Document:

EXHIBIT 4.19

 

PLIANT
CORPORATION

 

$306,000,000

 

principal
amount at maturity

 

111/8% Senior Secured
Discount Notes due 2009

 

EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

 

February 17, 2004

 

J.P. MORGAN SECURITIES INC.

CREDIT SUISSE FIRST BOSTON LLC

DEUTSCHE BANK SECURITIES INC.

c/o J.P. Morgan Securities Inc.

270 Park Avenue, 5th floor

New York, New York  10017

 

Ladies and Gentlemen:

 

Pliant Corporation, a Utah corporation (the “Company”), proposes to issue and sell to J.P. Morgan
Securities Inc. (“JPMorgan”),
Credit Suisse First Boston LLC (“CSFB”) and
Deutsche Bank Securities Inc. (“DBSI” and, together with JPMorgan and
CSFB, the “Initial Purchasers”),
upon the terms and subject to the conditions set forth in a purchase agreement
dated February 6, 2004 (the “Purchase
Agreement”), $306,000,000 principal amount at maturity of its 111/8%
Senior Secured Discount Notes due 2009 (the “Notes”)
to be guaranteed on a senior secured basis by certain of the Company’s
subsidiaries signatory hereto (the “Note
Guarantors”).  Capitalized
terms used but not defined herein shall have the meanings given to such terms
in the Purchase Agreement.

 

As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, the Company and the Note Guarantors agree with the
Initial Purchasers, for the benefit of the holders (including the Initial
Purchasers and the Market-Maker (as defined herein)) of the Notes, the Exchange
Notes (as defined herein) and the Private Exchange Notes (as defined herein)
(collectively, the “Holders”), as
follows:

 

1.  Registered Exchange
Offer.  Unless, because of
any change in law or applicable interpretations thereof by the Commission’s
staff, the Company and the Note Guarantors determine in good faith after
consultation with counsel that they are not permitted to effect the Registered
Exchange Offer (as defined herein), the Company and the Note Guarantors shall
(i) prepare and, not later than 75 days following the date of original issuance
of the Notes (the “Issue Date”),
file with the Commission a registration statement (the “Exchange Offer Registration Statement”) on
an appropriate form under the Securities Act with respect to a proposed offer
to the Holders of the Notes (the “Registered
Exchange Offer”) to issue and deliver to such Holders, in exchange
for the Notes, a like aggregate principal amount at maturity of debt securities
of the Company (the “Exchange Notes”)
that are identical in all material respects to the

 

 

Notes, except
for the transfer restrictions relating to the Notes, (ii) use commercially
reasonable efforts to cause the Exchange Offer Registration Statement to become
effective under the Securities Act no later than 150 days after the Issue Date
and the Registered Exchange Offer to be consummated no later than 190 days
after the Issue Date and (iii) keep the Registered Exchange Offer open for not
less than 20 business days (or longer, if required by applicable law) after the
date on which notice of the Registered Exchange Offer is mailed to the Holders
(such period being called the “Exchange
Offer Registration Period”). 
The Exchange Notes will be issued under the Indenture or an indenture
(the “Exchange Notes Indenture”)
among the Company, the Note Guarantors and the Trustee or such other bank or
trust company that is reasonably satisfactory to the Initial Purchasers, as
trustee (the “Exchange Notes Trustee”),
such indenture to be identical in all material respects to the Indenture,
except for the transfer restrictions relating to the Notes (as described
above).  All references in this
Agreement to “prospectus” shall, except where the context otherwise requires,
include any prospectus (or amendment or supplement thereto) filed with the
Commission pursuant to Section 6 of this Agreement.

 

Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Notes for Exchange Notes (assuming that such Holder (a) is not an
affiliate (within the meaning of Rule 405 under the Securities Act) of the
Company or an Exchanging Dealer (as defined herein) not complying with the
requirements of the next sentence, (b) is not an Initial Purchaser holding
Notes that have, or that are reasonably likely to have, the status of an unsold
allotment in an initial distribution, (c) acquires the Exchange Notes in the
ordinary course of such Holder’s business, (d) has no arrangements or
understandings with any person to participate in the distribution of the
Exchange Notes and (e) if such Holder is not an Exchanging Dealer (as defined
below), it is not engaged in, and does not intend to engage in, a distribution
of the Exchange Notes) and to trade such Exchange Notes from and after their
receipt without any limitations or restrictions under the Securities Act and
without material restrictions under the securities laws of the several states
of the United States.  The Company, the
Note Guarantors, the Initial Purchasers and each Exchanging Dealer acknowledge
that, pursuant to current interpretations by the Commission’s staff of
Section 5 of the Securities Act, each Holder that is a broker-dealer
electing to exchange Notes, acquired for its own account as a result of
market-making activities or other trading activities, for Exchange Notes (an “Exchanging Dealer”), is required to
deliver a prospectus containing substantially the information set forth in
Annex A hereto on the cover, in Annex B hereto in the “Exchange Offer
Procedures” section and the “Purpose of the Exchange Offer”
section (if any) and in Annex C hereto in the “Plan of Distribution”
section of such prospectus in connection with a sale of any such Exchange
Notes received by such Exchanging Dealer pursuant to the Registered Exchange
Offer.

 

If, prior to the consummation of the Registered Exchange Offer, any
Holder shall notify the Company in writing that it holds any Notes acquired by
it that have, or that are reasonably likely to be determined to have, the
status of an unsold allotment in an initial distribution, or any Holder
notifies the Company in writing that it believes that it is not entitled to
participate in the Registered Exchange Offer (other than because it has an
understanding or arrangement with any person to participate in the distribution
of the Exchange Notes) and such Holder has not received a written opinion from
counsel to the Company, reasonably acceptable to such Holder to the effect that
such Holder is legally permitted to participate in the Registered Exchange
Offer, the Company shall, upon the request of any such Holder, simultaneously
with the delivery of the Exchange Notes in the Registered Exchange Offer, issue
and deliver to any

 

2

 

such Holder, in exchange for the Notes held
by such Holder (the “Private Exchange”),
a like aggregate principal amount of debt at maturity securities of the Company
(the “Private Exchange Notes”)
that are identical in all material respects to the Exchange Notes, except for
the transfer restrictions relating to such Private Exchange Notes.  The Private Exchange Notes will be issued
under the same indenture as the Exchange Notes, and, if permitted under the
policies established at such time by the CUSIP Service Bureau of Standard &
Poor’s Corporation, the Company shall use commercially reasonable efforts to
cause the Private Exchange Notes to bear the same CUSIP number as the Exchange
Notes.

 

In connection with the Registered Exchange Offer, the Company shall:

 

(a)  mail to each Holder a copy
of the prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;

 

(b)  keep the Registered
Exchange Offer open for not less than 20 business days (or longer, if required
by applicable law) after the date on which notice of the Registered Exchange
Offer is mailed to the Holders;

 

(c)  utilize the services of a
depositary for the Registered Exchange Offer with an address in the Borough of
Manhattan, The City of New York;

 

(d)  permit Holders to withdraw
tendered Notes at any time prior to the close of business, New York City time,
on the last business day on which the Registered Exchange Offer shall remain
open; and

 

(e)  otherwise comply in all
respects with all laws that are applicable to the Registered Exchange Offer.

 

As soon as practicable after the close of the Registered Exchange Offer
and any Private Exchange, as the case may be, the Company shall:

 

(a) accept for exchange all Notes tendered
and not validly withdrawn pursuant to the Registered Exchange Offer and the
Private Exchange;

 

(b) deliver to the Trustee for cancelation
all Notes so accepted for exchange; and

 

(c) cause the Trustee or the Exchange Notes
Trustee, as the case may be, promptly to authenticate and deliver to each
Holder, Exchange Notes or Private Exchange Notes, as the case may be, equal in
principal amount at maturity to the Notes of such Holder so accepted for
exchange.

 

The Company and the Note Guarantors shall use commercially reasonable
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 used by all persons (including Exchanging Dealers) subject to
the prospectus delivery requirements of the Securities Act for 180 days
after the consummation of the Registered Exchange Offer (such 180 days, the “Applicable Period”).

 

3

 

The Indenture or the Exchange Notes Indenture, as the case may be,
shall provide that the Notes, the Exchange Notes and the Private Exchange Notes
shall vote and consent together on all matters as one class and that none of
the Notes, the Exchange Notes or the Private Exchange Notes will have the right
to vote or consent as a separate class on any matter.

 

Prior to the earlier of (i) December 15, 2006 and
(ii) the Cash Election Date (as defined in the Indenture), each Exchange Note
and Private Exchange Note issued pursuant to the Registered Exchange Offer and
in the Private Exchange Offer will accrete on the same schedule as the
Notes surrendered in exchange therefor. 
Interest on each Exchange Note and Private Exchange Note issued pursuant
to the Registered Exchange Offer and in the Private Exchange 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 earlier of (i) December 15, 2006 and (ii) the Cash
Election Date.

 

Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company and the Note Guarantors in writing (which
may be contained in the applicable letter of transmittal) that at the time of
the consummation of the Registered Exchange Offer (i) any Exchange Notes
received by such Holder will be acquired in the ordinary course of business,
(ii) such Holder will have no arrangements or understanding with any person to
participate in the distribution of the Notes or the Exchange Notes within the
meaning of the Securities Act, (iii) such Holder is not an affiliate (within
the meaning of Rule 405 under the Securities Act) of the Company or, if it is
such an affiliate, such Holder will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable and (iv)
if such Holder is a broker-dealer, that it will deliver a prospectus in
connection with any resale of such Exchange Notes during the Applicable Period.

 

Notwithstanding any other provisions hereof, the Company and the Note
Guarantors will ensure that (i) any Exchange Offer Registration Statement and
any amendment thereto and any prospectus forming part thereof and any supplement
thereto complies in all material respects with the Securities Act and the rules
and regulations of the Commission thereunder, (ii) any Exchange Offer
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any prospectus forming part of any Exchange
Offer Registration Statement, and any supplement to such prospectus, does not,
as of the consummation of the Registered Exchange Offer, 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 under
which they were made, not misleading.

 

2.  Shelf Registration.  If (i) because of any change in law or
applicable interpretations thereof by the Commission’s staff the Company and
the Note Guarantors determine in good faith after consultation with counsel
that they are not permitted to effect the Registered Exchange Offer as
contemplated by Section 1 hereof, or (ii) any Notes validly tendered
pursuant to the Registered Exchange Offer are not exchanged for Exchange Notes
within 190 days after the Issue Date, or (iii) the Initial Purchasers so
request with respect to Notes or Private Exchange Notes not eligible to be
exchanged for Exchange Notes in the Registered Exchange Offer and held by them
following the consummation of the Registered Exchange Offer, or (iv) any
applicable law or interpretations do not permit any Holder to participate in
the Registered Exchange Offer (other than because such Holder has an
understanding or arrangement

 

4

 

with any
person to participate in the distribution of the Exchange Notes), or (v) any
Holder that participates in the Registered Exchange Offer notifies the Company
in writing within 30 days following the consummation of the Registered
Exchange Offer that such Holder may not resell the Exchange Notes acquired by
it in the Registered Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange Offer Registration
Statement is not legally available for such resales by such Holder, or
(vi) the Company so elects, then the following provisions shall apply:

 

(a)  The Company and the Note
Guarantors shall use commercially reasonable efforts to file as promptly as
practicable (but in no event more than 60 days after so required or requested
pursuant to this Section 2; provided that in the case of any filing
in response to clause (i), (iii) or (iv) of the preceding paragraph, the
Company and the Note Guarantors shall not be required to make any such filing
earlier than 75 days following the Issue Date (the date of such filing, the “Shelf Filing Date”)) with the Commission,
and thereafter shall use commercially reasonable efforts to cause to be
declared effective on or prior to 115 days after the Shelf Filing Date (but, in
the case of any filing in response to clause (i), (iii), (iv) or (vi) of
the preceding paragraph, in no event earlier than the 190th day after the Issue
Date), a shelf registration statement on an appropriate form under the
Securities Act relating to the offer and sale of the Transfer Restricted Notes
(as defined below) by the Holders thereof from time to time in accordance with
the methods of distribution set forth in such registration statement
(hereafter, a “Shelf Registration Statement”
and, together with any Exchange Offer Registration Statement, a “Registration Statement”).

 

(b)  The Company and the Note
Guarantors shall use commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective in order to permit the prospectus
forming part thereof to be used by Holders of Transfer Restricted Notes for a
period ending on the earlier of (i) two years from the Issue Date or such
shorter period that will terminate when all the Transfer Restricted Notes
covered by the Shelf Registration Statement have been sold pursuant thereto and
(ii) the date on which the Notes become eligible for resale without volume
restrictions pursuant to Rule 144 under the Securities Act (in any such case,
such period being called the “Shelf
Registration Period”).  The
Company and the Note Guarantors shall be deemed not to have used commercially
reasonable efforts to keep the Shelf Registration Statement effective during
the requisite period if any of them voluntarily take any action that would
result in Holders of Transfer Restricted Notes covered thereby not being able
to offer and sell such Transfer Restricted Notes during that period, unless
(A) such action is required by applicable law or (B) such action was
permitted by Section 2(c).

 

(c)  Notwithstanding the
provisions of Section 2(b) (but subject to the provisions of
Section 3(b)), the Company and the Note Guarantors may for valid business
reasons, including without limitation, a potential acquisition, divestiture of
assets or other material corporate transaction, issue a notice that the Shelf
Registration Statement is no longer effective or the prospectus included
therein is no longer usable for offers and sales of Transfer Restricted Notes
and may issue any notice suspending use of the Shelf Registration Statement required
under applicable securities laws to be issued. 
The provisions of this Section 2(c) shall also be applicable to the
Exchange Offer Registration Statement during the Applicable Period; provided that the Applicable Period shall
be

 

5

 

extended for the number of days (which shall not exceed 60) that the
use of the Exchange Offer Registration Statement is suspended.

 

(d)  Notwithstanding any other
provisions hereof, the Company and the Note Guarantors shall ensure that (i)
any Shelf Registration Statement and any amendment thereto and any prospectus
forming part thereof and any supplement thereto complies in all material
respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any amendment
thereto (in either case, other than with respect to information included
therein in reliance upon or in conformity with written information furnished to
the Company by or on behalf of any Holder specifically for use therein (the “Holders’ Information”)) does not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (iii) any prospectus forming part of any Shelf Registration
Statement, and any supplement to such prospectus (in either case, other than
with respect to Holders’ Information), does 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 under which they were
made, not misleading.

