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REGISTRATION RIGHTS AGREEMENT
Dated as of August 14, 2001
by and among
NORSKE XXXX CANADA LIMITED
and
THE GUARANTORS listed on the signature page herein
and
XXXXXXX XXXXX & CO.,
XXXXXXX LYNCH, PIERCE, XXXXXX &SMITH
INCORPORATED,
RBC DOMINION SECURITIES CORPORATION
and
TD SECURITIES (USA) INC.
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered
into as of August 14, 2001 by and among Norske Xxxx Canada Limited, a British
Columbia company (the "COMPANY"), certain of its subsidiaries listed on the
signature pages herein, (the "GUARANTORS" and, together with the Company, the
"ISSUERS") and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("XXXXXXX
XXXXX") and each of the other Initial Purchasers named in Schedule A
(collectively, the "INITIAL PURCHASERS") of the Purchase Agreement (as defined
below), for whom Xxxxxxx Xxxxx, RBC Dominion Securities Corporation and TD
Securities (USA) Inc. are acting as representatives (in such capacity, the
"REPRESENTATIVES").
This Agreement is made pursuant to the Purchase Agreement dated as of
August 8, 2001 by and among the Company, the Guarantors and the Initial
Purchasers (the "PURCHASE AGREEMENT"), which provides for, among other things,
the sale by the Company to the Initial Purchasers of an aggregate of
$250,000,000 principal amount of the Company's 8 5/8% Senior Notes due 2011 (the
"NOTES") which are to be unconditionally guaranteed by the Guarantors on a
senior basis (the "GUARANTEE" and, together with the Notes, the "Securities") as
described in the Purchase Agreement. In order to induce the Initial Purchasers
to enter into the Purchase Agreement, the Issuers have agreed to provide to the
Initial Purchasers and their direct and indirect transferees the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"ADDITIONAL INTEREST" shall have the meaning set forth in Section
2(e)(i) hereof.
"ADVICE" shall have the meaning set forth in Section 3(i) hereof.
"APPLICABLE PERIOD" shall have the meaning set forth in Section 3(s)
hereof.
"BUSINESS DAY" shall mean a day that is not a Saturday, a Sunday, or a
day on which banking institutions in New York, New York or Vancouver,
Canada are required to be closed.
"COMPANY" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
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"DEPOSITARY" shall mean The Depository Trust Company or any other
depositary appointed by the Company; PROVIDED, HOWEVER, that such
depositary must have an address in the Borough of Manhattan, in the City of
New York.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(b)(ii) hereof.
"EFFECTIVENESS TARGET DATE" shall have the meaning set forth in
Section 2(e)(i) hereof.
"EVENT DATE" shall have the meaning set forth in Section 2(e)(ii)
hereof.
"EXCHANGE ACT" shall mean the United States Securities Exchange Act of
1934, as amended.
"EXCHANGE OFFER" shall mean the exchange offer by the Issuers of
Exchange Securities for Securities pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on an appropriate form under the Securities Act, and
all amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
materials incorporated by reference therein.
"EXCHANGE PERIOD" shall have the meaning set forth in Section 2(a)(ii)
hereof.
"EXCHANGE SECURITIES" shall mean the $250,000,000 8 5/8% Senior Notes
due 2011, issued by the Issuers pursuant to and entitled to the benefits
of, the Indenture (which shall be qualified under the TIA) and registered
pursuant to an effective Registration Statement under the Securities Act,
to be offered to Holders of Securities in exchange for Securities pursuant
to the Exchange Offer, which shall be identical to such Securities (except
that (i) interest thereon shall accrue from the last date on which interest
was paid on such Securities or, if no such interest has been paid, from the
Issue Date and (ii) the transfer restrictions thereon shall be eliminated).
"GUARANTORS" shall have the meaning set forth in the preamble to this
Agreement and also includes their successors and permitted assigns.
"HOLDER" shall mean each of the Initial Purchasers, for so long as
they own any Transfer Restricted Securities, each successor, assign or
transferee of an Initial Pur-
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chaser who becomes a registered owner of Transfer Restricted Securities
under the Indenture and each Participating Broker-Dealer that holds
Exchange Securities for so long as such Participating Broker-Dealer is
required to deliver a prospectus meeting the requirements of the Securities
Act in connection with any resale of such Exchange Securities.
"INDENTURE" shall mean the Indenture relating to the Securities dated
as of August 14, 2001 among the Issuers and Xxxxx Fargo Bank Minnesota,
National Association, as trustee, as the same may be amended from time to
time in accordance with the terms thereof.
"INITIAL PURCHASERS" shall have the meaning set forth in the preamble
to this Agreement.
"INSPECTORS" shall have the meaning set forth in Section 3(m) hereof.
"ISSUE DATE" shall mean the date on which the Securities are
originally issued.
"ISSUERS" shall have the meaning set forth in the preamble to this
Agreement.
"MAJORITY HOLDERS" shall mean, subject to Section 7(l), the Holders of
a majority of the aggregate principal amount of outstanding Transfer
Restricted Securities.
"PARTICIPATING BROKER-DEALER" shall mean any of the Initial Purchasers
or other broker-dealer that holds Transfer Restricted Securities acquired
for its own account as a result of market-making activities or other
trading activities and that will be the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of the Exchange Securities to be
received in the Exchange Offer.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"PRIVATE EXCHANGE" shall have the meaning set forth in Section
2(a)(iii) hereof.
"PRIVATE EXCHANGE SECURITIES" shall have the meaning set forth in
Section 2(a)(iii) hereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Transfer Restricted Securities covered by a Shelf
Registration Statement, and by all other amendments and supplements to a
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prospectus, including post-effective amendments, and in each case including
all materials incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
preamble to this Agreement.
"RECORDS" shall have the meaning set forth in Section 3(m) hereof.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Issuers with this Agreement, including
without limitation: (i) all applicable SEC, stock exchange or National
Association of Securities Dealers, Inc. (the "NASD") registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable
fees and disbursements of one counsel for any Holder that is an Initial
Purchaser in connection with blue sky qualification of any of the Exchange
Securities or Transfer Restricted Securities) and compliance with the rules
of the NASD, (iii) all applicable expenses incurred by the Issuers in
preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus and any amendments
or supplements thereto, and in preparing or assisting in preparing any
other documents relating to the performance of and compliance with this
Agreement, (iv) the fees and disbursements of counsel for the Issuers and
of the independent certified public accountants of the Issuers, including
the expenses of any "cold comfort" letters required by or incident to such
performance or compliance with this Agreement, (v) the fees and expenses of
the Trustee, and any exchange agent or custodian, (vi) all fees and
expenses incurred in connection with the listing, if any, of any of the
Transfer Restricted Securities on any securities exchange or exchanges, if
the Company, in its discretion, elects to make any such listing, (vii) all
rating agency fees, if any, (viii) the reasonable fees and expenses of one
counsel up to $75,000, if any, designated in writing by the Majority
Holders to act as counsel for the Holders of the Transfer Restricted
Securities in connection with a Shelf Registration Statement and (ix) any
fees and disbursements to be paid by the Issuers or sellers of securities
and the fees and expenses of any special experts retained by the Issuers in
connection with any Shelf Registration Statement; but excluding fees of
counsel to the Holders (other than as set forth in (ii) and (viii) above)
and underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of Transfer Restricted Securities by a
Holder.
