Exhibit 2
REGISTRATION RIGHTS AGREEMENT
Dated as of November 19, 1997
among
AEP INDUSTRIES INC.
and
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
and
SALOMON BROTHERS INC
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of
November 19, 1997, by and among AEP INDUSTRIES INC., a corporation formed
under the laws of the State of Delaware (the "Company"), and X.X. XXXXXX
SECURITIES INC., XXXXXX XXXXXXX & CO. INCORPORATED and SALOMON BROTHERS INC
(collectively, the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of November 14, 1997, between the Company and the Initial
Purchasers (the "Purchase Agreement") relating to the sale by the Company to
the Initial Purchasers, severally, of $200,000,000 aggregate principal amount
of its 9.875% Senior Subordinated Notes due 2007 (the "Notes"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement for the equal benefit of both of the Initial Purchasers and their
direct and indirect transferees. The execution and delivery of this
Agreement is a condition to the Initial Purchasers' obligation to purchase
the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4.
Advice: See Section 5.
Applicable Period: See Section 2(b).
Black Out Period: See Section 3(a).
Closing Date: The Closing Date as defined in the Purchase Agreement.
Company: See the introductory paragraph to this Agreement.
Consummation Date: The 180th day after the Issue Date. DTC: See
Section 5(i).
DTC: See Section 5(i).
Effectiveness Date: The 150th day after the Issue Date; provided,
however, that with respect to any Shelf Registration Statement, the
Effectiveness Date shall be the 90th day following the Filing Date with
respect thereto.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Exchange Securities: See Section 2(a).
Filing Date: (A) If no Registration Statement has been filed by the
Company pursuant to this Agreement, the 90th day after the Issue Date;
provided, however, that if a Shelf Notice is given within 15 days of the
Filing Date, then the Filing Date with respect to the Initial Shelf
Registration Statement shall be the 20th day after the date of the giving of
such Shelf Notice and (B) in each other case (which may be applicable
notwithstanding the consummation of the Exchange Offer), the 90th day after
the delivery of a Shelf Notice.
Holder: Any record holder of Registrable Securities.
Indemnified Person: See Section 7.
Indemnifying Person: See Section 7.
Indenture: The Indenture, dated as of November 19, 1997, between
the Company and The Bank of New York, as trustee, pursuant to which the Notes
are being issued, as amended or supplemented from time to time in accordance
with the terms thereof.
Initial Purchasers: See the introductory paragraph to this
Agreement.
Initial Shelf Registration Statement: See Section 3(a).
Inspectors: See Section 5(p).
Issue Date: The original issue date of the Notes.
NASD: See Section 5(t).
Notes: See the preamble to this Agreement.
Participant: See Section 7.
Participating Broker-Dealer: See Section 2(b).
Person: An individual, corporation, limited or general partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Private Exchange: See Section 2(b).
Private Exchange Securities: See Section 2(b).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
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registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
Records: See Section 5(p).
Registrable Securities: The Notes upon original issuance thereof
and at all times subsequent thereto, each Exchange Security as to which
Section 2(c)(v) hereof is applicable upon original issuance and at all times
subsequent thereto and, if issued, the Private Exchange Securities, until in
the case of any such Notes, Exchange Securities or Private Exchange
Securities, as the case may be, (i) a Registration Statement (other than,
with respect to any Exchange Security as to which Section 2(c)(v) hereof is
applicable, the Exchange Registration Statement) covering such Notes,
Exchange Securities or Private Exchange Securities has been declared
effective by the SEC and such Notes, Exchange Securities or Private Exchange
Securities, as the case may be, have been disposed of in accordance with such
effective Registration Statement, (ii) such Notes, Exchange Securities or
Private Exchange Securities, as the case may be, are sold in compliance with
Rule 144, or (iii) such Notes, Exchange Securities or Private Exchange
Securities, as the case may be, cease to be outstanding.
Registration Statement: Any registration statement of the Company,
including, but not limited to, the Exchange Registration Statement, that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and
sales of securities made in compliance therewith resulting in offers and
sales by subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus delivery
requirements of the Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration Statement: See Section 3(b).
Subsequent Shelf Registration Statement: See Section 3(b).
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TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee as defined in the Indenture and, if existent,
the trustee under any indenture governing the Exchange Securities and Private
Exchange Securities (if any).
Underwritten registration or underwritten offering: A registration
in which securities of the Company are sold to an underwriter for reoffering
to the public.
