Exhibit 4.2
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REGISTRATION RIGHTS AGREEMENT
Dated as of May 17, 1999
by and among
ATRIUM COMPANIES, INC.
and
THE GUARANTORS
named herein
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.,
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of May 17, 1999 by and among ATRIUM COMPANIES, INC., a Delaware
corporation (the "COMPANY"), the persons listed on the signature pages hereto
and any company which later becomes a party hereto in accordance with this
Agreement, as guarantors (collectively, the "GUARANTORS" and, together with the
Company, the "ISSUERS"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED (the "INITIAL PURCHASER").
This Agreement is made pursuant to the Purchase Agreement dated as
of May 10, 1999 by and among the Company, the Guarantors and the Initial
Purchaser (the "PURCHASE AGREEMENT"), which provides for, among other things,
the sale by the Company to the Initial Purchaser of an aggregate of $175,000,000
principal amount of the Company's 10 1/2% Senior Subordinated Notes due 2009,
Series A (the "NOTES") and the guarantees thereof by the Guarantors (the
"GUARANTEES" and, together with the Notes, the "SECURITIES"). In order to induce
the Initial Purchaser to enter into the Purchase Agreement, the Issuers have
agreed to provide to the Initial Purchaser and its direct and indirect
transferees the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1.DEFINITIONS. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"ADVICE" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"APPLICABLE PERIOD" shall have the meaning set forth in Section
3(s) hereof.
"BUSINESS DAY" shall mean a day that is not a Saturday, a Sunday,
or a day on which banking institutions in New York, New York are required to be
closed.
"COMPANY" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's
successors and permitted assigns.
"DEPOSITARY" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; PROVIDED, HOWEVER, that such depositary
must have an address in the Borough of Manhattan, in The City of New York.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(b) hereof.
"EFFECTIVENESS TARGET DATE" shall have the meaning set forth in
Section 2(e) hereof.
"EVENT DATE" shall have the meaning set forth in Section 2(e)
hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCHANGE OFFER" shall mean the exchange offer by the Issuers of
Exchange Securities for Securities pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange
offer registration statement on an appropriate form under the Securities Act,
and all amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"EXCHANGE PERIOD" shall have the meaning set forth in Section 2(a)
hereof.
"EXCHANGE SECURITIES" shall mean the 10 1/2% Senior Subordinated
Notes due 2009, Series B, issued by the Company, and the guarantees thereon of
the Guarantors, issued pursuant to and entitled to the benefits of, the
Indenture (which shall be qualified under the TIA) and registered pursuant to an
effective Registration Statement under the Securities Act, to be offered to
Holders of Securities in exchange for Securities pursuant to the Exchange Offer,
which shall be identical to the Securities
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(except that (i) interest thereon shall accrue from the last date on which
interest was paid on the Securities or, if no such interest has been paid, from
the Issue Date and (ii) the transfer restrictions thereon shall be eliminated).
"GUARANTORS" shall have the meaning set forth in the preamble to
this Agreement and also includes any Guarantor's successors and permitted
assigns.
"HOLDERS" shall mean the Initial Purchaser, for so long as it owns
any Transfer Restricted Securities, each of its direct and indirect successors,
assigns and transferees who become registered owners of Transfer Restricted
Securities under the Indenture and each Participating Broker-Dealer that holds
Exchange Securities for so long as such Participating Broker-Dealer is required
to deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities.
"INDENTURE" shall mean the Indenture relating to the Securities
dated as of May 17, 1999 between the Company, the Guarantors and State Street
Bank and Trust Company as trustee, as the same may be amended from time to time
in accordance with the terms thereof.
"INITIAL PURCHASER" shall have the meaning set forth in the
preamble to this Agreement.
"INSPECTORS" shall have the meaning set forth in Section 3(m)
hereof.
"ISSUE DATE" shall mean the date on which the Securities are
originally issued.
"ISSUERS" shall have the meaning set forth in the preamble to this
Agreement.
"LIQUIDATED DAMAGES" shall have the meaning set forth in Section
2(e) hereof.
"MAJORITY HOLDERS" shall mean, subject to Section 7(k), the
Holders of a majority of the aggregate principal amount of outstanding Transfer
Restricted Securities.
"PARTICIPATING BROKER-DEALER" shall have the meaning
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set forth in Section 3(s) hereof.
"PERSON" shall mean an individual, partnership, corporation,
limited liability company, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
"PRIVATE EXCHANGE" shall have the meaning set forth in Section
2(a) hereof.
"PRIVATE EXCHANGE SECURITIES" shall have the meaning set forth in
Section 2(a) hereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Transfer Restricted Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
preamble to this Agreement.
"RECORDS" shall have the meaning set forth in Section 3(m) hereof.
"REGISTRATION EXPENSES" shall mean any and all expenses incident
to performance of or compliance by the Issuers with this Agreement, including
without limitation: (i) all applicable SEC, stock exchange or National
Association of Securities Dealers, Inc. (the "NASD") registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance with
state securities or blue sky laws (including reasonable fees and disbursements
of one counsel for any Holder that is an Initial Purchaser in connection with
blue sky qualification of any of the Exchange Securities or Transfer Restricted
Securities) and compliance with the rules of the NASD, (iii) all applicable
expenses incurred by the Issuers in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any Prospectus
and any amendments or supplements thereto, and in preparing or assisting in
preparing any other documents relating to the performance
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of and compliance with this Agreement, (iv) all rating agency fees, if any, (v)
the fees and disbursements of counsel for the Issuers and of the independent
certified public accountants of the Issuers, including the expenses of any "cold
comfort" letters required by or incident to such performance or compliance with
this Agreement, (vi) the fees and expenses of the Trustee, and any exchange
agent or custodian, (vii) all fees and expenses incurred in connection with the
listing, if any, of any of the Transfer Restricted Securities on any securities
exchange or exchanges, if the Company, in its discretion, elects to make any
such listing, and (viii) any fees and disbursements of any underwriter
customarily required to be paid by the Company or sellers of securities and the
fees and expenses of any special experts retained by the Issuers in connection
with any Registration Statement; but excluding fees of counsel to the Holders
and underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of Transfer Restricted Securities by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement
(including, without limitation, the Exchange Offer Registration Statement and
the Shelf Registration Statement) of the Issuers which covers any of the
Exchange Securities or Transfer Restricted Securities pursuant to the provisions
of this Agreement, and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES" shall have the meaning set forth in the preamble to
this Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SHELF REGISTRATION" shall mean a registration effected pursuant
to Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Issuers relating to a "shelf" offering in accordance with Rule
415 of the Securities Act, or any similar rule that may be adopted by
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the SEC, pursuant to the provisions of Section 2(b) hereof which covers all of
the Transfer Restricted Securities or all of the Private Exchange Securities, as
the case may be, on an appropriate form under the Securities Act, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"TIA" shall have the meaning set forth in Section 3(k) hereof.
