EXHIBIT 10.1
Execution Copy
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REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 23, 2004
BETWEEN
SONOCO PRODUCTS COMPANY, AS ISSUER
AND
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANK SECURITIES INC.
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into this 23rd day of June, 2004, between Sonoco Products Company, a
South Carolina corporation (the "Company"), as issuer, and Banc of America
Securities LLC ("BofA") and Deutsche Bank Securities Inc. ("Deutsche Bank"), as
representatives (the "Representatives") of the several initial purchasers (the
"Initial Purchasers") listed on Schedule A to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated June
16, 2004, between the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of $150,000,000 principal amount of the Company's
5.625% Notes due 2016 (the "Securities"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed with the
Initial Purchasers to provide to the Holders (as defined below) the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 Act" shall mean the Securities Exchange Act of l934, as amended
from time to time.
"Additional Interest" shall have the meaning set forth in Section 2.5
hereof.
"Affiliate" shall have the meaning set forth in Section 4(a) hereof.
"BofA" shall have the meaning set forth in the preamble.
"Business Day" shall mean a day that is not a Saturday, a Sunday, or a
day on which banking institutions in New York, New York are authorized or
required to be closed.
"Closing Date" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"CUSIP number" means the alphanumeric designation assigned to a
Security by Standard and Poor's CUSIP Service Bureau.
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"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; provided, however, that such depositary
must have an address in the Borough of Manhattan, in The City of New York.
"Deutsche Bank" shall have the meaning set forth in the preamble
hereof.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Securities for Registrable Securities pursuant to Section 2.1 hereof.
"Effectiveness Period" shall have the meaning set forth in Section
2.2(b).
"Event Date" shall have the meaning set forth in Section 2.5.
"Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2.1 hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement,
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2.1(b)
hereof.
"Exchange Securities" shall mean the 5.625% Notes due 2016 issued by
the Company under the Indenture containing terms identical to the Securities in
all material respects (except for references to certain interest rate
provisions, restrictions on transfers and restrictive legends), to be offered to
Holders of Securities in exchange for Registrable Securities pursuant to the
Exchange Offer.
"Holder" shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees, any registered owners of Registrable Securities under the
Indenture, and each Participating Broker-Dealer that holds Exchange Securities
for so long as such Participating Broker-Dealer is required to deliver a
prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Securities.
"Indenture" shall mean the Indenture relating to the Securities dated
as of June 15, 1991, between the Company and The Bank of New York, as Trustee,
as amended by a supplemental indenture thereto to be dated as of June 23, 2004
relating to the Securities (the "First Supplemental Indenture"), and as may be
amended, supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof.
"Initial Purchaser" or "Initial Purchasers" shall have the meaning set
forth in the preamble.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indenture)
Registrable Securities; provided, however, that whenever the consent or approval
of Holders of a specified percentage of Registrable
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Securities is required hereunder, Registrable Securities held by the Company and
other obligors on the Securities or any "affiliate" (as such term is defined in
Rule 405 under the 1933 Act) of the Company shall be disregarded in determining
whether such consent or approval was given by the Holders of such required
percentage amount.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Participating Broker-Dealer" shall mean any of BofA, Deutsche Bank and
any other broker-dealer which makes a market in the Securities and exchanges
Registrable Securities in the Exchange Offer for Exchange Securities.
"Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, joint venture, association, joint stock
company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2.1(f)
hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2.1(f) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
"Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that Securities and, if issued,
the Private Exchange Securities, shall cease to be Registrable Securities when
(i) a Registration Statement with respect to such Securities shall have been
declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities are
eligible to be sold to the public pursuant to Rule l44 (or any similar provision
then in force, but not Rule 144A) under the 1933 Act, (iii) such Securities
shall have ceased to be outstanding or (iv) the Exchange Offer is consummated
(except in the case of Securities purchased from the Company continuing to be
held by the Initial Purchasers and having the status of an unsold allotment in
the initial distribution).
"Registration Default" shall have the meaning set forth in Section 2.5
hereof.
"Registration Expenses" shall mean any and all expenses incidental to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or NASD registration and filing fees, including,
if applicable, the reasonable fees and expenses of any "qualified independent
underwriter" (and its counsel) that is required to be retained by any holder of
Registrable Securities in accordance with the rules and regulations of the NASD,
(ii) all fees and expenses incurred in connection with compliance with state
securities or blue sky laws and compliance with the rules of the NASD (including
reasonable fees and disbursements of
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counsel for any underwriters or Holders that are Initial Purchasers in
connection with blue sky qualification of any of the Exchange Securities or
Registrable Securities and any filings with the NASD), (iii) the cost of
preparing or assisting in preparing, word processing, printing and distributing
any Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and other
documents relating to the performance of and compliance with this Agreement,
including, but not limited to, any expenses of counsel to the Company, (iv) any
rating agency fees, (v) the fees and disbursements of counsel for the Company
and of the independent public accountants of the Company, including the expenses
of any special audits or "cold comfort" letters required by Holders or
underwriters of Registrable Securities who may be entitled to request such
audits or letters pursuant to this Agreement, (vi) the fees and expenses of the
Trustee, and any escrow agent or custodian, (vii) the reasonable out-of-pocket
expenses of the Initial Purchasers in connection with the Exchange Offer,
including the reasonable fees and expenses of counsel to the Initial Purchasers
in connection therewith, (viii) the reasonable fees and disbursements of
Milbank, Tweed, Hadley & McCloy LLP, counsel representing the Holders of Shelf
Registrable Securities or Special Counsel and (ix) the reasonable out-of-pocket
expenses of any underwriters customarily required to be paid by an issuer or
seller of securities in an underwritten offering or an offering pursuant to a
securities sales agency agreement, but excluding underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder.
"Registration Statement" shall mean the Exchange Offer Registration
Statement or the Shelf Registration Statement 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.
"SAS 72" shall mean Statement on Auditing Standards No. 72, as amended
or supplemented from time to time.
