EXHIBIT 4.2
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REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
PIONEER COMPANIES, INC.,
PCI CHEMICALS CANADA COMPANY/SOCIETE PCI CHIMIE CANADA,
PIONEER AMERICAS LLC
AND
THE PERSONS LISTED ON THE
SIGNATURE PAGES HEREOF
Dated as of December 31, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS................................................ 1
ARTICLE 2. DEMAND REGISTRATION........................................ 5
SECTION 2.1 Request for Registration.............................. 5
SECTION 2.2 Notice of Demand Registrations........................ 5
SECTION 2.3 Effective Registration................................ 6
SECTION 2.4 Priority on Demand Registrations...................... 6
ARTICLE 3. PIGGYBACK REGISTRATIONS.................................... 7
SECTION 3.1 Holder Piggyback Registration......................... 7
SECTION 3.2 Priority on Piggyback Registrations................... 7
ARTICLE 4. SHELF REGISTRATION......................................... 8
SECTION 4.1 Filing of Shelf Registration.......................... 8
SECTION 4.2 Shelf Registration Procedures......................... 9
ARTICLE 5. STANDSTILL AND SUSPENSION PERIODS.......................... 9
SECTION 5.1 Company Standstill Period............................. 9
SECTION 5.2 Suspension Period..................................... 10
SECTION 5.3 Holder Standstill Period.............................. 10
ARTICLE 6. REGISTRATION PROCEDURES.................................... 11
SECTION 6.1 Company Obligations................................... 11
SECTION 6.2 Holder Obligations.................................... 15
ARTICLE 7. INDEMNIFICATION............................................ 16
SECTION 7.1 Indemnification by the Companies...................... 16
SECTION 7.2 Indemnification by the Holders........................ 17
SECTION 7.3 Notice of Claims, Etc................................. 17
SECTION 7.4 Contribution.......................................... 18
SECTION 7.5 Indemnification Payments.............................. 18
SECTION 7.6 Remedies.............................................. 18
ARTICLE 8. EXPENSES................................................... 19
ARTICLE 9. CURRENT PUBLIC INFORMATION................................. 20
ARTICLE 11. MISCELLANEOUS.............................................. 20
SECTION 11.1 Notice Generally...................................... 20
SECTION 11.2 Successors and Assigns................................ 21
SECTION 11.3 Amendments and Waivers................................ 21
SECTION 11.4 Severability.......................................... 22
SECTION 11.5 Headings.............................................. 22
SECTION 11.6 Governing Law......................................... 22
SECTION 11.7 Counterparts.......................................... 22
SECTION 11.8 Entire Agreement...................................... 22
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 11.9 Specific Performance.................................. 22
SECTION 11.10 Further Assurances.................................... 22
SECTION 11.11 Agreement and Declaration of Trust.................... 22
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("this Agreement"), dated as of
December 31, 2001, by and among Pioneer Companies Inc, a Delaware corporation
("Pioneer"), Pioneer Americas LLC, a Delaware limited liability company ("PA"),
and PCI Chemicals Canada Company/Societe PCI Chimie Canada, an unlimited
liability company organized in the Province of Nova Scotia, Canada ("PCICC"),
and each of the other persons or entities signatory hereto (each of Pioneer, PA
and PCICC are hereinafter sometimes referred to as a "Company" and collectively,
the "Companies").
W I T N E S S E T H:
WHEREAS, the Amended Joint Plan of Reorganization, dated as of
September 21, 2001, of Pioneer and its subsidiaries as modified (the "Plan") was
confirmed on November 28, 2001 by order of the United States Bankruptcy Court
for the Southern District of Texas, Houston Division, in Case 01-38259-H3-11;
WHEREAS, pursuant to the Plan, Pioneer will issue its common stock,
par value $0.01 ("Common Stock"), in partial exchange for certain claims against
PCICC and PA;
WHEREAS, pursuant to the Plan, PA will issue the New Tranche A
Indenture Notes, which notes will be guaranteed by Pioneer, PCICC and all of the
other subsidiaries of Pioneer (the "Tranche A Guarantees") (the New Tranche A
Indenture Notes, together with the Tranche A Guarantees, are hereinafter
referred to as the "A Notes"), in each case, in partial exchange for certain
claims against PCICC and PA; and
WHEREAS, pursuant to the Plan, PCICC will issue the New Tranche B
Notes, which notes will be guaranteed by Pioneer, PA and all of the other
subsidiaries of Pioneer (the "Tranche B Guarantees") (the New Tranche B Notes,
together with the Tranche B Guarantees, are hereinafter referred to as the "B
Notes", and the B Notes, together with the A Notes, are hereinafter referred to
as the "Notes"), in each case, in partial exchange for certain claims against
PCICC and PA;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and affirmed, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1. DEFINITIONS
All capitalized terms used but not defined in this Agreement have the
respective meanings assigned to such terms in the Plan. As used in this
Agreement, the following capitalized terms (in their singular and plural forms,
as applicable) have the following meanings:
"A Notes" has the meaning assigned to such term in the recitals to this
Agreement.
"Action" has the meaning assigned to such term in Section 7.3.
"Affiliate", with respect to the Companies or any other registrant under a
Registration Statement, has the meaning assigned to such term in Rule 144(a)(1)
of the Securities Act and, with respect to any Holder, means a person that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Holder.
"Agreement" has the meaning assigned to such term in the introductory
paragraph to this Agreement.
"B Notes" has the meaning assigned to such term in the recitals to this
Agreement.
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"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York City, New York or
Houston, Texas are authorized or obligated by law or executive order to close.
"Commission" means the United States Securities and Exchange Commission
and any successor United States federal agency or governmental authority having
similar powers.
"Common Stock" has the meaning assigned to such term in the recitals to
this Agreement.
"Company Standstill Period" has the meaning assigned to such term in
Section 5.1.
"Company" and "Companies" has the meaning assigned to such terms in the
introductory paragraph to this Agreement.
"Confirmation Date" means the Effective Date (as such term is defined in
the Plan) of the Plan as confirmed.
"Demand Registration" has the meaning assigned to such term in Section
2.1.
"Demand Request" has the meaning assigned to such term in Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute, and the rules and regulations of the Commission
thereunder.
"Holder Shelf Offering" has the meaning assigned to such term in Section
4.2.
"Holder" means each person or entity signatory hereto or Permitted
Assignee which owns, by itself or with one or more of its Affiliates, 5% or
greater of Pioneer's then outstanding Common Stock, provided, however, that at
such time as any Holder, together with all of its Affiliates, shall cease to own
at least 5% of Pioneer's then outstanding Common Stock such person or entity
shall cease to be a "Holder" for purposes hereof.
"Inspectors" has the meaning assigned to such term in Section 6.1(o).
"Joining Holder" has the meaning assigned to such term in Section 2.2.
"Loss" has the meaning assigned to such term in Section 7.1.
"Material Adverse Effect" has the meaning assigned to such term in Section
2.4.
