POLYMER GROUP, INC.
$200,000,000
8 3/4% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
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February 27, 1998
CHASE SECURITIES INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Polymer Group, Inc., a Delaware corporation, proposes to issue and sell
$200,000,000 aggregate principal amount of its 8 3/4% Senior Subordinated Notes
due 2008 (the "Notes"). The Notes will be issued pursuant to an Indenture to be
dated as of March 1, 1998 (the "Indenture") between the Company, the Guarantors
(as defined below) and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee (the
"Trustee"). The Notes will be unconditionally guaranteed on a senior
subordinated basis (the "Guarantees") by each of PGI Polymer, Inc., a Delaware
Corporation, PNA Corp., a North Carolina corporation, FNA Polymer Corp., a North
Carolina corporation, Fabrene Group, Inc., a Canadian nonresident organization,
Fabrene Corp., a Delaware corporation, Fabrene Group, L.L.C., a Delaware limited
liability company, FiberTech Group, Inc., a Delaware corporation, Technetics
Group, Inc., a Delaware corporation, FiberGol Corporation, a Delaware
corporation, Chicopee Holdings, Inc., a Delaware corporation, Chicopee, Inc., a
Delaware corporation, Chicopee Holdings, B.V., a Delaware Corporation, Dominion
Textile (USA) Inc., a Delaware corporation, Poly-Bond Inc., a Delaware
corporation, DomTex Industries Inc., a New York corporation and Loretex
Corporation, a New York corporation (collectively, the "Guarantors" and,
together with the Company, the "Issuers"), pursuant to the terms of the
Indenture. The Notes and the Guarantees are sometimes referred to herein
together as the "Securities." The Issuers hereby confirm their agreement with
Chase Securities Inc. ("CSI" or the "Initial Purchaser") concerning the purchase
of the Securities by the Initial Purchaser.
The Securities will be offered and sold to the Initial Purchaser
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions therefrom. The Company has
prepared a preliminary offering memoran-
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dum dated February 19, 1998 (the "Preliminary Offering Memorandum") and an
offering memorandum dated the date hereof (the "Final Offering Memorandum")
setting forth information concerning the Issuers and the Securities. Copies of
the Preliminary Offering Memorandum have been, and copies of the Final Offering
Memorandum will be, delivered by the Company to the Initial Purchaser pursuant
to the terms of this Agreement. Any references herein to the Preliminary
Offering Memorandum and the Final Offering Memorandum shall be deemed to include
the documents incorporated therein by reference and all amendments and
supplements thereto, unless otherwise noted. Each of the Issuers hereby confirms
that it has authorized the use of the Preliminary Offering Memorandum and the
Final Offering Memorandum in connection with the offering and resale of the
Securities by the Initial Purchaser in accordance with Section 2.
Holders of the Securities (including the Initial Purchaser and its
direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), pursuant to which the Issuers
will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior
subordinated notes of the Company (the "Exchange Notes") which are identical in
all material respects to the Notes and which are unconditionally guaranteed by
each of the Guarantors (except that the Exchange Securities will not contain
terms with respect to transfer restrictions) and (ii) under certain limited
circumstances, a shelf registration statement with respect to the resale of the
Securities pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").
The Securities are being offered in connection with the refinancing
(the "Refinancing") of approximately $150.9 million of the outstanding
indebtedness under the Company's existing credit facility, as amended on January
29, 1998 (the "Amended Credit Facility") and the acquisition of certain assets
and assumption of certain liabilities described in the Final Offering Memorandum
as the "Oriented Polymer Acquisition". The consummation of the Refinancing and
the Oriented Polymer Acquisition are referred to herein collectively as the
"Transaction." The net proceeds from the Offering will be used by the Company to
effect the Transaction and to pay related fees and expenses. If the Oriented
Polymer Acquisition is not consummated, the Company will apply the entire amount
of net proceeds from the Offering toward the Refinancing and general corporate
purposes.
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Final Offering Memorandum.
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1. Representations, Warranties and Agreements of the Issuers. Each of
the Issuers represents and warrants to, and agrees with, the Initial Purchaser
on and as of the date hereof and the Closing Date (as defined in Section 3)
that:
(a) The Final Offering Memorandum, as of its date, did not, and on the
Closing Date will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Issuers make no representation or
warranty as to information contained in or omitted from the Final Offering
Memorandum in reliance upon and in conformity with written information
relating to the Initial Purchaser furnished to the Company by or on behalf
of the Initial Purchaser expressly for use therein (the "Initial
Purchaser's Information").
(b) The Final Offering Memorandum, as of its respective date, contains
all of the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act; and the Securities
satisfy the eligibility requirements of Rule 144A(d)(3) under the
Securities Act.
(c) Assuming the accuracy of the representations and warranties of the
Initial Purchaser contained in Section 2 and its compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchaser and the offer,
resale and delivery of the Securities by the Initial Purchaser in the
manner contemplated by this Agreement and the Final Offering Memorandum, to
register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(d) The Company and each of the Subsidiaries (as defined in
paragraph (e) below) have been duly incorporated and are validly existing
as corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and are
in good standing as foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure
to so qualify or have such power or authority would not, singularly or in
the aggregate, have a material adverse effect on the financial condition,
results of operations or business prospects of the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect").
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(e) As of the dates set forth therein, the Company had the
authorized, issued and outstanding capitalization as set forth in the Final
Offering Memorandum under the heading "Capitalization"; all of the
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable. The
entities listed on Schedule I hereto are the only active subsidiaries,
direct and indirect, of the Company (collectively, the "Subsidiaries"). All
of the outstanding shares of capital stock of each Subsidiary have been
duly and validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear of any
lien, charge, encumbrance, security interest, restriction upon voting or
transfer or any other claim of any third party except for any such lien,
charges, encumbrances, security interests and restrictions existing under
or in connection with the Amended Credit Facility; and except as set forth
in the Final Offering Memorandum or incorporated therein by reference,
there were no material (i) options, warrants or other rights to purchase,
(ii) agreements or other obligations of the Company to issue or (iii) other
rights to convert any obligation into, or exchange any securities for,
shares of capital stock of or ownership interests in the Company or any of
the Subsidiaries outstanding.
(f) Each of the Issuers has all requisite corporate power and
authority to execute and deliver this Agreement, the Indenture, the
Registration Rights Agreement, the Notes (in the case of the Company) and
the Guarantees endorsed on the Notes (in the case of the Guarantors)
(collectively, the "Transaction Documents") and to perform its obligations
hereunder and thereunder; and all corporate action required to be taken by
each of the Issuers for the due and proper authorization, execution and
delivery of each of the Transaction Documents to which it is a party and
the consummation of the transactions contemplated thereby have been duly
and validly taken.
(g) This Agreement has been duly authorized, executed and delivered by
each of the Issuers and constitutes a valid and legally binding agreement
of each of the Issuers.
(h) The Registration Rights Agreement has been duly authorized by each
of the Issuers and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, will constitute a valid and legally
binding agreement of each of the Issuers, enforceable against each of the
Issuers in accordance with its terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and (ii) the
enforce-
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ability of rights to indemnification and contribution thereunder may be
limited by federal or state securities laws or regulations or the public
policy underlying such laws or regulations.
(i) The Indenture has been duly authorized by each of the Issuers and,
when duly executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a valid and legally binding agreement
of each of the Issuers, enforceable against each of the Issuers in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law.
(j) The Notes have been duly authorized by the Company and, when duly
executed, authenticated, issued and delivered as provided in the Indenture
and paid for as provided herein, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of
the Company entitled to the benefits of the Indenture, enforceable against
the Company in accordance with their terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(k) The Guarantees to be endorsed on the Notes have been duly
authorized by each of the Guarantors and, when duly executed by each of the
Guarantors and when the Notes are duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein,
will constitute valid and legally binding obligations of each of the
Guarantors entitled to the benefits of the Indenture, enforceable against
each of the Guarantors in accordance with their terms, except to the extent
that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
(l) The Exchange Notes have been duly authorized by the Company and,
when executed, authenticated, issued and delivered as provided in the
Indenture and the Registration Rights Agreement in exchange for the Notes,
will be duly and validly issued and outstanding and will constitute valid
and legally binding obligations of the Company entitled to the benefits of
the Indenture, enforceable against the Company in accordance with their
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, re-
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organization, moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law).
(m) The Guarantees to be endorsed on the Exchange Notes have been duly
authorized by each of the Guarantors and, when duly executed by each of the
Guarantors and when the Exchange Notes are duly executed, authenticated,
issued and delivered as provided in the Indenture and the Registration
Rights Agreement in exchange for the Notes, will constitute valid and
legally binding obligations of each of the Guarantors entitled to the
benefits of the Indenture, enforceable against each of the Guarantors in
accordance with their terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(n) Each Transaction Document conforms in all material respects to the
description thereof contained in the Final Offering Memorandum.
(o) The execution, delivery and performance by each of the Issuers of
each of the Transaction Documents to which it is a party, the issuance,
authentication, sale and delivery of the Securities and compliance by each
of the Issuers with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents and the Transaction
will not (i) conflict with or result in a breach or violation of any of the
terms or the provisions of, or constitute a default under, or, with notice
or lapse of time or both, constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of any of the Issuers pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other material agreement or instrument to which
any of the Issuers is a party or by which any of the Issuers is bound or to
which any of the property or assets of any of the Issuers is subject or
(ii) result in any violation of the provisions of (a) the charter or by-
laws of any of the Issuers or (b) any statute or any judgment, order,
decree, rule or regulation of any court or arbitrator or governmental
agency or body having jurisdiction over any of the Issuers or any of their
properties or assets, except, in the case of clause (i) above, for any such
events which would not, singularly or in the aggregate, have a Material
Adverse Effect or a material adverse effect on the ability of the Issuers
to enter into each of the Transaction Documents and consummate each of the
transactions contemplated thereby; and no consent, approval, authorization
or order of, or filing or registration with, any such court or arbitrator
or governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery
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and performance by each of the Issuers of each of the Transaction Documents
to which it is a party, the issuance, authentication, sale and delivery of
the Securities and compliance by each of the Issuers with the terms thereof
and the consummation of the transactions contemplated by the Transaction
Documents and the Transaction, except for such consents, approvals,
authorizations, filings, registrations or qualifications (a) which shall
have been obtained or made prior to the Closing Date, (b) as may be
required to be obtained or made under the Securities Act and applicable
state securities laws as provided in the Registration Rights Agreement and
(c) which would not, singularly or in the aggregate, have a Material
Adverse Effect.
(p) Each of Ernst & Young LLP and Deloitte & Touche, LLP, S.E.N.C. are
independent certified public accountants with respect to the Company and
its consolidated subsidiaries within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants ("AICPA") and its interpretations and rulings thereunder. The
historical financial statements (including the related notes) contained in
the Final Offering Memorandum comply in all material respects with the
requirements applicable to a registration statement on Form S-1 under the
Securities Act (except that certain supporting schedules are omitted); such
historical financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods covered thereby and fairly present the financial position of
the entities purported to be covered thereby at the respective dates
indicated and the results of their operations and their cash flows for the
respective periods indicated; and the financial information contained in
the Final Offering Memorandum under the headings "Summary -- Summary
Historical and Pro Forma Financial Data for the Company," "Capitalization,"
"Selected Consolidated Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" is derived from
the accounting records of the Company and the Subsidiaries and fairly
presents the information purported to be shown thereby. The pro forma
financial statements contained in the Final Offering Memorandum have been
prepared on a basis consistent with the historical financial statements
contained in the Final Offering Memorandum (except for the pro forma
adjustments specified therein), include all material adjustments to the
historical financial statements required by Rule 11-02 of Regulation S-X
under the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), to reflect the transactions described in the
Final Offering Memorandum, are based on assumptions made on a reasonable
basis and fairly present the historical and proposed transactions described
in the Final Offering Memorandum (including the transactions contemplated
by the Transaction Documents and the Transaction). The other historical
financial and statistical information
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and data included in the Final Offering Memorandum fairly presents, in all
material respects, the information purported to be shown thereby.