"REGISTRATION STATEMENT" shall mean any registration statement
(including, without limitation, the Exchange Offer Registration Statement
and the Shelf Registration Statement) of the Issuers which covers any of
the Transfer Restricted Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case
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including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"REPRESENTATIVE" shall have the meaning set forth in the preamble to
this Agreement.
"SEC" shall mean the United States Securities and Exchange Commission.
"SECURITIES" shall have the meaning set forth in the preamble to this
Agreement.
"SECURITIES ACT" shall mean the United States Securities Act of 1933,
as amended.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.
"SHELF REGISTRATION EVENT" shall have the meaning set forth in Section
2(b)(i) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Issuers relating to a "shelf" offering in accordance with
Rule 415 of the Securities Act, or any similar rule that may be adopted by
the SEC, pursuant to the provisions of Section 2(b) hereof which covers all
of the Transfer Restricted Securities, on an appropriate form under the
Securities Act, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"TIA" shall mean the Trust Indenture Act of 1939, as amended.
"TRANSFER RESTRICTED SECURITIES" shall mean each Security and each
Private Exchange Security, if issued; PROVIDED, HOWEVER, that each Security
or Private Exchange Security, as the case may be, shall cease to be a
Transfer Restricted Security when (i) with respect to a Security only, such
Security has been exchanged by a person other than a Participating
Broker-Dealer in the Exchange Offer for an Exchange Security which is
entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Securities Act, (ii) with
respect to a Security only, following the exchange by a Participating
Broker-Dealer in the Exchange Offer of a Security for an Exchange Security,
such Exchange Security is sold to a purchaser who receives from such
Participating Broker-Dealer on or prior to the date of such sale a copy of
the Prospectus contained in the Exchange Offer Registration
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Statement, as amended or supplemented, (iii) such Security or Private
Exchange Security, as the case may be, has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement, (iv) such Security or Private Exchange Security, as
the case may be, is distributed to the public pursuant to Rule 144 under
the Securities Act (or any similar provision then in force, but not Rule
144A under the Securities Act), (v) such Security or Private Exchange
Security, as the case may be, shall have been otherwise transferred by the
holder thereof and a new security not bearing a legend restricting further
transfer shall have been delivered by the Issuers and subsequent
disposition of such new security shall not require registration or
qualification under the Securities Act or any similar state law then in
force, or (vi) such Security or Private Exchange Security, as the case may
be, ceases to be outstanding.
"TRUSTEE" shall mean the trustee with respect to the Securities under
the Indenture.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) EXCHANGE OFFER. (i) To the extent not prohibited by any applicable law
or applicable policy of the SEC, the Issuers shall, for the benefit of the
Holders, at the Company's cost, (A) prepare and, as soon as practicable but not
later than 120 days after the Issue Date, file with the SEC an Exchange Offer
Registration Statement on an appropriate form under the Securities Act covering
the offer by the Issuers to the Holders to exchange all of the Securities for a
like principal amount of Exchange Securities, (B) use their best efforts to
cause such Exchange Offer Registration Statement to be declared effective under
the Securities Act by the SEC not later than the date which is 180 days after
the Issue Date, (C) use their best efforts to keep such Registration Statement
effective until the closing of the Exchange Offer and (D) use their best efforts
to commence the Exchange Offer and, on or prior to 240 days after the Issue
Date, issue Exchange Securities in exchange for all Securities properly tendered
prior thereto in the Exchange Offer. Upon the effectiveness of the Exchange
Offer Registration Statement, the Issuers shall promptly commence the Exchange
Offer, it being the objective of such Exchange Offer to enable each Holder
eligible and electing to exchange Securities for Exchange Securities (assuming
that such Holder (A) is not an affiliate of the Issuers within the meaning of
Rule 405 under the Securities Act or, if such Holder is an affiliate, that it
will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (B) is not a broker-dealer tendering
Transfer Restricted Securities acquired directly from the Issuers for its own
account, (C) acquired the Exchange Securities in the ordinary course of such
Holder's business and (D) has no arrangements or understandings with any Person
to participate in the Exchange Offer for the purpose of distributing (within the
meaning of the Securities Act) the Exchange Securities) and to transfer such
Exchange Securities
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from and after their receipt without any limitations or restrictions on transfer
under the Securities Act and under state securities or blue sky laws.
(ii) In connection with the Exchange Offer, the Issuers shall:
(A) after the effectiveness of the Exchange Offer Registration
Statement, mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;
(B) keep the Exchange Offer open for acceptance for a period of 30
calendar days after the date notice thereof is mailed to the Holders (or
longer if required by applicable law) (such period referred to herein as
the "EXCHANGE PERIOD");
(C) utilize the services of the Depositary for the Exchange Offer;
(D) permit Holders to withdraw tendered Securities at any time prior
to 5:00 p.m. (New York time) on the last Business Day of the Exchange
Period by sending to the institution specified in the notice, a telegram,
telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Securities delivered for exchange, and a
statement that such Holder is withdrawing such Holder's election to have
such Securities exchanged;
(E) notify each Holder that any Securities not tendered or withdrawn
will remain outstanding and continue to accrue interest but will not retain
any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
(F) otherwise comply in all respects with all applicable laws relating
to the Exchange Offer.
(iii) If, prior to consummation of the Exchange Offer the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Issuers upon the request of
any Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to such Initial Purchaser in
exchange (the "PRIVATE EXCHANGE") for the Securities held by such Initial
Purchaser, a like principal amount of debt securities of the Company, guaranteed
by the Guarantors, issued pursuant to, and entitled to the benefits of, the
Indenture and identical to the Exchange Securities, except that such securities
shall bear appropriate transfer restrictions (the "PRIVATE EXCHANGE
SECURITIES").