"TRANSFER RESTRICTED SECURITIES" shall mean each Security and, if
issued, each Private Exchange Security; PROVIDED, HOWEVER, that each Security or
Private Exchange Security, as the case may be, shall cease to be a Transfer
Restricted Security when (i) with respect to a Security only, such Security has
been exchanged by a person other than a Participating Broker-Dealer for an
Exchange Security in the Exchange Offer, (ii) with respect to a Security only,
following the exchange by a Participating Broker-Dealer in the Exchange Offer of
a Security for an Exchange Security, such Exchange Security is sold to a
purchaser who receives from such Participating Broker-Dealer on or prior to the
date of such sale a copy of the Prospectus contained in the Exchange Offer
Registration Statement, as amended or supplemented, (iii) such Security or
Private Exchange Security, as the case may be, has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement, (iv) such Security or Private Exchange Security, as the
case may be, is distributed to the public pursuant to Rule 144 under the
Securities Act (or any similar provision then in force, but not Rule 144A under
the Securities Act) or has become eligible for resale without restriction
pursuant to Rule 144(k) under the Securities Act, (v) such Security or Private
Exchange Security, as the case may be, shall have been otherwise transferred by
the holder thereof and a new Security not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
such new Security shall not require registration or qualification under the
Securities Act or any similar state law then in force, or (vi) such Security or
Private Exchange Security, as the case may be, ceases to be outstanding.
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"TRUSTEE" shall mean the trustee with respect to the Securities
under the Indenture.
2.REGISTRATION UNDER THE SECURITIES ACT.
(a) EXCHANGE OFFER. To the extent not prohibited by any applicable
law or applicable policy of the SEC, the Issuers shall, for the benefit of the
Holders, at the Issuers' cost, (i) cause to be filed with the SEC within 60 days
after the Issue Date an Exchange Offer Registration Statement on an appropriate
form under the Securities Act covering the offer by the Issuers to the Holders
to exchange all of the Transfer Restricted Securities (other than Private
Exchange Securities) for a like principal amount of Exchange Securities, (ii)
use their best efforts to have such Exchange Offer Registration Statement
declared effective under the Securities Act by the SEC not later than the date
which is 180 days after the Issue Date, (iii) use their best efforts to have
such Registration Statement remain effective until the closing of the Exchange
Offer and (iv) use their best efforts to commence the Exchange Offer and, on or
prior to 210 days after the Issue Date, issue Exchange Securities in exchange
for all Securities properly tendered prior thereto in the Exchange Offer. Upon
the effectiveness of the Exchange Offer Registration Statement, the Issuers
shall promptly commence the Exchange Offer, it being the objective of such
Exchange Offer to enable each Holder eligible and electing to exchange Transfer
Restricted Securities (other than Private Exchange Securities) for Exchange
Securities (assuming that such Holder is not an affiliate of the Issuers within
the meaning of Rule 405 under the Securities Act and is not a broker-dealer
tendering Transfer Restricted Securities acquired directly from the Issuers for
its own account, acquires the Exchange Securities in the ordinary course of such
Holder's business and has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing (within the
meaning of the Securities Act) the Exchange Securities) and to transfer such
Exchange Securities from and after their receipt without any limitations or
restrictions on transfer under the Securities Act and under state securities or
blue sky laws.
In connection with the Exchange Offer, the Issuers shall:
(i) mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate
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letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 20 Business Days after the date notice thereof is mailed to
the Holders (or longer if required by applicable law) (such period
referred to herein as the "EXCHANGE PERIOD");
(iii) utilize the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Securities at any time prior
to 5:00 p.m. (Eastern time) on the last Business Day of the Exchange
Period; and
(v) otherwise comply in all material respects with all applicable laws
relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer the Initial
Purchaser holds any Securities 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, to the extent not prohibited by any applicable law or
applicable policy of the SEC, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to such Initial Purchaser in
exchange (the "PRIVATE EXCHANGE") for the Securities held by such Initial
Purchaser, a like principal amount of debt securities of the Company, guaranteed
by the Guarantors, that are issued pursuant to, and entitled to the benefits of,
the Indenture and are identical to the Exchange Securities, except that such
securities shall bear appropriate transfer restrictions (the "PRIVATE EXCHANGE
SECURITIES").
The Exchange Securities and the Private Exchange Securities shall
be issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture and which, in either case, has been qualified under
the TIA or is exempt from such qualification and shall provide that the Exchange
Securities (other than the Private Exchange Securities) shall not be subject to
the transfer restrictions set forth in the Indenture. The Indenture or such
indenture shall provide that the Exchange Securities, the Private Exchange
Securities and the Securities shall vote and consent together on all matters as
one class and that none of the Exchange Securities, the Private Exchange
Securities or the Securities will have the right to vote or consent as a
separate class on any matter. The Private Exchange Securities shall be
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of the same series as, and the Issuers shall use their best efforts to have the
Private Exchange Securities bear the same CUSIP number as, the Exchange
Securities. The Issuers shall not have any liability hereunder solely as a
result of such Private Exchange Securities not bearing the same CUSIP number as
the Exchange Securities.