(q) There are no legal or governmental proceedings pending to which
the Company or any of the Subsidiaries is a party or of which any property
or assets of the Company or any of the Subsidiaries is the subject which,
singularly or in the aggregate, if determined adversely to the Company or
any of the Subsidiaries, could reasonably be expected to have a Material
Adverse Effect or; which could reasonably be expected to prevent or
adversely affect the issuance of the Securities or challenge the validity
or enforceability of any of the Transaction Documents or any action taken
or to be taken pursuant to the Transaction and the Transaction Documents;
and to the best knowledge of the Company, no such proceedings are overtly
threatened by governmental authorities or threatened by others.
(r) Neither the Company nor any of the Subsidiaries is (i) in
violation of its charter or by-laws, (ii) in default, and no event has
occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party
or by which it is bound or to which any of its property or assets is
subject except for any such default which would not, singly or in the
aggregate with all other such defaults, have a Material Adverse Effect or
(iii) in violation in any material respect of any law, ordinance,
governmental rule, regulation, order, judgment or decree to which it or its
property or assets may be subject.
(s) The Company and each of the Subsidiaries possess all material
licenses, certificates, authorizations and permits issued by, and have made
all declarations and filings with, the appropriate federal, state, local or
foreign regulatory agencies or bodies which are necessary or desirable for
the ownership of their respective properties or the conduct of their
respective businesses as described in the Final Offering Memorandum, except
where the failure to possess or make the same would not, singularly or in
the aggregate, have a Material Adverse Effect, and neither the Company nor
any of the Subsidiaries has received notification of any revocation or
modification of any such license, certificate, authorization or permit or
has any reason to believe that any such license, certificate, authorization
or permit will not be renewed in the ordinary course.
(t) Neither the Company nor any of the Subsidiaries is an "investment
company" or a company "controlled by" an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act"), and the rules and regulations of the Commission thereunder.
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(u) The Company and each of the Subsidiaries maintain reasonably
adequate insurance covering their respective properties, operations,
personnel and businesses.
(v) The Company and each of the Subsidiaries own or possess or can
acquire on reasonable terms, adequate rights to use all material patents,
patent applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses and know-
how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) materially
necessary for the conduct of their respective businesses; and the Company
and the Subsidiaries have not received any notice of any infringement of or
claim or conflict with, any such rights of others except for any such
infringement, claim or conflict which would not, singly or in the aggregate
with all other such defaults, have a Material Adverse Effect.
(w) The Company and each of the Subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use, all
items of real property described as being owned by them in the Final
Offering Memorandum, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title other than (i)
liens, encumbrances and claims securing the Amended Credit Facility or (ii)
liens, encumbrances, claims and defects and imperfections of title that (a)
are described in the Final Offering Memorandum or (b) do not materially
interfere with the use made of such property or could not reasonably be
expected to have a Material Adverse Effect.
(x) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan of the Company or any of the Subsidiaries, or any
entity that together with the Company or any Subsidiary is treated as a
single employer under Section 414 (b), (c), (m) or (e) of the Code, which
could reasonably be expected to have a Material Adverse Effect; each such
employee benefit plan is in compliance in all material respects with
applicable law, including ERISA and the Code; the Company and each of the
Subsidiaries have not incurred and do not expect to incur material
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any pension plan for which the Company or any of the
Subsidiaries would have any liability; and each such pension
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plan that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which could reasonably be expected to cause
the loss of such qualification.
(y) Except as would not individually or in the aggregate have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and the
Subsidiaries, considered as one enterprise, (A) each of the Company and
each Subsidiary is in material compliance with all applicable Environmental
Laws, (B) each of the Company and each Subsidiary has all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or, to the knowledge of the Company, threatened Environmental
Claims against the Company or any Subsidiary, and (D) there are no
conditions with respect to any property or operations of the Company or any
Subsidiary that could reasonably be anticipated to form the basis of an
Environmental Claim against the Company or any Subsidiary.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or
Canadian, Mexican, Argentine, German, Dutch, French or other applicable
jurisdiction's) federal, state, provincial, local or municipal statute,
law, rule, regulation, ordinance, code, policy or rule of common law and
any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, relating to
the environment, health, safety or any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority. "Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigations or proceedings
relating in any way to any Environmental Law.
(z) No part of the proceeds of the sale of the Securities will be used
for any purpose that violates the provisions or any of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board of Governors.
(aa) The statistical and market-related data included in the Final
Offering Memorandum are based on or derived from sources which the Issuers
believe to be reliable.
(bb) Assuming the accuracy of the representations and warranties of
the Initial Purchaser contained in Section 2 and its compliance with the
agreements set
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forth therein, none of the Issuers nor any of their respective affiliates
(as defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")) ("Affiliates") has, directly or through any authorized
agent, (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as such term is defined in the
Securities Act), which is or will be integrated with the sale of the
Securities in a manner that would require registration of the Securities
under the Securities Act, (ii) engaged, in connection with the offering of
the Securities, in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or has solicited
offers for, or has offered and sold, the Securities in any manner involving
a public offering within the meaning of Section 4(2) of the Securities Act
or (iii) with respect to Securities sold outside the United States to non-
U.S. persons (as defined in Rule 902 under the Securities Act), engaged in
any "directed selling efforts" within the meaning of Rule 902 under the
Securities Act and the Issuers, their affiliates and any person acting on
their behalf has complied with and will implement the "offering
restriction" within the meaning of such Rule 902.
(cc) Other than the Common Stock of the Company listed on the New York
Stock Exchange under the symbol "PGH," there are no securities of any
Issuer registered under the Exchange Act, listed on a national securities
exchange or quoted in a U.S. automated inter-dealer quotation system.
(dd) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act in
connection with the offering of the Securities.
(ee) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Final Offering Memorandum has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith.
(ff) Since the date as of which information is given in the Final
Offering Memorandum, except as otherwise expressly stated therein, (i)
there has been no material adverse change or any development involving a
prospective material adverse change in the financial condition, or in the
results of operations or business prospects of the Company and the
Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, (ii) neither the Company nor any Subsidiary has entered
into any material transaction other than in the ordinary course of business
and (iii) there has not been any change in the long-term debt of the
Company and the Subsidiaries (other than borrowings under the Amended
Credit Facility).
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2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Issuers agree to issue and sell to
the Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, the entire principal amount of Notes (including the Guarantees thereof)
at a purchase price equal to 97.5% of the principal amount thereof. The Company
shall not be obligated to deliver any of the Securities except upon payment for
all of the Securities to be purchased as provided herein.
(b) The Initial Purchaser has advised the Issuers that it proposes to
offer the Securities for resale upon the terms and subject to the conditions set
forth herein and in the Final Offering Memorandum. The Initial Purchaser
represents and warrants to, and agrees with, the Issuers that (i) it is
purchasing the Securities pursuant to a private sale exempt from registration
under the Securities Act, (ii) it has not solicited offers for, or offered or
sold, and will not solicit offers for, or offer or sell, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D under the Securities Act or in any manner involving
a public offering within the meaning of Section 4(2) of the Securities Act and
(iii) it has solicited and will solicit offers for the Securities only from, and
has offered or sold and will offer, sell or deliver the Securities, as part of
its initial offering, only (A) within the United States to persons whom it
reasonably believes to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act (as such
rule may be amended from time to time, "Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and, in each case,
in transactions in accordance with Rule 144A and (B) outside the United States
to persons other than U.S. persons in reliance on Regulation S under the
Securities Act ("Regulation S").
(c) In connection with the offer and sale of Securities in reliance on
Regulation S, the Initial Purchaser represents, warrants and agrees that:
(i) The Securities have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except pursuant to an exemption from,
or in transactions not subject to, the registration requirements of the
Securities Act.
(ii) Such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of their distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Securities and
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the Closing Date, only in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the Securities Act.
(iii) Neither the Initial Purchaser nor any of its affiliates or any
other person acting on its behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and all such
persons have complied and will comply with the offering restrictions
requirement of Regulation S.
(iv) at or prior to the confirmation of sale of any Securities sold in
reliance on Regulation S, it will have sent to each distributor, dealer or
other person receiving a selling concession, fee or other remuneration that
purchase Securities from it during the restricted period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the date of
original issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
(v) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the
Company.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) The Initial Purchaser represents, warrants and agrees that (i) it
has not offered or sold and prior to the date six months after the Closing Date
will not offer or sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services ▇▇▇ ▇▇▇▇ and the
Public Offers of Securities Regulations 1995 with respect to anything done by it
in relation to the Securities in, from or otherwise involving the United
Kingdom; and (iii) it has only issued or passed on and will only issue or pass
on in the United Kingdom any document received by
-14-
it in connection with the issue of the Securities to a person who is of a kind
described in Article 11(3) of the Financial Services ▇▇▇ ▇▇▇▇ (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(e) The Initial Purchaser agrees that, prior to or simultaneously with
the confirmation of sale by such Initial Purchaser to any purchaser of any of
the Securities purchased by such Initial Purchaser from the Issuers pursuant
hereto, such Initial Purchaser shall furnish to that purchaser a copy of the
Final Offering Memorandum (and any amendment or supplement thereto that the
Issuers shall have furnished to such Initial Purchaser prior to the date of such
confirmation of sale). In addition to the foregoing, the Initial Purchaser
acknowledges and agrees that the Issuers and, for purposes of the opinions to be
delivered to the Initial Purchaser pursuant to Sections 5(d) and (e), counsel
for the Issuers and for the Initial Purchaser, respectively, may rely upon the
accuracy of the representations and warranties of the Initial Purchaser and its
compliance with its agreements contained in this Section 2, and the Initial
Purchaser hereby consents to such reliance.
(f) The Issuers acknowledge and agree that the Initial Purchaser may
sell Securities to any affiliate of the Initial Purchaser and that any such
affiliate may sell Securities purchased by it to the Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, New York, New York, or at such other place as shall be agreed upon by
the Initial Purchaser and the Company, at 10:00 A.M., New York City time, on
March 5, 1998, or at such other time or date, not later than seven full business
days thereafter, as shall be agreed upon by the Initial Purchaser and the
Company (such date and time of payment and delivery being referred to herein as
the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of same-
day funds to such account or accounts as the Company shall specify prior to the
Closing Date or by such other means as the parties hereto shall agree prior to
the Closing Date against delivery to the Initial Purchaser of the certificates
evidencing the Securities. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligations of the Initial Purchaser hereunder. Upon delivery, the
Securities shall be in global form, registered in such names and in such
denominations as the Initial Purchaser shall have requested in writing not less
than two full business days prior to the Closing Date. The Issuers agree to make
one or more global certificates evidencing the Securities available for
inspection by the Initial Purchaser in New York, New York at least 24 hours
prior to the Closing Date.