"SEC" shall mean the United States Securities and Exchange Commission
or any successor agency or government body performing the functions currently
performed by the United States Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble.
"Shelf Registrable Securities" shall have the meaning set forth in
Section 2.5.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2.2 hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2.2 of this
Agreement which covers all of the Registrable Securities or all of the Private
Exchange Securities on an appropriate form under Rule 415 under the 1933 Act, or
any similar rule 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, and upon request, all
exhibits thereto and all material incorporated by reference therein.
"Special Counsel" shall have the meaning set forth in Section 3(g)
hereof.
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"Suspension Period" shall have the meaning set forth in Section 2.4(c)
hereof.
"TIA" shall mean the U.S. Trust Indenture Act of 1939, as amended, any
reference herein to the TIA or a particular provision thereof shall mean such
Act or provision, as the case may be, as amended or replaced from time to time
or as supplemented from time to time by the rules or regulations adopted by the
SEC under or in furtherance of the purposes of the Act or provision as the case
may be.
"Trustee" shall mean the trustee with respect to the Securities under
the Indenture.
"Underwriter" shall have the meaning set forth in Section 4(a) hereof.
2. Registration Under the 1933 Act.
2.1 Exchange Offer. The Company shall, for the benefit of the Holders,
at the Company's cost, (A) use its reasonable best efforts to file with the SEC
an Exchange Offer Registration Statement within 120 days of the Closing Date on
an appropriate form under the 1933 Act with respect to a proposed Exchange Offer
and the issuance and delivery to the Holders, in exchange for the Registrable
Securities (other than Private Exchange Securities), of a like principal amount
of Exchange Securities, (B) use its reasonable best efforts to cause the
Exchange Offer Registration Statement to be declared effective under the 1933
Act within 180 days of the Closing Date, (C) use its reasonable best efforts to
keep the Exchange Offer Registration Statement effective until the closing of
the Exchange Offer, (D) use its reasonable best efforts to cause the Exchange
Offer to be consummated not later than 210 days following the Closing Date and
(E) for a period of 90 days following the consummation of the Exchange Offer, to
make available a prospectus meeting the requirements of the 1933 Act to any such
participating broker-dealer for use in connection with any resale of any
exchange notes acquired in the exchange offer. If the Company has not
consummated the Exchange Offer within 210 days of the Closing Date, then the
Company will file as promptly as practicable a Shelf Registration Statement (as
described in Section 2.2 hereof). The Exchange Securities will be issued under
the Indenture. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder eligible and electing to
exchange Registrable Securities for Exchange Securities (assuming that such
Holder (a) is not an "affiliate" (as such term is defined in Rule 405 under the
1933 Act) of the Company (b) is not a broker-dealer tendering Registrable
Securities acquired directly from the Company for its own account, (c) acquired
the Exchange Securities in the ordinary course of such Holder's business and (d)
has no arrangements or understandings with any Person to participate in the
Exchange Offer for the purpose of distributing the Exchange Securities) to
transfer such Exchange Securities from and after their receipt without any
limitations or restrictions under the 1933 Act or under state securities or blue
sky laws. Exchange Securities will be issued under the Exchange Offer as
evidence of the same continuing indebtedness under the Securities. Under no
circumstances will the surrender of the Securities and the issue of Exchange
Securities constitute new indebtedness or obligate the Company to repay the
principal amount of the Securities.
In connection with the Exchange Offer, the Company shall:
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(a) mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;
(b) keep the Exchange Offer open for acceptance for a period of not
less than 20 Business Days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law) (such period referred to
herein as the "Exchange Period");
(c) utilize the services of the Depositary for the Exchange Offer;
(d) permit Holders to withdraw tendered Registrable Securities at any
time prior to 5:00 PM, New York City time, on the last Business Day of the
Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Securities delivered for exchange,
and a statement that such Holder is withdrawing such Holder's election to have
such Securities exchanged;
(e) notify each Holder that any Registrable Security not tendered will
remain outstanding and continue to accrue interest, but will not retain any
rights under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein); and
(f) otherwise comply in all respects with all applicable laws relating
to the Exchange Offer.
If, prior to consummation of the Exchange Offer, the Initial Purchasers
hold any Securities acquired by them and having the status of an unsold
allotment in the initial distribution, the Company upon the request of any
Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to such Initial Purchaser in
exchange (the "Private Exchange") for such Securities held by such Initial
Purchaser, a like principal amount of unsubordinated debt securities of the
Company that are identical (except that such securities shall bear appropriate
transfer restrictions) to the Exchange Securities (the "Private Exchange
Securities").
The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture, which, in either case, has been qualified under the
TIA, or is exempt from such qualification, and shall provide that the Exchange
Securities shall not be subject to the transfer restrictions set forth in the
Indenture but that the Private Exchange Securities shall be subject to such
transfer restrictions. The Indenture or such indenture shall provide that the
Exchange Securities, the Private Exchange Securities and the Securities shall
vote and consent together on all matters as one class and that none of the
Exchange Securities, the Private Exchange Securities or the Securities will have
the right to vote or consent as a separate class on any matter. The Private
Exchange Securities shall be of the same series as, and the Company shall use
its reasonable best efforts to have the Private Exchange Securities bear the
same CUSIP number as, the Exchange Securities.
As soon as practicable after the close of the Exchange Offer and/or the
Private Exchange, as the case may be, the Company shall:
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(i) accept for exchange all Registrable Securities duly
tendered and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration Statement
and the letter of transmittal which shall be an exhibit thereto;
(ii) accept for exchange all Registrable Securities properly
tendered and not validly withdrawn pursuant to the Private Exchange;
(iii) deliver, cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange; and
(iv) cause the Trustee promptly to authenticate and deliver
Exchange Securities or Private Exchange Securities, as the case may be,
to each Holder of Registrable Securities so accepted for exchange in a
principal amount equal to the principal amount of the Registrable
Securities of such Holder so accepted for exchange.
