EXHIBIT 4.3
Registration Rights Agreement
Dated as of December 1, 1997
among
Bear Island Paper Company, L.L.C. and
Bear Island Finance Company II
and
TD Securities (USA) Inc. and
Salomon Brothers Inc
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into on December 1, 1997 among BEAR ISLAND PAPER
COMPANY, L.L.C., a Virginia limited liability company (the
"Company"), and BEAR ISLAND FINANCE COMPANY II, a Delaware
corporation ("FinCo" and, together with the Company, the
"Issuers"), and TD SECURITIES (USA) INC. ("TD Securities") and
SALOMON BROTHERS INC ("Salomon Brothers" and, together with TD
Securities, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase
Agreement dated November 21, 1997 between the Issuers and the
Initial Purchasers (the "Purchase Agreement"), which provides for
the sale by the Issuers to the Initial Purchasers of an aggregate
of $100,000,000 principal amount of the Issuers' 10% Senior
Secured Notes due 2007 (the "Initial Notes"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the
Issuers have agreed to provide to the Initial Purchasers and
their direct and indirect transferees the registration rights set
forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto
agree as follows:
1. Definitions. As used in this Agreement, the
following capitalized defined terms shall have the following
meanings:
"1933 Act" shall mean the Securities Act of 1933, as
amended from time to time, and the rules and regulations of
the Securities and Exchange Commission promulgated
thereunder.
"1934 Act" shall mean the Securities Exchange Act of
1934, as amended from time to time, and the rules and
regulations of the Securities and Exchange Commission
promulgated thereunder.
"Closing Time" shall mean the Closing Time as defined
in the Purchase Agreement.
"Company" shall have the meaning set forth in the
preamble of this Agreement and also includes the Company's
successors.
"Depositary" shall mean The Depository Trust Company,
or any other depositary appointed by the Issuers; provided,
however, that any such depositary must have an address in
the Borough of Manhattan, in The City of New York.
"Exchange Notes" shall mean the 10% Senior Secured
Notes due 2007 issued by the Issuers under the Indenture
containing terms identical to the Initial Notes (except that
(i) interest thereon shall accrue from the last interest
payment date on which interest was paid on the Initial Notes
or, if no such interest has been paid, from the Original
Issue Date, (ii) the transfer restrictions thereon shall be
eliminated and (iii) certain provisions relating to an
increase in the stated rate of interest thereon shall be
eliminated), to be offered to Holders of Initial Notes in
exchange for Initial Notes pursuant to the Exchange Offer.
"Exchange Offer" shall mean the exchange offer by the
Issuers of Exchange Notes for Registrable Notes pursuant to
Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration
under the 1933 Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an
exchange offer registration statement on Form S-4 (or, if
applicable, on another appropriate form), and all amendments
and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"FinCo" shall have the meaning set forth in the
preamble of this Agreement and also includes FinCo's
successors.
"GAAP" shall have the meaning set forth in the
Indenture.
"Holders" shall mean the Initial Purchasers, for so
long as they own any Registrable Notes, and each of their
successors, assigns and direct and indirect transferees who
become registered holders of Registrable Notes under the
Indenture.
"Indenture" shall mean the Indenture relating to the
Initial Notes and Exchange Notes dated as of December 1,
1997 between the Issuers and Crestar Bank, as Trustee, as
the same may be amended from time to time in accordance with
the terms thereof.
"Initial Notes" shall have the meaning set forth in the
preamble of this Agreement.
"Issuers" shall have the meaning set forth in the
preamble of this Agreement and also includes each of the
Issuers' successors.
"Initial Purchasers" shall have the meaning set forth
in the preamble of this Agreement.
"Majority Holders" shall mean the Holders of a majority
of the aggregate principal amount of outstanding Registrable
Notes; provided that whenever the consent or approval of
Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Issuers or
any of their affiliates (as such term is defined in Rule 405
under the 1933 Act) shall be disregarded in determining
whether such consent or approval was given by the Holders of
such required percentage or amount.
"Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall
administer an underwritten offering determined in accordance
with Section 4.
"Original Issue Date" shall mean the date on which the
Initial Notes are issued under the Indenture.
"Participating Broker-Dealer" shall have the meaning
set forth in Section 3(f) of this Agreement.
"Person" shall mean an individual, partnership,
corporation, limited liability company, trust or
unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary
prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Notes covered by
a Shelf Registration Statement, and by all other amendments
and supplements to a prospectus, including post-effective
amendments, and in each case including all material
incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth
in the preamble of this Agreement.
"Registrable Notes" shall mean the Initial Notes;
provided, however, that certain Initial Notes shall cease to
be Registrable Notes when (i) a Registration Statement with
respect to such Initial Notes shall have been declared
effective under the 1933 Act and such Initial Notes shall
have been disposed of pursuant to such Registration
Statement, (ii) such Initial Notes may be distributed to the
public pursuant to Rule 144(k) (or any similar provision
then in force, but not Rule 144A) under the 1933 Act, (iii)
such Initial Notes shall have ceased to be outstanding, (iv)
such Initial Notes have been exchanged by a person other
than a Broker-Dealer for Exchange Notes upon consummation of
the Exchange Offer or (v) following the exchange by a
Participating Broker-Dealer in the Exchange Offer of an
Initial Note for an Exchange Note, the date on which that
Exchange Note is sold to a purchaser who receives from that
Participating Broker-Dealer on or before the date of that
sale a copy of the Prospectus.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Issuers with
this Agreement, including without limitation: (i) all SEC,
stock exchange or National Association of Securities
Dealers, Inc. (the "NASD") registration and filing fees,
(ii) all fees and expenses incurred in connection with
compliance with state or other securities or blue sky laws
and compliance with the rules of the NASD (including
reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with state or other
securities or blue sky qualification, if any, of any of the
Exchange Notes or Registrable Notes in any United States
jurisdiction referred to in Section 3(d)), (iii) all
expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities
sales agreements, certificates representing the Registrable
Notes or Exchange Notes and other documents relating to the
performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) all fees and expenses incurred in
connection with the listing, if any, of any of the
Registrable Notes or Exchange Notes on any securities
exchange or exchanges, (vi) all fees and disbursements
relating to the qualification of the Indenture under
applicable securities laws, (vii) the fees and disbursements
of counsel for the Issuers and of the independent public
accountants of the Issuers, including the expenses of any
special audits or "cold comfort" letters required by or
incident to such performance and compliance, (viii) in the
case of a Shelf Registration Statement, subject to Section
2(c), the reasonable fees and disbursements of one counsel
for the Holders of Registrable Notes (which counsel shall be
selected by the Majority Holders), (ix) the fees and
expenses of a "qualified independent underwriter" as defined
by Conduct Rule 2720 of the NASD (if required by the NASD
rules) in connection with the offering of the Registrable
Notes or Exchange Notes, (x) the fees and expenses of the
Trustee, including its counsel, and any exchange agent or
custodian, and (xi) any fees and disbursements of the
underwriters customarily required to be paid by issuers or
sellers of securities and the reasonable fees and expenses
of any special experts retained by the Issuers in connection
with any Registration Statement, but excluding fees of
counsel to the underwriters or the Holders and underwriting
discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of Registrable Notes by
a Holder.
