1
EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
Dated as of April 4, 1997
among
TEKNI-PLEX, INC.,
THE GUARANTOR NAMED HEREIN
and
X.X. XXXXXX SECURITIES INC.
2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of
April 4, 1997, by and among TEKNI-PLEX, INC., a corporation formed under the
laws of the State of Delaware (the "Company"), DOLCO PACKAGING CORP. (the
"Guarantor" and, together with the Company, the "Issuers"), and X.X. XXXXXX
SECURITIES INC. (the "Initial Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of April 1, 1997, among the Company, the Guarantor and the
Initial Purchaser (the "Purchase Agreement") relating to the sale by the Company
to the Initial Purchaser of $75,000,000 aggregate principal amount of its 11
1/4% Senior Subordinated Notes due 2007 (the "Notes") and the issuance by the
Guarantor to the Initial Purchaser of a guarantee (the "Guarantee" and together
with the Notes, the "Securities"). In order to induce the Initial Purchaser to
enter into the Purchase Agreement, the Issuers have agreed to provide the
registration rights set forth in this Agreement for the benefit of the Initial
Purchaser and its direct and indirect transferees. The execution and delivery of
this Agreement is a condition to the Initial Purchaser's obligation to purchase
the Securities under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Additional Interest: See Section 4.
Advice: See Section 5.
Applicable Period: See Section 2(b).
Closing Date: The Closing Date as defined in the Purchase Agreement.
Company: See the introductory paragraph to this Agreement.
Consummation Date: The 165th day after the Closing.
Effectiveness Date: The 135th day after the Closing Date.
3
-2-
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: The 60th day after the Closing Date.
Guarantor: See the introductory paragraph to this Agreement.
Holder: Any record holder of Registrable Securities.
Indemnified Person: See Section 7.
Indemnifying Person: See Section 7.
Indenture: The Indenture, dated as of April 1, 1997, among the Company,
the Guarantor and Marine Midland Bank, 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 Purchaser: See the introductory paragraph to this Agreement.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 5(p).
Issue Date: The original issue date of the Notes.
Issuers: See the introductory paragraph to this Agreement.
NASD: See Section 5(t).
Notes: See the preamble to this Agreement.
Participant: See Section 7.
4
-3-
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 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 Securities, upon original issuance thereof
and at all times subsequent thereto, each Exchange Security as to which Section
2(c)(1)(i) 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 Securities, 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)(1)(i) hereof is
applicable, the Exchange Registration Statement) covering such Securities,
Exchange Securities or Private Exchange Securities has been declared effective
by the SEC and such Securities, Exchange Securities or Private Exchange
Securities, as the case may be, have been disposed of in accordance with such
effective Registration Statement, (ii) such Securities, Exchange Securities or
Private Exchange Securities, as the case may be, are sold in compliance with
Rule 144, or (iii) such Securities, Exchange Securities or Private Exchange
Securities, as the case may be, cease to be outstanding.
Registration Statement: Any registration statement of the Company and
the Guarantor, including, but not limited
5
-4-
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: See Section 3(b).
Subsequent Shelf Registration: See Section 3(b).
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
connection with which securities are sold to an underwriter for reoffering to
the public pursuant to an effective Registration Statement.
