Document:

Exhibit 4.7

 

Execution Copy

 

Graphic Packaging International, Inc.

 

9.50% Senior Subordinated Notes due 2013

 

unconditionally guaranteed as to the

payment of principal, premium,

if any, and interest by

 

the Guarantors listed on the signature pages hereof

 

 

Exchange and Registration Rights Agreement

 

 

August 8, 2003

 

Goldman,
Sachs & Co.

Deutsche
Bank Securities Inc.

J.P.
Morgan Securities Inc.

Morgan
Stanley & Co. Incorporated

Citigroup
Global Markets Inc.

Credit
Suisse First Boston LLC

ABN
AMRO Incorporated

Banc of America Securities LLC,

As representatives of the several Purchasers

named in Schedule I to the Purchase Agreement

c/o
Goldman, Sachs & Co.

85
Broad Street

New
York, New York 10004

 

Ladies
and Gentlemen:

 

Graphic
Packaging International, Inc., a Delaware corporation (the “Company”), proposes
to issue and sell to the Purchasers (as defined herein) upon the terms set
forth in the Purchase Agreement (as defined herein) its 9.50% Senior
Subordinated Notes due 2013, which will be unconditionally guaranteed by
Graphic Packaging Corporation and GPI Holding, Inc.  As an inducement to the Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the
Purchasers thereunder, the Company agrees with the Purchasers for the benefit
of holders (as defined herein) from time to time of the Registrable Securities
(as defined herein) as follows:

 

1.                                       Certain Definitions.  For
purposes of this Exchange and Registration Rights Agreement, the following
terms shall have the following respective meanings:

 

“Base Interest”
shall mean the interest that would otherwise accrue on the Securities under the
terms thereof and the Indenture, without giving effect to the provisions of
this Agreement.

 

 

The term “broker-dealer”
shall mean any broker or dealer registered with the Commission under the
Exchange Act.

 

“Closing Date”
shall mean the date on which the Securities are initially issued.

 

“Commission”
shall mean the United States Securities and Exchange Commission, or any other
federal agency at the time administering the Exchange Act or the Securities
Act, whichever is the relevant statute for the particular purpose.

 

“Effective Time,”
in the case of (i) an Exchange Registration, shall mean the time and date as of
which the Commission declares the Exchange Registration Statement effective or
as of which the Exchange Registration Statement otherwise becomes effective and
(ii) a Shelf Registration, shall mean the time and date as of which the
Commission declares the Shelf Registration Statement effective or as of which
the Shelf Registration Statement otherwise becomes effective.

 

“Electing Holder”
shall mean any holder of Registrable Securities that has returned a completed
and signed Notice and Questionnaire to the Company in accordance with Section
3(d)(ii) or 3(d)(iii) hereof.

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934, or any successor thereto, as
the same shall be amended from time to time.

 

“Exchange Offer”
shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Exchange
Registration” shall have the meaning assigned thereto in Section
3(c) hereof.

 

“Exchange
Registration Statement” shall have the meaning assigned thereto in
Section 2(a) hereof.

 

“Exchange
Securities” shall have the meaning assigned thereto in Section 2(a)
hereof.

 

“Guarantors”
shall have the meaning assigned to the term Note Guarantors in the Indenture.

 

The term “holder”
shall mean each of the Purchasers and other persons who acquire Registrable
Securities from time to time (including any successors or assigns), in each
case for so long as such person owns any Registrable Securities.

 

“Indenture”
shall mean the Indenture, dated as of August 8, 2003, between the Company,
the Guarantors and Wells Fargo Bank Minnesota, National Association, as Trustee
governing the Company’s 9.50% Senior Subordinated Notes due 2013, as the same
shall be amended from time to time.

 

“Issuers”
shall mean the Company and the Guarantors.

 

2

 

“Notice and
Questionnaire” means a Notice of Registration Statement and Selling
Securityholder Questionnaire substantially in the form of Exhibit A hereto,
with such changes thereto as the Company may reasonably determine.

 

The term “person”
shall mean a corporation, association, partnership, organization, business,
individual, government or political subdivision thereof or governmental agency.

 

“Purchase
Agreement” shall mean the Purchase Agreement, dated as of
August 1, 2003, between the Purchasers, the Guarantors and the Company
relating to the Securities.

 

“Purchasers”
shall mean the Purchasers named in Schedule I to the Purchase Agreement.

 

“Registrable
Securities” shall mean the Securities; provided, however, that a
Security shall cease to be a Registrable Security when (i) the Security has
been exchanged for an Exchange Security in an Exchange Offer as contemplated in
Section 2(a) hereof (provided that any Exchange Security that, pursuant to the
last two sentences of Section 2(a), is included in a prospectus for use in connection
with resales by broker-dealers shall be deemed to be a Registrable Security
with respect to Sections 6 and 9 until resale of such Registrable Security has
been effected within the 90-day period referred to in Section 2(a)); (ii) a
Shelf Registration Statement registering such Security under the Securities Act
has been declared or becomes effective and such Security has been sold or
otherwise transferred by the holder thereof pursuant to and in a manner
contemplated by such effective Shelf Registration Statement; (iii) such
Security is sold pursuant to Rule 144 under circumstances in which any legend
borne by such Security relating to restrictions on transferability thereof,
under the Securities Act or otherwise, is removed by the Company or pursuant to
the Indenture; (iv) such Security is eligible to be sold pursuant to paragraph
(k) of Rule 144; or (v) such Security shall cease to be outstanding.

 

“Registration
Default” shall have the meaning assigned thereto in Section 2(c)
hereof.

 

“Registration Expenses”
shall have the meaning assigned thereto in Section 4 hereof.

 

“Resale Period”
shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Restricted
Holder” shall mean (i) a holder that is an affiliate of the Company
within the meaning of Rule 405, (ii) a holder who acquires Exchange Securities
outside the ordinary course of such holder’s business, (iii) a holder who has
arrangements or understandings with any person to participate in the Exchange
Offer for the purpose of distributing Exchange Securities and (iv) a holder
that is a broker-dealer, but only with respect to Exchange Securities received
by such broker-dealer pursuant to an Exchange Offer in exchange for Registrable
Securities acquired by the broker-dealer directly from the Company.

 

3

 

“Rule 144,”
“Rule 405” and “Rule 415” shall mean, in each case, such
rule promulgated under the Securities Act (or any successor provision), as the
same shall be amended from time to time.

 

“Securities”
shall mean, collectively, the 9.50% Senior Subordinated Notes due 2013 of the
Company to be issued and sold to the Purchasers, and securities issued in
exchange therefor or in lieu thereof pursuant to the Indenture.  Each Security is entitled to the benefit of
the guarantees provided for in the Indenture (the “Guarantee”) and, unless the
context otherwise requires, any reference herein to a “Security,” an “Exchange
Security” or a “Registrable Security” shall include a reference to the related
Guarantees.

 

“Securities Act”
shall mean the Securities Act of 1933, or any successor thereto, as the same
shall be amended from time to time.

 

“Shelf
Registration” shall have the meaning assigned thereto in Section
2(b) hereof.

 

“Shelf
Registration Statement” shall have the meaning assigned thereto in
Section 2(b) hereof.

 

“Special Interest”
shall have the meaning assigned thereto in Section 2(c) hereof.

 

“Trust Indenture
Act” shall mean the Trust Indenture Act of 1939, or any successor
thereto, and the rules, regulations and forms promulgated thereunder, all as
the same shall be amended from time to time.