Interest on each Exchange Security and Private Exchange Security will
accrue from the last date on which interest was paid on the Securities
surrendered in exchange therefor or, if no interest has been paid on the
Securities, from the date of original issuance. The Exchange Offer and the
Private Exchange shall not be subject to any conditions, other than (i) that the
Exchange Offer or the Private Exchange, or the making of any exchange by a
Holder, as the case may be, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) the valid tendering of Registrable
Securities in accordance with the Exchange Offer and the Private Exchange, (iii)
that each Holder of Registrable Securities exchanged in the Exchange Offer shall
have represented that all Exchange Securities to be received by it shall be
acquired in the ordinary course of its business and that at the time of the
consummation of the Exchange Offer it shall have no arrangement or understanding
with any person to participate in the distribution (within the meaning of the
1933 Act) of the Exchange Securities and shall have made such other
representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to render the use of Form S-3 or other
appropriate form under the 1933 Act available and (iv) that no action or
proceeding shall have been instituted or threatened in any court or by or before
any governmental agency with respect to the Exchange Offer or the Private
Exchange which, in the judgment of the Company would reasonably be expected to
impair the ability of the Company to proceed with the Exchange Offer or the
Private Exchange. The Company shall, to the extent such information is available
to the Company, inform the Initial Purchasers of the names and addresses of the
Holders to whom the Exchange Offer is made, subject to the right of any Holder
to object to the disclosure of such information with respect to such Holder, and
the Initial Purchasers shall have the right, subject to applicable law, 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
Agreement, the Company shall have no further obligation to register the
Registrable Securities pursuant to Section 2.2 of this Agreement other than
pursuant to Section 2.2(iii), (iv) or (v) below.
2.2 Shelf Registration. (i) If, because of any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the
SEC, the Company determines, after consultation with its outside counsel, that
the Company is not permitted to effect the Exchange
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Offer as contemplated by Section 2.1 hereof, (ii) if for any other reason (A)
the Exchange Offer Registration Statement is not declared effective within 180
days following the Closing Date or (B) the Exchange Offer is not consummated
within 210 days after the Closing Date, (iii) upon the request of any of the
Initial Purchasers holding Private Exchange Securities issued with respect to
Registrable Securities that were not eligible to be exchanged for Exchange
Securities in the Exchange Offer or if the Initial Purchasers do not receive
freely tradable Exchange Securities in the Exchange Offer, (iv) upon notice of
any Holder (other than an Initial Purchaser) given to the Company in writing
within 20 days after the commencement of the Exchange Offer that (A) due to a
change in law or SEC policy it is not entitled to participate in the Exchange
Offer, (B) due to a change in law or SEC policy it may not resell the Exchange
Securities acquired by it in the Exchange Offer to the public without delivering
a prospectus and the prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
it is a broker-dealer and owns Registrable Securities acquired directly from the
Company or an "affiliate" of the Company (as such term is defined in Rule 405
under the 1933 Act) or (v) the holders of a majority of the Exchange Securities
may not resell the Exchange Notes acquired by them in the Exchange Offer to the
public without restriction under the 1933 Act and without restriction under
applicable blue sky or state securities laws, then in case of each of clauses
(i) through (v) the Company shall, at the Company's cost:
(a) As promptly as practicable, and, in any event, no later than 60
days after such filing obligation arises, file with the SEC, and thereafter
shall use their reasonable best efforts to cause to be declared effective as
promptly as practicable but, in any event, no later than 150 days after such
obligation arises, a Shelf Registration Statement relating to the offer and sale
of the Registrable Securities by the Holders from time to time in accordance
with the methods of distribution elected by the Majority Holders participating
in the Shelf Registration and set forth in such Shelf Registration Statement.
(b) Use their reasonable best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus forming part
thereof to be usable by Holders until the earlier of (A) two years from the date
the Shelf Registration Statement is declared effective by the SEC, (B) the date
on which the Registrable Securities become eligible for resale pursuant to Rule
144(k) or any successor provision or (C) the date on which all Registrable
Securities covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement or cease to be outstanding or otherwise to
be Registrable Securities (the "Effectiveness Period"); provided, however, that
the Effectiveness Period in respect of the Shelf Registration Statement shall be
extended if and to the extent necessary to permit dealers to comply with the
applicable prospectus delivery requirements of Rule 174 under the 1933 Act and
as otherwise provided herein.
(c) Notwithstanding any other provisions hereof, use their reasonable
best efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any supplement
thereto complies in all material respects with the 1933 Act and the rules and
regulations thereunder, (ii) any Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any Prospectus
forming part of any Shelf Registration
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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 therein,
in light of the circumstances under which they were made, not misleading.
The Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement, as required by Section 3(b) below, and to furnish
to the Holders of Registrable Securities copies of any such supplement or
amendment as promptly as reasonably practicable after its being used or filed
with the SEC.
2.3 Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2.1 or 2.2. Each Holder
shall pay all underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement.
2.4 Effectiveness. (a) The Company will be deemed not to have used
reasonable best efforts to cause the Exchange Offer Registration Statement or
the Shelf Registration Statement, as the case may be, to become, or to remain,
effective during the requisite period if the Company voluntarily takes any
action that would, or omits to take any action which omission would, result in
any such Registration Statement not being declared effective or in the Holders
of Registrable Securities covered thereby not being able to exchange or offer
and sell such Registrable Securities during that period as and to the extent
contemplated hereby, unless (i) such action is required by applicable law, or
(ii) such action is taken by the Company in good faith and for valid business
reasons (not including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets or a material corporate
transaction or event, so long as the Company promptly thereafter complies with
the requirements of Section 3(k) hereof, if applicable.
(b) An Exchange Offer Registration Statement pursuant to Section 2.1
hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not
be deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to an Exchange Offer Registration
Statement or a Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have become effective during the period of such interference, until the offering
of Registrable Securities pursuant to such Registration Statement may legally
resume.