6
-5-
2. Exchange Offer
(a) The Issuers agree 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 and guaranteed by
the Guarantor with terms identical in all material respects to the Guarantee
(the "Exchange Securities") (and which are entitled to the benefits of a
trust indenture which is 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 Issuers agree to use their 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 Rule 501(b) of Regulation D under the
Securities Act and such Holder has full power and authority to exchange the
Registrable Securities in exchange for the Exchange Securities. Upon
consummation of
7
-6-
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 Issuers shall have
no further obligation to register Registrable Securities (other than Private
Exchange Securities and other than Exchange Securities as to which clause
(c)(1)(i) 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 Issuers shall include within the Prospectus contained in the
Exchange Registration Statement one or more section(s) reasonably acceptable
to the Initial Purchaser, which shall contain a summary statement of the
positions taken or policies made by the Staff of the SEC (which are
available to the Issuers) 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 Broker-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 Purchaser, 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 Issuers shall use their 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 that such
period shall not exceed 180 days (or such longer period if extended pursuant to
the last paragraph of Section 5) (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial Purchaser
holds any Notes acquired by it and having the status of an unsold allotment in
the initial distribution, the
8
-7-
Company upon the request of the Initial Purchaser shall, simultaneously with the
delivery of the Exchange Securities in the Exchange Offer, issue and deliver to
the Initial Purchaser, in exchange (the "Private Exchange") for the Securities
held by the 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. If possible, 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 (1) prior to the consummation of the Exchange Offer, the Company
reasonably determines in good faith or Holders of at least a majority in
aggregate principal amount of the Registrable Securities notify the Company
that they have reasonably determined in good faith that (i) in the opinion
of counsel, the Exchange Securities would not, upon receipt, be tradeable by
such Holders who are not affiliates of the Company without restriction under
the Securities Act and without restrictions under applicable blue sky or
state securities laws or (ii) in the opinion of counsel, the SEC is unlikely
to permit the consummation of the Exchange Offer and/or (2) subsequent to
the consummation of the Private Exchange, holders of at least a majority in
aggregate principal amount of the Private Exchange Securities so request
with respect to the Private Exchange Securities and/or (3) the Exchange
Offer is commenced and not consummated prior to the 45th day following the
Consummation Date for any reason, then the Company shall promptly deliver to
the Holders and the Trustee notice thereof (the "Shelf Notice") and shall
thereafter file an Initial Shelf Registration as set forth
9
-8-
in Section 3 (which only in the circumstances contemplated by clause (2) of
this sentence will relate solely to the Private Exchange Securities)
pursuant to Section 3. The parties hereto agree that, following the delivery
of a Shelf Notice to the Holders of Registrable Securities (only in the
circumstances contemplated by clauses (1) and/or (3) of the preceding
sentence), the Issuers shall not have any further obligation to conduct the
Exchange Offer or the Private Exchange under this Section 2.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c), then:
(a) Initial Shelf Registration. The Issuers 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 pursuant to Rule
415 covering all of the Registrable Securities (the "Initial Shelf
Registration"). If the Issuers shall have not yet filed an Exchange Offer,
the Issuers shall use their reasonable best efforts to file with the SEC the
Initial Shelf Registration on or prior to the Filing Date. Otherwise, the
Issuers shall use their reasonable best efforts to file with the SEC the
Initial Shelf Registration within 45 days of the delivery of the Shelf
Notice. The Initial Shelf Registration 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
Issuers shall not permit any securities other than the Registrable
Securities to be included in the Initial Shelf Registration or any
Subsequent Shelf Registration. The Issuers shall use their reasonable best
efforts to cause the Initial Shelf Registration to be declared effective
under the Securities Act on or prior to the 75th day after the filing
thereof with the Commission and to keep the Initial Shelf Registration
continuously effective under the Securities Act until the date on which the
Securities are no longer "restricted securities" (within the meaning of Rule
144 under the Act) (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 have been sold in the manner set forth and as contemplated in
the Initial Shelf Registration or (ii) a Subse-
10
-9-
quent Shelf Registration covering all of the Registrable Securities has been
declared effective under the Securities Act.
(b) Subsequent Shelf Registrations. If the Initial Shelf Registration
or any Subsequent Shelf Registration ceases to be effective for any reason
at any time during the Effectiveness Period (other than because of the sale
of all of the securities registered thereunder), the Issuers shall use their
reasonable 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 in a manner
reasonably 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"). If a Subsequent Shelf Registration is
filed, the Issuers shall use their reasonable best efforts to cause the
Subsequent Shelf Registration to be declared effective as soon as
practicable after such filing and to keep such Registration Statement
continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the
Initial Shelf Registration or any Subsequent Shelf Registration was
previously continuously effective. As used herein the term "Shelf
Registration" means the Initial Shelf Registration and any Subsequent Shelf
Registration.