"Registration Statement" shall mean any registration
statement of the Issuers which covers any of the Exchange
Notes or Registrable Notes pursuant to the provisions of
this Agreement, and all amendments and supplements to any
such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated
by reference therein.
"Rule 144" shall mean Rule 144 promulgated under the
1933 Act, or any successor rule to similar effect.
"Salomon Brothers" shall have the meaning set forth in
the preamble of this Agreement and also includes each of
Salomon Brothers' successors.
"SEC" shall mean the Securities and Exchange
Commission.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Issuers pursuant to the
provisions of Section 2(b) of this Agreement which covers
all of the Registrable Notes on an appropriate form under
Rule 415 under the 1933 Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to
such registration statement, including post-effective
amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated
by reference therein.
"TD Securities" shall have the meaning set forth in the
preamble of this Agreement and also includes each of TD
Securities' successors.
"Trustee" shall mean the trustee with respect to the
Initial Notes and Exchange Notes under the Indenture.
2. Registration Under the 1933 Act. (a) Exchange
Offer Registration. To the extent not prohibited by any
applicable law or applicable interpretation of the Staff of the
SEC, the Issuers at their cost, shall use their best efforts
(A) to file within 90 days after the Original Issue Date with the
SEC an Exchange Offer Registration Statement covering the offer
by the Issuers to the Holders to exchange all of the Registrable
Notes for Exchange Notes, (B) to cause such Exchange Offer
Registration Statement to be declared effective by the SEC within
180 days after the Original Issue Date, (C) to cause such
Exchange Offer Registration Statement to remain effective until
the closing of the Exchange Offer and (D) to consummate the
Exchange Offer within 210 days after the Original Issue Date.
The Exchange Notes will be issued under the Indenture. Upon the
effectiveness of the Exchange Offer Registration Statement, the
Issuers shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder (other
than Participating Broker-Dealers (as defined in Section 3(f)))
eligible and electing to exchange Registrable Notes for Exchange
Notes (assuming that such Holder is not an affiliate of the
Issuers within the meaning of Rule 405 under the 1933 Act,
acquires the Exchange Notes in the ordinary course of such
Holder's business and has no arrangements or understandings with
any person to participate in the Exchange Offer for the purpose
of distributing the Exchange Notes) to trade such Exchange Notes
from and after their receipt without any limitations or
restrictions under the 1933 Act and without material restrictions
under the securities laws of a substantial proportion of the
several states of the United States.
In connection with the Exchange Offer, the Issuers shall:
(i) 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;
(ii) keep the Exchange Offer open for not less than 30
days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law);
(iii) use the services of the Depositary for the
Exchange Offer with respect to Initial Notes evidenced by
global certificates;
(iv) permit Holders to withdraw tendered Registrable
Notes at any time prior to the close of business, New York
City 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 such
Holder, the principal amount of Registrable Notes delivered
for exchange, and a statement that such Holder is
withdrawing his election to have such Registrable Notes
exchanged; and
(v) otherwise comply in all material respects with all
applicable laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange
Offer, the Issuers shall:
(i) accept for exchange Registrable Notes duly
tendered and not validly withdrawn pursuant to the Exchange
Offer in accordance with the terms of the Exchange Offer
Registration Statement and the letter of transmittal which
is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee
for cancellation all Registrable Notes so accepted for
exchange by the Issuers; and
(iii) cause the Trustee promptly to authenticate
and deliver Exchange Notes to each Holder of Registrable
Notes equal in amount to the Registrable Notes of such
Holder so accepted for exchange.
Interest on each Exchange Note will accrue from the
last payment date on which interest was paid on the Registrable
Notes surrendered in exchange therefor or, if no interest has
been paid on the Registrable Notes, from the Original Issue Date.
The Exchange Offer shall not be subject to any conditions, other
than that the Exchange Offer, or the making of any exchange by a
Holder, does not violate applicable law or any applicable
interpretation of the Staff of the SEC. Each Holder of
Registrable Notes (other than Participating Broker-Dealers) who
wishes to exchange such Registrable Notes for Exchange Notes in
the Exchange Offer will be required to represent that (i) it is
not an affiliate of the Issuers, (ii) any Exchange Notes to be
received by it were acquired in the ordinary course of business
and (iii) at the time of the commencement of the Exchange Offer
it has no arrangement with any person to participate in the
distribution (within the meaning of the 1933 Act) of the Exchange
Notes. The Issuers 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
Notes in the Exchange Offer.