-15-
4. Further Agreements of the Company. Each of the Issuers agrees with
the Initial Purchaser:
(a) to advise the Initial Purchaser promptly and, if requested,
confirm such advice in writing, of the happening of any event which makes
any statement of a material fact made in the Final Offering Memorandum
untrue and which requires the making of any additions to or changes in the
Final Offering Memorandum (as amended or supplemented from time to time) in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; to advise the Initial Purchaser
promptly upon receipt of any order preventing or suspending the use of the
Preliminary Offering Memorandum or the Final Offering Memorandum, of any
suspension of the qualification of the Securities for offering or sale in
any jurisdiction and of the initiation or threatening of any proceeding for
any such purpose; and to use its best efforts to prevent the issuance of
any such order preventing or suspending the use of the Preliminary Offering
Memorandum or the Final Offering Memorandum or suspending any such
qualification and, if any such suspension is issued, to obtain the lifting
thereof at the earliest possible time;
(b) to furnish promptly to the Initial Purchaser and counsel for the
Initial Purchaser, without charge, as many copies of the Preliminary
Offering Memorandum and the Final Offering Memorandum (and any amendments
or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the Final Offering
Memorandum, to furnish a copy thereof to the Initial Purchaser and counsel
for the Initial Purchaser and not to effect any such amendment or
supplement to which the Initial Purchaser shall reasonably object by notice
to the Company after a reasonable period to review unless the Company is
advised by counsel that such amendment or supplement is legally required;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchaser, any event shall occur, information
shall become known or condition shall exist as a result of which it is
necessary, in the reasonable opinion of counsel for the Initial Purchaser
or counsel for the Issuers, to amend or supplement the Final Offering
Memorandum in order that the Final Offering Memorandum will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Final Offering
Memorandum to comply with applicable law, to promptly prepare (subject to
Section 4(c) above) such amendment or supplement as may be necessary to
correct such untrue statement or omission or so that
-16-
the Final Offering Memorandum, as so amended or supplemented, will comply
with applicable law;
(e) for so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to furnish to holders of the Securities, upon request of such holders, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement being
for the benefit of the holders from time to time of the Securities and
prospective purchasers of the Securities designated by such holders);
(f) for a period of two years following the Closing Date, to furnish
to the Initial Purchaser copies of any annual reports, quarterly reports
and current reports filed by any Issuer with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall be
furnished by the Company to the Trustee or to the holders of the Securities
pursuant to the Indenture or the Exchange Act or any rule or regulation of
the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchaser may reasonably request to qualify the Securities for offering and
sale under the state securities or Blue Sky laws of such jurisdictions as
the Initial Purchaser may designate and to continue such qualifications in
effect for so long as required for the resale of the Securities; provided,
however, that the Issuers shall not be obligated to qualify as foreign
corporations in any jurisdiction in which they are not so qualified or to
file a general consent to service of process in any jurisdiction or to
subject themselves to the payment of taxes in excess of a nominal amount in
any jurisdiction in which they are not so subject;
(h) to assist the Initial Purchaser in arranging for the Securities
to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market and for the Securities to
be eligible for clearance and settlement through The Depository Trust
Company ("DTC");
(i) not to, and to cause its Affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) which could be integrated
with the sale of the Securities
-17-
in a manner which would require registration of the Securities under the
Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may
be, not to, and to cause its Affiliates not to, and not to authorize or
knowingly permit any person acting on their behalf to, solicit any offer to
buy or offer to sell the Securities by means of any form of general
solicitation or general advertising within the meaning of Regulation D or
in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act; and not to offer, sell, contract to sell or
otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, contract or disposition would cause
the exemption afforded by Section 4(2) of the Securities Act to cease to be
applicable to the offering and sale of the Securities as contemplated by
this Agreement and the Final Offering Memorandum;
(k) for a period of 60 days from the date of the Final Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement for,
or announce any offer, sale, contract for sale of or other disposition of
any debt securities issued or guaranteed by any of the Issuers (other than
the Securities) without the prior written consent of the Initial Purchaser
other than debt incurred under the Amended Credit Facility, the Exchange
Securities, any Private Exchange Securities, if any and debt incurred in
the ordinary course of business;
(l) until consummation of the Exchange Offer, without the prior
written consent of the Initial Purchaser, not to, and not permit any of its
Affiliates to, resell any of the Securities that have been reacquired by
them, except for Securities purchased by any of the Issuers or any of their
respective Affiliates and resold in a transaction registered under the
Securities Act;
(m) in connection with the offering of the Securities, until the
Initial Purchaser shall have notified the Company of the completion of the
resale of the Securities, not to, and to cause its affiliated purchasers
(as defined in Regulation M under the Exchange Act) not to, either alone or
with one or more other persons, bid for or purchase, for any account in
which it or any of its affiliated purchasers has a beneficial interest, any
Securities, or attempt to induce any person to purchase any Securities; and
not to, and to cause its affiliated purchasers not to, make bids or
purchase for the purpose of creating actual, or apparent, active trading in
or of raising the price of the Securities;
-18-
(n) to do and perform all things required to be done and performed by
it under this Agreement and the Registration Rights Agreement that are
within its control prior to or after the Closing Date, and to use its best
efforts to satisfy all conditions precedent on its part to the delivery of
the Securities;
(o) prior to the Closing Date, not to issue any press release or
other communication directly or indirectly or hold any press conference
with respect to any Issuer, its condition, financial or otherwise, or
earnings, business affairs or business prospects (except for routine
communications in the ordinary course of business and consistent with the
past practices of such Issuer), without the prior written consent of the
Initial Purchaser, unless in the judgment of such Issuer and its counsel,
and after notification to the Initial Purchaser, such press release or
communication is reasonably necessary or advisable; and
(p) to apply the net proceeds from the sale of the Securities as set
forth in the Final Offering Memorandum under the heading "Use of Proceeds."
5. Conditions of Initial Purchaser's Obligations. The respective
obligations of the Initial Purchaser hereunder are subject to the accuracy, on
and as of the date hereof and the Closing Date, of the representations and
warranties of each of the Issuers contained herein, to the accuracy of the
statements of each of the Issuers and their respective officers made in any
certificates delivered pursuant hereto, to the performance by each of the
Issuers of its respective obligations hereunder and to each of the following
additional terms and conditions:
(a) The Final Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchaser as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchaser
may agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(b) The Initial Purchaser shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Final Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which, in the written opinion of counsel for the
Initial Purchaser, is material or omits to state any fact which, in the
written opinion of such counsel, is material or is necessary to make the
statements therein not misleading.
-19-
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Final Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby and the
Transaction (including any agreements or documents executed and delivered
in connection therewith), shall be reasonably satisfactory in all material
respects to the Initial Purchaser, and the Issuers shall have furnished to
the Initial Purchaser all documents and information that they or its
counsel may reasonably request to enable them to pass upon such matters.
(d) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the Initial Purchaser
their written opinion, as counsel to the Issuers, addressed to the Initial
Purchaser and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser, substantially to the effect set
forth in Annex B hereto.
(e) The Initial Purchaser shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Initial Purchaser, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Initial Purchaser may
reasonably require, and the Issuers shall have furnished to such counsel
such documents and information as they request for the purpose of enabling
them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchaser letters
(the "Initial Letters") of Ernst & Young LLP and Deloitte & Touche, LLP,
S.E.N.C., addressed to the Initial Purchaser and dated the date hereof, in
form and substance previously approved by the Initial Purchaser and counsel
for the Initial Purchaser.
(g) The Company shall have furnished to the Initial Purchaser letters
(the "Bring-Down Letters") of Ernst & Young LLP and Deloitte & Touche, LLP,
S.E.N.C., addressed to the Initial Purchaser and dated the Closing Date, in
form and substance reasonably satisfactory to the Initial Purchaser and
counsel for the Initial Purchaser.
(h) The Company shall have furnished to the Initial Purchaser a
certificate, dated the Closing Date, of its chief executive officer and its
chief financial officer stating that (A) such officers have carefully
examined the Final Offering Memorandum and (B) as of the Closing Date, the
representations and warranties of such Issuer in this Agreement are true
and correct in all material respects, such Issuer has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder on or prior to the Closing Date, and subsequent to the
date of the most recent financial statements contained in the Final
Offering Memorandum, there has been no material adverse change in the
financial position or
-20-
results of operations of the Company and the Subsidiaries, taken as a
whole, except as expressly set forth in the Final Offering Memorandum.
(i) The Initial Purchaser shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of each of the Issuers.
(j) The Indenture shall have been duly executed and delivered by each
of Issuers and the Trustee, and the Notes shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee and the
Guaranty of each Guarantor shall have been duly endorsed thereon.
(k) The Notes shall have been approved by the NASD for trading in the
PORTAL Market.
(l) If any event shall have occurred that requires the Issuers under
Section 4(d) to prepare an amendment or supplement to the Final Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchaser shall have been given a reasonable opportunity to comment
thereon, and copies thereof shall have been delivered to the Initial
Purchaser reasonably in advance of the Closing Date.
(m) There shall not have occurred any invalidation of Rule 144A under
the Securities Act by any court or any withdrawal or proposed withdrawal of
any rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the reasonable judgment of the Initial Purchaser would materially
and adversely impair the ability of the Initial Purchaser to purchase, hold
or effect resales of the Securities as contemplated hereby.
(n) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Final Offering
Memorandum (exclusive of any amendment or supplement thereto), other than
as contemplated by the Transaction and expressly described in the Final
Offering Memorandum, there shall not have been any decrease in the capital
stock or increase in the long-term debt (other than borrowings under the
Amended Credit Facility) or any change, or any development involving a
prospective change, in or affecting the financial condition, results of
operations or business prospects of the Company and the Subsidiaries taken
as a whole, the effect of which, in any such case described above, is, in
the reasonable judgment of the Initial Purchaser, so material and adverse
as to make it impracticable or inadvisable to proceed with the sale or
delivery
-21-
of the Securities on the terms and in the manner contemplated in this
Agreement and the Final Offering Memorandum (exclusive of any amendment or
supplement thereto).
(o) No action shall have been taken by and no statute, rule,
regulation or order shall have been enacted, adopted or issued by, any
governmental agency or body which would, as of the Closing Date, prevent
the issuance, sale or resale of the Securities in the manner contemplated
by the Final Offering Memorandum; and no injunction, restraining order or
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance, sale or resale of the Securities in the manner
contemplated by the Final Offering Memorandum.
(p) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Notes or any of
the Company's other debt securities or preferred stock by any "nationally
recognized statistical rating organization", as such term is defined by the
Commission for purposes of Rule 436(g)(2) of the rules and regulations of
the Commission under the Securities Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review (other
than an announcement with positive implications of a possible upgrading),
its rating of the Notes or any of the Company's other debt securities or
preferred stock.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any securities of
the Company on any exchange or in the over-the-counter market shall have
been suspended or (ii) any moratorium on commercial banking activities
shall have been declared by federal or New York state authorities or (iii)
an outbreak or escalation of hostilities or a declaration by the United
States of a national emergency or war or (iv) a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) the effect of which, in the case of clauses (iii) and (iv),
is, in the reasonable judgment of the Initial Purchaser, so material and
adverse as to make it impracticable or inadvisable to proceed with the sale
or the delivery of the Securities on the terms and in the manner
contemplated in this Agreement and in the Final Offering Memorandum
(exclusive of any amendment or supplement thereto).
-22-
(r) Each of the components of the Transaction shall have been
consummated on the Closing Date.
(s) The Company shall have entered into the Amended Credit Facility
and the Initial Purchaser shall have received a conformed copy thereof.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchaser.
6. Termination. The obligations of the Initial Purchaser hereunder
may be terminated by the Initial Purchaser, in its absolute discretion, by
notice given to and received by the Company prior to delivery of and payment for
the Securities if, prior to that time, any of the events described in Section
5(m), (n), (o), (p) or (q) shall have occurred and be continuing.
7. Reimbursement of Initial Purchaser's Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6 (except in the case
of a failure of the Condition specified in Section 5(q)), (b) the Issuers shall
fail to tender the Securities for delivery to the Initial Purchaser for any
reason permitted under this Agreement or (c) the Initial Purchaser shall decline
to purchase the Securities for any reason permitted under this Agreement, the
Issuers, jointly and severally, shall reimburse the Initial Purchaser for such
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
as shall have been reasonably incurred by the Initial Purchaser in connection
with this Agreement and the proposed purchase and resale of the Securities.
