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EXHIBIT 4.8
PIONEER AMERICAS ACQUISITION CORP.
$200,000,000 AGGREGATE PRINCIPAL
AMOUNT OF 9 1/4% SENIOR
SECURED NOTES DUE 2007
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as
of June 17, 1997, by and among Pioneer Americas Acquisition Corp., a Delaware
corporation (the "Company"), the companies listed on Schedule 1 hereto
(collectively, the "Subsidiary Guarantors" and together with the Company, the
"Registrants") and Donaldson, Lufkin & Jenrette Securities Corporation and
Salomon Brothers Inc (the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated June 11, 1997, among the Company, the Subsidiary Guarantors
and the Initial Purchasers (the "Purchase Agreement") relating to the sale by
the Company to the Initial Purchasers of $200,000,000 aggregate principal
amount of the Company's 9 1/4% Senior Secured Notes due 2007 (the "Series A
Notes") and the guarantees thereon of the Subsidiary Guarantors (the
"Guarantees" and together with the Series A Notes, the "Securities"). In order
to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company and the Subsidiary Guarantors have agreed to provide the registration
rights set forth in this Agreement for the equal benefit of the Initial
Purchasers and their respective direct and indirect transferees. The execution
and delivery of this Agreement is a condition to the Initial Purchasers'
obligation to purchase the Securities under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Advice: See Section 5.
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Affiliate: An "affiliate" as defined in Rule 405 under the
Securities Act (as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission).
Applicable Period: See Section 2.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
or The New York Stock Exchange are authorized or obligated by law or executive
order to close.
Closing Date: The Closing Date as defined in the Purchase
Agreement.
Commission: The Securities and Exchange Commission.
Company: See the introductory paragraph to this Agreement.
Depositary: The Depository Trust Company, or any other
depositary appointed by the Company, provided that such depositary must have an
address in the Borough of Manhattan, The City of New York.
Effectiveness Date: The 150th day after the Closing Date.
Effectiveness Period: See Section 3.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: See Section 2.
Exchange Offer Registration Statement: See Section 2.
Exchange Securities: See Section 2.
Filing Date: The 30th day after the Closing Date.
Holder: Any holder of Registrable Securities.
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Indenture: The Indenture, dated as of June 17, 1997 among the
Company, the Subsidiary Guarantors and United States Trust Company of New York,
as trustee, pursuant to which the Securities are being issued, as amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraph to this
Agreement.
Initial Shelf Registration: See Section 3.
Majority: At least a majority of the then Outstanding (within
the meaning of the Indenture) aggregate principal amount of the securities
described.
Managing Underwriters: The investment banker or investment
bankers and manager or managers that shall administer an underwritten offering.
Liquidated Damages: See Section 4.
NASD: National Association of Securities Dealers, Inc.
Participating Broker-Dealer: See Section 2.
Person: An individual, trustee, corporation, partnership, joint
stock company, trust, unincorporated association, union, business association,
firm or other legal entity.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 430A under the Securities Act (as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission)), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
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Registrable Securities: The Securities upon original issuance
thereof and at all times subsequent thereto, until (i) a Registration Statement
covering such Securities or the Exchange Securities to be exchanged for such
Securities (and in the case of any Resale Securities, any resale thereof) has
been declared effective by the Commission and such Securities have been
disposed of or exchanged (or, in the case where such Registration Statement
covers the resale of Resale Securities, such Securities have been exchanged and
the Resale Securities received therefor have been resold), as the case may be,
in accordance with such effective Registration Statement, (ii) such Securities
are sold in compliance with Rule 144, (iii) any such Securities shall have been
otherwise transferred and new certificate(s) evidencing such Securities not
bearing any legend restricting further transfer shall have been delivered by or
on behalf of the Company and such Securities shall be tradable by each Holder
thereof without restriction under the Securities Act or the Exchange Act and
without material restriction under the applicable state securities or "Blue
Sky" laws or (iv) any such Securities cease to be outstanding.
Registrants: See the introductory paragraph to this Agreement.
Registration Default: See Section 4.
Registration Statement: Any registration statement of the
Registrants, including, but not limited to, the Exchange Offer Registration
Statement, that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus contained therein,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
Resale Securities: Any Exchange Securities received by a
Restricted Person pursuant to the Exchange Offer, and at all times subsequent
thereto, until such Exchange Securities have been resold by such Restricted
Person.
Restricted Person: (i) Any Affiliate of any of the Registrants,
(ii) the Initial Purchasers or (iii) any Affiliate of the Initial Purchasers
(other than Affiliates of the Initial Purchasers that (x) are acquiring the
Exchange Securities in the
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ordinary course of business and do not have an arrangement with any Person to
distribute the Exchange Securities and (y) may trade such Exchange Securities
without restriction under the Securities Act).
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the Commission.
Rule 144A: Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the Commission.
Rule 158: Rule 158 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
Rule 415: Rule 415 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
Securities: See the introductory paragraphs to this Agreement.
Securities Act: The Securities Act of 1933, as amended.
Series A Notes: See the introductory paragraphs to this
Agreement.
Series B Notes: See Section 2.
Shelf Filing Date: The 30th day after the date the Shelf Notice
is delivered.
Shelf Notice: See Section 2.
Shelf Registration: See Section 3.
Staff: See Section 2.
Subsidiary Guarantors: See the introductory paragraph to this
Agreement.
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Subsequent Shelf Registration: See Section 3.
Trust Indenture Act: The Trust Indenture Act of 1939, as
amended.
Trustee: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Securities.
Underwritten registration or underwritten offering: A
registration in which securities of the Registrants are sold to one or more
underwriters for reoffering to the public.
2. Exchange Offer; Shelf Notice
(a) The Company and the Subsidiary Guarantors agree to use
their best efforts, to file with the Commission as soon as practicable after
the Closing Date, but in no event later than the Filing Date, a registration
statement (the "Exchange Offer Registration Statement") on an appropriate form
under the Securities Act with respect to a proposed offer by the Registrants
(the "Exchange Offer") to the Holders of Registrable Securities to issue and
deliver to such Holders, in exchange for the Registrable Securities, a
corresponding principal amount of debt securities of the Company (the "Series B
Notes"), guaranteed by the Subsidiary Guarantors (the Series B Notes together
with such guarantees, the "Exchange Securities"), which are substantially
identical to the Series A Notes and the Guarantees (except that the Exchange
Securities shall have been registered pursuant to an effective Registration
Statement under the Securities Act), and are entitled to the benefits of the
Indenture or a trust indenture which is identical in all material respects to
the Indenture (other than such changes to the Indenture or any such identical
trust indenture as are necessary to comply with any requirements of the
Commission to effect or maintain the qualification thereof under the Trust
Indenture Act, and which, in either case, has been qualified under the Trust
Indenture Act).