(b) Shelf Registration. (i) If, because of any change
in law or applicable interpretations thereof by the Staff of the
SEC, the Issuers are not permitted to effect the Exchange Offer
as contemplated by Section 2(a) hereof, or (ii) if for any other
reason the Exchange Offer is not consummated within 210 days
following the Original Issue Date, or (iii) if, within 120 days
after the Closing Time (as defined in the Purchase Agreement) any
Holder (other than the Initial Purchasers) gives the Issuers
written notice that it is not eligible to participate in the
Exchange Offer or (iv) upon the request of any Initial Purchaser
(with respect to any Registrable Notes which it acquired directly
from the Issuers), within 120 days after the Closing Time (as
defined in the Purchase Agreement), that such Initial Purchaser
shall hold Registrable Notes which it acquired directly from the
Issuers and if such Initial Purchaser is not permitted, in the
opinion of counsel to such Initial Purchaser, pursuant to
applicable law or applicable interpretation of the Staff of the
SEC, to participate in the Exchange Offer, the Issuers shall, at
their cost,
(A) as promptly as practicable, file with the SEC a
Shelf Registration Statement relating to the offer and sale
of the Registrable Notes by the Holders from time to time in
accordance with the methods of distribution elected by the
Majority Holders of such Registrable Notes and set forth in
such Shelf Registration Statement, and use their best
efforts to cause such Shelf Registration Statement to be
declared effective by the SEC within 210 days after the
Original Issue Date. In the event that the Issuers are
required to file a Shelf Registration Statement upon the
request of any Holder (other than an Initial Purchaser) not
eligible to participate in the Exchange Offer pursuant to
clause (iii) above or upon the request of any Initial
Purchaser pursuant to clause (iv) above, the Issuers shall
file and have declared effective by the SEC both an Exchange
Offer Registration Statement pursuant to Section 2(a) with
respect to all Registrable Notes and a Shelf Registration
Statement (which may be a combined Registration Statement
with the Exchange Offer Registration Statement) with respect
to offers and sales of Registrable Notes held by such Holder
or such Initial Purchaser after completion of the Exchange
Offer; provided that, with respect to Exchange Notes
received by an Initial Purchaser in exchange for any portion
of an unsold allotment of Initial Notes, the Issuers may, if
permitted by current interpretations by the Commissions's
staff, file a post-effective amendment to the Exchange Offer
Registration Statement containing the information required
by Regulation S-K Items 507 and/or 508, as applicable, in
satisfaction of its obligations under this Section 2(b) with
respect thereto, and any such Exchange Offer Registration
Statement, as so amended, shall be referred to herein as,
and governed by (for so long as such interpretation of the
Commission shall continue to be effective) the provisions
herein applicable to, a Shelf Registration Statement.
(B) use their best efforts to keep the Shelf
Registration Statement continuously effective (subject to
the provisions of this Agreement that permit the Issuers to
suspend the use of any Prospectus contained in a Shelf
Registration Statement) in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of
two years from the date the Shelf Registration Statement is
declared effective by the SEC (or one year from the date the
Shelf Registration Statement is declared effective if such
Shelf Registration Statement is filed upon the request of
any Initial Purchaser pursuant to clause (iv) above) or such
shorter period which will terminate when (i) all of the
Registrable Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration
Statement, (ii) the date on which, in the written opinion of
counsel to the Issuers, all of the Registrable Notes then
held by the Holders (which are not affiliates of Issuers)
may be sold by such Holders in the public United States
securities markets without registration under the 1933 Act
pursuant to Rule 144(k) under the 1933 Act or any successor
provision thereto or (iii) the date on which there ceases to
be outstanding any Registrable Notes; and
(C) notwithstanding any other provisions hereof, use
their best efforts to ensure that (1) any Shelf Registration
Statement and any amendment thereto and any Prospectus
forming part thereof and any supplement thereto complies in
all material respects with the 1933 Act and the rules and
regulations thereunder, (2) any Shelf Registration Statement
and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading
and (3) any Prospectus forming part of any Shelf
Registration Statement, and any supplement to such
Prospectus (as amended or supplemented from time to time),
does not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements, in light of the circumstances under which they
were made, not misleading.
The Issuers further agree, if necessary, to supplement
or amend the Shelf Registration Statement if reasonably requested
by the Majority Holders with respect to information relating to
the Holders and otherwise as required by Section 3(b) below, to
use reasonable efforts to cause any such amendment to become
effective and such Shelf Registration to become usable as soon as
thereafter practicable and to furnish to the Holders of
Registrable Notes copies of any such supplement or amendment
promptly after its being used or filed with the SEC.
(c) Expenses. The Issuers shall be liable for and pay
all Registration Expenses in connection with the registration
pursuant to Section 2(a) or 2(b) and (x) in the case of any Shelf
Registration Statement, will reimburse the Holders and the
Initial Purchasers for the reasonable fees and disbursements of
one firm or counsel to act as counsel for the Holders of the
Registrable Notes in connection therewith and (y) in the case of
an Exchange Offer Registration Statement, will reimburse the
Initial Purchasers, as applicable, for the reasonable fees and
disbursements of one firm or counsel in connection therewith;
provided that, in the case of clauses (x) and (y): (A) such firm
shall be Shearman & Sterling, New York, New York (or, in the case
of clause (x), such other firm or counsel designated in writing
by the Majority Holders within 15 days of the initial filing of
the Shelf Registration Statement and approved by the Issuers) and
(B) the reasonable fees and expenses of such firm shall not
exceed $20,000. Each Holder shall pay all expenses of its
counsel other than as set forth in the preceding sentence,
underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of such Holder's
Registrable Notes pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. (i) The
Issuers will be deemed not to have used their best efforts to
cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to
remain, effective during the requisite period if it voluntarily
takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of
Registrable Notes covered thereby not being able to exchange or
offer and sell such Registrable Notes during that period unless
(A) such action is required by applicable law or (B) such action
is taken by the Issuers in good faith and for valid business
reasons (not including avoidance of the Issuers' obligations
hereunder), including the acquisition or divestiture of assets,
so long as the Issuers promptly comply with the requirements of
Section 3(k) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant
to Section 2(a) hereof or a Shelf Registration Statement pursuant
to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC;
provided, however, that if, after it has been declared effective,
the offering of Registrable Notes pursuant to a Registration
Statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement will be deemed not
to have been effective during the period of such interference,
until the offering of Registrable Notes pursuant to such
Registration Statement may legally resume.
