BEAR ISLAND PAPER COMPANY, L.L.C.
(a Virginia limited liability company)
BEAR ISLAND FINANCE COMPANY II
(a Delaware corporation)
$100,000,000
10% Senior Secured Notes due 2007
PURCHASE AGREEMENT
November 21, 1997
TD SECURITIES (USA) INC.
SALOMON BROTHERS INC
c/o TD Securities (USA) Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Bear Island Paper Company, L.L.C., a Virginia limited
liability company (the "Company"), and Bear Island Finance
Company II, a Delaware corporation ("XxxXx" and, together with
the Company, the "Issuers"), propose to issue and sell to TD
Securities (USA) Inc. ("TD Securities") and Salomon Brothers Inc
("Salomon Brothers" and, together with TD Securities, the
"Initial Purchasers") $100,000,000 aggregate principal amount of
their 10% Senior Secured Notes due 2007 (the "Securities"). The
Securities are to be issued pursuant to an indenture to be dated
on or about December 1, 1997 (the "Indenture") between the
Issuers, as joint and several obligors, the Security Parties (as
defined herein), Xxxxx-Xxxxx Industries, Inc. ("Xxxxx-Xxxxx") and
Crestar Bank, a Virginia banking corporation, as trustee (the
"Trustee").
The Company is wholly owned by Xxxxx-Xxxxx. On October
15, 1997, Xxxxx-Xxxxx entered into an agreement (the "Acquisition
Agreement") to purchase all of the partnership interests of Bear
Island Paper Company, L.P. ("BIPCO") owned by certain
subsidiaries of Dow Xxxxx & Company, Inc. ("Dow Xxxxx") and The
Washington Post Company ("The Washington Post"). Before the
closing of this acquisition, BIPCO will be converted from a
limited partnership into Bear Island Mergerco, L.L.C.
("Mergerco"), a limited liability company organized under
Virginia law, and Xxxxx-Xxxxx will contribute its interests in
Mergerco and assign its rights under the Acquisition Agreement to
the Company, a second newly formed limited liability company,
also organized under Virginia law, of which the sole member will
be Xxxxx-Xxxxx. The Company and XxxXx will then consummate the
offering and the Company will purchase the interests of the Dow
Xxxxx and The Washington Post subsidiaries in Mergerco.
Immediately following the acquisition, Mergerco will be merged
with and into the Company, and the Company will continue to be
wholly owned by Xxxxx-Xxxxx. (The transactions described above
are referred to as the "Acquisition.") Financing for the
Acquisition is intended to be provided by (i) borrowings pursuant
to an agreement (the "Bank Credit Agreement") for $120 million
senior secured bank credit facilities and (ii) the net proceeds
received by the Company from the issuance of Securities to be
sold in this offering.
In addition, on October 15, 1997, Xxxxx-Xxxxx, Xxx
Xxxxx and The Washington Post entered into a separate agreement
(the "Timberlands Acquisition Agreement" and, together with the
Acquisition Agreement, the "Acquisition Agreements") for the
purchase by Xxxxx-Xxxxx of all the partnership interests in Bear
Island Timberlands Company, L.P., a Virginia limited partnership
("BITCO"), that are owned by subsidiaries of Dow Xxxxx and The
Washington Post. Immediately before the closing of this
acquisition, BITCO will be converted from a limited partnership
into Bear Island Timberlands Company, L.L.C. ("Timberlands"), a
Virginia limited liability company. (Unless otherwise indicated,
all references herein to Timberlands shall refer, prior to such
conversion, to BITCO.) At the closing of this acquisition,
Xxxxx-Xxxxx will purchase the equity interests in Timberlands
owned by the subsidiaries of Dow Xxxxx and The Washington Post
pursuant to the terms of the Timberlands Acquisition Agreement
(the foregoing transactions occurring before and at the closing
are referred to as the "Timberlands Acquisition"). After the
Timberlands Acquisition, Timberlands will be owned 100% by Xxxxx-
Xxxxx. Financing of the Timberlands Acquisition is intended to
be provided by borrowings pursuant an agreement (the "Timberlands
Credit Agreement") for a $35 million senior secured two-year term
loan to be borrowed by Xxxxx-Xxxxx and guaranteed by Timberlands.
Concurrently with the Timberlands Acquisition, Timberlands and
Xxxx Xxxxxxx Mutual Life Insurance Company will substantially
modify the terms of their existing loan agreement in order to
increase the indebtedness of Timberlands from the present $27
million balance outstanding to $30 million, to reduce the term to
two years and to provide for a related fee by Timberlands (such
loan agreement, as amended, the "Xxxxxxx Credit Agreement" and,
together with the Bank Credit Agreement and the Timberlands
Credit Agreement, the "Credit Agreements").
The obligations of the Issuers under the Indenture and
the Securities are to be secured by (i) a second priority
security interest in (x) all of the real property of the Company
(the "Company Real Property") pursuant to a deed of trust among
the Company, the Trustee and the collateral trustee thereunder
(the "Deed of Trust") and (y) all of the personal property of the
Company, except for a third priority security interest in certain
equipment and fixed assets of the Company, to the extent that
such equipment and fixed assets are assignable, and except for
certain other assets that are not assignable (the "Company
Personal Property" and, together with the Company Real Property,
the "Company Collateral"), pursuant to a pledge and security
agreement between the Company and the Trustee (the "Company
Pledge and Security Agreement"); (ii) a third priority security
interest in 100% of the membership interests in Timberlands (the
"Timberlands Collateral") pursuant to a pledge agreement between
Xxxxx-Xxxxx and the Trustee (the "Timberlands Pledge Agreement");
and (iii) a second priority security interest in 65% of the
issued and outstanding capital stock of F.F. Xxxxx, Inc. ("Xxxxx
Inc." and, together with Timberlands, the "Security Parties")
(the "Xxxxx Collateral" and, together with the Company Collateral
and the Timberlands Collateral, the "Collateral") pursuant to (1)
a pledge agreement between Xxxxx-Xxxxx and the Trustee governed
by the law of the State of New York (the "Xxxxx Pledge
Agreement") and (2) a hypothec agreement between Xxxxx-Xxxxx and
the Trustee governed by Quebec law further relating to the Xxxxx
Collateral (the "Hypothec Agreement" and, together with the Deed
of Trust, the Company Pledge and Security Agreement, the
Timberlands Pledge Agreement and the Xxxxx Pledge Agreement, the
"Collateral Documents").
Prior to the initial issuance of the Securities under
the Indenture, the Trustee, on behalf of holders of the
Securities, will enter into an intercreditor agreement (the
"Intercreditor Agreement") with the Company, Xxxxx-Xxxxx and
Toronto-Dominion (Texas), Inc., as administrative agent under the
Bank Credit Agreement (in such capacity, the "Bank Agent"), and
as administrative agent under the Timberlands Credit Agreement
(in such capacity, the "Timberlands Agent"). The Intercreditor
Agreement will provide, among other things, for the allocation of
rights between the Bank Agent, the Timberlands Agent and the
Trustee with respect to Collateral and for enforcement provisions
with respect thereto.
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of
1933, as amended (the "1933 Act"), in reliance on exemptions
therefrom. The Issuers have prepared a preliminary offering
memorandum, dated November 7, 1997 (such preliminary offering
memorandum being hereinafter referred to as the "Preliminary
Offering Memorandum"), and a final offering memorandum, dated
November 21, 1997 (such final offering memorandum, in the form
first furnished to the Initial Purchasers for use in connection
with the offering of the Securities, being hereinafter referred
to as the "Offering Memorandum"), each setting forth information
regarding the Issuers, the Acquisition and the Securities. In
addition, the Issuers have prepared a disclosure document
relating to the offering of the Securities in Canada (the
"Canadian Wrap"). The Preliminary Offering Memorandum and the
Offering Memorandum, when used in conjunction with the Canadian
Wrap, are hereinafter referred to as the "Preliminary Canadian
Offering Memorandum" and the "Canadian Offering Memorandum,"
respectively. The Issuers hereby confirm that they have
authorized the use of the Preliminary Offering Memorandum and the
Offering Memorandum for the offering and resale of the Securities
to the persons referred to in clauses (i) and (ii) of the next
paragraph, and the use of the Preliminary Canadian Offering
Memorandum and the Canadian Offering Memorandum for the offering
and resale of the securities to the persons referred to in
Sections 6(i)(B) and (vii).
The Issuers understand that the Initial Purchasers
propose to make an offering of the Securities on the terms set
forth in the Offering Memorandum and this Agreement, as soon as
the Initial Purchasers deem advisable after this Agreement has
been executed and delivered, (i) to persons in the United States
whom the Initial Purchasers reasonably believe to be qualified
institutional buyers ("Qualified Institutional Buyers") as
defined in Rule 144A under the 1933 Act, as such rule may be
amended from time to time ("Rule 144A"), in transactions
complying with Rule 144A and/or (ii) to non-U.S. persons in
offshore transactions (as defined in Regulation S ("Regulation
S") under the 1933 Act) in compliance with Regulation S.
The holders of Securities will be entitled to the
benefits of a registration rights agreement, in substantially the
form attached hereto as Exhibit A with such changes as shall be
agreed to by the parties hereto (the "Registration Rights
Agreement"), pursuant to which the Issuers will use their best
efforts to file a registration statement with the Securities and
Exchange Commission (the "Commission") registering the Securities
and/or the Exchange Securities (the "Exchange Securities")
referred to in the Registration Rights Agreement under the 1933
Act.