(c) During any period of 365 consecutive days, the Company may suspend
the availability of a Shelf Registration Statement and the use of a related
Prospectus for two periods of up to 45 consecutive days (each such period, a
"Suspension Period") (except for such 45-day period immediately prior to
maturity of the Securities), but no more than an aggregate of 60 days during any
period of 365 consecutive days, if (A) any event shall occur as set forth in
Section 2.4(a)(i) or (ii) or as a result of which it shall be necessary, in the
good faith determination of the board of directors of the Company to amend the
Shelf Registration Statement or amend or supplement any prospectus or prospectus
supplement thereunder in order that each such document not include any untrue
statements of a material fact or omit to state a material fact
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necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (B) the Company has not filed with the
SEC the financial statements required by the applicable rules and regulations
for the Shelf Registration Statement to remain active; provided, however, that
the Company shall use reasonable best efforts to prepare and file any such
amendment or supplement as promptly as practicable. The two-year period referred
to in Section 2.2(b) shall be extended by an amount of time equal to all such
Suspension Periods.
2.5 Interest. The Indenture will provide that in the event that either
(a) the Exchange Offer Registration Statement is not filed with the SEC on or
prior to the 120th day following the Closing Date, (b) the Exchange Offer
Registration Statement has not been declared effective on or prior to the 180th
day following the Closing Date or the Exchange Offer is not consummated on or
prior to the 210th day after the Closing Date, or (c) if required, a Shelf
Registration Statement is not filed with the SEC on or prior to the 60th day
following the date such obligation arises or is not declared effective on or
prior to the 150th day following the date such obligation arises (each such
event referred to in clauses (a) through (c) above, a "Registration Default"),
the interest rate borne by the Securities shall be increased ("Additional
Interest") by one-quarter of one percent (0.25%) per annum upon the occurrence
of each Registration Default, which rate will increase by one quarter of one
percent (0.25%) at the beginning of each succeeding 90-day period (or portion
thereof) that such Additional Interest continues to accrue under any such
circumstance; provided, however, that the maximum aggregate increase in the
interest rate will in no event exceed one percent (1%) per annum; provided
further, that no Additional Interest shall be payable if the Exchange Offer
Registration Statement is not filed or declared effective or the Exchange Offer
is not consummated on account of the reasons set forth in clause (i) of the
first paragraph of Section 2.2 (it being understood, however, that in any such
case the Company shall be obligated to file a Shelf Registration Statement and
Additional Interest shall be payable if the Shelf Registration Statement is not
filed or is not declared effective in accordance with clause (c) above), or
notice under clause (iv) of such paragraph was not made on a timely basis; and
provided further, that Additional Interest shall only be payable in case the
Shelf Registration Statement is not filed or is not declared effective as
aforesaid. Immediately following the cure of a Registration Default, the accrual
of Additional Interest with respect to that particular Registration Default will
cease. Immediately following the cure of all Registration Defaults or the date
on which the Exchange Securities are saleable pursuant to Rule 144(k) under the
1933 Act or any successor provision, the accrual of Additional Interest will
cease and the interest rate will revert to the original rate.
If the Shelf Registration Statement is declared effective but becomes
unusable by the Holders of Registrable Securities covered by such Shelf
Registration Statement ("Shelf Registrable Securities") for any reason, and (a)
the aggregate number of days in any consecutive 365 day period for which the
Shelf Registration Statement shall not be usable exceeds 60 days in the
aggregate or (b) there shall be more than two Suspension Periods, then the
interest rate borne by the Shelf Registrable Securities will be increased by
0.25% per annum of the principal amount of the Securities for the first 90-day
period (or portion thereof) beginning on the 61st such day that such Shelf
Registration Statement remains unusable or the first day of the third Suspension
Period, as the case may be. If the Shelf Registration Statement remains unusable
for 60 days or if a third Suspension Period is ongoing, as the case may be,
during any 90-day period for which Additional Interest shall be payable pursuant
to this paragraph, then the interest rate borne by the Shelf Registrable
Securities during such 90-day period shall be increased by an
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additional 0.25% per annum of the principal amount of the Securities at the
beginning of each such subsequent 90-day period; provided, however, that the
maximum aggregate increase in the interest rate as a result of a Shelf
Registration Statement being unusable (inclusive of any interest that accrues on
such Shelf Registrable Securities pursuant to the first paragraph of this
Section 2.5) will in no event exceed one percent (1%) per annum. Upon the Shelf
Registration Statement once again becoming usable, the interest rate borne by
the Shelf Registrable Securities will be reduced to the original interest rate.
Additional Interest shall be computed based on the actual number of days elapsed
in each 90-day period for which Additional Interest is due.
The Company shall notify the Trustee within five business days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Additional Interest shall be
paid in the same manner as regular interest pursuant to the Indenture. Any
accrued and unpaid interest (including Additional Interest, if any) on a
Registrable Security upon the issuance of an Exchange Security in exchange for a
Registrable Security shall cease to be payable to the Holder thereof but such
accrued and unpaid interest (including Additional Interest, if any) shall be
payable to the Holder of such Exchange Security with the next Interest Payment
for such Exchange Security. The Additional Interest 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 Additional Interest shall be deemed to accrue
from and including the day of the applicable Event Date.