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(iv) The Exchange Securities and the Private Exchange Securities shall
be issued under (A) the Indenture or (B) an indenture identical in all material
respects to the Indenture and which, in either case, has been qualified under
the TIA or is exempt from such qualification and shall provide that the Exchange
Securities shall not be subject to the transfer restrictions set forth in the
Indenture. The Indenture or such indenture shall provide that the Exchange
Securities, the Private Exchange Securities and the Securities shall vote and
consent together on all matters as one class and that none of the Exchange
Securities, the Private Exchange Securities or the Securities shall have the
right to vote or consent as a separate class on any matter. The Private Exchange
Securities shall be of the same series as, and the Company shall seek to cause
the CUSIP Service Bureau to issue the same CUSIP numbers for the Private
Exchange Securities as for the Exchange Securities issued pursuant to the
Exchange Offer; provided that the Company shall not have any liability under
this Agreement solely as a result of such Private Exchange Securities not having
the same CUSIP number as the Exchange Securities.
(v) The Exchange Offer and the Private Exchange shall not be subject
to any conditions other than (A) in the reasonable opinion of counsel to the
Company, the Exchange Offer, or Private Exchange, as the case may be, does not
violate applicable law or any applicable policy of the SEC, (B) no action or
proceeding shall have been instituted or threatened in any court or by any
governmental agency which, in the judgment of the Issuers, would reasonably be
expected to impair the ability of the Issuers to proceed with the Exchange Offer
or the Private Exchange nor shall any material adverse development have occurred
in any such action or proceeding with respect to the Issuers, (C) all
governmental approvals which the Issuers deem reasonably necessary for the
consummation of the Exchange Offer or Private Exchange shall have been obtained
and (D) the due tendering of Transfer Restricted Securities in accordance with
the terms of the Exchange Offer.
(vi) As soon as practicable after the close of the Exchange Offer
and/or the Private Exchange, as the case may be, the Issuers shall:
(A) accept for exchange all Securities or portions thereof properly
tendered and not validly withdrawn pursuant to the Exchange Offer or the
Private Exchange; and
(B) deliver, or cause to be delivered, to the Trustee for cancellation
all Securities or portions thereof so accepted for exchange by the Issuers,
and issue, and cause the Trustee under the Indenture to promptly
authenticate and deliver to each Holder, a new Exchange Security or Private
Exchange Security, as the case may be, equal in principal amount to the
principal amount of the Securities surrendered by such Holder and accepted
for exchange.
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(vii) To the extent not prohibited by any law or applicable policy of the
SEC, the Issuers shall use their best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. Each Holder of Securities who wishes to exchange such
Securities for Exchange Securities in the Exchange Offer will be required to
make certain customary representations in connection therewith, including
representations that (A) such Holder is not an affiliate of any of the Issuers
within the meaning of Rule 405 under the Securities Act, or if it is an
affiliate, that it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable, (B) it is not a
broker-dealer tendering Transfer Restricted Securities acquired directly from
the Issuers for its own account, (C) any Exchange Securities to be received by
it will be acquired in the ordinary course of business and (D) it has no
arrangement or understanding with any Person to participate in the distribution
(within the meaning of the Securities Act) of the Exchange Securities. Each
Participating Broker-Dealer will be required to acknowledge that it will deliver
the Prospectus included in the Exchange Offer Registration Statement in
connection with the resale of Exchange Securities to the extent it is subject to
the prospectus delivery requirements of the SEC. The Company shall inform the
Initial Purchasers of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of Securities in the
Exchange Offer.
(viii) Upon consummation of the Exchange Offer in accordance with this
Section 2(a), (A) the provisions of this Agreement shall continue to apply,
modified as necessary, solely with respect to Transfer Restricted Securities
that are Private Exchange Securities, Exchange Securities held by Participating
Broker-Dealers and Transfer Restricted Securities entitled to a Shelf
Registration pursuant to the first paragraph of Section 2(b) hereof and (B) the
Company shall have no further obligation to register any Transfer Restricted
Securities other than the registration of Transfer Restricted Securities
pursuant to Section 2(b) hereof.
(b) SHELF REGISTRATION. (i) In the event that (A) filing the Exchange Offer
Registration Statement would not be permitted by applicable law or SEC policy,
(B) the Exchange Offer is not consummated within 240 days after the Issue Date
or (C) any Holder of Securities notifies the Company within 20 Business Days
after the commencement of the Exchange Offer that (1) due to a change in
applicable law or SEC policy it is not entitled to participate in the Exchange
Offer, (2) due to a change in applicable law or SEC policy it may not resell the
Exchange Securities to be acquired by it in the Exchange Offer to the public
without delivering a prospectus and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
such Holder or (3) it is a broker-dealer and owns Securities acquired directly
from the Company or an affiliate of the Company or (D) the Holders of a majority
of the Securities may not resell the Exchange Securities to be acquired by them
in the Exchange Offer to the public without restriction under the Securities
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Act and without restriction under applicable blue sky or state securities laws
(any of the events specified in (A)-(D) being a "SHELF REGISTRATION EVENT"),
then the Issuers shall, at the Company's cost, use their best efforts to file as
promptly as practicable after the date of such Shelf Registration Event and, in
any event, prior to the later of (1) 240 days after the Issue Date or (2) 30
days after such filing obligation arises, and use their best efforts to cause
the Shelf Registration Statement to be declared effective by the SEC on or prior
to 60 days from the date the Shelf Registration Statement was first filed. No
Holder of Transfer Restricted Securities may include any of its Transfer
Restricted Securities in any Shelf Registration pursuant to this Agreement
unless and until such Holder furnishes to the Company in writing such
information as the Company may, after conferring with counsel with regard to
information relating to Holders that would be required by the SEC to be included
in such Shelf Registration Statement or Prospectus included therein, reasonably
request for inclusion in any Shelf Registration Statement or Prospectus included
therein. Each Holder as to which any Shelf Registration is being effected agrees
to furnish to the Company all information with respect to such Holder necessary
to make any information previously furnished to the Company by such Holder not
materially misleading.
(ii) The Issuers agree to use their best efforts to keep the Shelf
Registration Statement continuously effective until the second anniversary of
the effective date of the Shelf Registration Statement (subject to extension
pursuant to Section 3(i) hereof) (or such shorter period that will terminate
when all of the Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto or cease to be
outstanding or otherwise cease to be Transfer Restricted Securities) (the
"EFFECTIVENESS PERIOD"). The Issuers shall not permit any securities other than
Transfer Restricted Securities to be included in the Shelf Registration. The
Company further agrees, if necessary, to supplement or amend the Shelf
Registration Statement, if required by the rules, regulations or instructions
applicable to the registration form used by the Issuers for such Shelf
Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registrations, and the Company agrees to
furnish to the Holders of Transfer Restricted Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) EXPENSES. The Company shall pay all Registration Expenses in connection
with any registration pursuant to Section 2(a) or 2(b) hereof. Each Holder shall
pay all expenses of its counsel (other than as expressly agreed otherwise in
this Agreement), all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Transfer Restricted
Securities pursuant to the Shelf Registration Statement.