Section 1. Representations and Warranties. (a) Each
of the Issuers jointly and severally represents and warrants to
and agrees with the Initial Purchasers as of the date hereof and
as of the Closing Time (as defined in Section 2(b)) as follows:
(i) Similar Offerings. The Issuers and their
respective affiliates (as defined in Rule 501(b) under the
1933 Act) have not, directly or indirectly through any agent
(provided that no representation is made as to the Initial
Purchasers, their affiliates or any person acting on their
behalf), solicited any offer to buy, sold or offered to sell
(or otherwise negotiated in respect of), and will not,
directly or indirectly, solicit any offer to buy, sell or
offer to sell (or otherwise negotiated in respect of), in
the United States or to any United States citizen or
resident, any security (as defined in the 1933 Act) which is
or would be integrated with the sale of the Securities in a
manner that would require the Securities to be registered
under the 1933 Act.
(ii) Offering Memorandum. As of their respective
dates and as of the Closing Time, none of the Preliminary
Offering Memorandum, the Offering Memorandum or any
amendment or supplement thereto will include an untrue
statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading; except that this representation and warranty
does not apply to untrue statements or omissions made in
reliance upon and in conformity with information furnished
in writing to the Issuers by the Initial Purchasers through
TD Securities expressly for use in the Preliminary Offering
Memorandum, the Offering Memorandum or any amendment or
supplement thereto.
(iii) No Listed Securities. There are no debt
securities of the Issuers registered under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or listed
on a national securities exchange or quoted in a U.S.
automated inter-dealer quotation system. The Issuers have
been advised by the National Association of Securities
Dealers, Inc. (the "NASD") PORTAL Market that the Securities
have been designated PORTAL eligible securities in
accordance with the rules and regulations of the NASD.
(iv) Independent Accountants. Xxxxxxx & Xxxxxxx
L.L.P. and Xxxxxxx & Xxxxxxx, Chartered Accountants, General
Partnership, each of which is reporting upon certain audited
financial statements and related schedules and notes
included in the Offering Memorandum, are each independent
public accountants in accordance with the provisions of the
1933 Act and the rules and regulations of the Commission
thereunder.
(v) Accounting Controls. Each of the Issuers, the
Security Parties, BIPCO, BITCO, Xxxxx-Xxxxx and their
respective subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance
with management's general or specific authorization,
(B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets, (C) access to assets is permitted
only in accordance with management's general or specific
authorization, and (D) the recorded accountability for
assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to
any differences.
(vi) Financial Statements. The financial statements
included in the Offering Memorandum, together with the
related notes, present fairly (a) the financial position of
BIPCO, BITCO, Xxxxx Inc. and their consolidated
subsidiaries, if any, as of the dates indicated and (b) the
results of operations and cash flows of BIPCO, BITCO, Xxxxx
Inc. and their consolidated subsidiaries, if any, in each
case for the periods specified. Such financial statements
have been prepared in conformity with, in the case of BIPCO
and BITCO, generally accepted accounting principles as
applied in the United States and, in the case of Xxxxx
Inc., generally accepted accounting principles as applied in
Canada, applied on a consistent basis throughout the periods
involved. The selected financial data included in the
Offering Memorandum present fairly the information shown
therein and have been compiled on a basis consistent with
that of the audited consolidated financial statements
included in the Offering Memorandum. The pro forma
financial statements and related notes thereto and other pro
forma financial information included in the Offering
Memorandum present fairly the information shown therein,
have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial
statements, and have been properly compiled on the pro forma
bases described therein and, in the opinion of the Issuers,
the assumptions used in the preparation thereof are made on
a reasonable basis and the adjustments used therein are
appropriate to give effect to the transactions or
circumstances referred to therein.
(vii) No Material Adverse Change in Business.
Since the respective dates as of which information is given
in the Offering Memorandum, except as otherwise stated
therein or contemplated thereby, there has not been (A) any
material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Issuers, the Security Parties, BIPCO, BITCO
and their respective subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business (except that, as described in the Offering
Memorandum, BIPCO's successor will be merged into the
Company and BIPCO shall cease to exist, and BITCO will be
converted into Timberlands concurrently with the Closing
Time) (a "Material Adverse Effect"), (B) any transaction
entered into by either of the Issuers, the Security Parties,
BIPCO, BITCO, Xxxxx-Xxxxx or any of their respective
subsidiaries other than in the ordinary course of business,
or (C) except for the distributions paid or to be paid to
Xxxxx-Xxxxx by each of the Company, Timberlands and Xxxxx
Inc. of up to $2.0 million, $5.0 million and Cdn$6.0
million, respectively, any dividend or distribution of any
kind declared, paid or made by the Issuers, the Security
Parties, BIPCO, BITCO or any of their respective
subsidiaries on any class of their respective membership
interests, partnership interests or capital stock, as the
case may be.
(viii) Good Standing of the Issuers, the Security
Parties, Xxxxx-Xxxxx and Xxxxx Partners. Each of the
Issuers, Xxxxx Inc., Xxxxx-Xxxxx and F.F. Xxxxx, Inc. &
Partners, Limited Partnership ("Xxxxx Partners") has been
duly organized or formed, as the case may be, and is validly
existing and in good standing as a corporation, a limited
liability company or a limited partnership, as the case may
be, under the laws of the jurisdiction of its organization
or formation, as the case may be, and each such entity has
all requisite corporate, limited liability company or
partnership power and authority, as the case may be, under
such laws to own, lease and operate its properties and
conduct its business as described in the Offering Memorandum
or, in the case of the Security Parties, Xxxxx-Xxxxx and
Xxxxx Partners, as is now being conducted, and, in the case
of each of the Issuers, to enter into and perform its
obligations under this Agreement; each of such entities is
duly qualified to transact business and is in good standing
in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except to the extent
that the failure to so qualify or be in good standing would
not have a Material Adverse Effect; except as otherwise
disclosed in the Offering Memorandum, Xxxxx Inc. is the
owner of a 50.1% share in the common stock of Xxxxx
Partners, free and clear of any interest, mortgage, deed of
trust, pledge, lien, encumbrance or claim; none of the
shares in the common stock of Xxxxx Partners was acquired in
violation of any preemptive or similar right of any holder
of a share in the common stock of Xxxxx Partners.
(ix) Good Standing of Merging Entities. As of the
date of this Agreement and at all times prior to the Closing
Time, each of BIPCO and BITCO has been duly formed and is
validly existing and in good standing as a limited
partnership under the laws of the Commonwealth of Virginia,
and each has all requisite limited partnership power and
authority under such laws to own, lease and operate its
properties and conduct its business as described in the
Offering Memorandum and to enter into and perform its
obligations under this Agreement; and, as of the date of
this Agreement and at all times prior to the Closing Time,
each of BIPCO and BITCO is duly qualified to transact
business and is in good standing in each other jurisdiction
in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of
business, except to the extent that the failure to so
qualify or be in good standing would not have a Material
Adverse Effect.
(x) Capitalization. The actual capitalization of
BIPCO at September 30, 1997 is as set forth in the Offering
Memorandum under the caption "Capitalization" in the
"Actual" column; all of the issued membership interests of
the Company have been duly and validly authorized and
issued.
(xi) Authorization of the Agreement. This Agreement
has been duly authorized, executed and delivered by the
Issuers.
(xii) Authorization of the Indenture. The
Indenture has been duly authorized by each of the Issuers,
Xxxxx Inc. and Xxxxx-Xxxxx (and, on or before the Closing
Time, by Timberlands) and, when duly executed and delivered
by each of the Issuers, the Security Parties, Xxxxx-Xxxxx
and the Trustee, will constitute a valid and binding
agreement of the Issuers, the Security Parties and Xxxxx-
Xxxxx, enforceable against each of such entities in
accordance with its terms, except as (x) enforcement thereof
may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), (y) the enforceability of
any right to indemnification or waiver of usury provided
therein violates the public policy of any law, rule or
regulation and (z) enforcement thereof may be limited by the
laws of the Province of Quebec, as described under the
caption "Enforceability of Judgements" in the Canadian
Offering Memorandum.
(xiii) Authorization of the Securities. The
Securities have been duly authorized by the Issuers and, at
the Closing Time, will have been duly executed by each of
the Issuers and, when authenticated, issued and delivered in
the manner provided for in the Indenture and delivered
against payment of the purchase price therefor as provided
in this Agreement, will constitute valid and binding
obligations of the Issuers, enforceable against each of the
Issuers in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be
in the form contemplated by, and entitled to the benefits
of, the Indenture.
(xiv) Authorization of the Other Agreements. Each
of the Registration Rights Agreement, the Intercreditor
Agreement, the Collateral Documents, the Acquisition
Agreements and the Credit Agreements has been duly
authorized by the Company, XxxXx and/or Xxxxx-Xxxxx, as the
case may be, and, except for the Intercreditor Agreement,
when executed and delivered by the Company, XxxXx and/or
Xxxxx-Xxxxx, as the case may be, and the other parties
thereto in accordance with the terms thereof, will
constitute a valid and binding agreement of the Company,
XxxXx and/or Xxxxx-Xxxxx, as the case may be, enforceable
against such entity or entities in accordance with its terms
except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors' rights generally and
except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xv) Perfection of Security Interest in Xxxxx
Collateral and Timberlands Collateral. When executed and
delivered by Xxxxx-Xxxxx and the Trustee, each of the Xxxxx
Pledge Agreement, the Hypothec Agreement and the Timberlands
Pledge Agreement will be effective to create in favor of the
Trustee for the benefit of the holders of the Securities, a
legal, valid and enforceable security interest in the
Collateral described therein and in proceeds thereof. In
the case of the Collateral described in such Collateral
Documents, when (x) financing statements or applications for
registration in appropriate form are filed in the requisite
filing offices and (y) the Hypothec Agreement is registered
in the requisite Quebec registry, such Collateral Documents
shall constitute a fully perfected lien on, and security
interest in, all right, title and interest in favor of the
Trustee, for the benefit of the holders of the Securities,
in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in such Collateral Documents),
in each case prior and superior in right to any other
person, other than the respective lenders under the Bank
Credit Agreement and the Timberlands Credit Agreement.