 

Unless
the context otherwise requires, any reference herein to a “Section” or “clause”
refers to a Section or clause, as the case may be, of this Exchange and Registration
Rights Agreement, and the words “herein,” “hereof” and “hereunder” and other
words of similar import refer to this Exchange and Registration Rights
Agreement as a whole and not to any particular Section or other subdivision.

 

2.                                       Registration Under the
Securities Act.

 

(a)                                  Except as set forth in Section 2(b) below,
the Issuers agree to use their reasonable best efforts to file under the
Securities Act, within 120 days after the Closing Date, a registration
statement relating to an offer to exchange (such registration statement, the
“Exchange Registration Statement”, and such offer, the “Exchange Offer”) any
and all of the Securities for a like aggregate principal amount of debt
securities issued by the Company and guaranteed by the Guarantors, which debt
securities and guarantees are substantially identical to the Securities and the
related Guarantees, respectively (and are entitled to the benefits of a trust
indenture which is substantially identical to the Indenture or is the Indenture
and which has been qualified under the Trust Indenture Act), except that they
have been registered pursuant to an effective registration statement under the
Securities Act and do not contain restrictions on transfer or provisions for
the additional interest contemplated in Section 2(c) below or the liquidated
damages provided in Section 2 (d) below (such new debt securities hereinafter
called “Exchange Securities”). The Issuers agree to use their reasonable best
efforts to cause the Exchange Registration Statement to become effective under
the Securities Act within 150 days

 

4

 

after
the Closing Date. The Exchange Offer will be registered under the Securities
Act on the appropriate form and will comply with all applicable tender offer
rules and regulations under the Exchange Act. The Issuers further agree to use
their reasonable best efforts to commence the Exchange Offer promptly, hold the
Exchange Offer open for the period required by applicable law (including
pursuant to any applicable interpretation by the staff of the Commission), but
in any event for at least 10 business days and exchange Exchange Securities for
all Registrable Securities that have been validly tendered and not withdrawn on
or prior to the expiration of the Exchange Offer.  If the Issuers commence the Exchange Offer, the Company will be
entitled to close the Exchange Offer 30 days after the commencement thereof (or
at the end of such shorter period permitted by applicable law), provided that
the Company has accepted all the Registrable Securities validly tendered in
accordance with the terms of the Exchange Offer.  The Issuers agree (x) to include in the Exchange Registration
Statement a prospectus for use in any resales by any holder of Exchange Securities
that is a broker-dealer and (y) to keep such Exchange Registration Statement
effective for a period (the “Resale Period”) beginning when Exchange Securities
are first issued in the Exchange Offer and ending upon the earlier of the
expiration of the 90th day after the Exchange Offer has been completed and such
time as such broker-dealers no longer own any Registrable Securities.

 

Each
holder participating in the Exchange Offer shall be required to represent to
the Company that (i) any Exchange Securities received by such holder will be
acquired in the ordinary course of business, (ii) at the time of the
commencement of the Exchange Offer such holder has no arrangements or
understanding with any person to participate in the distribution of the
Securities or the Exchange Securities within the meaning of the Securities Act,
(iii) such holder is not an “affiliate,” as defined in Rule 405 of the
Securities Act, of the Company, (iv) if such holder is not a broker-dealer,
that it is not engaged in, and does not intend to engage in, the distribution
of the Exchange Securities, (v) if such holder is a broker-dealer, that it will
receive Exchange Securities for its own account in exchange for Securities that
were acquired as a result of market-making activities or other trading
activities and that it will deliver a prospectus in connection with any resale
of such Exchange Securities and (vi) such holder is not acting on behalf of any
person who could not truthfully make the foregoing representations.

 

(b)                                 If (i) on or prior to the time the Exchange
Offer is consummated existing Commission interpretations are changed such that
the Exchange Securities received by holders other than Restricted Holders in
the Exchange Offer for Registrable Securities are not or would not be, upon
receipt, transferable by each such holder without restriction under the
Securities Act, (ii) the Exchange Offer has not been completed within 180 days
following the Closing Date, (iii) any Purchaser so requests with respect to
Registrable Securities not eligible to be exchanged for Exchange Securities in
the Exchange Offer and held by it following consummation of the Exchange Offer
or (iv) any holder (other than a Purchaser) shall be, and shall notify the
Company that such holder is, prohibited by law or Commission policy from
participating in the Exchange Offer or such holder may not resell the Exchange
Securities acquired in the Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange Registration Statement
is not available for such resales by such holder (other than in either case (x)
due solely to the status of such holder as an affiliate of the Company within
the meaning of the Securities Act or (y) due to such holder’s inability to make
the representations set forth in the second paragraph of Section 2(a) hereof)
and any such holder so requests, the Issuers shall, in lieu of (or, in the case
of clauses (iii) and (iv), in addition to) conducting the Exchange Offer
contemplated by Section 2(a), use their reasonable best efforts to file under
the

 

5

 

Securities
Act as promptly as reasonably practicable, a “shelf” registration statement
providing for the registration of, and the sale on a continuous or delayed
basis by the holders of, all of the Registrable Securities (or in the case of
clause (iii), the Registrable Securities held by the Purchasers), pursuant to
Rule 415 or any similar rule that may be adopted by the Commission (such
filing, the “Shelf Registration” and such registration statement, the “Shelf
Registration Statement”). The Issuers agree to use their reasonable best
efforts (x) to cause the Shelf Registration Statement to become effective
within 120 days after the date on which the obligation to file such Shelf
Registration Statement arises and to use their reasonable best efforts to cause
such Shelf Registration Statement to remain effective for a period ending on
the earlier of the second anniversary of the Effective Time or such shorter period
that will terminate when all the Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or are distributed to the public pursuant to Rule 144 or become
eligible for resale pursuant to Rule 144 without volume restriction, if any; provided,
however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the prospectus
forming a part thereof for resales of Registrable Securities unless such holder
is an Electing Holder, and (y) after the Effective Time of the Shelf
Registration Statement, promptly upon the request of any holder of Registrable
Securities that is not then an Electing Holder, to take any action reasonably necessary
to enable such holder to use the prospectus forming a part thereof for resales
of Registrable Securities, including, without limitation, any action necessary
to identify such holder as a selling securityholder in the Shelf Registration
Statement; provided, however, that nothing in this clause (y) shall relieve any
such holder of the obligation to return a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(d)(iii) hereof. The
Issuers further agree to supplement or make amendments to the Shelf
Registration Statement, as and when required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or rules and regulations
thereunder for shelf registration, and the Issuers agree to furnish to each
Electing Holder copies of any such supplement or amendment promptly following
its filing with the Commission.

 

Notwithstanding
the foregoing, the Company may suspend the availability of any Shelf
Registration Statement for up to an aggregate of 30 days in any consecutive
twelve-month period if (i) such action is required by applicable law, (ii) such
action is taken by the Company in good faith and for valid business reasons (not
including avoidance of the Company’s obligations hereunder), including the
acquisition or divestiture of assets, or (iii) with respect to a Shelf
Registration Statement required to be filed due to a failure to consummate the
Exchange Offer within the required time period, such action occurs following
the consummation of the Exchange Offer.