(d) EFFECTIVE REGISTRATION STATEMENT. (i) An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; PROVIDED, HOWEVER, that if,
after it has been declared effective, the offering
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of Transfer Restricted Securities pursuant to an Exchange Offer Registration
Statement or Shelf Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of Transfer
Restricted Securities may legally resume.
(ii) The Issuers will be deemed not to have used their best efforts to
cause the Exchange Offer Registration Statement or the Shelf Registration
Statement, as the case may be, to become, or to remain, effective during the
requisite period if they voluntarily take any action that would result in any
such Registration Statement not being declared effective or in the Holders of
Transfer Restricted Securities covered thereby not being able to exchange or
offer and sell such Transfer Restricted Securities during that period, unless
such action (A) is required by applicable law, or (B) is taken by the Issuers in
good faith and for valid business reasons (not including the avoidance of the
Issuers' obligations hereunder), including a material corporate transaction, so
long as the Issuers promptly comply with the requirements of Section 3(i), if
applicable; PROVIDED that the foregoing shall not affect the rights of the
Holders to receive Additional Interest pursuant to Section 2(e) hereof.
(iii) During any 365-day period, the Company may suspend the availability
of a Shelf Registration Statement and the use of a related Prospectus, as
provided in Sections 3(e)(E) and 3(i) of this Agreement, for periods up to 45
consecutive days (except for such 45-day period immediately prior to maturity of
the Securities), but no more than an aggregate 60 days during any 365-day
period, if (A) any event shall occur as a result of which it shall be necessary,
in the good faith determination of the board of directors of the Company, to
amend the Shelf Registration Statement or amend or supplement any prospectus or
prospectus supplement thereunder in order that each such document not include
any untrue statement of material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading and (B), so long as the Issuers without unreasonable
delay prepare and furnish to each of the Holders of the Transfer Restricted
Securities a reasonable number of copies of the supplemented or amended
prospectus contemplated by Section 3(i) hereof.
(e) ADDITIONAL INTEREST. (i) In the event that (A) the applicable
Registration Statement is not filed with the SEC on or prior to the date
specified herein for such filing, (B) the applicable Registration Statement is
not declared effective by the SEC on or prior to the date specified herein for
such effectiveness (the "EFFECTIVENESS TARGET DATE"), (C) the Exchange Offer is
required to be consummated hereunder and the Issuers fail to consummate the
Exchange Offer within 60 days of the Effectiveness Target Date with respect to
the Exchange Offer Registration Statement or (D) the applicable Registration
Statement is filed and declared effective prior to the Effectiveness Target Date
but thereafter ceases to be effective or usable during the periods specified
herein except in accordance with Section 2(d)(iii) hereof without
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being immediately succeeded by an additional Registration Statement covering the
Transfer Restricted Securities which has been filed and declared effective (each
such event referred to in clauses (A) through (D), a "REGISTRATION DEFAULT"),
then the Issuers shall pay, jointly and severally, additional interest to each
Holder of Transfer Restricted Securities as to which such Registration Default
relates ("ADDITIONAL INTEREST"), with respect to the first 90-day period (or
portion thereof) while one or more Registration Defaults are continuing
immediately following the occurrence of such Registration Default or
Registration Defaults, at a rate equal to 0.25% per annum of the principal
amount of the Securities. The amount of Additional Interest will increase by an
additional 0.25% per annum of the principal amount of the Securities for each
subsequent 90-day period (or portion thereof) while one or more Registration
Defaults are continuing until all Registration Defaults have been cured, up to
an aggregate maximum amount of 1.00% per annum of the principal amount of the
Securities. Additional Interest shall be computed based on the actual number of
days elapsed during which any such Registration Default exists. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Following the
cure of a Registration Default, the accrual of Additional Interest with respect
to such Registration Default will cease.
(ii) The Company shall notify the Trustee within four Business Days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "EVENT Date"). Additional Interest shall be
paid in arrears by depositing with the Trustee, in trust, for the benefit of the
Holders of Transfer Restricted Securities, on or before the applicable
semiannual interest payment date, immediately available funds in sums sufficient
to pay the Additional Interest then due. The Additional Interest due shall be
payable in arrears on each interest payment date to the record Holder of
Securities entitled to receive the interest payment to be paid on such date as
set forth in the Indenture. Each obligation to pay Additional Interest shall be
deemed to accrue from and including the day following the applicable Event Date.
(f) SPECIFIC ENFORCEMENT. Without limiting the remedies available to the
Initial Purchasers and the Holders, the Issuers acknowledge that any failure by
the Issuers to comply with their obligations under Section 2(a) and Section 2(b)
hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it would not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Issuers' obligations under
Section 2(a) and Section 2(b) hereof; PROVIDED, HOWEVER, that without limiting
the ability of the Initial Purchasers or any Holder to specifically enforce such
obligations, in the case of any terms of this Agreement for which Additional
Interest pursuant to Section 2(e) is expressly provided as a remedy for a
violation of such terms, such Additional Interest shall be the sole monetary
damages for such violation.
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3. REGISTRATION PROCEDURES. In connection with the obligations of the
Issuers with respect to the Registration Statements pursuant to Sections 2(a)
and 2(b) hereof, the Issuers shall use their best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be selected
by the Company, (ii) shall, in the case of a Shelf Registration, be
available for the sale of the Transfer Restricted Securities by the selling
Holders thereof and (iii) shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and use their best
efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof. The Issuers shall not file
any Registration Statement or Prospectus or any amendments or supplements
thereto in respect of which the Holders must provide information for
inclusion therein without the Holders being afforded an opportunity to
review such documentation a reasonable time prior to the filing of such
document or if the Majority Holders or such Participating Broker-Dealer, as
the case may be, their counsel or the managing underwriters, if any, shall
reasonably object;
(b) subject to Section 2(d)(iii), prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as
may be necessary under applicable law to keep such Registration Statement
effective for the Effectiveness Period or the Applicable Period, as the
case may be; and cause each Prospectus to be supplemented by any required
prospectus supplement and as so supplemented to be filed pursuant to Rule
424 (or any similar provision then in force) under the Securities Act, and
comply in all material respects with the provisions of the Securities Act,
the Exchange Act and the rules and regulations promulgated thereunder
applicable to it with respect to the disposition of all securities covered
by each Registration Statement during the Effectiveness Period or the
Applicable Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof described
in this Agreement (including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Transfer Restricted Securities, at least three Business Days prior to
filing, that a Shelf Registration Statement with respect to the Transfer
Restricted Securities is being filed and advising such Holder that the
distribution of Transfer Restricted Securities will be made in accordance
with the method selected by the Majority Holders participating in the Shelf
Registration; (ii) furnish to each Holder of Transfer Restricted
Securities, without charge, as many copies of each Prospectus, and any
amendment or supplement thereto
-14-
and such other documents as such Holder may reasonably request, in order to
facilitate the disposition of the Transfer Restricted Securities; and (iii)
subject to Section 3(i) hereof hereby consent to the use of the Prospectus
or any amendment or supplement thereto by each of the selling Holders of
Transfer Restricted Securities in accordance with applicable law in
connection with the offering and sale of the Transfer Restricted Securities
covered by and in the manner described in such Prospectus or any amendment
or supplement thereto;
(d) in the case of a Shelf Registration, use their best efforts to
register or qualify, as may be required by applicable law, the Transfer
Restricted Securities under all applicable state securities or "blue sky"
laws of such jurisdictions by the time the applicable Registration
Statement is declared effective by the SEC as any Holder of Transfer
Restricted Securities covered by a Registration Statement shall reasonably
request in advance of such date of effectiveness, and do any and all other
acts and things which may be reasonably necessary or advisable to enable
such Holder to consummate the disposition in each such jurisdiction of such
Transfer Restricted Securities owned by such Holder; PROVIDED, HOWEVER,
that the Issuers shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3(d), or (ii)
take any action which would subject it to general service of process or
taxation in any such jurisdiction where it is not then so subject.