(c) Supplements and Amendments. The Issuers shall promptly supplement
and amend the Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if 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.
4. Additional Interest
(a) The Issuers and the Initial Purchasers agree that the Holders of
Registrable Securities will suffer damages if the Issuers fail to fulfill
their 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 Issuers, jointly and sever-
11
-10-
ally, agree 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 except as otherwise provided below):
(i) if neither the Exchange Registration Statement nor the Initial
Shelf Registration has been filed on or prior to the Filing Date, 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 Filing Date, such Additional Interest rate
increasing by an additional .25% per annum at the beginning of each
subsequent 90-day period;
(ii) if neither the Exchange Registration Statement nor the Initial
Shelf Registration is declared effective by the SEC on or prior to the
Effectiveness Date, 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
Securities 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
has been declared effective and such Shelf Registration ceases to be
effective at any time during the Effectiveness 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) 166th 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 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;
12
-11-
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 as required hereunder (in the case of
clause (i) of this Section 4), (2) upon the effectiveness of the Exchange
Registration Statement or the Shelf Registration 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 the effectiveness of the Shelf Registration 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. It is understood and agreed that, notwithstanding any provision to
the contrary, so long as any Registrable Security is then covered by an
effective Shelf Registration Statement, no Additional Interest shall accrue
on such Registrable Security.
(b) The Company shall notify the Trustee within one business day 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 Issuers 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 including the first day but
excluding the last day of such period), and, the denominator of which is
360. Each obligation to pay Additional Interest shall be deemed to accrue
immediately following the occurrence of the ap-
13
-12-
plicable 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 or Exchange Offer to be filed or
declared effective, or a Shelf Registration 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 Issuers 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
Issuers shall:
(a) Use their reasonable best efforts to prepare and file with the SEC,
as soon as practicable after the date hereof but in any event prior to the
Filing Date in the case of the Exchange Registration Statement and the 45th
day following the Consummation Date in the case of the Shelf Registration
Statement, a Registration Statement or Registration Statements as prescribed
by Section 2 or 3, and to use their reasonable best efforts to cause each
such Registration Statement to become effective and remain effective as
provided herein, provided that, if (1) such filing is pursuant to Section 3,
or (2) a Prospectus contained in an Exchange 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 Issuers shall upon
written request furnish to and afford the Holders of the Registrable
Securities (which in the case of Registrable Securities in the form of
global certificates shall be The Depository Trust Company ("DTC")) 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.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration
14
-13-
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; 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 Issuers shall not be
deemed to have used their reasonable best efforts to keep a Registration
Statement effective during the Applicable Period if either of them
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 Issuers comply 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 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, who have provided the Issuers with their
names and addresses promptly (but in any event within two 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
15
-14-
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 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 their reasonable 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 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 their reasonable best efforts to obtain the withdrawal of any
such order at the earliest possible moment.
16
-15-
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriters, if any, or the Holders of a majority
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 that the Company
shall not be required to take any action pursuant to this Section 5(e) that
would, in the opinion of counsel for the Company, violate applicable law.
(f) If (1) a Shelf Registration 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 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 Issuers hereby consent to the use
of such Prospectus and each amendment or supplement thereto by each of the
sell-
17
-16-
ing 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 their reasonable 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 that where Exchange
Securities held by Participating Broker-Dealers or Registrable Securities
are offered other than through an underwritten offering, the Issuers agree
to cause their counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is
required to be kept effective and 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 that neither of the Issuers shall be
required to (A) qualify generally to do business in any jurisdiction where
it is not then so qualified, (B) take any action that would subject it to
general service of process in any such jurisdiction where it is not then so
subject or (C) subject itself to taxation in excess of a nominal dollar
amount in any such jurisdiction.
(i) If a Shelf Registration is filed pursuant to Section 3, reasonably
cooperate with the selling Holders of Registrable Securities and the
managing underwriters,
18
-17-
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 DTC; and enable such Registrable Securities to be registered in such
names as the managing underwriter or underwriters, if any, or Holders may
request at least two business days prior to any sale of Registrable
Securities.