 

(c)                                  In the event that (i) the Issuers have not
filed the Exchange Registration Statement nor a Shelf Registration Statement
(applicable to all of the Registrable Securities) on or before 120 days after
the Closing Date, or (ii) the Exchange Registration Statement has not become
effective or been declared effective by the Commission on or before 150 days
after the Closing Date, or (iii) the Exchange Offer has not been consummated
within 180 days after the Closing Date, or (iv) if a Shelf Registration
Statement required to be filed under Section 2(b) hereof is not declared
effective on or before 120 days after the date on which the obligation to file
the Shelf Registration Statement arises, or (v) if any Shelf Registration
Statement required by Section 2(b) hereof is filed and declared effective, and
during the period the Issuers are required to use their reasonable best efforts
to cause the Shelf Registration Statement to remain

 

6

 

effective,
(x) the Company shall have suspended the Shelf Registration Statement pursuant
to Section 2(b) hereof for more than 30 days in the aggregate in any
consecutive twelve-month period and be continuing to suspend the availability
of the Shelf Registration Statement or (y) the Shelf Registration Statement
shall cease to be effective (other than by action of the Issuers pursuant to
the second paragraph of Section 2(b) hereof) without being replaced within 60
days by a shelf registration statement that is filed and declared effective
(each such event referred to in clauses (i) through (v), a “Registration
Default” and each period during which a Registration Default has occurred and
is continuing, a “Registration Default Period”), then, as liquidated damages
for such Registration Default, subject to the provisions of Section 9(b),
special interest (“Special Interest”), in addition to the Base Interest, shall
accrue on Registrable Securities for the Registration Default Period (but only
with respect to one Registration Default at any particular time) until such
time as all Registration Defaults have been cured at a per annum rate of 0.25%
for the first 90 days of the Registration Default Period, which rate shall
increase by an additional 0.25% during each subsequent 90-day period, up to a
maximum of 0.50% regardless of the number of Registration Defaults that shall
have occurred and be continuing. 
Following the cure of all Registration Defaults, the accrual of Special
Interest will cease.  A Registration
Default under clause (iv) or (v) will be deemed cured upon consummation of the
Exchange Offer in the case of a Shelf Registration Statement required to be filed
due to a failure to consummate the Exchange Offer within the required time
period.

 

(d)                                 If during the 90 day period referenced in the
penultimate sentence of the first paragraph of Section 2(a) hereof the Exchange
Offer Registration Statement is suspended by the Company or ceases to be effective
such that any broker-dealer that (i) receives Exchange Securities in the
Exchange Offer and (ii) is subject to prospectus delivery requirements cannot
fulfill such requirements, the Company shall pay liquidated damages to such
broker-dealers in an amount calculated in a manner consistent with that
specified above with respect to Registration Defaults.

 

(e)                                  The Company and the Guarantors shall take all
actions reasonably necessary or advisable to be taken by them to ensure that
the transactions contemplated herein are effected as so contemplated, including
all actions necessary or desirable to register the Guarantees under the
registration statement contemplated in Section 2(a) or 2(b) hereof, as
applicable.

 

(f)                                    Any reference herein to a registration statement
as of any time shall be deemed to include any document incorporated, or deemed
to be incorporated, therein by reference as of such time and any reference
herein to any post-effective amendment to a registration statement as of any
time shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time.

 

3.                                       Registration Procedures.

 

If
the Issuers file a registration statement pursuant to Section 2(a) or Section
2(b), the following provisions shall apply:

 

(a)                                  At or before the Effective Time of the
Exchange Offer or the Shelf Registration, as the case may be, the Issuers shall
qualify the Indenture under the Trust Indenture Act of 1939.

 

7

 

(b)                                 In the event that such qualification would
require the appointment of a new trustee under the Indenture, the Issuers shall
appoint a new trustee thereunder pursuant to the applicable provisions of the
Indenture.

 

(c)                                  In connection with the Issuers’ obligations with
respect to the registration of Exchange Securities as contemplated by Section
2(a) (the “Exchange Registration”), if applicable, the Issuers shall:

 

(i)                                     use their reasonable best efforts to prepare
and file with the Commission within 120 days after the Closing Date, an
Exchange Registration Statement on any form which may be utilized by the
Company and which shall permit the Exchange Offer and resales of Exchange
Securities by broker-dealers during the Resale Period to be effected as
contemplated by Section 2(a), and use their reasonable best efforts to cause
such Exchange Registration Statement to become effective within 150 days after
the Closing Date;

 

(ii)                                  prepare and file with the Commission such
amendments and supplements to such Exchange Registration Statement and the
prospectus included therein as may be necessary to effect and maintain the
effectiveness of such Exchange Registration Statement for the periods and
purposes contemplated in Section 2(a) hereof and as may be required by the
applicable rules and regulations of the Commission and the instructions
applicable to the form of such Exchange Registration Statement, and promptly
provide each broker-dealer holding Exchange Securities with such number of
copies of the prospectus included therein (as then amended or supplemented), in
conformity in all material respects with the requirements of the Securities Act
and the rules and regulations of the Commission thereunder, as such
broker-dealer reasonably may request prior to the expiration of the Resale
Period, for use in connection with resales of Exchange Securities;

 

(iii)                               promptly notify each broker-dealer that has
requested or received copies of the prospectus included in such registration
statement, and confirm such advice in writing, (A) when such Exchange
Registration Statement or the prospectus included therein or any prospectus
amendment or supplement or post-effective amendment has been filed, and, with
respect to such Exchange Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any request by the
Commission for amendments or supplements to such Exchange Registration
Statement or prospectus or for additional information, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of such Exchange
Registration Statement or the initiation of any proceedings for that purpose,
(D) of the receipt by the Issuers of any notification with respect to the
suspension of the qualification of the Exchange Securities for sale in any jurisdiction
or the initiation of any proceeding for such purpose, or (E) at any time during
the Resale Period when a prospectus is required to be delivered under the
Securities Act, that such Exchange Registration Statement, prospectus,
prospectus amendment or supplement or post-effective amendment does not conform
in all material respects to the applicable requirements of the Securities Act
and the rules and regulations of the Commission thereunder or contains an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;

 

8

 

(iv)                              in the event that the Issuers would be
required, pursuant to Section 3(c)(iii)(E) above, to notify any broker-dealers
holding Exchange Securities, use their reasonable best efforts to prepare and
furnish as soon as practicable to each such broker-dealer a reasonable number
of copies of a prospectus supplemented or amended so that, as thereafter
delivered to purchasers of such Exchange Securities during the Resale Period,
such prospectus shall conform in all material respects to the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder and shall 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 in light of the
circumstances then existing;

 

(v)                                 use their reasonable best efforts to obtain
the withdrawal of any order suspending the effectiveness of such Exchange
Registration Statement or any post-effective amendment thereto at the earliest
practicable date;

 

(vi)                              use their reasonable best efforts to (A)
register or qualify the Exchange Securities under the securities laws or blue
sky laws of such jurisdictions as any participating Holder of the Registrable
Securities reasonably requests in writing no later than the commencement of the
Exchange Offer, (B) keep such registrations or qualifications in effect and
comply with such laws so as to permit the continuance of offers, sales and
dealings therein in such jurisdictions until the expiration of the Resale
Period and (C) take any and all other actions as may be reasonably necessary to
enable each broker-dealer holding Exchange Securities to consummate the
disposition thereof in such jurisdictions; provided, however, that neither the
Company nor the Guarantors shall be required for any such purpose to (1)
qualify as a foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this Section
3(c)(vi), (2) consent to general service of process in any such jurisdiction or
(3) make any changes to its certificate of incorporation or by-laws or any
agreement between it and its stockholders;

 

(vii)                           provide a CUSIP number for all Exchange
Securities, not later than the consummation of the Exchange Offer; and

 

(viii)                        comply in all material respects with all
applicable rules and regulations of the Commission, and make generally
available to its securityholders as soon as practicable but no later than
eighteen months after the effective date of such Exchange Registration
Statement, an earning statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of the
Company, Rule 158 thereunder).