The Company and the Subsidiary Guarantors agree to use their best
efforts to (x) cause the Exchange Offer Registration Statement to become
effective under the Securities Act on or before the Effectiveness Date; (y)
keep the Exchange Offer open for acceptance for at least 20 Business Days (or
longer if required by applicable law) after the date that notice of the
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Exchange Offer is mailed to Holders and to conduct the Exchange Offer in
accordance with such procedures as may be required by applicable provisions of
the Exchange Act, including, without limitation, the requirements of Rule 13e-4
(other than the filing requirements of such Rule) and Regulation 14E under the
Exchange Act (in each case, as such Rule or Regulation may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission); and (z) consummate the Exchange Offer on or prior to the 30th
Business Day following the date the Exchange Offer Registration Statement is
declared effective; it being the objective of such Exchange Offer to enable
each Holder of Registrable Securities so electing to exchange its Registrable
Securities for Exchange Securities (assuming that such Holder is not an
Affiliate of the Company or any Subsidiary Guarantor, acquires the Exchange
Securities in the ordinary course of such Holder's business and has no
arrangements with any person to participate in a public distribution of the
Exchange Securities within the meaning of the Securities Act) and to trade in
such Exchange Securities from and after their receipt without any limitations
or restrictions on transfer under the Securities Act or the Exchange Act and
without restrictions on transfer under the securities or Blue Sky laws of a
substantial portion of the several states of the United States.
The Initial Purchasers acknowledge and agree that the foregoing
statement of the objective of the Exchange Offer is based upon existing
interpretations of the staff of the Commission's Division of Corporation
Finance (the "Staff"), which interpretations are subject to change without
notice. Each Holder who participates in the Exchange Offer will be required to
represent to the Registrants that any Exchange Securities received by it will
be acquired in the ordinary course of its business, that at the time of the
consummation of the Exchange Offer such Holder will have no arrangement or
understanding with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Securities, and that such Holder
is not an Affiliate of any of the Registrants (within the meaning of the
Securities Act). The Company shall inform the Initial Purchasers of the names
and addresses of the Holders to whom the Exchange Offer is made, and the
Initial Purchasers shall have the right to contact such Holders and otherwise
facilitate the tender of Registrable Securities in the Exchange Offer. Upon
consummation of the Exchange Offer in accordance with this Section 2, the
provisions of this Agreement shall continue to apply, mutatis mutandis, solely
with respect to (i) Resale
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Securities and (ii) Exchange Securities held by Participating Broker-Dealers,
to the extent set forth in Section 2(b), and the Registrants shall have no
further obligation to register Registrable Securities (other than Resale
Securities) pursuant to Section 3.
(b) The Registrants shall include within each Prospectus
distributed to any Holders of Registrable Securities contained in the Exchange
Offer Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the Staff with respect to
the potential "underwriter" status of any broker-dealer that holds Registrable
Securities acquired for its own account as a result of market-making or other
trading activities and will be the beneficial owner (as defined in Rule 13d-3
under the Exchange Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission) of Exchange
Securities received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer"), whether such positions or policies have been
publicly disseminated by the Staff or such positions or policies, in the
reasonable judgment of the Initial Purchasers, represent the prevailing views
of the Staff, including a statement that any such broker-dealer who receives
Exchange Securities for Registrable Securities pursuant to the Exchange Offer
may be deemed to be an "underwriter" within the meaning of the Securities Act
and must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities, which prospectus
delivery requirement may be satisfied by the delivery of the final Prospectus
contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also state that the delivery by a Participating
Broker-Dealer of the final Prospectus relating to the Exchange Offer in
connection with resales of Exchange Securities shall not be deemed to be an
admission by such Participating Broker-Dealer that it is an "underwriter"
within the meaning of the Securities Act, and shall contain all other
information with respect to resales of the Exchange Securities by Participating
Broker-Dealers that the Commission may require in connection therewith, but
such "Plan of Distribution" shall not name any such Participating Broker-Dealer
or disclose the principal amount of Exchange Securities held by any such
Participating Broker-Dealer, except to the extent required by the Staff. Such
"Plan of Distribution" section shall also state that the Registrants agree to
allow the use of each
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Prospectus distributed to any Holders of Registrable Securities by all persons
subject to the prospectus delivery requirements of the Securities Act,
including all Participating Broker-Dealers, to the extent set forth in the next
paragraph.
The Company and the Subsidiary Guarantors shall use their best
efforts to keep the Exchange Offer Registration Statement effective and to
amend and supplement the Prospectus contained therein as required by Section 5
hereof, to ensure that it is available for delivery by all persons subject to
the prospectus delivery requirements of the Securities Act for such period of
time as such persons must comply with such requirements in order to resell the
Exchange Securities, provided that such period shall not exceed 180 days (or
such longer period if extended pursuant to the last paragraph of Section 5)
(the "Applicable Period").
In connection with the Exchange Offer, the Company shall:
(i) mail or otherwise deliver 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;
(ii) utilize the services of the Depositary for the Exchange
Offer;
(iii) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last Business Day
on which the Exchange Offer shall remain open, by sending to the
institution specified in the notice, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of Securities delivered for exchange, and a statement
that such Holder is withdrawing his election to have such Securities or
a portion thereof exchanged;
(iv) notify each Holder that any Security not tendered will
remain outstanding and continue to accrue interest, but will not retain
any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
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(v) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(A) accept for exchange all Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer;
(B) deliver to the Trustee for cancellation all Securities or
portions thereof so accepted for exchange; and
(C) issue, and cause the Trustee to authenticate and deliver
promptly to each Holder of Securities, Exchange Securities or Resale
Securities equal in principal amount to the Securities of such Holder so
accepted for exchange.
The Exchange Securities may be issued under (i) the Indenture or
(ii) an indenture substantially identical to the Indenture, in either case with
such changes to the Indenture or any such identical trust indenture as are
necessary to comply with any requirements of the Commission to effect or
maintain the qualification thereof under the Trust Indenture Act, which
furthermore will provide that the Exchange Securities will not be subject to
the transfer restrictions set forth in the Indenture and that the Series B
Notes and the Series A Notes will vote and consent together on all matters as
one class and that neither the Series B Notes nor the Series A Notes will have
the right to vote or consent as a separate class on any matter.