(e) in the case of (i) a Shelf Registration or (ii) Participating
Broker-Dealers who have notified the Company that they will be utilizing
the Prospectus contained in the Exchange Offer Registration Statement as
provided in Section 3(s) hereof, notify each Holder of Transfer Restricted
Securities, or such Participating Broker-Dealers, as the case may be, and
their counsel, if any, promptly and confirm such notice in writing (if such
notice was not originally given in writing) (A) when a Registration
Statement has become effective and when any post-effective amendments and
supplements thereto become effective, (B) of any request by the SEC or any
state securities authority for amendments and supplements to a Registration
Statement or Prospectus or for additional information after the
Registration Statement has become effective, (C) of the issuance by the SEC
or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (D) if any of the Issuers receive any
notification with respect to the suspension of the qualification of the
Transfer Restricted Securities to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction or the initiation of
any proceeding for such purpose, (E) of the happening of any event or the
failure of any event to occur or the discovery of any facts or otherwise
during the Effectiveness Period or the Applicable Period (including as
contemplated in Section 2(d)(iii) hereof), as the case may be, which makes
any statement of a material fact made in such Regis-
-15-
tration Statement or the related Prospectus untrue or which causes such
Registration Statement or Prospectus to omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (F) of the Company's
reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate;
(f) obtain the withdrawal of any order suspending the effectiveness of
a Registration Statement as soon as practicable;
(g) in the case of a Shelf Registration, furnish to counsel for the
Holders of Transfer Restricted Securities, without charge, at least one
conformed copy of each Registration Statement relating to such Shelf
Registration and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Transfer Restricted Securities to facilitate the timely
preparation and delivery of certificates not bearing any restrictive
legends representing Securities covered by such Shelf Registration to be
sold and relating to the subsequent transfer of such Securities; and cause
such Securities to be in such denominations (consistent with the provisions
of the Indenture) and registered in such names as the selling Holders may
reasonably request at least three Business Days prior to the closing of any
sale of Transfer Restricted Securities;
(i) in the case of (i) a Shelf Registration or (ii) a Participating
Broker-Dealer who has notified the Company that it will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement, upon the
occurrence of any circumstance contemplated by Section 3(e)(B), 3(e)(C),
3(e)(E) or 3(e)(F) hereof, the Issuers shall be deemed to have used their
best efforts to keep the applicable Registration Statement effective if the
Issuers shall use their best efforts to prepare, file and have declared
effective (if applicable) as soon as practicable a supplement or
post-effective amendment to a Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers
of the Transfer Restricted Securities, such Prospectus at the time of such
delivery will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
to notify each Holder or Participating Broker-Dealer, as applicable, to
suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event; and such Holder or Participating
Broker-Dealer, as the case may be, will forthwith discontinue disposition
of Transfer Restricted Securities or Exchange Securities, as the case may
be, pursuant to a Regis-
-16-
tration Statement until such Holder's or Participating Broker-Dealer's, as
the case may be, receipt of the copies of the supplemented or amended
Prospectus contemplated hereof or until it is advised in writing (the
"ADVICE") by the Company that the use of the applicable Prospectus may be
resumed; PROVIDED, HOWEVER that upon such suspension the period during
which such Registration Statement to be maintained effective pursuant to
this Agreement shall be extended by the number of days in the period from
and including the date of the giving of such notice to and including the
date when the Company shall have made available to the Holders or
Participating Broker-Dealers, as the case may be, (A) copies of the
supplemented or amended Prospectus necessary to resume such dispositions or
(B) the Advice;
(j) obtain a CUSIP number for all Exchange Securities or Private
Exchange Securities or Securities, as the case may be, not later than the
effective date of a Registration Statement, and provide the Trustee with
printed certificates for the Exchange Securities or the Private Exchange
Securities, as the case may be, in a form eligible for deposit with the
Depositary;
(k) (i) cause the Indenture or the indenture provided in Section 2(a)
to be qualified under the TIA in connection with the registration of the
Transfer Restricted Securities, (ii) cooperate with the Trustee or any
trustee under such indenture and the Holders to effect such changes to the
Indenture or such indenture as may be required for the Indenture or such
indenture to be so qualified in accordance with the terms of the TIA and
(iii) execute, and use its best efforts to cause the Trustee or any trustee
under such indenture to execute, all documents as may be required to effect
such changes, and all other forms and documents required to be filed with
the SEC to enable the Indenture or such indenture to be so qualified in a
timely manner;
(l) in the case of a Shelf Registration, enter into customary
agreements (including underwriting agreements) and take all other customary
and appropriate actions as are reasonably requested by the Majority Holders
in order to expedite or facilitate the disposition of such Transfer
Restricted Securities, and in such connection, whether or not an
underwriting agreement is entered into and whether or not the registration
is an underwritten registration,
(i) make such representations and warranties to Holders of such
Transfer Restricted Securities and the underwriters (if any) with
respect to the business of the Company and its subsidiaries as then
conducted 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 requested by
the Majority Holders;
-17-
(ii) obtain opinions of counsel to the Company in form and
substance reasonably satisfactory to the managing underwriters (if
any) and the Holders of a majority in principal amount of the Transfer
Restricted Securities covered by such Registration Statement,
addressed to each selling Holder and the managing underwriters
covering the matters customarily covered in opinions requested in
underwritten offerings;
(iii) obtain "cold comfort" letters and updates thereof from the
independent auditors of the Company (and, if necessary, any other
independent auditors 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 the Company and the underwriters
(if any) with copies to each of the selling Holders of Transfer
Restricted Securities, 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 reasonably requested by such selling Holder and the
Underwriters; and
(iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures substantially
identical to those set forth in Section 4 hereof (or such other
provisions and procedures acceptable to the Company and the Holders of
a majority in aggregate principal amount of Transfer Restricted
Securities covered by such Registration Statement and the managing
underwriters) with respect to all parties to be indemnified pursuant
to said Section (including, without limitation, such selling Holders
and such underwriters). The above shall be done at each closing in
respect of the sale of Transfer Restricted Securities, or as and to
the extent required thereunder;
(m) if (i) a Shelf Registration is filed pursuant to Section 2(b) or
(ii) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) 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 one counsel representing the selling Holders of Transfer
Restricted Securities and each such person who would be an "underwriter" as