 

(d)                                 In connection with the Issuers’ obligations
with respect to the Shelf Registration, if applicable, the Issuers shall:

 

(i)                                     use their reasonable best efforts to prepare
and file with the Commission within the time periods specified in Section 2(b),
a Shelf Registration Statement on any form which may be utilized by the Company
and which shall register all of the Registrable Securities (or in the case of a
Shelf Registration Statement filed pursuant to Section 2(b)(iii), the
Registrable Securities held by the Purchasers) for resale by the holders
thereof in accordance with such method or methods of disposition as may be
specified in

 

9

 

the applicable Notice and Questionnaire by such of the holders as, from
time to time, may be Electing Holders and use their reasonable best efforts to
cause such Shelf Registration Statement to become effective within the time
periods specified in Section 2(b);

 

(ii)                                  not less than 15 calendar days prior to the
Effective Time of the Shelf Registration Statement, mail the Notice and
Questionnaire to the holders of Registrable Securities; no holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no holder shall be entitled to use the
prospectus forming a part thereof for resales of Registrable Securities at any
time, unless such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth therein;
provided, however, holders of Registrable Securities shall have at least 13
calendar days from the date on which the Notice and Questionnaire is first
mailed to such holders to return a completed and signed Notice and
Questionnaire to the Company;

 

(iii)                               after the Effective Time of the Shelf
Registration Statement, upon the request of any holder of Registrable
Securities that is not then an Electing Holder, promptly send a Notice and
Questionnaire to such holder; provided that the Issuers shall not be required
to take any action to name such holder as a selling securityholder in the Shelf
Registration Statement or to enable such holder to use the prospectus forming a
part thereof for resales of Registrable Securities until such holder has
returned a completed and signed Notice and Questionnaire to the Company;

 

(iv)                              as soon as practicable prepare and file with
the Commission such amendments and supplements to such Shelf Registration
Statement and the prospectus included therein as may be necessary to effect and
maintain the effectiveness of such Shelf Registration Statement for the period
specified in Section 2(b) hereof and as may be required by the applicable rules
and regulations of the Commission and the instructions applicable to the form
of such Shelf Registration Statement, and furnish to the Electing Holders
copies of any such supplement or amendment as soon as practicticable following
its filing with the Commission. 
Notwithstanding the foregoing, the Company may suspend the availability
of any Shelf Registration Statement for up to an aggregate of 30 days in any
consecutive twelve-month period if (i) such action is required by applicable
law, (ii) such action is taken by the Company in good faith and for valid
business reasons (not including avoidance of the Company’s obligations
hereunder), including the acquisition or divestiture of assets, or (iii) with
respect to a Shelf Registration Statement required to be filed due to a failure
to consummate the Exchange Offer within the required time period, such action
occurs following the consummation of the Exchange Offer;

 

(v)                                 comply in all material respects with the
provisions of the Securities Act with respect to the disposition of all of the
Registrable Securities covered by such Shelf Registration Statement in
accordance with the intended methods of disposition by the Electing Holders provided
for in such Shelf Registration Statement;

 

(vi)                              for a reasonable period prior to the filing
of such Shelf Registration Statement, and throughout the period specified in
Section 2(b), make reasonably available at reasonable times at the Company’s
principal place of business or such other reasonable place for inspection by a
representative of, and not more than one counsel

 

10

 

acting for, Electing Holders holding at least a majority in aggregate
principal amount of the Registrable Securities at the time outstanding (the
“Majority Electing Holders”) and any underwriter participating in the
distribution of the Registrable Securities being sold (including any person who
may be deemed an underwriter within the meaning of Section 2(a)(ii) of the
Securities Act) such relevant financial and other pertinent information and
books and records of the Company, and use their reasonable best efforts to
cause the officers, employees, counsel and independent certified public
accountants of the Company to respond to such inquiries, as shall be reasonably
necessary to conduct a reasonable investigation within the meaning of Section
11 of the Securities Act; provided, however, that the foregoing investigation
and information gathering shall be coordinated on behalf of all such parties by
one counsel designated by and on behalf of all such parties and provided,
further, that each such party shall be required to maintain in confidence and
not to disclose to any other person any information or records reasonably
designated by the Company as being confidential, until such time as (A) such
information becomes a matter of public record (whether by virtue of its
inclusion in such registration statement or otherwise except as a result of a
breach of this or any other obligation of confidentiality to the Issuers known
to such party), or (B) such person shall be required so to disclose such
information pursuant to a subpoena or order of any court or other governmental
agency or body having jurisdiction over the matter (subject to the requirements
of such order, and only after such person shall have given the Company prompt
prior written notice of such requirement so that the Company, at its expense,
may undertake appropriate action to prevent disclosure of such information or
records), or (C) such information is required to be set forth in such Shelf
Registration Statement or the prospectus included therein or in an amendment to
such Shelf Registration Statement or an amendment or supplement to such
prospectus in order that such Shelf Registration Statement, prospectus,
amendment or supplement, as the case may be, complies with applicable
requirements of the federal securities laws and the rules and regulations of
the Commission and does not contain an untrue statement of a material fact or
omit to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;

 

(vii)                           promptly notify each of the Electing Holders
and any managing underwriter thereof and confirm such advice in writing, (A)
when such Shelf Registration Statement or the prospectus included therein or
any prospectus amendment or supplement or post-effective amendment has been
filed, and, with respect to such Shelf Registration Statement or any
post-effective amendment, when the same has become effective, (B) of any
request by the Commission for amendments or supplements to such Shelf
Registration Statement or prospectus or for additional information, (C) of the
issuance by the Commission of any stop order suspending the effectiveness of
such Shelf Registration Statement or the initiation of any proceedings for that
purpose, (D) of the receipt by the Issuers of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding for such purpose or (E) if
at any time when a prospectus is required to be delivered under the Securities
Act, that such Shelf Registration Statement, prospectus, prospectus amendment
or supplement or post-effective amendment does not conform in all material
respects to the applicable requirements of the Securities Act and the rules and
regulations of the Commission thereunder or contains an untrue statement of a
material

 

11

 

fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the circumstances
then existing;

 

(viii)                        use their reasonable best efforts to obtain
the withdrawal of any order suspending the effectiveness of such registration
statement or any post-effective amendment thereto at the earliest practicable
date;

 

(ix)                                if requested by any managing underwriter or
the Majority Electing Holders, promptly incorporate in a prospectus supplement
or post-effective amendment such information as is required by the applicable
rules and regulations of the Commission and as such managing underwriter or
such Majority Electing Holders shall specify should be included therein
relating to the terms of the sale of such Registrable Securities, including
information with respect to the principal amount of Registrable Securities
being sold by such Majority Electing Holders or to any underwriters, the names
and descriptions of such Majority Electing Holders or underwriters, the
offering price of such Registrable Securities and any discount, commission or
other compensation payable in respect thereof, the purchase price being paid
therefor by such underwriters and with respect to any other terms of the
offering of the Registrable Securities to be sold by such Majority Electing
Holders or to such underwriters; and make all required filings of such prospectus
supplement or post-effective amendment as soon as practicable after
notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment;

 

(x)                                   furnish to each Electing Holder, and each
underwriter, if any, thereof such number of copies of such Shelf Registration
Statement (excluding exhibits thereto and documents incorporated by reference
therein) and of the prospectus included in such Shelf Registration Statement
(including each preliminary prospectus), in conformity in all material respects
with the applicable requirements of the Securities Act and the rules and
regulations of the Commission thereunder, as such Electing Holder and
underwriter, if any, may reasonably request in order to facilitate the offering
and disposition of the Registrable Securities owned by such Electing Holder or
underwritten by such underwriter and to permit such Electing Holder and
underwriter, if any, to satisfy the prospectus delivery requirements of the
Securities Act; and the Issuers hereby consent to the use of such prospectus
(including such preliminary prospectus) and any amendment or supplement thereto
by each such Electing Holder and by any such underwriter, in each case in the
form most recently provided to such person by the Company, in connection with
the offering and sale of the Registrable Securities covered by the prospectus
(including such preliminary prospectus) or any supplement or amendment thereto;