 

3.  Liquidated Damages.  (a) 
The parties hereto agree that the Holders of Transfer Restricted Notes
will suffer damages if the Company and the Note Guarantors fail to fulfill
their obligations under Section 1 or Section 2, as applicable, and
that it would not be feasible to ascertain the extent of such damages.  Accordingly, if (i) the applicable
Registration Statement is not filed with the Commission on or prior to the date
specified in this Agreement, (ii) the Exchange Offer Registration Statement or
the Shelf Registration Statement, as the case may be, is not declared effective
on or prior to the date specified in this Agreement, (iii) the Registered
Exchange Offer is not consummated on or prior to 190 days after the Issue Date
(other than in the event the Company is requested or required or elected to
file a Shelf Registration Statement), or (iv) the Shelf Registration Statement
is filed and declared effective on or prior to the date specified in this
Agreement but shall thereafter cease to be effective (at any time that the
Company and the Note Guarantors are obligated to maintain the effectiveness
thereof) without being succeeded within 60 days by an additional Registration
Statement or a post-effective amendment to the Shelf Registration Statement
filed and declared effective (each such event referred to in clauses (i)
through (iv), a “Registration Default”),
the interest rate on the Transfer Restricted Notes will be increased by 1.00%
per annum (the amount paid as a result of such increase being herein referred
to as “liquidated damages”) until (i) the applicable Registration Statement is
filed, (ii) the Exchange Offer Registration Statement is declared effective and
the Registered Exchange Offer is consummated, (iii) the Shelf Registration
Statement is declared effective or (iv) the Shelf Registration Statement again
becomes effective, an additional Registration Statement becomes effective or a
post-effective amendment to the Shelf Registration Statement becomes effective,
as the case may be.  Following the cure
of all Registration Defaults, the accrual of liquidated damages will cease.  As used herein, the term “Transfer Restricted Notes” means (i) each
Note until the date on which such Note has been exchanged for a freely
transferable Exchange Note in the Registered Exchange Offer (it being
understood that the requirement that an Exchanging Dealer deliver a prospectus
in connection with sales of Exchange Notes acquired in the Registered Exchange
Offer shall not mean that the Exchange Note is not freely transferable for
purposes of this Section 3), (ii) each Note or Private Exchange Note until
the date on which it has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (iii)
each Note or Private Exchange Note

 

6

 

until the date
on which it is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities
Act.  Notwithstanding anything to the
contrary in this Section 3(a), the Company shall not be required to pay
liquidated damages to a Holder of Transfer Restricted Notes if such Holder
failed to comply with its obligations to make the representations set forth in
the second to last paragraph of Section 1 or failed to provide the
information required to be provided by it, if any, pursuant to Section 4(o).

 

(b)  Notwithstanding the foregoing
provisions of Section 3(a), the Company and the Note Guarantors may for
valid business reasons, including without limitation, a potential acquisition,
divestiture of assets or other material corporate transaction, issue a notice
that the Shelf Registration Statement is no longer effective or the prospectus
included therein is no longer usable for offers and sales of Transfer
Restricted Notes and may issue any notice suspending use of the Shelf
Registration Statement required under applicable securities laws to be issued
and, in the event that the aggregate number of days in any consecutive
twelve-month period for which all such notices are issued and effective exceeds
60 days in the aggregate, then the interest rate on the Transfer Restricted
Notes covered by the Shelf Registration Statement will be increased by 1.00%
per annum (the amount paid as a result of such increase being herein referred
to as “liquidated damages”).  Upon the
Company and the Note Guarantors declaring that the Shelf Registration Statement
is useable after the period of time described in the preceding sentence,
accrual of liquidated damages shall cease; provided,
however, that if after any such cessation of the accrual of
liquidated damages the Shelf Registration Statement again ceases to be useable
beyond the period permitted above, liquidated damages will again accrue
pursuant to the foregoing provisions.

 

(c)  The Company shall notify the Trustee
and the Paying Agent under the Indenture immediately upon the happening of each
and every Registration Default.  With
respect to any liquidated damages due on the Transfer Restricted Notes after
the earlier of (i) December 15, 2006 and (ii) the Cash Election
Date, the Company and the Note Guarantors shall pay such liquidated damages by
depositing with the Paying Agent (which may not be the Company for these
purposes), in trust, for the benefit of the Holders thereof, prior to 10:00
a.m., New York City time, on the next interest payment date specified by the Indenture
and the Notes, sums sufficient to pay the liquidated damages then due.  The liquidated damages due shall be payable
on each interest payment date specified by the Indenture and the Notes to the
record holder entitled to receive the interest payment to be made on such
date.  With respect to any liquidated
damages due on the Transfer Restricted Notes on or prior to the earlier of
(i) December 15, 2006 and (ii) any Cash Election Date, such
liquidated damages will be added to the Accreted Value (as defined in the
Indenture) of the Notes.  Each
obligation to pay liquidated damages shall be deemed to accrue from and
including the date of the applicable Registration Default.

 

(d)  The parties hereto agree that the
liquidated damages provided for in this Section 3 constitute a reasonable
estimate of and are intended to constitute the sole damages that will be
suffered by Holders of Transfer Restricted Notes by reason of the failure of
(i) the Shelf Registration Statement or the Exchange Offer Registration Statement
to be filed, (ii) the Shelf Registration Statement to remain effective or (iii)
the Exchange Offer Registration Statement to be declared effective and the
Registered Exchange Offer to be consummated, in each case to the extent
required by this Agreement.

 

7

 

4.  Registration
Procedures.  In connection
with any Registration Statement, the following provisions shall apply:

 

(a)  The Company shall (i)
furnish to the Initial Purchasers, prior to the filing thereof with the
Commission, a copy of the Exchange Offer Registration Statement and each
amendment thereof and each supplement, if any, to the prospectus included
therein and shall use commercially reasonable efforts to reflect in each such
document, when so filed with the Commission, such comments as the Initial
Purchasers may reasonably propose; (ii) include information substantially
as set forth in Annex A hereto on the cover, in Annex B hereto in the “Exchange
Offer Procedures” section and the “Purpose of the Exchange Offer”
section (if any) and in Annex C hereto in the “Plan of Distribution”
section of the prospectus forming a part of the Exchange Offer
Registration Statement, and include information substantially as set forth in
Annex D hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; and (iii) if requested in writing by any Initial
Purchaser, include the information required by Items 507 or 508 of Regulation
S-K, as applicable, in the prospectus forming a part of the Exchange Offer
Registration Statement.

 

(b)  The Company shall advise
the Initial Purchasers, each Exchanging Dealer and the Holders (if applicable)
and, if requested by any such person, confirm such advice in writing (which
advice pursuant to clauses (ii)-(v) hereof shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite changes
have been made):

 

(i) when any Registration Statement and any amendment thereto has been
filed with the Commission and when such Registration Statement or any
post-effective amendment thereto has become effective;

 

(ii) of any request by the Commission for amendments or supplements to
any Registration Statement or the prospectus included therein or for additional
information;

 

(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of any Registration Statement or the initiation of any
proceedings for that purpose;

 

(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Notes, the Exchange Notes or the
Private Exchange Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and

 

(v) of the happening of any event that requires the making of any
changes in any Registration Statement or the prospectus included therein in
order that the statements therein are not misleading and do not omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.

 

(c)  The Company and the Note
Guarantors will make every reasonable effort to obtain the withdrawal at the
earliest possible time of any order suspending the effectiveness of any
Registration Statement.

 

8

 

(d)  The Company will furnish to
each Holder of Transfer Restricted Notes included within the coverage of any
Shelf Registration Statement, without charge, at least one conformed copy of
such Shelf Registration Statement and any post-effective amendment thereto,
including financial statements and schedules and, if any such Holder so
requests in writing, all exhibits thereto (including those, if any,
incorporated by reference).

 

(e)  The Company will, during
the Shelf Registration Period, promptly deliver to each Holder of Transfer
Restricted Notes included within the coverage of any Shelf Registration
Statement, without charge, as many copies of the prospectus (including each
preliminary prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder may reasonably request; and the
Company consents to the use of such prospectus or any amendment or supplement
thereto by each of the selling Holders of Transfer Restricted Notes in
connection with the offer and sale of the Transfer Restricted Notes covered by
such prospectus or any amendment or supplement thereto.

 

(f)  The Company will furnish to
the Initial Purchasers, each Exchanging Dealer who so requests in writing, and
to any other Holder who so requests in writing, without charge, at least one
conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if the Initial Purchasers or Exchanging Dealer or any such Holder so requests
in writing, all exhibits thereto (including those, if any, incorporated by
reference).

 

(g)  The Company will, during
the Exchange Offer Registration Period or the Shelf Registration Period, as
applicable, promptly deliver to the Initial Purchasers, each Exchanging Dealer
and such other persons that are required to deliver a prospectus following the
Registered Exchange Offer, without charge, as many copies of the final
prospectus included in the Exchange Offer Registration Statement or the Shelf Registration
Statement and any amendment or supplement thereto as the Initial Purchasers,
such Exchanging Dealer or other persons may reasonably request in writing; and
the Company and the Note Guarantors consent to the use of such prospectus or
any amendment or supplement thereto by the Initial Purchasers, such Exchanging
Dealer or other persons, as applicable, as aforesaid.

 

(h)  Prior to the effective date
of any Registration Statement, the Company and the Note Guarantors will use
commercially reasonable efforts to register or qualify, or cooperate with the
Holders of Notes, Exchange Notes or Private Exchange Notes included therein and
their respective counsel in connection with the registration or qualification
of, such Notes, Exchange Notes or Private Exchange Notes for offer and sale
under the securities or blue sky laws of such jurisdictions as any such Holder
reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of
the Notes, Exchange Notes or Private Exchange Notes covered by such
Registration Statement; provided
that the Company and the Note Guarantors will not be required to qualify
generally to do business in any jurisdiction where they are not then so
qualified or to take any action which would subject them to general service of
process or to taxation in any such jurisdiction where they are not then so
subject.

 

9

 

(i)  The Company and the Note
Guarantors will cooperate with the Holders of Notes, Exchange Notes or Private
Exchange Notes to facilitate the timely preparation and delivery of
certificates representing Notes, Exchange Notes or Private Exchange Notes to be
sold pursuant to any Registration Statement free of any restrictive legends and
in such denominations and registered in such names as the Holders thereof may
request in writing prior to sales of Notes, Exchange Notes or Private Exchange
Notes pursuant to such Registration Statement.

 

(j)  If any event contemplated
by Section 4(b)(ii) through (v) occurs during the period for which the
Company and the Note Guarantors are required to maintain an effective
Registration Statement, the Company and the Note Guarantors will promptly
prepare and file with the Commission a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to purchasers of the
Notes, Exchange Notes or Private Exchange Notes from a Holder, the prospectus
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 under which they were made, not misleading.

 

(k)  If any event contemplated
by Section 2(c) or 3(b) occurs during the period for which the Company and
the Note Guarantors are required to maintain an effective Registration
Statement, the Company and the Note Guarantors will, to the extent required
after the end of the applicable periods referred to in Sections 2(c) and
3(b), promptly prepare and file with the Commission a post-effective amendment
to the Registration Statement or a supplement to the related prospectus or file
any other required document so that, as thereafter delivered to purchasers of
the Notes, Exchange Notes or Private Exchange Notes from a Holder, the
prospectus 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 under which they were made, not misleading.

 

(l)  Not later than the
effective date of the applicable Registration Statement, the Company will
provide a CUSIP number for the Notes, the Exchange Notes and the Private
Exchange Notes, as the case may be, and provide the applicable trustee with
certificates for the Notes, the Exchange Notes or the Private Exchange Notes,
as the case may be, in a form eligible for deposit with The Depository Trust
Company.

 

(m)  The Company and the Note
Guarantors will comply with all applicable rules and regulations of the
Commission and the Company and the Note Guarantors will make generally
available to their security holders as soon as practicable after the effective
date of the applicable Registration Statement an earning statement of the
Company satisfying the provisions of Section 11(a) of the Securities Act; provided that in no event shall such
earning statement be delivered later than 45 days after the end of a 12-month
period (or 90 days, if such period is a fiscal year) beginning with the first
month of the Company’s first fiscal quarter commencing after the effective date
of the applicable Registration Statement, which statement shall cover such
12-month period.

 

(n)  The Company and the Note
Guarantors will cause the Indenture or the Exchange Notes Indenture, as the
case may be, to be qualified under the Trust Indenture Act as required by
applicable law in a timely manner.

 

10

 

(o)  The Company may require
each Holder of Transfer Restricted Notes to be registered pursuant to any Shelf
Registration Statement to furnish to the Company such information concerning
the Holder and the distribution of such Transfer Restricted Notes as the Company
may from time to time reasonably require for inclusion in such Shelf
Registration Statement, and the Company may exclude from such registration the
Transfer Restricted Notes of any Holder that fails to furnish such information
within a reasonable time after receiving such request.  Each Holder of Transfer Restricted Notes as
to which a Shelf Registration Statement is being effected, by its participation
in the Shelf Registration Statement, shall be deemed to agree to furnish the
Company and the Note Guarantors all information concerning such Holder required
to be described in order to make the information previously furnished by such
Holder to the Company and the Note Guarantors not materially misleading.

 

(p)  In the case of (A) a
Shelf Registration Statement, each Holder of Transfer Restricted Notes to be
registered pursuant thereto agrees by acquisition of such Transfer Restricted
Notes that, and (B) the Exchange Offer Registration Statement during the
Applicable Period only, each Holder of Exchange Notes subject to the prospectus
delivery requirements of the Securities Act agrees that, upon receipt of any
notice from the Company pursuant to Sections 2(c), 3(b) or 4(b)(ii)
through (v), such Holder will discontinue disposition of such Transfer Restricted
Notes or Exchange Notes, as applicable, until such Holder’s receipt of copies
of the supplemental or amended prospectus contemplated by Section 4(j) or
4(k), as the case may be, or until advised in writing by the Company that the
use of the applicable prospectus may be resumed (the “Advice”). 
If the Company shall give any notice under Sections 2(c), 3(b) or
4(b)(ii) through (v) during the period that the Company is required to maintain
an effective Registration Statement (the “Effectiveness
Period”), such Effectiveness Period shall be extended by the number
of days during such period from and including the date of the giving of such
notice to and including the date when each seller of Transfer Restricted Notes
or Exchange Notes, as applicable, covered by such Registration Statement shall
have received (x) the copies of the supplemental or amended prospectus
contemplated by Section 4(j) or 4(k), as the case may be, (if an amended
or supplemental prospectus is required) or (y) the Advice (if no amended or supplemental
prospectus is required).

 

(q)  In the case of a Shelf
Registration Statement, the Company and the Note Guarantors shall enter into
such customary agreements (including, if requested by  Holders of a majority in aggregate principal amount at maturity of
the Notes, an underwriting agreement in customary form) and take all such other
action, if any, as Holders of a majority in aggregate principal amount at
maturity of the Notes, Exchange Notes and Private Exchange Notes covered by the
Shelf Registration Statement or the managing underwriters (if any) shall
reasonably request in order to facilitate any disposition of Notes, Exchange
Notes or Private Exchange Notes pursuant to such Shelf Registration
Statement.  Notwithstanding anything to
the contrary contained in this Agreement, the Company and the Note Guarantors
shall not be required to engage in more than one underwritten offering pursuant
to this Agreement.