"Material Disclosure Event" means, as of any date of determination, any
pending or imminent event relating to Pioneer, which, in the determination of
the Board of Directors of Pioneer upon advice of counsel (i) requires disclosure
of material, non-public information relating to such event in any registration
statement so that such registration statement would 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 not misleading, (ii)
requires disclosure of material, non-public information relating to such event
in any Prospectus so that such Prospectus would not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading and (iii) if
publicly disclosed at the time of such event, would have a material adverse
effect on the business, financial condition or prospects of Pioneer and the
Company, in each case, believes that it has a bona fide business reason for
preserving confidentiality.
"NASD Rules" means the Rules of the Association set forth in the NASD
Manual.
"NASD" means the National Association of Securities Dealers, Inc.
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"NASDAQ" means the Nasdaq Stock Market.
"New Tranche A Indenture Notes" has the meaning assigned to such term in
the Plan
"New Tranche B Notes" has the meaning assigned to such term in the Plan.
"Notes" has the meaning assigned to such term in the recitals to this
Agreement.
"Notice and Questionnaire" means a duly executed, written notice delivered
to Pioneer containing the information called for by the Selling Securityholder
Notice and Questionnaire attached as Annex A to this Agreement.
"Permitted Assignee" means (i) any Affiliate of any Holder who acquires
Registrable Securities from such Holder or its Affiliates or (ii) any person or
entity that acquires, in one or more contemporaneous transactions, from one or
more Holders, at least 5% of Pioneer's then-outstanding shares of Common Stock,
such percentage to be calculated immediately after such acquisition.
"Plan" has the meaning assigned to such term in the recitals to this
Agreement.
"Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act to the
extent such prospectus is deemed to be part of the registration statement when
it became effective), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.
"Records" has the meaning assigned to such term in Section 6.1(o).
The terms "register" "registered" and "registration" means a registration
effected by preparing and filing with the Commission a registration statement on
an appropriate form in compliance with the Securities Act, and the declaration
or order of the Commission of the effectiveness of such registration statement
under the Securities Act.
"Registrable Common Stock" means the shares of Common Stock issued to the
Holders pursuant to the Plan; provided, however, that as to any Registrable
Common Stock, such securities shall cease to constitute "Registrable Common
Stock" for purposes of this Agreement if and when (i) a registration statement
with respect to the sale of such securities shall have been declared effective
by the Commission and such securities shall have been sold pursuant thereto in
accordance with the intended plan and method of distribution therefor set forth
in the final Prospectus forming part of such registration statement or (ii) such
securities are no longer outstanding or (iii) such securities are distributed in
accordance with the provisions of Rule 144 of the Securities Act (or any similar
provision then in force) under the Securities Act or (iv) such securities have
been transferred to the public free from any restrictions imposed by Rule 144
under the Securities Act and without the requirement of the filing of a
registration statement covering such securities.
"Registrable Notes" means the Notes issued to the Holders pursuant to the
Plan; provided, however, that as to any Registrable Notes, such securities shall
cease to constitute "Registrable Notes" for purposes of this Agreement if and
when (i) a registration statement with respect to the sale of such securities
shall have been declared effective by the Commission and such securities shall
have been sold pursuant thereto in accordance with the intended plan and method
of distribution therefor set forth in the final Prospectus forming part of such
registration statement or (ii) such securities are no longer outstanding or
(iii) such securities are distributed in accordance with the provisions of Rule
144 (or any similar provision then in force) under the Securities Act or (iv)
such securities have been transferred to the public free from any restrictions
imposed by Rule 144 under the Securities Act and without the requirement of the
filing of a registration statement covering such securities.
"Registrable Securities" means any of the Registrable Common Stock and/or
the Registrable Notes.
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"Registration Statement" means any Pioneer 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 materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.
"Requesting Holder" has the meaning assigned to such term in Section 2.1.
"Required Filing Date" has the meaning assigned to such term in Section
2.1.
"Required Period" has the meaning assigned to such term in Section 6.1(b).
"Road Show" has the meaning assigned to such term in Section 6.1(n).
"Securities Act" means the United States Securities Act of 1933, as
amended, or any successor statute, and the rules and regulations of the
Commission thereunder.
"Shelf Registration Statements" means shelf registration statements filed
by Pioneer, PA and PCICC pursuant to Rule 415 of the Securities Act and pursuant
to the Plan relating to the Registrable Securities of Holders that have provided
Pioneer a Notice and Questionnaire as required by Section 4.1 hereof.
"Suspension Notice" has the meaning assigned to such term in Section 5.2.
"Suspension Period" has the meaning assigned to such term in Section 5.2.
"Tranche A Guarantees" has the meaning assigned to such term in the
recitals to this Agreement.
"Tranche B Guarantees" has the meaning assigned to such term in the
recitals to this Agreement.
ARTICLE 2. DEMAND REGISTRATION
SECTION 2.1 Request for Registration. Beginning on the expiration of
the Required Period, any Holder or Holders (each a "Requesting Holder") may
deliver to Pioneer a written request (a "Demand Request") that the Companies
effect the registration under the Securities Act of that number and/or aggregate
principal amount, as the case may be, of Registrable Securities requested and
owned, beneficially or of record, by the Requesting Holder(s) (a "Demand
Registration"); provided, however, the Registrable Securities to be included in
such Demand Registration comprise (i) 5% or more of the outstanding Common Stock
on such date in the case of Registrable Common Stock and (ii) $20 million in
aggregate principal amount in the case of Registrable Notes; provided, further,
that the Companies will in no event be required to effect more than (i) two
Demand Registrations for the Holders in total in any 12-month period nor (ii) an
aggregate of seven Demand Registrations for the Holders in total. Upon receipt
of a Demand Request, and subject to the provisions of this Article 2, the
Companies will cause to be included in a registration statement on an
appropriate form under the Securities Act, filed with the Commission within 60
days after receiving a Demand Request (the "Required Filing Date"), such
Registrable Securities as may be requested by such Requesting Holder(s) in their
respective Demand Request(s) together with any other Registrable Securities as
requested by Joining Holders joining in such Demand Request pursuant to Section
2.2. The Companies shall use their best efforts to cause any such registration
statement to be declared effective by the Commission as promptly as practicable
after such filing but in any event not later than 90 days following the date of
the Demand Request. Unless the Requesting Holders otherwise elect, all Demand
Registrations will be underwritten offerings.
SECTION 2.2 Notice of Demand Registrations. If at any time any of
the Companies proposes to register Registrable Securities for the account of any
Requesting Holder pursuant to Section 2.1, Pioneer shall give written notice of
such proposed filing to all of the Holders that have identified themselves as
such to Pioneer as soon as practicable (but in no event later than the 10th
Business Day after receipt by Pioneer of such Demand Request). Upon the written
request of any non-Requesting Holder received by Pioneer no later than the 10th
Business Day after receipt by such Holder of the notice sent by Pioneer (each
such Holder a "Joining Holder"), to register, on the
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same terms and conditions as the securities otherwise being sold pursuant to
such Demand Registration, any of its applicable Registrable Securities, subject
to Section 2.4 hereof, the Companies will cause such Registrable Securities to
be included in the securities to be covered by the registration statement
proposed to be filed by the respective Company in respect of such Demand
Registration on the same terms and conditions as any similar securities included
therein, all to the extent required to permit the sale or other disposition by
each Holder of the Registrable Securities so registered.