(c) If (1) prior to the consummation of the Exchange Offer,
the Company reasonably determines in good faith that (i) the Exchange
Securities would not, upon receipt, be tradeable by the Holders of the
Registrable Securities which are not Affiliates of any of the Registrants
without restriction under the Securities Act and without restrictions under
applicable state securities or Blue Sky laws or (ii) after conferring with
counsel, the Commission is unlikely to permit the consummation of the Exchange
Offer prior to the 30th Business Day following the Effectiveness Date, (2)
either of the Initial Purchasers advises the Company that it continues to hold
any portion of the Registrable Securities purchased by it pursuant to the
Purchase Agreement and requests that a Shelf Registration be filed with respect
to such Registrable Securities, (3) the Exchange Offer is
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commenced and not consummated within 30 Business Days after the Effectiveness
Date for any reason or (4) any Holder of Securities determines that it is not
eligible to participate in the Exchange Offer or does not receive Exchange
Securities in the Exchange Offer which are tradeable without restriction under
the Securities Act and without restrictions under applicable state securities
or Blue Sky laws (other than the prospectus delivery requirements of
Participating Broker-Dealers) and so advises the Company within 10 Business
Days following consummation of the Exchange Offer, then the Company shall
promptly (and in any event within three Business Days) deliver to the Holders
and the Trustee written notice thereof (the "Shelf Notice") and shall file an
Initial Shelf Registration pursuant to Section 3. Following the delivery of a
Shelf Notice to the Holders of Registrable Securities (in the circumstances
contemplated by clauses (1) and (3) of the preceding sentence), the Company and
the Subsidiary Guarantors shall not have any further obligation to conduct the
Exchange Offer under this Section 2.
(d) In the event that the Company reasonably determines in
good faith and after conferring with counsel that (i) (A) the Exchange
Securities would not, upon consummation of any resale thereof by a Restricted
Person to any Person other than another Restricted Person, be tradeable by each
Holder thereof without restriction under the Securities Act and the Exchange
Act and without restriction under applicable state securities or Blue Sky laws,
or (B) the Commission is unlikely to permit the Registration Statement covering
the Exchange Offer to become effective prior to the Effectiveness Date solely
because such Registration Statement covers resales of the Exchange Securities
by Restricted Persons, then the Company shall promptly deliver a Shelf Notice
to the Restricted Persons who are Holders of Registrable Securities, and the
Registrants shall thereafter file an Initial Shelf Registration pursuant to,
and otherwise comply with, the provisions of Section 3; provided that, if a
Shelf Notice is not then otherwise required to be delivered pursuant to Section
2(c), such Initial Shelf Registration shall only cover resales of Registrable
Securities by Restricted Persons. Following the delivery of a Shelf Notice in
accordance with this Section 2(d) and compliance with the provisions of Section
3, the Registrants shall not have any further obligation under this Section 2
with respect to the filing of an offer to exchange the Registrable Securities
held by the Restricted Persons (including, without limitation, any obligation
to provide that a Registration Statement filed pursuant to Section 2(a)
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cover resales of Exchange Securities by Restricted Persons); provided that, the
provisions of this Section 2 shall otherwise remain in full force and effect
with respect to Registrable Securities held by any Person other than a
Restricted Person.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c) or
2(d), then:
(a) Initial Shelf Registration. The Company and the
Subsidiary Guarantors shall as promptly as practicable after delivery of such
Shelf Notice prepare and file with the Commission a Registration Statement, on
an appropriate form under the Securities Act, for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable
Securities (or, if a Shelf Notice is delivered solely pursuant to Section 2(d),
all of the Registrable Securities held by Restricted Persons) (the "Initial
Shelf Registration"). If the Company and the Subsidiary Guarantors shall have
not yet filed the Exchange Offer Registration Statement, the Company and the
Subsidiary Guarantors shall use their best efforts to file with the Commission
the Initial Shelf Registration on or prior to the Filing Date. Otherwise, the
Company and the Subsidiary Guarantors shall use their best efforts to file with
the Commission the Initial Shelf Registration on or prior to the Shelf Filing
Date. The Company and the Subsidiary Guarantors shall not permit any
securities other than the Registrable Securities to be included in the Initial
Shelf Registration or any Subsequent Shelf Registration. No Holder of
Registrable Securities may include any of its Registrable Securities in any
Shelf Registration pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 15 Business Days after receipt of a
request therefor, such information as the Company may, after conferring with
counsel with regard to information relating to Holders that would be required
by the Staff to be included in such Shelf Registration or Prospectus included
therein, reasonably request for inclusion in any Shelf Registration or
Prospectus included therein. No Holder of Registrable Securities that are to
be included in a Shelf Registration Statement shall be entitled to Liquidated
Damages pursuant to Section 4 unless and until such Holder shall have provided
all such reasonably requested information. Each Holder as to which any Shelf
Registration is being effected agrees to furnish promptly to the Company all
information to be disclosed
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in the applicable Shelf Registration or Prospectus included therein in order to
make the information previously furnished to the Company by such Holder not
materially misleading. The Company and the Subsidiary Guarantors shall use
their best efforts to cause the Initial Shelf Registration to be declared
effective under the Securities Act on or prior to the 150th day following
delivery of the Shelf Notice and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the date which is two
years from the effective date thereof (subject to extension pursuant to the
last paragraph of Section 5) (the "Effectiveness Period"), or such shorter
period ending when (i) all Registrable Securities covered by the Initial Shelf
Registration have been sold in the manner set forth and as contemplated in the
Initial Shelf Registration, (ii) a Subsequent Shelf Registration covering all
of the Registrable Securities has been declared effective under the Securities
Act or (iii) all Registrable Securities may be sold pursuant to subsection (k)
of Rule 144; provided that the Registrants shall not be required to keep such
Initial Shelf Registration effective where the only Registrable Securities
which have not been sold pursuant to the Initial Shelf Registration are
Registrable Securities held by Holders who would not have been able to trigger
the Registrants' Initial Shelf Registration filing obligations pursuant to
Section 2(c)(2), (3) or (4) hereof.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for
any reason at any time during the Effectiveness Period (other than in
accordance with subparagraph (a)), the Company and the Subsidiary Guarantors
shall use their best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within 15 days of
such cessation of effectiveness amend the Shelf Registration in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Registration Statement pursuant to
Rule 415 covering all of the Registrable Securities covered by such suspended
Shelf Registration (a "Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Company and the Subsidiary Guarantors shall use
their best efforts to cause the Subsequent Shelf Registration to be declared
effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective for a period equal to the number
of days in the Effectiveness Period less the aggregate number of days during
which the Initial Shelf Registration or any
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Subsequent Shelf Registration was previously continuously effective. As used
herein the term "Shelf Registration" means the Initial Shelf Registration and
any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Registrants shall
promptly supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if otherwise required by the Securities Act, or if
requested by the Holders of a Majority of the Registrable Securities covered by
such Registration Statement or by the Managing Underwriters of such Registrable
Securities if such Registrable Securities are being sold in connection with an
underwritten offering (except to the extent any supplement or amendment shall,
in the reasonable judgment of counsel to the Registrants, make the statements
therein misleading), and the Company agrees to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly
after its being used or filed with the Commission.