 

(r)  In the case of a Shelf
Registration Statement, the Company shall (i) make reasonably available for
inspection by a representative of, and Special Counsel (as defined below)
acting for, Holders of a majority in aggregate principal amount at maturity of
the Notes, Exchange Notes and Private Exchange Notes covered by the Shelf

 

11

 

Registration Statement and any underwriter participating in any
disposition of Notes, Exchange Notes or Private Exchange Notes pursuant to such
Shelf Registration Statement, all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries and (ii)
use commercially reasonable efforts to have its officers, directors, employees,
accountants and counsel supply all relevant information reasonably requested by
such representative, Special Counsel or any such underwriter (an “Inspector”) in connection with such Shelf
Registration Statement.

 

(s)  In the case of a Shelf
Registration Statement, the Company shall, if requested by Holders of a
majority in aggregate principal amount at maturity of the Notes, Exchange Notes
and Private Exchange Notes covered by the Shelf Registration Statement, their
Special Counsel or the managing underwriters (if any) in connection with such
Shelf Registration Statement, use commercially reasonable efforts to cause (i)
its counsel to deliver an opinion relating to the Shelf Registration Statement
and the Notes, Exchange Notes or Private Exchange Notes, as applicable, in
customary form, (ii) its officers to execute and deliver all customary documents
and certificates requested by Holders of a majority in aggregate principal
amount at maturity of the Notes, Exchange Notes and Private Exchange Notes
being sold, its Special Counsel or the managing underwriters (if any) and (iii)
its independent public accountants to provide a comfort letter or letters in
customary form, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards
No. 72.

 

5.  Registration Expenses.  The Company and the Note Guarantors will
jointly and severally bear all expenses incurred in connection with the
performance of their obligations under Sections 1, 2, 3 and 4 and the Company
will reimburse the Initial Purchasers or the Holders, as applicable, for the
reasonable fees and disbursements of one firm of attorneys (in addition to any
local counsel) chosen by the Holders of a majority in aggregate principal
amount at maturity of the Notes, the Exchange Notes and the Private Exchange
Notes covered by each Registration Statement (the “Special Counsel”) acting for the Initial Purchasers or
Holders in connection therewith.  The
Company and the Note Guarantors are not required to pay any commissions or
concessions of any broker-dealers.

 

6.  Market-Making.  (a) 
For so long as any of the Notes, Exchange Notes or Private Exchange
Notes are outstanding and JPMorgan (in such capacity, the “Market-Maker”) or
any of its affiliates (as defined in the rules and regulations of the
Commission) owns any equity securities of the Company, the Note Guarantors or
any of their affiliates and proposes to make a market in the Notes, Exchange
Notes or Private Exchange Notes as part of its business in the ordinary course,
the following provisions shall apply for the sole benefit of the Market-Maker:

 

(i) The Company and the Note Guarantors shall (A) on the date that the
Exchange Offer Registration Statement or, if required hereby, the Shelf
Registration Statement, is filed with the Commission, file a registration
statement (the “Market-Making Registration Statement”) (which may be the
Exchange Offer Registration Statement or the Shelf Registration Statement if
permitted by the rules and regulations of the Commission) and use commercially
reasonable efforts to cause such Market-Making Registration Statement to be
declared effective by the Commission on or prior to the consummation of the
Exchange Offer or the effective date of the Shelf Registration Statement, as
applicable; (B) periodically amend such Market-Making Registration
Statement so that the information contained therein complies with the
requirements of

 

12

 

Section 10(a) under the Securities Act; (C) if reasonably
requested in writing by the Market-Maker, within 45 days following the end of
each of the Company’s fiscal quarters (other than the fourth quarter), file a
supplement to the prospectus contained in the Market-Making Registration
Statement that sets forth the financial results of the Company for such
quarter; (D) amend the Market-Making Registration Statement or amend or
supplement the related prospectus when necessary to reflect any material
changes in the information provided therein; and (E) amend the
Market-Making Registration Statement when required to do so in order to comply
with Section 10(a)(3) of the Securities Act; provided, however,
that (1) prior to filing the Market-Making Registration Statement, any
amendment thereto or any amendment or supplement to the related prospectus
(other than a supplement filed pursuant to clause (C) of this paragraph unless
the Market-Maker reasonably requests), the Company will furnish to the
Market-Maker copies of all such documents proposed to be filed, which documents
will be subject to the review of the Market-Maker and its counsel and (2) the
Company and the Note Guarantors will not file the Market-Making Registration
Statement, any amendment thereto or any supplement to the related prospectus
(other than a supplement filed pursuant to clause (C) of this paragraph unless
the Market-Maker reasonably requests) to which the Market-Maker and its counsel
shall reasonably object unless the Company and the Note Guarantors are advised
by counsel that such Market-Making Registration Statement, amendment or
supplement is required to be filed under applicable securities laws and the
Company will provide the Market-Maker and its counsel with copies of the
Market-Making Registration Statement and each amendment and supplement filed.

 

(ii) The Company shall notify the Market-Maker and, if requested by the
Market-Maker, confirm such advice in writing, (A) when any Market-Making
Registration Statement, any post-effective amendment to the Market-Making
Registration Statement or any amendment or supplement to the related prospectus
has been filed, and, with respect to any post-effective amendment, when the
same has become effective; (B) of any request by the Commission for any
post-effective amendment to the Market-Making Registration Statement, any
supplement or amendment to the related prospectus or for additional
information; (C) the issuance by the Commission of any stop order
suspending the effectiveness of the Market-Making Registration Statement or the
initiation of any proceedings for that purpose; (D) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Notes or Exchange Notes for sale in any jurisdiction or the initiation
or threatening of any proceedings for such purpose; (E) of the happening
of any event that makes any statement made in the Market-Making Registration
Statement, the related prospectus or any amendment or supplement thereto untrue
or that requires the making of any changes in the Market-Making Registration
Statement, such prospectus or any amendment or supplement thereto, in order to
make the statements therein not misleading; and (F) of any advice from a
nationally recognized statistical rating organization that such organization
has placed the Company under surveillance or review with negative implications
or has determined to downgrade the rating of the Notes, Exchange Notes or
Private Exchange Notes or any other debt obligation of the Company whether or
not such downgrade shall have been publicly announced.

 

(iii) If any event contemplated by Section 6(a)(ii)(B) through (E)
occurs during the period for which the Company and the Note Guarantors are
required to maintain an effective Market-Making Registration Statement, the
Company and the Note Guarantors

 

13

 

shall promptly prepare and file with the Commission a post-effective
amendment to the Market-Making Registration Statement or an amendment or
supplement to the related prospectus or file any other required document so
that the prospectus 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 under which they were made, not
misleading.

 

(iv) In the event of the issuance of any stop order suspending the
effectiveness of the Market-Making Registration Statement or of any order
suspending the qualification of the Notes, Exchange Notes or Private Exchange
Notes for sale in any jurisdiction, the Company and the Note Guarantors shall
use promptly commercially reasonable efforts to obtain its withdrawal.

 

(v) The Company shall furnish to the Market-Maker, without charge, (i)
at least one conformed copy of the Market-Making Registration Statement and any
post-effective amendment thereto; and (ii) as many copies of the related prospectus
and any amendment or supplement thereto as the Market-Maker may reasonably
request.

 

(vi) The Company and the Note Guarantors shall consent to the use of
the prospectus contained in the Market-Making Registration Statement or any
amendment or supplement thereto by the Market-Maker in connection with its
market making activities.

 

(vii) For so long as the Notes, Exchange Notes or Private Exchange
Notes shall be outstanding, the Company shall furnish to the Market-Maker (A)
as soon as practicable after the end of each of the Company’s fiscal years, the
number of copies reasonably requested by the Market-Maker of the Company’s
annual report for such year, (B) as soon as available, the number of copies
reasonably requested by the Market-Maker of each report (including, without
limitation, reports on Forms 10-K, 10-Q and 8-K) or definitive proxy statements
of the Company filed under the Exchange Act or mailed to stockholders and (C)
all public reports and all reports and financial statements furnished by the
Company to the Nasdaq National Market System or any U.S. national securities
exchange or quotation service upon which the Notes or Exchange Notes may be
listed pursuant to requirements of or agreements with such exchange or
quotation service or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder.

 

(viii) Notwithstanding the foregoing provisions of Section 6, the
Company and the Note Guarantors may for valid business reasons, including
without limitation, a potential material acquisition, divestiture of assets or
other material corporate transaction, notify the Market-Maker in writing that
the Market-Making Registration Statement is no longer effective or the
prospectus included therein is no longer usable for offers and sales of Notes,
Exchange Notes or Private Exchange Notes; provided
that the use of the Market-Making Registration Statement or the prospectus
contained therein shall not be suspended for more than 60 days in the aggregate
in any consecutive 12 month period.  The
Market-Maker agrees that upon receipt of any notice from the Company pursuant
to Section 6(a)(ii)(B) through (E) or this Section 6(a)(viii), it
will discontinue use of the prospectus contained in the Market-Making
Registration Statement until receipt of copies of the supplemented or amended
prospectus relating thereto or until advised in writing by the Company that the
use of the prospectus contained in the Market-Making Registration Statement may
be resumed.

 

14

 

(b)  In connection with the Market-Making
Registration Statement, the Company shall (i) make reasonably available
for inspection by a representative of, and counsel acting for, the Market-Maker
all relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries and (ii) use its commercially
reasonable efforts to have its officers, directors, employees, accountants and
counsel supply all relevant information reasonably requested by such
representative or counsel or the Market-Maker.

 

(c)  Prior to the effective date of the
Market-Making Registration Statement, the Company and the Note Guarantors will
use commercially reasonable efforts to register or qualify, or cooperate with the
Market-Maker and its counsel in connection with the registration or
qualification of, the Notes, Exchange Notes or Private Exchange Notes for offer
and sale under the securities or blue sky laws of such jurisdictions as the
Market-Maker reasonably requests in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such
jurisdictions of the Notes, Exchange Notes or Private Exchange Notes covered by
the Market-Making Registration Statement; provided
that the Company and the Note Guarantors will not be required to qualify
generally to do business in any jurisdiction where they are not then so
qualified or to take any action which would subject them to general service of
process or to taxation in any such jurisdiction where they are not then so
subject.

 

(d)  The Company and the Note Guarantors
represent and agree that the Market-Making Registration Statement, any
post-effective amendments thereto, any amendments or supplements to the related
prospectus and any documents filed by them under the Exchange Act will, when
they become effective or are filed with the Commission, as the case may be,
conform in all respects to the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission thereunder and
will not, as of the effective date of such Market-Making Registration Statement
or post-effective amendments and as of the filing date of amendments or
supplements to such prospectus or filings under the Exchange Act, 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 that no representation or warranty
is made as to information contained in or omitted from the Market-Making
Registration Statement or the related prospectus in reliance upon and in
conformity with written information furnished to the Company by the
Market-Maker specifically for inclusion therein, which information the parties
hereto agree will be limited to the statements concerning the market-making
activities of the Market-Maker to be set forth on the cover page and in the
“Plan of distribution” section of the prospectus (the “Market-Maker’s
Information”).

 

(e)  At the time of effectiveness of the
Market-Making Registration Statement and concurrently with each time the
Market-Making Registration Statement or the related prospectus shall be amended
or such prospectus shall be supplemented, the Company shall (if requested by
the Market-Maker) furnish the Market-Maker and its counsel with a certificate
of its Chairman of the Board of Directors or its President and Chief Financial
Officer to the effect that:

 

(i) the Market-Making Registration Statement has been declared
effective; (ii) in the case of an amendment to the Market-Making Registration
Statement, such amendment has become effective under the Securities Act as of
the date and time specified in such certificate, if applicable; and in the case
of an amendment or supplement to the related prospectus, such amendment or
supplement to the prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Securities Act specified in such
certificate on the date specified therein; (iii) to the

 

15

 

knowledge of such officers, no stop order suspending the effectiveness
of the Market-Making Registration Statement has been issued and no proceeding
for that purpose is pending or threatened by the Commission; (iv) such officers
have carefully examined the Market-Making Registration Statement and the
prospectus (and, in the case of an amendment or supplement, such amendment or
supplement) and as of the date of such Market-Making Registration Statement,
amendment or supplement, as applicable, the Market-Making Registration
Statement and the prospectus, as amended or supplemented, if applicable, did
not include any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.

 

(f)  At the time of effectiveness of the
Market-Making Registration Statement and concurrently with each time the
Market-Making Registration Statement or the related prospectus shall be amended
or such prospectus shall be supplemented, the Company shall (if requested by
the Market-Maker) furnish the Market-Maker and its counsel with the written
opinion of counsel for the Company satisfactory to the Market-Maker to the
effect that:

 

(i) the Market-Making Registration Statement has been declared
effective; (ii) in the case of an amendment to the Market-Making Registration
Statement, such amendment has become effective under the Securities Act as of the
date and time specified in such opinion, if applicable; and in the case of an
amendment or supplement to the related prospectus, such amendment or supplement
to the prospectus was filed with the Commission pursuant to the subparagraph of
Rule 424(b) under the Securities Act specified in such opinion on the date
specified therein; (iii) to the knowledge of such counsel, no stop order
suspending the effectiveness of the Market-Making Registration Statement has
been issued and no proceeding for that purpose is pending or threatened by the
Commission; and (iv) such counsel has reviewed the Market-Making Registration
Statement and the prospectus (and, in the case of an amendment or supplement,
such amendment or supplement) and participated with officers of the Company and
independent public accountants for the Company in the preparation of such
Market-Making Registration Statement and prospectus (and, in the case of an
amendment or supplement, such amendment or supplement) and has no reason to
believe that (except for the financial statements and other financial and
statistical data contained therein as to which such counsel need express no
belief) as of the date of such Market-Making Registration Statement, amendment
or supplement, as applicable, the Market-Making Registration Statement and the
prospectus, as amended or supplemented, if applicable, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

 

(g)  At the time of effectiveness of the
Market-Making Registration Statement and concurrently with each time the
Market-Making Registration Statement or the related prospectus shall be amended
or such prospectus shall be supplemented to include audited annual financial
information, the Company shall (if requested by the Market-Maker) furnish the
Market-Maker and its counsel with a letter of Ernst & Young LLP (or other
independent public accountants for the Company or the Note Guarantors of nationally
recognized standing) in form satisfactory to the Market-Maker, addressed to the
Market-Maker and dated the date of delivery of such letter, (i) confirming that
they are independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission and, (ii) in all

 

16

 

other
respects, substantially in the form of the letter delivered to the Initial
Purchasers pursuant to Section 5(g) of the Purchase Agreement, with, in
the case of an amendment or supplement that includes audited financial
information, such changes as may be necessary to reflect the amended or supplemented
financial information.

 

(h)  The Company and the Note Guarantors,
on the one hand, and the Market-Maker, on the other hand, hereby agree to
indemnify each other, and, if applicable, contribute to the other, in
accordance with Sections 7 and 8 of this Agreement.

