Notwithstanding the
foregoing, nothing in this Section 9 shall be deemed to require the Company to
register any of its securities pursuant to the Exchange Act.
10. Underwritten Registrations. If any of the Transfer Restricted
Notes covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal
21
amount of such Transfer Restricted Notes included in such offering, subject to
the consent of the Company and the Note Guarantors (which shall not be
unreasonably withheld or delayed), and such Holders shall be responsible for all
underwriting commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted Notes on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
11. Miscellaneous. (a) Amendments and Waivers. The provisions of
this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of Holders of a majority in aggregate
principal amount of the Notes, the Exchange Notes and the Private Exchange
Notes, taken as a single class (and, with respect to the provisions of Section
6, the written consent of the Market- Maker). Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders whose Notes, Exchange Notes or
Private Exchange Notes are being sold pursuant to a Registration Statement and
that does not directly or indirectly affect the rights of other Holders may be
given by Holders of a majority in aggregate principal amount of the Notes, the
Exchange Notes and the Private Exchange Notes being sold by such Holders
pursuant to such Registration Statement whose rights are so affected.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
11(b), which address initially is, with respect to each Holder, the
address of such Holder maintained by the registrar under the Indenture,
with a copy in like manner to JPMorgan and DBSI;
(2) if to the Initial Purchasers or the Market-Maker,
initially at their addresses set forth in the Purchase Agreement; and
(3) if to the Company or the Note Guarantors, initially at the
address of the Company set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; one business day
after being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
The Company and the Note Guarantors or the Initial Purchasers may,
by written notice to the other, designate additional or different addresses for
subsequent notices or communications.
22
(c) Successors And Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopier) 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.
(e) Definition of Terms. For purposes of this Agreement, (a) the
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(h) Remedies. In the event of a breach by the Company, the Note
Guarantors or by any Holder of any of their obligations under this Agreement,
each Holder, the Company or the Note Guarantors, as the case may be, in addition
to being entitled to exercise all rights granted by law, including recovery of
damages (other than the recovery of damages for a breach by the Company or the
Note Guarantors of their obligations under Sections 1 or 2 hereof for which
liquidated damages have been paid pursuant to Section 3 hereof), will be
entitled to specific performance of its rights under this Agreement. The
Company, the Note Guarantors and each Holder agree that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by each
such person of any of the provisions of this Agreement and hereby further agree
that, in the event of any action for specific performance in respect of such
breach, each such person shall waive the defense that a remedy at law would be
adequate.
(i) No Inconsistent Agreements. Each of the Company and the Note
Guarantors represents, warrants and agrees with the Initial Purchasers that (i)
it has not entered into, and shall not, on or after the date of this Agreement,
enter into any agreement that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof,
(ii) it has not previously entered into any agreement which remains in effect
granting any registration rights with respect to any of its debt securities to
any person and (iii) (with respect to the Company) without limiting the
generality of the foregoing, without the written consent of the Holders of a
majority in aggregate principal amount of the then outstanding Transfer
Restricted Notes and the Market-Maker, it shall not grant to any person the
right to request the Company to register any debt securities of the Company
under the Securities Act unless the rights so granted are not in conflict or
inconsistent with the provisions of this Agreement.
(j) No Piggyback on Registrations. Neither the Company nor any of
its security holders (other than the Holders of Transfer Restricted Notes in
such capacity) shall have the right to include any securities of the Company in
any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Notes.
23
(k) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
24
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Note Guarantors and the Initial Purchasers.
Very truly yours,
PLIANT CORPORATION,
by /s/ Brian E. Johnson
_____________________________________
Name: Brian E. Johnson
Title: Executive Vice President
PLIANT CORPORATION INTERNATIONAL,
PLIANT FILM PRODUCTS OF MEXICO, INC.,
PLIANT SOLUTIONS CORPORATION,
PLIANT PACKAGING OF CANADA, LLC,
UNIPLAST HOLDINGS, INC.,
UNIPLAST U.S., INC.,
TUREX, INC.,
PIERSON INDUSTRIES, INC.,
UNIPLAST MIDWEST, INC.,
by /s/ Brian E. Johnson
_____________________________________
Name: Brian E. Johnson
Title: Executive Vice President
25
Accepted:
J.P. MORGAN SECURITIES INC.
by /s/
____________________________________
Authorized Signatory
DEUTSCHE BANK SECURITIES INC.
by /s/
____________________________________
Authorized Signatory
DEUTSCHE BANK SECURITIES INC.
by /s/
____________________________________
Authorized Signatory
ANNEX A
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker- dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Notes where such Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Company has agreed that, for a period of 180 days
after the Expiration Date (as defined herein), it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution".
ANNEX B
Each broker-dealer that receives Exchange Notes for its own account
in exchange for Notes, where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution".
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Notes where such Notes were acquired as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 180 days after the Expiration Date, it will make this prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale. In addition, until [ ] 200[ ], all dealers
effecting transactions in the Exchange Notes may be required to deliver a
prospectus.
The Company will not receive any proceeds from any sale of Exchange
Notes by broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Registered Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Notes. Any broker-dealer that resells Exchange Notes that were received by it
for its own account pursuant to the Registered Exchange Offer and any broker or
dealer that participates in a distribution of such Exchange Notes may be deemed
to be an "underwriter" within the meaning of the Securities Act and any profit
on any such resale of Exchange Notes and any commission or concessions received
by any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that, by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Notes) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
ANNEX D
| | CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE
10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Notes. If the undersigned is a broker-dealer that will receive Exchange Notes
for its own account in exchange for Notes that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.