8. Indemnification. (a) Each of the Issuers, jointly and severally,
shall indemnify and hold harmless the Initial Purchaser, its respective
affiliates, its respective officers, directors, employees, representatives and
agents, and each person, if any, who controls any Initial Purchaser within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively referred to for purposes of this Section 8(a) and Section 9 as an
"Initial Purchaser"), from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, without
limitation, any loss, claim, damage, liability or action relating to purchases
and sales of the Securities), to which such Initial Purchaser may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Final
Offering Memorandum or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of
-23-
the circumstances under which they were made, not misleading, and shall
reimburse the Initial Purchaser promptly upon demand for any legal or other
expenses reasonably incurred by the Initial Purchaser in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Issuers
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Initial Purchaser's
Information; provided, further, however, that with respect to any such untrue
statement in or omission from the Preliminary Offering Memorandum, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of the
Initial Purchaser to the extent that the sale to the person asserting any such
loss, claim, damage, liability or action was an initial resale by the Initial
Purchaser and any such loss, claim, damage, liability or action of or with
respect to the Initial Purchaser results from the fact that both (A) to the
extent required by applicable law, a copy of the Final Offering Memorandum was
not sent or given to such person at or prior to the written confirmation of the
sale of such Securities to such person and (B) the untrue statement in or
omission from the Preliminary Offering Memorandum was corrected in the Final
Offering Memorandum, unless, in either case, such failure to deliver the Final
Offering Memorandum was a result of non-compliance by the Issuers with Section
4(b).
(b) The Initial Purchaser shall indemnify and hold harmless each of
the Issuers, their respective affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls any
Issuer within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act (collectively referred to for purposes of this Section 9(b) and
Section 10 as the "Issuers"), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Issuers may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Final Offering Memorandum or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
any Initial Purchaser's Information, and shall reimburse the Issuers promptly
upon demand for any legal or other expenses reasonably incurred by the Issuers
in connection with investigating or defending or preparing to defend
-24-
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying
party in writing such claim or the commencement of such action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 8 except to the extent
that the indemnifying party was otherwise unaware of such claim or the
commencement of such action and it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; provided,
further, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based upon advice of counsel
to the indemnified party) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based upon advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified party or parties. Each
-25-
indemnified party, as a condition of the indemnity agreements contained in
Sections 8(a) and 8(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim.
No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
immediately preceding sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for the fees,
disbursements and other charges of counsel as contemplated by the third sentence
of this paragraph (c), the indemnifying party agrees that it shall be liable for
any settlement of any action without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such indemnifying party of
the aforesaid request for reimbursement and (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement; provided, however, that such indemnifying party
shall not be liable for any settlement effected without its consent pursuant to
this sentence if such indemnifying party is contesting such request for
reimbursement. No indemnifying party shall, without the prior written consent
of the indemnified party (which consent shall not be unreasonably withheld),
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party in form and
substance satisfactory to such indemnified party from all liability on claims
that are the subject matter of such proceeding.
The obligations of the Issuers and the Initial Purchaser in this
Section 8 and in Section 9 are in addition to any other liability that the
Issuers or the Initial Purchaser, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
9. Contribution. If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b), 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 loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Issuers on the one hand and the Initial Purchaser on
the other from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law or if the indemnified
party failed to give notice as required in Section 8(c) above, in such
proportion as is appropriate to reflect
-26-
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Issuers on the one hand and the Initial Purchaser on the
other with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault 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 any Issuer or information supplied by any Issuer on the one hand or
to any Initial Purchaser's Information on the other, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission, and any other equitable
considerations appropriate in the circumstances.
The Issuers and the Initial Purchaser agree that it would not be just
and equitable if contributions pursuant to this Section 9 were to be determined
by pro rata allocation (even if the Initial Purchaser were treated as one entity
for such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 9
shall be deemed to include, for purposes of this Section 9, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be
required to contribute any amount in excess of the amount by which the price at
which the aggregate amount of the Securities sold by the Initial Purchaser
exceeds the amount of any damages which such Initial Purchaser has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchaser and each of
the Issuers and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 8 and 9 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Issuers and
the Initial Purchaser and in Section 4(e) with respect to holders and
prospective purchasers of the Securities. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in
this Section 10, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
11. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Issuers, jointly
and sev-
-27-
erally, agree with the Initial Purchaser to pay (a) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and
any taxes payable in that connection; (b) the costs incident to the preparation,
printing and distribution of the Preliminary Offering Memorandum, the Final
Offering Memorandum and any amendments or supplements thereto; (c) the costs of
reproducing and distributing each of the Transaction Documents; (d) the costs
incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (e) the fees and expenses of the
Issuers' counsel and independent accountants; (f) the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
as provided in Section 4(g) and of preparing, printing and distributing Blue Sky
memoranda; (g) any fees charged by rating agencies for rating the Securities;
(h) the fees and expenses of the Trustee and any paying agent (including related
fees and expenses of any counsel to such parties); (i) all expenses and
application fees incurred in connection with the application for the inclusion
of the Notes on the PORTAL Market and the approval of the Notes for book-entry
transfer by DTC; and (j) all other costs and expenses incident to the
performance of the obligations of the Issuers under this Agreement which are not
otherwise specifically provided for in this Section 11; provided, however, that
except as expressly provided in this Section 11, the Initial Purchaser shall pay
its own costs and expenses (including, without limitation, fees and expenses of
counsel for the Initial Purchaser).
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Issuers and the Initial
Purchaser contained in this Agreement or made by or on behalf of the Issuers or
the Initial Purchaser pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by mail
or telecopy transmission to Chase Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇▇▇▇ (telecopier no.: (212) 270-
0994); or
(b) if to the Issuers, shall be delivered or sent by mail or telecopy
transmission to the address of the Company set forth in the Offering
Memorandum, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ (telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇);
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provided, however, that any notice to an Initial Purchaser pursuant to Section
8(c) shall also be delivered or sent by mail to such Initial Purchaser at its
address set forth on the signature page hereof. Any such statements, requests,
notices or agreements shall take effect at the time of receipt thereof.
14. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading and (b) except where otherwise expressly provided, the term
"affiliate" has the meaning set forth in Rule 405 under the Securities Act.
15. Initial Purchaser's Information. The parties hereto acknowledge
and agree that for all purposes of this Agreement (including, but not limited
to, Section 1(a), Section 8 and Section 9) the Initial Purchaser's Information
consists solely of the following information in the Preliminary Offering
Memorandum and the Final Offering Memorandum: (i) the last paragraph on the
front cover page concerning the terms of the offering by the Initial Purchaser;
(ii) the first paragraph on page "i" concerning stabilization activities by the
Initial Purchaser; and (iii) the statements concerning the Initial Purchaser
contained in the third paragraph, the third and fourth sentences in the fourth
paragraph, the seventh and eighth paragraphs and the first sentence of the ninth
paragraph under the heading "Plan of Distribution."
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
17. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
18. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature Pages Follow]
S-1
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between each of the Issuers and the
Initial Purchaser in accordance with its terms.
Very truly yours,
POLYMER GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
PGI POLYMER, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
PNA CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
FNA POLYMER CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
FABRENE GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
S-2
FABRENE CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
FABRENE GROUP, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
FIBERTECH GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
TECHNETICS GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
FIBERGOL CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
S-3
CHICOPEE HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
CHICOPEE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
DOMINION TEXTILE (USA) INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
POLY-BOND INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
DOMTEX INDUSTRIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
LORETEX CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
S-4
Accepted:
CHASE SECURITIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------
Authorized Signatory
S-5
Address for notices pursuant to Section 8(c):
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
SCHEDULE I
----------
Subsidiaries
------------
Albuma S.A.
Bonlam, S.A. de C.V.
Chicopee Holdings, B.V.
Chicopee Holdings, Inc.
Chicopee, Inc.
Chicopee, B.V.
DIFCO Inc. (formerly 3427790 Canada Limited)
Dominion Textile France S.A.R.L.
Dominion Textile Mauritius Inc.
Dominion Textile (USA) Inc.
DomTex Industries Inc.
DT Acquisition Inc.
Fabrene Corp.
Fabrene Group, Inc.
Fabrene, Inc.
Fabrene Group, L.L.C.
FiberGol Corporation
FiberTech Group, Inc.
FNA Polymer Corp.
Geca Tapes B.V.
Nordlys S.A.
Nordlys UK Ltd.
PGI Polymer, Inc.
Poly-Bond Inc.
PNA Corp.
Technetics Group, Inc.
ANNEX A
-------
[Form of Registration Rights Agreement]
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is dated as of
March , 1998, by and among POLYMER GROUP, INC., a Delaware corporation (the
"Company"), PGI Polymer, Inc., a Delaware corporation, PNA Corp., a North
Carolina corporation, FNA Polymer Corp., a North Carolina corporation, Fabrene
Group, Inc., a Canadian corporation, Fabrene Corp., a Delaware corporation,
Fabrene Group, L.L.C., a Delaware limited liability company, FiberTech Group,
Inc., a Delaware corporation, Technetics Group, Inc., a Delaware corporation,
FiberGol Corporation, a Delaware corporation, Chicopee Holdings, Inc., a
Delaware corporation, Chicopee, Inc., a Delaware corporation, Dominion Textile
(USA) Inc., a Delaware corporation, Poly-Bond Inc., a Delaware corporation,
DomTex Industries Inc., a New York corporation, and Loretex Industries, a New
York corporation (collectively with each of the Company's domestic subsidiaries
formed or acquired after the Closing Date required to become a guarantor
hereunder pursuant to the Indenture (as defined), the "Guarantors," and,
together with the Company, the "Issuers"), and CHASE SECURITIES INC. (the
"Initial Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of February 27, 1998, by and among the Issuers and the
Initial Purchaser (the "Purchase Agreement") relating to the sale by the Issuers
to the Initial Purchaser of $200,000,000 aggregate principal amount of the
Company's 8 3/4% Senior Subordinated Notes due 2008 (the "Notes"). The Notes
have been guaranteed (the "Guarantees") on a senior subordinated basis by each
of the Guarantors. In order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Issuers have agreed to provide the registration rights
set forth in this Agreement for the benefit of the Initial Purchaser and its
direct and indirect transferees. The execution and delivery of this Agreement is
a condition to the Initial Purchaser's obligation to purchase the Notes under
the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a).
Advice: See the last paragraph of Section 5.
Applicable Period: See Section 2(b).
Closing Date: The Closing Date as defined in the Purchase Agreement.
Company: See the introductory paragraph to this Agreement.
Effectiveness Date: The 210th day after the Closing Date; provided,
however, that, with respect to the Initial Shelf Registration Statement, (i) if
the Filing Date in respect thereof is fewer than 90 days prior to the 210th day
after the Closing Date, then the Effectiveness Date in respect thereof shall be
the 90th day after such Filing Date and (ii) if the Filing Date is after the
filing of the Exchange Offer Registration Statement with the SEC, then the
Effectiveness Date in respect thereof shall be the 90th day after such Filing
Date.
Effectiveness Period: See Section 3.
-2-
Event Date: See Section 4.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Offer: See Section 2(a).
Exchange Offer Registration Statement: See Section 2(a).
Exchange Securities: See Section 2(a).
Expiration Date: See Section 2(a).
Filing Date: The 90th day after the Closing Date; provided, however,
that, with respect to the Initial Shelf Registration Statement, (i) if a Shelf
Registration Event shall have occurred fewer than 30 days prior to the 90th day
after the Closing Date, then the Filing Date in respect thereof shall be the
30th day after such Shelf Registration Event and (ii) if a Shelf Registration
Event shall have occurred after the filing of the Exchange Offer Registration
Statement with the SEC, then the Filing Date in respect thereof shall be the
30th day after such Shelf Registration Event.
Guarantees: See the second introductory paragraph to this Agreement.
Guarantors: See the introductory paragraph to this Agreement.
Holder: Any record holder of Registrable Securities.
Indemnified Person: See the third paragraph of Section 7.
Indemnifying Person: See the third paragraph of Section 7.
Indenture: The Indenture, dated as of March 1, 1998, among the
Company, the Guarantors and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee, pursuant
to which the Notes are being issued, as amended or supplemented from time to
time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraph to this
Agreement.
Initial Shelf Registration Statement: See Section 3(a).
Inspectors: See Section 5(o).