3. Registration Procedures.
In connection with the obligations of the Company with respect to the
Registration Statements and pursuant to Sections 2.1 and 2.2 hereof, the Company
shall:
(a) prepare and file with the SEC a Registration Statement, within the
relevant time period specified in Section 2, on the appropriate form under the
1933 Act, which form (i) shall be selected by the Company; (ii) shall, in the
case of a Shelf Registration, be available for the sale of the Shelf Registrable
Securities 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 or incorporated by reference therein, and use their reasonable
best efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) subject to Section 2.4 hereof, 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 as provided for in Section 2 hereof; and cause each
Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to file such Prospectus pursuant to Rule 424 (or any similar
provision then in force) under the 1933 Act and comply with the provisions of
the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable
to them with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance, in the case
of a Shelf Registration, with the intended method or methods of distribution by
the selling Holders thereof (including sales by any Participating
Broker-Dealer);
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(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Shelf Registrable
Securities will be made in accordance with the method selected by the Initial
Purchasers, if any, or if no Initial Purchaser is participating in the Shelf
Registration, by the Majority Holders participating in the Shelf Registration;
(ii) furnish to each Holder of Shelf Registrable Securities and to each
underwriter of an underwritten offering of Shelf Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Initial Purchasers, Majority Holders or underwriter, selected by such
Initial Purchasers or Majority Holders, as the case may be, may reasonably
request considering the method of distribution selected by the Initial
Purchasers, if any, or if no Initial Purchaser is participating in the Shelf
Registration, by the Majority Holders, as the case may be, including financial
statements and schedules and, if any Holder so requests, all exhibits (but not
more than one set of such exhibits for each Holder) in order to facilitate the
public sale or other disposition of the Shelf Registrable Securities; and (iii)
hereby consent to the use of the Prospectus together with any amendment or
supplement thereto by each of the selling Holders of Shelf Registrable
Securities, subject to and in accordance with applicable law, in connection with
the offering and sale of the Shelf Registrable Securities covered by the
Prospectus or any amendment or supplement thereto;
(d) use its reasonable best efforts to register or qualify the Shelf
Registrable Securities under all applicable state securities or "blue sky" laws
of such jurisdictions as the Initial Purchasers or Majority Holders
participating in the Shelf Registration and each underwriter of an underwritten
offering of Shelf Registrable Securities shall reasonably request by the time
the applicable Registration Statement is declared effective by the SEC, and do
any and all other acts and things which may be reasonably necessary or advisable
to enable each such Initial Purchasers or Majority Holders and underwriter,
selected by such Initial Purchasers or Majority Holders, to consummate the
disposition in each such jurisdiction of such Shelf Registrable Securities owned
by the Holders; provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (ii) take any action which would subject it to general service of
process or taxation in any such jurisdiction where it is not then so subject, or
(iii) conform its capitalization or the composition of its assets at the time to
the securities or blue sky laws of such jurisdiction, or (iv) make any changes
to it articles of association or any agreement with its shareholders;
(e) notify promptly each Holder of Shelf Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Company that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below (which notice pursuant to clauses (ii), (iv),
(v) and (vi) hereof shall be accompanied by an instruction to suspend use of the
Prospectus until the requisite changes have been made) and, if requested by such
Holder or Participating Broker-Dealer, confirm such advice in writing (if such
notice was not originally given 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
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securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) in the case of a Shelf Registration, if, between the effective date of a
Registration Statement and the closing of any sale of Shelf Registrable
Securities covered thereby, the representations and warranties of the Company
contained in any underwriting agreement, securities sales agreement or other
similar agreement, if any, relating to the offering cease to be true and correct
in all material respects, (v) of the happening of any event, the existence of
any condition or the discovery of any facts during the period a Shelf
Registration Statement is effective which makes (A) any statement made in such
Registration Statement untrue in any material respect or which requires the
making of any changes in such Registration Statement in order to make the
statements therein not misleading or (B) any statement made in the related
Prospectus untrue in any material respect or which requires the making of any
changes in such Prospectus in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, (vi) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities or the Exchange Securities, as the
case may be, for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose and (vii) of any determination by the Company
that a post-effective amendment to such Registration Statement would be
appropriate;
(f) (i) in the case of the Exchange Offer Registration Statement (A)
include in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution" which section shall be reasonably acceptable to BofA and Deutsche
Bank, on behalf of the Participating Broker-Dealers, if any, and which shall
contain a summary statement of the positions taken or policies made by the staff
of the SEC with respect to the potential "underwriter" status of any
broker-dealer that holds Registrable Securities acquired for its own account as
a result of market-making activities or other trading activities and that will
be the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities to be received by such broker-dealer in the Exchange Offer,
including a statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer may be
deemed a statutory underwriter and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such Exchange
Securities, (B) furnish to each Participating Broker-Dealer who has delivered to
the Company the notice referred to in Section 3(e), without charge, as many
copies of each Prospectus included in the Exchange Offer Registration Statement,
including any preliminary prospectus, and any amendment or supplement thereto,
as such Participating Broker-Dealer may reasonably request, (C) hereby consent
to the use of the Prospectus forming part of the Exchange Offer Registration
Statement together with any amendment or supplement thereto, by any Person
subject to the prospectus delivery requirements of the SEC, including all
Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement
thereto, and (D) include in the transmittal letter or similar documentation to
be executed by an exchange offeree in order to participate in the Exchange Offer
(x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities, it will deliver a
prospectus meeting the requirements of the 1933 Act in connection with
any resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer;"
-13-
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the 1933
Act; and (ii) in the case of any Exchange Offer Registration Statement, the
Company agrees to deliver to BofA and Deutsche Bank, on behalf of the
Participating Broker-Dealers upon the effectiveness of the Exchange Offer
Registration Statement officers' certificates substantially in the form
customarily delivered in a public offering of debt securities;
(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