SECTION 2.3 Effective Registration. A registration of any
Registrable Securities will not count as a Demand Registration until the
registration statement relating to it has become effective pursuant to the
Securities Act (except with respect to any Requesting Holder that withdraws, at
its sole option, all of its Registrable Securities for such registration and the
Companies have performed their obligations hereunder in all material respects,
in which case such demand will count as a Demand Registration on behalf of that
Requesting Holder unless the Requesting Holder pays all reasonable expenses
actually incurred by the Companies in connection with such withdrawn
registration); provided, however, that if, after it has become effective, an
offering of Registrable Securities pursuant to a registration statement is
terminated by any stop order, injunction, or other order of the Commission or
other governmental agency or court, such registration pursuant thereto will be
deemed not to have been effected and will not count as a Demand Registration;
provided, further, that if the conditions to closing specified in any
underwriting agreement or any other agreement entered into in connection with
such registration are not satisfied, other than by reason of some act or
omission by such Holder, such registration pursuant thereto will be deemed not
to have been in effect and will not count as a Demand Registration.
SECTION 2.4 Priority on Demand Registrations. Notwithstanding any
term of this Article 2 to the contrary, but only to the extent the Demand
Registration only contemplates underwritten offerings, no securities to be sold
for the account of any person or entity (including any of the Companies) other
than Requesting Holders or Joining Holders shall be included in a Demand
Registration unless the lead underwriter or underwriters shall advise the
Requesting Holders in writing that the inclusion of such securities will not
materially and adversely affect the price per security to be offered in, or
success of, the offering (a "Material Adverse Effect"). Furthermore, in the
event that the lead underwriter or underwriters of such an underwritten offering
shall advise the Requesting Holders in writing that even after exclusion of all
securities of the other persons or entities pursuant to the immediately
preceding sentence, the amount of Registrable Securities proposed to be included
in such Demand Registration by Requesting Holders and Joining Holders is
sufficiently large to cause a Material Adverse Effect, the number of shares of
Registrable Common Stock or the aggregate principal amount of Registrable Notes,
as the case may be, to be included in such Demand Registration shall be
allocated among all Holders pro rata based on the ratio the number of shares of
Registrable Common Stock or aggregate principal amount of Registrable Notes, as
the case may be, each such Holder requests to be included bears to the total
number of shares of Registrable Common Stock or aggregate principal amount of
Registrable Notes, as the case may be, of all Holders that have been requested
to be included in such registration; provided, however, that if, as a result of
such pro-ration, any Holder shall not be entitled to include in a registration
all Registrable Securities of the class that such Holder has requested to be
included, such Holder may elect to withdraw its request to include such
Registrable Securities in such registration or may reduce the number or
principal amount, as the case may be, requested to be included; provided,
further, that (x) such request must be made in writing prior to the earlier of
the execution of the underwriting agreement or the execution of the custody
agreement with respect to such registration and (y) such withdrawal or reduction
shall be irrevocable.
ARTICLE 3. PIGGYBACK REGISTRATIONS
SECTION 3.1 Holder Piggyback Registration. If at any time after the
expiration of the Required Period a Company proposes to file a registration
statement under the Securities Act with respect to an offering of any securities
for such Company's own account (except pursuant to registrations on Form S-4 or
any successor form or on Form S-8 or any successor form relating solely to
securities issued pursuant to any benefit plan), such Company shall give written
notice of such proposed filing to the Holders that have identified themselves as
such to Pioneer as soon as practicable (but in no event less than 30 days before
the anticipated filing date). Such notice shall specify the number or aggregate
principal amount, as the case may be, of securities proposed to be registered
thereby, the proposed date of filing of such registration statement with the
Commission, the proposed means of distribution of such securities and the
proposed lead underwriters or underwriters (if any). Upon the written request of
any Holder, received by the Company no later than the 10th Business Day after
receipt by such Holder of the
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notice sent by such Company, to register, on the same terms and conditions as
the securities otherwise being sold pursuant to such registration, any of its
Registrable Securities (which request shall state the intended method of
disposition thereof if the securities otherwise being sold are being sold by
more than one method of disposition), the Companies will use their best efforts
to cause the Registrable Securities as to which registration shall have been so
requested to be included in the securities to be covered by the registration
statement proposed to be filed by such Company on the same terms and conditions
as any similar securities included therein, all to the extent required to permit
the sale or other disposition by such Holder of such Registrable Securities so
registered; provided, however, that, notwithstanding the foregoing, the
Companies may at any time in their reasonable discretion, or at the request of
Holders holding a majority of the Registrable Securities included in a Demand
Registration without the consent of any other Holder, delay or abandon the
proposed offering in which any Holder had requested to participate or cease the
filing (or obtaining or maintaining the effectiveness) of or withdraw the
related registration statement or other governmental approvals, registrations or
qualifications. A registration of Registrable Securities pursuant to this
Section 3.1 shall not be a Demand Registration.
SECTION 3.2 Priority on Piggyback Registrations. If the Registrable
Securities requested to be included in a registration statement by any Holder
pursuant to Section 3.1 differ from the type of securities proposed to be
registered by a Company and, if the related offering is to be an underwritten
one, the lead underwriter or underwriters advise such Company that due to such
differences the inclusion of such Registrable Securities would cause a Material
Adverse Effect, then (i) the number or dollar or principal amount, as
applicable, of such Holder's or Holders' Registrable Securities to be included
in the registration statement shall be reduced to an amount which, in the
judgment of the lead underwriter or underwriters, would eliminate such Material
Adverse Effect or (ii) if no such reduction would, in the judgment of the lead
underwriter or underwriters, eliminate such Material Adverse Effect, then the
Companies shall have the right to exclude all such Registrable Securities from
such registration statement provided no other securities of such type are
included and offered for the account of any other person or entity (including
the Companies) in such registration statement. Any partial reduction in the
number or aggregate principal amount, as the case may be, of Registrable
Securities to be included in the registration statement pursuant to clause (i)
of the immediately preceding sentence shall be effected pro rata based on the
ratio which such Holder's Registrable Securities bears to the total number or
aggregate principal amount, as the case may be, of Registrable Securities
requested to be included in such registration statement by all Holders who have
requested that their securities be included in such registration statement. If
the Registrable Securities requested to be included in the registration
statement pursuant to Section 3.1 are of the same type as the securities being
registered by a Company and the lead underwriter or underwriters advise such
Company that the inclusion of such Registrable Securities would cause a Material
Adverse Effect, such Company will be obligated to include in such registration
statement, as to each Holder, only a portion of the Registrable Securities such
Holder has requested be registered equal to the ratio which such Holder's
requested securities bears to the total number of shares or aggregate principal
amount, as the case may be, of Registrable Securities requested to be included
in such registration statement by all Holders who have requested that their
securities be included in such registration statement.