(e) Increase in Interest Rate. In the event that
(i) the Exchange Offer Registration Statement is not filed with
the SEC on or prior to the 90th calendar day following the
Original Issue Date, (ii) the Exchange Offer Registration
Statement is not declared effective on or prior to the 180th
calendar day following the Original Issue Date, (iii) the
Exchange Offer is not consummated or, if required, a Shelf
Registration Statement with respect to the Registrable Notes is
not declared effective on or prior to the 210th calendar day
following the Original Issue Date, or (iv) the Exchange Offer
Registration Statement is declared effective but thereafter
ceases to be effective or usable (each such event referred to in
clauses (i)-(iv) above, a "Registration Default"), the per annum
interest rate borne by the Initial Notes shall be increased by
one-half of one percent (0.5%) with respect to the first 90-day
period following such Registration Default, payable in cash on
each interest payment date, such interest rate to increase by an
additional one-half of one percent (0.5%) for each subsequent 90-
day period until such Registration Default has been cured, up to
a maximum increase of one and one-half percent (1.5%) per annum.
Upon (w) the filing of the Exchange Offer Registration Statement
after the 90-day period described in clause (i) above, (x) the
effectiveness of the Exchange Offer Registration Statement after
the 180-day period described in clause (ii) above, (y) the
consummation of the Exchange Offer or the effectiveness of a
Shelf Registration Statement, as the case may be, after the 210-
day period described in clause (iii) above or (z) the cure of any
Registration Default described in clause (iv) above, the interest
rate borne by the Initial Notes from the date of such filing,
effectiveness, consummation or cure, as the case may be, will be
reduced to the original interest rate if the Issuers are
otherwise in compliance with such requirements; provided,
however, that if, after any such reduction in interest rate, a
different event specified in clause (i), (ii), (iii) or (iv)
above occurs, the interest rate will again be increased pursuant
to the foregoing provisions. A Holder of Registrable Notes who
has failed to provide the information requested of that Holder by
the Issuers pursuant to the penultimate paragraph Section 3
within the time period specified in that paragraph, and such
failure has prejudiced the ability of the Issuers to comply with
their obligations under this Agreement to file any Registration
Statement within the required period of time, will not receive
the benefit of any increase in the interest rate on the Initial
Notes pursuant to this Section 2(e).
(f) Specific Enforcement. Without limiting the
remedies available to the Initial Purchasers and the Holders, the
Issuers acknowledge that any failure by the Issuers to comply
with their obligations under Section 2(a) and Section 2(b) hereof
may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy
at law, that it will not be possible to measure damages for such
injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as
may be required to specifically enforce the Issuers' obligations
under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the
registration obligations of the Issuers with respect to the
Registration Statements pursuant to Sections 2(a) and 2(b)
hereof, the Issuers shall:
(a) prepare and file with the SEC a Registration
Statement, within the time period specified in Section 2, on
the appropriate form under the 1933 Act, which form (i)
shall be selected by the Issuers, (ii) shall, in the case of
a Shelf Registration, be available for the sale of the
Registrable Notes by the selling Holders thereof and (iii)
shall comply as to form in all material respects with the
requirements of the applicable form and include or
incorporate by reference all financial statements required
by the SEC to be filed therewith, and use their best efforts
to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as
may be necessary under applicable law to keep such
Registration Statement effective for the applicable period;
cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the 1933 Act; and comply with the
provisions of the 1933 Act with respect to the disposition
of all securities covered by each Registration Statement
during the applicable period in accordance with the intended
method or methods of distribution by the selling Holders
thereof;
(c) in the case of a Shelf Registration, (i) notify
each Holder of Registrable Notes, at least five days prior
to filing, that a Shelf Registration Statement with respect
to the Registrable Notes is being filed and advising such
Holders that the distribution of Registrable Notes (or an
amendment thereto) will be made in accordance with the
method elected by the Majority Holders and designated by the
Majority Holders in a notice given by them to the Company;
and (ii) furnish to each Holder of Registrable Notes, to
counsel for the Initial Purchasers, and/or the Holders and
to each underwriter of an underwritten offering of
Registrable Notes, if any, without charge, as many copies of
each Prospectus, including each preliminary Prospectus, and
any amendment or supplement thereto and such other documents
as such Holder, counsel or underwriter may reasonably
request, including, if such Holder, counsel or underwriter
so requests, financial statements and schedules and all
exhibits (including those incorporated by reference) in
order to facilitate the public sale or other disposition of
the Registrable Notes pursuant to the Shelf Registration
Statement; and (iii) subject to the last paragraph of this
Section 3, hereby consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling
Holders of Registrable Notes covered by the Shelf
Registration Statement in connection with the offering and
sale of the Registrable Notes covered by the Prospectus or
any amendment or supplement thereto;
(d) use their best efforts to register or qualify the
Registrable Notes under all applicable state securities or
"blue sky" laws of such United States jurisdictions as the
Majority Holders of Registrable Notes covered by a
Registration Statement or, in the case of an underwritten
offering of Registrable Notes, the Managing Underwriter of
such underwritten offering, if any, shall reasonably request
by the time the applicable Registration Statement is
declared effective by the SEC, cooperate with the Holders in
connection with any filings required to be made with the
NASD, keep each such registration or qualification effective
during the period such Registration Statement is required to
be effective and do any and all other acts and things
requested in writing by such Majority Holders or Managing
Underwriters which may be reasonably necessary or advisable
to enable such Holder to consummate the disposition in each
such jurisdiction of such Registrable Notes owned by such
Holder; provided, however, that neither of the Issuers shall
be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d)
or (ii) take any action which would subject it to general
service of process or taxation in any such jurisdiction if
it is not then so subject;
(e) in the case of a Shelf Registration, notify each
Holder of Registrable Notes and counsel for the Initial
Purchasers promptly and, if requested by such Holder or
counsel, confirm such advice in writing promptly (i) when a
Registration Statement has become effective and when any
post-effective amendments and supplements thereto become
effective, (ii) of any request by the SEC or any state
securities authority for post-effective amendments and
supplements to a Registration Statement and Prospectus or
for additional information after the Registration Statement
has become effective, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending
the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if,