 

(xi)                                use their reasonable best efforts to (A)
register or qualify the Registrable Securities to be included in such Shelf
Registration Statement under such securities laws or blue sky laws of such
jurisdictions as any Electing Holder and managing underwriter, if any, thereof
shall reasonably request, (B) keep such registrations or qualifications in
effect and comply with such laws so as to permit the continuance of offers,
sales and dealings therein in such jurisdictions during the period the Shelf
Registration is required to remain effective under Section 2(b) above and for
so long as may be necessary to enable any such Electing Holder or underwriter
to complete its distribution of Securities pursuant to such Shelf Registration
Statement and (C) take any and all other actions as may be reasonably necessary
to enable each such Electing Holder and underwriter, if any, to consummate the
disposition in such jurisdictions of such Registrable Securities;

 

12

 

provided, however, that neither the Company nor the Guarantors shall be
required for any such purpose to (1) qualify as a foreign corporation in any
jurisdiction wherein it would not otherwise be required to qualify but for the
requirements of this Section 3(d)(xi), (2) consent to general service of
process in any such jurisdiction or (3) make any changes to its certificate of
incorporation or by-laws or any agreement between it and its stockholders;

 

(xii)                             unless any Registrable Securities shall be in
book-entry only form, cooperate with the Electing Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which certificates
shall not bear any restrictive legends; and, in the case of an underwritten
offering, enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriter may request a reasonable
amount of time prior to any sale of the Registrable Securities;

 

(xiii)                          provide a CUSIP number for all Registrable
Securities, not later than the applicable Effective Time;

 

(xiv)                         enter into one or more underwriting
agreements in customary form, including customary provisions relating to
indemnification and contribution, and use its reasonable best efforts to take
such other actions, if any, in connection therewith as any Electing Holders
aggregating at least 20% in aggregate principal amount of the Registrable
Securities at the time outstanding shall reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities;

 

(xv)                            if requested by the Majority Electing Holders
or if the offering contemplated by the Shelf Registration is an underwritten
offering, shall use their reasonable best efforts to, (A) make such
representations and warranties to the Electing Holders and the underwriters, if
any, thereof in form, substance and scope as are customarily made in connection
with an offering of debt securities pursuant to any underwriting agreement; (B)
obtain an opinion of counsel to the Issuers in customary form subject to
customary limitations, assumptions and exclusions and covering such matters, of
the type customarily covered by such an opinion, as the managing underwriters,
if any, or as any Electing Holders of at least 20% in aggregate principal
amount of the Registrable Securities at the time outstanding may reasonably
request, addressed to the Electing Holders and the underwriters, if any,
thereof and dated the effective date of such Shelf Registration Statement (and
if such Shelf Registration Statement contemplates an underwritten offering of a
part or all of the Registrable Securities, dated the date of the closing under
the underwriting agreement relating thereto); (C) obtain a “cold comfort”
letter or letters from the independent certified public accountants of the
Company addressed to the selling Electing Holders or the underwriters, if any,
thereof, dated (i) the effective date of such Shelf Registration Statement and
(ii) if such Shelf Registration Statement contemplates an underwritten
offering, dated the date of the closing under the underwriting agreement
relating thereto, such letter or letters to be in customary form and covering
such matters of the type customarily covered by letters of such type, subject
to receipt of appropriate documentation as contemplated, and only if permitted,
by Statement of Auditing Standards No. 72; (D) deliver such customary documents
and certificates, including officers’ certificates, as may be reasonably
requested by the Majority Electing Holders and the managing underwriters, if
any, thereof;

 

13

 

(xvi)                         notify in writing each holder of Registrable
Securities of any proposal by the Issuers to amend or waive any provision of
this Exchange and Registration Rights Agreement pursuant to Section 9(h) hereof
and of any amendment or waiver effected pursuant thereto, each of which notices
shall contain the text of the amendment or waiver proposed or effected, as the
case may be;

 

(xvii)                      in the event that any broker-dealer
registered under the Exchange Act shall underwrite any Registrable Securities
or participate as a member of an underwriting syndicate (within the meaning of
the Conduct Rules (the “Conduct Rules”) of the National Association of
Securities Dealers, Inc. (“NASD”) or any successor thereto, as amended from
time to time) thereof as an underwriter, use reasonable best efforts to provide
information to assist such broker-dealer in complying with the requirements of
such Conduct Rules; and

 

(xviii)                   comply in all material respects with all
applicable rules and regulations of the Commission, and make generally
available to its securityholders as soon as practicable but in any event not
later than eighteen months after the effective date of such Shelf Registration
Statement, an earning statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of the
Company, Rule 158 thereunder).

 

(e)                                  In the event that the Issuers would be
required, pursuant to Section 3(d)(vii)(E) above, to notify the Electing
Holders and the managing underwriters, if any, thereof, the Company shall as
soon as practicable prepare and furnish to each of the Electing Holders and to
each such underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall conform in all material respects
to the applicable requirements of the Securities Act and the rules and
regulations of the Commission thereunder and shall 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 in
light of the circumstances then existing. Each broker-dealer and Electing
Holder agrees that upon receipt of any notice from the Issuers pursuant to
Section 3(c)(iii)(E) or Section 3(d)(vii)(E) hereof, such broker-dealer or
Electing Holder shall forthwith discontinue the disposition of Registrable
Securities pursuant to the Exchange Registration Statement or Shelf
Registration Statement applicable to such Registrable Securities until such
broker-dealer or Electing Holder shall have received copies of such amended or
supplemented prospectus, and if so directed by the Issuers, such broker-dealer
or Electing Holder shall deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies, then in such broker-dealer’s or
Electing Holder’s possession of the prospectus covering such Registrable
Securities at the time of receipt of such notice.

 

(f)                                    In the event of a Shelf Registration, in
addition to the information required to be provided by each Electing Holder in
its Notice Questionnaire, the Company may require such Electing Holder to furnish
to the Company such additional information regarding such Electing Holder and
such Electing Holder’s intended method of distribution of Registrable
Securities as may be required in order to comply with the Securities Act. Each
such Electing Holder agrees to notify the Company as promptly as practicable of
any inaccuracy or change in information previously furnished by such Electing
Holder to the Company or of the occurrence of any event in either case as a
result of which any prospectus relating to such Shelf Registration contains or
would contain an untrue statement of a material fact regarding such Electing
Holder or

 

14

 

such
Electing Holder’s intended method of disposition of such Registrable Securities
or omits to state any material fact regarding such Electing Holder or such
Electing Holder’s intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and promptly to furnish
to the Company any additional information required to correct and update any
previously furnished information or required so that such prospectus shall not
contain, with respect to such Electing Holder or the disposition of such
Registrable Securities, 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 in light of the circumstances then existing.