2. Exchange Offer
(a) The Company agrees (to the extent not prohibited by applicable
law or applicable interpretations of the SEC) to file with the SEC as soon as
practicable after the Closing Date, but in no event later than the Filing
Date, an offer to exchange (the "Exchange Offer") any and all of the
Registrable Securities for a like aggregate principal amount of debt
securities of the Company which are identical in all material respects to the
Notes (the "Exchange Securities") (and which are entitled to the benefits of
a trust indenture which is substantially identical in all material respects
to the Indenture (other than such changes as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification of such trust
indenture under the TIA) and which has been qualified under the TIA), except
that the Exchange Securities shall have been registered pursuant to an
effective Registration Statement under the Securities Act and shall contain
no restrictive legend thereon. The Company agrees to use its reasonable best
efforts to keep the Exchange Offer open for at least 30 business days (or
longer if required by applicable law) after the date notice of the Exchange
Offer is mailed to Holders and to consummate the Exchange Offer on or prior
to the Effectiveness Date. The Exchange Offer will be registered under the
Securities Act on the appropriate form (the "Exchange Registration
Statement") and will comply with all applicable tender offer rules and
regulations under the Exchange Act. If after such Exchange Registration
Statement is initially declared effective by the SEC, the Exchange Offer or
the issuance of the Exchange Securities thereunder is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court such Exchange Registration Statement shall be
deemed not to have become effective for purposes of this Agreement.
Each Holder who participates in the Exchange Offer will be deemed to
represent that any Exchange Securities received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement with any person to
participate in the distribution of the Exchange Securities in violation of
the provisions of the Securities Act, and that such Holder is not an
affiliate of the Company within the meaning of the Securities Act.
Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply, mutatis,
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company shall have no further obligation to register
Registrable Securities (other than Private Exchange Securities and other than
Exchange Securities as to which clause 2(c)(v) hereof applies) pursuant to
Section 3 of this Agreement. No securities other than the Exchange
Securities shall be included in the Exchange Registration Statement.
(b) The Company shall include within the Prospectus contained in
the Exchange Registration Statement one or more section(s) reasonably
acceptable to the Initial Purchasers, which shall contain a summary statement
of the positions taken or policies made by the Staff of the SEC with respect
to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities received by such broker-dealer in the Exchange Offer (a
"Participating Bro-
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ker-Dealer"), whether such positions or policies have been publicly
disseminated by the Staff of the SEC or such positions or policies, in the
reasonable judgment of the Initial Purchasers, represent the prevailing views
of the Staff of the SEC. Such section(s) shall also allow the use of the
prospectus by all persons subject to the prospectus delivery requirements of
the Securities Act, including all Participating Broker-Dealers, and include a
statement describing the means by which Participating Broker-Dealers may
resell the Exchange Securities.
The Company shall use its reasonable best efforts to keep the
Exchange Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such persons
must comply with such requirements in order to resell the Exchange
Securities, provided, however, that such period shall not exceed 90 days (or
such longer period if extended pursuant to the last paragraph of Section 5)
(the "Applicable Period").
If, prior to consummation of the Exchange Offer, an Initial
Purchaser holds any Notes acquired by it and having the status of an unsold
allotment in the initial distribution, the Company upon the request of such
Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to each such Initial
Purchaser, in exchange (the "Private Exchange") for the Notes held by such
Initial Purchaser, a like principal amount of debt securities of the Company
that are identical in all material respects to the Exchange Securities (the
"Private Exchange Securities") (and which are issued pursuant to the same
indenture as the Exchange Securities) except for the placement of a
restrictive legend on such Private Exchange Securities. The Private Exchange
Securities shall bear the same CUSIP number as the Exchange Securities.
Interest on the Exchange Securities and Private Exchange Securities will
accrue from the last interest payment date on which interest was paid on the
Notes surrendered in exchange therefor or, if no interest has been paid on
the Notes, from the Issue Date.
Any indenture under which the Exchange Securities or the Private
Exchange Securities will be issued shall provide that the holders of any of
the Exchange Securities and the Private Exchange Securities will vote and
consent together on all matters (to which such holders are entitled to vote
or consent) as one class and that none of the holders of the Exchange
Securities and the Private Exchange Securities will have the right to vote or
consent as a separate class on any matter (to which such holders are entitled
to vote or consent).
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the Staff of the SEC, the Company reasonably determines in
good faith, after consultation with counsel, that it is not permitted to
effect the Exchange Offer, (ii) the Exchange Offer is not commenced on or
prior to the Effectiveness Date, (iii) the Exchange Offer is, for any
reason, not consummated on or prior to the 5th day after the Expiration Date,
(iv) any Holder of Private Exchange Securities so requests, or (v) in the
case of any Holder that participates in the Exchange Offer, such Holder does
not receive Exchange Securities on the date of the exchange that may be sold
without restriction under state and federal securities laws (the occurrence
of any such event set forth in the foregoing clauses (i) through (v), a
"Shelf Registration Event"), then, in the case of such events the Company
shall promptly deliver to the Holders and the Trustee notice thereof (the
"Shelf Notice") and thereafter the Company shall file an Initial Shelf
Registration Statement pursuant to Section 3.