(j) Use their reasonable 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 Issuers 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 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) file with the SEC, solely at the expense of
the Issuers, 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 their reasonable best efforts to cause the Registrable
Securities covered by a Registration Statement
19
-18-
or the Exchange Securities, as the case may be, to be rated, or, if
previously rated, updated, 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) Use their best efforts to cause all Registrable Securities covered
by such Registration Statement or the Exchange Securities, as the case may
be, to be (i) listed on each securities exchange, if any, on which similar
securities issued by either of the Issuers are then listed, or (ii)
authorized to be quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or the National Market System of
NASDAQ if similar securities of the Issuers are so authorized.
(o) In connection with an underwritten offering of Registrable
Securities pursuant to a Shelf Registration, 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 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 an opinion of counsel to the
Issuers and updates thereof in form and substance reasonably satisfactory to
the managing underwriters (if any), 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 man-
20
-19-
aging underwriters from the independent certified public accountants 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.
(p) If (1) a Shelf Registration 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 and its subsidiaries, if
any (collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities, and
cause the officers, directors and employees of the Company and its
subsidiaries, if any to supply all information in each case reasonably
requested by any such Inspector in connection with such Registration
Statement; provided that such Inspectors shall first agree in writing with
the Company that any informa-
21
-20-
tion reasonably designated by the Company in good faith in writing as
confidential at the time of delivery of such information shall be kept
confidential by such Inspector (and such Inspector shall enter into
reasonable confidentiality agreements, and observe other customary
confidentiality procedures, as the Company may reasonably request), except
to the extent that (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 or (iii) the information in such
Records has been made generally available to the public. 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
expense to undertake appropriate action to prevent disclosure of the Records
deemed confidential.
(q) 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
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
their reasonable 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.
(r) Comply in all material respects with all applicable rules and
regulations of the SEC and make generally
22
-21-
available to their 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.
(s) 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.
(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 their reasonable best efforts to take all other steps necessary
to effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby.
(v) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company and the Guarantor, in a form
customary for underwritten offerings of debt securities similar to the
Notes, addressed to the Trustee solely for the benefit of the Trustee, and
not for the benefit of 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) each of the Company and the Guarantors has duly
authorized, executed and delivered the Exchange
23
-22-
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 related indenture constitute a legal, valid and binding
obligation of each of the Company and the Guarantors, enforceable against
each of the Company and the Guarantors in accordance with its respective
terms (with customary exceptions).
The Issuers may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Issuers 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 Issuers may, from time to time, reasonably request. The Issuers may
exclude from such registration the Registrable Securities of any seller or
Participating Broker-Dealer who unreasonably fails to furnish such information
within a reasonable time after receiving such request. Each seller as to which
any Shelf Registration is being effected is deemed to agree to furnish promptly
to the Issuers all information required to be disclosed in order to make the
information previously furnished to the Issuers by such seller not materially
misleading.
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, and has
received copies of any amendments or supplements thereto. In the event the
Company shall give any such notice, each of the Effectiveness Period and the
Applicable Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Securities covered by such Registration
Statement or Exchange Securities to be sold by such Participating Broker-Dealer,
as the case may be, shall have re-
24
-23-
ceived (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 Issuers shall be borne by the Issuers, jointly
and severally, whether or not the Exchange Offer or a Shelf Registration 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 Issuers 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(o)(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 Issuers desire such
insurance, (viii) fees and expenses of all other Persons retained by either
of the Is-
25
-24-
suers, (ix) internal expenses of the Issuers (including, without limitation,
all salaries and expenses of officers and employees of the Issuers
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, (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, and (xiii) fees and expenses of the Trustee (including
reasonable fees and expenses of counsel to the Trustee).
(b) In connection with any Shelf Registration hereunder, the Issuers
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) 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 Issuers agree, jointly and severally, to indemnify and hold
harmless each Holder of Registrable Securities and each Participating
Broker-Dealer selling Exchange Securities during the Applicable Period, the
officers and directors 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 Issuers 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,
26
-25-
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 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 Prospectus
(as amended or supplemented if the Issuers 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 at or prior to the
sale of such Registrable Securities or Exchange Securities, as the case may be,
to such person.