 

4.                                       Registration Expenses.

 

The
Issuers agree to bear and to pay or cause to be paid promptly all expenses
incident to the Issuers’ performance of or compliance with this Exchange and
Registration Rights Agreement, including (a) all Commission and any NASD
registration, filing and review fees and expenses including the reasonable fees
and disbursements of counsel for the underwriters, if any, in connection with
such registration, filing and review, (b) all fees and expenses in connection
with the qualification of the Securities for offering and sale under the State
securities and blue sky laws referred to in Section 3(d)(xi) hereof and
determination of their eligibility for investment under the laws of such
jurisdictions as any managing underwriters or the Electing Holders may
designate, including the reasonable fees and disbursements of counsel for the
Electing Holders or underwriters in connection with such qualification and
determination, (c) all expenses relating to the preparation, printing, production,
distribution and reproduction of each registration statement required to be
filed hereunder, each prospectus included therein or prepared for distribution
pursuant hereto, each amendment or supplement to the foregoing, the expenses of
preparing the Securities for delivery and the expenses of printing or producing
any underwriting agreements, agreements among underwriters, selling agreements
and blue sky or legal investment memoranda and all other documents in
connection with the offering, sale or delivery of Securities to be disposed of
(including certificates representing the Securities), (d) messenger, telephone
and delivery expenses relating to the offering, sale or delivery of Securities
and the preparation of documents referred in clause (c) above, (e) fees and
expenses of the Trustee under the Indenture, any agent of the Trustee and any
counsel for the Trustee and of any collateral agent or custodian, (f) internal
expenses (including all salaries and expenses of the Company’s officers and
employees performing legal or accounting duties), (g) fees, disbursements and
expenses of counsel of the Company and independent certified public accountants
of the Company (including the expenses of any opinions or “cold comfort”
letters required by or incident to such performance and compliance), (h) fees,
disbursements and expenses of any “qualified independent underwriter” engaged
pursuant to Section 3(d)(xvii) hereof, (i) the reasonable fees, disbursements
and expenses of one counsel for the Electing Holders retained in connection
with a Shelf Registration, as selected by the Electing Holders of at least a
majority in aggregate principal amount of the Registrable Securities held by
Electing Holders (which counsel shall be reasonably satisfactory to the Company),
(j) any fees charged by securities rating services for rating the Securities,
and (k) fees, expenses and disbursements of any other persons, including
special experts, retained by the Company in connection with such registration
(collectively, the “Registration Expenses”). To the extent that any
Registration Expenses are incurred, assumed or paid by any holder of
Registrable Securities or any placement or sales agent therefor or underwriter
thereof, the Issuers shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt

 

15

 

of a request therefor. Notwithstanding the
foregoing, the holders of the Registrable Securities being registered shall pay
all agency fees and commissions and underwriting discounts and commissions
attributable to the sale of such Registrable Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
holders (severally or jointly), other than the counsel and experts specifically
referred to above.

 

5.                                       [Intentionally Omitted.]

 

6.                                       Indemnification.

 

(a)                                  Indemnification by the
Company and the Guarantors.  The Company and the Guarantors, jointly and
severally, will indemnify and hold harmless each of the broker-dealers whose
Registrable Securities are included in an Exchange Registration Statement and
each of the Electing Holders of Registrable Securities included in a Shelf
Registration Statement against any losses, claims, damages or liabilities,
joint or several, to which such broker-dealer or Electing Holder may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Exchange Registration Statement or Shelf Registration
Statement, as the case may be, under which such Registrable Securities were
registered under the Securities Act, or any preliminary, final or summary
prospectus contained therein or furnished by the Company to any such
broker-dealer or Electing Holder, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such broker-dealer or
Electing Holder for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that (i) neither the Company nor the
Guarantors shall be liable to any such person in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, or preliminary, final or summary
prospectus, or amendment or supplement thereto, in reliance upon and in conformity
with written information furnished to the Company by such person expressly for
use therein and (ii) with respect to any untrue statement or alleged untrue
statement or omission or alleged omission made in a Shelf Registration
Statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to a Shelf Registration Statement, the
indemnity agreement contained in this Section 5(a) will not inure to the
benefit of any broker-dealer or Electing Holder from whom the person asserting
any such loss, claim, damage or liability purchased the Registrable Securities
purchased concerned, to the extent that at the time of such purchase such
broker-dealer or Electing Holder had received timely written advice from the
Company prior to such purchase that the use of such prospectus, amendment,
supplement or preliminary prospectus was suspended as provided in Section 3(e).

 

(b)                                 Indemnification by the
Holders.  The Company may require, as a condition to
including any Registrable Securities in any registration statement filed
pursuant to Section 2(b) hereof, that the Company shall have received an
undertaking reasonably satisfactory to it from the Electing Holder of such
Registrable Securities, severally and not jointly, to (i) indemnify and hold
harmless the Company, the Guarantors, and all other holders of Registrable
Securities, against any losses, claims, damages or liabilities to which the
Company, the Guarantors or such other holders of Registrable Securities may
become subject, under the Securities

 

16

 

Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, or any preliminary, final or summary prospectus contained therein or
furnished by the Company to any such Electing Holder, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Electing
Holder expressly for use therein, and (ii) reimburse the Company and the
Guarantors for any legal or other expenses reasonably incurred by the Company
and the Guarantors in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that no such
Electing Holder shall be required to undertake liability to any person under
this Section 6(b) for any amounts in excess of the dollar amount of the
proceeds to be received by such Electing Holder from the sale of such Electing
Holder’s Registrable Securities pursuant to such registration.

 

(c)                                  Notices of Claims, Etc. 
Promptly after receipt by an indemnified party under subsection (a) or
(b) above of written notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an
indemnifying party pursuant to the indemnification provisions of or
contemplated by this Section 6, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under the indemnification provisions of or
contemplated by Section 6(a) or 6(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof
other than reasonable costs of investigation. 
No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.

 

(d)                                 Contribution.  If
for any reason the indemnification provisions contemplated by Section 6(a) or
Section 6(b) are unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the

 

17

 

indemnifying
party and the indemnified party in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were determined by pro rata
allocation (even if the holders or any agents or underwriters or all of them
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 6(d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions
of this Section 6(d), no holder shall be required to contribute any amount in
excess of the amount by which the dollar amount of the proceeds received by
such holder from the sale of any Registrable Securities (after deducting any
fees, discounts and commissions applicable thereto) exceeds the amount of any
damages which such holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.  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 holders’ and any underwriters’ obligations in
this Section 6(d) to contribute shall be several in proportion to the principal
amount of Registrable Securities registered or underwritten, as the case may
be, by them and not joint.

 

(e)                                  The obligations of the Company and the
Guarantors under this Section 6 shall be in addition to any liability which the
Company or the Guarantors may otherwise have and shall extend, upon the same
terms and conditions, to each officer, director and partner of each holder and
each person, if any, who controls any holder within the meaning of the
Securities Act; and the obligations of the holders contemplated by this Section
6 shall be in addition to any liability which the respective holder may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company or the Guarantors (including any person
who, with his consent, is named in any registration statement as about to
become a director of the Company or the Guarantors) and to each person, if any,
who controls the Company within the meaning of the Securities Act.

 

7.                                       Underwritten Offerings.

 

(a)                                  Selection of Underwriters.  If
any of the Registrable Securities covered by the Shelf Registration are to be
sold pursuant to an underwritten offering, the managing underwriter or
underwriters thereof shall be designated by Electing Holders holding at least a
majority in aggregate principal amount of the Registrable Securities to be
included in such offering, subject to the consent of the Company (which shall
not be unreasonably withheld or delayed) and such Electing Holders shall be
responsible for all underwriting discounts and commissions in connection
therewith.

 

(b)                                 Participation by Holders. 
Each holder of Registrable Securities hereby agrees with each other such
holder that no such holder may participate in any underwritten offering

 

18

 

hereunder
unless such holder (i) agrees to sell such holder’s Registrable Securities on
the basis provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements 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.