Issue Date: The date of original issuance of the Notes.
Issuers: See the introductory paragraph to this Agreement.
NASD: See Section 5(t).
Notes: See the second introductory paragraph to this Agreement.
-3-
Participant: See the first paragraph of Section 7.
Participating Broker-Dealer: See Section 2(b).
Person: An individual, corporation, limited or general partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
Private Exchange: See Section 2(b).
Private Exchange Securities: See Section 2(b).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the second introductory paragraph to this
Agreement.
Records: See Section 5(o).
Registrable Securities: The Notes upon original issuance thereof and
at all times subsequent thereto, each Exchange Security as to which Section
2(c)(v) hereof is applicable upon original issuance and at all times subsequent
thereto and, if issued, the Private Exchange Securities, until in the case of
any such Notes, Exchange Securities or Private Exchange Securities, as the case
may be, (i) a Registration Statement (other than, with respect to any Exchange
Security as to which Section 2(c)(v) hereof is applicable, the Exchange Offer
Registration Statement) covering such Notes, Exchange Securities or Private
Exchange Securities has been declared effective by the SEC and such Notes,
Exchange Securities or Private Exchange Securities, as the case may be, have
been disposed of in accordance with such effective Registration Statement, (ii)
such Notes, Exchange Securities or Private Exchange Securities, as the case may
be, are sold in compliance with Rule 144, (iii) such Note has been exchanged
for an Exchange Security pursuant to the Exchange Offer and Section 2(c)(v) is
not applicable thereto, or (iv) such Notes, Exchange Securities or Private
Exchange Securities, as the case may be, cease to be outstanding.
Registration Statement: Any registration statement of the Issuers,
including, but not limited to, the Exchange Offer Registration Statement, that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
-4-
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration Statement: See Section 3(b).
Shelf Registration Event: See Section 2(c).
Subsequent Shelf Registration Statement: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if applicable, the
trustee under any indenture governing the Exchange Securities and Private
Exchange Securities (if any).
Underwritten registration or underwritten offering: A registration in
which securities of the Company are sold to an underwriter or through an agent
for reoffering to the public.
2. Exchange Offer
(a) The Issuers agree to file with the SEC, on or before the Filing
Date, an offer to exchange (the "Exchange Offer") any and all of the Registrable
Securities for a like aggregate principal amount of senior subordinated debt
securities of the Company which are identical to the Notes and are guaranteed,
jointly and severally, by each of the Guarantors with terms identical to the
Guarantees (the "Exchange Securities") (and which are entitled to the benefits
of a trust indenture that is substantially identical to the Indenture (other
than such changes as are necessary to comply with any requirements of the SEC to
effect or maintain the qualification of such trust indenture under the TIA) and
which has been qualified under the TIA), except that the Exchange Securities
shall have been registered pursuant to an effective Registration Statement under
the Securities Act and shall contain no restrictive legend thereon. The Exchange
Offer will be registered under the Securities Act on the appropriate form (the
"Exchange Offer Registration Statement") and will comply with all applicable
tender offer rules and regulations under the Exchange Act. Each of the Issuers
agrees to use its best efforts (i) to cause the Exchange Offer Registration
Statement to become effective and to commence the Exchange Offer on or prior to
the Effectiveness Date, (ii) to keep the Exchange Offer open for 35 days (or
longer if required by applicable law) (the last day of such period, the
"Expiration Date") and (iii) to exchange Exchange Securities for all Notes
validly tendered and not withdrawn pursuant to the Exchange Offer on or prior to
the fifth day following the Expiration Date.
Each Holder who participates in the Exchange Offer will be deemed to
represent that any Exchange Securities received by it will be acquired in the
ordinary course of its business, that at the time of the
-5-
consummation of the Exchange Offer such Holder will have no arrangement with any
Person to participate in the distribution of the Exchange Securities in
violation of the provisions of the Securities Act and that such Holder is not an
affiliate of any of the Issuers within the meaning of the Securities Act.
Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities, Exchange Securities to which Section 2(c)(v) is applicable
and Exchange Securities held by Participating Broker-Dealers, and the Issuers
shall have no further obligation to register Registrable Securities (other than
Private Exchange Securities and other than Exchange Securities as to which
Section 2(c)(v) hereof applies) pursuant to Section 3 of this Agreement. No
securities other than the Exchange Securities shall be included in the Exchange
Offer Registration Statement.
(b) The Issuers shall include within the Prospectus contained in the
Exchange Offer Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchaser, which shall contain a summary
statement of the positions taken or policies made by the Staff of the SEC (and
publicly disseminated) with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of Exchange Securities received by such broker-dealer in the
Exchange Offer (a "Participating Broker-Dealer"). Such "Plan of Distribution"
section shall also allow the use of the prospectus by all Persons subject to the
prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange Securities.
Each of the Issuers shall use its 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 at least 180 days following the first bona fide offering of
securities under such Registration Statement (or such shorter time as such
Persons must comply with such requirements in order to resell the Exchange
Securities) (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial Purchaser
holds any Notes acquired by it and having the status of an unsold allotment in
the initial distribution, the Issuers upon the request of the Initial Purchaser
shall, simultaneously with the delivery of the Exchange Securities in the
Exchange Offer, issue and deliver to the Initial Purchaser, in exchange (the
"Private Exchange") for the Notes held by the Initial Purchaser, a like
principal amount of debt securities of the Company that are identical to the
Exchange Securities and are guaranteed, jointly and severally, by each of the
Guarantors with terms identical to the Guarantees (the "Private Exchange
Securities") (and which are issued pursuant to the same indenture as the
Exchange Securities) (except for the placement of a restrictive legend on such
Private Exchange Securities). The Private Exchange Securities shall bear the
same CUSIP number as the Exchange Securities. Interest on the Exchange
Securities and Private Exchange Securities will accrue from the last interest
payment date on which interest was paid on the Notes surrendered in exchange
therefor or, if no interest has been paid on the Notes, from the Issue Date.
Any indenture under which the Exchange Securities or the Private
Exchange Securities will be issued shall provide that the holders of any of the
Exchange Securities and the Private Exchange Securities will vote and consent
together on all matters to which such holders are entitled to vote or consent as
one class and that none of the holders of the Exchange Securities and the
Private Exchange Securities will have the right to vote or consent as a separate
class on any matter.
-6-
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the Staff of the SEC, the Company reasonably determines in
good faith, after consultation with counsel, that it is not permitted to effect
the Exchange Offer, (ii) the Exchange Offer is not commenced on or prior to the
Effectiveness Date, (iii) the Exchange Offer is, for any reason, not consummated
on or prior to the 5th day after the Expiration Date, (iv) any Holder of Private
Exchange Securities so requests, or (v) in the case of any Holder that
participates in the Exchange Offer, such Holder does not receive Exchange
Securities on the date of the exchange that may be sold without restriction
under federal securities laws (other than due solely to the status of such
Holder or an affiliate of any of the Issuers within the meaning of the
Securities Act) (the occurrence of any such event, a "Shelf Registration
Event"), then, in the case of each of clauses (i) through (v) of this sentence,
the Company shall promptly deliver to the Holders and the Trustee notice thereof
(the "Shelf Notice") and thereafter the Issuers shall file an Initial Shelf
Registration Statement pursuant to Section 3.
3. Shelf Registration
If a Shelf Registration Event has occurred (and whether or not an
Exchange Offer Registration Statement has been filed with the SEC or has become
effective or the Exchange Offer has been consummated), then:
(a) Initial Shelf Registration Statement. The Issuers shall promptly
prepare and file with the SEC a Registration Statement for an offering to
be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Securities (the "Initial Shelf Registration Statement"). The
Issuers shall file with the SEC the Initial Shelf Registration Statement on
or prior to the Filing Date. The Initial Shelf Registration Statement shall
be on Form S-1 or another appropriate form, if available, permitting
registration of such Registrable Securities for resale by such holders in
the manner designated by them (including, without limitation, in one or
more underwritten offerings). The Issuers shall not permit any securities
other than the Registrable Securities to be included in the Initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement (as
defined below). Each of the Issuers shall use their best efforts to cause
the Initial Shelf Registration Statement to be declared effective under the
Securities Act on or prior to the Effectiveness Date, and to keep the
Initial Shelf Registration Statement continuously effective under the
Securities Act until the date which is 24 months from the Closing Date, or
such shorter period ending when (i) all Registrable Securities covered by
the Initial Shelf Registration Statement have been sold in the manner set
forth and as contemplated in the Initial Shelf Registration Statement or
(ii) a Subsequent Shelf Registration Statement covering all of the
Registrable Securities has been declared effective under the Securities Act
(such 24 month or shorter period, the "Effectiveness Period").
(b) Subsequent Shelf Registration Statements. If the Initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement
ceases to be effective for any reason at any time during the Effectiveness
Period (other than because of the sale of all of the securities registered
thereunder), each of the Issuers shall use their best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and in
any event the Issuers shall within 45 days of such cessation of
effectiveness amend the Shelf Registration Statement in a manner reasonably
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional "shelf" Registration Statement pursuant to
Rule 415 covering all of the Registrable Securities (a "Subsequent Shelf
Registration Statement"). If a Subsequent Shelf Registration Statement is
filed, each of the Issuers shall use their best efforts to cause the
Subsequent Shelf Registration Statement to be declared effective as soon as
reasonably practicable after such filing and to keep such Registration
Statement continuously effec-
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tive until the end of the Effectiveness Period. As used herein the term
"Shelf Registration Statement" means the Initial Shelf Registration
Statement and any Subsequent Shelf Registration Statement.
(c) Supplements and Amendments. The Issuers shall promptly supplement
and amend the Shelf Registration Statement if required by the rules,
regulations or instructions applicable to the registration form used for
such Shelf Registration Statement, if required by the Securities Act, or if
reasonably requested by the Holders of a majority in aggregate principal
amount of the Registrable Securities covered by such Registration Statement
or by any underwriter of such Registrable Securities.
4. Additional Interest
(a) The Issuers and the Initial Purchaser agree that the Holders of
Notes will suffer damages if the Issuers fail to fulfill their obligations under
Section 2 or Section 3 hereof and that it would not be feasible to ascertain the
extent of such damages with precision. Accordingly, the Company agrees to pay,
as liquidated damages, additional interest on the Notes ("Additional Interest")
under the circumstances and to the extent set forth below (each of which shall
be given independent effect and shall not be duplicative):
(i) if either the Exchange Offer Registration Statement or the
Initial Shelf Registration Statement has not been filed on or prior to the
Filing Date (unless, with respect to the Exchange Offer Registration
Statement, a Shelf Event described in clause (i) of Section 2(c) shall have
occurred prior to the Filing Date), Additional Interest shall accrue on the
Notes over and above the stated interest in an amount equal to $0.192 per
week (or any part thereof) per $1,000 principal amount of Notes;
(ii) if either the Exchange Offer Registration Statement or the
Initial Shelf Registration Statement is not declared effective by the SEC
on or prior to the Effectiveness Date (unless, with respect to the Exchange
Offer Registration Statement, a Shelf Event described in clause (i) of
Section 2(c) shall have occurred), Additional Interest shall accrue on the
Notes over and above the stated interest in an amount equal to $0.192 per
week (or any part thereof) per $1,000 principal amount of Notes; and
(iii) if (A) the Issuers have not exchanged Exchange Securities for
all Notes validly tendered and not withdrawn in accordance with the terms
of the Exchange Offer on or prior to the fifth day after the Expiration
Date, or (B) the Exchange Offer Registration Statement ceases to be
effective at any time prior to the Expiration Date, or (C) if applicable,
any Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time during the
Effectiveness Period, then Additional Interest shall accrue on the Notes
over and above the stated interest in an amount equal to $0.192 per week
(or any part thereof) per $1,000 principal amount of the Notes for the
first 90 days commencing on (x) the sixth day after the Expiration Date, in
the case of (A) above, or (y) the day the Exchange Offer Registration
Statement ceases to be effective in the case of (B) above, or (z) the day
such Shelf Registration Statement ceases to be effective in the case of (C)
above;
provided, however, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement as required hereunder (in the case
of clause (i) of this Section 4(a)), (2) upon the effectiveness of the Exchange
Offer Registration Statement or the Shelf Registration Statement as required
hereunder (in the case of clause (ii) of this Section 4(a)) or (3) upon the
exchange of Exchange Securities for all Notes validly tendered and not withdrawn
(in the case of clause (iii)(A) of this Section 4(a)), or upon the effectiveness
of the Exchange Offer Registration Statement which had ceased to remain
effective (in the case of clause (iii)(B) of this Section 4(a)), or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the
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case of clause (iii)(C) of this Section 4(a)), or upon the effectiveness of a
Subsequent Shelf Registration Statement (in the case of clause (iii)(C) of this
Section 4(a)), Additional Interest on the Notes as a result of such clause (or
the relevant subclause thereof), as the case may be, shall cease to accrue (but
any accrued amount shall be payable).