(d) Selection of Underwriters. If at any time or from time to
time any of the Holders of the Registrable Securities included in any Shelf
Registration Statement desire to sell Registrable Securities in an underwritten
offering, Managing Underwriters shall be selected by the Holders of a Majority
of all Registrable Securities included in such offering.
(e) Amendment of Indenture. On or prior to the filing of the
Initial Shelf Registration, the Registrants and the Trustee shall amend or
supplement the Indenture or enter into an indenture substantially identical to
the Indenture, in either case, such document to be in form and substance
reasonably satisfactory to the Trustee, to provide for the Trustee to add to
the covenants therein and to provide additional indemnity to the Trustee and
such other terms as the Trustee and the Company may deem necessary to comply
with any requirements of the Commission to effect or maintain the qualification
thereof under the Trust Indenture Act, which amendment or supplement to the
Indenture or other indenture shall automatically become effective upon the
effectiveness of the Initial Shelf Registration.
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4. Liquidated Damages
(a) The Registrants and the Initial Purchasers agree that the
Holders of Registrable Securities will suffer damages if the Company and the
Subsidiary Guarantors fail to fulfill their obligations under Section 2 or
Section 3. Accordingly, the Company and the Subsidiary Guarantors jointly and
severally agree to pay liquidated damages ("Liquidated Damages") on the
Registrable Securities subject to a Registration Default (as defined below)
under the circumstances and to the extent set forth below:
(i) if the Exchange Offer Registration Statement has not been
filed on or prior to the Filing Date;
(ii) if the Exchange Offer Registration Statement has not been
declared effective on or prior to the Effectiveness Date;
(iii) if the Exchange Offer has not been consummated on or prior to
the 30th Business Day following the date the Exchange Offer Registration
Statement is declared effective;
(iv) if the Initial Shelf Registration has not been filed on or
prior to the Shelf Filing Date or declared effective within 150 days
following the delivery of the Shelf Notice, as the case may be; or
(v) if (A) the Exchange Offer Registration Statement has been
declared effective but ceases to be effective for a period of 15
consecutive days without being succeeded immediately by any additional
Registration Statement filed with the Commission and declared effective
at any time prior to the time that the Exchange Offer is consummated or
(B) the Initial Shelf Registration or any Subsequent Shelf Registration
has been declared effective and such Shelf Registration ceases to be
effective at any time during the Effectiveness Period for a period of 15
consecutive days without being succeeded immediately by any additional
Registration Statement filed and declared effective (each such event
referred to in clauses (i) through (v), a "Registration Default"),
then the Company and the Subsidiary Guarantors shall pay Liquidated Damages to
each applicable Holder of Registrable Securities with respect to the first
90-day period immediately following the occurrence of such Registration Default
in an
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amount equal to $.05 per week per $1,000 principal amount of Registrable
Securities held by such Holder. The amount of Liquidated Damages will increase
by an additional $.05 per week per $1,000 principal amount of Registrable
Securities at the beginning of each subsequent 90-day period, up to a maximum
amount of $.50 per week per $1,000 principal amount of Registrable Securities.
Notwithstanding anything to the contrary set forth herein, (1) upon the filing
of the Exchange Offer Registration Statement (in the case of (i) above), (2)
upon the effectiveness of the Exchange Offer Registration Statement (in the
case of (ii) above), (3) upon the consummation of the Exchange Offer (in the
case of (iii) above), (4) upon the filing of the Initial Shelf Registration or
upon the effectiveness of a Shelf Registration, as applicable (in the case of
(iv) above), or (5) upon the effectiveness of the Exchange Offer Registration
Statement which had ceased to remain effective (in the case of (v)(A) above),
or upon the effectiveness of the Shelf Registration which had ceased to remain
effective (in the case of (v)(B) above), the accrual of Liquidated Damages
payable with respect to the applicable Registrable Securities shall cease.
Notwithstanding the foregoing, the Registrants shall not be
required to pay such Liquidated Damages with respect to Registrable Securities
held by a Holder if the applicable Registration Default arises from the failure
of the Registrants to file, or cause to become effective, a Shelf Registration
Statement within the time periods specified in this Section 4 by reason of the
failure of such Holder to provide such information as (i) the Company may
reasonably request, with reasonable prior written notice, for use in the Shelf
Registration Statement or any Prospectus included therein to the extent the
Company reasonably determines that such information is required to be included
therein by applicable law, (ii) the NASD or the Commission may request in
connection with such Shelf Registration Statement or (iii) is required to
comply with the agreements of such Holder contained in the penultimate
paragraph of Section 5 to the extent compliance thereof is necessary for the
Shelf Registration Statement to be declared effective.
(b) The Company shall notify the Trustee in writing within
three Business Days after each and every date on which a Registration Default
commences. Liquidated Damages shall be paid by depositing with the Trustee, in
trust, for the benefit of the Holders thereof, on or before the next semi-
annual interest payment date following a Registration Default, immediately
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available funds in sums sufficient to pay the Liquidated Damages then due to
Holders of Registrable Securities. The Liquidated Damages due shall be payable
on each interest payment date to the record Holder of Registrable Securities
entitled to receive the interest payment to be paid on such date as set forth
in the Indenture. Each obligation to pay Liquidated Damages as a result of the
occurrence of a Registration Default shall be deemed to accrue from and
including the date of such Registration Default to but excluding the date such
Registration Default is no longer continuing.