The Exchange Offer and the Private Exchange shall not be subject
to any conditions, other than that (i) in the reasonable opinion of counsel to
the Issuers, the Exchange Offer or Private Exchange, as the case may be, does
not violate applicable law or any applicable policy of the SEC, (ii) no action
or proceeding shall have been instituted or threatened in any court or by any
governmental agency which might materially impair the ability of the Issuers to
proceed with the Exchange Offer or the Private Exchange nor shall any material
adverse development have occurred in any such action or proceeding with respect
to the Issuers, (iii) all governmental approvals shall have been obtained, which
approvals the Issuers deem necessary for the consummation of the Exchange Offer
or Private Exchange and (iv) the due tendering of Transfer Restricted Securities
in accordance with the terms of the Exchange Offer. As soon as practicable after
the close of the Exchange Offer and/or the Private Exchange, as the case may be,
the Issuers shall:
(i) accept for exchange all Transfer Restricted Securities or portions
thereof properly tendered and not validly withdrawn pursuant to the
Exchange Offer in accordance with the terms of the Exchange Offer
Registration Statement and the letter of transmittal that is an exhibit
thereto;
(ii) accept for exchange all Securities properly tendered pursuant to
the Private Exchange; and
(iii) deliver, or cause to be delivered, to the Trustee for
cancellation all Transfer Restricted Securities or portions thereof so
accepted for exchange by the Issuers, and issue, and cause the Trustee
under the Indenture to promptly authenticate and deliver to each
Holder, a new Exchange Security or Private Exchange Security, as the
case may be, equal in principal amount to the principal amount of the
Transfer Restricted Securities surrendered by such Holder and accepted
for exchange.
To the extent not prohibited by any law or applicable policy of
the SEC, the Issuers shall use their best efforts to
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complete the Exchange Offer as provided above, and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws in connection with the Exchange Offer. Each Holder of Transfer
Restricted Securities (other than Private Exchange Securities) who wishes to
exchange such Transfer Restricted Securities for Exchange Securities in the
Exchange Offer will be required to make certain customary representations in
connection therewith, including representations that such Holder is not an
affiliate of any of the Issuers within the meaning of Rule 405 under the
Securities Act, that it is not a broker-dealer tendering Transfer Restricted
Securities acquired directly from the Company for its own account, that any
Exchange Securities to be received by it will be acquired in the ordinary course
of business and that at the time of the commencement of the Exchange Offer it
has no arrangement or understanding with any Person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange
Securities. Each Participating Broker-Dealer will be required to acknowledge
that it will deliver the Prospectus included in the Exchange Offer Registration
Statement in connection with the resale of Exchange Securities to the extent it
is subject to the prospectus delivery requirements of the SEC. The Issuers shall
inform the Initial Purchaser of the names and addresses of the Holders to whom
the Exchange Offer is made, and the Initial Purchaser shall have the right to
contact such Holders and otherwise facilitate the tender of Transfer Restricted
Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, MUTATIS
MUTANDIS, solely with respect to Transfer Restricted Securities that are Private
Exchange Securities, Exchange Securities held by Participating Broker-Dealers
and Transfer Restricted Securities entitled to a Shelf Registration pursuant to
the first paragraph of Section 2(b) hereof.
(b)SHELF REGISTRATION. In the event that (i) the Issuers are not
permitted to file the Exchange Offer Registration Statement or to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law or
SEC policy, (ii) the Exchange Offer is not for any other reason consummated
within 210 days after the Issue Date, (iii) any holder of Securities notifies
the Company within 20 Business Days after the commencement of the Exchange Offer
that (a) due to a change in applicable law or SEC policy it is not entitled to
participate in the Exchange Offer, (b) due to a change in applicable law or SEC
policy it may not resell the
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Exchange Securities to be acquired by it in the Exchange Offer to the public
without delivering a prospectus and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
such holder or (c) it is a broker-dealer and owns Securities acquired directly
from the Company or an affiliate of the Company or (iv) the holders of a
majority of the Securities may not resell the Exchange Securities to be acquired
by them in the Exchange Offer to the public without restriction under the
Securities Act and without restriction under applicable blue sky or state
securities laws, then the Issuers shall, at their cost, cause to be filed as
promptly as practicable after such determination or date, as the case may be,
and, in any event, prior to the later of (A) 60 days after the Issue Date or (B)
30 days after such filing obligation arises and use their best efforts to cause
the Shelf Registration Statement to be declared effective by the SEC on or prior
to 60 days from such required filing date; PROVIDED, HOWEVER, that if the
Issuers have not consummated the Exchange Offer within 210 days of the Issue
Date, then the Issuers will file with the SEC on or prior to the 240th day after
the Issue Date a Shelf Registration Statement providing for the sale by the
Holders of all of the Transfer Restricted Securities, and shall use their best
efforts to have such Shelf Registration Statement declared effective by the SEC
as soon as practicable and, in any event, no later than 60 days after such Shelf
Registration Statement was first filed with the SEC. No Holder of Transfer
Restricted Securities may include any of its Transfer Restricted Securities in
any Shelf Registration pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing such information as the Company may, after
conferring with counsel with regard to information relating to Holders that
would be required by the SEC to be included in such Shelf Registration Statement
or Prospectus included therein, reasonably request for inclusion in any Shelf
Registration Statement or Prospectus included therein. Each Holder as to which
any Shelf Registration is being effected agrees to furnish to the Issuers all
information with respect to such Holder necessary to make any information
previously furnished to the Company by such Holder not materially misleading.
The Issuers agree to use their best efforts to keep the Shelf
Registration Statement continuously effective until the second anniversary of
the effective date of the Shelf Registration Statement (subject to extension
pursuant to the last paragraph of Section 3 hereof) (or such shorter period that
will terminate when all of the Transfer Restricted Securities covered by such
Shelf Registration Statement have
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been sold pursuant thereto or cease to be outstanding or otherwise cease to be
Transfer Restricted Securities) (the "EFFECTIVENESS PERIOD"). The Issuers shall
not permit any securities other than Transfer Restricted Securities to be
included in the Shelf Registration. The Issuers further agree, if necessary, to
supplement or amend the Shelf Registration Statement, if required by the rules,
regulations or instructions applicable to the registration form used by the
Issuers for such Shelf Registration Statement or by the Securities Act or by any
other rules and regulations thereunder for shelf registrations, and the Issuers
agree to furnish to the Holders of Transfer Restricted Securities copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(c) EXPENSES. The Issuers shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or 2(b) hereof and the
reasonable fees and expenses of one counsel, if any, designated in writing by
the Majority Holders to act as counsel for the Holders of the Transfer
Restricted Securities in connection with a Shelf Registration Statement, in the
case of such counsel, up to a maximum amount of $50,000. Except as provided in
the preceding sentence, each Holder shall pay all expenses of its own counsel,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Transfer Restricted Securities pursuant
to the Shelf Registration Statement.