a result of either (A) the sale by such person of Securities covered by
such Shelf Registration Statement or (B) the sale during the Applicable
Period by a Participating Broker-Dealer of Exchange Securities (provided
that a Participating Broker-Dealer shall not be deemed to be an underwriter
solely as a result of it being required to deliver a prospectus in
connection with any resale of Exchange Securities) and any attorney,
accountant or other agent retained by any such person (collectively, the
"INSPECTORS"), at
-18-
the offices where normally kept, during reasonable business hours, all
financial and other records, pertinent corporate documents and properties
of the Issuers (collectively, the "RECORDS") as shall be reasonably
necessary to enable them to fulfill their due diligence responsibilities,
and cause the officers, directors and employees of the Issuers to supply
all information in each case reasonably requested by any such Inspector in
connection with such Registration Statement. Records which the Company
determines, in good faith, to be confidential and any Records which they
notify the Inspectors are confidential shall not be disclosed by the
Inspectors to any other Person unless (1) the disclosure of such Records is
necessary to avoid or correct a material misstatement or omission in such
Registration Statement, (2) the disclosure is necessary in connection with
any action, suit or proceeding, (3) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction or (4) the information in such Records has been made generally
available to the public. Each such Holder and each such Participating
Broker-Dealer and their Inspectors and representatives will be required to
agree that all information obtained by it as a result of such inspections
shall be kept confidential and shall not be used by any such person as the
basis for any market transactions in the securities of the Issuers unless
and until such is made generally available to the public or for any purpose
except as contemplated hereby. Each selling Holder of such Transfer
Restricted 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 under (1) or (2) above, give notice to the Company
and allow the Company and its subsidiaries at their own expense to
undertake appropriate action to prevent disclosure of the Records deemed
confidential;
(n) comply with all applicable rules and regulations of the SEC so
long as the provisions of this Agreement are applicable and make generally
available to its security holders earnings 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 45
days after the end of any 12-month period (or 90 days after the end of any
12-month period if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Transfer Restricted 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 Registration Statement, which statements shall cover said
12-month periods;
(o) upon consummation of an Exchange Offer or a Private Exchange,
obtain a customary opinion of counsel to the Issuers addressed to the
Trustee for the benefit of all Holders of Transfer Restricted Securities
participating in the Exchange Offer or the Private Exchange, as the case
may be, and which includes an opinion that (i) the Issuers have duly
authorized, executed and delivered the Exchange Securities and Private
-19-
Exchange Securities, as applicable, and (ii) each of the Exchange
Securities or the Private Exchange Securities, as the case may be,
constitute a legal, valid and binding obligation of the Issuers,
enforceable against the Issuers in accordance with its respective terms (in
each case, with customary exceptions);
(p) if an Exchange Offer or a Private Exchange is to be consummated,
upon proper delivery of 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 cause to be marked, on such Securities and on the
books of the Trustee, the Note Registrar (as defined in the Indenture) and,
if necessary, the Depositary, delivered by such Holders that such
Securities are being canceled in exchange for the Exchange Securities or
the Private Exchange Securities, as the case may be; but in no event shall
such Securities be marked as paid or otherwise satisfied solely as a result
of being exchanged for Exchange Securities or Private Exchange Securities
in the Exchange Offer or the Private Exchange, as the case may be;
(q) cooperate with each seller of Transfer Restricted Securities
covered by any Registration Statement participating in the disposition of
such Transfer Restricted Securities and one counsel acting on behalf of all
such sellers in connection with the filings, if any, required to be made
with the NASD;
(r) take all other steps necessary to effect the registration of the
Transfer Restricted Securities covered by a Registration Statement
contemplated hereby and to comply with any requirements under applicable
Canadian securities laws, rules, regulations and policies ("CANADIAN
SECURITIES LAWS") in respect of the registration and exchange of Transfer
Restricted Securities under the Registration Statement; and
(s) in the case of the Exchange Offer Registration Statement (A)
include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution," which section shall be reasonably acceptable to
Xxxxxxx Xxxxx on behalf of the Initial Purchasers, and which shall contain
a summary statement of the positions taken or policies made by the staff of
the SEC with respect to the potential "underwriter" status of any
Participating Broker-Dealer, including a statement that any such
Participating Broker-Dealer who receives Exchange Securities for Transfer
Restricted Securities pursuant to the Exchange Offer may be deemed a
statutory underwriter and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Securities, (B) furnish to each Participating Broker-Dealer who
has delivered to the Company the notice referred to in Section 3(e),
without charge, as many copies of each Prospectus included in the Exchange
Offer Registration Statement, including any preliminary prospectus, and any
amendment or sup-
-20-
plement thereto, as such Participating Broker-Dealer may reasonably
request, (C) subject to Section 3(i), consent hereby to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto in accordance with applicable law, by any
Person subject to the prospectus delivery requirements of the SEC,
including all Participating Broker-Dealers, in connection with the sale or
transfer of the Exchange Securities covered by and in the manner described
in such Prospectus or any amendment or supplement thereto, (D) use their
best efforts to keep the Exchange Offer 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
terminate on the earlier of 180 days from the date on which the Exchange
Offer is declared effective or the date on which all Participating
Broker-Dealers and the Initial Purchasers have sold all Exchange Notes held
by them (or such later date if extended pursuant to Section 3(i) hereof)
(the "APPLICABLE PERIOD"), and (E) include in the transmittal letter or
similar documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (1) the following provision:
"If the exchange offeree is a broker-dealer holding Securities
acquired for its own account as a result of market-making activities
or other trading activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of
Exchange Securities received in respect of such Securities pursuant to
the Exchange Offer";
and (2) a statement to the effect that by a broker-dealer executing a
transmittal letter or similar documentation containing the provision
described in clause (E) (1) and by delivering a Prospectus in connection
with the exchange of Transfer Restricted Securities, such broker-dealer
will not be deemed to admit that it is an underwriter within the meaning of
the Securities Act;
(t) in the case of any Exchange Offer Registration Statement, deliver,
upon request, to the Trustee and to Participating Broker-Dealers upon
consummation of the Exchange Offer (i) an opinion of counsel in a form
reasonably satisfactory to the Initial Purchaser, and (ii) an officers'
certificate containing certifications substantially similar to those set
forth in Section 5(c) of the Purchase Agreement and such additional
certifications as are customarily delivered in a public offering of debt
securities.