5. Registration Procedures
In connection with the registration of any Registrable Securities
or Exchange Securities pursuant to Section 2 or 3, the Company and the
Subsidiary Guarantors shall use their best efforts to effect such registrations
to permit the sale of such Registrable Securities or Exchange Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company and the Subsidiary Guarantors shall:
(a) Prepare and file with the Commission, as soon as
practicable after the Closing Date but in any event prior to the Filing Date
(in the case of an Exchange Offer Registration Statement) or the Shelf Filing
Date (in the case of a Shelf Registration), a Registration Statement or
Registration Statements as prescribed by Section 2 or 3, and use its best
efforts to cause each such Registration Statement to become effective and
remain effective as provided herein, provided that, if (1) such filing is
pursuant to Section 3, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, before filing any
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company shall furnish to and afford the Holders of the Registrable
Securities covered by such Registration Statement (the "Selling Holders"), and
each such Participating Broker-Dealer, as the case may be, one special counsel
for the Selling Holders or Participating Broker-Dealers, as the case may be
(the "Holders Counsel") and the Managing Underwriters, if any, a reasonable
opportunity to review copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits thereto)
proposed to be filed (at least 10 Business Days prior to such
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filing) and use their best efforts to reflect in each such document, when filed
with the Commission, such comments as the Holders of a Majority of the
Registrable Securities covered by such Registration Statement, or such
Participating Broker-Dealers, as the case may be, the Holders Counsel, or the
Managing Underwriters, if any, may reasonably propose. The Registrants shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded an
opportunity to review prior to the filing of such document if the Holders of a
Majority of the Registrable Securities covered by such Registration Statement,
or such Participating Broker-Dealers, as the case may be, the Holders Counsel,
or the Managing Underwriters, if any, shall reasonably object.
(b) Prepare and file with the Commission such amendments and
post-effective amendments to each Shelf Registration or Exchange Offer
Registration Statement, as the case may be, as may be necessary to keep such
Registration Statement continuously effective for the Effectiveness Period or
the Applicable Period, as the case may be; cause the related Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 under the Securities Act (as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission); and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as
so supplemented and with respect to the subsequent resale of any securities
being sold by a Participating Broker-Dealer covered by any such Prospectus.
The Company and the Subsidiary Guarantors shall be deemed not to
have used their best efforts to cause a Registration Statement to become
effective or to keep a Registration Statement effective during the Applicable
Period if any of them voluntarily takes any action that would result in Selling
Holders seeking to sell Registrable Securities covered thereby or Participating
Broker-Dealers seeking to sell Exchange Securities not being able to sell such
Registrable Securities or such Exchange Securities during that period unless
such action is required by applicable law.
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(c) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, notify the Selling Holders, or each Participating
Broker-Dealer, as the case may be, the Holders Counsel and the Managing
Underwriters, if any, promptly, and confirm such notice in writing, (i) when a
Prospectus or any prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective (including in such notice a
written statement that any Holder may, upon request, obtain, without charge,
one conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules, documents incorporated or deemed
to be incorporated by reference therein and exhibits thereto), (ii) of the
issuance by the Commission or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary Prospectus or the
initiation of any proceedings for that purpose, (iii) of the receipt by any of
the Company or any Subsidiary Guarantor of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Securities or the Exchange
Securities for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (iv) of the happening of any
event or any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any 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, and
(v) of any request by the Commission or any state securities authority for
amendments or supplements to the Registration Statement or Prospectus
(including schedules and exhibits thereto).
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(d) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, use their best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any of the
Registrable Securities or the Exchange Securities to be sold by any
Participating Broker-Dealer, for sale in any jurisdiction at the earliest
possible time.
(e) If a Shelf Registration is filed pursuant to Section 3 and
if requested by the Managing Underwriters, if any, or the Holders of a Majority
of the Registrable Securities being sold in connection with an underwritten
offering, (i) promptly incorporate in a prospectus supplement or post-effective
amendment such information as the Managing Underwriters, if any, or such
Holders or counsel request to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment, and
(iii) promptly supplement or make amendments to such Registration Statement
(except in the case of (i), (ii) and (iii) to the extent any supplement or
amendment shall, in the reasonable judgment of counsel to the Registrants, make
the statements therein misleading).
(f) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, furnish to each of the Selling Holders and to
each such Participating Broker-Dealer who so requests and to the Holders
Counsel and each Managing Underwriter, if any, without charge, one conformed
copy of the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and schedules,
and, if requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits thereto.
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(g) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, deliver to each of the Selling Holders or each
such Participating Broker-Dealer, as the case may be, their counsel, and the
underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each form of preliminary Prospectus) and each amendment
or supplement thereto and any documents incorporated by reference therein as
such Persons may reasonably request; and, subject to the last paragraph of this
Section 5, each of the Company and the Subsidiary Guarantors hereby consents to
the use of such Prospectus and each amendment or supplement thereto by each of
the Selling Holders or each such Participating Broker-Dealer, as the case may
be, and the underwriters or agents, if any, and dealers (if any), in connection
with the offering and sale of the Registrable Securities covered by or the sale
by Participating Broker-Dealers of the Exchange Securities pursuant to such
Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities or
any delivery of a Prospectus contained in the Exchange Offer Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, to use their best efforts to register
or qualify, and to cooperate with the Selling Holders or each such
Participating Broker-Dealer, as the case may be, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any of the Selling Holders,
Participating Broker-Dealers, or the Managing Underwriters, if any, request in
writing as are necessary to permit the offer and sale of such Securities in
such jurisdictions; and to use their best efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective, provided
that neither the Company nor any Subsidiary Guarantor shall be required to (A)
qualify generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of
process in any such jurisdiction where it is not then
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so subject or (C) subject itself to taxation in excess of a nominal dollar
amount in any such jurisdiction.
(i) Cooperate with the Trustee and, in the case of a Shelf
Registration, the Selling Holders and the Managing Underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Exchange Securities or Registrable Securities, as the case may be, to be sold,
which certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with the Depositary; and enable such Exchange
Securities or Registrable Securities to be in such denominations and registered
in such names as the Holders of Registrable Securities or the Managing
Underwriters, if any, may request.
(j) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(iv) above, as promptly as practicable prepare and (subject to
Section 5(a) above) file with the Commission, at the expense of the Company and
the Subsidiary Guarantors, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder or to the
purchasers of the Exchange Securities to whom such Prospectus will be delivered
by a Participating Broker-Dealer any such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(k) Use its best efforts to cause the Registrable Securities
covered by a Registration Statement or the Exchange Securities, as the case may
be, to continue to be rated by the rating agencies which initially rated the
Series A Notes, during the period the Registration Statement is required to
remain effective hereunder.
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(l) Not later than the effective date of the first
Registration Statement relating to the Registrable Securities or the Exchange
Securities, as the case may be, obtain a CUSIP number for the Registrable
Securities.