(d) EFFECTIVE REGISTRATION STATEMENT. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; PROVIDED, HOWEVER,
that if, after it has been declared effective, the offering of Transfer
Restricted Securities pursuant to an Exchange Offer Registration Statement or
Shelf Registration Statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or court,
such Registration Statement will be deemed not to have been effective during the
period of such interference, until the offering of Transfer Restricted
Securities may legally resume. The Issuers will be deemed not to have used their
best efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if they voluntarily take any action that would
result in any such Registration Statement not being declared effective or in the
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Holders of Transfer Restricted Securities covered thereby not being able to
exchange or offer and sell such Transfer Restricted Securities during that
period, unless (i) such action is required by applicable law or (ii) in the case
of the Shelf Registration Statement only, such action is taken by the Issuers in
good faith and for valid business reasons (but not including avoidance of the
Issuers' obligations hereunder) including a material corporate transaction, and
the aggregate number of days in which such Shelf Registration Statement is not
effective or usable does not exceed 60 days; PROVIDED, that the Issuers will be
entitled to benefit of this clause (ii) only once during the term of this
Agreement and Liquidated Damages shall not accrue during such 60-day period by
reason of such Shelf Registration Statement not being effective or usable.
(e) LIQUIDATED DAMAGES. In the event that (i) the applicable
Registration Statement is not filed with the SEC on or prior to the date
specified herein for such filing, (ii) the applicable Registration Statement is
not declared effective by the SEC on or prior to the date specified herein for
such effectiveness (the "EFFECTIVENESS TARGET DATE"), (iii) if the Exchange
Offer is required to be consummated hereunder, the Issuers fail to consummate
the Exchange Offer within 30 days of the Effectiveness Target Date with respect
to the Exchange Offer Registration Statement or (iv) subject to clause (ii) of
the last sentence of Section 2(d), the applicable Registration Statement is
filed and declared effective prior to the Effectiveness Target Date but shall
thereafter cease to be effective or usable during the periods specified herein
without being immediately succeeded by an additional Registration Statement
covering the Transfer Restricted Securities which has been filed and declared
effective (each such event referred to in clauses (i) through (iv), a
"REGISTRATION DEFAULT"), then the Issuers shall pay liquidated damages to each
Holder of Transfer Restricted Securities as to which such Registration Default
relates ("LIQUIDATED DAMAGES"), with respect to the first 90-day period (or
portion thereof) while a Registration Default is continuing immediately
following the occurrence of such Registration Default, in an amount equal to
0.25% per annum of the principal amount of the Securities. The amount of
Liquidated Damages will increase by an additional 0.25% per annum of the
principal amount of the Securities for each subsequent 90-day period (or portion
thereof) while a Registration Default is continuing until all Registration
Defaults have been cured, up to an aggregate maximum amount of 1.00% per annum
of the principal amount of the Securities. Liquidated Damages shall be computed
based on the actual number
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of days elapsed during which any such Registration Defaults exists. Following
the cure of a Registration Default, the accrual of Liquidated Damages with
respect to such Registration Default will cease.
The Issuers shall notify the Trustee within five Business Days
after each and every date on which an event occurs in respect of which
Liquidated Damages are required to be paid (an "EVENT DATE"). Liquidated Damages
shall be paid in arrears by depositing with the Trustee, in trust, for the
benefit of the Holders of Transfer Restricted Securities, on or before the
applicable semiannual interest payment date, immediately available funds in sums
sufficient to pay the Liquidated Damages then due. The Liquidated Damages due
shall be payable in arrears on each interest payment date to the record
Holder of Securities entitled to receive the interest payment to be paid on
such date as set forth in the Indenture. Each obligation to pay Liquidated
Damages shall be deemed to accrue from and including the day following the
applicable Event Date.
(f) SPECIFIC ENFORCEMENT. Without limiting the remedies available
to the Initial Purchaser and the Holders, the Issuers acknowledge that any
failure by the Issuers to comply with their obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Initial
Purchaser or the Holders for which there is no adequate remedy at law, that it
would not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, the Initial Purchaser or any Holder may obtain
such relief as may be required to specifically enforce the Company's obligations
under Section 2(a) and Section 2(b) hereof.
3.REGISTRATION PROCEDURES. In connection with the obligations of
the Issuers with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Issuers shall:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Issuers, (ii) shall, in the case of a Shelf
Registration, be available for the sale of the Transfer Restricted
Securities by the selling Holders thereof and (iii) shall comply as to
form in all material respects with the
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requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and use their
best efforts to cause such Registration Statement to become effective
and remain effective in accordance with Section 2 hereof. The Issuers
shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders must
provide information for inclusion therein without the Holders being
afforded an opportunity to review such documentation a reasonable time
prior to the filing of such document or if the Majority Holders or such
Participating Broker-Dealer, as the case may be, their counsel or the
managing underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under
applicable law to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented by any required prospectus
supplement and as so supplemented to be filed pursuant to Rule 424 (or
any similar provision then in force) under the Securities Act, and
comply in all material respects with the provisions of the Securities
Act, the Exchange Act and the rules and regulations promulgated
thereunder applicable to it with respect to the disposition of all
securities covered by each Registration Statement during the
Effectiveness Period or the Applicable Period, as the case may be, in
accordance with the intended method or methods of distribution by the
selling Holders thereof described in this Agreement (including sales by
any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Transfer Restricted Securities, at least three Business Days prior to
filing, that a Shelf Registration Statement with respect to the
Transfer Restricted Securities is being filed and advising such Holder
that the distribution of Transfer Restricted Securities will be made in
accordance with the method selected by the Majority Holders
participating in the Shelf Registration; (ii) furnish to each Holder of
Transfer Restricted Securities, without charge, as many copies of each
Prospectus, and any amendment or supplement thereto and such other
documents as such Holder may reasonably request, in order to facilitate
the disposition of the Transfer Restricted Securities; and (iii)
subject to the
-16-
last paragraph of Section 3 hereof, hereby consent to the use of the
Prospectus or any amendment or supplement thereto by each of the