 

8.                                       Rule 144.

 

The
Company covenants to the holders of Registrable Securities that to the extent
it shall be required to do so under the Exchange Act, the Company shall timely
file the reports required to be filed by it under the Exchange Act or the
Securities Act (including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder’s sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.  The Company will be
deemed to have satisfied the foregoing requirements if the Company’s parent
Graphic Packaging Corporation files such reports and takes such actions of the
types otherwise so required, in each case within the applicable time periods.

 

9.                                       Miscellaneous.

 

(a)                                  No Inconsistent Agreements.  The
Issuers represent, warrant, covenant and agree that they have not granted, and
shall not grant, registration rights with respect to Registrable Securities or
any other securities which would be inconsistent with the terms contained in
this Exchange and Registration Rights Agreement.

 

(b)                                 Specific Performance.  The
parties hereto acknowledge that there would be no adequate remedy at law if the
Issuers fail to perform any of their obligations hereunder and that the
Purchasers and the holders from time to time of the Registrable Securities may
be irreparably harmed by any such failure, and accordingly agree that the
Purchasers and such holders, in addition to any other remedy to which they may
be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of the Issuers under this Exchange and
Registration Rights Agreement in accordance with the terms and conditions of
this Exchange and Registration Rights Agreement, in any court of the United
States or any State thereof having jurisdiction.

 

(c)                                  Notices.  All
notices, requests, claims, demands, waivers and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
by hand, if delivered personally or by courier, or three days after being
deposited in the mail (registered or certified mail, postage prepaid, return
receipt requested) as follows:   If to
the Company, to it at 814 Livingston Court, Marietta, Georgia 30067,
Attention:  Secretary, with a copy to
David A. Brittenham, Esq., Debevoise & Plimpton, 919 Third Avenue, New
York, New York 10022, and if to a holder, to the address of such holder set
forth in the security register or

 

19

 

other
records of the Company, or to such other address as the Company or any such
holder may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

 

(d)                                 Parties in Interest.  All
the terms and provisions of this Exchange and Registration Rights Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable
by the parties hereto and the holders from time to time of the Registrable
Securities and the respective successors and assigns of the parties hereto and
such holders. In the event that any transferee of any holder of Registrable
Securities shall acquire Registrable Securities, in any manner, whether by
gift, bequest, purchase, operation of law or otherwise, such transferee shall,
without any further writing or action of any kind, be deemed a beneficiary
hereof for all purposes and such Registrable Securities shall be held subject
to all of the terms of this Exchange and Registration Rights Agreement, and by
taking and holding such Registrable Securities such transferee shall be
entitled to receive the benefits of, and be conclusively deemed to have agreed
to be bound by all of the applicable terms and provisions of this Exchange and
Registration Rights Agreement. If the Company shall so request, any such
successor, assign or transferee shall agree in writing to acquire and hold the
Registrable Securities subject to all of the applicable terms hereof.

 

(e)                                  Survival.  The
respective indemnities, agreements, representations, warranties and each other
provision set forth in this Exchange and Registration Rights Agreement or made
pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any holder of Registrable Securities, any director, officer or partner of such
holder, any agent or underwriter or any director, officer or partner thereof,
or any controlling person of any of the foregoing, and shall survive delivery
of and payment for the Registrable Securities pursuant to the Purchase
Agreement and the transfer and registration of Registrable Securities by such
holder and the consummation of an Exchange Offer.

 

(f)                                    Governing Law. 
This Exchange and Registration Rights Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

 

(g)                                 Headings.  The
descriptive headings of the several Sections and paragraphs of this Exchange
and Registration Rights Agreement are inserted for convenience only, do not
constitute a part of this Exchange and Registration Rights Agreement and shall
not affect in any way the meaning or interpretation of this Exchange and
Registration Rights Agreement.

 

(h)                                 Entire Agreement;
Amendments.  This Exchange and Registration Rights
Agreement and the other writings referred to herein (including the Indenture
and the form of Securities) or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Exchange and Registration Rights Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Exchange and Registration Rights Agreement may be amended
and the observance of any term of this Exchange and Registration Rights
Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) only by a written instrument duly
executed by the Issuers and the holders of at least a majority in aggregate
principal amount of the Registrable Securities at the time outstanding. Each
holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any amendment or waiver effected pursuant to this Section
9(h), whether or not any notice, writing or marking

 

20

 

indicating
such amendment or waiver appears on such Registrable Securities or is delivered
to such holder.

 

(i)                                     Counterparts. 
This agreement may be executed by the parties in counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.

 

[Signature Pages Follow]

 

21

 

If
the foregoing is in accordance with your understanding, please sign and return
to us six counterparts hereof, and upon the acceptance hereof by you, on behalf
of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers, the Guarantors
and the Company.  It is understood that
your acceptance of this letter on behalf of each of the Purchasers is pursuant
to the authority set forth in a form of Agreement among Purchasers, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on your part as to the authority of the signers thereof.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Graphic
  Packaging International, Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Edward W. Stroetz, Jr.

  
	
   

  	
   

  	
  Name:
  Edward W. Stroetz, Jr.

  
	
   

  	
   

  	
  Title:
  Acting General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Guarantors:

  
	
   

  	
   

  	
   

  
	
   

  	
  Graphic
  Packaging Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Edward W. Stroetz, Jr.

  
	
   

  	
   

  	
  Name:
  Edward W. Stroetz, Jr.

  
	
   

  	
   

  	
  Title:
  Acting General Counsel and Secertary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GPI
  Holding, Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Edward W. Stroetz, Jr.

  
	
   

  	
   

  	
  Name:
  Edward W. Stroetz, Jr.

  
	
   

  	
   

  	
  Title:
  Acting General Counsel and Secretary

  

 

S-1

 

Accepted as of the date hereof:

 

GOLDMAN, SACHS & CO.

DEUTSCHE BANK SECURITIES INC.

J.P. MORGAN SECURITIES INC.

MORGAN STANLEY & CO. INCORPORATED

CREDIT SUISSE FIRST BOSTON LLC

CITIGROUP
GLOBAL MARKETS INC.

ABN
AMRO INCORPORATED

BANC
OF AMERICA SECURITIES LLC

 

	
  By:

  	
  /s/
  Goldman, Sachs & Co.

  	
   

  
	
   

  	
  (Goldman,
  Sachs & Co.)

  
	
   

  	
   

  
	
  On
  behalf of each of the Purchasers

  

 

S-2

 

Exhibit A

 

Graphic Packaging International, Inc.

 

INSTRUCTION TO DTC
PARTICIPANTS

 

(Date of Mailing)

 

URGENT - IMMEDIATE ATTENTION REQUESTED

 

DEADLINE FOR RESPONSE:  [DATE](a)

 

The
Depository Trust Company (“DTC”) has identified you as a DTC Participant
through which beneficial interests in the Graphic Packaging International, Inc.
(the “Company”) 9.50% Senior Subordinated Notes due 2013 (the “Securities”) are
held.

 

The
Company is in the process of registering the Securities under the Securities
Act of 1933 for resale by the beneficial owners thereof.  In order to have their Securities included
in the registration statement, beneficial owners must complete and return the
enclosed Notice of Registration Statement and Selling Securityholder
Questionnaire.

 

It
is important that beneficial owners of the Securities receive a copy of the
enclosed materials as soon as possible as their rights to have the Securities included in the registration
statement depend upon their returning the Notice and Questionnaire by [Deadline
For Response].  Please forward a copy of
the enclosed documents to each beneficial owner that holds interests in the
Securities through you.  If you require
more copies of the enclosed materials or have any questions pertaining to this
matter, please contact Graphic Packaging International, Inc., 814 Livingston
Court, Marietta, Georgia 30067, Attention: 
Secretary, (770) 644-3000.