 

(i)  The Company will comply with the
provisions of this Section 6 at its own expense and will reimburse the
Market-Maker for its expenses associated with this Section 6 (including
reasonable fees of counsel for the Market-Maker).

 

(j)  The agreements contained in this
Section 6 and the representations, warranties and agreements contained in
this Agreement shall survive all offers and sales of the Notes and Exchange
Notes and shall remain in full force and effect, regardless of any termination
or cancelation of this Agreement or any investigation made by or on behalf of
any indemnified party.

 

(k)  For purposes of this Section 6,
(i) any reference to the terms “amend”, “amendment” or “supplement” with
respect to the Market-Making Registration Statement or the prospectus contained
therein shall be deemed to refer to and include the filing under the Exchange
Act of any document deemed to be incorporated therein by reference and
(ii) any reference to the terms “Notes”, “Exchange Notes” or “Private
Exchange Notes” shall be deemed to refer to and include any securities issued
in exchange for or with respect to such Notes, Exchange Notes or Private
Exchange Notes.

 

7.  Indemnification.  (a) 
In the event of a Shelf Registration Statement or in connection with any
prospectus delivery pursuant to an Exchange Offer Registration Statement by the
Initial Purchasers or Exchanging Dealer, as applicable, or in connection with
the Market-Making Registration Statement, the Company and the Note Guarantors shall
jointly and severally indemnify and hold harmless each Holder (including,
without limitation, each of the Initial Purchasers, the Market-Maker or such
Exchanging Dealer), its affiliates, its respective officers, directors,
employees, representatives and agents, and each person, if any, who controls
such Holder within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 7 and
Section 8 as a Holder) 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 Notes, Exchange Notes or Private Exchange Notes), to
which that Holder 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 any such
Registration Statement or Market-Making Registration Statement or any
prospectus forming part thereof or in any amendment or supplement thereto,
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (iii) in the case of the Market-Maker, any material breach
by the Company of the representations, warranties and agreements contained in
Section 6, and shall reimburse each Holder promptly upon demand for any
legal or other expenses reasonably

 

17

 

incurred by
that Holder 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 Company and the Note Guarantors 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 Holders’ Information or Market-Maker’s Information,
respectively; and provided, further, that with respect to any such
untrue statement in or omission from any related preliminary prospectus, the
indemnity agreement contained in this Section 7(a) shall not inure to the
benefit of any Holder from whom the person asserting any such loss, claim,
damage, liability or action received Notes, Exchange Notes or Private Exchange
Notes to the extent that such loss, claim, damage, liability or action of or
with respect to such Holder results from the fact that both (A) a copy of the
final prospectus was not sent or given to such person at or prior to the
written confirmation of the sale of such Notes, Exchange Notes or Private
Exchange Notes to such person and (B) the untrue statement in or omission from
the related preliminary prospectus was corrected in the final prospectus
unless, in either case, such failure to deliver the final prospectus was a
result of non-compliance by the Company with Section 4(d), 4(e), 4(f),
4(g) or 6(a)(v), as applicable.

 

(b)  In (i) the event of a Shelf
Registration Statement, each Holder or (ii) connection with the
Market-Making Registration Statement, the Market-Maker, as applicable, shall
indemnify and hold harmless the Company, its affiliates, its respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 7(b)
and Section 8 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company 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 any such
Registration Statement or Market-Making Registration Statement, respectively,
or any prospectus forming part thereof or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, 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 Holders’ Information or Market-Maker’s
Information, respectively, furnished to the Company by such Holder, and shall
reimburse the Company for any legal or other expenses reasonably incurred by
the Company 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 no such Holder shall be liable for any indemnity claims hereunder in
excess of the amount of net proceeds received by such Holder from the sale of
Notes, Exchange Notes or Private Exchange Notes pursuant to such Shelf
Registration Statement, Market-Making Registration Statement or prospectus.

 

(c)  Promptly after receipt by an
indemnified party under this Section 7 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 7(a) or 7(b), notify the indemnifying party in writing of the
claim or the commencement of that action; provided,

 

18

 

however, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have
under this Section 7 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, 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 7.  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 7 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than the 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 indemnified party, as a condition of
the indemnity agreements contained in Sections 7(a) and 7(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.  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 from all liability
on claims that are the subject matter of such proceeding.

 

8.  Contribution.  If the indemnification provided for in
Section 7 is unavailable or insufficient to hold harmless an indemnified
party under Section 7(a) or 7(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, (a) in such proportion as shall
be appropriate to reflect the

 

19

 

relative
benefits received by the Company from the initial offering and sale of the
Notes, on the one hand, and by a Holder from receiving Notes, Exchange Notes or
Private Exchange Notes, as applicable, registered under the Securities Act or,
if applicable, by the Market-Maker from the filing and effectiveness of a
Market-Making Registration Statement, on the other, or (b) if the
allocation provided by clause (a) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (a) above but also the relative fault of the Company and
the Note Guarantors, on the one hand, and such Holder, 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 the Company and the Note
Guarantors or information supplied by the Company and the Note Guarantors, on
the one hand, or to any Holders’ Information or Market-Maker’s Information, respectively,
supplied by such Holder, 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.  The
parties hereto agree that it would not be just and equitable if contributions
pursuant to this Section 8 were to be determined by pro rata allocation 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 8 shall be deemed to include, for purposes of this Section 8,
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 8, an indemnifying party that is a Holder of
Notes, Exchange Notes or Private Exchange Notes or the Market-Maker shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Notes, Exchange Notes or Private Exchange Notes sold by such
indemnifying party to any purchaser exceeds the amount of any damages which such
indemnifying party 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.

 

9.  Rules 144 and 144A.  The Company and the Note Guarantors shall
use commercially reasonable efforts to file the reports required to be filed by
them under the Securities Act and the Exchange Act in a timely manner and, if
at any time the Company and the Note Guarantors are not required to file such
reports, they will, upon the written request of any Holder of Transfer
Restricted Notes or the Market-Maker, make publicly available other information
so long as necessary to permit sales of such Holder’s or the Market-Maker’s
securities pursuant to Rules 144 and 144A. 
The Company and the Note Guarantors covenant that they will take such
further action as any Holder of Transfer Restricted Notes or the Market-Maker
may reasonably request, all to the extent required from time to time to enable
such Holder or the Market-Maker to sell Transfer Restricted Notes without
registration under the Securities Act within the limitation of the exemptions
provided by Rules 144 and 144A (including, without limitation, the requirements
of Rule 144A(d)(4)).  Upon the
written request of any Holder of Transfer Restricted Notes, the Company and the
Note Guarantors shall deliver to such Holder or the Market-Maker a written
statement as to whether they have complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 9 shall be deemed
to require the Company to register any of its securities pursuant to the
Exchange Act.

 

20

 

10.                                 Underwritten Registrations.  If any of the Transfer Restricted Notes
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 administer the offering will be selected by the Holders of a majority
in aggregate principal amount at maturity of such Transfer Restricted Notes
included in such offering, subject to the consent of the Company and the Note
Guarantors (which shall not be unreasonably withheld or delayed), and such
Holders shall be responsible for all underwriting commissions and discounts in
connection therewith.

 

No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person’s Transfer Restricted Notes
on the basis reasonably provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

 

11.  Miscellaneous.  (a)  Amendments and Waivers.  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, unless the Company has obtained the
written consent of Holders of a majority in aggregate principal amount at
maturity of the Notes, the Exchange Notes and the Private Exchange Notes, taken
as a single class (and, with respect to the provisions of Section 6, the
written consent of the Market-Maker). 
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 whose Notes, Exchange Notes or Private Exchange Notes are
being sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of a
majority in aggregate principal amount at maturity of the Notes, the Exchange
Notes and the Private Exchange Notes being sold by such Holders pursuant to
such Registration Statement whose rights are so affected.

 

(b)  Notices.
All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, first-class mail, telecopier or air
courier guaranteeing next-day delivery:

 

(1) if to a Holder, at the most current
address given by such Holder to the Company in accordance with the provisions
of this Section 11(b), which address initially is, with respect to each
Holder, the address of such Holder maintained by the registrar under the
Indenture, with a copy in like manner to JPMorgan, DBSI and CSFB;

 

(2) if to the Initial Purchasers or the
Market-Maker, initially pursuant to Section 14(a) of the Purchase
Agreement; and

 

(3) if to the Company or the Note Guarantors,
initially at the address of the Company set forth in the Purchase Agreement.

 

All such notices and communications shall be deemed to have been duly
given:  when delivered by hand, if
personally delivered; one business day after being delivered to a next-day air
courier; five business days after being deposited in the mail; and when receipt
is acknowledged by the recipient’s telecopier machine, if sent by telecopier.

 

21

 

The Company and the Note Guarantors or the Initial Purchasers may, by
written notice to the other, designate additional or different addresses for
subsequent notices or communications.

 

(c)  Successors
And Assigns.  This Agreement
shall be binding upon the Company and its successors and assigns.

 

(d)  Counterparts.  This Agreement may be executed in any number
of counterparts (which may be delivered in original form or by telecopier) 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.

 

(e)  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, (b) the term “subsidiary” has the
meaning set forth in Rule 405 under the Securities Act and (c) except
where otherwise expressly provided, the term “affiliate” has the meaning set
forth in Rule 405 under the Securities Act.

 

(f)  Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(g)  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(h)  Remedies.  In the event of a breach by the Company, the
Note Guarantors or by any Holder of any of their obligations under this
Agreement, each Holder, the Company or the Note Guarantors, as the case may be,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages (other than the recovery of damages for a breach by the
Company or the Note Guarantors of their obligations under Sections 1 or 2
hereof for which liquidated damages have been paid pursuant to Section 3
hereof), will be entitled to specific performance of its rights under this Agreement.  The Company, the Note Guarantors and each
Holder agree that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by each such person of any of the
provisions of this Agreement and hereby further agree that, in the event of any
action for specific performance in respect of such breach, each such person
shall waive the defense that a remedy at law would be adequate.

 

(i)  No
Inconsistent Agreements. 
Each of the Company and the Note Guarantors represents, warrants and
agrees with the Initial Purchasers that (i) it has not entered into, and shall
not, on or after the date of this Agreement, enter into any agreement that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof, (ii) it has not previously
entered into any agreement which remains in effect granting any registration
rights with respect to any of its debt securities to any person and (iii) (with
respect to the Company) without limiting the generality of the foregoing,
without the written consent of the Holders of a majority in aggregate principal
amount at maturity of the then outstanding Transfer Restricted Notes and the
Market-Maker, it shall not grant to any person the right to request the Company
to register any debt securities of the Company under the Securities Act unless
the rights so granted are not in conflict or inconsistent with the provisions
of this Agreement.

 

22

 

(j)  No
Piggyback on Registrations. 
Neither the Company nor any of its security holders (other than the
Holders of Transfer Restricted Notes in such capacity) shall have the right to
include any securities of the Company in any Shelf Registration or Registered
Exchange Offer other than Transfer Restricted Notes.

 

(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 commercially reasonable 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.

 

23

 

Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Note Guarantors and the Initial Purchasers.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  PLIANT CORPORATION,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Brian E. Johnson

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, Chief Financial

  
	
   

  	
   

  	
  Officer and Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLIANT CORPORATION INTERNATIONAL,

  
	
   

  	
  PLIANT FILM PRODUCTS OF MEXICO, INC.,

  
	
   

  	
  PLIANT SOLUTIONS CORPORATION,

  
	
   

  	
  PLIANT PACKAGING OF CANADA, LLC,

  
	
   

  	
  UNIPLAST HOLDINGS INC.,

  
	
   

  	
  UNIPLAST U.S., INC.,

  
	
   

  	
  TUREX, INC.,

  
	
   

  	
  PIERSON INDUSTRIES, INC.,

  
	
   

  	
  UNIPLAST MIDWEST, INC.,

  
	
   

  	
  UNIPLAST INDUSTRIES CO.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Brian E. Johnson

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  

 

24

 

	
  Confirmed and accepted as of the date first written above.

  
	
   

  
	
  J.P. MORGAN SECURITIES INC.,

  
	
  For itself and on behalf of the several

  
	
  Initial Purchasers.

  
	
   

  
	
   

  
	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

25

 

ANNEX A

 

Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Notes.  The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an “underwriter” within the meaning of the
Securities Act.  This Prospectus, as it
may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Notes received in exchange
for Notes where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities.  The Company has agreed that, for a period of 180 days after the
Expiration Date (as defined herein), it will make this Prospectus available to
any broker-dealer for use in connection with any such resale.  See “Plan of Distribution”.

 

 

ANNEX B

 

Each broker-dealer that receives Exchange Notes for its own account in
exchange for Notes, where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes.  See “Plan of
distribution”.

 

 

ANNEX C

 

PLAN
OF DISTRIBUTION

 

Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Notes.  This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Notes where such Notes
were acquired as a result of market-making activities or other trading
activities.  The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale.

 

The Company will not receive any proceeds from any sale of Exchange
Notes by broker-dealers.  Exchange Notes
received by broker-dealers for their own account pursuant to the Registered
Exchange Offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices.  Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer or the purchasers of any
such Exchange Notes.  Any broker-dealer
that resells Exchange Notes that were received by it for its own account
pursuant to the Registered Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
“underwriter” within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commission or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act.  The Letter of Transmittal states
that, by acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an “underwriter” within
the meaning of the Securities Act.

 

For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or supplement
to this Prospectus to any broker-dealer that requests such documents in the
Letter of Transmittal.  The Company has
agreed to pay all expenses incident to the Registered Exchange Offer (including
the expenses of one counsel for the Holders of the Notes) other than
commissions or concessions of any broker-dealers and will indemnify the Holders
of the Notes (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.

 

 

ANNEX D

 

o                                    CHECK
HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE
PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

 

Name:

Address:

 

 

If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes.  If the undersigned is a
broker-dealer that will receive Exchange Notes for its own account in exchange
for Notes that were acquired as a result of market-making activities or other
trading activities, it acknowledges that it will deliver a prospectus in
connection with any resale of such Exchange Notes; however, by so acknowledging
and by delivering a prospectus, the undersigned will not be deemed to admit
that it is an “underwriter” within the meaning of the Securities Act.EXHIBIT 10.18

 

PLIANT CORPORATION

 

 

$306,000,000

 

principal amount at maturity

 

111/8% Senior Secured
Discount Notes due 2009

 

 

PURCHASE AGREEMENT

 

 

February 6, 2004

 

J. P. MORGAN SECURITIES INC.

CREDIT SUISSE FIRST BOSTON LLC

DEUTSCHE BANK SECURITIES INC.

c/o J.P. Morgan Securities Inc.