(m) If a Shelf Registration is filed pursuant to Section 3
with respect to an underwritten offering, enter into such agreements (including
an underwriting agreement, if requested) and take all other actions in order to
expedite or facilitate the registration or disposition of such Registrable
Securities and in connection therewith, (i) make such representations and
warranties to the Holders of such Registrable Securities and the underwriters,
with respect to the business of the Company and its subsidiaries (including
without limitation the Subsidiary Guarantors) and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and the Subsidiary
Guarantors and updates thereof in form and substance reasonably satisfactory to
the Managing Underwriters, addressed to each selling Holder of such Registrable
Securities and the underwriters covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as may be
reasonably requested by underwriters; (iii) obtain "cold comfort" letters and
updates thereof in form and substance reasonably satisfactory to the Managing
Underwriters from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
parent or subsidiary of the Company (including without limitation the
Subsidiary Guarantors) or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each selling Holder of such
Registrable Securities and the underwriters, such letters to be in customary
form and covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings and such other matters as
reasonably requested by underwriters; (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures
no less favorable than those set forth in Section 7 (or such other provisions
and procedures acceptable to Holders of a Majority of Registrable Securities
covered by such Registration Statement and the Managing Underwriters or agents)
with respect to all parties to
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be indemnified pursuant to said Section 7; and (v) deliver such documents and
certificates as may be reasonably requested by the Holders of a Majority of all
of the Registrable Securities being sold and the Managing Underwriters, if any,
to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Registrants. The
foregoing actions set forth in this Section 5(m) shall be performed at (A) the
effectiveness of such Registration Statement and each post-effective amendment
thereto and (B) each closing under any underwriting or similar agreement, as
and to the extent required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, make available for inspection by any Selling
Holder of such Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney, accountant or
other agent retained by any of such Selling Holders or such Participating
Broker-Dealers, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during business hours, all
financial and other records, pertinent corporate documents and properties of
the issuers and their respective subsidiaries (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and employees of
the Company and its Subsidiaries to supply all information in each case
reasonably requested by any such Inspector in connection with such due
diligence responsibilities. Records which the Company or any Subsidiary
Guarantor determines, in good faith, to be confidential and any Records which
it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary, in the
reasonable judgment of counsel to each Selling Holder and each such
Participating Broker-Dealer, to avoid or correct a misstatement or omission in
such Registration Statement, (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction or
(iii) the information in such Records has been made generally available to the
public, other than by such Selling Holders and Participating Broker-Dealers.
Each of the Selling Holders and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company unless and
until such is made generally available to the public. Each of the
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Selling Holders and each such Participating Broker-Dealer will be required to
further agree that it will, upon learning that disclosure of such Records may
be required pursuant to clauses (i) or (ii) above, give notice to the Company
and allow the Company at its expense to undertake appropriate action to prevent
disclosure of the Records deemed confidential.
(o) Provide an indenture trustee for the Registrable
Securities or the Exchange Securities, as the case may be, and cause the
Indenture or the trust indenture provided for in Section 2(a), as the case may
be, to be qualified under the Trust Indenture Act not later than the effective
date of the Exchange Offer or the first Registration Statement relating to the
Registrable Securities; and in connection therewith, cooperate with the Trustee
under any such indenture and the Holders of the Registrable Securities, to
effect such changes to such indenture as may be (i) necessary or desirable to
provide for the Trustee to add to the covenants, and to provide additional
indemnity to the Trustee, and (ii) necessary to comply with any requirements of
the Commission to effect or maintain the qualification thereof under the Trust
Indenture Act; and execute, and use its best efforts to cause the Trustee to
execute, all documents, including the Intercreditor Agreement, as may be
required to effect such changes, and all other forms and documents required to
be filed with the Commission to enable such indenture to be so qualified in a
timely manner.
(p) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its securityholders earnings statements satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 no later than 45 days after
the end of any 12-month period (or 90 days after the end of any 12-month period
if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement,
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which statements shall cover said 12-month periods. The Company may, at its
option, satisfy such requirement by complying with Rule 158.
(q) If an Exchange Offer is to be consummated, upon delivery
of the Registrable Securities by Holders to the Company (or to such other
Person as directed by the issuers) in exchange for the Exchange Securities, the
Company shall mark, or cause to be marked, on such Registrable Securities that
such Registrable Securities are being canceled in exchange for the Exchange
Securities; in no event shall such Registrable Securities be marked as paid or
otherwise satisfied.
(r) In the case of a Shelf Registration, a reasonable time prior
to the filing of any document which is to be incorporated by reference into a
Registration Statement or Prospectus after the initial filing of a Shelf
Registration, provide a reasonable number of copies of such document to the
Initial Purchasers on behalf of the Holders of Registrable Securities covered
thereby, and make available such of the representatives of the Company and the
Subsidiary Guarantors as shall be reasonably requested by such Holders or the
Initial Purchasers on behalf of such Holders for discussion of such document.
(s) Cooperate with each Holder of Registrable Securities covered
by any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD.
(t) Use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
as the Company may, from time to time, reasonably request in writing,
including, without limitation, a written representation to the Registrants
(which may be contained in the
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letter of transmittal contemplated by the Exchange Offer Registration Statement
or Shelf Registration, as applicable) stating that (A) it is not an Affiliate
of any of the Registrants, (B) the amount of Registrable Securities held by
such Holder prior to the Exchange Offer, (C) the amount of Registrable
Securities owned by such Holder to be exchanged in the Exchange Offer and
representing that such Holder is not engaged in, and does not intend to engage
in, and has no arrangement or understanding with any Person to participate in,
a distribution of the Exchange Securities to be issued and (D) it is acquiring
the Exchange Securities in its ordinary course of business. The Company may
exclude from such registration the Registrable Securities of any seller or
Participating Broker-Dealer who fails to furnish such information within a
reasonable time after receiving such request.
No Holder may participate in any registration in which Securities
or Exchange Securities are sold to an underwriter for reoffering to the public
unless such Holder completes and executes all reasonable questionnaires, powers
of attorneys, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of the applicable underwriting arrangements.
Each Holder of Registrable Securities and each Participating Broker-
Dealer agrees by acquisition of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv), or 5(c)(v),
such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 5(j), or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and has received copies of any amendments or supplements thereto. In
the event the Company shall give any such notice, each of the Effectiveness
Period and the Applicable Period shall be extended by the number of days during
such periods from and including the date of the giving of such notice to and
including the date when each seller of Registrable Securities covered by such
Registration Statement or Exchange Securities to be sold by such Participating
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Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(j) or (y) the
Advice.