ARTICLE 4. SHELF REGISTRATION
SECTION 4.1 Filing of Shelf Registration. Each Company shall, at its
cost, file with the Commission on or before March 31, 2002, and thereafter shall
use its best efforts to cause to be declared effective no later than May 31,
2002 (the "Shelf Registration Statements") on an appropriate form under the
Securities Act relating to the offer and sale of the Registrable Securities by
the Holders thereof from time to time in accordance with the methods of
distribution set forth in the Shelf Registration Statements and Rule 415 under
the Securities Act; provided, however, that no Holder will be named in the
Prospectuses included in such Shelf Registration Statements unless such Holder
has provided Pioneer a Notice and Questionnaire prior to the date of the filing
of the applicable Shelf Registration Statement with the Commission. The
Companies' best efforts shall include, but will not be limited to, promptly
responding to all comments received from the staff of the Commission. If the
Commission notifies the Companies that the Shelf Registration Statements will
receive no action or review from the Commission, the Companies will request that
the Shelf Registration Statements become effective within five business days
after receipt of such Commission notification. Once the Shelf Registration
Statements are declared effective by the Commission, the Companies will (i)
cause the Shelf Registration Statements to remain effective, and supplemented
and amended as required by Section 6.1(b) hereof, throughout the Required Period
and (ii) file post-effective amendments on Form S-3 to each Shelf Registration
Statement, as soon as the applicable Company is eligible to use Form S-3 for
secondary offerings.
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SECTION 4.2 Shelf Registration Procedures.
(a) During the Required Period, any Holder shall be entitled
to sell all or any part of the Registrable Securities registered on behalf of
such Holder pursuant to the Shelf Registration Statements ("Holder Shelf
Offering"); provided, however, that with respect to any Permitted Assignee that
becomes a Holder pursuant to Section 11.2, such Holder shall deliver a Notice
and Questionnaire to the applicable Company at least 10 Business Days prior to
any intended distribution of Registrable Securities under a Shelf Registration
Statement. The applicable Company shall (i) as promptly as is practicable after
the date a Notice and Questionnaire is received by such Company, but in any
event within 10 Business Days after such date, if required by applicable law,
file with the Commission a post-effective amendment to the applicable Shelf
Registration Statement or prepare and, if required by applicable law, file a
supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Holder delivering such Notice and Questionnaire is named as a
selling securityholder in such Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law
and, if a Company shall file a post-effective amendment to a Shelf Registration
Statement, use best efforts to cause such post-effective amendment to be
declared effective under the Securities Act as promptly as is practicable and
(ii) notify such Holder as promptly as practicable after the effectiveness under
the Securities Act of any post-effective amendment filed pursuant to this
Article 4; provided, however, that if such Notice and Questionnaire is delivered
during a Suspension Period, the applicable Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth in
clauses (i) and (ii) above upon expiration of the Suspension Period as though
such Holder's Notice and Questionnaire had been delivered on the expiration date
of such Suspension Period.
(b) Any Holder may, by written notice to Pioneer, request
that the Companies take any reasonable steps necessary to assist and cooperate
with such Holder to facilitate a Holder Shelf Offering, subject to the
provisions hereof. Such request will specify the number of shares of Registrable
Securities proposed to be sold and will also specify the intended method of
disposition thereof.
ARTICLE 5. STANDSTILL AND SUSPENSION PERIODS
SECTION 5.1 Company Standstill Period. Except for the initial
distribution of Registrable Securities pursuant to the Plan, without the prior
written consent of the lead underwriter or underwriters in a Holder Shelf
Offering during the Required Period or in a Demand Registration, the Companies
agree not to effect any public sale or distribution of any securities the same
as or similar to the Registrable Securities, or any securities convertible into
or exchangeable or exercisable for any of the Companies' securities the same as
or similar to the Registrable Securities (except pursuant to registrations on
Form S-4 or any successor form or on Form S-8 or any successor form relating
solely to securities offered pursuant to any benefit plan), during the 14-day
period prior to and through the period (i) beginning on the commencement of the
public distribution of Registrable Securities in an underwritten Holder Shelf
Offering or a registration statement to be filed to effect a Demand Registration
by or on behalf of any Holder to the extent timely notified in writing by the
selling Holders or the lead underwriter or underwriters managing such
distribution and (ii) ending on the first to occur of (A) the 120th day after
such commencement and (B) the end of such distribution (the "Companies
Standstill Period") including that portion of such period following an
underwritten distribution commenced during the Companies Standstill Period that
does not coincide with the Companies Standstill Period.
SECTION 5.2 Suspension Period The Companies may, by notice in
writing to each Holder, suspend the Demand Registration rights of the Holder
and/or require the Holders to suspend use of any resale Prospectus included in a
Shelf Registration Statement for any period determined in good faith by the
Companies if there shall occur and be continuing a Material Disclosure Event
(such period, a "Suspension Period"). Notwithstanding the foregoing, no
Suspension Period shall exceed 30 days in any one instance or be invoked by the
Company more than twice in any 12-month period; provided, however, that each day
during any Suspension Period shall only be counted once in determining the
aggregate number of days in such Suspension Period notwithstanding the
occurrence of multiple concurrent deferrals. Each Holder agrees that, upon
receipt of notice from any Company of the occurrence of a Material Disclosure
Event (a "Suspension Notice"), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the Shelf Registration
Statements or any public sale or distribution pursuant to Rule 144 of the
Securities Act until the earlier of (i) the expiration of the Suspension Period
and (ii) such
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Holder's receipt of a notice from such Company to the effect that such
suspension has terminated. Any Suspension Notice shall be accompanied by a
certificate of the President, the Chief Financial Officer or General Counsel of
the applicable Company confirming the existence of the Material Disclosure
Event. If so directed by a Company, such Holder will deliver to such Company (at
such Company's expense) all copies, other than permanent file copies, then in
such Holder's possession, of the most recent Prospectus covering such
Registrable Securities at the time of receipt of such Suspension Notice. In the
event of a Suspension Notice, during the Suspension Period the Companies shall
use reasonable efforts, and promptly after such time as the related Material
Disclosure Event no longer exists the Companies shall take any and all actions
necessary or desirable, to give effect to any Holders' rights under this
Agreement that may be, or have been, affected by such notice, including the
Holders' Demand Registration rights and rights with respect to any Shelf
Registration Statement.
SECTION 5.3 Holder Standstill Period. Without the prior written
consent of the Companies or the lead underwriter or underwriters prior to the
closing, or the prior written consent of the lead underwriter or underwriters of
the offering thereafter, no Holder shall effect any disposition of Registrable
Securities under the Shelf Registration Statements or any public sale or
distribution pursuant to Rule 144 (except in accordance with Section 3.1) during
the 14-day period prior to, and through the period (i) beginning on the
commencement of the public distribution of securities of any Company the same as
or similar to the Registrable Securities, or any securities convertible into or
exchangeable or exercisable for any Company securities the same as or similar to
the Registrable Securities in an underwritten offering by or on behalf of any
Company or any other Holder to the extent timely notified in writing (prior to
such Holder giving any Demand Request) by the Companies, the Selling Holders or
the lead underwriter or underwriters managing such distribution and (ii) ending
on the first to occur of (A) the 60th day after such commencement and (B) the
end of such distribution.