3. Shelf Registration Statement
If a Shelf Notice is delivered as contemplated by Section 2(c), then:
(a) Initial Shelf Registration Statement. The Company shall as
promptly as reasonably practicable prepare and file with the SEC a Registration
Statement for an offering to be made on a continuous basis
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pursuant to Rule 415 covering all of the Registrable Securities (the "Initial
Shelf Registration Statement"). If the Company shall have not yet filed an
Exchange Offer, the Company shall use its reasonable best efforts to file
with the SEC the Initial Shelf Registration Statement on or prior to the
applicable Filing Date. The Initial Shelf Registration Statement shall be on
Form S-1 or another appropriate form permitting registration of such
Registrable Securities for resale by such holders in the manner or manners
designated by them (including, without limitation, one or more underwritten
offerings). The Company shall use its reasonable best efforts to cause the
Initial Shelf Registration Statement to be declared effective under the
Securities Act on or prior to the 120th day after the filing thereof with the
SEC and to keep the Initial Shelf Registration Statement continuously
effective under the Securities Act until the date which is 24 months from the
Issue Date (subject to extension pursuant to the last paragraph of Section 5
hereof) (the "Effectiveness Period"), or such shorter period ending when (i)
all Registrable Securities covered by the Initial Shelf Registration
Statement have been sold in the manner set forth and as contemplated in the
Initial Shelf Registration Statement, (ii) a Subsequent Shelf Registration
Statement covering all of the Registrable Securities has been declared
effective under the Securities Act or (iii) the Registrable Securities may be
sold or transferred without restriction pursuant to Rule 144(k) under the
Securities Act. Notwithstanding the foregoing, the Company may suspend the
effectiveness of the Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement (as defined below) for a period (the "Black Out
Period") not to exceed 45 days if (i)(A) an event occurs and is continuing as
a result of which such Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement would, in the good faith judgment of the
Company, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (B) the
Company determines in good faith that the disclosure of such event at such
time would have a material adverse effect on the business, operations or
prospects of the Company or (ii) in the good faith judgment of the Company,
it would be seriously detrimental to the Company and its stockholders to
maintain the effectiveness of such registration statement and it is therefore
essential to suspend the effectiveness of such registration statement;
provided, however, that the Company shall only be entitled to one Black Out
Period during any 18 month period.
(b) Subsequent Shelf Registration Statements. If the Initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement ceases
to be effective for any reason at any time during the Effectiveness Period
(other than because of the sale of all of the securities registered
thereunder), the Company shall use its best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any
event shall within 45 days of such cessation of effectiveness amend the Shelf
Registration Statement in a manner expected to obtain the withdrawal of the
order suspending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the Registrable
Securities (a "Subsequent Shelf Registration Statement"). If a Subsequent
Shelf Registration Statement is filed, the Company shall use its best efforts
to cause the Subsequent Shelf Registration Statement to be declared effective
as soon as practicable after such filing and to keep such Registration
Statement continuously effective for a period equal to the number of days in
the Effectiveness Period less the aggregate number of days during which the
Initial Shelf Registration Statement or any Subsequent Shelf Registration
Statement was previously continuously effective. As used herein the term
"Shelf Registration Statement" means the Initial Shelf Registration Statement
and any Subsequent Shelf Registration Statement.
(c) Supplements and Amendments. The Company shall promptly
supplement and amend the Shelf Registration Statement if required by the
rules, regulations or instructions applicable to the registration form used
for such Shelf Registration Statement, if required by the Securities Act, or
if reasonably requested by the Holders of a majority in aggregate principal
amount of the Registrable Securities covered by such Registration Statement
or by any underwriter of such Registrable Securities.
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4. Additional Interest
(a) The Company and the Initial Purchasers agree that the Holders
of Registrable Securities will suffer damages if the Company fails to fulfill
its obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision.