selling Holders of Transfer Restricted Securities in connection with
the offering and sale of the Transfer Restricted Securities covered by
such Prospectus or any amendment or supplement thereto;
(d) in the case of a Shelf Registration, use their best efforts to
register or qualify, as may be required by applicable law, the Transfer
Restricted Securities under all applicable state securities or "blue
sky" laws of such jurisdictions by the time the applicable Registration
Statement is declared effective by the SEC as any Holder of Transfer
Restricted Securities covered by a Registration Statement shall
reasonably request in advance of such date of effectiveness, and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each
such jurisdiction of such Transfer Restricted Securities owned by such
Holder; PROVIDED, HOWEVER, that no Issuer shall be required to (i)
qualify as a foreign corporation or as a broker or dealer in securities
in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (ii) file or subject itself to any general
consent to service of process or (iii) subject itself to taxation in
any such jurisdiction if it is not so subject;
(e) in the case of (1) a Shelf Registration or (2) Participating
Broker-Dealers who have notified the Company that they will be
utilizing the Prospectus contained in the Exchange Offer Registration
Statement as provided in Section 3(s) hereof, notify each Holder of
Transfer Restricted Securities, or such Participating Broker-Dealers,
as the case may be, their counsel, if any, promptly and confirm such
notice in writing (if such notice was not originally given in writing)
(i) when a Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective,
(ii) of any request by the SEC or any state securities authority for
amendments and supplements to a Registration Statement or Prospectus or
for additional information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if the Issuers receive any notification with respect to
the
-17-
suspension of the qualification of the Transfer Restricted Securities
or the Exchange Securities to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction or the initiation
of any proceeding for such purpose, (v) of the happening of any event
or the failure of any event to occur or the discovery of any facts or
otherwise during the Effectiveness Period or the Applicable Period, as
the case may be, which makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or
which causes such Registration Statement or Prospectus to omit to state
a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading and
(vi) the Issuers' reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as
practicable;
(g) in the case of a Shelf Registration, furnish to each Holder of
Transfer Restricted Securities, without charge, at least one conformed
copy of each Registration Statement relating to such Shelf Registration
and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Transfer Restricted Securities to facilitate the timely
preparation and delivery of certificates not bearing any restrictive
legends representing Securities covered by such Shelf Registration to
be sold and relating to the subsequent transfer of such Securities; and
cause such Securities to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the
selling Holders may reasonably request at least three Business Days
prior to the closing of any sale of Transfer Restricted Securities;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof, use
their best efforts to prepare a supplement or post-effective amendment
to a Registration Statement or the related Prospectus or any document
incorporated therein by
-18-
reference or file any other required document so that (subject to
Section 3(a)), as thereafter delivered to the purchasers of the
Transfer Restricted Securities or Exchange Securities to whom a
Prospectus is being delivered by a Participating Broker-Dealer who has
notified the Company that it will be utilizing the Prospectus contained
in the Exchange Offer Registration Statement as provided in Section
3(a) hereof, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and to notify each Holder or Participating
Broker-Dealer, as applicable, to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event, and each
Holder hereby agrees to suspend use of the Prospectus until the Issuers
have amended or supplemented the Prospectus to correct such
misstatement or omission;
(j) obtain a CUSIP number for all Exchange Securities or Private
Exchange or Securities, as the case may be, not later than the
effective date of a Registration Statement, and provide the Trustee
with certificates for the Exchange Securities or the Private Exchange
Securities, as the case may be, in a form eligible for deposit with the
Depositary;
(k) cause the Indenture or the indenture provided in Section 2(a) to be
qualified under the Trust Indenture Act of 1939, as amended (the
"TIA"), in connection with the registration of the Exchange Securities
or Transfer Restricted Securities, as the case may be, cooperate with
the Trustee or any trustee under such indenture and the Holders to
effect such changes to the Indenture or such indenture as may be
required for the Indenture or such indenture to be so qualified in
accordance with the terms of the TIA and execute, and use their best
efforts to cause the Trustee or any trustee under such indenture to
execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to
enable the Indenture or such indenture to be so qualified in a timely
manner;
(l) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) and take all such other customary
and appropriate actions as are reasonably requested by the Majority
Holders in order to expedite or facilitate the registration or the
disposition
-19-
of such Transfer Restricted Securities, and in such connection, (i)
make such representations and warranties to Holders of such Transfer
Restricted Securities and the underwriters (if any) with respect to the
business of the Issuers and their respective subsidiaries as then
conducted and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in
each case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested by
the Majority Holders; (ii) obtain opinions of counsel to the Issuers in
form and substance reasonably satisfactory to the managing underwriters
(if any) and the Holders of a majority in principal amount of the
Transfer Restricted Securities covered by such Registration Statement,
addressed to each selling Holder and the managing underwriters covering
the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
Holders and underwriters; (iii) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of
the Issuers (and, if necessary, any other independent certified public
accountants of any subsidiary of the Issuers or of any business
acquired by any of the Issuers for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to the Issuers and the selling Holders of
Transfer Restricted Securities and the underwriters (if any), such
letters to be in customary form (meeting the requirement of Statement
of Accounting Standards No. 72 ("SAS 72") and covering matters of the
type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested
by such selling Holders and underwriters; provided, however, that it
shall be a condition of the Issuers' obligation to provide such letter
that the addressees thereto (other than the Issuers) shall make the
representations required by SAS 72 and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures substantially identical to those set forth in
Section 4 hereof (or such other provisions and procedures acceptable to
the Issuers and the Holders of a majority in aggregate principal amount
of Transfer Restricted Securities covered by such Registration
Statement and the managing underwriters) with respect to all parties to
be indemnified pursuant to said Section (including, without limitation,
such selling Holders and such underwriters).