8
ARTICLE 6. REGISTRATION PROCEDURES
SECTION 6.1 Company Obligations. Whenever any of the Companies is
required pursuant to this Agreement to register Registrable Securities, it will:
(a) cause the related registration statements to include a
Prospectus intended to permit each Holder to resell, at such Holder's election,
all or part of the Registrable Securities held by such Holder without
restriction;
(b) promptly and timely prepare and file with the Commission
such amendments and post-effective amendments to any such registration
statements as may be necessary to keep each such registration statement
continuously effective (subject to any Suspension Periods) (i) with respect to
the Shelf Registration Statements, for a period (the "Required Period") ending
on the date which is three years after the date on which such Shelf Registration
Statement becomes effective with respect to the offer and sale of Registrable
Securities plus the aggregate number of days in all applicable Suspension
Periods and (ii) with respect to all other registration statements, for a period
equal to the lesser of such period necessary for completion of the contemplated
distribution and 180 days;
(c) promptly and timely cause the Prospectuses to be
supplemented by any required Prospectus supplement;
(d) provide the Holders with a reasonable opportunity to
review and comment on any registration statement (including the prospectus
contained therein or any amendment or supplement thereto) to be filed pursuant
to this Agreement prior to the filing thereof with the Commission, and shall
make all changes thereto (including to any documents incorporated in the
registration statement by reference or proposed to be filed after the initial
filing of the registration statement) as any Holder may request in writing to
the extent such changes are required by the Securities Act;
(e) cause (i) any such registration statement and any
amendment or supplement thereto, as of the effective date of such registration
statement, amendment or supplement, (x) to comply in all material respects with
the applicable requirements of the Securities Act and the rules and regulations
of the Commission promulgated thereunder and (y) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(ii) the related Prospectus, (x) to comply in all material respects with the
applicable requirements of the Securities Act and the rules and regulations of
the Commission promulgated thereunder and (y) not to contain any 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;
(f) furnish to the Holders such number of conformed copies
of such registration statement and of each such amendment thereto (in each case
including all exhibits thereto), such number of copies of the Prospectus
included in such registration statement (including each preliminary and final
Prospectus and each supplement thereto), and such number of the documents, if
any, incorporated by reference in such registration statement or Prospectus, as
each Holder reasonably may request;
(g) use its best efforts (i) to register or qualify the
Registrable Securities covered by such registration statement under such
securities or "blue sky" laws of the states of the United States as each Holder
reasonably shall request, to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and to do any and
all other acts and things that may be necessary or advisable to enable the
Holders to consummate the disposition in such jurisdictions of the Registrable
Securities covered by such registration statement, except that no Company shall
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction in which it is not obligated to be so
qualified, or to subject itself to taxation in any such jurisdiction, or to
consent to general service of process in any such jurisdiction and (ii) to
obtain all other approvals, consents, exemptions or authorization from
securities regulatory authorities or
9
government agencies as may be necessary to enable such Holders to consummate the
disposition of the Registrable Securities;
(h) immediately notify the Holders, at any time when a
Prospectus or Prospectus supplement relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the occurrence of any
event as a result of which, the Prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits 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, which untrue statement or omission requires amendment
of the registration statement or supplementing of the Prospectus, and, at the
request of the Holders, prepare and furnish to the Holders a reasonable number
of copies of a supplement to such Prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
Prospectus shall not include 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; provided, however, that with respect to Registrable
Securities registered pursuant to such registration statement, each Holder
agrees that it will not sell any Registrable Securities pursuant to such
registration statement during the time after the furnishing of a Company's
notice that such Company is preparing and filing with the Commission a
supplement to or an amendment of such Prospectus or registration statement;
provided, further, that such Company shall use its best efforts to prepare and
make effective such supplemental amendment;
(i) comply in all material respects with all applicable
rules and regulations of the Commission, and make available to holders of its
securities, as soon as reasonably practicable, but in any event not later than
18 months after (i) the effective date (as defined in Rule 158(c) under the
Securities Act) of such registration statement, (ii) the effective date of each
post-effective amendment to such registration statement and (iii) the date of
such filing by a Company with the Commission of an annual report or Form 10-K,
whether or not such Form 10-K is required to be incorporated by reference in
such registration statement, an earnings statement of such Company and its
subsidiaries which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder (including at the option of such Company, Rule 158);
(j) provide and cause to be maintained a transfer agent and
registrar for the Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement; it being hereby agreed that the Holders shall furnish to such Company
such information regarding the Holders and the plan and method of distribution
of Registrable Securities intended by the Holders as such Company may from time
to time reasonably request in writing and as shall be required by law or by the
Commission in connection therewith;
(k) provide CUSIP numbers for each of the Common Stock, New
Tranche A Indenture Notes and the New Tranche B Notes;
(l) notify the Holders and the lead underwriter or
underwriters, if any, promptly, and (if requested by any such person) confirm
such notice in writing, (i) when a Prospectus, Prospectus supplement or
post-effective amendment related to such registration statement has been filed,
and, with respect to such registration statement or any post-effective amendment
thereto, when the same has become effective, (ii) of any request by the
Commission or any other federal or state governmental authority for amendments
or supplements to such registration statement or related Prospectus, (iii) of
the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose and (iv) of the
receipt by such Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose;
(m) use reasonable commercial efforts to obtain the
withdrawal of any order suspending the effectiveness of such registration
statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest possible moment;
(n) enter into customary agreements (including underwriting
agreements in customary
10
form, which shall include "lock-up" obligations as may be requested by the lead
underwriter or underwriters, not to exceed 180 days in duration, but excluding
shares that may be issued pursuant to benefit plans or in connection with
mergers or acquisitions) and take such other actions (including using its
reasonable efforts to make road show presentations (it being agreed that such
presentations by officers of the Companies in excess of an aggregate of fourteen
days in duration during any 12-month period for all Demand Registrations and the
Shelf Registration Statements under this Agreement shall be unreasonable) and
otherwise engaging in such reasonable marketing support in connection with any
underwritten offering (a "Road Show")) as are reasonably requested by any
selling Holder in order to expedite or facilitate the sale or disposition of any
Registrable Securities and in such connection, whether or not an underwriting
agreement is entered into and whether or not the Registrable Securities are to
be sold in an underwritten offering, make such representations and warranties to
the holders of such Registrable Securities and the underwriter or underwriters,
if any, in form and substance and scope as are customarily made in connection
with such offerings of equity or debt securities.