Accordingly, the Company agrees to pay, as liquidated damages, additional
interest on the Registrable Securities ("Additional Interest") under the
circumstances and to the extent set forth below (each of which shall be given
independent effect and shall not be duplicative):
(i) (A) if neither the Exchange Registration Statement nor the Initial
Shelf Registration Statement has been filed on or prior to the Filing Date
or (B) notwithstanding that the Company has consummated or will consummate
the Exchange Offer, the Company is required to file a Shelf Registration
Statement and such Shelf Registration Statement is not filed on or prior to
the Filing Date applicable thereto, Additional Interest shall accrue on the
Registrable Securities over and above the stated interest at a rate of .25%
per annum for the first 90 days immediately following the applicable Filing
Date, such Additional Interest rate increasing by an additional .25% per
annum at the beginning of each subsequent 90-day period;
(ii) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration Statement is declared effective by the SEC on or
prior to the Effectiveness Date or (B) notwithstanding that the Company has
consummated or will consummate the Exchange Offer, the Company is required
to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the SEC on or prior to Effectiveness
Date in respect of such Shelf Registration Statement, Additional Interest
shall be accrued on the Registrable Securities included or which should
have been included in such Registration Statement over and above the stated
interest at a rate of .25% per annum for the first 90 days immediately
following the day after the Effectiveness Date, such Additional Interest
rate increasing by an additional .25% per annum at the beginning of each
subsequent 90-day period; and
(iii) if (A) the Company has not exchanged Exchange Securities for all
Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to the Consummation Date or (B) the Exchange Registration
Statement ceases to be effective at any time prior to the time that the
Exchange Offer is consummated or (C) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration Statement
ceases to be effective at any time during the Effectiveness Period (other
than during a Black Out Period), then Additional Interest shall be accrued
on the Registrable Securities (over and above any interest otherwise
payable on the Registrable Securities) at a rate of .25% per annum for the
first 90 days commencing on the (x) 180th day after the Issue Date, in the
case of (A) above, or (y) the day the Exchange Registration Statement
ceases to be effective in the case of (B) above, or (z) the day such Shelf
Registration Statement ceases to be effective in the case of (C) above,
such Additional Interest rate increasing by an additional .25% per annum at
the beginning of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Registrable
Securities may not exceed at any one time in the aggregate 1.0% per annum;
and provided, further, that (1) upon the filing of the Exchange Registration
Statement or a Shelf Registration Statement as required hereunder (in the
case of clause (i) of this Section 4), (2) upon the effectiveness of the
Exchange Registration Statement or the applicable Shelf Registration
Statement as required hereunder (in the case of clause (ii) of this Section
4), or (3) upon the exchange of Exchange Securities for all Notes tendered
(in the case of clause (iii)(A) of this Section 4), or upon the effectiveness
of the Exchange Registration Statement which had ceased to remain effective
(in the case of (iii)(B) of this Section 4), or upon
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the effectiveness of the Shelf Registration Statement which had ceased to
remain effective (in the case of (iii)(C) of this Section 4), Additional
Interest on the Registrable Securities as a result of such clause (or the
relevant subclause thereof), as the case may be, shall cease to accrue.
(b) The Company shall notify the Trustee within three business days
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). The Company
shall pay the Additional Interest due on the Registrable Securities by
depositing with the Trustee, in trust, for the benefit of the Holders
thereof, on or before the applicable semi-annual interest payment date,
immediately available funds in sums sufficient to pay the Additional Interest
then due to Holders of Registrable Securities. The Additional Interest
amount due shall be payable on each interest payment date to the record
Holder of Registrable Securities entitled to receive the interest payment to
be made on such date as set forth in the Indenture. The amount of Additional
Interest will be determined by multiplying the applicable Additional Interest
rate by the principal amount of the affected Registrable Securities of such
Holders, multiplied by a fraction, the numerator of which is the number of
days such Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months
and, in the case of a partial month, the actual number of days elapsed), and,
the denominator of which is 360. Each obligation to pay Additional Interest
shall be deemed to accrue immediately following the occurrence of the
applicable Event Date. The parties hereto agree that the Additional Interest
provided for in this Section 4 constitutes a reasonable estimate of the
damages that may be incurred by Holders of Registrable Securities by reason
of the failure of a Shelf Registration Statement or Exchange Offer to be
filed or declared effective, or a Shelf Registration Statement to remain
effective, as the case may be, in accordance with this Section 4.
5. Registration Procedures
In connection with the registration of any Registrable Securities
pursuant to Sections 2 or 3 hereof, the Company shall effect such
registrations to permit the sale of such Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant
thereto the Company shall:
(a) Use its reasonable best efforts to prepare and file with the
SEC, as soon as practicable after the date hereof but in any event on or
prior to the Filing Date, a Registration Statement or Registration Statements
as prescribed by Section 2 or 3, and to use its best efforts to cause each
such Registration Statement to become effective and remain effective as
provided herein, provided, however, that, if (1) such filing is pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the Company
shall, upon written request, furnish to and afford the Holders of the
Registrable Securities and each such Participating Broker-Dealer, as the case
may be, covered by such Registration Statement, their counsel and the
managing underwriters, if any, a reasonable opportunity to review copies of
all such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed; the Company
shall not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded a
reasonable opportunity to review prior to the filing of such document, if the
Holders of a majority in aggregate principal amount of the Registrable
Securities covered by such Registration Statement, or each such Participating
Broker-Dealer, as the case may be, their counsel, or the managing
underwriters, if any, shall reasonably object by notice to the Company after
a reasonable period to review unless the Company is advised by Counsel that
such amendment or supplement is legally required;
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(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration Statement or Exchange
Registration Statement, as the case may be, as may be necessary to keep such
Registration Statement continuously effective for the Effectiveness Period or
the Applicable Period, as the case may be (except for a Black Out Period);
cause the related Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Securities Act; and comply with
the provisions of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to it with respect
to the disposition of all securities covered by such Registration Statement
as so amended or in such Prospectus as so supplemented and with respect to
the subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus; the Company shall be deemed to
have not used its best efforts to keep a Registration Statement effective
during the Applicable Period if the Company voluntarily takes any action that
would result in selling Holders of the Registrable Securities covered thereby
or Participating Broker-Dealers seeking to sell Exchange Securities not being
able to sell such Registrable Securities or such Exchange Securities during
that period unless such action is required by applicable law or unless the
Company complies with this Agreement, including without limitation, the
provisions of paragraph 5(k) hereof and the last paragraph of this Section 5.