between the effective date of a Registration Statement and
the closing of any sale of Registrable Notes covered
thereby, the representations and warranties of the Issuers
contained in any underwriting agreement, securities sales
agreement or other similar agreement, if any, relating to
such offering cease to be true and correct in all material
respects, (v) of the receipt by the Issuers of any
notification with respect to the suspension of the
qualification of the Registrable Notes for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose, (vi) of the happening of any
event or the discovery of any facts during the period a
Shelf Registration Statement is effective which makes any
statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which requires
the making of any changes in such Registration Statement or
Prospectus in order to make the statements therein not
misleading and (vii) of any determination by the Issuers
that a post-effective amendment to a Registration Statement
would be appropriate;
(f) (A) in the case of an Exchange Offer, (i) include
in the Exchange Offer Registration Statement a "Plan of
Distribution" section covering the use of the Prospectus
included in the Exchange Offer Registration Statement by
broker-dealers who have exchanged their Registrable Notes
for Exchange Notes for the resale of such Exchange Notes,
(ii) furnish to each broker-dealer who desires to
participate in the Exchange Offer, without charge, as many
copies of each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such
broker-dealer may reasonably request, (iii) include in the
Exchange Offer Registration Statement a statement to the
effect that any broker-dealer who holds Registrable Notes
acquired for its own account as a result of market-making
activities or other trading activities (a "Participating
Broker-Dealer"), and who receives Exchange Notes for
Registrable Notes pursuant to the Exchange Offer, may be a
statutory underwriter and must deliver a prospectus meeting
the requirements of the 1933 Act in connection with any
resale of such Exchange Notes, (iv) subject to the last
paragraph of this Section 3, consent to the use of the
Prospectus forming part of the Exchange Offer Registration
Statement or any amendment or supplement thereto, by any
broker-dealer in connection with the sale or transfer of the
Exchange Notes covered by the Prospectus or any amendment or
supplement thereto in accordance with the 1933 Act, and (v)
include in the transmittal letter or similar documentation
to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following
provision:
If the 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,
the undersigned represents that it will receive
Exchange Notes for its own account in exchange for
Registrable Notes and that the Registrable Notes to be
exchanged for Exchange Notes were acquired by it as a
result of market-making activities or other trading
activities and acknowledges that it will deliver a
prospectus meeting the requirements of the 1933 Act in
connection with any resale of such Exchange Notes
pursuant to the Exchange Offer; 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 1933 Act;
and (y) a statement to the effect that by making the
acknowledgment described in subclause (x) and by delivering
a Prospectus in connection with the exchange of Registrable
Notes, the broker-dealer will not be deemed to admit that it
is an underwriter within the meaning of the 1933 Act;
(B) to the extent any Participating Broker-Dealer
notifies the Issuers in writing that it is participating in
the Exchange Offer, use their best efforts to cause to be
delivered at the request of an entity stating that it
represents the Participating Broker-Dealers (which entity
shall be TD Securities, unless it elects not to act as such
representative) only one, if any, "cold comfort" letter with
respect to the Prospectus in the form existing on the last
date for which exchanges are accepted pursuant to the
Exchange Offer and with respect to each subsequent amendment
or supplement, if any, effected during the period specified
in clause (C) below;
(C) to the extent any Participating Broker-Dealer
notifies the Issuers in writing that it is participating in
the Exchange Offer, use their best efforts to maintain the
effectiveness of the Exchange Offer Registration Statement
for a period of 30 days following the closing of the
Exchange Offer; and
(D) the Issuers shall not be required to amend or
supplement the Prospectus contained in the Exchange Offer
Registration Statement as would otherwise be contemplated by
Section 3(b), or take any other action as a result of this
Section 3(f), for a period exceeding 180 days after the last
date for which exchanges are accepted pursuant to the
Exchange Offer (as such period may be extended by the
Issuers) and Participating Broker-Dealers shall not be
authorized by the Issuers to, and shall not, deliver such
Prospectus after such period in connection with resales
contemplated by this Section 3;
(g) (i) in the case of an Exchange Offer, furnish
counsel for the Initial Purchasers and, (ii) in the case of
a Shelf Registration, furnish counsel for the Holders of
Registrable Notes with copies of any request by the SEC or
any state securities authority for amendments or supplements
to a Registration Statement and Prospectus or for additional
information;
(h) make best efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration
Statement as soon as practicable and provide immediate
notice to each Holder of the withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to
each Holder of Registrable Notes included within the
coverage of such Shelf Registration, without charge, at
least one conformed copy of each Registration Statement and
any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto);
(j) in the case of a Shelf Registration, cooperate
with the selling Holders of Registrable Notes to facilitate
the timely preparation and delivery of certificates
representing Registrable Notes to be sold and not bearing
any restrictive legends; and cause such Registrable Notes to
be in such denominations (consistent with the provisions of
the Indenture) and registered in such names as the selling
Holders or the underwriters, if any, covered in the Shelf
Registration may reasonably request at least two business
days prior to the closing of any sale of such Registrable
Notes pursuant to such Shelf Registration Statement;
(k) in the case of a Shelf Registration, upon the
occurrence of any event or the discovery of any facts, each
as contemplated by Section 3(e)(vi) hereof, use their best
efforts to prepare a post-effective amendment or supplement
to a Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the
purchasers of the Registrable Notes, such Prospectus will
not contain at the time of such delivery any untrue
statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading. The Issuers agree to notify each Holder to
suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and each Holder
hereby agrees to suspend use of the Prospectus until the
Issuers have amended or supplemented the Prospectus to
correct such misstatement or omission. At such time as such
public disclosure is otherwise made or the Issuers determine
that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include
any omitted material fact, the Issuers agree promptly to
notify each Holder of such determination and to furnish each
Holder such numbers of copies of the Prospectus, as amended
or supplemented, as such Holder may reasonably request;
(l) obtain a CUSIP number for all Exchange Notes, or
Registrable Notes, as the case may be, not later than the
effective date of a Registration Statement, and provide the
Trustee with printed certificates for the Exchange Notes or
the Registrable Notes, as the case may be, in a form
eligible for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended (the "TIA"), in