(o) make available for inspection by each Holder, any
underwriter participating in any disposition pursuant to such registration, and
any attorney, accountant or other agent retained by such Holder or any such
underwriter (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Companies (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the officers, directors and employees of,
and independent accountants and counsel to, the Companies to supply all
information reasonably requested by any such Inspector in connection with such
registration, provided, however, that (i) in connection with any such
inspection, any such Inspectors shall cooperate to the extent reasonably
practicable to minimize any disruption to the operation by the Companies of
their businesses, (ii) Records and information obtained hereunder shall be used
by such Inspectors only to exercise their due diligence responsibility and (iii)
Records or information furnished or made available hereunder shall be kept
confidential and shall not be disclosed by such Holder, underwriter or
Inspectors unless (A) the disclosure of such Records or information is necessary
so that (1) any Prospectus would 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 and (2) any Registration Statement would 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 not
misleading, (B) the release of such Records or information is ordered pursuant
to a subpoena or other order from a court or governmental authority of competent
jurisdiction or a third party or (C) such Records or information otherwise
become available to the public other than through disclosure by such Holder,
underwriter or Inspector in breach hereof or by any person in breach of any
other confidentiality arrangement;
(p) furnish to each Holder and to each underwriter, if any,
a signed counterpart, addressed to such Holder or such underwriter, if any, of
(i) an opinion or opinions of counsel to such Company dated the effective date
of such registration statement (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the appointed representative of
or counsel to the Holders of at least 50% in number and/or principal amount, as
the case may be, of the Registrable Securities being registered) covering the
matters customarily covered in opinions requested in such offerings of equity or
debt securities and such other matters as may be reasonably requested by such
representative or counsel and (ii) a "comfort" letter or "comfort" letters from
such Company's independent public accountants who have certified such Company's
financial statements included in such registration statement, in customary form
and covering such matters of the type customarily covered by "comfort" letters
in relation to such offerings and as such Holder or the lead underwriter or
underwriters reasonably request;
(q) file all such information, documents and other reports
required to be filed by Section 13 or 15(d) of the Exchange Act and applicable
to a U.S. company subject to such sections, within such time limits and periods
provided therefore notwithstanding that the Company may not be required to
remain subject to the reporting requirements of Sections 13 or 15(d) of the
Exchange Act.
(r) keep a single representative of the sellers of each
class of Registrable Securities (appointed by the Holders of a majority of the
respective classes of Registrable Securities in the registration) advised as to
the initiation and progress of any registration hereunder;
(s) in connection with any registration hereunder, provide
officers' certificates and other
11
customary closing documents in form and scope customary for such offerings;
(t) cooperate with each seller of Registrable Securities and
each underwriter participating in the disposition of such Registrable Securities
and underwriters' counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc.;
(u) with respect to an underwritten offering of Registrable
Common Stock, use its best efforts to cause all such Registrable Securities to
be listed on each securities exchange on which similar securities issued by any
of the Companies are then listed and, if no such securities are so listed, use
its best efforts to cause such Registrable Securities to be listed on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq, as directed by
the Holders thereof, and, if listed on Nasdaq, use its best efforts to (A)
secure designation of all such Registrable Securities as a Nasdaq "national
market system security" within the meaning of Rule 11Aa2-1 under the Exchange
Act and (B) cause such Registrable Securities to be listed on the Nasdaq
National Market or, failing that, to secure Nasdaq authorization for such
Registrable Securities;
(v) in the event that any broker-dealer registered under the
Exchange Act shall be an "affiliate" (as defined in Section 2720(b) of the NASD
Rules) of such Company or has a "conflict of interest" (as determined by Section
2720(b)(7) of the NASD Rules) and such broker-dealer shall underwrite,
participate as a member of an underwriting syndicate or selling group or "assist
in the distribution" (within the meaning of the NASD Rules) of any Registrable
Securities, whether as a holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Companies will assist such broker-dealer in complying
with the requirements of the NASD Rules, including, without limitation, by (A)
engaging a "qualified independent underwriter" (as defined in Section
2720(b)(15) of the NASD Rules) to participate in the preparation of the
registration statement relating to such Registrable Securities, to exercise
usual standards of due diligence in respect thereto and to recommend the public
offering price of such Registrable Securities, (B) indemnifying such qualified
independent underwriter, to the extent of the indemnification of underwriters
provided in Section 7 hereof, and (C) providing such information to such
broker-dealer as may be required in order for such broker-dealer to comply with
the requirements of the Rules of Fair Practice of the NASD; and
(w) use its best efforts to take all other action necessary
to effect the registration of the Registrable Securities contemplated hereby.
SECTION 6.2 Holder Obligations. Each Holder agrees that:
(a) information obtained by it or by its Inspectors shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Companies or their Affiliates unless and
until such information is made generally available to the public; and
(b) it will use all reasonable efforts, prior to making any
disclosure allowed by Section 6.1(m)(iii)(A) or (B), to inform the Companies
that such disclosure is necessary to avoid or correct a misstatement or omission
in the registration statement or ordered pursuant to a subpoena or other order
from a court or governmental authority of competent jurisdiction or otherwise
required by law. Such Holder further agrees that it will, upon learning that
disclosure of such Records or information is sought by a court or governmental
authority or otherwise required by law, give notice to the Companies and allow
the Companies, at the expense of the Companies, to undertake appropriate action
to prevent disclosure of the Records or information deemed confidential.
ARTICLE 7. INDEMNIFICATION
SECTION 7.1 Indemnification by the Companies. (a) The Companies
shall indemnify and hold harmless (i) each Holder and its Affiliates, with
respect to any registration statement filed pursuant to this Agreement, (ii) any
underwriter or selling agent selected by the Holders or other securities
professional, if any, which facilitates the disposition of the Registrable
Securities with respect to such Registrable Securities and (iii) each person who
controls the Holder or Affiliate thereof or such underwriter, selling agent or
securities professional, including their respective directors and officers of
each Holder, and any underwriter or selling agent, within the
12
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act,
against any losses, claims, damages, liabilities or expenses (each a "Loss" and
collectively "Losses"), joint or several, to which the Holder or any such
persons may become subject under the Securities Act or otherwise, to the extent
that such Losses (or related actions or proceedings) arise out of or are based
upon (A) any untrue statement or alleged untrue statement of a material fact
contained in a registration statement, or any amendments or supplements thereto,
in which such Registrable Securities are to be or were included for registration
under the Securities Act, or any omission or alleged omission to state a
material fact required to be stated or necessary to make the statements in such
Registration Statement, amendment or supplement, not misleading, (B) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary Prospectus if used prior to the effective date of the registration
statement (unless such statement is corrected in the final Prospectus and
Pioneer shall have furnished a sufficient number of copies thereof to the Holder
in a manner and at a time sufficient to permit delivery of the same to
prospective purchasers concurrently with or prior to the sale of the related
Registrable Securities), any final Prospectus (as supplemented, if the
applicable Company shall have filed with the Commission any supplement thereto)
if used during the period in which the Company is required to keep the
registration statement to which such Prospectus relates current and otherwise in
compliance with Section 10(a) of the Securities Act, or any omission or alleged
omission to state a material fact required to be stated or necessary to the make
statements in such preliminary Prospectus or final Prospectus, in the light of
the circumstances under which such statements were made, not misleading, or (C)
any material violation or alleged material violation of the Securities Act, the
Exchange Act, the rules and regulations as promulgated of the Securities Act and
the Exchange Act, and state securities laws; provided, however, that the
Companies shall have no obligation to provide any indemnification hereunder to
the extent any such Losses (or actions or proceedings in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, preliminary
Prospectus or final Prospectus, as the case may be, in reliance upon and in
conformity with written information furnished to any Company by a Holder seeking
such indemnification or on such Holder's behalf specifically for inclusion in
such registration statement. The indemnity provided in this Section 7.1 shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Holder or any such other persons and shall survive the transfer of
the Registrable Securities by the Holder or any such other persons.