Each Participant will be required to agree, severally and not jointly,
to indemnify and hold harmless the Issuers, their directors, their officers and
each person who controls the Issuers 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 Issuers to each Participant, but only with
reference 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 proceeding and shall pay the
reasonable fees and expenses actually incurred by such counsel related to such
proceeding, provided that the failure to so no-
27
-26-
tify 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 in writing 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 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 Issuers, their directors, their officers and such
control persons of the Issuers 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 non-appealable 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 in
writing the chief legal officer or, if no chief legal officer exists, to the
chief executive officer of an Indemnifying Person to reimburse the Indemnified
Person for reasonable fees and expenses actually incurred by counsel as
contemplated by the 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 60
days after receipt by such Indemnifying Person of the aforesaid request and (ii)
a second such written request shall have been sent to and received by the chief
legal officer or, if no chief legal officer exists, by the chief executive
officer of the Indemnifying Person at least 30 days after the first such
28
-27-
request but at least 15 days prior to the date of such settlement, and (iii)
with respect to such request, such Indemnifying Person shall not have reimbursed
the Indemnified Person for all reasonable fees and expenses of such counsel in
accordance with such request prior to the date of such settlement; provided,
however, that the Indemnifying Person shall not be liable for any settlement
effected without its consent pursuant to this sentence if the Indemnifying Party
is contesting, in good faith, the request for reimbursement. 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 Issuers 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 Issuers 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 Issuers 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 include,
29
-28-
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
Each of the Issuers shall use their reasonable best efforts to 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 Issuers are not required to file such reports, they
shall, 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 Issuers shall use their
reasonable best efforts to 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. Notwithstanding the foregoing, nothing in this section 8 shall be deemed to
require the Issuers to register any of their securities pursuant to the Exchange
Act.
9. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or man-
30
-29-
agers 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 reasonably acceptable to the Company.
No Holder of Registrable Securities may participate in any underwritten
registation 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 Issuers of any of their
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 Issuers
agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by them 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, they shall waive the defense
that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuers have 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 Issuers
have not entered and will not enter into any agreement with respect to any
of their securities which will grant to any Person piggy-back rights with
respect to a Registration Statement.
(c) Adjustments Affecting Registrable Securities. The Issuers 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
31
-30-
Securities in a registration undertaken pursuant to this Agreement.
(d) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written consent
of Holders of at least a majority of the then outstanding aggregate
principal amount of Registrable Securities. 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 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 Issuers, at Tekni-Plex, Inc., 000 Xxxxxxxxxx Xxxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: Dr. F. Xxxxxxx Xxxxx; with a copy
to Winthrop, Stimson, Xxxxxx & Xxxxxxx, Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxx Xxxx, Esq..
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.
32
-31-
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.
(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, that, with respect
to the indemnity and contribution agreements in Section 7, each Holder of
Registrable Securities subsequent to the Initial Purchaser shall be bound by
the terms thereof if such Holder elects to include Registrable Securities in
a Shelf Registration; 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
33
-32-
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 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.
(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 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.
(m) Subsidiary Guarantor a Party. Immediately upon the designation of
any subsidiary of the Company as a Guarantor (as defined in the Indenture),
the Company shall cause such Guarantor to guarantee the obligations of the
Company hereunder (including, without limitation, the obligation to pay
Additional Interest, if any, pursuant to the terms of Section 4 hereof), by
executing and delivering to the Initial Purchaser an appropriate amendment
to this Agreement.
34
-33-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TEKNI-PLEX, INC.
By: /s/ Xxxxxxx X.X. Xxxxx
------------------------------------
Name: Xxxxxxx X.X. Xxxxx
Title: President
DOLCO PACKAGING CORP.
By: /s/ Xxxxxxx X.X. Xxxxx
------------------------------------
Name: Xxxxxxx X.X. Xxxxx
Title: President
X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