connection with the registration of the Exchange Notes, or
Registrable Notes, as the case may be, (ii) cooperate with
the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and
(iii) execute, and use their best efforts to cause the
Trustee to execute, all documents as may be required to
effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture to
be so qualified in a timely manner;
(n) in the case of a Shelf Registration, enter into
agreements (including underwriting agreements) and take all
other customary and reasonably appropriate actions
(including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the disposition
of such Registrable Notes and, in such connection, whether
or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration:
(i) make such representations and warranties to
the Holders of such Registrable Notes and the
underwriters, if any, in form, substance and scope as
are customarily made by issuers to underwriters in
similar underwritten offerings as may be reasonably
requested by them;
(ii) obtain opinions of counsel to the Issuers and
updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory
to the Managing Underwriters, if any, and the holders
of a majority in principal amount of the Registrable
Notes being sold) addressed to each selling Holder and
the underwriters, if any, covering the matters
customarily covered in opinions requested in sales of
securities or underwritten offerings and such other
matters as may be reasonably requested by such Holders
and underwriters;
(iii) obtain "cold comfort" letters and
updates thereof from the Issuers' independent certified
public accountants addressed to the underwriters, if
any, and use reasonable best efforts to have such
letters addressed to the selling Holders of Registrable
Notes, such letters to be in customary form and
covering matters of the type customarily covered in
"cold comfort" letters to underwriters in connection
with similar underwritten offerings;
(iv) enter into a securities sales agreement with
the Holders and an agent of the Holders providing for,
among other things, the appointment of such agent for
the selling Holders for the purpose of soliciting
purchases of Registrable Notes, which agreement shall
be in form, substance and scope customary for similar
offerings;
(v) if an underwriting agreement is entered into,
cause the same to set forth indemnification provisions
and procedures substantially equivalent to the
indemnification provisions and procedures set forth in
Section 5 hereof with respect to the underwriters and
all other parties to be indemnified pursuant to said
Section; and
(vi) deliver such documents and certificates as
may be reasonably requested in writing and as are
customarily delivered in similar offerings.
The actions referred to in clauses (i) through (vi) above
shall be done at (i) the effectiveness of such Registration
Statement (and, if appropriate, each post-effective
amendment thereto) and (ii) each closing under any
underwriting or similar agreement as and to the extent
required thereunder. In the case of any underwritten
offering, the Issuers shall provide written notice to the
Holders of all Registrable Notes of such underwritten
offering at least 15 days prior to the filing of a
prospectus supplement for such underwritten offering. Such
notice shall (x) offer each such Holder the right to
participate in such underwritten offering, (y) specify a
date, which shall be no earlier than 10 days following the
date of such notice, by which such Holder must inform the
Issuers of its intent to participate in such underwritten
offering and (z) include the instructions such Holder must
follow in order to participate in such underwritten
offering;
(o) in the case of a Shelf Registration, make
available for inspection during business hours (at the
offices where normally kept) by representatives of the
Majority Holders of the Registrable Notes and any Managing
Underwriters participating in any disposition pursuant to a
Shelf Registration Statement and any counsel or accountant
retained by such Majority Holders or Managing Underwriters,
all financial and other records, pertinent corporate
documents and properties of the Issuers reasonably requested
by any such persons, and cause the respective officers,
directors, employees, and any other agents of the Issuers to
supply all information reasonably requested by any such
representative, underwriter, special counsel or accountant
in connection with a Registration Statement as is customary
for similar due diligence examinations; provided, that such
persons shall first agree in writing with the Issuers that
any information that is designated in writing by the
Issuers, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by
such person, unless such disclosure is made in connection
with a court proceeding or required by law, or such
information becomes available to the public generally or
through a third party without an accompanying obligation of
confidentiality;
(p) (i) in the case of an Exchange Offer, a reasonable
time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any
amendment to an Exchange Offer Registration Statement or
amendment or supplement to a Prospectus, provide copies of
such document to the Initial Purchasers, and make such
changes in any such document prior to the filing thereof as
any of the Initial Purchasers or their counsel may
reasonably request; (ii) in the case of a Shelf
Registration, a reasonable time prior to filing any Shelf
Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement
or amendment or supplement to such Prospectus, provide
copies of such document to the Holders of Registrable Notes,
to the Initial Purchasers, to counsel on behalf of the
Majority Holders or to the Managing Underwriter or
Underwriters of an underwritten offering of Registrable
Notes, if any, and make such changes in any such document
prior to the filing thereof as the Holders of Registrable
Notes, TD Securities on behalf of such Holders, their
counsel and any Managing Underwriter may reasonably request
in writing unless the Issuers or their counsel reasonably
object to such changes; and (iii) cause the representatives
of the Issuers to be available for discussion of such
document as shall be reasonably requested in writing by the
Holders of Registrable Notes, TD Securities on behalf of
such Holders or any Managing Underwriter and shall not at
any time make any filing of any such document of which such
Holders, TD Securities on behalf of such Holders, their
counsel or any Managing Underwriter shall not have
previously been advised and furnished a copy or to which
such Holders, TD Securities on behalf of such Holders, their
counsel or any underwriter shall reasonably object;
(q) in the case of a Shelf Registration, use their
best efforts to cause all Registrable Notes to be listed on
any securities exchange on which similar debt securities
issued by the Issuers are then listed if requested in
writing by the Majority Holders or by the Managing
Underwriters of an underwritten offering of Registrable
Notes, if any;
(r) in the case of a Shelf Registration, use their
best efforts to cause the Registrable Notes to be rated with
the appropriate rating agencies, if so requested by the
Majority Holders or by the underwriter or underwriters of an
underwritten offering of Registrable Notes, if any, unless
the Registrable Notes are already so rated;
(s) otherwise use their best efforts to comply with
all applicable rules and regulations of the SEC and make
available to their security holders, as soon as reasonably
practicable, an earnings statement covering at least
12 months which shall satisfy the provisions of
Section 11(a) of the 1933 Act and Rule 158 thereunder; and
(t) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due
diligence investigation by any underwriter and its counsel.