(xvi) Perfection of Security Interest in Company
Collateral. Each of the Company Pledge and Security
Agreement and the Deed of Trust will be effective to create
in favor of the Trustee, for the benefit of the Holders of
the Securities, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds
thereof. When the Deed of Trust and financing statements in
appropriate form are filed in the requisite filing offices,
such agreements shall constitute a fully perfected lien
(except with respect to certain Collateral, such lien shall
be perfected only to the extent perfection is required by
the Company Pledge and Security Agreement) on, and security
interest in, all right, title and interest of the Trustee,
on behalf of the holders of the Securities, in such
Collateral and the proceeds thereof, as security for the
Obligations (as defined in such agreements), in each case
prior and superior in right to any other Person other than
the lenders under the Bank Credit Agreement.
(xvii) The Acquisition Agreements. The Acquisition
Agreements are in full force and effect, and Xxxxx-Xxxxx has
used its best efforts to obtain all regulatory and
contractual consents and approvals necessary to consummate
the Acquisition and the Timberlands Acquisition.
(xviii) Description of the Securities, the Indenture
and Other Agreements. The statements set forth in the
Offering Memorandum, insofar as such statements purport to
summarize certain provisions of the Securities, the
Indenture, the Registration Rights Agreement, the
Intercreditor Agreement, the Collateral Documents, the
Acquisition Agreements and the Credit Agreements, constitute
accurate summaries thereof in all material respects.
(xix) Absence of Defaults and Conflicts. None of
the Issuers, the Security Parties, BIPCO or Xxxxx-Xxxxx nor
any of their respective subsidiaries is in violation of its
respective organizational documents or in default in the
performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which any such
entity or any of its respective subsidiaries is a party or
by which it or any of them may be bound, or to which any of
the property or assets of any such entity or any of its
respective subsidiaries is subject (collectively,
"Agreements and Instruments"), except for such violations or
defaults that would not result in a Material Adverse Effect;
and (A) the execution, delivery and performance of this
Agreement, the Securities, the Indenture, the Registration
Rights Agreement, the Collateral Documents, the Acquisition
Agreements, the Intercreditor Agreement and the Credit
Agreements by the Issuers, the Security Parties and Xxxxx-
Xxxxx, as the case may be, and the consummation by such
parties of the transactions contemplated herein and therein
(including the issuance and sale by the Issuers of the
Securities in accordance with the offering and sale
restrictions contained in this Agreement and the Offering
Memorandum and the use of the proceeds from the sale of the
Securities as described in the Offering Memorandum under the
caption "Use of Proceeds"), (B) compliance by the Issuers
with their obligations hereunder and under the Securities,
and (C) compliance by each of the Issuers, the Security
Parties and Xxxxx-Xxxxx of its obligations under the
Indenture and such other agreements to which it is a party
will not (after giving effect to (i) the redemption or
defeasance of BIPCO's 10.375% Senior Secured Notes due 2004,
and (ii) the related release and discharge of all liens,
encumbrances and security interests securing those notes),
(1) whether with or without the giving of notice or the
passage of time or both, constitute a breach of, or default
or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any such entity
or any of its subsidiaries pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not result in a
Material Adverse Effect or those liens, charges or
encumbrances created pursuant to the Collateral Documents)
or (2) result in any violation of (x) the provisions of the
respective organizational documents of any such entity or
any of its subsidiaries or (y) any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over any such entity or any of
its subsidiaries or any of their assets, properties or
operations (except for such violations that would not result
in a Material Adverse Effect). As used herein, a "Repayment
Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a
portion of such indebtedness by any such entity or any of
its subsidiaries.
(xx) Absence of Labor Disputes. No labor dispute with
the employees of any of the Issuers, the Security Parties,
BIPCO or BITCO or any of their respective subsidiaries
exists or, to the knowledge of either of the Issuers, is
threatened that, if such dispute were to occur, in either
case may reasonably be expected to result in a Material
Adverse Effect, and the Issuers have no actual knowledge of
any existing or imminent labor disturbance by the employees
of any such entity's or its subsidiaries' principal
suppliers, contractors or customers that could be expected
to result in a Material Adverse Effect.
(xxi) Absence of Proceedings. Except as set forth
in the Offering Memorandum, there is no action, suit,
proceeding, inquiry or investigation before or brought by
any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of either of the
Issuers, threatened, to which any of the Issuers, the
Security Parties, BIPCO or BITCO is a party and which might
reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially
and adversely affect the validity or enforceability of any
material provision of this Agreement, the Indenture, the
Securities, the Collateral Documents or the rights and
remedies of the Initial Purchasers, the Trustee or the
holders of the Securities thereunder.
(xxii) Possession of Intellectual Property. The
Issuers, the Security Parties, BIPCO, BITCO, Xxxxx-Xxxxx and
their respective subsidiaries own or possess, or can acquire
on reasonable terms (or have the rights to sue at law or in
equity for any infringement of), adequate patents, patent
rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business
now carried on by them, except where the failure to own,
possess or hold such rights to acquire or sue would not have
a Material Adverse Effect; and none of the Issuers, the
Security Parties, BIPCO, BITCO, Xxxxx-Xxxxx or any of their
respective subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render
any Intellectual Property invalid or inadequate to protect
the interest of the Issuers, the Security Parties, BIPCO,
BITCO, Xxxxx-Xxxxx or their respective subsidiaries therein,
and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xxiii) Absence of Further Requirements. No filing
with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or
governmental authority or agency or quasi-governmental
agency (other than (i) under the 1933 Act and the rules and
regulations thereunder with respect to the Registration
Rights Agreement and the transactions contemplated
thereunder and the securities or "blue sky" laws of any
jurisdiction, (ii) those that have been obtained and are in
full force and effect and (iii) those filings that are
necessary or required to create or perfect the liens,
encumbrances and security interests under the Collateral
Documents) is necessary or required on behalf of the Issuers
for the issuance, sale and delivery of the Securities, or
for the execution, delivery or performance by the Issuers,
the Security Parties or Xxxxx-Xxxxx, as the case may be, of
this Agreement, the Indenture, the Registration Rights
Agreement, the Intercreditor Agreement, the Collateral
Documents, the Acquisition Agreements or the Credit
Agreements, or for the consummation by any of such entities,
as the case may be, of the transactions contemplated in such
agreements.
(xxiv) Possession of Licenses and Permits. Each of
the Issuers, the Security Parties, BIPCO, Xxxxx-Xxxxx and
their respective subsidiaries possesses, and, upon
consummation of the transactions contemplated under this
Agreement and the Acquisition Agreements, will possess, such
permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") of
the appropriate federal, state, local or foreign regulatory
and quasi-regulatory agencies or bodies necessary to conduct
any business now conducted by them and as contemplated to be
conducted by them upon consummation of the transactions
contemplated under this Agreement and the Acquisition
Agreements, except (x) where the failure to possess such
Governmental Licenses would not, singly or in the aggregate,
have a Material Adverse Effect and (y) BIPCO and BITCO will
cease to possess such Governmental Licenses when BIPCO or
its successor ceases to exist and BITCO is converted into
Timberlands, in each case, concurrently with the Closing
Time. Each of the Issuers, the Security Parties, BIPCO,
Xxxxx-Xxxxx and their respective subsidiaries is, and upon
consummation of the transactions contemplated under this
Agreement and the Acquisition Agreements will be, in
substantial compliance with the terms and conditions of all
such Governmental Licenses, except where the failure to
comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses
are, and upon consummation of the transactions contemplated
under this Agreement and the Acquisition Agreements will be,
valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and none of the
Issuers, the Security Parties, BIPCO, Xxxxx-Xxxxx or any of
their respective subsidiaries has received any notice of
proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in a Material Adverse Effect.
(xxv) Title to Property. Each of the Issuers, the
Security Parties, BIPCO, Xxxxx-Xxxxx and their respective
subsidiaries has title in fee simple to, or a valid
leasehold interest in all its real property and good title
to or a valid leasehold interest (and, in the case of Xxxxx
Inc. and its subsidiaries, superficiary rights) in all its
other properties and assets, free and clear of all liens,
charges, encumbrances or restrictions, except such as
(A) are described in the Offering Memorandum (including,
without limitation, "Permitted Liens" as defined therein),
(B) do not, singly or in the aggregate, have a Material
Adverse Effect or (C) insofar as BIPCO ceases to exist and
BITCO is converted into Timberlands concurrently with the
Closing Time.