270 Park Avenue, 5th floor

New York, New York  10017

 

Ladies and Gentlemen:

 

Pliant Corporation, a  Utah corporation (the “Company”),
proposes to issue and sell $306,000,000 principal amount at maturity of its 111/8%
Senior Secured Discount Notes due 2009 (the “Notes”).  The Notes will be issued pursuant to an
Indenture to be dated as of February 17, 2004 (the “Indenture”),
among the Company, Pliant Corporation International; Pliant Film Products of
Mexico, Inc.; Pliant Solutions Corporation; Pliant Packaging of Canada, LLC;
Uniplast Holdings Inc.; Uniplast U.S., Inc.; Turex, Inc.; Pierson Industries,
Inc.; Uniplast Midwest, Inc.; and Uniplast Industries Co. (collectively, the “Note
Guarantors”) and Wilmington Trust Company, a Delaware banking corporation,
as trustee (in such capacity, the “Trustee”), and will be guaranteed on
a senior secured basis by the Note Guarantors.   The Company and the Note Guarantors hereby confirm their
agreement with J.P. Morgan Securities Inc. (“JPMorgan”), Credit Suisse
First Boston LLC (“CSFB”) and Deutsche Bank Securities Inc. (together with
JPMorgan and CSFB, the “Initial Purchasers”) concerning the purchase of
the Notes from the Company by the several Initial Purchasers.

 

The Notes will be offered and sold to the
Initial Purchasers without being registered under the Securities Act of 1933,
as amended (the “Securities Act”), in reliance upon an exemption
therefrom. The Company has prepared a preliminary offering memorandum dated
January 27, 2004 (the “Preliminary Offering Memorandum”), and will
prepare an offering

 

 

memorandum
dated the date hereof (the “Offering Memorandum”) setting forth
information concerning the Company and the Notes.  Copies of the Preliminary Offering Memorandum have been, and
copies of the Offering Memorandum will be, delivered by the Company to the
Initial Purchasers pursuant to the terms of this Agreement.  Any references herein to the Preliminary
Offering Memorandum and the Offering Memorandum shall be deemed to include all
amendments and supplements thereto, unless otherwise noted.  The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Notes by the Initial
Purchasers in accordance with Section 2.

 

Holders of the Notes (including the Initial
Purchasers, their direct and indirect transferees and the Market-Maker (as
defined in Annex A attached hereto)) will be entitled to the benefits of an
Exchange and Registration Rights Agreement, substantially in the form attached
hereto as Annex A (the “Registration Rights Agreement”), pursuant to
which the Company 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 secured notes of the Company (the “Exchange Notes”),
which are identical in all material respects to the Notes (except that the
Exchange Notes will not contain terms with respect to transfer restrictions or
liquidated damages) and (ii) under certain circumstances, a shelf registration
statement pursuant to Rule 415 under the Securities Act (the “Shelf
Registration Statement”).

 

Pursuant to (i) the Amended and Restated
Intercreditor Agreement dated as of the Closing Date (as hereinafter defined),
among the Company, Deutsche Bank Trust Company Americas (as Credit Agent under
the credit agreement dated as of the Closing Date among the Company, JPMorgan
Chase Bank and Credit Suisse First Boston, acting through its Cayman Islands
Branch and Deutsche Bank Trust Company Americas (the “Credit Agreement”)),
the Trustee and the trustee with respect to the Company’s 111/8%
Senior Secured Notes due 2009 (the “May 2003 Notes”) (the “Intercreditor
Agreement”), (ii) the Pledge Agreement dated as of the Closing Date,
among the Company, the Subsidiary Pledgors party thereto and the Collateral
Agent (as defined herein) (the “Pledge Agreement”), (iii) the
Canadian Pledge Agreement dated as of the Closing Date, among Uniplast
Industries Co. (“Uniplast”), the subsidiaries of Uniplast party thereto
and the Collateral Agent (the “Canadian Pledge Agreement” and, together
with the Pledge Agreement, the “Pledge Agreements”), (iv) the
Security Agreement dated as of the Closing Date, among the Company, the
Grantors party thereto and the Collateral Agent (the “Security Agreement”),
(v) the Canadian Security Agreement dated as of the Closing Date, among
Uniplast, the subsidiaries of Uniplast party thereto and the Collateral Agent
(the “Canadian Security Agreement” and, together with the Security
Agreement, the “Security Agreements”) and (vi) a mortgage or deed
of trust with respect to each of the following properties:  (a) 299 Clukey Drive, Harrington,
Delaware; (b) 1330 Lebanon Road, Danville, Kentucky; (c) 10
Greenfield Road, South Deerfield, Massachusetts; (d) 1 Edison Drive,
McAlester, Oklahoma; (e) 851 Garrett Parkway, Lewisburg, Tennessee;
(f) 230 Enterprise Drive, Newport News, Virginia; (g) 8039 South
192nd Street, Kent, Washington; and (h) 1701 First Avenue, Chippewa
Falls, Wisconsin (collectively, the “Mortgages” and together with the
Intercreditor Agreement, the Pledge Agreements and the Security Agreements, the
“Security Documents”), each to be delivered to Wilmington Trust Company,
a Delaware banking corporation, as collateral agent (in such capacity, the “Collateral
Agent”), the Notes and the

 

2

 

guarantees of
the Note Guarantors relating to the Notes (the “Guarantees”) will be, on
the Closing Date or within a commercially reasonable period of time thereafter,
secured by a first-priority security interest in the 2004 Notes First Lien
Collateral (as defined in the Intercreditor Agreement ) and a second-priority
security interest in the Senior Lender First Lien Collateral (as defined in the
Intercreditor Agreement), as applicable, for the benefit of the Trustee, the
Collateral Agent and each holder of the Notes and the successors and assigns of
the foregoing (collectively, the “Secured  Parties”).  Pursuant to the Credit Agreement and the
security documents relating thereto, the Lenders (as defined in the Credit
Agreement) will, as of the Closing Date, hold a first-priority security
interest in the Senior Lender First Lien Collateral and a second-priority
security interest in the 2004 Notes First Lien Collateral.  Pursuant to the indenture governing the May
2003 Notes and the security documents relating thereto, the holders of the May
2003 Notes hold a second-priority security interest in the Common Collateral
(as defined in the Intercreditor Agreement).

 

Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Offering Memorandum.

 

1.  Representations,
Warranties and Agreements of the Company and the Note Guarantors.
The Company and each of the Note Guarantors represent and warrant to, and agree
with, the several Initial Purchasers on and as of the date hereof and the
Closing Date (as defined in Section 3) that:

 

(a)  Each of the Preliminary
Offering Memorandum and the Offering Memorandum, as of its respective date, did
not, and on the Closing Date the Offering Memorandum will not, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided
that the Company and the Note Guarantors make no representation or warranty as
to information contained in or omitted from the Preliminary Offering Memorandum
or the Offering Memorandum in reliance upon and in conformity with written
information relating to the Initial Purchasers furnished to the Company by or
on behalf of any Initial Purchaser specifically for use therein (the “Initial
Purchasers’ Information”).

 

(b)  Assuming (i) that the
Notes are issued, sold and delivered under the circumstances contemplated by
the Offering Memorandum and this Agreement, (ii) the accuracy of the
representations and warranties of the Initial Purchasers contained in
Section 2 and their compliance with the agreements set forth therein and
with the transfer procedures and restrictions described in the Offering
Memorandum, (iii) that each purchaser within the United States that buys
Notes from the Initial Purchasers is a qualified institutional buyer as defined
in Rule 144A under the Securities Act, (iv) the accuracy of the
representations and warranties made in accordance with this Agreement and the
Offering Memorandum by purchasers to whom the Initial Purchasers initially
resell the Notes and (v) the receipt by purchasers to whom the Initial
Purchasers initially resell the Notes of a copy of the Offering Memorandum
furnished as contemplated by Section 2(e) hereof, it is not necessary, in
connection with the issuance and sale of the Notes to the Initial Purchasers
and the offer, resale and delivery of the Notes by the Initial Purchasers in
the manner contemplated by this Agreement and the Offering

 

3

 

Memorandum, to register the Notes under the
Securities Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended (the “Trust Indenture Act”).

 

(c)  The Company and each of its
subsidiaries have been duly incorporated and are validly existing as
corporations or limited liability companies in good standing under the laws of
their respective jurisdictions of incorporation, formation or organization, are
duly qualified to do business and are in good standing as foreign corporations
or limited liability companies 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 condition (financial or otherwise), results of operations,
business or prospects of the Company and its subsidiaries taken as a whole (a “Material
Adverse Effect”).

 

(d)  As of the Closing Date, the
Company will have an authorized capitalization as set forth in the Offering
Memorandum under the heading “Capitalization”, and 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.  All of the outstanding shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and, except for director qualifying shares, 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 (collectively, “Liens”), except for those
expressly permitted by or created pursuant to the Credit Agreement and the
security documents relating thereto, the indenture governing the May 2003 Notes
and the security documents relating thereto, the Indenture or the Security
Documents (collectively, “Permitted Liens”).

 

(e)  The Company and each of the
Note Guarantors each had, has or as of the Closing Date will have, full right,
power and authority to execute and deliver this Agreement, the Indenture, the
Registration Rights Agreement, each Security Document to which it is a party
and the Notes (in the case of the Company only) (collectively, the “Transaction
Documents”) and to perform their respective obligations hereunder and
thereunder; and all requisite action required to be taken 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, or as of the Closing Date will be, duly and
validly taken.

 

(f)  This Agreement has been duly
authorized, executed and delivered by the Company and each of the Note
Guarantors and constitutes a valid and legally binding agreement of the Company
and each of the Note Guarantors, enforceable against the Company and each of
the Note Guarantors in accordance with its terms, except to the extent that
(i) such enforceability may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors’ rights generally and (B) general equitable principles
(whether considered in a proceeding in equity or at law) and (ii) the
validity or enforceability of rights to

 

4

 

indemnification and contribution hereunder
may be limited by federal or state securities laws or regulations or the public
policy underlying such laws or regulations.

 

(g)  The Registration Rights
Agreement has been, or as of the Closing Date will be, duly authorized by the
Company and each of the Note Guarantors 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 the Company and each of the Note
Guarantors enforceable against the Company and each of the Note Guarantors 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 validity or enforceability 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.

 

(h)  The Indenture has been, or as
of the Closing Date will be, duly authorized by the Company and each of the
Note Guarantors 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 the Company and each of the Note Guarantors enforceable
against the Company and each of the Note Guarantors 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).  On the Closing Date, the
Indenture will conform in all material respects to the requirements of the
Trust Indenture Act and the rules and regulations of the Commission applicable
to an indenture which is qualified thereunder.

 

(i)  The Notes and the Guarantees
thereof by the Note Guarantors have been, or as of the Closing Date will be,
duly authorized by the Company and each of the Note Guarantors, as the case may
be, and, when the Notes have been 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, as issuer, entitled to the benefits of the
Indenture, including Article 11 thereof with respect to the Guarantees of
the Notes by the Note Guarantors, and enforceable against the Company, as
issuer, and each of the Note Guarantors, as 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).

 

(j)  Each of the Security Documents
has been, or as of the Closing Date will be, duly authorized, executed and
delivered by the Company and each of the Note Guarantors (to the extent a party
thereto).

 

5

 

(k)  On and as of the Closing Date
or within a commercially reasonable time thereafter:

 

(i)  Each Security
Document, when executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a valid and legally binding obligation of
the grantor party thereto, enforceable against such grantor 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).

 

(ii)  Upon
delivery to the Credit Agent of the certificates or instruments representing or
evidencing the Pledged Securities (as defined in the Pledge Agreements) or
other Common Collateral in accordance with the Pledge Agreements (or in the
case of certificates or instruments representing or evidencing Common
Collateral which are then in the possession of the Credit Agent, upon the
execution and delivery of the Intercreditor Agreement) and, in the case of
Common Collateral not constituting certificated securities or instruments, the
filing of Uniform Commercial Code (“UCC”) financing statements in the
appropriate filing office, the Collateral Agent will obtain a valid and
perfected second-priority lien upon and security interest in all right, title
and interest of the applicable pledgor in such Pledged Securities as security
for the payment and performance of the Obligations (as defined in the
Indenture);

 

(iii)  Upon filing
by the Collateral Agent of (x) (A) financing statements, (B) any filings
required with the United States Patent and Trademark Office and (C) any filings
required with the United States Copyright Office and (y) such similar filings
as those listed in the preceding clause (x) as required under Canadian law to
perfect the first priority or second priority security interest, as applicable,
in the Common Collateral located in Canada, the security interests granted
pursuant to the Security Agreements will constitute valid, perfected, first-priority
security interests with respect to the 2004 Notes First Lien Collateral secured
thereby, and second-priority security interests with respect to the Senior
Lender First Lien Collateral secured thereby, in each case, as described
therein for the ratable benefit of the Secured Parties.

 

(iv)  The
Mortgages will be effective to grant a legal and valid mortgage lien on all of
the mortgagor’s right, title and interest in each of the  mortgaged properties thereunder.  When the Mortgages are duly recorded in the
proper recorders’ offices or appropriate public records and the mortgage
recording fees and taxes in respect thereof are paid and compliance is
otherwise had with the formal requirements of state or local law applicable to
the recording of real estate mortgages generally, each such Mortgage shall
constitute a validly perfected and enforceable first-priority security interest
in the related mortgaged property, for the ratable benefit of the Secured
Parties, subject only to the encumbrances and exceptions to title expressly set
forth therein and except to the extent that such

 

6

 

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).

 

(v)  (A) Neither
the Company nor any of the Note Guarantors hold any Accounts (as defined in the
Security Agreements) with respect to which the Collateral Agent does not hold a
perfected, second-priority security interest, other than any such Accounts, if
any, in which the Lenders do not or will not hold a first-priority security
interest.

 

(B) Neither the Company nor any
of the Note Guarantors maintains any Inventory (as defined in the Security
Agreements) with respect to which the Collateral Agent does not possess a
perfected, second-priority security interest, other than any such Inventory, if
any, in which the Lenders do not or will not hold a first-priority security
interest.

 

(vi)  Except where
the failure to do so would not have a Material Adverse Effect, each of the
Company and the Note Guarantors has filed with the United States Patent and
Trademark Office for registration or recordation, as applicable, (A) a
completed application for the registration of each trademark and patent owned
by it which is material to the business of the Company or such Note Guarantor
and (B) an appropriate assignment to the Company or any of the Note Guarantors
of the interest acquired by it in any trademark and patent.

 

(vii)  The
mortgaged properties under the Mortgages comply in all material respects with
all applicable setback requirements, zoning codes, ordinances, laws and
regulations, except where non-compliance would not, individually or in the
aggregate, have a Material Adverse Effect.

 

(viii)  There are
no pending or, to the knowledge of the Company, threatened condemnation
proceedings, lawsuits, or administrative actions relating to the mortgaged
properties under the Mortgages which would have, individually or in the
aggregate, a Material Adverse Effect.

 

(l)  Each of the Security
Documents, the Indenture, the Credit Agreement, the Notes, the Guarantees and
the Registration Rights Agreement conforms in all material respects to the
description thereof contained in the Offering Memorandum (to the extent
described therein).