(c) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, notify the selling Holders of
Registrable Securities, or each such Participating Broker-Dealer, as the case
may be, their counsel and the managing underwriters, if any, within 3
business days (and confirm such notice in writing), (i) when a Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective amendment,
when the same has become effective under the Securities Act (including in
such notice a written statement that any Holder may, upon request, obtain,
without charge, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules,
documents incorporated or deemed to be incorporated by reference and
exhibits), (ii) of the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose, (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of a Registration Statement or any of the Registrable
Securities or the Exchange Securities to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (iv) of the happening of any
event or any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement,
it will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (v) of the Company's reasonable determination that
a post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, use its best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or
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exemption from qualification) of any of the Registrable Securities or the
Exchange Securities to be sold by any Participating Broker-Dealer, for sale
in any jurisdiction, and, if any such order is issued, to use its best
efforts to obtain the withdrawal of any such order at the earliest possible
moment.
(e) If a Shelf Registration Statement is filed pursuant to Section
3 and if requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount of the Registrable Securities being
sold in connection with an underwritten offering, (i) promptly incorporate in
a prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, or such Holders or counsel reasonably request
to be included therein, or (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment; provided, however, that
the Company will not be required to incorporate such information or make such
filings during a Black Out Period.
(f) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, furnish to each selling Holder of
Registrable Securities and to each such Participating Broker-Dealer who so
requests and to counsel and each managing underwriter, if any, without
charge, one conformed copy of the Registration Statement or Statements and
each post-effective amendment thereto, including financial statements and
schedules, and if requested, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, deliver to each selling Holder of
Registrable Securities, or each such Participating Broker-Dealer, as the case
may be, their counsel, and the underwriters, if any, without charge, as many
copies of the Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably request;
and, subject to the last paragraph of this Section 5, the Company hereby
consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, and the underwriters or
agents, if any, and dealers (if any), in connection with the offering and
sale of the Registrable Securities covered by or the sale by Participating
Broker-Dealers of the Exchange Securities pursuant to such Prospectus and any
amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities or any
delivery of a Prospectus contained in the Exchange Registration Statement by
any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, to use its best efforts to register or qualify, and to
cooperate with the selling Holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, the underwriters, if any,
and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any selling Holder,
Participating Broker-Dealer, or the managing underwriters reasonably request
in writing, provided, however, that where Exchange Securities held by
Participating Broker-Dealers or Registrable Securities are offered other than
through an underwritten offering, the Company agrees to cause its counsel to
(i) perform Blue Sky investigations and file registrations and qualifications
required to be filed pursuant to this Section 5(h); (ii) keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be
10
kept effective hereunder; and (iii) do any and all other reasonable acts or
things necessary or advisable to enable the disposition in such jurisdictions
of the Exchange Securities held by Participating Broker-Dealers or the
Registrable Securities covered by the applicable Registration Statement,
provided, further, that the Company shall not be required to (A) qualify
generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or (C)
subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction.
(i) If a Shelf Registration Statement is filed pursuant to Section
3, cooperate with the selling Holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold,
which certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company ("DTC"); and
enable such Registrable Securities to be registered in such names as the
managing underwriter or underwriters, if any, or Holders may request.
(j) Use its best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or approved by
such other United States governmental agencies or authorities of the United
States as may be necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such Registrable
Securities, except as may be required solely as a consequence of the nature
of such selling Holder's business, in which case the Company will cooperate
in all reasonable respects with the filing of such Registration Statement and
the granting of such approvals.
(k) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(iv) or 5(c)(v) above, as promptly as
practicable prepare and (subject to Section 5(a) above and any applicable
Black Out Period) file with the SEC, solely at the expense of the Company, a
supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder or to the purchasers of the Exchange
Securities to whom such Prospectus will be delivered by a Participating
Broker-Dealer, any such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(l) Use its best efforts to cause the Registrable Securities
covered by a Registration Statement or the Exchange Securities, as the case
may be, to be rated with the appropriate rating agencies, if so requested by
the Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement or the Exchange Securities,
as the case may be, or the managing underwriters, if any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Securities, (i) provide the Trustee with printed
certificates for the Registrable Securities in a form eligible for deposit
with DTC and (ii) provide a CUSIP number for the Registrable Securities.