Milbank, Tweed, Hadley & McCloy LLP, as special counsel for the Holders of Shelf
Registrable Securities (or, if Milbank, Tweed, Hadley & McCloy LLP is unable or
unwilling to serve, such other special counsel (but not more than one) as may be
selected by Holders of a majority in principal amount of such Shelf Registrable
Securities ("Special Counsel")), copies of any comment letters received from the
SEC or any other request by the SEC or any state securities authority for
amendments or supplements to a Registration Statement and Prospectus or for
additional information;
(h) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
practicable moment;
(i) in the case of a Shelf Registration, furnish to each Holder of
Shelf Registrable Securities, and each underwriter, if any, without charge, at
least one conformed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules (without
documents incorporated therein by reference or exhibits thereto, unless
requested in writing);
(j) in the case of a Shelf Registration (unless any Registrable
Securities shall be in book-entry form only), cooperate with the selling Initial
Purchasers, if any, or Majority Holders of Shelf Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Shelf Registrable Securities to be sold and not bearing any restrictive legends;
and enable such Shelf Registrable Securities to be in such denominations
(consistent with the provisions of the Indenture) and registered in such names
as the selling Initial Purchasers, if any, or Majority Holders or the
underwriters, selected by such Initial Purchasers or Majority Holders, if any,
may reasonably request at least three business days prior to the closing of any
sale of Shelf Registrable Securities;
(k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Sections 3(e)(v)
and 3(e)(vi) hereof, as promptly as practicable after the occurrence of such an
event, subject to section 2.4(c), use its reasonable best efforts to prepare a
supplement or post-effective amendment to the Registration Statement or the
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Shelf Registrable Securities or Participating Broker-Dealers, such
Prospectus will not contain at the time of such delivery any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. At such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a
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material fact or to include any omitted material fact, the Company agrees
promptly to notify each Holder of such determination and to furnish each Holder
such number of copies of the Prospectus as amended or supplemented, as such
Holder may reasonably request and the Initial Purchasers, on their own behalf
and on behalf of subsequent holders, hereby agree to suspend use of the
Prospectus until the Company has amended or supplemented to correct such
misstatement or omission;
(l) in the case of a Shelf Registration, a reasonable time prior to the
filing of any Shelf Registration Statement, any Prospectus, any amendment to a
Shelf Registration Statement or amendment or supplement to a Prospectus (other
than any document which is to be incorporated by reference into a Shelf
Registration Statement or a Prospectus after initial filing of a Shelf
Registration Statement) provide copies of such Registration Statement,
Prospectus, amendment or supplement to the Initial Purchasers, if any, or the
Majority Holders on behalf of such Holders; and make representatives of the
Company as shall be reasonably requested by the Majority Holders of Shelf
Registrable Securities, or the Initial Purchasers on behalf of such Holders,
available for discussion of such document;
(m) obtain a CUSIP number for all Exchange Securities, Private Exchange
Securities or Registrable Securities, as the case may be, not later than the
effective date of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Securities, Private Exchange Securities or the
Registrable Securities, as the case may be, in a form eligible for deposit with
the Depositary;
(n) (i) cause the Indenture to be qualified under the TIA in connection
with the registration of the Exchange Securities or Registrable Securities, as
the case may be, (ii) cooperate with the Trustee to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in accordance
with the terms of the TIA and (iii) execute, and use its best efforts to cause
the Trustee to execute, all documents as may be required to effect such changes,
and all other forms and documents required to be filed with the SEC to enable
the Indenture to be so qualified in a timely manner;
(o) in the case of a Shelf Registration, and considering the method of
distribution selected by the Majority Holders, enter into customary agreements
(including underwriting agreements and, if requested by the Initial Purchasers,
if any, or the Majority Holders, as the case may be, securities sales agreements
providing for, among other things, the appointment of an agent for the selling
Holders for the purpose of soliciting purchases of Shelf Registrable Securities,
which agreement shall be in form, substance and scope customary for similar
offerings) and take all other customary and appropriate actions in order to
expedite or facilitate the disposition of such Shelf Registrable Securities,
including in the case of an underwritten offering:
(i) make such representations and warranties to the
underwriters selected by such Initial Purchasers or Majority Holders,
as the case may be, and to the Holders selling through such
underwriters, comparable in form, substance and scope to the
representations and warranties made by the Company pursuant to the
Purchase Agreement;
-15-
(ii) if so requested by the Initial Purchasers, if any, the
Majority Holders or the underwriters selected by such Initial
Purchasers or Majority Holders, as the case may be, obtain opinions of
counsel to the Company (which counsel shall be reasonably satisfactory
to the underwriters, if any, selected by such Initial Purchasers and
Majority Holders) and updates thereof addressed to such underwriters
and to the Holders selling through such underwriters, covering matters
comparable in form, substance and scope to those covered in the
opinions delivered by counsel to the Company pursuant to the Purchase
Agreement and subject to exceptions and qualifications comparable in
form, substance and scope to those contained in such delivered
opinions;
(iii) if so requested by the Initial Purchasers, if any, the
Majority Holders or the underwriters selected by such Initial
Purchasers or Majority Holders, as the case may be, obtain "cold
comfort" letters and updates thereof from the Company's independent
certified public accountants (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company, or of
any business acquired by the Company for which financial statements
are, or are required to be, included in the Registration Statement)
addressed to the underwriters selected by the Initial Purchasers or the
Majority Holders, as the case may be, and to the Holders selling
through such underwriters, such letters to be in customary form and in
accordance with applicable accounting standards and covering matters of
the type customarily covered in "cold comfort" letters to underwriters
in connection with similar underwritten offerings;
(iv) cause the same to set forth indemnification provisions
and procedures comparable in scope to the indemnification provisions
and procedures set forth in Section 4 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to said
Section or, at the request of any underwriters, such other
indemnification provisions customarily provided to underwriters under
the circumstances applicable to the offering; provided, however, that
such underwriting agreement shall contain indemnification provisions
and procedures regarding the indemnification of the Company with
respect to information provided by the underwriter or by any other
party to be indemnified under Section 4 hereof, comparable in scope to
the indemnification provisions and procedures set forth in Section 4
hereof or, at the request of the Company, such other indemnification
provisions customarily provided under the circumstances applicable to
the offering; and
(v) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
offerings to the Initial Purchasers, if any, the Holders of a majority
in principal amount of the Shelf Registrable Securities being sold and
the underwriters.