Each seller of Transfer Restricted Securities as to which any registration
is being effected shall be obligated to furnish to the Company such information
regarding such
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seller and the proposed distribution of such Transfer Restricted Securities as
the Company may from time to time reasonably request in writing. The Company may
exclude from such registration the Transfer Restricted Securities of any seller
who fails to furnish such information within a reasonable time (not to exceed 15
Business Days) after receiving such request and shall be under no obligation to
compensate any such seller for any lost income, interest or other opportunity
forgone, or any liability incurred, as a result of the Company's decision to
exclude such seller.
4. INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Issuers shall jointly
and severally indemnify and hold harmless the Initial Purchasers, each Holder,
each Participating Broker-Dealer, each underwriter who participates in an
offering of Transfer Restricted Securities, their respective affiliates, and
each Person, if any, who controls any of such parties within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto), covering
Transfer Restricted Securities or Exchange Securities, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission; PROVIDED that (subject to
Section 4(d) below) any such settlement is effected with the prior written
consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred (including
reasonable fees and disbursements of one counsel (in addition to any local
counsel as may be necessary) chosen as provided in Section 4(c) below)
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any court or governmental
agency or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such al-
-22-
leged untrue statement or omission, to the extent that any such expense is
not paid under subparagraph (i) or (ii) of this Section 4(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Initial Purchasers, such Holder, such Participating Broker-Dealer or any
underwriter with respect to such Initial Purchasers, Holder, Participating
Broker-Dealer or underwriter, as the case may be, expressly for use in the
Registration Statement (or any amendment or supplement thereto) or any
Prospectus (or any amendment or supplement thereto).
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Issuers, the Initial Purchasers, any underwriter and the other
selling Holders and each of their respective directors and each Person, if any,
who controls any of the Issuers, the Initial Purchasers, any underwriter or any
other selling Holder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, against any and all loss, liability, claim, damage and
expense whatsoever of the kind described in the indemnity contained in Section
4(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment or supplement thereto) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Issuers by or on behalf of such selling Holder with
respect to such Holder expressly for use in the Registration Statement (or any
supplement thereto), or any such Prospectus (or any amendment thereto);
PROVIDED, HOWEVER, that, in the case of the Shelf Registration Statement, no
such Holder shall be liable for any claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 4(a) above, counsel to all the indemnified parties shall be
selected by the Initial Purchasers, and, in the case of parties indemnified
pursuant to Section 4(b) above, counsel to all the indemnified parties shall be
selected by the Issuers. An indemnifying party may participate at its own
expense in the defense of any such action; PROVIDED, HOWEVER, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemni-
-23-
fying parties be liable for fees and expenses of more than one counsel (in
addition to any local counsel as may be necessary) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution is or
could be sought under this Section 4 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes a full and unconditional release of each indemnified party
from all liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel, then such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 4(a)(ii) effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 4(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it reasonably
considers such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
(e) (i) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Issuers and the Holders,
as applicable, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Issuers and the Holders; PROVIDED, HOWEVER, that 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 that was
not guilty of such fraudulent misrepresentation. As between the Issuers and the
Holders, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
-24-
agreement in such proportion as shall be appropriate to reflect the relative
fault of the Issuers, on the one hand, and the Holders of Transfer Restricted
Securities, the Participating Broker-Dealer or Initial Purchasers, as the case
may be, on the other hand, in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
(ii) The relative fault of the Issuers, on the one hand, and the Holders of
Transfer Restricted Securities, the Participating Broker-Dealer or the Initial
Purchasers, as the case may be, on the other hand, 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 Holder of Transfer
Restricted Securities, the Participating Broker-Dealer or the Initial
Purchasers, as the case may be, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(iii) Notwithstanding the provisions of this Section 4, no Holder shall be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Holder from the sale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement exceeds the amount of any damages
which such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
(iv) The Issuers and the Holders of the Transfer Restricted Securities and
the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 4.
(v) For purposes of this Section 4, each affiliate of any Person, if any,
who controls a Holder of Transfer Restricted Securities, the Initial Purchasers
or a Participating Broker-Dealer within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such other Person, and each director of the Issuers, each
affiliate of the Issuers, each executive officer of the Issuers who signed the
Registration Statement, and each Person, if any, who controls the Issuers within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Issuers.
5. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may participate
in any underwritten registration hereunder unless such Holder (i) agrees to sell
such Holder's Transfer Restricted Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agree-
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ments and other documents reasonably required under the terms of such
underwriting arrangements. The Issuers shall be under no obligation to
compensate any Holder for lost income, interest or other opportunity foregone,
or other liability incurred, as a result of the Issuers' decision to exclude
such Holder from any underwritten registration if such Holder has not complied
with the provisions of this Section 5 in all material respects following 15
Business Days' written notice of non-compliance and the Issuers' decision to
exclude such Holder.
6. SELECTION OF UNDERWRITERS. The Holders of Transfer Restricted Securities
covered by the Shelf Registration Statement who desire to do so may sell the
securities covered by such Shelf Registration in an underwritten offering. In
any such underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities
covered by the Shelf Registration Statement; PROVIDED, HOWEVER, that such
underwriters and managers must be reasonably satisfactory to the Company.
6A. AGENT FOR SERVICE AND WAIVER OF IMMUNITIES. By the execution and
delivery of this Agreement, the Issuers (i) acknowledge that they have
designated and appointed CT Corporation System, a Delaware corporation ("CT")
(and any successor entity thereto), as their authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to this
Agreement that may be instituted in any federal or state court in the State of
New York or brought under federal or state securities laws, and acknowledge that
CT has accepted such designation, (ii) submit to the jurisdiction of any such
court in any such suit or proceeding, and (iii) agree that service of process
upon CT and written notice of said service to an Issuer in accordance with
Section 7(e) shall be deemed effective service of process upon an Issuer in any
such suit or proceeding. The Issuers further agree to take any reasonable
action, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
CT in full force and effect so long as any of the Notes shall be outstanding;
PROVIDED, HOWEVER, that the Issuers may, by written notice to the Initial
Purchasers, designate such additional or alternative agent for service of
process under this Section 6A that (i) maintains an office located in the
Borough of Manhattan, City of New York in the State of New York and (ii) is
either (x) counsel for the Issuers or (y) a corporate service company which acts
as agent for service of process for other persons in the ordinary course of its
business. Such written notice shall identify the name of such agent for process
and the address of the office of such agent for process in the Borough of
Manhattan, City of New York, State of New York.