(n) In connection with an underwritten offering of Registrable
Securities pursuant to a Shelf Registration Statement, enter into an
underwriting agreement as is customary in underwritten offerings and take all
such other actions as are reasonably requested by the managing underwriters
in order to expedite or facilitate the registration or the disposition of
such Registrable Securities, and in such connection, (i) make such
representations and warranties to the underwriters, with respect to the
business of the Company and its subsidiaries, if
11
any, and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case,
as are customarily made by issuers to underwriters in underwritten offerings,
and confirm the same if and when reasonably requested; (ii) obtain a written
opinion of counsel to the Company and updates thereof in form and substance
reasonably satisfactory to the managing underwriters, addressed to the
underwriters covering the matters customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably
requested by underwriters; (iii) obtain "cold comfort" letters and updates
thereof in form and substance reasonably satisfactory to the managing
underwriters from the independent certified public accountant(s) of the
Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as may be reasonably requested
by underwriters; and (iv) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 7 hereof (or such other provisions
and procedures acceptable to Holders of a majority in aggregate principal
amount of Registrable Securities covered by such Registration Statement and
the managing underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section. The above shall be done at each
closing under such underwriting agreement, or as and to the extent required
thereunder.
(o) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, make available for inspection by any
selling Holder of such Registrable Securities being sold, or each such
Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Securities, if any, and
any attorney, accountant or other agent retained by any such selling holder
or each such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors
and employees of the Company to supply all information in each case
reasonably requested by any such Inspector in connection with such
Registration Statement. Records determined in good faith by the Company to
be confidential shall not be disclosed by any Inspector notified of such
determination unless (i) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in such Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, (iii) the information in such Records
has been made generally available to the public or (iv) the release thereof
is necessary or advisable in connection with any action, suit or proceeding
involving any Holder or other Investor. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company unless and
until such is made generally available to the public. Each selling Holder of
such Registrable Securities and each such Participating Broker-Dealer will be
required to further agree that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company at its own expense to undertake appropriate
action to prevent disclosure of the Records deemed confidential.
(p) Provide an indenture trustee for the Registrable Securities or
the Exchange Securities, as the case may be, and cause the Indenture or the
trust indenture provided for in Section 2(a), as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange
Offer or the first Registration Statement relating to the Registrable
Securities; and in connection therewith, cooperate with the trustee under
12
any such indenture and the holders of the Registrable Securities, to effect
such changes to such indenture as may be required for such indenture to be so
qualified in accordance with the terms of the TIA; and execute, and use its
best efforts to cause such 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 such indenture to be so qualified in a
timely manner.
(q) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 90
days after the end of any 12-month period (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Shelf
Registration Statement, which statements shall cover said 12-month periods.
(r) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to the
Company (or to such other Person as directed by the Company) in exchange for
the Exchange Securities or the Private Exchange Securities, as the case may
be, the Company shall xxxx, or caused to be marked, on such Registrable
Securities that such Registrable Securities are being cancelled in exchange
for the Exchange Securities or the Private Exchange Securities, as the case
may be; in no event shall such Registrable Securities be marked as paid or
otherwise satisfied.
(s) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company in customary form, relating to
the Exchange Securities or the Private Exchange Securities, as the case may
be, addressed to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer or the Private Exchange, as
the case may be, and which includes an opinion that (i) the Company has duly
authorized, executed and delivered the Exchange Securities and Private
Exchange Securities and the related indenture; and (ii) each of the Exchange
Securities or the Private Exchange Securities, as the case may be, and the
related indenture constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms
(with customary exceptions).
(t) Reasonably cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc. (the "NASD").
(u) Use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities covered by
a Registration Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company such information regarding such seller or
Participating Broker-Dealer and the distribution of such Registrable
Securities or Exchange Securities to be sold by such Participating
Broker-Dealer, as the case may be, as the Company may, from time to time,
reasonably request. The Company may exclude from such registration the
Registrable Securities of any seller or Participating Broker-Dealer who fails
to furnish such information within 10 business days after receiving such
request. Each seller as to which any Shelf Registration Statement is being
effected is deemed to agree to furnish promptly to the Company all
information required to be disclosed in order to make the information
previously furnished to the Company by such seller not materially misleading.