The above shall be done at each closing under any underwriting or
similar agreement as and to the extent required thereunder;
(p) in the case of a Shelf Registration or if a Prospectus is required
to be delivered by any Participating Broker-Dealer in the case of an Exchange
Offer, make available for inspection by representatives of the Initial
Purchasers, if any, the Majority Holders, any underwriters selected by such
Initial Purchasers or Majority Holders, as the case may be, participating in any
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disposition pursuant to a Shelf Registration Statement, any Participating
Broker-Dealer (provided that a Participating Broker-Dealer shall not be deemed
to be an underwriter solely as a result of it being required to deliver a
prospectus in connection with any resale of Exchange Securities), any Special
Counsel or any accountant retained by any of the foregoing, all such financial
and other records, pertinent corporate documents and properties of the Company
reasonably requested by any such persons, and cause the respective officers,
directors, employees, and any other agents of the Company to respond to such
queries, as shall be reasonably necessary to conduct a reasonable investigation
within the meaning of Section 11 of the 1933 Act; provided, however, that such
records, documents or information which the Company identifies as being
confidential shall not be disclosed by the representative, Holder, attorney or
accountant unless (i) the disclosure of such records, documents or information
is necessary to avoid or correct a misstatement or omission in a Registration
Statement, (ii) the release of such records, documents or information is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction or
as part of the evidentiary procedures of a court of competent jurisdiction,
subject to the requirements of such subpoena or order, and only after such
person shall have given the Company reasonable prior notice of such
requirements; or (iii) such records, documents or information have previously
been generally made available to the public, and provided further, that the
Company may require recipients of such records, documents or information to
enter into a confidentiality agreement;
(q) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to such Prospectus,
provide copies of such document to the Initial Purchasers and to Milbank, Tweed,
Hadley & McCloy LLP, as counsel to the Holders of Registrable Securities, and
make such changes in any such document prior to the filing thereof as the
Initial Purchasers or such counsel to the Holders of Registrable Securities may
reasonably request and, except as otherwise required by applicable law, not file
any such document in a form to which the Initial Purchasers on behalf of the
Holders of Registrable Securities and such counsel to the Holders of Registrable
Securities shall not have previously been advised and furnished a copy of or to
which the Initial Purchasers on behalf of the Holders of Registrable Securities
or such counsel to the Holders of Registrable Securities shall reasonably
object, and make the representatives of the Company available for discussion of
such documents as shall be reasonably requested by the Initial Purchasers; and
(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 Initial Purchasers, if any, the Majority
Holders, Special Counsel and to the underwriter or underwriters of an
underwritten offering of Shelf Registrable Securities, if any, as
appointed by the Initial Purchasers or the Majority Holders, as the
case may be, make such changes in any such document prior to the filing
thereof as the Initial Purchasers, Special Counsel or the underwriter
or underwriters reasonably request and not file any such document in a
form to which the Majority Holders of Shelf Registrable Securities, the
Initial Purchasers on behalf of the Holders of Shelf Registrable
Securities, Special Counsel or any underwriter shall not have
previously been advised and furnished a copy of or to which such
Majority Holders, the
-17-
Initial Purchasers on behalf of the Holders of Shelf Registrable
Securities, Special Counsel or any underwriter shall reasonably object,
and make the representatives of the Company available for discussion of
such document as shall be reasonably requested by the Majority Holders,
the Initial Purchasers on behalf of such Holders, Special Counsel or
any underwriter;
(r) [RESERVED]
(s) in the case of a Shelf Registration, use its reasonable best
efforts to cause the Shelf Registrable Securities to be rated by two nationally
recognized statistical rating agencies, if so requested by the Initial
Purchasers, if any, or the Majority Holders, or if requested by the underwriter
or underwriters as appointed by the Initial Purchasers, if any, or the Majority
Holders of an underwritten offering of Shelf Registrable Securities, if any;
(t) otherwise comply with all applicable rules and regulations of the
SEC and make available to its security holders, as soon as reasonably
practicable, an earnings statement of the Company covering at least 12 months
which shall satisfy the provisions of Section 11(a) of the 1933 Act, including,
at the option of the Company, Rule 158 thereunder;
(u) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any due
diligence investigation by any underwriter as appointed by the Initial
Purchasers, if any, or the Majority Holders and such underwriter's counsel
(including any "qualified independent underwriter" that is required to be
retained in accordance with the rules and regulations of the NASD); and
(v) upon consummation of an Exchange Offer or a Private Exchange,
obtain a customary opinion of counsel to the Company addressed to the Trustee
for the benefit of all Holders of Registrable Securities participating in the
Exchange Offer or Private Exchange, and which includes an opinion that (i) the
Company has duly authorized, executed and delivered the Exchange Securities
and/or Private Exchange Securities, as applicable, and the related indenture,
and (ii) each of the Exchange Securities and related indenture constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms (with customary exceptions).
In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Shelf Registrable Securities to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder of
such Shelf Registrable Securities as the Company may from time to time
reasonably request in writing for use in connection with any Shelf Registration
Statement or Prospectus included therein, including without limitation,
information specified in Item 507 of Regulation S-K under the 1933 Act.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event or the
discovery of any facts, each of the kind described in Section 3(e)(v) hereof,
such Holder will forthwith discontinue disposition of Shelf Registrable
Securities pursuant to a Shelf Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(k)
-18-
hereof, and, if so directed by the Company, such Holder will deliver to the
Company (at the expense of the Company ) all copies in such Holder's possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Shelf Registrable Securities current at the time of
receipt of such notice.
If any of the Shelf Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or managers that will manage such
offering will be selected by the Majority Holders of such Shelf Registrable
Securities included in such offering, provided, however, that such selection is
acceptable to the Company. No Holder of Shelf Registrable Securities may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Shelf Registrable Securities on the basis provided
in any underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
4. Indemnification; Contribution.
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser, its selling agents, each Holder, including Participating
Broker-Dealers, each Person who participates as an underwriter (any such Person
being an "Underwriter"), their respective affiliates (as such term is defined in
Rule 501(b) under the 1933 Act (each, an "Affiliate")), and each Person, if any,
who "controls" any of such indemnified 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 loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto)
pursuant to which Exchange Securities or Registrable Securities were
registered under the 1933 Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided,
however, that (subject to Section 4(d) below) any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, in the case where the indemnified parties are entitled to
appoint counsel in accordance with
-19-
paragraph (c) of this Section), the reasonable fees and disbursements
of counsel chosen by the indemnified parties) reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Holder or Underwriter expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto).