(b) The Companies shall indemnify and hold harmless each
Holder against any losses or damages incurred by such Holder to the extent such
loses or damages arise out of or are based upon the failure of a Shelf
Registration Statement to be declared effective on or before June 30, 2002 to
the extent such failure is the result of a breach of the Companies' covenant
contained in Section 4.1 hereof to use their respective best efforts to cause
the Shelf Registration Statements to be declared effective.
SECTION 7.2 Indemnification by the Holders. Each Holder shall
severally, and not jointly, indemnify and hold harmless (in the same manner and
to the same extent as set forth in Section 7.1 hereof) the Companies, each
director and officer of the Companies and each other person, if any, who
controls the respective Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, with respect to any untrue
statement in or omission from any registration statement filed by a Company
pursuant to this Agreement, any preliminary Prospectus or any final Prospectus
included in such registration statement, or any amendment or supplement to such
registration statement or Prospectus, as the case may be, of a material fact if
such statement or omission was made in reliance upon and in conformity with
written information furnished to any Company or any of their representatives by
such Holder or such other persons, if any, who control the Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
or on the Holder's behalf, specifically for inclusion in such registration
statement, preliminary Prospectus or final Prospectus, as the case may be;
provided, such Holder's aggregate liability under this Agreement (including
Section 7.4) shall be limited to an amount equal to the net proceeds (after
deducting the underwriters' discount but before deducting expenses in connection
with the applicable offering) received by the Holder from the sale of the
securities effected pursuant to such registration.
SECTION 7.3 Notice of Claims, Etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding (an
"Action") involving a claim referred to in Sections 7.1 and 7.2 hereof, such
indemnified party shall, if indemnification is sought against an indemnifying
party, give written notice to the indemnifying party of the commencement of such
Action; provided, however, that the failure of any indemnified party to give
said notice shall not relieve the indemnifying party of its obligations under
Sections 7.1 or 7.2 hereof, as the case may be, except to the extent that the
indemnifying party is actually and materially prejudiced by such failure. In
case an Action is brought against any indemnified party, and such indemnified
party notifies an
13
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party). Notwithstanding the
foregoing, the indemnified party shall have the right to employ its own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of such indemnified party, unless (i) the employment of such counsel
shall have been authorized in writing by the indemnifying party, (ii) the
indemnifying party shall not have employed counsel (reasonably satisfactory to
the indemnified party) to take charge of the defense of such Action, within a
reasonable time after notice of the commencement thereof or (iii) such
indemnified party reasonably shall have concluded that there may be defenses
available to it which are different from or additional to those available to the
indemnifying party which, if the indemnifying party and the indemnified party
were to be represented by the same counsel, could result in a conflict of
interest for such counsel or materially prejudice the prosecution of the
defenses available to such indemnified party. If any of the events specified in
clauses (i), (ii) or (iii) of the preceding sentence shall have occurred or
otherwise shall be applicable, then the fees and expenses of one counsel (or
firm of counsel) for the indemnified party shall be borne by the indemnifying
party. Anything in this Section 7.3 to the contrary notwithstanding, an
indemnifying party shall not be liable for the settlement of any action effected
without its prior written consent (which consent in the case of an action
exclusively seeking monetary relief shall not unreasonably be withheld or
delayed), but if settled with the prior written consent of the indemnifying
party, or if there be a final judgment adverse to the indemnified party, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior consent of the indemnified party, consent to
entry of any judgment or enter into any settlement which does not include as a
term thereof the unconditional release of the indemnified party from all
liability in respect of such claim or litigation or which, notwithstanding such
unconditional release, constitutes an admission of fault or liability by such
indemnified party.
SECTION 7.4 Contribution. If the indemnification provided for in
this Article 7 is unavailable or insufficient to hold harmless an indemnified
party in respect of any Losses, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such Losses which amount shall include,
without limitation, the legal fees and other expenses incurred by such
indemnified party in connection with the investigation and defense in such
proportion as appropriate to reflect the relative fault of the Companies, on the
one hand, and the Indemnified Holders to be indemnified pursuant to this Article
7, on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or mitigate the damage in respect of or
prevent any untrue statement or omission giving rise to such indemnification
obligation. Each of the Companies and the Holders agree that it would not be
just and equitable if contributions pursuant to this Section 7.4 were determined
by pro rata allocation or by any other method of allocation which did not take
account of the equitable considerations referred to above. 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 is not
guilty of such fraudulent misrepresentation.
SECTION 7.5 Indemnification Payments. Periodic payments of amounts
required to be paid pursuant to this Article 7 shall be made during the course
of the investigation or defense, as and when reasonably itemized bills therefor
are delivered to the indemnifying party in respect of any particular Loss as
incurred.
SECTION 7.6 Remedies. The remedies provided in this Article 7 are
not exclusive and should not limit any right or remedies that may otherwise be
available to an indemnified party at law or in equity.
ARTICLE 8. EXPENSES
The Companies agree to bear and to pay or cause to be paid promptly upon
request being made therefor all expenses incident to the Companies' performance
of or compliance with this Agreement, including, without limitation, (a) all
Commission and any NASD registration and filing fees and expenses, (b) all fees
and expenses in connection with the registration or qualification of the
Registrable Securities for offering and sale under the state securities and
"Blue Sky" laws and determination of their eligibility for investment under the
laws of such United States jurisdictions as the Holders or underwriters, if any,
of such Registrable Securities may designate, including reasonable fees and
disbursements, if any, of counsel for the selling holders or underwriters in
connection with such registrations or qualifications and determination, (c) all
expenses relating to the preparation, printing, distribution
14
and reproduction of the registration statement required to be filed hereunder,
each prospectus included therein or prepared for distribution pursuant hereto,
each amendment or supplement to the foregoing, the expenses of preparing the
Registrable Securities for delivery and the expenses of printing or producing
any underwriting agreement(s), agreement(s) among underwriters and "Blue Sky" or
legal investment memoranda, any selling agreements and all other documents in
connection with the offering, sale or delivery of Registrable Securities to be
disposed of (including certificates representing the Registrable Securities),
(d) the Companies' messenger, telephone and delivery expenses, (e) fees and
expenses of any trustee under any indenture, any transfer agent and registrar
with respect to the Registrable Securities and any escrow agent, custodian,
administrative agent or security agent, (f) internal expenses (including,
without limitation, all salaries and expenses of the Companies' officers and
employees performing legal or accounting duties), (g) fees, disbursements and
expenses of counsel and independent certified public accountants of the
Companies (including the expenses of any opinions or "comfort" letters required
by or incident to such performance and compliance), (h) fees, disbursements and
expenses of any "qualified independent underwriter" required by the NASD Rules
in connection with any underwriting arrangements, (i) fees, disbursements and
expenses of one counsel for the Holders of Registrable Securities retained in
connection with such registration, as selected by the Holders of at least 50% in
aggregate principal amount or number, as the case may be, of the outstanding
Registrable Securities being registered, (j) fees, expenses and disbursements of
any other persons, including special experts, retained by the Companies in
connection with such registration, (k) all fees and expenses incurred in
connection with the qualification of the shares of Registrable Common Stock for
quotation on The Nasdaq National Market, or the listing of such shares on any
securities exchange, and (l) all expenses in connection with its performance of
its obligations under Section 6.1 (collectively, the "Registration Expenses").