13
Each Holder of Registrable Securities and each Participating
Broker-Dealer agrees by acquisition of such Registrable Securities or
Exchange Securities to be sold by such Participating Broker-Dealer, as the
case may be, that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iii),
5(c)(iv), or 5(c)(v), such Holder will forthwith discontinue disposition of
such Registrable Securities covered by such Registration Statement or
Prospectus or Exchange Securities to be sold by such Participating
Broker-Dealer, as the case may be, until such holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 5(k), or
until it is advised in writing (the "Advice") by the Company that the use of
the applicable Prospectus may be resumed. In the event the Company shall
give any such notice, each of the Effectiveness Period and the Applicable
Period shall be extended by the number of days during such periods from and
including the date of the giving of such notice to and including the date
when each seller of Registrable Securities covered by such Registration
Statement or Exchange Securities to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) or (y) the
Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Exchange Offer or a Shelf Registration Statement is filed
or becomes effective, including, without limitation, (i) all registration and
filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky
laws (including, without limitation, reasonable fees and disbursements of
counsel in connection with Blue Sky qualifications of the Registrable
Securities or Exchange Securities and determination of the eligibility of the
Registrable Securities or Exchange Securities for investment under the laws
of such jurisdictions in the United States (x) where the holders of
Registrable Securities are located, in the case of the Exchange Securities,
or (y) as provided in Section 5(h), in the case of Registrable Securities or
Exchange Securities to be sold by a Participating Broker-Dealer during the
Applicable Period)), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities or Exchange
Securities in a form eligible for deposit with DTC and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriters, if any, or, in respect of Registrable Securities or Exchange
Securities to be sold by any Participating Broker-Dealer during the
Applicable Period, by the Holders of a majority in aggregate principal amount
of the Registrable Securities included in any Registration Statement or of
such Exchange Securities, as the case may be), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company and
fees and disbursements of special counsel for the sellers of Registrable
Securities (subject to the provisions of Section 6(b)), (v) fees and
disbursements of all independent certified public accountants referred to in
Section 5(n)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such
performance), (vi) rating agency fees, (vii) Securities Act liability
insurance, if the Company desires such insurance, (viii) fees and expenses of
all other Persons retained by the Company, (ix) internal expenses of the
Company (including, without limitation, all salaries and expenses of officers
and employees of the Company performing legal or accounting duties), (x) the
expense of any annual audit, (xi) the fees and expenses incurred in
connection with the listing of the securities to be registered on any
securities exchange, if applicable, and (xii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any
other documents necessary in order to comply with this Agreement.
(b) In connection with any Shelf Registration Statement hereunder,
the Company shall reimburse the Holders of the Registrable Securities being
registered in such registration for the fees and disbursements of not more
than one counsel (in addition to appropriate local counsel) in an aggregate
amount not to ex-
14
ceed $25,000 chosen by the Holders of a majority in aggregate principal
amount of the Registrable Securities to be included in such Registration
Statement. Such Holders shall be responsible for any and all other
out-of-pocket expenses of the Holders of Registrable Securities incurred in
connection with the registration of the Registrable Securities.
7. Indemnification
The Company agrees to indemnify and hold harmless each Holder of
Registrable Securities and each Participating Broker-Dealer selling Exchange
Securities during the Applicable Period, the affiliates, officers, directors,
employees, representatives and agents of each such person, and each person,
if any, who controls any such person within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act (each, a
"Participant"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, the reasonable legal fees and
other expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
(or any amendment thereto) or Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
information relating to any Participant furnished to the Company in writing
by such Participant expressly for use therein; provided, however, that the
foregoing indemnity with respect to any preliminary prospectus shall not
inure to the benefit of any Participant (or to the benefit of any person
controlling such Participant) from whom the person asserting any such losses,
claims, damages or liabilities purchased Registrable Securities or Exchange
Securities if such untrue statement or omission or alleged untrue statement
or omission made in such preliminary prospectus is eliminated or remedied in
the related final Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) and a copy of the
related Prospectus (as so amended or supplemented) shall not have been
furnished to such person, if required by law so to have been delivered, at or
prior to the sale of such Registrable Securities or Exchange Securities, as
the case may be, to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages, or liabilities, unless such failure to furnish was a result of
non-compliance by the Company with Section 5(g).