(b) In the case of a Shelf Registration, each Holder severally, but not
jointly, agrees to indemnify and hold harmless the Company, the Initial
Purchasers, each Underwriter and the other selling Holders, and each of their
respective directors and officers, and each Person, if any, who controls the
Company, the Initial Purchasers, any Underwriter or any other selling Holder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 4(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus included therein (or any amendment or supplement thereto) in reliance
upon and in conformity with written information with respect to such Holder
furnished to the Company by such Holder expressly for use in the Shelf
Registration Statement (or any amendment thereto) or such Prospectus (or any
amendment or supplement thereto); provided, however, that no such Holder shall
be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Securities pursuant to such
Shelf Registration Statement; and provided further, that no such underwriter
shall be liable for any claims hereunder in excess of the amount of any
underwriting fees or discounts received by such underwriter with respect to the
sale of Shelf Registrable Securities pursuant to such Shelf Registration
Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action 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. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party and any other
indemnified parties as the indemnifying party may designate in any action for
which indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
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the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action; or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party; provided, however, that (i), (ii) and (iii)
above notwithstanding, an indemnified party may participate at its own expense
in the defense of any such action. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to any local counsel) for all indemnified parties. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 4 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 4(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement; provided,
however, that an indemnifying party shall not be liable for any such settlement
effected without its consent if such indemnifying party, prior to the date of
such settlement, (x) reimburses such indemnified party in accordance with such
request for the amount of such fees and expenses of counsel as the indemnifying
party believes in good faith to be reasonable, and (y) provides written notice
to the indemnified party that the indemnifying party disputes in good faith the
reasonableness of the unpaid balance of such fees and expenses.
(e) If the indemnification provided for in this Section 4 is for any
reason unavailable 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 Company on the one hand and the
Initial Purchasers on another hand, and the Holders on another hand, from the
offering of the Exchange Securities or Registrable
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Securities 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 Company on the one hand, and the
Initial Purchasers on another hand, and the Holders on another hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative fault of the Company on the one hand, and the Initial
Purchasers on another hand, and the Holders on another hand, 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 Company, 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 Company, the Holders and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 4. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
4 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 4, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which any
underwriting fees or discounts received by such Initial Purchaser with respect
to the sale of Shelf Registrable Securities pursuant to the related Shelf
Registration Statement exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and each Initial Purchaser's or Holder's Affiliates
and selling agents shall have the same rights to contribution as such Initial
Purchaser or Holder, and each Person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Initial Purchasers'
respective obligations to contribute pursuant to this Section 4 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A to the Purchase Agreement and not joint.
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5. Miscellaneous.
5.1 Rule 144 and Rule 144A. For so long as the Company is subject to
the reporting requirements of Section 13 or 15 of the 1934 Act, the Company
covenants that it will file the reports required to be filed by it under Section
13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC
thereunder. If the Company ceases to be so required to file such reports, the
Company covenants that it will upon the request of any Holder of Registrable
Securities (a) make publicly available such information as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such
information to a prospective purchaser as is necessary under applicable rules
and regulations to permit sales pursuant to Rule 144A under the 1933 Act and it
will take such further action as any Holder of Registrable Securities may
reasonably request, and (c) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
1933 Act within the limitation of the exemptions provided by (i) Rule 144 under
the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A
under the 1933 Act, as such Rule may be amended from time to time, or (iii) any
similar rules or regulations hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements. The
Company's obligations under this Section 5.1 shall terminate upon the later of
the consummation of the Exchange Offer and the Effectiveness Period.
5.2 No Inconsistent Agreements. The Company has not entered into, and
the Company will not after the date of this Agreement enter into, any agreement
that could interfere with the Company's performance of its obligations hereunder
or that could prevent or limit the Holders of Registrable Securities from
enjoying the rights granted to them hereunder. The rights granted to the Holders
hereunder do not and will not for the term of this Agreement in any way conflict
with any material rights granted to the holders of the Company's other issued
and outstanding securities under any such agreements.
5.3 Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of at least
a majority in aggregate principal amount of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or
departure.
5.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (a)
if to a Holder, at the most current address given by such Holder to the Company
by means of a notice given in accordance with the provisions of this Section
5.4, which address initially is the address set forth in the Purchase Agreement
with respect to the Initial Purchasers; and (b) if to the Company initially at
the address set forth in the Purchase Agreement, and thereafter at such other
address of which notice is given in accordance with the provisions of this
Section 5.4.
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All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two business days
after being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered to
an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.
5.5 Successor and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement and the Indenture, and such person
shall be entitled to receive the benefits hereof.
5.6 Third Party Beneficiaries. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Company and the
Holders, and shall have the right to enforce such agreements directly to the
extent they deem such enforcement necessary or advisable to protect their rights
or the rights of Holders hereunder. Each Holder of Registrable Securities shall
be a third party beneficiary to the agreements made hereunder between the
Company and the Initial Purchasers, on the other hand, and shall have the right
to enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights hereunder.
5.7 Specific Enforcement. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Sections 2.1 through
2.4 hereof may result in material irreparable injury to the Initial Purchasers
or the Holders for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Company's obligations
under Sections 2.1 through 2.4 hereof.
5.8 Restriction on Resales. Until the expiration of two years after the
original issuance of the Securities, the Company will not, and will cause their
"affiliates" (as such term is defined in Rule 144(a)(1) under the 1933 Act) not
to, resell any Securities which are "restricted securities" (as such term is
defined under Rule 144(a)(3) under the 1933 Act) that have been reacquired by
any of them.
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5.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
5.10 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
5.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.12 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SONOCO PRODUCTS COMPANY,
as Issuer
By:
-----------------------------
Name:
----------------------
Title:
----------------------
CONFIRMED AND ACCEPTED
as of the date first above written:
BANC OF AMERICA SECURITIES LLC
By:
---------------------------------------
Authorized Signatory
DEUTSCHE BANK SECURITIES INC.
By:
---------------------------------------
Authorized Signatory
By:
---------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Initial Purchasers
set forth above
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