(xxvi) Tax Returns. Each of the Issuers, the
Security Parties, BIPCO, Xxxxx-Xxxxx and their respective
subsidiaries has filed any federal, state, local and foreign
income and other material tax returns that are required to
be filed by such entities or has duly requested extensions
thereof and has paid all taxes required to be paid by any of
them and any related assessments, fines or penalties, except
for any such tax, assessment, fine or penalty that is being
contested in good faith and by appropriate proceedings; and
adequate charges, accruals or reserves have been provided
for in the financial statements referred to in Section
1(a)(vi) above in respect of any federal, state, local and
foreign income and other material taxes for all periods as
to which the tax liability of any such entity or its
subsidiaries has not been finally determined or remains open
to examination by applicable taxing authorities.
(xxvii) Environmental Laws. Except as described in
the Offering Memorandum and except as would not, singly or
in the aggregate, result in a Material Adverse Effect, (A)
none of the Issuers, the Security Parties, BIPCO, BITCO,
Xxxxx-Xxxxx and their respective subsidiaries is in
violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance or code, or rule of common
law or any judicial or administrative interpretation
thereof, including any applicable judicial or administrative
order, consent, decree or judgment, regulating, or imposing
liability concerning, pollution, the protection of human
health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or
to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"),
and (B) none of the Issuers has any knowledge of any events
or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or
governmental body or agency, against or affecting any of the
Issuers, the Security Parties, BIPCO, BITCO, Xxxxx-Xxxxx or
any of their respective subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxviii) Registration Rights. Except as described in
the Offering Memorandum, there are no persons with
registration rights or other similar rights to have any
securities registered by either of the Issuers under the
1933 Act (other than those provided in the Credit Agreements
and related agreements).
(xxix) Solvency. At the date of this Agreement,
each of BIPCO and the Company is, and immediately after the
Closing Time, the Company will be, Solvent. As used herein,
the term "Solvent" means, with respect to each such entity,
on a particular date, that on such date (A) the fair value
of the assets of such entity is greater than the total
amount of liabilities (including contingent liabilities) of
such entity, (B) the present fair salable value of the
assets of such entity is greater than the amount that will
be required to pay the probable liabilities of such entity
on its debts as they become absolute and matured, (C) such
entity is able to pay its debts and other liabilities,
including contingent obligations, as they mature and
(D) such entity is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for
which it has an unreasonably small capital.
(xxx) Investment Company Act. As of the date of
this Agreement, each of the Issuers, the Security Parties
and BIPCO is not, and upon (i) the issuance and sale of the
Securities as herein contemplated and the application of the
net proceeds as described in the Offering Memorandum and
(ii) the consummation of the transactions contemplated in
the Acquisition Agreements and the related financings, and
the Issuers and the Security Parties will not be, an
"investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(xxxi) Rule 144A Eligibility. The Securities are
eligible for resale pursuant to Rule 144A and will not be,
at the Closing Time, of the same class as securities of the
Issuers that are listed on a national securities exchange
registered under Section 6 of the 1934 Act, or quoted in a
U.S. automated interdealer quotation system.
(xxxii) No General Solicitation. None of the Issuers
or any person acting on their behalf through any agent
(provided that no representation is made as to the Initial
Purchasers, their affiliates or any person acting on their
behalf) has engaged or will engage in any form of general
solicitation or general advertising (within the meaning of
Rule 502(c) under the 1933 Act) in connection with the
offering of the Securities in the United States.
(xxxiii) No Registration Required. Assuming (A) that
the representations and warranties of the Initial Purchasers
set forth in Section 2 and Section 6 hereof are true and
(B) the compliance by the Initial Purchasers with the
covenants and agreements set forth in Section 2 and Section
6 hereof, it is not necessary in connection with the offer,
sale and delivery of the Securities to the Initial
Purchasers under, or in connection with the initial resale
of such Securities by the Initial Purchasers in accordance
with, this Agreement to register the Securities under the
1933 Act or to qualify any indenture in respect of the
Securities under the Trust Indenture Act of 1939, as
amended.
(xxxiv) No Directed Selling Efforts. With respect to
those Securities sold in reliance on Regulation S, (A) none
of the Issuers, any of their respective affiliates or any
person acting on its or their behalf (other than the Initial
Purchasers, their affiliates and any person acting on their
behalf, as to whom the Issuers make no representation) has
engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) in the United States
and (B) each of the Issuers, their respective affiliates and
any person acting on its or their behalf (other than the
Initial Purchasers, their affiliates and any person acting
on their behalf, as to whom the Issuers make no
representation) has complied and will comply with the
offering restrictions requirement of Regulation S.
(b) Officers' Certificates. Any certificate signed by any
officer of either of the Issuers and delivered to the Initial
Purchasers or to counsel for the Initial Purchasers shall be
deemed a representation and warranty by such Issuer to the
Initial Purchasers as to the matters covered thereby.
Section 2. Purchase, Sale and Resale of the
Securities; Closing; Representations and Warranties of the
Initial Purchasers. (a) Securities. On the basis of the
representations and warranties contained in this Agreement, and
subject to the terms and conditions set forth in this Agreement,
the Issuers agree to sell to the Initial Purchasers, severally
and not jointly, and each Initial Purchaser, severally and not
jointly, agrees to purchase from the Issuers, at the price set
forth in Schedule B, the aggregate principal amount of Securities
set forth in Schedule A opposite the name of such Initial
Purchaser, plus any additional amount of Securities which such
Initial Purchaser may become obligated to purchase pursuant to
the provisions of Section 11 hereof.
(b) Payment. Payment of the purchase price for, and
delivery of, the Securities shall be made at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other place as shall be agreed
upon by the Issuers and the Initial Purchasers, at 9:00 A.M., New
York time, on the fifth business day after the date hereof
(unless postponed in accordance with the provisions of Section
11), or such other time not later than ten business days after
such date as shall be agreed upon by the Issuers and the Initial
Purchasers (such date and time of payment and delivery being
herein called the "Closing Time").
Payment shall be made to the Issuers by wire transfer
of immediately available funds to a bank account designated by
the Issuers, against delivery to TD Securities for the respective
accounts of the Initial Purchasers of certificates for the
Securities to be purchased by them. It is understood that each
Initial Purchaser has authorized TD Securities, for its account,
to accept delivery of, and receipt for, and make payment of the
purchase price for, the Securities which it has agreed to
purchase. TD Securities, individually and not as representative
of the Initial Purchasers, may (but shall not be obligated to)
make payment of the purchase price for the Securities to be
purchased by any Initial Purchaser whose funds have not been
received by the Closing Time, but such payment shall not relieve
such Initial Purchaser from its obligations hereunder.
(c) Qualified Institutional Buyer. Each Initial Purchaser
severally and not jointly represents and warrants to, and agrees
with, the Issuers that it is a Qualified Institutional Buyer
within the meaning of Rule 144A under the 1933 Act.
(d) Denominations; Registration. Certificates for the
Securities shall be in such denominations ($1,000 or integral
multiples thereof) and registered in such names as the
Representative(s) may request in writing at least one full
business day before the Closing Time. The certificates
representing the Securities shall be registered in the name of
Cede & Co. pursuant to an agreement among the Issuers, the
Trustee and The Depository Trust Company ("DTC"), and shall be
made available for examination and packaging by the Initial
Purchasers in The City of New York not later than 10:00 A.M. on
the last business day prior to the Closing Time.
Section 3. Certain Covenants of the Issuers. Each of
the Issuers jointly and severally covenants with the Initial
Purchasers as follows:
(a) Offering Memorandum. The Issuers will promptly
deliver to the Initial Purchasers (without charge, for the
period ending after the later of (i) the completion of the
distribution of the Securities as determined by TD
Securities and (ii) 45 days following the Closing Time, and
at the expense of the Initial Purchasers thereafter) such
number of copies of the Offering Memorandum, as it may then
be amended or supplemented, or the Preliminary Offering
Memorandum, as it may then be amended or supplemented, as
the Initial Purchasers may from time to time reasonably
request.
(b) Notice and Effect of Material Events. The
Issuers will as soon as is practicable notify each Initial
Purchaser, and confirm such notice in writing, of (x) any
filing made by the Issuers of information relating to the
offering of the Securities with any securities exchange or
any other regulatory body in the United States or any other
jurisdiction, and (y) prior to the completion of the
distribution of the Securities by the Initial Purchasers as
determined by TD Securities, any material changes in or
affecting the condition, financial or otherwise, the
earnings, business affairs or business prospects of the
Issuers, the Security Parties, Xxxxx-Xxxxx and their
respective subsidiaries which (i) make any statement of any
material fact made in the Offering Memorandum materially
false or misleading or (ii) are not disclosed in the
Offering Memorandum. If, during the period referred to in
paragraph (a) above, any event shall occur or condition
exist as a result of which it is necessary, in the opinion
of counsel for the Initial Purchasers or counsel for the
Issuers, to amend or supplement the Offering Memorandum in
order that the Offering Memorandum will not include an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or if, in the opinion of counsel
for the Initial Purchasers or counsel for the Issuers, it is
necessary to amend or supplement the Offering Memorandum to
comply with applicable law, the Issuers, at their own
expense, will promptly prepare such amendment or supplement
as may be necessary so that the statements in the Offering
Memorandum as so amended or supplemented will not, in the
light of the circumstances then existing, be misleading or
so that such Offering Memorandum as so amended or
supplemented will comply with applicable law, as the case
may be, and furnish the Initial Purchasers such number of
copies as they may reasonably request (and the Initial
Purchasers will, upon receiving notice from the Issuers to
do so, suspend use of the Offering Memorandum, until such
time as they shall have received such copies of the amended
or supplemented Offering Memorandum).
(c) Amendment to Offering Memorandum and Supplements.