 

(m)  The execution, delivery and
performance by the Company and each of the Note Guarantors of each of the
Transaction Documents to which such entity is a party, the issuance,
authentication, sale and delivery of the Notes and compliance by the Company
and each of the Note Guarantors with the terms thereof and the consummation of
the transactions contemplated by the Transaction Documents will not
(i) conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or, except for  Permitted Liens, result in the creation or
imposition of any Lien

 

7

 

upon any property or assets of the Company or
any of its subsidiaries pursuant to, any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject (assuming compliance by the
Initial Purchasers with their representations, warranties and agreements set
forth in Section 2 hereof), except for such conflict, breach or violation
which would not, singularly or in the aggregate, have a Material Adverse
Effect, (ii) result in any violation of the provisions of the charter or
by-laws of the Company or any of its subsidiaries or (iii) result in any
violation of any statute or any judgment, order, decree, rule or regulation of
any court or arbitrator or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or assets
(assuming compliance by the Initial Purchasers with their representations,
warranties and agreements set forth in Section 2 hereof), except for such
violation which would not, singularly or in the aggregate, have a Material
Adverse Effect; and (assuming compliance by the Initial Purchasers with their
representations, warranties and agreements set forth in Section 2 hereof)
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 the Company and each of the Note
Guarantors of each of the Transaction Documents to which each is a party, the
issuance, authentication, sale and delivery of the Notes and compliance by the
Company and each of the Note Guarantors with the terms thereof and the
consummation of the transactions contemplated by the Transaction Documents,
except for such consents, approvals, authorizations, filings, registrations or
qualifications (i) which shall have been obtained or made on or prior to the
Closing Date, (ii) in the case of performance or compliance with the
Registration Rights Agreement, such as may be required to be obtained or made
under the Securities Act, applicable state securities laws and the Trust
Indenture Act, (iii) as may be required under state or foreign securities
and blue sky laws and the rules and regulations of the National Association of
Securities Dealers, Inc. and (iv) as may be required for such filings or
recordings necessary to perfect the security interests created by the Security
Documents.

 

(n)  To the best knowledge of the
Company (i) Arthur Andersen LLP, at the time they were the Company’s
accountants, were independent certified public accountants with respect to the
Company and its 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 (“Independent
Accountants”), and (ii) Ernst & Young LLP are Independent
Accountants.  The historical financial
statements (including the related notes) contained in the Offering Memorandum
comply in all material respects with the requirements applicable to a
registration statement on Form S-4 under the Securities Act (except that
certain supporting schedules are omitted); such 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 Offering Memorandum under the headings “Summary—Summary
financial data”,

 

8

 

“Capitalization”, “Selected financial data”,
“Management’s discussion and analysis of financial condition and results of
operations” and “Management—Executive compensation” are derived from the
accounting records of the Company and its subsidiaries and accurately present
in all material respects the information purported to be shown thereby.  The other historical financial information
and data concerning the Company and its subsidiaries included in the Offering
Memorandum are accurately presented in all material respects.

 

(o)  Other than as disclosed in the
Offering Memorandum, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the subject
which, (A) singularly or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect or (B) question 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 the Company and each of the Note
Guarantors, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.

 

(p)  To the best knowledge of the
Company and each of the Note Guarantors, (A) no action has been taken and
no statute, rule, regulation or order has been enacted, adopted or issued by
any governmental agency or body which prevents the issuance of the Notes or suspends
the sale of the Notes in any jurisdiction; and (B) no injunction,
restraining order or order of any nature by any federal, state or foreign court
of competent jurisdiction has been issued with respect to the Company or any of
its subsidiaries which would prevent or suspend the issuance or sale of the
Notes or the use of the Preliminary Offering Memorandum or the Offering
Memorandum in any jurisdiction; no action, suit or proceeding is pending
against or, to the best knowledge of the Company and each of the Note
Guarantors, threatened against or affecting the Company or any of its
subsidiaries before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, which could reasonably be expected to interfere
with or adversely affect the issuance of the Notes or in any manner draw into
question the validity or enforceability of any of the Transaction Documents or
any action taken or to be taken pursuant thereto; and the Company has complied
with any and all requests by any securities authority in any jurisdiction for
additional information to be included in the Preliminary Offering Memorandum
and the Offering Memorandum.

 

(q)  Neither the Company nor any of
its subsidiaries, is (i) in violation of its charter or by-laws (or
similar organizational document), (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 material 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,
other than any defaults under the Company’s existing credit facilities as to
which the Company has obtained a temporary waiver as described in the Offering
Memorandum or (iii) in violation of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject, except in the case of

 

9

 

clauses (ii) and (iii), for any such default
or violation which would not, singularly or in the aggregate, have a Material
Adverse Effect.

 

(r)  The Company and each of its
subsidiaries possess, and are in compliance with, all material licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state 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 Offering Memorandum, except where the failure to
possess or comply or make the same would not, singularly or in the aggregate,
have a Material Adverse Effect, and neither the Company nor any of its
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.

 

(s)  Each of the Company and each
of its subsidiaries has timely filed or caused to be filed all federal, state,
local and foreign income and franchise tax returns and reports required to have
been filed and has paid or caused to be paid all taxes required to have been
paid by it, except (i) any taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such subsidiary, as
applicable, has set aside on its books adequate reserves or (ii) to the
extent that the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.

 

(t)  Neither the Company nor any of
its subsidiaries is (i) 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 or (ii) a “holding
company” or a “subsidiary company” of a holding company or an “affiliate”
thereof within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

 

(u)  The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

 

(v)  The Company and each of its
subsidiaries maintains insurance covering their respective properties,
operations, personnel and businesses against loss or damage of the kinds
customarily insured against by entities engaged in the same or similar
businesses as the Company and its subsidiaries, and such insurance is of such
type and in such amounts in accordance with customary industry practice.

 

(w)  The Company and each of its
subsidiaries own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names,

 

10

 

trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective
businesses; and the conduct of their respective businesses will not conflict
with, and the Company and its subsidiaries have not received any notice of any
claim of conflict with, any such rights of others, except for such conflicts
which would not, singularly or in the aggregate, have a Material Adverse
Effect.

 

(x)  The Company and each of its
subsidiaries have good and marketable title in fee simple to, or have valid
rights to lease or otherwise use, all items of real and personal property which
are material to the business of the Company and its subsidiaries taken as a
whole, in each case free and clear of all Liens except (A) Permitted Liens
and (B) such as (i) do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries or
(ii) could not reasonably be expected to have a Material Adverse Effect.

 

(y)  No labor disturbance by or
dispute with the employees generally of the Company or any of its subsidiaries
exists or, to the best knowledge of the Company and its subsidiaries, is
contemplated or threatened.

 

(z)  The statistical and
market-related data included in the Offering Memorandum are based on or derived
from sources, including management estimates, that the Company believes to be
reliable.

 

(aa)  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 (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 its
subsidiaries 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 its 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 its
subsidiaries would have any liability; and each such pension 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.

 

(bb)  There has been no storage,
generation, transportation, handling, treatment, disposal, discharge, emission
or other release of any kind of toxic or other wastes or hazardous or regulated
substances by, due to or caused by the Company or any of its subsidiaries (or,
to the best knowledge of the Company and its subsidiaries, any other entity
(including any predecessor) for whose acts or omissions the Company or any of
its subsidiaries is or could reasonably be expected to be liable) upon any of
the property now

 

11

 

or previously owned or leased by the Company
or any of its subsidiaries, or upon any other property, in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or permit
or which would, under any statute or any ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give rise to any
liability, except for any violation or liability that could not reasonably be
expected to have, singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; and there has been no disposal,
discharge, emission or other release of any kind onto such property or into the
environment surrounding such property of any toxic or other wastes or other
hazardous substances with respect to which the Company or any of the Note
Guarantors has knowledge, except for any such disposal, discharge, emission or
other release of any kind which could not reasonably be expected to have,
singularly or in the aggregate with all such discharges and other releases, a
Material Adverse Effect.

 

(cc)  Neither the Company nor, to
the best knowledge of the Company and each of the Note Guarantors, any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee
from corporate funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, unlawful rebate,
payoff, influence payment, kickback or other unlawful payment.

 

(dd)  On and immediately after the
Closing Date, the Company (after giving effect to the issuance of the Notes and
the application of the net proceeds thereof as described in the Offering
Memorandum) will be Solvent.  As used in
this paragraph, the term “Solvent” means, with respect to a particular date,
that on such date (i) the present fair market value (or present fair saleable
value) of the assets of the Company is not less than the total amount required
to pay the probable liabilities of the Company on its total existing debts and
liabilities (including contingent liabilities) as they become absolute and
matured, (ii) the Company is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and commitments as they mature
and become due in the normal course of business, (iii) assuming the sale of the
Notes as contemplated by this Agreement and the Offering Memorandum, the
Company is not incurring debts or liabilities beyond its ability to pay as such
debts and liabilities mature and (iv) the Company is not engaged in any
business or transaction, and is not about to engage in any business or
transaction, for which its property would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry in
which the Company is engaged.  In
computing the amount of such contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.

 

(ee)  Neither the Company nor any of
its subsidiaries owns any “margin securities” as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve System (the “Federal
Reserve Board”), and none of the proceeds of the

 

12

 

sale of the Notes will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose
which might cause any of the Notes to be considered a “purpose credit” within
the meanings of Regulation T, U or X of the Federal Reserve Board.

 

(ff)  Except for this Agreement,
neither the Company nor any of its subsidiaries is a party to any contract,
agreement or understanding with any person that would give rise to a valid
claim against the Company or the Initial Purchasers for a brokerage commission,
finder’s fee or like payment in connection with the offering and sale of the
Notes.

 

(gg)  The Notes satisfy the
eligibility requirements of Rule 144A(d)(3) under the Securities Act.

 

(hh)  Neither the Company nor any of
its affiliates (provided that no representation is made with respect to
the Initial Purchasers) has, directly or through any agent, 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 Notes in a manner that would require
registration of the Notes under the Securities Act.

 

(ii)  None of the Company or any of
its affiliates or any other person acting on its or their behalf (provided
that no representation is made with respect to the Initial Purchasers or any
person to which the Initial Purchasers sell Notes pursuant to
Section 2(e)) has engaged, in connection with the offering of the Notes,
in any form of general solicitation or general advertising within the meaning
of Rule 502(c) under the Securities Act.

 

(jj)  There are no securities of the
Company registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), or listed on a national securities
exchange or quoted in a U.S. automated inter-dealer quotation system.

 

(kk)  None of the Company or any of
the Note Guarantors has taken or will 
take, directly or indirectly, any action prohibited by Regulation M
under the Exchange Act in connection with the offering of the Notes.

 

(ll)  No forward-looking statement
(within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Preliminary Offering
Memorandum or the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.

 

(mm)  Aspen Industrial S.A. de C.V.
is the only Subsidiary which is a significant subsidiary of the Company (as
defined in Section 1.02(w) of Regulation S-X under the Act).

 

(nn)  Since the date as of which
information is given in the Offering Memorandum, except as otherwise stated
therein, (i) there has been no material adverse

 

13

 

change or any development involving a
prospective material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs, management or business prospects of the
Company or any of the Note Guarantors, whether or not arising in the ordinary
course of business, (ii) none of the Company or any of the Note Guarantors has
incurred any material liability or obligation, direct or contingent, other than
in the ordinary course of business, (iii) none of the Company or any of
the Note Guarantors has entered into any material transaction other than in the
ordinary course of business and (iv) there has not been any material change in
the long-term debt of the Company or any of the Note Guarantors, or any dividend
or distribution of any kind declared, paid or made by the Company or any of the
Note Guarantors on any class of their respective capital stock.

 

(oo)  Nothing has come to the
attention of the Company that has caused the Company to believe that the
statistical and market-related data included in the Preliminary Offering
Memorandum and the Offering Memorandum are not based on or derived from sources
that are reliable and accurate in all material respects.

 

2.  Purchase and
Resale of the Notes. 
(a)  On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers agrees, severally and not jointly, to purchase from the
Company, the principal amount at maturity of Notes set forth opposite the name
of such Initial Purchaser on Schedule 1 hereto at a purchase price equal
to 71.97% of the principal amount at maturity thereof.  The Company shall not be obligated to
deliver any of the Notes except upon payment for all of the Notes to be
purchased as provided herein.

 

(b)  The Initial Purchasers have advised the Company
that they propose to offer the Notes for resale upon the terms and subject to
the conditions set forth herein and in the Offering Memorandum.  Each Initial Purchaser, severally and not
jointly, represents, warrants and agrees that (i) it is a qualified institutional
buyer as defined in Rule 144A under the Securities Act, (ii) it is
purchasing the Notes pursuant to a private sale exempt from registration under
the Securities Act, (iii) it has not solicited offers for, or offered or sold,
and will not solicit offers for, or offer or sell, the Notes 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 (“Regulation D”) or in
any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act, (iv) it has solicited and will solicit offers for the
Notes only from, and has offered or sold and will offer, sell or deliver the
Notes, as part of their initial offering, only (x) to persons whom it
reasonably believes to be qualified institutional buyers (“Qualified
Institutional Buyers”), as defined in Rule 144A under the Securities Act (“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 or (y) in accordance with the restrictions set forth
in Annex B hereto and (v) it has and will comply with the applicable
provisions set forth under “Transfer restrictions” and “Plan of distribution”
in the Offering Memorandum.

 

14

 

(c)  Each Initial Purchaser, severally and not jointly,
agrees that, prior to or simultaneously with the confirmation of sale by such
Initial Purchaser to any purchaser of any of the Notes purchased by such
Initial Purchaser from the Company pursuant hereto, such Initial Purchaser
shall furnish to that purchaser a copy of the Offering Memorandum (and any
amendment or supplement thereto that the Company shall have furnished to such
Initial Purchaser prior to the date of such confirmation of sale).

 

(d)  Each Initial Purchaser acknowledges and agrees that
the Company and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 5(d) and (e), counsel for the Company and for
the Initial Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of the Initial Purchasers and their compliance
with their agreements contained in this Section 2, and each Initial
Purchaser hereby consents to such reliance.

 

(e)  The Company and each of the Note Guarantors
acknowledges and agrees that the Initial Purchasers may sell Notes to or
through any affiliate of an Initial Purchaser, which shall have represented,
warranted and agreed to comply with the provisions of this Section 2, and
that any such affiliate may sell Notes purchased by it to or through an Initial
Purchaser.

 

3.  Delivery of and
Payment for the Notes. 
(a)  Delivery of and payment for
the Notes shall be made at the offices of Cravath, Swaine & Moore LLP,
New York, New York, or at such other place as shall be agreed upon by the
Initial Purchasers and the Company, at 10:00 A.M., New York City time, on
February 17, 2004 or at such other time or date, not later than seven full
business days thereafter, as shall be agreed upon by the Initial Purchasers 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 Notes 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 Purchasers of the
certificates evidencing the Notes.  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
Purchasers hereunder.  Upon delivery,
the Notes shall be in global form, registered in such names and in such
denominations as JPMorgan on behalf of the Initial Purchasers shall have
requested in writing not less than two full business days prior to the Closing
Date.  The Company agrees to make one or
more global certificates evidencing the Notes available for inspection by
JPMorgan on behalf of the Initial Purchasers in New York, New York at
least 24 hours prior to the Closing Date.