Each Participant will be required to agree, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers, its employees and agents and each person who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company
to each Participant, but only with respect to information relating to such
Participant furnished to the Company in writing by such Participant expressly
for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus. The liability of any
Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Securities giving rise
to such obligations.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Person") in writing, and the Indemnifying Person,
upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person
and any others the Indemnifying Person may designate in such pro-
15
ceeding and shall pay the reasonable fees and expenses actually incurred by
such counsel related to such proceeding, provided, however, that the failure
to so notify the Indemnifying Person shall not relieve it of any obligation
or liability which it may have hereunder or otherwise (unless and only to the
extent that such failure directly results in the loss or compromise of any
material rights or defenses). In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed
to the contrary, (ii) the Indemnifying Person has failed within a reasonable
time to retain counsel reasonably satisfactory to the Indemnified Person or
(iii) the named parties in any such proceeding (including any impleaded
parties) include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood
that the Indemnifying Person shall not, in connection with any proceeding or
related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all Indemnified Persons, and that all such reasonable fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for the
Participants and such control persons of Participants shall be designated in
writing by Participants who sold a majority in interest of Registrable
Securities sold by all such Participants and any such separate firm for the
Company, its directors, officers and such control persons of the Company
shall be designated in writing by the Company. The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the second and third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of
the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement. No Indemnifying Person shall, without the prior
written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder
by such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the Indemnification provided for in the first and second
paragraphs of this Section 7 is unavailable to an Indemnified Person in
respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Participants on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand
and the Participants on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Participants and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The parties shall agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result
of the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to
16
include, subject to the limitations set forth above, any reasonable legal or
other expenses actually incurred by such Indemnified Person in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall a Participant be required to
contribute any amount in excess of the amount by which proceeds received by
such Participant from sales of Registrable Securities exceeds the amount of
any damages that such Participant has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section
7 will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. Rule 144 and Rule 144A
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner and, if at any
time the Company is not required to file such reports, it will, upon the
request of any Holder of Registrable Securities, make publicly available
other information so long as necessary to permit sales pursuant to Rule 144
and Rule 144A under the Securities Act. The Company further covenants that
it will take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable
such holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule
144 and Rule 144A under the Securities Act, as such Rules may be amended from
time to time, or (b) any similar rule or regulation hereafter adopted by the
SEC.
9. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Holders of a majority in
aggregate principal amount of such Registrable Securities included in such
offering and shall be reasonably acceptable to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell
such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
10. Miscellaneous
(a) Remedies. In the event of a breach by the Company of any of
its obligations under this Agreement, each Holder of Registrable Securities,
in addition to being entitled to exercise all rights provided herein, in the
Indenture or, in the case of the Initial Purchasers, in the Purchase
Agreement or granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agree that, in the event of any action for
specific performance in respect of such breach, the Company shall waive the
defense that a remedy at law would be adequate.
17
(b) No Inconsistent Agreements. The Company has not, as of the
date hereof, entered and shall not, after the date of this Agreement, enter
into any agreement with respect to any of their securities that is
inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement or otherwise conflicts with the provisions hereof. The
Company has not entered and will not enter into any agreement with respect to
any of its securities which will grant to any Person piggy-back rights with
respect to a Registration Statement.
(c) Adjustments Affecting Registrable Securities. The Company
shall not, directly or indirectly, take any action with respect to the
Registrable Securities as a class that would adversely affect the ability of
the Holders of Registrable Securities to include such Registrable Securities
in a registration undertaken pursuant to this Agreement.
(d) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of (A) Holders of at least a majority of the
then outstanding aggregate principal amount of Registrable Securities and (B)
in circumstances that would adversely affect the Participating
Broker-Dealers, the Participating Broker-Dealers holding not less than a
majority in aggregate principal amount of the Exchange Securities held by all
Participating Broker-Dealers; provided, however, that Section 7 and this
Section 10(d) may not be amended, modified or supplemented without the prior
written consent of each Holder and each Participating Broker-Dealer
(including any Person who was a Holder or Participating Broker-Dealer of
Registrable Securities or Exchange Securities, as the case may be, disposed
of pursuant to any Registration Statement) affected by any such amendment,
modification or supplement. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect, impair, limit or compromise the rights of
other Holders of Registrable Securities may be given by Holders of at least a
majority in aggregate principal amount of the Registrable Securities being
sold by such Holders pursuant to such Registration Statement, provided,
however, that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(e) Notices. All notices and other communications (including
without limitation any notices or other communications to the Trustee)
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or
telecopier:
(i) if to a Holder of Registrable Securities, at the most current address
given by the Trustee to the Company; and
(ii) if to the Company, Corporate Headquarters, 000 Xxxxxxxx Xxxxxx,
Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000, (telecopy 201/807-2489), Attention:
EVP - Finance.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one
business day after being timely delivered to a next-day air courier; and when
receipt is acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee under
the Indenture at the address specified in such Indenture.
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(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Registrable Securities; provided, however,
that this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor or
assign holds Registrable Securities.
(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, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(k) Entire Agreement. This Agreement, together with the Purchase
Agreement, is intended by the parties as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(l) Securities Held by the Company or its Affiliates. Whenever the
consent or approval of holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company
or any of its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage; provided,
however, that for purposes of this Section 10(1), no Initial Purchaser shall
be deemed to be an affiliate of the Company.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
AEP INDUSTRIES INC.
By:
-----------------------------------
Name:
Title:
X.X. XXXXXX SECURITIES INC.
By:
-----------------------------------
Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED
By:
-----------------------------------
Name:
Title:
SALOMON BROTHERS INC
By:
-----------------------------------
Name:
Title:
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