The Issuers will advise each Initial Purchaser promptly of
any proposal to amend or supplement the Offering Memorandum
and will not effect such amendment or supplement without the
consent of the Initial Purchasers (except to the extent that
any such amendment or supplement objected to is necessary,
in the judgment of counsel to the Issuers, to make the
statements made in the Offering Memorandum, in the light of
the circumstances under which they were made, not
misleading). Neither the consent of the Initial Purchasers,
nor the Initial Purchasers' delivery of any such amendment
or supplement, shall constitute a waiver of any of the
conditions set forth in Section 5 hereof.
(d) Qualification of Securities for Offer and Sale.
The Issuers will use their best efforts, in cooperation with
the Initial Purchasers, to qualify the Securities for
offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as
the Initial Purchasers may designate (and in the Provinces
of Quebec, Ontario and British Columbia on a private
placement basis) and maintain such qualifications in effect
as long as required for the sale of the Securities;
provided, however, that the Issuers shall not be obligated
to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which they are not so
qualified or to subject themselves to taxation in respect of
doing business in any jurisdiction in which they are not
otherwise so subject.
(e) Rating of Securities. The Issuers shall take all
reasonable action necessary to enable Standard & Poor's
Ratings Services, a division of McGraw Hill, Inc. ("S&P"),
and Xxxxx'x Investors Service Inc. ("Moody's") to provide
their respective credit ratings of the Securities.
(f) DTC. The Issuers will use their reasonable
efforts in cooperation with the Initial Purchasers to permit
the Securities to be eligible for clearance and settlement
through DTC.
(g) PORTAL. The Issuers will use their reasonable
efforts in cooperation with the Initial Purchasers to permit
the Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the
NASD relating to trading in the PORTAL market.
(h) Use of Proceeds. The Company will apply the net
proceeds that it receives from the offer and sale of the
Securities issued by the Issuers in the manner set forth in
the Offering Memorandum under the heading "Use of Proceeds."
(i) Restriction on Sale of Securities. For a period
of 90 days from the date of the Offering Memorandum, the
Issuers will not, without the prior written consent of TD
Securities, directly or indirectly, issue, sell, offer or
agree to sell, grant any option for the sale of, or
otherwise dispose of, any other debt securities of the
Issuers or securities of the Issuers that are convertible
into, or exchangeable for, the Securities or such other debt
securities, other than the Exchange Securities referred to
in the Registration Rights Agreement.
Section 4. Payment of Expenses. (a) Expenses.
Whether or not any sale of the Securities is consummated, the
Issuers will pay and bear all costs and expenses incident to the
performance of their and any of their respective subsidiaries'
obligations under this Agreement, the Securities, the Indenture,
the Registration Rights Agreement, the Intercreditor Agreement
and the Collateral Agreements, including (i) the preparation and
printing of the Preliminary Offering Memorandum, the Offering
Memorandum and any amendments or supplements thereto, and the
cost of furnishing copies thereof to the Initial Purchasers,
(ii) the delivery of the Securities to the Initial Purchasers,
(iii) the fees and disbursements of the Issuers' counsel and
accountants, (iv) the qualification of the Securities under the
applicable U.S. securities laws in accordance with Section 3(d)
hereof and any filing for review of the offering with NASD,
including filing fees and fees and disbursements of counsel for
the Initial Purchasers in connection therewith and in connection
with the preparation of any "blue sky" or legal investment
memoranda, (v) any fees charged by rating agencies for rating the
Securities, (vi) the fees and expenses of the Trustee and the
collateral trustee under the Deed of Trust, including the fees
and disbursements of counsel for the Trustee and the collateral
trustee under the Deed of Trust, in connection with the
Indenture, the Deed of Trust and the Securities, (vii) all fees
and expenses in connection with the pledge of the Collateral,
including any transfer or stamp taxes, (viii) the cost of
preparing certificates representing the Securities, (ix) the cost
of obtaining approval for the trading of the Securities through
PORTAL and (x) all other costs and expenses incident to the
performance of the Issuers' obligations hereunder that are not
otherwise specifically provided for in this Section; provided
that, except as specifically provided herein, the Issuers will
not be obligated to pay the costs and expenses of counsel for the
Initial Purchasers.
(b) Termination of Agreement. If this Agreement is
terminated by the Initial Purchasers in accordance with the
provisions of Section 5 or 10(a)(i), the Issuers shall reimburse
the Initial Purchasers for all of their documented out-of-pocket
expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchasers (reasonably incurred by the
Initial Purchasers in connection with this Agreement or the
offering contemplated hereunder).
Section 5. Conditions of Initial Purchasers'
Obligations. The obligations of the Initial Purchasers to
purchase and pay for the Securities that they have agreed to
purchase hereunder are subject to the accuracy of the
representations and warranties of the Issuers contained herein
and in certificates of any officer of the Issuers and any
subsidiary delivered pursuant to the provisions hereof, to the
performance by the Issuers of their obligations hereunder, and to
the following further conditions:
(a) Opinion of Counsel for the Issuers. At the
Closing Time, the Initial Purchasers shall have received a
favorable opinion, dated as of the Closing Time, of the
following counsel for the Issuers, in form and substance
satisfactory to counsel for the Initial Purchasers: (i)
Skadden, Arps, Slate, Xxxxxxx & Xxxx, special New York
counsel for the Issuers, to the effect set forth in Exhibit
B-1 hereto and to such further effect as counsel for the
Initial Purchasers may reasonably request, (ii) Xxxx &
Valentine, counsel for the Issuers, to the effect set forth
in Exhibit B-2 hereto and to such further effect as counsel
for the Initial Purchasers may reasonably request and (iii)
XxXxxxxx Xxxxxxxx, special Quebec counsel for the Issuers,
to the effect set forth in Exhibit B-3 hereto and to such
further effect as counsel for the Initial Purchasers may
reasonably request. Each such counsel may also state that,
insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of
officers of the Issuers and their respective subsidiaries
(and other affiliates) and certificates of public officials.
(b) Opinion of Counsel for the Initial Purchasers.
At the Closing Time, the Initial Purchasers shall have
received the favorable opinion, dated as of the Closing
Time, of Xxxxxxxx & Sterling, counsel for the Initial
Purchasers. In giving such opinion such counsel may rely,
as to all matters governed by the laws of jurisdictions
other than the law of the State of New York, the federal law
of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory
to the Initial Purchasers. Such counsel may also state
that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon
certificates of officers of the Issuers and their respective
subsidiaries (and other affiliates) and certificates of
public officials.
(c) Officers' Certificates. At the Closing Time,
there shall not have been, since the date hereof or since
the respective dates as of which information is given in the
Offering Memorandum, any material adverse change in the
condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Issuers and
its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, and the
Initial Purchasers shall have received a certificate of the
President or a Vice President of each of the Issuers and of
the chief financial or chief accounting officer of each of
the Issuers, dated as of the Closing Time, to the effect
that (i) there has been no such material adverse change,
(ii) the representations and warranties in Section 1 hereof
are true and correct in all material respects with the same
force and effect as though expressly made at and as of the
Closing Time (except for those representations and
warranties that are expressly made as of a certain date),
and (iii) the Issuers have complied in all material respects
with all agreements and satisfied in all material respects
all conditions on their part to be performed or satisfied at
or prior to the Closing Time.
(d) Accountants' Comfort Letters. At the time of the
execution of this Agreement, the Initial Purchasers shall
have received from each of Coopers & Xxxxxxx, L.L.P.,
independent auditors for the Issuers, BIPCO and BITCO, and
Coopers & Xxxxxxx, Chartered Accountants, General
Partnership, independent auditors for Xxxxx Inc., a letter
dated such date, in form and substance satisfactory to the
Initial Purchasers, together with signed or reproduced
copies of such letter for each of the other Initial
Purchasers containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
Initial Purchasers with respect to the financial statements
and certain financial information contained in the Offering
Memorandum.
(e) Bring-Down Comfort Letters. At the Closing Time,
the Initial Purchasers shall have received from each of
Coopers & Xxxxxxx, L.L.P., independent auditors for the
Issuers, BIPCO and BITCO, and Coopers & Xxxxxxx, Chartered
Accountants, General Partnership, independent auditors for
Xxxxx Inc., a letter, dated as of the Closing Time, to the
effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except
that the specified date referred to shall be a date not more
than three business days prior to the Closing Time.
(f) Maintenance of Rating. At the Closing Time, the
Securities shall be rated at least B2 by Moody's and B by
S&P, and the Issuers shall have delivered to the Initial
Purchasers a letter dated the Closing Time from each such
rating agency, or other evidence satisfactory to the Initial
Purchasers, confirming that the Securities have such
ratings; and since the date of this Agreement, there shall
not have occurred a downgrading in the rating assigned to
the Securities or any of the Issuers' other debt securities
by any "nationally recognized statistical rating
organization," as that term is defined by the Commission in
Rule 436(g)(2) under the 1933 Act, and no such securities
rating agency shall have publicly announced that it has
under surveillance or review, with possible negative
implications, its rating of the Securities or any of the
Issuers' other debt securities.
(g) PORTAL. At the Closing Time, the Securities
shall have been designated for trading on PORTAL.