 

4.  Further
Agreements of the Company and the Note Guarantors.  The Company and each of the Note Guarantors
agree with each of the several Initial Purchasers:

 

(a)  to advise the Initial
Purchasers 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
Offering Memorandum untrue or which requires the making of any additions to or
changes in the Offering Memorandum (as amended or supplemented from

 

15

 

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 Purchasers promptly of any order preventing
or suspending the use of the Preliminary Offering Memorandum or the Offering
Memorandum, of any suspension of the qualification of the Notes for offering or
sale in any jurisdiction and of the initiation or threatening of any proceeding
for any such purpose; and to use its reasonable best efforts to prevent the
issuance of any such order preventing or suspending the use of the Preliminary
Offering Memorandum or the 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 each of
the Initial Purchasers and counsel for the Initial Purchasers, without charge,
as many copies of the Preliminary Offering Memorandum and the Offering
Memorandum (and any amendments or supplements thereto) as may be reasonably
requested;

 

(c)  prior to making any amendment
or supplement to the Offering Memorandum, to furnish a copy thereof to each of
the Initial Purchasers and counsel for the Initial Purchasers and not to effect
any such amendment or supplement to which the Initial Purchasers shall
reasonably object by notice to the Company after a reasonable period to review,
unless in the opinion of counsel to the Company such amendment or supplement is
required by law;

 

(d)  if, at any time prior to
completion of the resale of the Notes by the Initial Purchasers, any event
shall occur or condition exist as a result of which it is necessary, in the
opinion of counsel for the Initial Purchasers or counsel for the Company, to
amend or supplement the Offering Memorandum in order that the 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 Offering
Memorandum to comply with applicable law, to promptly prepare such amendment or
supplement as may be necessary to correct such untrue statement or omission or
so that the Offering Memorandum, as so amended or supplemented, will comply
with applicable law;

 

(e)  if the Company is no longer
then subject to and in compliance with Section 13 or 15(d) of the Exchange
Act, and the Notes are “restricted securities” within the meaning of Rule
144(a)(3) under the Securities Act, to furnish to holders of the Notes and
prospective purchasers of the Notes designated by such holders, upon request of
such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act for so long as
the Notes are outstanding (the foregoing agreement being for the benefit of the
holders from time to time of the Notes and prospective purchasers of the Notes
designated by such holders);

 

(f)  to promptly take from time to
time such actions as the Initial Purchasers may reasonably request to qualify
the Notes for offering and sale under the securities or Blue Sky laws of such
United States jurisdictions as the Initial Purchasers may designate and to
continue such qualifications in effect for so long as required for the resale
of the Notes;

 

16

 

provided that the
Company and its subsidiaries 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;

 

(g)  to assist the Initial
Purchasers in arranging for the Notes 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 Notes to be eligible for clearance and settlement
through The Depository Trust Company (“DTC”);

 

(h)  not to, and to cause its
affiliates (other than the Initial Purchasers or any person to which the
Initial Purchasers sell Notes pursuant to Section 2(e), as to whom the
Company and the Note Guarantors make no covenant) 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 Notes in a manner which would require registration of the Notes
under the Securities Act;

 

(i)  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 Notes 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 Notes as contemplated by this Agreement and the
Offering Memorandum; provided, however, that the Company and the
Note Guarantors do not covenant pursuant to this paragraph (i) with respect to
the Initial Purchasers or any person to which the Initial Purchasers sell Notes
pursuant to Section 2(e);

 

(j)  for a period of 90 days from
the date of the Offering Memorandum and except as contemplated by the
Registration Rights Agreement, 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 the Company or the Note Guarantors
or any of their subsidiaries (other than the Notes and the Exchange Notes)
without the prior written consent of JPMorgan; provided, that the filing
of one or more post-effective amendments to the Company’s registration
statement covering market-making activities by JPMorgan relating to the
Company’s 11L
% Senior Secured Notes due 2009 and the Company’s 13% Senior Subordinated Notes
due 2010 is expressly permitted;

 

(k)  during the period from the
Closing Date until two years after the Closing Date, without the prior written
consent of the Initial Purchasers, not to, and to cause its affiliates (as
defined in Rule 144 under the Securities Act) not to, resell any of the
Notes

 

17

 

that have been reacquired by them other than
to the Company, except for Notes purchased by the Company or any of its
affiliates and resold in a transaction registered under the Securities Act and
except for the Notes and Exchange Notes purchased and resold by JPMorgan in
connection with its market making activities, if any;

 

(l)  not to, for a period of two
years following the Closing Date, be or become, or be or become owned by, an
open-end investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act, and to not be or become, or be or become owned by, a
closed-end investment company required to be registered, but not registered
thereunder;

 

(m)  in connection with the
offering of the Notes, until JPMorgan on behalf of the Initial Purchasers shall
have notified the Company of the completion of the resale of the Notes, 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 Notes, or attempt to induce any person to
purchase any Notes; 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 Notes; provided, however,
that the Company and the Note Guarantors do not covenant pursuant to this
paragraph (m) with respect to the Initial Purchasers or any person to
which the Initial Purchasers sell Notes pursuant to Section 2(e);

 

(n)  in connection with the
offering of the Notes, to make its officers, employees, independent accountants
and legal counsel reasonably available upon request by the Initial Purchasers;

 

(o)  to do and perform all things
required to be done and performed by it under this Agreement that are within
its control prior to or after the Closing Date, and to use its commercially
reasonable best efforts to satisfy all conditions precedent on its part to the
delivery of the Notes;

 

(p)  to not take any action prior
to the execution and delivery of the Indenture which, if taken after such
execution and delivery, would have violated any of the covenants contained in
the Indenture;

 

(q)  to not take any action prior
to the Closing Date which would require the Offering Memorandum to be amended
or supplemented pursuant to Section 4(d) without the prior written consent
of the Initial Purchasers, which consent shall not be unreasonably withheld;

 

(r)  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 the Company, its condition, financial
or otherwise, or earnings, business affairs or business prospects (except for
routine oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the Initial
Purchasers are notified), without the prior written consent of the Initial
Purchasers, unless

 

18

 

in the judgment of the Company and its
counsel, and after notification to the Initial Purchasers, such press release
or communication is required by law; and

 

(s)  to apply the net proceeds from
the sale of the Notes as set forth in the Offering Memorandum under the heading
“Use of proceeds”.

 

5.  Conditions to
Initial Purchasers’ Obligations.  The respective obligations of the several Initial Purchasers
hereunder are subject to the accuracy, on and as of the date hereof and the
Closing Date, of the representations and warranties of the Company and each of
the Note Guarantors contained herein, to the accuracy of the statements of the
Company and each of the Note Guarantors and their respective officers made in
any certificates delivered pursuant hereto, to the performance by the Company
and each of the Note Guarantors of their respective obligations hereunder, and
to each of the following additional terms and conditions:

 

(a)  The Offering Memorandum (and
any amendments or supplements thereto) shall have been printed and copies
distributed to the Initial Purchasers as promptly as practicable on or
following the date of this Agreement or at such other date and time as to which
the Initial Purchasers may agree; and no stop order suspending the sale of the
Notes in any jurisdiction shall have been issued and no proceeding for that
purpose shall have been commenced or shall be pending or threatened.

 

(b)  None of the Initial Purchasers
shall have discovered and disclosed to the Company on or prior to the Closing
Date that the Offering Memorandum or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel for the
Initial Purchasers, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

(c)  All requisite proceedings and
other legal matters incident to the authorization, form and validity of each of
the Transaction Documents and the Offering Memorandum, and all other legal
matters relating to the Transaction Documents and the transactions contemplated
thereby, shall be reasonably satisfactory in all material respects to the
Initial Purchasers, and the Company shall have furnished to the Initial
Purchasers all documents and information that the Initial  Purchasers or their counsel may reasonably
request to enable them to pass upon such matters.

 

(d)  Each of Sonnenschein
Nath & Rosenthal LLP and Stoel Rives LLP shall have furnished to the
Initial Purchasers its written opinion, as counsel to the Company, addressed to
the Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers.

 

(e)  The Initial Purchasers shall
have received from Cravath, Swaine & Moore LLP, counsel for the Initial
Purchasers, such opinion or opinions, dated the Closing Date, with respect to
such matters as the Initial Purchasers may reasonably require, and the Company
shall have furnished to such counsel such documents and information as they
request for the purpose of enabling them to pass upon such matters.

 

19

 

(f)  Each of the following legal
counsel shall have furnished to the Initial Purchasers its respective written
opinion, as special counsel to the Company, addressed to the Initial Purchasers
and dated the Closing Date, in form and substance reasonably satisfactory to
the Initial Purchasers: (i) Potter Anderson & Corroon, LLP as special
counsel in the state of Delaware; (ii) Baker & Daniels,  as special counsel in the state of Indiana;
(iii) Wyatt, Tarrant & Combs, as special counsel in the state of Kentucky;
(iv) Riemer & Braunstein LLP, as special counsel in the state of
Massachusetts; (v) McAfee & Taft, a Professional Corporation, as special
counsel in the state of Oklahoma; (vi) Edwards & Angell,  as special counsel in the state of Rhode
Island; (vii) Wyatt, Tarrant & Combs, as special counsel in the state of
Tennessee; (viii) Hunton & Williams, as special counsel in the state of
Virginia; (ix) Perkins Coie LLP, as special counsel in the state of Washington;  (x) Quarles & Brady LLP, as special
counsel in the state of Wisconsin, (xi) Fasken Martineau DuMoulin LLP, as
special Canadian counsel and (xii) Stewart Mckelvey Stirling Scales, as special
Nova Scotia counsel.

 

(g)  The Company shall have
furnished to the Initial Purchasers a letter (“Initial Letter”) from
Ernst & Young LLP, addressed to the Initial Purchasers and dated the
date hereof, in form and substance satisfactory to the Initial Purchasers,
containing statements and information of the type customarily included in
accountants’ “comfort letters” to underwriters with respect  to the financial statements and certain
financial information contained in the Offering Memorandum; provided, however,
that to the extent that Ernst & Young LLP is not able to address any of the
foregoing matters due to the fact that they became the Company’s accountants in
2002, such matters may be addressed in a letter (the “Company Initial Letter”)
from Brian E. Johnson, Executive Vice President and Chief Financial Officer of
the Company, and Geff Perera, Senior Vice President and Corporate Controller of
the Company, in form and substance reasonably satisfactory to the Initial
Purchasers.

 

(h)  The Company shall have
furnished to the Initial Purchasers a letter (the “Bring-Down Letter”)
of Ernst & Young LLP, addressed to the Initial Purchasers and dated
the Closing Date (i) confirming that they are independent public accountants
with respect to the Company and its subsidiaries within the meaning of Rule 101
of the Code of Professional Conduct of the AICPA and its interpretations and
rulings thereunder, (ii) stating, as of the date of the Bring-Down Letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Offering
Memorandum, as of a date not more than three business days prior to the date of
the Bring-Down Letter), that the conclusions and findings of such accountants
with respect to the financial information and other matters covered by its
Initial Letter are accurate and (iii) confirming in all material respects the
conclusions and findings set forth in its Initial Letter.  In addition, the Company shall have
furnished to the Initial Purchasers a 
letter (the “Company Bring-Down Letter”) of Brian E. Johnson and
Geff Perera, addressed to the Initial Purchasers and dated the Closing Date (i)
stating, as of the date of the Company Bring-Down Letter, that the conclusions
and findings of Mr. Johnson and Mr. Perera with respect to the financial
information and other matters covered by the Company Initial Letter are
accurate and (ii) confirming in all material respects the conclusions and
findings set forth in the Company Initial Letter.

 

20

 

(i)  The Company and each of the
Note Guarantors shall have furnished to the Initial Purchasers a certificate,
dated the Closing Date, of their respective 
chief executive officers  and
their respective chief financial officers stating that (A) such officers
have carefully examined the Offering Memorandum, (B) in their opinion, the
Offering Memorandum, as of its date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and since the
date of the Offering Memorandum, no event has occurred which should have been
set forth in a supplement or amendment to the Offering Memorandum so that the
Offering Memorandum (as so amended or supplemented) would not include any
untrue statement of a material fact and would not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, (C) as of the Closing Date, the representations and warranties of
the Company or the particular Note Guarantor, as applicable, in this Agreement
are true and correct in all material respects, the Company or the particular
Note Guarantor, as applicable,  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
(D) with respect to officers of the Company only, subsequent to the date
of the most recent financial statements contained in the Offering Memorandum,
there has been no material adverse change in the financial position or results
of operations of the Company or any of its subsidiaries, or any change, or any
development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole.

 

(j)  The Initial Purchasers shall
have received counterparts of the Registration Rights Agreement which shall
have been executed and delivered by a duly authorized officer of the Company
and each of the Note Guarantors.

 

(k)  The Indenture shall have been
duly executed and delivered by the Company, the Note Guarantors and the
Trustee, and the Notes shall have been duly executed and delivered by the
Company and duly authenticated by the Trustee.

 

(l)  The Notes shall have been
approved by the NASD for trading in the PORTAL Market and shall be eligible for
clearance and settlement through DTC.

 

(m)  If any event shall have
occurred that requires the Company under Section 4(d) to prepare an
amendment or supplement to the Offering Memorandum, such amendment or
supplement shall have been prepared, the Initial Purchasers shall have been
given a reasonable opportunity to comment thereon, and copies thereof shall
have been delivered to the Initial Purchasers reasonably in advance of the
Closing Date.

 

(n)  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 judgment of

 

21

 

the Initial Purchasers would materially
impair the ability of the Initial Purchasers to purchase, hold or effect
resales of the Notes as contemplated hereby.

 

(o)  Except as described in the
Offering Memorandum (exclusive of any amendment or supplement thereto),
subsequent to the execution and delivery of this Agreement or, if earlier, the
dates as of which information is given in the Offering Memorandum, there shall not
have been any change in the long-term debt or any change, or any development
involving a prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company and its
subsidiaries taken as a whole, the effect of which, in any such case described
above, is, in the judgment of the Initial Purchasers, so material and adverse
as to make it impracticable or inadvisable to proceed with the sale or delivery
of the Notes on the terms and in the manner contemplated by this Agreement and
the Offering Memorandum (exclusive of any amendment or supplement thereto).

 

(p)  No action shall have been
taken 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 or sale of the Notes; 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 or sale of the Notes.

 

(q)  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 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.

 

(r)  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) any calamity or crisis, either
within or outside the United States or 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 this clause (iv), is, in the judgment of the
Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the offer, sale or the delivery of the

 

22

 

Notes on the terms and in the manner
contemplated by this Agreement and in the Offering Memorandum (exclusive of any
amendment or supplement thereto).