In the case of a Shelf Registration Statement, the
Issuers may (as a condition to such Holder's participation in the
Shelf Registration and subject to Section 2(e)) require each
Holder of Registrable Notes to furnish to the Issuers, within 20
days after the Issuers have requested such information, such
information regarding such Holder and the proposed distribution
by such Holder of such Registrable Notes as the Issuers may from
time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each
Holder agrees (a) to furnish the information requested to be
furnished pursuant to the immediately preceding sentence within
the time period specified therein and (b) that, upon receipt of
any notice from the Issuers of the happening of any event or the
discovery of any facts, each of the kind described in clauses
(ii) through (vii) of Section 3(e) hereof, such Holder will
forthwith discontinue disposition of Registrable Notes pursuant
to a Registration Statement, and will not deliver any Prospectus
forming a part thereof, until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section
3(k) hereof or written notice from the Issuer that the use of the
Prospectus may be resumed, and, if so directed by the Issuers,
such Holder will deliver to the Issuers (at the Issuers' expense)
all copies in its possession, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such
Registrable Notes current at the time of receipt of such notice.
If the Issuers shall give any such notice to suspend the
disposition of Registrable Notes pursuant to a Shelf Registration
Statement as a result of the happening of any event or the
discovery of any facts, each of the kind described in Section
3(e)(vi) hereof, the Issuers shall be deemed to have used their
best efforts to keep the Shelf Registration Statement effective
during such period of suspension provided that the Issuers shall
use their best efforts to file and have declared effective (if an
amendment) as soon as practicable an amendment or supplement to
the Shelf Registration Statement. The period during which the
Registration Statement shall be maintained effective pursuant to
this Agreement shall be extended by the number of days during the
period from and including the date of the giving of such notice
to and including the date when the Holders shall have received
copies of the supplemented or amended Prospectus necessary to
resume such dispositions or written notice from the Issuer that
the use of the Prospectus may be resumed.
4. Underwritten Registrations. If any of the
Registrable Notes 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 such investment bankers of national standing in
the United States as are selected by the Majority Holders of such
Registrable Notes included in such offering and shall be
reasonably acceptable to the Issuers.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees
to sell such Holder's Registrable Notes 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.
5. Indemnification and Contribution. (a) The
Issuers shall indemnify and hold harmless each Holder, including
the Initial Purchasers and Participating Broker-Dealers, each
underwriter who participates in an offering of Registrable Notes,
their respective affiliates, and their respective directors,
officers, employees and agents, and each Person, if any, who
controls any of such parties within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all losses, liabilities, claims,
damages and expenses whatsoever, as incurred, arising out of
any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or
any amendment thereto) pursuant to which Exchange Notes or
Registrable Notes were registered under the 1933 Act,
including all documents incorporated therein by reference,
or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all losses, liabilities, claims,
damages and expenses whatsoever, as incurred, to the extent
of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission;
provided that (subject to Section 5(c) below) any such
settlement is effected with the written consent of the
Issuers; and
(iii) against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of
counsel chosen by an indemnified party), reasonably incurred
in investigating, preparing or defending against any
litigation, or investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 5(a);
provided, however, that (i) this indemnity shall not apply to any
loss, liability, claim, damage or expense to the extent arising
out of an untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the Issuers by the Initial
Purchasers, any Holder, including Participating Broker-Dealers,
or any underwriter expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement
thereto) and (ii) the Issuers shall not be liable to any
indemnified party under this indemnity agreement with respect to
the Registration Statement or Prospectus to the extent that any
such loss, claim, damage or liability of such indemnified party
results solely from an untrue statement of a material fact
contained in, or the omission of a material fact from, the
Registration Statement or Prospectus which untrue statement or
omission was corrected in an amended or supplemented Registration
Statement or Prospectus, if the person alleging such loss, claim,
damage or liability was not sent or given, at or prior to the
written confirmation of such sale, a copy of the amended or
supplemented Registration Statement or Prospectus if the Issuers
had previously furnished copies thereof to such indemnified party
and if delivery of a prospectus is required by the Act and was
not so made. This indemnity agreement will be in addition to any
liability which the Issuers may otherwise have.
(b) In the case of a Shelf Registration, each Holder
agrees, severally and not jointly, to indemnify and hold harmless
the Issuers, the Initial Purchasers, each underwriter who
participates in an offering of Registrable Notes and the other
selling Holders and each of their respective directors and
officers (including each officer of each of the Issuers who
signed the Registration Statement) and each Person, if any, who
controls the Issuers, each Initial Purchaser, any underwriter or
any other selling Holder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all
losses, liabilities, claims, damages and expenses described in
the indemnity contained in Section 5(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Issuers by
such Holder, as the case may be, expressly for use in the
Registration Statement (or any amendment thereto), or the
Prospectus (or any amendment or supplement thereto); provided,
however, that no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by
such Holder from the sale of Registrable Notes pursuant to such
Shelf Registration Statement.