(h) Additional Documents. At the Closing Time,
counsel for the Initial Purchasers shall have been furnished
with all such documents, certificates and opinions as they
may require for the purpose of enabling them to pass upon
the matters referred to in Section 5(b) and in order to
evidence the accuracy and completeness of any of the
representations, warranties or statements of the Issuers,
the performance of any of the covenants of the Issuers or
the fulfillment of any of the conditions herein contained;
and all proceedings taken by the Issuers at or prior to the
Closing Time in connection with the authorization, issuance
and sale of the Securities as contemplated in this Agreement
shall be satisfactory in form and substance to the Initial
Purchasers and to counsel for the Initial Purchasers
(i) Execution and Delivery of Agreements. At or
prior to the Closing Time, the Indenture, the Registration
Rights Agreement, the Intercreditor Agreement, the
Acquisition Agreements, the Credit Agreements and all of the
Collateral Documents, in form and substance reasonably
satisfactory to the Initial Purchasers, shall have been duly
executed and delivered and be in full force and effect.
(j) Consummation of Transactions. At the Closing
Time, the transactions contemplated by the Acquisition
Agreements and the Credit Agreements and the transfer by
Messrs. Xxxxx X. Xxxxx and Xxxxxx Xxxxx of all their
interests in the capital stock of Xxxxx Inc. to Xxxxx-Xxxxx
(as described in the Offering Memorandum) shall have been
consummated.
(k) Filings, Registrations and Recordings. Each
document (including, without limitation, any Uniform
Commercial Code financing statement) required by the
Collateral Documents or under law or reasonably requested by
the Trustee to be filed, registered or recorded in order to
create in favor of the Trustee, for the benefit of holders
of the Securities, a perfected security interest in the
Collateral, as contemplated by the Collateral Documents,
shall be in proper form for filing, registration or
recordation.
(l) Solvency Opinion. At the Closing Time, the
Initial Purchasers shall have received a solvency opinion of
Valuation Research Corporation, in form and substance
reasonably satisfactory to the Initial Purchasers and dated
as of the Closing Time.
(m) Termination of Agreement. If any condition
specified in this Section shall not have been fulfilled when
and as required to be fulfilled, this Agreement may be
terminated by the Initial Purchasers by notice to the
Issuers at any time at or prior to the Closing Time, and
such termination shall be without liability of any party to
any other party except as provided in Section 4 and except
that Sections 1, 7 and 8 shall survive any such termination
and remain in full force and effect.
Section 6. Subsequent Offers and Resales of the
Securities. (a) Representations, Warranties and Covenants of
the Initial Purchasers. Each of the Initial Purchasers
represents, warrants and covenants to observe the following
procedures in connection with the offer and sale of the
Securities:
(i) Offers and Sales Only to Qualified Institutional
Buyers. Each Initial Purchaser understands that no action
has been taken in any jurisdiction by the Issuers that would
permit a public offering of the Securities in any
jurisdiction where action would be required for such
purpose. Each Initial Purchaser represents and agrees that
it has not offered, sold or delivered and it will not offer,
sell or deliver any of the Securities in any jurisdiction
except under circumstances that will result in compliance
with the applicable laws thereof, and that it will take at
its own expense whatever action is required to permit its
purchase and resale of the Securities in any such
jurisdiction (other than in the United States). Each such
offer or sale shall only be made (A) to persons whom the
offeror or seller reasonably believes to be Qualified
Institutional Buyers (as defined in Rule 144A under the 1933
Act) or (B) to non-U.S. persons outside the United States
(which shall include dealers or other professional
fiduciaries in the United States acting on a discretionary
basis for beneficial owners (other than an estate or trust)
that are non-U.S. persons) to whom the offeror or seller
reasonably believes offers and sales of the Securities may
be made in reliance upon Regulation S under the 1933 Act and
applicable securities legislation of the relevant
jurisdiction.
(ii) No General Solicitation. Neither it nor any
person acting on its behalf has engaged or will engage in
any form of general solicitation or general advertising
(within the meaning of Rule 502(c) under the 1933 Act) in
connection with the offering or sale of the Securities in
the United States.
(iii) Subsequent Purchaser Notification. Each
Initial Purchaser will take reasonable steps to inform, and
cause each of its affiliates to take reasonable steps to
inform, persons acquiring Securities from such Initial
Purchaser or affiliate, as the case may be, in the United
States (the "Subsequent Purchasers") that the Securities (A)
have not been and will not be registered under the 1933 Act,
(B) are being sold to them without registration under the
1933 Act in reliance on Rule 144A or in accordance with
another exemption from registration under the 1933 Act, as
the case may be, and (C) may not be offered, sold or
otherwise transferred except (1) to the Issuers, (2) outside
the United States in accordance with Rule 904 of Regulation
S or (3) inside the United States in accordance with (x)
Rule 144A to a person whom the seller reasonably believes is
a Qualified Institutional Buyer that is purchasing such
Securities for its own account or for the account of a
Qualified Institutional Buyer to whom notice is given that
the offer, sale or transfer is being made in reliance on
Rule 144A or (y) pursuant to another available exemption
from registration under the 1933 Act.
(iv) Restrictions on Transfer. The transfer
restrictions set forth under "Notice to Investors" in the
Offering Memorandum, including the legend required thereby,
shall apply to the Securities except as otherwise agreed by
the Issuers and the Initial Purchasers.
(v) Resale Pursuant to Rule 903 of Regulation S or
Rule 144A. Each Initial Purchaser understands that the
Securities have not been and will not be registered under
the 1933 Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the
1933 Act or pursuant to an exemption from the registration
requirements of the 1933 Act. Each Initial Purchaser
severally represents, warrants and agrees that it has
offered and sold Securities and will offer and sell
Securities (i) as part of their distribution at any time and
(ii) otherwise until forty days after the later of the date
upon which the offering of the Securities commences and the
Closing Time, only (x) outside the United States in
accordance with Rule 903 of Regulation S or (y) to a
Qualified Institutional Buyer in transactions that meet the
requirements of Rule 144A under the 1933 Act. Accordingly,
neither the Initial Purchasers, their affiliates nor any
persons acting on their behalf have engaged or will engage
in any directed selling efforts with respect to Securities,
and the Initial Purchasers, their affiliates and any person
acting on their behalf have complied and will comply with
the offering restriction requirements of Regulation S. Each
Initial Purchaser agrees that, at or prior to confirmation
of a sale of Securities (other than a sale of Securities
pursuant to Rule 144A), it will have sent to each
distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases
Securities from it or through it during the restricted
period a confirmation or notice to substantially the
following effect:
The Securities covered hereby have not been
registered under the United States Securities Act
of 1933 (the "Securities Act") and may not be
offered or sold within the United States or to or
for the account or benefit of U.S. persons (i) as
part of their distribution at any time and (ii)
otherwise until forty days after the later of the
date upon which the offering of the Securities
commenced and the date of closing, except in
either case in accordance with Regulation S or
another exemption from the registration
requirements of the Securities Act. Terms used
above have the meaning given to them by Regulation S.
Terms used in the above paragraph have the meaning given to
them by Regulation S.
(vi) Contractual Arrangements With Respect to
Distribution. Each Initial Purchaser severally represents
and agrees that it has not entered and will not enter into
any contractual arrangements with respect to the
distribution of the Securities, except with its affiliates
or with the prior written consent of the Issuers.
(vii) Distribution in Canada. Each of the Initial
Purchasers acknowledges that the distribution of the
Securities in Canada is being made without the filing of a
prospectus only on a private placement basis and only to
exempt purchasers in the provinces of Quebec, Ontario and
British Columbia. Accordingly, each Initial Purchaser
severally represents, warrants and agrees that: (a) any
offer and resale of the Securities in Canada will be
restricted and must be made by prospectus and through an
appropriately registered dealer or in accordance with an
exemption from prospectus and registration requirements
under provincial securities laws; (b) it and any person
acting on its behalf has offered or sold and will offer or
sell the Securities in Canada solely by use of the
Preliminary Canadian Offering Memorandum and the Canadian
Offering Memorandum; (c) it and any person acting on its
behalf will send a confirmation of the acceptance of offers
to purchase Securities to purchasers in Canada who have not
withdrawn their offers to purchase prior to the issuance of
such confirmation; and (d) it will give written notice to
the Issuers of the full name and address of each purchaser
to whom it sells Securities in Canada, together with the
amount of Securities sold to each such purchaser, the trade
date and such other information regarding such purchase,
offer or sale as may be required by the Issuers to make the
filings required by the applicable Canadian laws and to pay
all fees in connection with such filings.
(b) Covenants of the Issuers. Each of the Issuers jointly
and severally covenants with each Initial Purchaser as follows:
(i) Due Diligence. In connection with the original
distribution of the Securities in accordance with the terms
of this Agreement, each of the Issuers agrees that, prior to
any offer or resale of the Securities by the Initial
Purchasers, the Initial Purchasers and counsel for the
Initial Purchasers shall have the right to make reasonable
inquiries into the businesses of the Issuers, the Security
Parties, BIPCO, BITCO, Xxxxx-Xxxxx and their respective
subsidiaries.
(ii) Integration. The Issuers agree that they will
not and will cause their respective affiliates not to
solicit any offer to buy or make any offer or sale of, or
otherwise negotiate in respect of, securities of the Issuers
of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 under the 1933 Act,
such offer or sale would render invalid (for the purpose of
(i) the sale of the Securities by the Issuers to the Initial
Purchasers, (ii) the resale of the Securities by the Initial
Purchasers to Subsequent Purchasers or (iii) the resale of
the Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act
provided by Section 4(2) thereof or by Rule 144A or by
Regulation S thereunder or otherwise.