6. Registration Expenses
The Registrants shall jointly and severally bear all expenses
incurred in connection with the performance of their respective obligations
under Sections 2, 3 and 5 and in the event of a Shelf Registration Statement,
shall bear or reimburse the Holders for the reasonable fees and disbursements
of one firm of counsel designated by the Holders of a Majority of the
Registrable Securities to act as counsel for all Holders of the Registrable
Securities in connection therewith; provided, however, that in an underwritten
offering, the Company shall not be responsible for any fees and expenses of any
underwriter including any underwriting discounts and commissions or any legal
fees and expenses of counsel to the underwriters (except for the reasonable
fees and disbursements of counsel in connection with state securities or Blue
Sky qualification of any of the Registrable Securities or the Exchange
Securities).
7. Indemnification
(a) The Company and the Subsidiary Guarantors, jointly and
severally, agree to indemnify and hold harmless (i) each Holder (including each
of the Initial Purchasers, if such Initial Purchaser holds Registrable
Securities, including Resale Securities, for its own account) and (ii) each
person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any Holder (any of the
persons referred to in this clause (ii) being hereinafter referred to as a
"controlling person"), and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any controlling person
(any person referred to in clause (i), (ii) or (iii) may hereinafter be
referred to as an "Indemnified Person") to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities, judgments, actions
and expenses (including without limitation and as incurred, reimbursement of
all reasonable costs of investigating, preparing, pursuing or defending any
claim or action, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, including the reasonable fees and expenses of
counsel to any Indemnified Person) directly or indirectly caused by, related
to, based upon, arising out of
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or in connection with any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment or
supplement thereto), or any preliminary Prospectus or Prospectus relating to
any Registration Statement (or any amendment or supplement thereto), or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities, judgments, actions
or expenses are caused by an untrue statement or omission or alleged untrue
statement or omission that is made in reliance upon and in conformity with
information relating to any Holder furnished in writing to the Company and the
Subsidiary Guarantors by such Holder expressly for use therein, provided,
however, that the indemnity obligations arising under this Section 7(a) with
respect to a specific untrue statement or omission or alleged untrue statement
or omission of a material fact in any preliminary Prospectus shall not inure to
the benefit of a Holder or its related Indemnified Persons if the person
asserting any losses, claims, damages, liabilities, judgments, actions and
expenses with respect to such untrue statement or omission purchased the
Securities from such Holder and if it is established in the related proceeding
that a copy (provided, that the Registrants have furnished to such Holder as
many copies of a final Prospectus and any amendments or supplements thereto as
such Holder has reasonably requested) of the final Prospectus was not sent or
given by or on behalf of such Holder to such person at or prior to the written
confirmation of the sale of the Securities to such person if required by
applicable law, and if the final Prospectus would have cured the untrue
statement or omission giving rise to such losses, claims, damages, liabilities,
judgments, actions and expenses provided, further, that the Company and the
Subsidiary Guarantors shall not be relieved thereby of their indemnity
obligation with respect to any other untrue statement or omission or alleged
untrue statement or omission of a material fact. The Company and the
Subsidiary Guarantors shall notify the Initial Purchasers promptly of the
institution, threat or assertion of any claim, proceeding (including any
governmental investigation) or litigation in connection with the matters
addressed by this Agreement which involve the Company or the Subsidiary
Guarantors or an Indemnified Person.
(b) In case any action or proceeding (including any
governmental investigation) shall be brought or asserted against
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any of the Indemnified Persons with respect to which indemnity may be sought
against the Company or the Subsidiary Guarantors, such Indemnified Person shall
promptly notify the Company and the Subsidiary Guarantors in writing (provided,
that the failure to give such notice shall not relieve the Company or the
Subsidiary Guarantors of its obligations pursuant to this Agreement unless the
Company or the Subsidiary Guarantors were otherwise unaware of such obligations
and only to the extent they were actually and materially prejudiced by such
failure). In case any such action shall be brought against any Indemnified
Person and it shall notify Pioneer, the Company and the Subsidiary Guarantors
of the commencement thereof, Pioneer, the Company and the Subsidiary Guarantors
shall be entitled to participate therein and, to the extent that any of
Pioneer, the Company and the Subsidiary Guarantors shall wish, jointly with any
of Pioneer, the Company or the Subsidiary Guarantors similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
Indemnified Person, and after notice from Pioneer, the Company and the
Subsidiary Guarantors to such Indemnified Person of its election so to assume
the defense thereof, Pioneer, the Company and the Subsidiary Guarantors shall
not be liable to such Indemnified Person under such subsection for any legal or
other expense subsequently incurred by such Indemnified Person in connection
with the defense thereof other than reasonable costs of investigation. If,
however, (i) the Indemnifying Person has authorized the employment of counsel
for the Indemnified Person at the expense of Pioneer, the Company or the
Subsidiary Guarantors, or (ii) an Indemnified Person shall have reasonably
concluded that representation of such Indemnified Person and Pioneer, the
Company and the Subsidiary Guarantors by the same counsel would be
inappropriate under applicable standards of professional conduct due to actual
or potential differing interests between them and the Indemnified Person so
notifies the Indemnifying Person, such Indemnified Person shall have the right
to employ its own counsel in any such action and the fees and expenses of such
counsel shall be paid, as incurred, by the Company and the Subsidiary
Guarantors (regardless of whether it is ultimately determined that an
Indemnified Person is not entitled to indemnification hereunder); provided,
however, that such Indemnified Person undertakes to repay to the Company all
such fees and expenses in the event of a determination by a court of competent
jurisdiction which is no longer subject to appeal or further review that such
Indemnified Person was not entitled to have such payment made. The Company and
the Subsidiary Guarantors shall not, in connection with any one such action or
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proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more then one separate firm of attorneys (in addition to any local counsel) at
any time for the Indemnified Persons, which firm shall be designated by the
Holders of a Majority of the Series A Notes and the Series B Notes which are
the subject of such action or proceeding. The Company and the Subsidiary
Guarantors shall be liable for any settlement of any such action or proceeding
effected with the Company's prior written consent, which consent will not be
unreasonably withheld, and the Company and the Subsidiary Guarantors agree to
indemnify and hold harmless any Indemnified Person from and against any loss,
claim, damage, liability or expense by reason of any settlement of any action
effected with the written consent of the Company. Notwithstanding the
immediately preceding sentence, if at any time an Indemnified Person shall have
requested an indemnifying party to reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than twenty business days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement. The Company and the Subsidiary
Guarantors shall not, without the prior written consent of an Indemnified
Person, settle or compromise or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened action, claim, litigation
or proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Person is a party thereto), unless
such settlement, compromise, consent or termination includes an unconditional
release of such Indemnified Person from all liability arising out of such
action, claim, litigation or proceeding.