(c) Each indemnified party shall give notice in
writing as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect
of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall
not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of
more than one counsel, in addition to any local counsel, for all
indemnified parties in connection with any one action or separate
but similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this
Section 5 (whether or not the indemnified parties are actual or
potential parties thereof), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature
contemplated by Section 5(a)(ii) hereof effected without its
written consent if (i) such settlement is entered into more than
45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance
with such request prior to the date of such settlement.
(e) If the indemnification provided for in any of the
indemnity provisions set forth in this Section 5 is for any
reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Issuers, the Initial Purchaser and the Holders, from the offering
of the Exchange Notes or Registrable Notes included in such
offering or (ii) if the allocation provided by clause (i) 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 Issuers, the Initial
Purchasers, and the Holders, in connection with the statements or
omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable
considerations. The relative fault of the Issuers, the Initial
Purchasers, and the Holders shall be determined by reference to,
among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the
Issuers, the Initial Purchasers or the Holders and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Issuers,
the Initial Purchasers and the Holders of the Registrable Notes
agree that it would not be just and equitable if contribution
pursuant to this Section 5 were determined by pro rata allocation
(even if the Initial Purchasers were treated as one entity, and
the Holders were treated as one entity, for such purpose) or by
another method of allocation which does not take account of the
equitable considerations referred to above in this Section 5.
The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above
in this Section 5 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or
any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon
any such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For
purposes of this Section 5, each person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as such Initial Purchaser or Holder, and
each director of the Issuers and each officer of the Issuers who
signed the Registration Statement, and each person, if any, who
controls the Issuers within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Issuers. The parties hereto agree that any
underwriting discount or commission or reimbursement of fees paid
to any Initial Purchaser pursuant to the Purchase Agreement shall
not be deemed to be a benefit received by any Initial Purchaser
in connection with the offering of the Exchange Notes or
Registrable Notes in such offering.
6. Miscellaneous. (a) Rule 144 and Rule 144A. For
so long as the Issuers are subject to the reporting requirements
of Section 13 or 15 of the 1934 Act, the Issuers covenant that
they will file the reports required to be filed by them under the
1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules
and regulations adopted by the SEC thereunder, that if they cease
to be so required to file such reports, they will upon the
request of any Holder of Registrable Notes (i) make publicly
available such information as is necessary to permit sales
pursuant to Rule 144 under the 1933 Act, (ii) deliver such
information to a prospective purchaser as is necessary to permit
sales pursuant to Rule 144A under the 1933 Act and (iii) take
such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable
such Holder to sell its Registrable Notes without registration
under the 1933 Act within the limitation of the exemptions
provided by (x) Rule 144 under the 1933 Act, as such Rule may be
amended from time to time, (y) Rule 144A under the 1933 Act, as
such Rule may be amended from time to time, or (z) any similar
rules or regulations hereafter adopted by the SEC. Upon the
request of any Holder of Registrable Notes, the Issuers will
deliver to such Holder a written statement as to whether they
have complied with such requirements.
(b) No Inconsistent Agreements. The Issuers have not,
as of the date hereof, entered into nor will the Issuers on or
after the date of this Agreement enter into any agreement which
is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the
Issuers' other issued and outstanding securities under any such
agreements.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the
Issuers have obtained the written consent of Holders of at least
a majority in aggregate principal amount of the outstanding
Registrable Notes affected by such amendment, modification,
supplement, waiver or departure; provided, however, that no
amendment, modification, supplement or waiver or consent to any
departure from the provisions of Section 5 hereof shall be
effective as against any Holder of Registrable Notes unless
consented to in writing by such Holder.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, telecopier, or
any courier guaranteeing overnight delivery (i) if to a Holder,
at the most current address given by such Holder to the Issuers
by means of a notice given in accordance with the provisions of
this Section 6(d), which address initially is, with respect to an
Initial Purchaser, the address set forth in the Purchase
Agreement; and (ii) if to the Issuers, initially at the Issuers'
address set forth in the Purchase Agreement and thereafter at
such other address, notice of which is given in accordance with
the provisions of this Section 6(d).
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if
personally delivered; five business days after being deposited in
the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands, or other
communications shall be concurrently delivered by the person
giving the same to the Trustee, at the address specified in the
Indenture.
(e) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors,
assigns and transferees of each of the parties, including,
without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein
shall be deemed to permit any assignment, transfer or other
disposition of Registrable Notes in violation of the terms hereof
or of the Purchase Agreement or the Indenture. If any transferee
of any Holder shall acquire Registrable Notes, in any manner,
whether by operation of law or otherwise, such Registrable Notes
shall be held subject to all of the terms of this Agreement, and
by taking and holding such Registrable Notes, such Person shall
be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such Person shall
be entitled to receive the benefits hereof.
(f) Third Party Beneficiary. The Holders shall be
third party beneficiaries to the agreements made hereunder
between the Issuers, on the one hand, and the Initial Purchasers,
on the other hand, and the Initial Purchasers shall have the
right to enforce such agreements directly to the extent they deem
such enforcement necessary or advisable to protect their rights
hereunder.
(g) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
(j) Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
BEAR ISLAND PAPER COMPANY,
L.L.C.
By: /s/ Edward D. Sherrick
____________________________
Name: Edward D. Sherrick
Title: Vice President
of Finance
BEAR ISLAND FINANCE COMPANY II
By: /s/ Edward D. Sherrick
____________________________
Name: Edward D. Sherrick
Title: Vice President
of Finance
Confirmed and accepted as of
the date first above
written:
TD SECURITIES (USA) INC.
SALOMON BROTHERS INC
By: TD SECURITIES (USA) INC.
By: /s/ Rod Ashtaryeh
________________________
Name: Rod Ashtaryeh
Title: Managing Director