7. MISCELLANEOUS.
(a) REPORTING REQUIREMENT. So long as any of the Transfer Restricted
Securities are outstanding, the Issuers will comply with the provisions of
Section 4.02 of the Indenture.
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(b) NO PROSPECTUS IN CANADA. For greater certainty, the parties hereto
acknowledge that nothing contained in this Agreement shall be construed as
requiring the Issuers to file a prospectus or other offering document in Canada
in respect of the Exchange Offer or a Shelf Registration or to entitle Holders
of Transfer Restricted Securities resident in Canada to obtain, upon the
Exchange Offer or a Shelf Registration, securities which are "free trading" in
Canada under applicable Canadian Securities Laws.
(c) NO INCONSISTENT AGREEMENTS. The rights granted to the Holders hereunder
do not, and will not for the term of this Agreement in any way conflict with and
are not, and will not during the term of this Agreement be inconsistent with the
rights granted to the holders of the Issuers' other issued and outstanding
securities under any other agreements entered into by the Issuers.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
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,
otherwise than with the prior written consent of the Issuers and the Majority
Holders; PROVIDED, HOWEVER, that no amendment, modification, or supplement or
waiver or consent to the departure with respect to the provisions of Section 4
hereof shall be effective as against any Holder of Transfer Restricted
Securities or the Issuers unless consented to in writing by such Holder of
Transfer Restricted Securities or the Issuers, as the case may be.
(e) NOTICES. (i) All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, facsimile, or any courier guaranteeing overnight delivery (A)
if to a Holder, at the most current address given by such Holder to the Company
by means of a notice given in accordance with the provisions of this Section
7(e), which address initially is, with respect to the Initial Purchasers, the
address set forth in the Purchase Agreement; and (B) if to the Company,
initially at the Company's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 7(e), and to CT Corporation System as
contemplated by Section 6A hereof.
(ii) All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
is confirmed, if sent by facsimile; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.
(iii) Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
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(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of the Company and
the Initial Purchasers, including, without limitation and without the need for
an express assignment, subsequent Holders. If any transferee of any Holder shall
acquire Transfer Restricted Securities, in any manner, whether by operation of
law or otherwise, such Transfer Restricted Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities, such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this Agreement
and such Person shall be entitled to receive the benefits hereof.
(g) THIRD PARTY BENEFICIARY. Each Holder shall be a third party beneficiary
of the agreements made hereunder between the Issuers, on the one hand, and the
Initial Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder.
(h) 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.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND
THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
PROVISIONS RELATING TO CONFLICTS OF LAW.
(k) SUBMISSION TO JURISDICTION. EACH OF THE ISSUERS AND HOLDERS HEREBY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE
COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO
THIS AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY. SERVICE OF ANY PROCESS,
SUMMONS, NOTICE OR DOCUMENT BY REGISTERED MAIL ADDRESSED TO SUCH ISSUER AND
HOLDERS AT THE ADDRESS SPECIFIED ABOVE SHALL BE EFFECTIVE SERVICE OF PROCESS
AGAINST SUCH ISSUER OR HOLDER FOR ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT. EACH OF THE ISSUERS AND HOLDERS IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY
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SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. A FINAL
JUDGMENT IN ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE
ENFORCED IN ANY OTHER COURTS TO WHOSE JURISDICTION SUCH ISSUER OR HOLDER IS OR
MAY BE SUBJECT, BY SUIT UPON JUDGMENT.
(l) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(m) SECURITIES HELD BY THE COMPANY OR ANY OF ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Issuers or any of their 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.
(n) GUARANTORS. So long as any Transfer Restricted Securities remain
outstanding, the Company shall cause each of its subsidiaries that becomes a
guarantor of the Securities under the Indenture to execute and deliver a
counterpart to this Agreement which subjects all such subsidiaries to the
provision of this Agreement as the Guarantors. Each of the Guarantors joins the
Company in all of its undertakings hereunder to effect or cause the be effected
the Exchange Offer for the Exchange Securities (performance of which
undertakings which will be guaranteed by each of the Guarantors with terms
identical to such Guarantors' guaranty of the Securities) and to file any Shelf
Registration Statement required hereunder.
(o) TAXES. All payments made by the Issuers under or with respect to the
Securities will be made free and clear of and without withholding or deduction
for or on account of any present or future taxes, unless the Issuer is required
to withheld or deduct taxes by law or by the interpretation or administration of
the law. If the Issuers are required to withhold or deduct any amount for or on
account of taxes from any payment made under or with respect to the Securities,
the Issuers will pay such additional amounts as may be necessary so that the net
amount received by each holder of notes, including additional amounts, after
such withholding or deduction will not be less than the amount the holder would
have received if such taxes had not been withheld or deducted; PROVIDED that no
additional amounts will be payable with respect to a payment made to a holder of
Securities
(1) with whom the Issuers do not deal at arm's length, within the meaning
of the INCOME TAX Act (Canada), at the time of making such payment;
-29-
(2) who is subject to taxes by reason of its being connected with the
jurisdiction imposing such taxes otherwise than by the mere
acquisition, holding or disposition of the Securities or the receipt
of payments thereunder; or
(3) who, for purposes of the INCOME TAX ACT (Canada), is or is deemed to
be resident in Canada or uses or holds or is deemed or considered to
use or hold the notes in carrying on business in Canada.
[Signature Pages Follow]
S-1
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
NORSKE XXXX CANADA LIMITED
By: /S/ XXXXX XXXXXXXX
----------------------
Name: XXXXX XXXXXXXX
Title: VICE-PRESIDENT, FINANCE,
CFO AND SECRETARY
THE GUARANTORS:
ELK FALLS PULP & PAPER LIMITED
NORSKE XXXX CANADA (JAPAN) LTD.
NORSKE XXXX CANADA FINANCE LIMITED
NORSKE XXXX CANADA PULP OPERATIONS LIMITED
NORSKE XXXX CANADA PULP SALES INC.
NORSKE XXXX CANADA SALES INC.
NORSKE XXXX PAPER COMPANY
NSCL HOLDINGS INC.
By: /S/ XXXXX XXXXXXXX
----------------------
Name: XXXXX XXXXXXXX
Title: AUTHORIZED SIGNATORY
S-3
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
RBC DOMINION SECURITIES CORPORATION
TD SECURITIES (USA) INC.
For themselves and as Representatives of the other Initial Purchasers named
above.
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /S/ XXXXX XXXXX
-----------------------------
Name: XXXXX XXXXX
Title: DIRECTOR