(c) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Subsidiary Guarantors, their
directors and officers and any person controlling (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company
or the Subsidiary Guarantors, to the same extent as the foregoing indemnity
from the Company and the Subsidiary Guarantors to each
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of the Indemnified Persons, but only with respect to claims and actions based
on information relating to such Holder furnished in writing by such Holder to
the Company and the Subsidiary Guarantors expressly for use in any Registration
Statement. In case any action or proceeding shall be brought against the
Company, any Subsidiary Guarantor or their directors or officers or any such
controlling person in respect of which indemnity may be sought against a
Holder, such Holder shall have the rights and duties given the Company and the
Subsidiary Guarantors, and the Company, such Subsidiary Guarantor, such
directors or officers or such controlling person shall have the rights and
duties given to each Holder by the immediately preceding paragraph. In no
event shall any Holder be liable or responsible for any amount in excess of the
amount by which the total received by such Holder with respect to its sale of
Registrable Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Registrable Securities and (ii) the amount
of any damages which such Holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities, judgments, actions or expenses referred to herein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other hand
from their sale of Registrable Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party and the indemnified
party, as well as any other relevant equitable considerations. The relative
fault of the Company and the Subsidiary Guarantors, on the one hand, and the
Indemnified Person, on the other hand, 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
related to information supplied by the Company or any Subsidiary Guarantor, on
the one hand, and the Indemnified Person, on the other hand, and the parties'
relative intent, knowledge, access to
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information and opportunity to correct or prevent such statement or omission.
The indemnity set forth herein shall be in addition to any liability or
obligation the Company and the Subsidiary Guarantors may otherwise have to any
Indemnified Person.
The Company, the Subsidiary Guarantors and each Holder agree that
it would not be just and equitable if contribution to this Section 7(d) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no Holder
nor related Indemnified Persons shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of its Registrable Securities, exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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. The
Holders' obligations to contribute pursuant to this Section 7(d) are several in
proportion to the respective principal amount of Registrable Securities held by
each of them and not joint.
8. Rules 144 and 144A
The Registrants covenant that they will file the reports required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder in a timely manner and, if at
any time the Registrants are not required to file such reports, they will, upon
the request of any Holder of Registrable Securities, make publicly available
other information so long as necessary to permit sales pursuant to Rule 144 and
Rule 144A. The Registrants further covenant that they will take such further
action as any Holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such Holder to
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sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 and Rule 144A.
9. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering
will be selected by the Holders of a Majority of such Registrable Securities
included in such offering; provided that such investment bankers or managers
shall be reasonably acceptable to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. The Registrants have not, as
of the date hereof, and the Registrants shall not, after the date of this
Agreement, enter into any agreement with respect to any of its securities that
is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The Registrants have not entered or will not enter into any agreement with
respect to any of its securities which will grant to any Person piggy-back
rights with respect to a Registration Statement.
(b) Adjustments Affecting Registrable Securities. The
Registrants shall not, directly or indirectly, take any action with respect to
the Registrable Securities as a class that would adversely affect the ability
of the Holders of Registrable Securities to include such Registrable Securities
in a registration undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be
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amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Registrants have obtained
the written consent of Holders of at least a Majority of the Registrable
Securities; provided that no amendment, modification or supplement or waiver or
consent to the departure from the provisions of Section 7 shall be effective as
against any Holder of Registrable Securities unless consented to in writing by
such Holder. 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 of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of Registrable
Securities, may be given by Holders of at least a Majority of the Registrable
Securities being sold by such Holders pursuant to such Registration Statement,
provided that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(d) Notices. All notices and other communications
(including without limitation any notices or other communications to the
trustee under the applicable indenture) provided for or permitted hereunder
shall be made in writing by hand delivery, registered first-class mail,
next-day air courier or telecopier:
(i) if to a Holder of Registrable Securities, at the most current
address given by the Trustee to the Company; and
(ii) if to the Company or any Subsidiary Guarantor, at:
Pioneer Americas Acquisition Corp.
4200 NationsBank Center
700 Louisiana Street
Houston, Texas 770002
Attn: General Counsel
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five Business Days
after being deposited and the postage prepaid, if mailed; one Business Day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
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Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the trustee under the
applicable indenture at the address specified in such indenture.
(e) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Registrable Securities; provided that, with
respect to the indemnity and contribution agreements in Section 7, each Holder
of Registrable Securities subsequent to the Initial Purchasers shall be bound
by the terms thereof if (i) such Holder elects to include Registrable
Securities in a Shelf Registration and (ii) such Holder is advised expressly by
the Company of the provisions contained in Section 7 and that such Holder's
election to include Registrable Securities in a Shelf Registration shall be
deemed such Holder's agreement to be bound by such provisions.
(f) 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.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
(i) 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 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
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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.
(j) Entire Agreement. This Agreement, together with the
Purchase Agreement and the Indenture, is intended by the parties as a final
expression of their agreement, and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein and therein.
(k) Registrable Securities Held by the Registrants or Their
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Registrants or their Affiliates shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
[signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
PIONEER AMERICAS ACQUISITION CORP.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
PIONEER AMERICAS, INC.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
PIONEER CHLOR ALKALI COMPANY, INC.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
IMPERIAL WEST CHEMICAL CO.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
ALL-PURE CHEMICAL CO.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
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BLACK MOUNTAIN POWER COMPANY
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
ALL PURE CHEMICAL NORTHWEST, INC.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
PIONEER CHLOR ALKALI INTERNATIONAL,
LTD.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
G.O.W. CORPORATION
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
PIONEER (EAST), INC.
By: /s/ KENT R. STEPHENSON
--------------------------------
Name: Kent R. Stephenson
Title: President
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T.C. HOLDINGS, INC.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
T.C. PRODUCTS, INC.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President
Accepted as of the date hereof:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ PETER BACON
--------------------------------
Name: Peter Bacon
Title: Managing Director
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SCHEDULE 1
Subsidiary Guarantors
Pioneer Americas, Inc.
Pioneer Chlor Alkali Company, Inc.
Imperial West Chemical Co.
All-Pure Chemical Co.
Black Mountain Power Company
All Pure Chemical Northwest, Inc.
Pioneer Chlor Alkali International, Ltd.
G.O.W. Corporation
Pioneer (East), Inc.
T.C. Holdings, Inc.
T.C. Products, Inc.