-20-
The above shall be done at each closing in respect of the sale of
Transfer Restricted Securities, or as and to the extent required
thereunder;
(m) if (1) a Shelf Registration is filed pursuant to Section 2(b) or
(2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, make available for
inspection by each selling Holder of Transfer Restricted Securities and
each such person who would be an "underwriter" as a result of either
(i) the sale by such person of Securities covered by such Shelf
Registration Statement or (ii) the sale during the Applicable Period by
a Participating Broker-Dealer of Exchange Securities (provided that a
Participating Broker-Dealer shall not be deemed to be an underwriter
solely as a result of it being required to deliver a prospectus in
connection with any resale of Exchange Securities) and any attorney,
accountant or other agent retained by any such person (collectively,
the "INSPECTORS"), at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Issuers and their respective
subsidiaries (collectively, the "RECORDS") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of
the Issuers and their respective subsidiaries to supply all information
in each case reasonably requested by any such Inspector in connection
with such Registration Statement. Records which the Issuers determine,
in good faith, to be confidential and any Records which they notify the
Inspectors are confidential shall not be disclosed by the Inspectors to
any other Person unless (i) the disclosure of such Records is necessary
to avoid or correct a material misstatement or omission in such
Registration Statement, (ii) the disclosure of such Records is
necessary in connection with the Inspectors' assertion of any claims or
actions or with their establishment of any defense in an action then
pending before a court of competent jurisdiction, (iii) the release of
such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction or (iv) the information in such Records
has been made generally available to the public. Each such Holder and
each such Participating Broker-Dealer will be required to agree that
information
-21-
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 is
made generally available to the public. Each selling Holder of such
Transfer Restricted Securities and each such Participating
Broker-Dealer will be required to further agree that it will, upon
learning that disclosure of such Records is necessary under (i) or (ii)
above, give notice to the Issuers and allow the Issuers at their
expense to undertake appropriate action to prevent disclosure of the
Records deemed confidential;
(n) use their best efforts to comply with all applicable rules and
regulations of the SEC and make generally available to its
securityholders earnings statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any
similar rule promulgated under the Securities Act) no later than 45
days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Transfer Restricted Securities
are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of
the Company after the effective date of a Registration Statement, which
statements shall cover said 12-month periods;
(o) upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuers addressed to the Trustee
for the benefit of all Holders of Transfer Restricted Securities
participating in the Exchange Offer or the Private Exchange, as the
case may be, and which includes an opinion that (i) the Issuers have
duly authorized, executed and delivered the Exchange Securities and
Private Exchange Securities, and (ii) each of the Exchange
Securities or the Private Exchange Securities, as the case may be,
constitute a legal, valid and binding obligation of the Issuers,
enforceable against the Issuers in accordance with its respective
terms (in each case, with customary exceptions);
(p) if an Exchange Offer or a Private Exchange is to be consummated,
upon proper delivery of the Transfer Restricted Securities by Holders
to the Issuers (or to such other Person as directed by the Issuers) in
exchange
-22-
for the Exchange Securities or the Private Exchange Securities, as the
case may be, the Issuers shall ▇▇▇▇, or cause to be marked, on such
Transfer Restricted Securities and on the books of the Trustee, the
Note Registrar (as defined in the Indenture) and, if necessary, the
Depositary, delivered by such Holders that such Transfer Restricted
Securities are being canceled in exchange for the Exchange Securities
or the Private Exchange Securities, as the case may be; but in no event
shall such Transfer Restricted Securities be marked as paid or
otherwise satisfied solely as a result of being exchanged for Exchange
Securities or Private Exchange Securities in the Exchange Offer or the
Private Exchange, as the case may be;
(q) cooperate with each seller of Transfer Restricted Securities
covered by any Registration Statement participating in the
disposition of such Transfer Restricted Securities and one counsel
acting on behalf of all such sellers in connection with the filings,
if any, required to be made with the NASD;
(r) use their best efforts to take all other steps necessary to effect
the registration of the Transfer Restricted Securities covered by a
Registration Statement contemplated hereby; and
(s)(A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution," which section shall be reasonably acceptable to
the Initial Purchaser, and which shall contain a summary statement of
the positions taken or policies made by the staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer (a
"PARTICIPATING BROKER-DEALER") that holds Transfer Restricted
Securities acquired for its own account as a result of market-making
activities or other trading activities and that will be the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Securities to be received by such broker-dealer in the Exchange Offer,
whether such positions or policies have been publicly disseminated by
the staff of the SEC or such positions or policies, in the reasonable
judgment of the Initial Purchaser, represent the prevailing views of
the staff of the SEC, including a statement that any such Participating
Broker-Dealer who receives Exchange Securities for Transfer Restricted
Securities pursuant to the Exchange Offer may be deemed a statutory
underwriter
-23-
and must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange
Securities, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Issuers the notice referred to in Section 3(e),
without charge, as many copies of each Prospectus included in the
Exchange Offer Registration Statement, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request,
(iii) hereby consent to the use of the Prospectus forming part of the
Exchange Offer Registration Statement or any amendment or supplement
thereto, by any Person subject to the prospectus delivery requirements
of the SEC, including all Participating Broker-Dealers, in connection
with the sale or transfer of the Exchange Securities covered by the
Prospectus or any amendment or supplement thereto, (iv) use their best
efforts to keep the Exchange Offer Registration Statement effective and
to amend and supplement the Prospectus contained therein in order to
permit such Prospectus to be lawfully delivered by all Persons subject
to the prospectus delivery requirements of the Securities Act for such
period of time as such Persons must comply with such requirements in
order to resell the Exchange Securities; PROVIDED, HOWEVER, that such
period shall not be required to exceed 180 days (or such longer period
if extended pursuant to the last sentence of Section 3 hereof) (the
"APPLICABLE PERIOD"), and (v) include in the transmittal letter or
similar documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Transfer
Restricted Securities acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the Securities
Act in connection with any resale of Exchange Securities received
in respect of such Transfer Restricted Securities pursuant to the
Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus
in connection with the exchange of Transfer Restricted Securities, such
broker-dealer will not be deemed to admit that it is an underwriter
within the meaning of the Securities Act; and
-24-
(B) in the case of any Exchange Offer Registration Statement, the
Issuers agree to deliver, upon request, to the Trustee and to
Participating Broker-Dealers upon consummation of the Exchange Offer
(i) an opinion of counsel substantially in the form attached hereto as
EXHIBIT A, and (ii) an officers' certificate containing certifications
substantially similar to those set forth in Section 5(c) of the
Purchase Agreement and such additional certifications as are
customarily delivered in a public offering of debt securities.