(b) The Company shall notify the Trustee within one business day
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). The Company shall
pay the Additional Interest due on the Registrable Securities by depositing with
the Trustee, in trust, for the benefit of the Holders thereof, on or before the
applicable semi-annual interest payment date, immediately available funds in
sums sufficient to pay the Additional Interest then due to Holders of
Registrable Securities. Each obligation to pay Additional Interest shall be
deemed to accrue immediately following the occurrence of the applicable Event
Date. Any accrued Additional Interest amount shall be due and payable on each
interest payment date immediately after the applicable Event Date to the record
Holder of Registrable Securities entitled to receive the interest payment to be
made on such date as set forth in the Indenture. The parties hereto agree that
the Additional Interest provided for in this Section 4 constitutes a reasonable
estimate of the damages that may be incurred by Holders of Registrable
Securities by reason of the failure of a Shelf Registration Statement or
Exchange Offer Registration Statement to be filed or declared effective, or a
Shelf Registration Statement or an Exchange Offer Registration Statement to
remain effective, as the case may be, in accordance with this Section 4.
(c) Each of the Guarantors, jointly and severally, guarantee the
payment of the Additional Interest to the same extent and in the same manner as
the guarantee provisions set forth in the Indenture, which provisions are
incorporated herein by reference mutatis mutandis.
5. Registration Procedures
In connection with the registration of any Registrable Securities
pursuant to Sections 2 or 3 hereof, each of the Issuers shall use their best
efforts to effect such registrations to permit the sale of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Issuers shall:
(a) prepare and file with the SEC on or before the Filing Date, a
Registration Statement or Registration Statements as prescribed by Section
2 or 3, and to use their best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein,
provided that, if (1) such filing is pursuant to Section 3, or (2) a
Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuers shall
furnish to and afford the Holders of the Registrable Securities and each
such Participating Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing underwriters, if
any, a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference therein
and all exhibits thereto) proposed to be filed (at least five days prior to
such filing); the Issuers shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto in respect of which the
Holders must be afforded a reasonable opportunity to review prior to the
filing of such document, if the Holders of a majority in aggregate
principal amount of the Registrable Securities covered by such Registration
Statement, or each such Participating Broker-Dealer, as the case may be,
their counsel, or the managing underwriters, if any, shall reasonably
object;
-9-
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement or Exchange Offer
Registration Statement, as the case may be, as may be necessary to keep
such Registration Statement continuously effective for the Effectiveness
Period, in the case of a Shelf Registration Statement, or until the later
of the Expiration Date and the Applicable Period, in the case of the
Exchange Offer Registration Statement; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provisions then in force)
under the Securities Act; and comply with the provisions of the Securities
Act, the Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to it with respect to the disposition of all
securities covered by such Registration Statement as so amended or in such
Prospectus as so supplemented and with respect to the subsequent resale of
any securities being sold by a Participating Broker-Dealer covered by any
such Prospectus;
(c) if (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, notify the selling
Holders of Registrable Securities, or each such Participating Broker-
Dealer, as the case may be, their counsel and the managing underwriters, if
any, promptly (but in any event within five business days), and confirm
such notice in writing, (i) when a Prospectus or any prospectus supplement
or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has
become effective (including in such notice a written statement that any
Holder may, upon request, obtain, without charge, one conformed copy of
such Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be
incorporated by reference and exhibits); (ii) of the issuance by the SEC of
any stop order suspending the effectiveness of a Registration Statement or
of any order preventing or suspending the use of any preliminary prospectus
or the initiation of any proceedings for that purpose; (iii) if at any time
when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Securities the representations and
warranties of any of the Issuers contained in any agreement (including any
underwriting agreement) contemplated by Section 5(n) below cease to be true
and correct; (iv) of the receipt by any of the Issuers of any notification
with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable
Securities or the Exchange Securities to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose; (v) of the happening of any
event or any information becoming known that requires the making of any
changes in such Registration Statement, Prospectus or documents so that, in
the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that such notification need not specifically
identify such event if notification of the occurrence thereof would, in the
Company's reasonable judgment, involve the disclosure of confidential non-
public information; and (vi) of the Company's reasonable determination that
a post-effective amendment to the Registration Statement would be
appropriate;
(d) if (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, use their best efforts to
prevent the issuance of any order suspending
-10-
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of a Prospectus or suspending the qualification (or
exemption from qualification) of any of the Registrable Securities or the
Exchange Securities to be sold by any Participating Broker-Dealer for sale
in any jurisdiction, and, if any such order is issued, to use their best
efforts to obtain the withdrawal of any such order at the earliest possible
moment;
(e) if a Shelf Registration Statement is filed pursuant to Section 3
and if requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount of the Registrable Securities being
sold in connection with an underwritten offering or any Participating
Broker-Dealer, (i) promptly incorporate in a prospectus supplement or post-
effective amendment such information about the Company, the underwriters,
if any, and the holders as the managing underwriters, if any, such Holders,
any Participating Broker-Dealer or their respective counsel reasonably
request to be included therein; (ii) make all required filings of such
prospectus supplement or such post-effective amendment as soon as
reasonably practicable after the Company has received notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment and (iii) supplement or make amendments to such Registration
Statement;
(f) if (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, furnish to each selling
Holder of Registrable Securities and to each such Participating Broker-
Dealer who so requests and upon request to their respective counsel and
each managing underwriter, if any, without charge, one conformed copy of
the Registration Statement or Registration Statements and each post-
effective amendment thereto, including financial statements and schedules,
and, if requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits;
(g) if (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, deliver to each selling
Holder of Registrable Securities, or each such Participating Broker-Dealer,
as the case may be, their counsel, and the underwriters, if any, without
charge, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto
and any documents incorporated by reference therein as such Persons may
reasonably request; and, subject to the last paragraph of this Section 5,
each of the Issuers hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders of
Registrable Securities or each such Participating Broker-Dealer, as the
case may be, and the underwriters or agents, if any, and dealers (if any),
in connection with the offering and sale of the Registrable Securities
covered by or the sale by Participating Broker-Dealers of the Exchange
Securities pursuant to such Prospectus and any amendment or supplement
thereto;
(h) prior to any public offering of Registrable Securities or any
delivery of a Prospectus contained in the Exchange Offer Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, use their best efforts to register
or qualify, and to cooperate with the selling Holders of Registrable
Securities or each such Participating Broker-Dealer, as the case may be,
the underwriters, if any, and their respective counsel in connection with
the registration or qualification (or exemption from such registration or
qualification) of such Registrable
-11-
Securities or Exchange Securities, as the case may be, for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the
United States as any selling Holder, Participating Broker-Dealer, or the
managing underwriters reasonably request in writing, provided , however,
that where Exchange Securities held by Participating Broker-Dealers or
Registrable Securities are offered other than through an underwritten
offering, the Issuers shall cause their counsel to (i) perform Blue Sky
investigations and file registrations and qualifications required to be
filed pursuant to this Section 5(h); (ii) use their best efforts to keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept
effective hereunder; and (iii) do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Exchange Securities held by Participating Broker-Dealers or the
Registrable Securities covered by the applicable Registration Statement,
provided, further, however, that none of the Issuers shall in any case be
required to (A) qualify generally to do business in any jurisdiction where
it is not then so qualified, (B) take any action that would subject it to
general service of process in any such jurisdiction where it is not then so
subject, (C) subject itself to taxation in excess of a nominal dollar
amount in any such jurisdiction or (D) qualify for sales in all 50 states;
(i) if a Shelf Registration Statement is filed pursuant to Section 3,
cooperate with the selling Holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold,
which certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company; and enable
such Registrable Securities to be in such denominations and registered in
such names as the managing underwriter or underwriters, if any, or Holders
may reasonably request;
(j) if (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, upon the occurrence of
any event contemplated by paragraph 5(c)(v) or 5(c)(vi) above, as promptly
as practicable prepare and (subject to Section 5(a) above) file with the
SEC, solely at the expense of the Issuers, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder or to the purchasers of the Exchange Securities to whom
such Prospectus will be delivered by a Participating Broker-Dealer, any
such Prospectus will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Issuers shall
not be required to amend or supplement a Registration Statement, any
related Prospectus or any document incorporated therein by reference, in
the event that, and for a period not to exceed an aggregate of 45 days in
any calendar year if, (i) an event occurs and is continuing as a result of
which a Shelf Registration Statement would, in the Issuers' good faith
judgment, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
(ii) (a) the Issuers determine in their good faith judgment that the
disclosure of such event at such time would have a material adverse effect
on the business, operations or prospects of the Issuers or (b) the
disclosure otherwise relates to a pending material business transaction
that has not been publicly disclosed;
(k) prior to the effective date of the first Registration Statement
relating to the Registrable Securities, (i) provide the Trustee with
printed certificates for the Registrable Securities in a form eligi-
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ble for deposit with The Depository Trust Company; and (ii) provide a CUSIP
number for the Registrable Securities;
(l) in connection with an underwritten offering of Registrable
Securities pursuant to a Shelf Registration Statement, enter into an
underwriting agreement as is customary in underwritten offerings and take
all such other actions as are reasonably requested by the managing
underwriters in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection, (i)
make such representations and warranties to and covenants with, the
underwriters, with respect to the business of the Issuers and their
subsidiaries and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in
each case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when reasonably
requested; (ii) obtain the written opinions of counsel to the Issuers and
updates thereof in form and substance reasonably satisfactory to the
managing underwriters, addressed to the underwriters covering the matters
customarily covered in opinions requested in underwritten offerings and
substantially in the form of the opinion delivered in connection with the
sale of the Securities to the Initial Purchaser pursuant to the Purchase
Agreement; (iii) use their best efforts to obtain "cold comfort" letters
and updates thereof in form and substance reasonably satisfactory to the
managing underwriters from the independent certified public accountants of
the Issuers (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by
the Company or any of its subsidiaries for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each of the underwriters, such letters to be in
customary form and substantially in the form of the letters delivered to
the Initial Purchaser in connection with the sale of the Securities
pursuant to the Purchase Agreement; and (iv) if an underwriting agreement
is entered into, the same shall contain indemnification provisions and
procedures comparable to those set forth in Section 7 hereof with respect
to all parties to be indemnified pursuant to said Section, all of which
shall be done at each closing under such underwriting agreement, or as and
to the extent required thereunder;
(m) if (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, subject to the prior
receipt by the Company of undertakings to use reasonable efforts to
preserve the confidentiality of any information disclosed by the Issuers
pursuant hereto in form and substance reasonably satisfactory to the
Company, make available for inspection by one representative of the selling
Holders of such Registrable Securities being sold, or each such
Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Securities, if any,
and any attorney, accountant or other agent retained by any such selling
Holder or each such Participating Broker-Dealer, as the case may be, or
underwriter (collectively, the "Inspectors"), at the offices where normally
kept, during reasonable business hours, all relevant financial and other
records, pertinent corporate documents and properties of the Issuers and
their subsidiaries (collectively, the "Records") to the extent necessary to
enable them to exercise any applicable due diligence responsibilities, and
cause the officers, directors and employees of the Issuers and their
subsidiaries to supply all information in each case requested by any such
Inspector in connection with such Registration Statement; provided,
however, that records which the Company determines, in good faith, to be
confidential and any Records which the Company notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a misstatement
or omission in such Registration Statement; (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction; (iii) the information in
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such Records has been made generally available to the public; or (iv)
release thereof is necessary or advisable in connection with any action,
suit or proceeding involving any Holder or other Inspector; provided,
further, however, that prior notice shall be provided as soon as
practicable to the Issuers of the potential disclosure of any information
by such Inspector pursuant to clauses (i), (ii), (iii) or (iv) of this
sentence to permit the Issuers to obtain a protective order (or waive the
provisions of this paragraph (m)) and that such Inspector shall take such
actions as are reasonably necessary to protect the confidentiality of such
information (if practicable); each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be required to
agree that information obtained by it as a result of such inspections shall
be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Issuers unless and until such
information is generally available to the public; each selling Holder of
such Registrable Securities and each such Participating Broker-Dealer will
be required to further agree that it will, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give notice to
the Issuers and allow the Issuers to undertake appropriate action to
prevent disclosure of the Records deemed confidential at the Issuers' sole
expense;
(n) provide for an indenture trustee for the Registrable Securities
or the Exchange Securities, as the case may be, and cause the Indenture or
the trust indenture provided for in Section 2(a), as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange
Offer or the first Registration Statement relating to the Registrable
Securities; and in connection therewith, cooperate with the trustee under
any such indenture and the holders of the Registrable Securities to effect
such changes to such indenture as may be required for such indenture to be
so qualified in accordance with the terms of the TIA; and execute, and use
their best efforts to cause such trustee to execute, all documents as may
be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable such indenture to be so
qualified in a timely manner;
(o) comply with all applicable rules and regulations of the SEC to
the extent and so long as they are applicable to the Exchange Offer
Registration Statement or the Shelf Registration Statement and make
generally available to their securityholders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no
later than 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 Registrable Securities
are sold to underwriters in a firm commitment or best efforts underwritten
offering; and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements
shall cover said 12-month periods;
(p) upon consummation of an Exchange Offer or a Private Exchange,
upon the request of any Holder, obtain an opinion of counsel to the Company
in customary form, relating to the Exchange Securities or the Private
Exchange Securities, as the case may be, addressed to the Trustee for the
benefit of all Holders of Registrable Securities participating in the
Exchange Offer or the Private Exchange, as the case may be, and which
includes an opinion that (i) each of the Issuers have duly authorized,
executed and delivered the Exchange Securities and Private Exchange
Securities, the Guarantees to be endorsed thereon and the related
indenture; and (ii) each of the Exchange Securities or the Private Exchange
Securities, as the case may be, the Guarantees endorsed thereon and the
related indenture and guarantees thereunder constitute legal, valid and
binding obligations of each of the Issuers party thereto, enforceable
against each of the Issuers party thereto in accordance with their
respective terms (with customary exceptions);
-14-
(q) if an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Securities by Holders to the Company (or
to such other Person as directed by the Company) in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may be,
▇▇▇▇, or caused to be marked, on such Registrable Securities that such
Registrable Securities are being cancelled in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be; in no
event shall such Registrable Securities be marked as paid or otherwise
satisfied; and
(r) cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc. (the "NASD").