To the extent that any Registration Expenses are incurred, assumed or paid by
any Holder of Registrable Securities or any underwriter thereof, the Companies
shall reimburse such person for the full amount of the Registration Expenses so
incurred, assumed or paid promptly after receipt of a request therefor.
Notwithstanding the foregoing, the Holders of the Registrable Securities being
registered shall pay all agency fees and commissions and underwriting discounts
and commissions attributable to the sale of such Registrable Securities and the
fees and disbursements of any counsel or other advisors or experts retained by
such holders (severally or jointly), other than the counsel and experts
specifically referred to above.
15
ARTICLE 9. CURRENT PUBLIC INFORMATION
The Companies shall timely file all reports required to be filed by it
under the Securities Act and the Exchange Act and shall at all times comply with
the requirements of Rule 144(c) under the Securities Act, as such Rule may be
amended from time to time (or any similar rule or regulation hereafter adopted
by the Commission), regarding the availability of current public information to
the extent required to enable any Holder to sell Registrable Securities without
registration under the Securities Act pursuant to the resale provisions of Rule
144 of the Securities Act (or any similar rule or regulation), and pursuant to
Form S-3 or any similar short form registration statement. Upon the request of
any Holder, the Companies will deliver to such Holder a written statement as to
whether it has complied with such requirements and, upon such Holder's
compliance with the applicable provisions of Rule 144 of the Securities Act,
will take such action as may be required (including, without limitation, causing
legal counsel to issue an appropriate opinion) to cause its transfer agent to
effectuate any transfer of Registrable Securities properly requested by such
Holder, in accordance with the terms and conditions of Rule 144 of the
Securities Act.
ARTICLE 10. SELECTION OF UNDERWRITERS
With respect to any offering of Registrable Securities pursuant to a
Demand Registration in the form of an underwritten offering, the Companies shall
select an investment banking firm of national standing to be lead underwriter
for the offering, which shall be reasonably acceptable to the Requesting Holders
of a majority by number and/or principal amount, as the case may be, of the
Registrable Securities participating in such registration, and such Holders may,
if they so elect, select an investment banking firm of national standing to be
co-lead underwriter, which shall be reasonably acceptable to the Companies. Any
additional co-lead underwriter shall be selected by the Companies.
ARTICLE 11. MISCELLANEOUS
SECTION 11.1 Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Agreement shall specify the Section of this
Agreement pursuant to which it is given or being made and shall be deemed
sufficiently given or made if in writing and signed by the party making the
same, and either delivered in person with receipt acknowledged or sent by
registered or certified mail, return receipt requested, postage prepaid, or by
telecopy and confirmed by telecopy answerback, addressed, if to any Holder, at
the address of such Holder as set forth on the signature pages hereto; and if to
any Company, in care of Pioneer at
Pioneer Companies, Inc.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxxxx, Esq.
Vice President,
General Counsel and Secretary
Telecopy Number: (000) 000-0000
16
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy Number: (000) 000-0000
and to:
Xxxxx Xxxxxxxxxx LLP
Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx, Esq.
Dev Sen, Esq.
Telecopy Number: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback or three Business Days after the same shall have been deposited in
the United States mail (by registered or certified mail, return receipt
requested, postage prepaid), whichever is earlier.
SECTION 11.2 Successors and Assigns. The rights and benefits of
Holders under this Agreement may not be assigned by any Holder (except that this
Agreement may be assigned by any Holder to a Permitted Assignee, whereupon such
Permitted Assignee shall be deemed to be an Holder for all purposes of this
Agreement) without the prior written consent of the Companies. This Agreement
shall be binding on all successors to the Companies and the Holders.
SECTION 11.3 Amendments and Waivers. This Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only by a
written instrument duly executed by the Companies and the holders of at least a
66-2/3% of the number of shares of Common Stock that are Registrable Securities
and the principal amount of the Notes that are Registrable Securities at the
time outstanding; provided, however, that no amendments may be made to (i) the
definition of "Holder" in respect of the ownership percentage required to be a
Holder, (ii) the first sentence of Section 2.1 in respect of the percentage of
Registrable Securities required to be included in a Demand Registration, (iii)
Section 7.1, or (iv) this Section 11.3, without the prior written consent of all
Holders of Registrable Securities. Each Holder of any Registrable Securities at
the time or thereafter outstanding shall be bound by any amendment or waiver
effected pursuant to this Section 11.3, whether or not any notice, writing or
marking indicating such amendment or wavier appears on such Registrable
Securities or is delivered to such Holder.
SECTION 11.4 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
SECTION 11.5 Headings. The headings used in this Agreement are for
the convenience of reference only and shall not, for any purpose, be deemed a
part of this Agreement.
SECTION 11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
EXCLUSIVELY BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO THE PROVISIONS THEREOF
17
RELATING TO CONFLICT OF LAWS.
SECTION 11.7 Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 11.8 Entire Agreement. This Agreement embodies the entire
agreement and understanding among the Companies and the Holders in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to the subject
matter of this Agreement.
SECTION 11.9 Specific Performance. The parties hereto acknowledge and
agree that the Holders would not have adequate remedies at law and would be
irreparably harmed if any of the provisions of this Agreement were not performed
by the Companies in accordance with the specific terms hereof or were otherwise
breached, and that, in such case, it would be impossible to measure in money the
damages to such Holders. It is accordingly agreed that the Holders shall be
entitled to injunctive relief or the enforcement of other equitable remedies,
without bond or other security, to compel performance and to prevent breaches of
this Agreement and specifically to enforce the terms and provisions hereof, in
addition to any other remedy to which they may be entitled, at law or in equity.
SECTION 11.10 Further Assurances. Each of the Companies party hereto
shall execute such documents and perform such further acts as may be reasonably
required or desirable to carry out or to perform the provisions of this
Agreement.
SECTION 11.11 Agreement and Declaration of Trust. Copies of the
Agreement and Declaration of Trust of the Holders that are affiliates of Xxxxxx
Investments, LLC are on file with the Secretary of State of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed by
the Trustees of the Holder as Trustees and not individually, and that the
obligations of this instrument are not binding upon any of the Trustees, offices
or shareholders of the Holder individually but are binding only upon the assets
and property of the Holder.
18
IN, WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed and delivered as of the date first above
written.
PIONEER COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President, Secretary and
General Counsel
PCI CHEMICALS CANADA COMPANY/SOCIETE PCI
CHIMIE CANADA
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President, Secretary and
General Counsel
PIONEER AMERICAS LLC
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President and
General Counsel