(iii) Rule 144A Information. The Issuers agree
that, in order to render the Securities eligible for resale
pursuant to Rule 144A under the 1933 Act, while any of the
Securities remain outstanding, they will make available,
upon request, to any holder of Securities or prospective
purchasers of Securities the information specified in Rule
144A(d)(4), unless the Issuers furnish information to the
Commission pursuant to Section 13 or 15(d) of the 1934 Act.
(iv) Restriction on Resales. After the Closing Time
and until the Issuers shall have filed, and the Commission
shall have declared effective, a Registration Statement (as
defined in the Registration Rights Agreement) covering the
Securities, the Issuers shall not, and shall not permit any
of their affiliates to, sell any Securities that are
"restricted securities" (as such term is defined in Rule
144(a)(3) under the 1933 Act).
Section 7. Indemnification. (a) Indemnification of
Initial Purchasers. Each of the Issuers jointly and severally
agrees to indemnify and hold harmless each Initial Purchaser and
each person, if any, who controls any Initial Purchaser 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
an untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or
supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation,
or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission; provided
that (subject to Section 7(d) below) any such settlement is
effected with the written consent of the Issuers; and
(iii) against any and all expense whatsoever, as
incurred (including reasonable fees and disbursements of
counsel chosen by TD Securities), reasonably incurred in
investigating, preparing or defending against any
litigation, or 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 does 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 any Initial
Purchaser through TD Securities expressly for use in the
Preliminary Offering Memorandum or the Offering Memorandum (or
any amendment or supplement thereto); provided further that, with
respect to any untrue statement contained in or omission from any
Preliminary Offering Memorandum, this indemnity agreement shall
not inure to the benefit of any Initial Purchaser on account of
any loss, claim, damage, liability or action arising from the
sale of any Securities to any person in the initial resale by
that Initial Purchaser if that Initial Purchaser failed to send
or give a copy of the Offering Memorandum, as the same may be
amended or supplemented, to that person within the time required
by the 1933 Act, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact in such Preliminary Offering Memorandum was
corrected in the Offering Memorandum and the Offering Memorandum
was made available to that Initial Purchaser prior to the sale of
the Securities.
(b) Indemnification of Issuers and Directors. Each Initial
Purchaser severally agrees to indemnify and hold harmless the
Issuers, their directors, and each person, if any, who controls
either of the Issuers 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 subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or
supplement thereto) in reliance upon and in conformity with
written information furnished to the Issuers by such Initial
Purchaser through TD Securities expressly for use in the
Preliminary Offering Memorandum or the Offering Memorandum (or
any amendment or supplement thereto).
(c) Actions Against Parties; Notification. 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. In
the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by TD
Securities, and, in the case of parties indemnified pursuant to
Section 7(b) above, counsel to the indemnified parties shall be
selected by the Issuers. 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 the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this
Section 7 or Section 8 hereof (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) Settlement Without Consent If Failure to Reimburse. If
at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees
and expenses of counsel and the indemnifying party is obligated
to reimburse the indemnified party under the foregoing provisions
of this Section 7, such indemnifying party agrees that it shall
be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such
settlement is entered into more than 60 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.
Section 8. Contribution. If the indemnification
provided for in Section 7 hereof 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 on the one hand and the Initial
Purchasers on the other hand from the offering of the Securities
pursuant to this Agreement 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 on the one hand and of the Initial Purchasers on the
other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers on the
one hand and the Initial Purchasers on the other hand in
connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses)
received by the Issuers and the total discount received by the
Initial Purchasers, in each case as set forth on the cover of the
Offering Memorandum, bear to the aggregate initial price to
investors of the Securities as set forth on such cover.
The relative fault of the Issuers on the one hand and
the Initial Purchasers on the other 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 Issuers or by the Initial Purchasers and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Issuers and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this
Section 8 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
8. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to
above in this Section 8 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 8, no
Initial Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the
Securities purchased by it and sold pursuant to the terms of this
Agreement exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of 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 8, each person, if any,
who controls an Initial Purchaser 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, and each
director of the Issuers, 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 Initial Purchasers' respective
obligations to contribute pursuant to this Section 8 are several
in proportion to the principal amount of Securities set forth
opposite their respective names in Schedule A hereto and not
joint.
Section 9. Representations, Warranties and Agreements
to Survive Delivery. All representations, warranties,
indemnities, agreements and other statements of the Issuers or
their respective officers set forth in or made pursuant to this
Agreement will remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any
Initial Purchaser or controlling person, or by or on behalf of
the Issuers, and will survive delivery of the Securities to the
Initial Purchasers.
Section 10. Termination of Agreement. (a)
Termination; General. The Initial Purchasers may terminate this
Agreement, by notice to the Issuers, at any time at or prior to
the Closing Time (i) if there has been, since the time of the
execution of this Agreement or the respective dates as of which
information is given in the Offering Memorandum, any event or
condition which would result in a Material Adverse Effect, or
(ii) if there has occurred any material adverse change in the
financial markets in the United States or the international
financial markets, or any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development
involving a prospective change in national or international
political, financial or economic conditions, in each case, the
effect of which is such as to make it, in the judgment of TD
Securities, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in
any securities of the Issuers has been suspended or materially
limited by the Commission, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the
Nasdaq National Market has been suspended or materially limited,
or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of such
exchanges or by such system or by order of the Commission, NASD
or any other governmental authority, in each case, the effect of
which is such as to make it, in the judgment of TD Securities,
impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iv) if a banking moratorium
has been declared by either Federal, New York, Delaware,
Connecticut, Virginia or Quebec authorities.
(b) Liabilities. If this Agreement is terminated
pursuant to this Section, such termination shall be without
liability of any party to any other party, except as to the
extent provided in Section 4; provided that the provisions of
Sections 1, 7, 8 and 9 shall remain in full force and effect.
Section 11. Default by One or More of the Initial
Purchasers. If one or more of the Initial Purchasers shall fail
at the Closing Time to purchase the Securities which it or they
are obligated to purchase under this Agreement (the "Defaulted
Securities"), TD Securities shall have the right, but not the
obligation, within 24 hours thereafter, to make arrangements for
one or more non-defaulting Initial Purchasers, or any other
Initial Purchasers, to purchase, each severally and not jointly,
all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set
forth; if, however, TD Securities shall not have completed such
arrangements within such 24-hour period, then this Agreement
shall terminate without liability on the part of any non-
defaulting Initial Purchaser.
No action pursuant to this Section shall relieve any
defaulting Initial Purchaser from liability in respect of its
default.
In the event of any such default that does not result
in a termination of this Agreement, either TD Securities or the
Issuers shall have the right to postpone the Closing Time for a
period not exceeding seven days in order to effect any required
changes in the Offering Memorandum or in any other documents or
arrangements.
Section 12. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Initial Purchasers
shall be directed to TD Securities at 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attention: Xxx Xxxxxxxxx, and notices
to the Issuers shall be directed to them in care of Xxxxx-Xxxxx
at Post Office Box 0000, 00 Xxxxx Xxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000, Attention: President, with copies to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxxxxx.
Section 13. Parties. This Agreement shall inure to
the benefit of and be binding upon the Initial Purchasers and the
Issuers and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Initial
Purchasers and the Issuers and their respective successors and
the controlling persons and officers and directors referred to in
Section 7 and 8 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Initial Purchasers and the
Issuers and their respective successors, and said controlling
persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Initial
Purchaser shall be deemed to be a successor by reason merely of
such purchase.
Section 14. Governing Law and Time. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. SPECIFIED TIMES OF THE DAY REFER TO NEW
YORK CITY TIME.
Section 15. Effect of Headings. The Section headings
herein are for convenience only and shall not affect the
construction hereof.
Section 16. Counterparts. This Agreement may be
executed in one or more counterparts and, when a counterpart has
been executed by each party, all such counterparts taken together
shall constitute one and the same agreement.
_________________________
If the foregoing is in accordance with the Initial
Purchasers' understanding of our agreement, please sign and
return to us a counterpart hereof, whereupon this instrument will
become a binding agreement between the Issuers and the Initial
Purchasers in accordance with its terms.
Very truly yours,
BEAR ISLAND PAPER COMPANY, L.L.C.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President of
Finance
BEAR ISLAND FINANCE COMPANY II
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
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/ Xxx Xxxxxxxxx
Name: Xxx Xxxxxxxxx
Title: Managing Director
SCHEDULE A
Principal
Amount of
Name of Initial Purchaser Securities
TD Securities (USA) Inc. . . . . . . . . . . . $51,000,000
Salomon Brothers Inc . . . . . . . . . . . . . $49,000,000
------------
Total . . . . . . . . . . . . . . . . . . . . . $100,000,000
============
SCHEDULE B
BEAR ISLAND PAPER COMPANY, L.L.C.
BEAR ISLAND FINANCE COMPANY II
$100,000,000 Senior Notes Due 2007
1. The initial price of the Securities shall be 100% of the
principal amount thereof, plus accrued interest, if any, from the
date of issuance.
2. The purchase price to be paid by the Initial Purchasers
for the Securities shall be 97% of the principal amount thereof.
3. The interest rate on the Securities shall be 10% per
annum.
4. The redemption prices to be supplied in the Final
Offering Memorandum under the caption "Description of the
Notes Optional Redemption" (and correspondingly in the Indenture)
shall be on or after December 1 of the years appearing below:
YEAR REDEMPTION PRICE
2002 105.000%
2003 103.333%
2004 101.667%
2005 and 100.000%
thereafter
Exhibit A
FORM OF REGISTRATION RIGHTS AGREEMENT
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 ("XxxXx" and, together with the Company, the
"Issuers"), and TD SECURITIES (USA) INC. ("TD Securities") and
XXXXXXX XXXXXXXX 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.