The Issuers may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Issuers such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
as the Issuers may, from time to time, reasonably request. The Issuers may
exclude from such registration the Registrable Securities or Exchange Securities
of any selling Holder or Participating Broker-Dealer, as the case may be, who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
Each Holder of Registrable Securities and each Participating Broker-
Dealer agrees by acquisition of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi), such
Holder will forthwith discontinue disposition of such Registrable Securities
covered by such Registration Statement or Prospectus or Exchange Securities to
be sold by such Participating Broker-Dealer, as the case may be, until such
holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(j), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto. In the event that the
Issuers shall give any such notice, each of the Effectiveness Period and the
Applicable Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Securities covered by such Registration
Statement or Exchange Securities to be sold by such Participating Broker-Dealer,
as the case may be, shall have received (x) the copies of the supplemented or
amended Prospectus contemplated by Section 5(j) hereof or (y) the Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Issuers shall be borne by the Issuers
whether or not the Exchange Offer Registration Statement or a Shelf Registration
Statement is filed or becomes effective, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel) in such jurisdictions (x) where the holders of
Registrable Securities are located, in the case of the Exchange Securities, or
(y) as provided in Section 5(h), in the case of Registrable Securities to be
sold in a public offering or Exchange Securities to be sold by a Participating
Broker-Dealer during the Applicable Period)); (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
or Exchange Securities in a form eligible for deposit with The Depository Trust
Company and of printing prospectuses if the printing of prospectuses is
-15-
requested by the managing underwriters, if any, or, in respect of Registrable
Securities or Exchange Securities to be sold by any Participating Broker-Dealer
during the Applicable Period; (iii) messenger, telephone and delivery expenses
incurred by the Issuers; (iv) fees and disbursements of counsel for the Issuers;
(v) fees and disbursements of all independent certified public accountants
referred to in Section 5(l)(iii) (including, without limitation, the expenses of
any special audit and "cold comfort" letters required by or incident to such
performance); (vi) rating agency fees; (vii) Securities Act liability insurance,
if the Issuers desire such insurance; (ix) fees and expenses of all other
Persons retained by the Issuers; (x) internal expenses of the Issuers
(including, without limitation, all salaries and expenses of officers and
employees of the Issuers performing legal or accounting duties); (xi) the
expense of any annual audit of the Issuers; (xii) the fees and expenses incurred
by the Issuers in connection with the listing of the Registrable Securities on
any securities exchange, if the Issuers decide to so list the Registrable
Securities; and (xiii) the expenses relating to printing, word processing and
distributing all Registration Statements.
7. Indemnification
Each of the Issuers, jointly and severally, agrees to indemnify and
hold harmless each Holder of Registrable Securities and each Participating
Broker-Dealer selling Exchange Securities during the Applicable Period, the
officers and directors of each such Person, and each Person, if any, who
controls any such Person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "Participant"), from
and against any and all losses, claims, damages, liabilities or any action in
respect thereof (including, without limitation, the reasonable legal fees and
other expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) to which such Participant may become subject,
whether commenced or threatened, under the Securities Act, the Exchange Act, any
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto) or Prospectus
(as amended or supplemented if the Issuers shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to such Holder of Registrable Securities or
Participating Broker-Dealer, as the case may be, furnished to the Company in
writing by such Holder of Registrable Securities or Participating Broker-Dealer,
as the case may be, expressly for use therein; provided, however, that the
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of any Holder of Registrable Securities or Participating Broker-
Dealer, as the case may be (or to the benefit of any officer or director of, or
of any Person controlling, such Holder of Registrable Securities or
Participating Broker-Dealer) from whom the Person asserting any such losses,
claims, damages or liabilities purchased Registrable Securities or Exchange
Securities, as the case may be, to the extent that such untrue statement or
omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the related Prospectus (as amended or
supplemented if the Issuers shall have furnished any amendments or supplements
thereto) and, to the extent required by applicable law, a copy of the related
Prospectus (as so amended or supplemented) shall not have been furnished to such
Person at or prior to the sale of such Registrable Securities or Exchange
Securities, as the case may be, to such Person, unless such failure to furnish
was a result of non-compliance by the Issuers with Section 5(g).
Each Holder of Registrable Securities and each Participating Broker-
Dealer selling Exchange Securities during the Applicable Period will be required
to agree, severally and not jointly, to indemnify and hold harmless each of the
Issuers, its directors, its officers who sign the Registration Statement and
each Person
-16-
who controls any Issuer within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuers to each Participant, but only with reference to information
relating to such Holder of Registrable Securities or Participating Broker-
Dealer, as the case may be, furnished to the Company in writing by such Holder
of Registrable Securities or Participating Broker-Dealer, as the case may be,
expressly for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus. The liability of any such
Holder of Registrable Securities or Participating Broker-Dealer, as the case may
be, under this paragraph shall in no event exceed the proceeds received by such
Holder of Registrable Securities or Participating Broker-Dealer, as the case may
be, from sales of Registrable Securities or Exchange Securities, as the case may
be, giving rise to such obligations.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses incurred by such counsel related to such
proceeding; provided, however, that the failure to so notify the Indemnifying
Person shall not relieve it of any obligation or liability which it may have
hereunder or otherwise (unless and only to the extent that the Indemnifying
Person was otherwise unaware that such suit, action, proceeding, claim, or
demand shall have been brought or asserted and such failure actually materially
prejudices the Indemnifying Person (through the forfeiture of substantive rights
or defenses)). In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel, but, other than in circumstances involving a
conflict among Indemnified Persons, the fees and expenses of such counsel shall
be at the expense of such Indemnified Person unless (i) the Indemnifying Person
and the Indemnified Person shall have agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to an actual or potential
conflict of interest. It is understood that, other than in circumstances
involving a conflict among Indemnified Persons, the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Participants shall be designated in writing by the Holders
of Registrable Securities or Participating Broker-Dealers selling Exchange
Securities during the Applicable Period, as the case may be, who sold a majority
in interest of Registrable Securities or Exchange Securities, as the case may
be, sold by all such Holders of Registrable Securities or Participating Broker-
Dealers, as the case may be. Any such separate firm for the Issuers, its
directors, its officers and such control Persons of the Issuers shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for reasonable fees and expenses incurred by counsel as contemplated by
the third sentence of this paragraph, the Indemnifying Person agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such Indemnifying Person of the aforesaid request and (ii) such
Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement; provided,
however, that the Indemnifying Person shall not be liable for any settlement
effected without its consent pursuant to this sentence if the Indemnifying Party
is contesting
-17-
such request for reimbursement. No Indemnifying Person shall, without the prior
written consent of the Indemnified Person, (which consent shall not be
unreasonably withheld) effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party, and indemnity could have been sought hereunder by such indemnified party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional written release of such Indemnified
Person in form and substance satisfactory to the Indemnified Persons from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is for any reason unavailable to, or insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person or Persons on the
one hand and the Indemnified Person or Persons on the other from the initial
offering of the Notes or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law or if the indemnified party failed to
give notice as required in the next succeeding previous paragraph, not only such
relative benefits but also the relative fault of the Indemnifying Person or
Persons on the one hand and the Indemnified Person or Persons on the other in
connection with the statements or omissions or alleged statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable considerations. The
relative fault of the parties 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, on the one hand, or such Holder of Registrable
Securities or Participating Broker-Dealer, as the case may be, on the other, the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances.
The parties shall agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a Holder of
Registrable Securities or Participating Broker-Dealer be required to contribute
any amount in excess of the amount by which proceeds received by such Holder of
Registrable Securities or Participating Broker-Dealer, as the case may be, from
sales of Registrable Securities or Exchange Securities, as the case may be,
exceeds the amount of any damages that such Holder of Registrable Securities or
Participating Broker-Dealer, as the case may be, has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7
will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
-18-
8. Rule 144 and Rule 144A
Each of the Issuers covenants that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder in a timely manner and, if at any
time any of the Issuers is not required to file such reports, it will, upon the
request of any Holder of Registrable Securities, provide other information so
long as necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. Each of the Issuers further covenants that it will take such
further reasonable action as any Holder of Registrable Securities may reasonably
request, to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 and Rule 144A under the
Securities Act.
9. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will manage the offering will be
selected by the Holders of a majority in aggregate principal amount of such
Registrable Securities included in such offering and reasonably acceptable to
the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements (however the terms applicable to each Holder shall be identical in
all respects) and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements applicable to all Holders.