The Issuers may require each seller of Transfer Restricted
Securities as to which any registration is being effected to furnish to the
Issuers such information regarding such seller and the proposed distribution of
such Transfer Restricted Securities as the Issuers may from time to time
reasonably request in writing. The Issuers may exclude from such registration
the Transfer Restricted Securities of any seller who fails to furnish such
information within a reasonable time (not to exceed 15 Business Days) after
receiving such request and shall be under no obligation to compensate any such
seller for any lost income, interest or other opportunity forgone, or any
liability incurred, as a result of the Issuers' decision to exclude such seller.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Issuers that they will be
utilizing the Prospectus contained in the Exchange Offer Registration Statement
as provided in Section 3(s) hereof that are seeking to sell Exchange Securities
and are required to deliver Prospectuses, each Holder agrees that, upon receipt
of any notice from the Issuers of the happening of any event of the kind
described in Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof,
such Holder or Participating Broker-Dealer, as the case may be, will forthwith
discontinue disposition of Transfer Restricted Securities or Exchange
Securities, as the case may be, pursuant to a Registration Statement until such
Holder's or Participating Broker-Dealer's, as the case may be, receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3(i)
hereof or until it is advised in writing (the "ADVICE") by the Company that the
use of the applicable Prospectus may be resumed, and, if so directed by the
Company, such Holder will deliver to the Company (at the Company's expense) all
copies in such Holder's or Participating Broker-Dealer's, as the case may be,
possession, other than permanent file copies then in such Holder's or
Participating Broker-Dealer's, as the case may be, possession, of the Prospectus
covering such Transfer Restricted
-25-
Securities or Exchange Securities, as the case may be, current at the time of
receipt of such notice. If the Issuers shall give any such notice to suspend the
disposition of Transfer Restricted Securities or Exchange Securities, as the
case may be, pursuant to a Registration Statement, the Issuers shall use their
best efforts to file and have declared effective (if an amendment) as soon as
practicable an amendment or supplement to the Registration Statement and, in the
case of an amendment, have such amendment declared effective as soon as
practicable and shall extend the period during which such Registration Statement
shall be maintained effective pursuant to this Agreement by the number of days
in the period from and including the date of the giving of such notice to and
including the date when the Issuers shall have made available to the Holders or
Participating Broker-Dealers, as the case may be, (x) copies of the supplemented
or amended Prospectus necessary to resume such dispositions or (y) the Advice.
4.INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Issuers,
jointly and severally, shall indemnify and hold harmless the Initial Purchaser,
each Holder, each Participating Broker-Dealer, each underwriter who participates
in an offering of Transfer Restricted Securities, their respective affiliates,
and each Person, if any, who controls any of such parties within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment or supplement thereto),
covering Transfer Restricted Securities or Exchange Securities,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any
-26-
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; PROVIDED that (subject to
Section 4(d) below) any such settlement is effected with the prior
written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred (including
reasonable fees and disbursements of one counsel (in addition to any
local counsel) chosen as provided in Section 4(c) below) reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) of this Section
4(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission (i) made in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of the Initial Purchaser, such Holder, such Participating Broker-Dealer or any
underwriter with respect to such Initial Purchaser, Holder, Participating
Broker-Dealer or underwriter, as the case may be, expressly for use in the
Registration Statement (or any amendment or supplement thereto) or any
Prospectus (or any amendment or supplement thereto) or (ii) contained in any
preliminary prospectus if the Initial Purchaser, such Holder, such Participating
Broker-Dealer or such underwriter failed to send or deliver a copy of the final
Prospectus (in the form it was first provided to such parties for confirmation
of sales or as amended or supplemented pursuant to Section 3(i) prior to such
confirmation of sales) to the Person asserting such losses, claims, damages or
liabilities on or prior to the delivery of written confirmation of any sale of
securities covered thereby to such Person in any case where such delivery is
required by the Securities Act and the Issuers shall have previously furnished
copies thereof to such Initial Purchaser, such Holder, such Participating
Broker-Dealer or such underwriter, as the case may be, in accordance with this
Agreement, at or prior to the written confirmation of the sale of such
Securities to such Person and the untrue statement contained in or the omission
from the preliminary Prospectus or the final Prospectus was corrected in the
final
-27-
Prospectus (in the form it was first provided to such parties for confirmation
of sales or as amended or supplemented pursuant to Section 3(i) prior to such
confirmation of sales).
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Issuers, the Initial Purchaser, each underwriter who
participates in an offering of Transfer Restricted Securities and the other
selling Holders and each of their respective directors and each Person, if any,
who controls any of the Issuers, the Initial Purchaser, any underwriter or any
other selling Holder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, against any and all loss, liability, claim, damage and
expense whatsoever described in the indemnity contained in Section 4(a) hereof,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment or supplement thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Issuers by or on behalf of such selling Holder with respect to
such Holder expressly for use in the Registration Statement (or any supplement
thereto), or any such Prospectus (or any amendment thereto); PROVIDED, HOWEVER,
that, in the case of the Shelf Registration Statement, no such Holder shall be
liable for any claims hereunder in excess of the amount of net proceeds received
by such Holder from the sale of Transfer Restricted Securities pursuant to the
Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 4(a) above, counsel to all the
indemnified parties shall be selected by the Initial Purchaser, and, in the case
of parties indemnified pursuant to Section 4(b) above, counsel to all the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; PROVIDED,
HOWEVER, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses
-28-
of more than one counsel (in addition to any local counsel) separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution is
sought under this Section 4 (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes a full and unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel, then such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 4(a)(ii) effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Issuers (jointly and
severally) and the Holders, as applicable, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement incurred by the Issuers and the Holders; PROVIDED,
HOWEVER, that no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Issuers and the Holders, such parties shall
contribute to such aggregate losses, liabilities, claims, damages and expenses
of the nature
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contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Issuers, on the one hand, and
the Holders of Transfer Restricted Securities, the Participating Broker-Dealer
or Initial Purchaser, as the case may be, on the other hand, in connection with
the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative fault of the Issuers, on the one hand, and the
Holders of Transfer Restricted Securities, the Participating Broker-Dealer or
the Initial Purchaser, as the case may be, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuers, or by the Holder
of Transfer Restricted Securities, the Participating Broker-Dealer or the
Initial Purchaser, as the case may be, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Issuers and the Holders of the Transfer Restricted Securities
and the Initial Purchaser agree that it would not be just and equitable if
contribution pursuant to this Section 4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 4.
For purposes of this Section 4, each affiliate of any Person, if
any, who controls a Holder of Transfer Restricted Securities, the Initial
Purchaser or a Participating Broker-Dealer within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as such other Person, and each director of each of the Issuers,
each affiliate of each of the Issuers, each executive officer of each of the
Issuers who signed the Registration Statement, and each Person, if any, who
controls any of the Issuers within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as each of the Issuers.