 

(s)  On the Closing Date, the
following documents and instruments relating to substantially all of the Common
Collateral shall have been delivered to the Initial Purchasers:  a copy of the financing statements and such
other instruments as are  necessary to
perfect the lien of, and the security interests to be created by, the Security
Documents.

 

(t)  The Initial Purchasers shall
have received in respect of the Mortgages delivered pursuant to
Section 5(s), a mortgagee’s title policy of title insurance or marked-up
title commitment for such insurance.  Such policy or title commitment shall (i) be in an amount equal to
the amount of title insurance coverage provided to the Lenders in respect of
their security interest in the properties covered by such Mortgages; (ii)
insure that the Mortgages insured thereby create a valid second lien on the
property covered by such Mortgage, free and clear of all liens, defects and
encumbrances other than Permitted Liens; (iii) name the Collateral Agent, for
the benefit of the holders of the Notes, as the insured thereunder; (iv) be in
the form of ALTA Loan Policy-1992; and (v) contain such endorsements and
effective coverage as contained in the title insurance policies delivered in
connection with the Credit Agreement.

 

(u)  On or prior to the Closing
Date, JPMorgan shall have received the results of lien searches, conducted by a
search service reasonably satisfactory to JPMorgan, and JPMorgan shall be
satisfied that no liens are outstanding on the property or assets of the
Company and the Note Guarantors, other than any such Liens (i) which constitute
Permitted Liens or (ii) as to which JPMorgan has received documentation
reasonably satisfactory to it evidencing the termination of such liens.

 

(v)  On or prior to the Closing
Date, a copy of each of the duly executed Security Documents shall have been
delivered to the Initial Purchasers.

 

(w)  The initial funding under the
Credit Agreement shall have been consummated contemporaneously with the
issuance of the Notes on the terms described in the Offering Memorandum.

 

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 Purchasers.

 

6.  Termination.  The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers, in their absolute
discretion, by notice given to and received by the Company prior to delivery of
and payment for the Notes if, prior to that time, any of the events described
in Section 5(n), (o), (p) (q) or (r) shall have occurred and be
continuing.

 

7.  Defaulting
Initial Purchasers. 
(a)  If, on the Closing Date, any
Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchaser may make arrangements for the
purchase of the Notes which such defaulting Initial Purchaser agreed but failed
to purchase by other persons satisfactory to the Company and the

 

23

 

non-defaulting Initial Purchaser, but if no such arrangements are made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of the non-defaulting Initial Purchaser or the Company,
except that the Company and the Note Guarantors will continue to be liable for
the payment of expenses to the extent set forth in Sections 8 and 12 and except
that the provisions of Sections 9 and 10 shall not terminate and shall remain
in effect. As used in this Agreement, the term “Initial Purchasers” includes,
for all purposes of this Agreement unless the context otherwise requires, any
party not listed in Schedule 1 hereto that, pursuant to this
Section 7, purchases Notes which a defaulting Initial Purchaser agreed but
failed to purchase.

 

(b)  Nothing contained herein shall relieve a defaulting
Initial Purchaser of any liability it may have to the Company or any
non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Notes of a defaulting Initial
Purchaser, either the non-defaulting Initial Purchasers or the Company may
postpone the Closing Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Initial Purchasers may be necessary in the Offering Memorandum or in any other
document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Offering Memorandum that effects any such changes.

 

8.  Reimbursement of
Initial Purchasers’ Expenses.  If (a) this Agreement shall have been terminated pursuant to
Section 6, (b) the Company shall fail to tender the Notes for delivery to
the Initial Purchasers (unless the Initial Purchasers had failed to comply with
their representations, warranties and agreements set forth in Section 2
hereof) or (c) the Initial Purchasers shall decline to purchase the Notes
for any reason permitted under this Agreement, the Company and the Note
Guarantors shall reimburse the Initial Purchasers for such out-of-pocket
expenses (including reasonable fees and disbursements of counsel) as shall have
been reasonably incurred by the Initial Purchasers in connection with this
Agreement and the proposed purchase and resale of the Notes.

 

9.  Indemnification.  (a) 
The Company and each of the Note Guarantors shall jointly and severally
indemnify and hold harmless each Initial Purchaser, its affiliates, their
respective officers, directors, employees, representatives and agents, and each
person, if any, who controls any Initial Purchaser within the meaning of the
Securities Act or the Exchange Act (collectively referred to for purposes of
this Section 9(a) and Section 10 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 Notes), to which
that 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 Offering Memorandum or in any amendment
or supplement thereto or in any information provided by the Company pursuant to
Section 4(e) or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and shall reimburse each Initial Purchaser promptly
upon demand for any legal or other expenses reasonably incurred by that Initial
Purchaser 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; provided,
however,
that the Company and the Note Guarantors 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 Purchasers’ Information; and provided,
further,
that with respect to any such untrue statement in or omission from the
Preliminary Offering Memorandum, the indemnity agreement contained in this
Section 9(a) shall not inure to the benefit of any such 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 such Initial Purchaser and
any such loss, claim, damage, liability or action of or with respect to such
Initial Purchaser results from the fact that both (A) to the extent required by
applicable law, a copy of the Offering Memorandum was not sent or given to such
person at or prior to the written confirmation of the sale of such Notes to
such person and (B) the untrue statement in or omission from the Preliminary
Offering Memorandum was corrected in the Offering Memorandum unless, in either
case, such failure to deliver the Offering Memorandum was a result of
non-compliance by the Company with Section 4(b).

 

(b)  Each Initial Purchaser, severally and not jointly,
shall indemnify and hold harmless the Company, its affiliates (other than an
Initial Purchaser to the extent it would be deemed an affiliate), their
respective officers, directors, employees, representatives and agents, and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act (collectively referred to for purposes of this
Section 9(b) and Section 10 as the Company), from and against
any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company 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 Offering Memorandum or
in any amendment or supplement thereto or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, 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 Purchasers’ Information provided by such Initial Purchaser, and shall
reimburse the Company for any legal or other expenses reasonably incurred by
the Company 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.

 

(c)  Promptly after receipt by an indemnified party
under this Section 9 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 9(a) or 9(b),
notify the indemnifying party in writing of the claim or the commencement of
that 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 9 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and, provided, further, 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 9.  If any

 

25

 

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 9 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 indemnified party, as a condition of
the indemnity agreements contained in Sections 9(a) and 9(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. 
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 from all liability on claims
that are the subject matter of such proceeding.

 

The obligations of the Company, the Note
Guarantors and the Initial Purchasers in this Section 9 and in
Section 10 are in addition to any other liability that the Company, the
Note Guarantors or the Initial Purchasers, 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.

 

10.  Contribution.  If the indemnification provided for in
Section 9 is unavailable or insufficient to hold harmless an indemnified
party under Section 9(a) or 9(b), then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the

 

26

 

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 Company and the Note Guarantors on the one hand and the Initial Purchasers
on the other from the offering of the Notes or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Note Guarantors on
the one hand and the Initial Purchasers 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 benefits received
by the Company and the Note Guarantors on the one hand and the Initial
Purchasers on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the Notes
purchased under this Agreement (before deducting expenses) received by or on
behalf of the Company and the Note Guarantors, on the one hand, and the total
discounts and commissions received by the Initial Purchasers with respect to
the Notes purchased under this Agreement, on the other, bear to the total gross
proceeds from the sale of the Notes under this Agreement.  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 the Company or information supplied by the Company and
the Note Guarantors on the one hand or to any Initial Purchasers’ 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.  The Company, the Note
Guarantors and the Initial Purchasers agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be
determined by pro rata allocation
(even if the Initial Purchasers 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 10 shall be deemed to include, for purposes of this
Section 10, 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 10, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total discounts and commissions received by such Initial Purchaser
with respect to the Notes purchased by it under this Agreement 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.

 

The Initial Purchasers’ obligations to
contribute as provided in this Section 10 are several in proportion to
their respective purchase obligations and not joint.

 

11.  Persons Entitled
to Benefit of Agreement. 
This Agreement shall inure to the benefit of and be binding upon the
Initial Purchasers, the Company, the Note Guarantors 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 9 and 10 with respect to affiliates, officers,
directors, employees, representatives, agents and controlling persons of the
Company, the Note Guarantors and the Initial Purchasers and in
Section 4(e) with respect to holders and

 

27

 

prospective purchasers of the Notes. 
Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 11, any legal
or equitable right, remedy or claim under or in respect of this Agreement or
any provision contained herein.

 

12.  Expenses.  The Company and the Note Guarantors agree
with the Initial Purchasers to pay (a) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Notes and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and
distribution of the Preliminary Offering Memorandum, the 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
Notes, including stamp duties and transfer taxes, if any, payable upon issuance
of the Notes; (e) the fees and expenses of the Company’s counsel and
independent accountants; (f) the fees and expenses of qualifying the Notes
under the securities laws of the several jurisdictions as provided in
Section 4(g) and of preparing, printing and distributing Blue Sky
Memoranda (including related fees and expenses of counsel for the Initial
Purchasers); (g) any fees charged by rating agencies for rating the Notes;
(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; (j) one-half the cost of air travel in
connection with the “road show” undertaken in connection with the offering of
the Notes (and the Company, the Note Guarantors and the Initial Purchasers
agree that in connection with such road show the Initial Purchasers shall pay
the rental costs for the venues used during such road show and its own expenses
for lodging and meals); and (k) all other costs and expenses incident to
the performance of the obligations of the Company and the Note Guarantors under
this Agreement which are not otherwise specifically provided for in this
Section 12; provided, however, that except as
provided in this Section 12 and Section 8, the Initial Purchasers
shall pay their own costs and expenses.

 

13.  Survival.  The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company, the
Note Guarantors and the Initial Purchasers contained in this  Agreement or made by or on behalf of the
Company, the Note Guarantors or the Initial Purchasers pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Notes and shall remain in full force and effect, regardless of
any termination or cancelation of this Agreement or 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.

 

14.  Notices, etc..  All statements, requests, notices and
agreements hereunder shall be in writing, and:

 

(a)  if to the Initial Purchasers,
shall be delivered or sent by mail or telecopy transmission to J.P. Morgan
Securities, 270 Park Avenue, New York, New York 10017,
Attention:  Gerard J. Murray (telecopier no.: (212) 270-1063); or

 

(b)  if to the Company shall be
delivered or sent by mail or telecopy transmission to the address of the
Company set forth in the Offering Memorandum, Attention:  Brian E. Johnson (telecopier no.: (847)
969-3338);

 

28

 

provided that any notice to an Initial
Purchaser pursuant to Section 9(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.

 

The Company and the Note Guarantors or the
Initial Purchasers may, by written notice to the other, designate additional or
different addresses for subsequent notices or communications.

 

The Company shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Initial Purchasers by JPMorgan.

 

15.  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, (b) the term “subsidiary” has
the meaning set forth in Rule 405 under the Securities Act and (c) except
where otherwise expressly provided, the term “affiliate” has the meaning set
forth in Rule 405 under the Securities Act.

 

16.  Initial
Purchasers’ Information. 
The parties hereto acknowledge and agree that, for all purposes of this
Agreement, the Initial Purchasers’ Information consists solely of the following
information in the Preliminary Offering Memorandum and the Offering Memorandum:
(i) the last sentence on the front cover page concerning delivery of the Notes
and (ii) the statements concerning the Initial Purchasers contained in the
third and tenth paragraphs under the heading “Plan of distribution”.

 

17.  GOVERNING LAW.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

 

18.  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.

 

19.  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.

 

20.  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.

 

29

 

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 among the
Company, the Note Guarantors and the several Initial Purchasers in accordance
with its terms.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  PLIANT CORPORATION,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Brian E. Johnson

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PLIANT CORPORATION INTERNATIONAL,

  
	
   

  	
  PLIANT FILM PRODUCTS OF MEXICO, INC.,

  
	
   

  	
  PLIANT SOLUTIONS CORPORATION,

  
	
   

  	
  PLIANT PACKAGING OF CANADA, LLC,

  
	
   

  	
  UNIPLAST HOLDINGS INC.,

  
	
   

  	
  UNIPLAST U.S., INC.,

  
	
   

  	
  TUREX, INC.,

  
	
   

  	
  PIERSON INDUSTRIES, INC.,

  
	
   

  	
  UNIPLAST MIDWEST, INC.,

  
	
   

  	
  UNIPLAST INDUSTRIES CO.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Brian E. Johnson

  
	
   

  	
   

  	
  Title: Vice President

  
								

 

30

 

	
  Accepted:

  
	
   

  
	
  J.P. MORGAN SECURITIES INC.,

  
	
  For itself and on behalf of the several

  
	
  Initial Purchasers listed in Schedule I hereto.

  
	
   

  
	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Address for notices pursuant to Section 9(c):

  
	
  1 Chase Plaza, 25th floor

  
	
  New York, New York 10081

  
	
  Attention:  Legal Department

  

 

31

 

SCHEDULE 1

 

 

	
  Initial Purchasers

  	
   

  	
  Aggregate
  Principal

  Amount at Maturity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  J.P. Morgan Securities Inc.

  	
   

  	
  $

  	
  153,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Credit Suisse First Boston LLC

  	
   

  	
  $

  	
  107,100,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank Securities Inc.

  	
   

  	
  $

  	
  45,900,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  306,000,000

  	
   

  

 

 

ANNEX A

 

[Form of
Exchange and Registration Rights Agreement]

 

 

ANNEX B

 

Restrictions on Offers and Sales Outside the United States

 

In connection with offers and sales of
Securities outside the United States:

 

(a)  Each Initial Purchaser acknowledges that 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.

 

(b)  Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:

 

(i)  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 the
Closing Date, only in accordance with Regulation S under the Securities Act
(“Regulation S”) or Rule 144A or any other available exemption from
registration under the Securities Act.

 

(ii)  None of such
Initial Purchaser or any of its affiliates or any other person acting on its or
their 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.

 

(iii)  At or prior
to the confirmation of sale of any Securities sold in reliance on Regulation S,
such Initial Purchaser 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 distribution compliance 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.”

 

(iv)  Such Initial
Purchaser 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 paragraph (a) and this
paragraph (b) and not otherwise defined in this Agreement have the meanings
given to them by Regulation S.

 

(c)  Each Initial Purchaser,
severally and not jointly, 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 (as amended); (ii) it has only
communicated or caused to be communicated any invitation or inducement to
engage in investment activity (within the meaning of Section 21 of the
United Kingdom Financial Services and Markets Act 2000 (the “FSMA”)) received
by it in connection with the issue or sale of any Securities in circumstances
in which Section 21(i) of the FSMA does not apply to the Company or the
Note Guarantors; and (iii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation to the
Notes in, from or otherwise involving the United Kingdom.

 

(d)  Each Initial Purchaser
acknowledges that no action has been or will be taken by the Company that would
permit a public offering of the Securities, or possession or distribution of
the Preliminary Offering Memorandum, the Offering Memorandum or any other
offering or publicity material relating to the Securities, in any country or
jurisdiction where action for that purpose is required.

 

2

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