10. Miscellaneous
(a) Remedies. In the event of a breach by any of the Issuers of any of
its obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights provided herein, in the
Indenture or, in the case of the Initial Purchaser, in the Purchase Agreement or
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement; provided, however, that any such
right to specific performance shall be subject to principles of customary
commercial reasonableness. The Issuers agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. None of the Issuers has, as of the
date hereof, entered into and each shall not, after the date of this Agreement,
enter into any agreement with respect to any of its securities that is
inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. None of the
Issuers has entered into and each will not enter into any agreement with respect
to any of its securities which will grant to any Person "piggy-back" rights with
respect to a Registration Statement (other than any such agreement that has been
or, prior to the Filing Date will be, amended or waived).
(c) Adjustments Affecting Registrable Securities. The Issuers shall
not, directly or indirectly, take any action with respect to the Registrable
Securities as a class that would adversely affect the ability of the
-19-
Holders of Registrable Securities to include such Registrable Securities in
a registration undertaken pursuant to this Agreement.
(d) Joint and Several Obligations; Addition of Guarantors. The
Guarantors agree that their obligations under this agreement are joint and
several. So long as any Registrable Securities remain outstanding, the Company
shall cause each of its subsidiaries that becomes a guarantor of the Notes under
the Indenture to execute and deliver an instrument pursuant to which such
subsidiary agrees to be bound by the provisions of this agreement as a
Guarantor.
(e) Amendments and Waivers. Except as provided in paragraph (d)
above, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, otherwise than with the prior written consent of (A) the
Holders of not less than a majority in aggregate principal amount of the then
outstanding Registrable Securities and (B) in circumstances that would adversely
affect the Participating Broker-Dealers, the Participating Broker-Dealers
holding not less than a majority in aggregate principal amount of the Exchange
Securities held by all Participating Broker-Dealers; provided, however, that
Section 7 and this Section 10(e) may not be amended, modified or supplemented
without the prior written consent of each Holder and each Participating
Broker-Dealer (including any Person who was a Holder or Participating
Broker-Dealer of Registrable Securities or Exchange Securities, as the case may
be, disposed of pursuant to any Registration Statement) affected by any such
amendment, modification or supplement. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly materially affect or impair the rights of other Holders
of Registrable Securities may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Securities being sold by such
Holders pursuant to such Registration Statement.
(f) Notices. All notices and other communications (including without
limitation any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
(i) if to a Holder of Registrable Securities, at the most current
address given by the Trustee to the Company; and
(ii) if to the Issuers, at Polymer Group, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the trustee under the
Indenture at the address specified in such Indenture.
(g) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Registrable Securities.
-20-
(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) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
(k) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(l) Entire Agreement. This Agreement, together with the Purchase
Agreement, is intended by the parties as a final expression of their agreement,
and is intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein.
(m) Securities Held by the Issuers or Its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by any of the
Issuers or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be deemed to be not outstanding for purposes of
determining whether such consent or approval was given by the Holders of such
required percentage.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
POLYMER GROUP, INC.
By: _____________________________________
Name:
Title:
PGI POLYMER, INC.
By: _____________________________________
Name:
Title:
PNA CORP.
By: _____________________________________
Name:
Title:
FNA POLYMER CORP.
By: _____________________________________
Name:
Title:
FABRENE GROUP, INC.
By: _____________________________________
Name:
Title:
-2-
FABRENE CORP.
By: _____________________________________
Name:
Title:
FABRENE GROUP, L.L.C.
By: _____________________________________
Name:
Title:
FIBERTECH GROUP, INC.
By: _____________________________________
Name:
Title:
TECHNETICS GROUP, INC.
By: _____________________________________
Name:
Title:
FIBERGOL CORPORATION
By: _____________________________________
Name:
Title:
CHICOPEE HOLDINGS, INC.
By: _____________________________________
Name:
Title:
-3-
CHICOPEE, INC.
By: _____________________________________
Name:
Title:
DOMINION TEXTILE (USA) INC.
By: _____________________________________
Name:
Title:
POLY-BOND INC.
By: _____________________________________
Name:
Title:
DOMTEX INDUSTRIES INC.
By: _____________________________________
Name:
Title:
LORETEX CORPORATION
By: _____________________________________
Name:
Title:
CHASE SECURITIES INC.
By: _____________________________________
Name:
Title:
ANNEX B
-------
[Form of Opinion of Counsel for the Company]
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the Initial Purchaser their
written opinion, as counsel for the Issuers, addressed to the Initial Purchaser
and dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchaser, substantially to the effect set forth below:
(i) The Company and each of the Subsidiaries incorporated or organized
under the laws of the State of Delaware have been duly incorporated or
organized, as the case may be, and are validly existing as a corporation or
limited liability company, as the case may be, in good standing under the
laws of the State of Delaware, are duly qualified to do business and are in
good standing as a foreign corporation in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged (except where the failure
to so qualify or have such power or authority would not, singularly or in
the aggregate, have a Material Adverse Effect).
(ii) As of September 27, 1997, the Company had the authorized
capitalization as set forth in the Final Offering Memorandum under the
heading "Capitalization"; all of the outstanding shares of capital stock of
the Company have been duly and validly authorized and issued and are fully
paid and non-assessable. To our knowledge, there are no material (A)
options, warrants or other obligations of the Company to issue or (B) other
rights to convert any obligation into, or exchange any securities for,
shares of capital stock of or ownership interests in the Company or any of
the Subsidiaries outstanding.
(iii) All of the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the Company,
free and clear of any lien, charge, encumbrance, security interest,
restriction upon voting or transfer or any other claim of any third party
(other than any lien securing the Amended Credit Facility).
(iv) Each of the Company and each Guarantor has the requisite power
(corporate or otherwise) to enter into and perform its obligations under
the Transaction Documents to which it is a party, including without
limitation the corporate power to issue, sell and deliver the Notes and the
Guarantees, respectively, as contemplated by the Purchase Agreement.
-2-
(v) The Company's Board of Directors or a duly authorized committee
thereof has adopted by requisite vote the resolutions necessary to
authorize the Company's execution, delivery and performance of each of the
Transaction Documents to which it is a party and has approved by requisite
vote the terms thereof. Each Guarantor's Board of Directors has adopted by
requisite vote the resolutions necessary to authorize such Guarantor's
execution, delivery and performance of each of the Transaction Documents to
which it is a party.
(vi) Each of the Company and each Guarantor has duly executed and
delivered the Purchase Agreement, the Indenture, the Registration Rights
Agreement and the Amended Credit Facility.
(vii) Each of the Purchase Agreement, the Indenture and the
Registration Rights Agreement is a valid and binding obligation of each of
the Company, each Guarantor and (assuming the due authorization, execution
and delivery thereof by the other parties thereto) is enforceable against
each of the Company and each Guarantor in accordance with its terms.
(viii) The Notes have been duly executed and delivered by the Company
and, when paid for by the Initial Purchaser in accordance with the terms of
the Purchase Agreement and, (assuming the due authorization, execution and
delivery of the Indenture by the Trustee and due authentication and
delivery of the Notes by the Trustee in accordance with the Indenture),
will constitute the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled
to the benefits of the Indenture.
(ix) The Guarantees have been duly executed and delivered by each of
the Guarantors and, when the Notes are duly and validly authorized,
executed, issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with the
terms of the Purchase Agreement, will be the valid and binding obligations
of each of the Guarantors, enforceable against each of the Guarantors in
accordance with their terms and entitled to the benefits of the Indenture.
(x) When the Exchange Notes have been duly executed and delivered by
the Company in accordance with the terms of the Registration Rights
Agreement, the Exchange Offer and the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee and
due authentication and delivery of the Exchange Notes by the Trustee in
accordance with the Indenture), the Exchange Notes will constitute the
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of the
Indenture.
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(xi) Each Transaction Document conforms in all material respects to
the description thereof contained in the Final Offering Memorandum.
(xii) The execution, delivery and performance by each of the Issuers
of each of the Transaction Documents to which it is a party, the issuance,
authentication, sale and delivery of the Securities and compliance each of
the Issuers with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents and the Transaction will not (A)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or, with notice or lapse of
time or both, constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of any of the Issuers pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument to which any of
the Issuers is a party or by which any of the Issuers is bound or to which
any of the property or assets of any of the Issuers is subject or (B)
result in any violation of the provisions of the charter or by-laws of any
of the Issuers or any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body having
jurisdiction over any of the Issuers or any of their properties or assets;
and, to the knowledge of such counsel, no consent, approval, authorization
or order of, or filing or registration with, any such court or arbitrator
or governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by each of the Issuers of each of the Transaction Documents to
which it is a party, the issuance, authentication, sale and delivery of the
Securities and compliance by each of the Issuers with the terms thereof and
the consummation of the transactions contemplated by the Transaction
Documents and the Transaction, except for such consents, approvals,
authorizations, filings, registrations or qualifications (1) which have
been obtained or made prior to the Closing Date and (2) as may be required
to be obtained or made under the Securities Act and applicable state
securities laws as provided in the Registration Rights Agreement.
(xiii) To the knowledge of such counsel, there are no pending actions
or suits or judicial, arbitral, rule-making, administrative or other
proceedings to which the Company or any of the Subsidiaries is a party or
of which any property or assets of the Company or any of the Subsidiaries
is the subject which (A) singularly or in the aggregate, if determined
adversely to the Company or any of the Subsidiaries, could reasonably be
expected to have a Material Adverse Effect or (B) questions the validity or
enforceability of any of the Transaction Documents or any action taken or
to be taken pursuant thereto; and to the best knowledge of such counsel, no
such proceedings are threatened or contemplated by governmental authorities
or threatened by others.
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(xiv) Neither the Company nor any of the Subsidiaries is (A) in
violation of its charter or by-laws, (B) in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to
which it is a party or by which it is bound or to which any of its property
or assets is subject or (C) in violation in any material respect of any
law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject.
(xv) Neither the Company nor any of the Subsidiaries is an "investment
company" or a company "controlled by" an "investment company" within the
meaning of the Investment Company Act and the rules and regulations of the
Commission thereunder.
(xvi) Neither the consummation of the transactions contemplated by
this Agreement nor the sale, issuance, execution or delivery of the
Securities will violate Regulation G, T, U or X of the Federal Reserve
Board.
(xvii) Assuming the accuracy of the representations, warranties and
agreements of the Issuers and of the Initial Purchasers contained in the
Purchase Agreement, it is not necessary, in connection with the issuance
and sale of the Securities to the Initial Purchasers and the offer, resale
and delivery of the Securities by the Initial Purchasers in the manner
contemplated by the Purchase Agreement and the Final Offering Memorandum,
to register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act.
(xviii) As of the date of such opinion, none of the Securities are of
the same class (within the meaning of Rule 144A under the Securities Act)
as securities of the Issuers that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are quoted
in a United States automated inter-dealer quotation system.
Such counsel shall also state that they have participated in
conferences with representatives of the Issuers, representatives of the
independent public accountants of the Company and the Subsidiaries,
representatives of the Initial Purchaser and counsel for the Initial Purchaser,
at which conferences the contents of the Preliminary Offering Memorandum and the
Final Offering Memorandum and any amendment and supplement thereto and related
matters were discussed and, although such counsel assumes no responsibility for
the accuracy, completeness or fairness of the Preliminary Offering Memorandum
and the Final Offering Memorandum and any amendment or supplement thereto
(except as expressly provided in (xi) above), nothing has come to the attention
of such counsel to cause such coun-
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sel to believe that the Preliminary Offering Memorandum or the Final Offering
Memorandum or any amendment or supplement thereto (other than the financial
statements and other financial and accounting information contained therein, as
to which such counsel need express no belief) as of its date of issuance and, in
the case of the Final Offering Memorandum and any amendment or supplement
thereto, as of the Closing Date, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Issuers and public officials which are furnished to the Initial
Purchaser and counsel for the Initial Purchaser.