5.PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Transfer Restricted Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and
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executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements. The Issuers shall be under no obligation to
compensate any Holder for lost income, interest or other opportunity foregone,
or other liability incurred, as a result of the Issuers' decision to exclude
such Holder from any underwritten registration if such Holder has not complied
with the provisions of this Section 5 in all material respects following 15
Business Days' written notice of non-compliance and the Issuers' decision to
exclude such Holder.
6. SELECTION OF UNDERWRITERS. The Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of the Transfer Restricted
Securities covered by the Shelf Registration Statement; PROVIDED, HOWEVER, that
such underwriters and managers must be reasonably satisfactory to the Company.
7. MISCELLANEOUS.
(a) REPORTING REQUIREMENT. So long as any of the Transfer
Restricted Securities are outstanding, the Issuers will comply with the
provisions of Section 10.10 of the Indenture.
(b) NO INCONSISTENT AGREEMENTS. The rights granted to the Holders
hereunder do not, and will not for the term of this Agreement in any way
conflict with and are not, and will not during the term of this Agreement be
inconsistent with the rights granted to the holders of the Issuers' other issued
and outstanding securities under any other agreements entered into by the
Issuers.
(c) AMENDMENTS AND WAIVERS. Except as provided in Section 7(l),
the provisions of this Agreement, including provisions of this sentence, may
not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, otherwise than with
the prior written consent of the Issuers and the Majority Holders; PROVIDED,
HOWEVER, that no amendment, modification, or supplement or waiver or consent
to the departure with respect to the provisions of Section 4 hereof shall be
effective as
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against any Holder of Transfer Restricted Securities or any of the Issuers
unless consented to in writing by such Holder of Transfer Restricted Securities
or the Issuers, as the case may be.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, facsimile, or any courier guaranteeing overnight delivery (i)
if to a Holder, at the most current address given by such Holder to the Issuers
by means of a notice given in accordance with the provisions of this Section
7(d), which address initially is, with respect to the Initial Purchaser, the
address set forth in the Purchase Agreement; and (ii) if to the Issuers,
initially at the Company's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt is confirmed, if sent by facsimile; and on the next Business Day,
if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Company and the Initial Purchaser, including, without limitation and without the
need for an express assignment, subsequent Holders. If any transferee of any
Holder shall acquire Transfer Restricted Securities, in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Transfer Restricted Securities, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.
(f) THIRD PARTY BENEFICIARY. Each Holder shall be a third party
beneficiary of the agreements made hereunder
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between the Issuers, on the one hand, and the Initial Purchaser, on the other
hand, and shall have the right to enforce such agreements directly to the extent
it deems such enforcement necessary or advisable to protect its rights or the
rights of Holders hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. All specified times of
day refer to New York City time.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) SECURITIES HELD BY ANY OF THE ISSUERS OR ANY OF THEIR
RESPECTIVE AFFILIATES. Whenever the consent or approval of Holders of a
specified percentage of Transfer Restricted Securities is required hereunder,
Transfer Restricted Securities held by any of the Issuers or any of their
respective affiliates (as such term is defined in Rule 405 under the Securities
Act) shall not be counted in determining whether such consent or approval was
given by the Holders of such required percentage.
(l) GUARANTORS. So long as any Transfer Restricted Securities
remain outstanding, the Company shall cause each of its subsidiaries that
becomes a guarantor of the Securities under the Indenture to execute and deliver
a counterpart to this Agreement which subjects such subsidiary to the provisions
of this Agreement as a guarantor (all such subsidiaries, the "GUARANTORS"). Each
of the Guarantors agrees to join the Company in all of its undertakings
hereunder to effect the Exchange Offer for the Exchange Securities (which will
be
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guaranteed by each of the Guarantors with terms identical to such Guarantors'
guaranty of the Securities) and the filing of any Shelf Registration Statement
required hereunder (including, without limitation, the undertakings in Sections
3 and 4 hereof).
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
ATRIUM COMPANIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
GUARANTORS:
ATRIUM CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
ATRIUM DOOR AND WINDOW
COMPANY - WEST COAST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
ATRIUM DOOR AND WINDOW COMPANY
OF THE NORTHEAST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
S-35
ATRIUM DOOR AND WINDOW COMPANY
OF NEW YORK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
ATRIUM DOOR AND WINDOW COMPANY
OF ARIZONA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
ATRIUM DOOR AND WINDOW COMPANY
OF NEW ENGLAND
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
DOOR HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Assistant Secretary
▇.▇. ▇▇▇▇▇ COMPANY, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Assistant Secretary
S-36
▇.▇. ▇▇▇▇▇ COMPANY - SOUTH
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
TOTAL TRIM, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Assistant Secretary
TOTAL TRIM, INC. - SOUTH
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Assistant Secretary
WING INDUSTRIES HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Assistant Secretary
WING INDUSTRIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Assistant Secretary
S-37
HEAT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Treasurer and Secretary
H.I.G. VINYL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title:
THERMAL INDUSTRIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Treasurer and Secretary
BEST BUILT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
CHAMPAGNE INDUSTRIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
Treasurer and Secretary
S-38
Confirmed and accepted as of
the date first above
written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
S-39
Schedule A
FORM OF OPINION OF COUNSEL
1. Each of the Exchange Offer Registration Statement and the
Prospectus (other than the financial statements, notes or schedules thereto and
other financial and statistical information and supplemental schedules included
or referred to therein or omitted therefrom and the Form T-1, as to which such
counsel need express no opinion), complies as to form in all material respects
with the applicable requirements of the Securities Act and the applicable rules
and regulations promulgated under the Securities Act.
2. We have participated in conferences with officers and other
representatives of the Issuers, your representatives and representatives of the
independent accountants for the Issuers at which conferences the contents of the
Exchange Offer Registration Statement and related matters were discussed.
Although such counsel has not verified and does not pass upon or assume any
responsibility for the accuracy, completeness or fairness of the statements
contained therein, on the basis of the foregoing participation (relying as to
materiality to a large extent upon representations and opinions of officers and
other representatives of the Issuers), no facts have come to such counsel's
attention that lead such counsel to believe that the Exchange Offer Registration
Statement (other than the financial statements, notes and schedules thereto or
other financial information contained or referred to therein and the Form T-1,
as to which such counsel need express no belief), at the time the Exchange Offer
Registration Statement became effective and at the time of the consummation of
the Exchange Offer, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading, or that the Prospectus (other than
the financial statements, notes and schedules thereto or other financial
information contained or referred to therein, as to which such counsel need
express no belief) contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading.