"XxxXx" shall have the meaning set forth in the
preamble of this Agreement and also includes XxxXx'x
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 Xxxxxx 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 Xxxxxx'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 Xxxxxx'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 Xxxxxx'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 Xxxxxx (a) agrees
to sell such Xxxxxx'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 Xxxxxx, 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 Xxxxxx 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 Xxxxxx.
(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/ Xxxxxx X. Xxxxxxxx
____________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
of Finance
BEAR ISLAND FINANCE COMPANY II
By: /s/ Xxxxxx X. Xxxxxxxx
____________________________
Name: Xxxxxx X. Xxxxxxxx
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/ Xxx Xxxxxxxxx
________________________
Name: Xxx Xxxxxxxxx
Title: Managing Director
Exhibit B
FORMS OF OPINIONS OF ISSUERS' COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
Based upon the foregoing and subject to the
limitations, qualifications, exceptions and assumptions
set forth herein, we are of the opinion that, as of the
date hereof:
1. XxxXx has been duly incorporated and is
validly existing as a corporation and is in good standing
under the laws of the State of Delaware.
2. XxxXx has the corporate power and authority
to execute and deliver the Purchase Agreement, the
Indenture, the Notes and the Registration Rights
Agreement and to perform its obligations thereunder, and
the execution and delivery by XxxXx of the Purchase
Agreement, the Indenture, the Notes and the Registration
Rights Agreement has been duly authorized by it.
3. The Purchase Agreement has been duly
executed and delivered by Xxxxx.
4. The Indenture has been duly executed and
delivered by Xxxxx and, when duly executed and delivered
by each of the other Opinion Parties, will constitute a
valid and binding obligation of each of the Opinion
Parties, enforceable against each Opinion Party in
accordance with its terms.
5. The Notes are in the form contemplated by
the Indenture and, when the Notes are executed by the
Issuers and authenticated by the Trustee in the manner
provided in the Indenture and delivered to and paid for
by the Initial Purchasers in accordance with the terms of
the Purchase Agreement, the Notes will constitute valid
and binding obligations of the Issuers, enforceable
against the Issuers in accordance with their terms and
the Notes will be entitled to the benefits of the
Indenture.
6. The Registration Rights Agreement has been
duly executed and delivered by Xxxxx and, when duly
executed and delivered by the Company, will constitute a
valid and binding obligation of the Issuers, enforceable
against the Issuers in accordance with its terms.
7. Each of the Collateral Documents, when duly
executed and delivered by each Opinion Party that is a
party to such Collateral Document, will constitute a
valid and binding obligation of such Opinion Party,
enforceable against such Opinion Party in accordance with
its terms.
8. The execution and delivery by XxxXx of each
of the Purchase Agreement, the Indenture, the Notes and
the Registration Rights Agreement and the performance by
XxxXx of its obligations under each of the Purchase
Agreement, the Indenture, the Notes and the Registration
Rights Agreement, each in accordance with its terms, do
not (i) conflict with the Certificate of Incorporation or
By-laws of XxxXx, (ii) constitute a violation of or a
default under any Applicable Contracts (as hereinafter
defined) or (iii) cause the creation of any security
interest or lien (other than the security interests and
liens granted or created by or pursuant to the Opinion
Documents) upon any property of XxxXx pursuant to any
Applicable Contracts. "Applicable Contracts" mean those
agreements or instruments set forth on Schedule 1 to the
Opinion Certificate.
9. Based on our review of Applicable Laws, no
Governmental Approval that has not been obtained is
required in connection with the execution and delivery of
the Purchase Agreement, the Indenture, the Notes, the
Registration Rights Agreement and the Collateral
Documents by any Opinion Party that is a party thereto
and the performance by any such Opinion Party of its
obligations thereunder (except for the filing of UCC-1
financing statements in the filing offices required by
applicable law and filings and registrations with the
U.S. Patent and Trademark Office and the U.S. Copyright
Office with respect to the registrations and applications
set forth on the schedules to the Company Pledge and
Security Agreement (and any after-acquired U.S.
trademark, U.S. patent and U.S. copyright registrations
and applications) and other similar filings required
under the Company Pledge and Security Agreement).
10. The Notes and the Indenture conform in all
material respects to the descriptions thereof contained
in the Offering Memorandum.
11. To our knowledge (but without any
independent investigation), except as disclosed in the
Offering Memorandum, there is no action, suit,
proceeding, inquiry or investigation pending or
threatened before, or brought by, any Governmental
Authority to which any Opinion Party is a party or to
which any property of any Opinion Party is subject, that
(a) seeks to restrain, enjoin or prevent the execution
and delivery of the Opinion Documents, the performance by
the Opinion Parties of their obligations thereunder or
the consummation of the transactions contemplated by the
Opinion Documents or (b) would be required to be
disclosed in the Offering Memorandum if the Offering
Memorandum were a registration statement filed with the
Commission under the Securities Act of 1933, as amended.
Our opinion in this paragraph 11 is based solely on our
discussions with the officers of the Opinion Parties
responsible for the matters discussed in this paragraph,
and our review of documents furnished to us by the
Opinion Parties, and we have made no search of the public
docket records of any Governmental Authority.
12. The statements set forth in the Offering
Memorandum under the captions "Description of the Notes,"
"Exchange Offer; Registration Rights" and "Description of
Certain Other Indebtedness The Bank Credit Facilities"
and " The Timberlands Loan," insofar as such statements
purport to summarize certain provisions of the Indenture,
the Notes, the Registration Rights Agreement, the
Collateral Documents and the Credit Agreements,
constitute accurate summaries of those provisions in all
material respects.
13. The statements in the Offering Memorandum
that purport to summarize certain provisions of the
documents specified in Schedule 1 to this letter
constitute accurate summaries of those provisions in all
material respects.
14. The statements made in the Offering
Memorandum under the caption "Certain Federal Income Tax
Considerations" insofar as they purport to constitute
statements of law or legal conclusions, have been
reviewed by us and fairly present the information
disclosed therein in all material respects.
15. Assuming (a) the accuracy of the
representations and warranties of the Issuers set forth
in Sections 1(a) (i), (ii), (xxx), (xxxi), (xxii) and
(xxiv) of the Purchase Agreement and of the Initial
Purchasers in Section 6 of the Purchase Agreement, (b)
the due performance by the Issuers of the covenants and
agreements set forth in Section 3 of the Purchase
Agreement and the due performance by the Initial
Purchasers of the covenants and agreements set forth in
Section 6 of the Purchase Agreement, (c) the Initial
Purchasers' compliance with the offering and transfer
procedures and restrictions described in the Offering
Memorandum, (d) the accuracy of the representations and
warranties made in accordance with the Purchase Agreement
and the Offering Memorandum by purchasers to whom the
Initial Purchasers initially resell Notes and (e) that
purchasers to whom the Initial Purchasers initially
resell Notes receive a copy of the Offering Memorandum
prior to such sale, the offer, sale and delivery of the
Notes to the Initial Purchasers in the manner
contemplated by the Purchase Agreement and the Offering
Memorandum and the initial resale of the Notes by the
Initial Purchasers in the manner contemplated in the
Offering Memorandum do not require registration under the
Securities Act of 1933, as amended, and the Indenture
does not require qualification under the Trust Indenture
Act of 1939, as amended, it being understood that we do
not express any opinion as to any subsequent resale of
any Notes.
16. None of the Opinion Parties is, after the
consummation of the transactions contemplated by the
Opinion Documents and the application of the net proceeds
from the issuance and sale of the Notes as described in
the Offering Memorandum under the caption "Use of
Proceeds," an "investment company" required to be
registered as such under the Investment Company Act of
1940, as amended.
17. The provisions of the Company Pledge and
Security Agreement are effective to create, in favor of
the Trustee, a valid security interest in the Company's
rights in that portion of the Collateral (as defined in
the Company Pledge and Security Agreement) described
therein which is subject to Article 9 of the New York UCC
(the "Article 9 Collateral") which security interest will
secure the Obligations (as defined in the Company Pledge
and Security Agreement).
18. The provisions of the Timberlands Pledge
Agreement are effective to create in favor of the Trustee
a valid security interest in Xxxxx-Xxxxx'x rights in the
Pledged LLC Interests (as defined in the Timberlands
Pledge Agreement) to secure the Secured Obligations (as
defined in the Timberlands Pledge Agreement).
19. The provisions of the Xxxxx Pledge
Agreement are effective to create in favor of the Trustee
a valid security interest in Xxxxx-Xxxxx'x rights in the
certificate identified on Schedule 2 to this letter (the
"Xxxxx Pledged Securities," and, together with the
Pledged LLC Interests, the "Pledged Collateral) to secure
the Secured Obligations (as defined in the Xxxxx Pledge
Agreement). Assuming the Agent (as defined in the Xxxxx
Senior Pledge Agreement) is in possession of the Xxxxx
Pledged Securities in the State of New York, upon the
acknowledgment by the Agent (as defined in the Xxxxx
Senior Pledge Agreement) that it holds the Xxxxx Pledged
Securities for the Trustee, the Trustee will have a
perfected security interest in the Xxxxx Pledged
Securities. Upon such acknowledgement, no interest of
any other creditor, other than the Agent for the benefit
of the Company Agent and the Timberlands Agent, will be
equal or prior to the security interest of the Trustee in
the Xxxxx Pledged Securities.