 

(a)                                  Not
less than 28 calendar days from date of mailing.

 

A-1

 

Graphic Packaging International, Inc.

 

Notice of Registration Statement

and

Selling Securityholder Questionnaire

 

(Date)

 

Reference
is hereby made to the Exchange and Registration Rights Agreement (the “Exchange
and Registration Rights Agreement”) between Graphic Packaging International,
Inc. (the “Company”) and the Purchasers named therein.  Pursuant to the Exchange and Registration
Rights Agreement, the Company has filed with the United States Securities and
Exchange Commission (the “Commission”) a registration statement on Form
[    ] (the “Shelf Registration Statement”) for the
registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”), of the Company’s 9.50% Senior Subordinated
Notes due 2013 (the “Securities”).  A
copy of the Exchange and Registration Rights Agreement is attached hereto.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Exchange and
Registration Rights Agreement.

 

Each
beneficial owner of Registrable Securities (as defined below) is entitled to
have the Registrable Securities beneficially owned by it included in the Shelf
Registration Statement.  In order to
have Registrable Securities included in the Shelf Registration Statement, this
Notice of Registration Statement and Selling Securityholder Questionnaire
(“Notice and Questionnaire”) must be completed, executed and delivered to the
Company’s counsel at the address set forth herein for receipt ON OR BEFORE
[Deadline for Response].  Beneficial
owners of Registrable Securities who do not complete, execute and return this
Notice and Questionnaire by such date (i) will not be named as selling
securityholders in the Shelf Registration Statement and (ii) may not use the
Prospectus forming a part thereof for resales of Registrable Securities.

 

Certain
legal consequences arise from being named as a selling securityholder in the
Shelf Registration Statement and related Prospectus.  Accordingly, holders and beneficial owners of Registrable
Securities are advised to consult their own securities law counsel regarding
the consequences of being named or not being named as a selling securityholder
in the Shelf Registration Statement and related Prospectus.

 

The
term “Registrable Securities” is defined in the Exchange and Registration
Rights Agreement.

 

A-2

 

ELECTION

 

The
undersigned holder (the “Selling Securityholder”) of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3).  The undersigned, by signing and returning
this Notice and Questionnaire, agrees to be bound with respect to such
Registrable Securities by the terms and conditions of this Notice and
Questionnaire and the Exchange and Registration Rights Agreement, including,
without limitation, Section 6 of the Exchange and Registration Rights
Agreement, as if the undersigned Selling Securityholder were an original party
thereto.

 

Upon
any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the
Company and Trustee the Notice of Transfer set forth in Appendix A to the
Prospectus and as Exhibit B to the Exchange and Registration Rights Agreement.

 

The
Selling Securityholder hereby provides the following information to the Company
and represents and warrants that such information is accurate and complete:

 

A-3

 

QUESTIONNAIRE

 

(1)                (a)                                                    Full Legal Name of Selling Securityholder:

 

(b)                                                    Full Legal Name of Registered Holder (if not
the same as in (a) above) of Registrable Securities Listed in Item (3) below:

 

(c)                                                     Full Legal Name of DTC Participant (if
applicable and if not the same as (b) above) Through Which Registrable
Securities Listed in Item (3) below are Held:

 

	
  (2)

  	
  Address for Notices to
  Selling Securityholder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Contact
  Person:

  	
   

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  Beneficial Ownership of
  Securities:

  
						

 

 

Except
as set forth below in this Item (3), the undersigned does not beneficially own
any Securities.

 

	
  (a)

  	
  Principal amount of
  Registrable Securities beneficially owned:

  	
   

  
	
   

  	
  CUSIP No(s). of such
  Registrable Securities:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  Principal
  amount of Securities other than Registrable Securities beneficially 

  	
   

  
	
   

  	
  owned:

  	
   

  
	
   

  	
  CUSIP
  No(s). of such other Securities:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (c)

  	
  Principal
  amount of Registrable Securities which the undersigned wishes to be

  
	
   

  	
  included
  in the Shelf Registration Statement:

  	
   

  
	
   

  	
  CUSIP No(s). of such
  Registrable Securities to be included in the Shelf Registration Statement:

  	
   

  
						

 

(4)                                  Beneficial Ownership of Other Securities of
the Company:

 

Except
as set forth below in this Item (4), the undersigned Selling Securityholder is
not the beneficial or registered owner of any other securities of the Company,
other than the Securities listed above in Item (3).

 

A-4

 

State
any exceptions here:

 

(5)                                  Relationships with the Company:

 

Except
as set forth below, neither the Selling Securityholder nor any of its
affiliates, officers, directors or principal equity holders (5% or more) has
held any position or office or has had any other material relationship with the
Company (or its predecessors or affiliates) during the past three years.

 

State
any exceptions here:

 

(6)                                  Plan of Distribution:

 

Except
as set forth below, the undersigned Selling Securityholder intends to
distribute the Registrable Securities listed above in Item (3) only as follows
(if at all):  Such Registrable
Securities may be sold from time to time directly by the undersigned Selling
Securityholder or, alternatively, through underwriters, broker-dealers or
agents.  Such Registrable Securities may
be sold in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of sale,
or at negotiated prices.  Such sales may
be effected in transactions (which may involve crosses or block transactions)
(i) on any national securities exchange or quotation service on which the
Registered Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such exchanges
or services or in the over-the-counter market, or (iv) through the writing of
options.  In connection with sales of
the Registrable Securities or otherwise, the Selling Securityholder may enter
into hedging transactions with broker-dealers, which may in turn engage in
short sales of the Registrable Securities in the course of hedging the
positions they assume.  The Selling
Securityholder may also sell Registrable Securities short and deliver
Registrable Securities to close out such short positions, or loan or pledge
Registrable Securities to broker-dealers that in turn may sell such securities.

 

State
any exceptions here:

 

By
signing below, the Selling Securityholder acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the provisions of
the Exchange Act and the rules and regulations thereunder, particularly
Regulation M.

 

In
the event that the Selling Securityholder transfers all or any portion of the
Registrable Securities listed in Item (3) above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to
notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Exchange and
Registration Rights Agreement.

 

By
signing below, the Selling Securityholder consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and
related Prospectus.  The Selling Securityholder
understands that such information will be relied upon by the Company in
connection with the preparation of the Shelf Registration Statement and related
Prospectus.

 

A-5

 

In
accordance with the Selling Securityholder’s obligation under Section 3(d) of
the Exchange and Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration
Statement remains in effect.  All
notices hereunder and pursuant to the Exchange and Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail, or air
courier guaranteeing overnight delivery as follows:

 

(i)                                     To the Company:

 

Graphic
Packaging International, Inc.

814
Livingston Court

Marietta,
Georgia  30067

Attention:  Secretary

 

(ii)                                  With a copy to:

 

David
A. Brittenham, Esq.

Debevoise
& Plimpton

919
Third Avenue

New
York, New York  10022

 

Once
this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company’s counsel, the terms of this Notice and Questionnaire,
and the representations and warranties contained herein, shall be binding on,
shall inure to the benefit of and shall be enforceable by the respective
successors, heirs, personal representatives, and assigns of the Company and the
Selling Securityholder (with respect to the Registrable Securities beneficially
owned by such Selling Securityholder and listed in Item (3) above).  This Agreement shall be governed in all
respects by the laws of the State of New York.

 

IN
WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by
its duly authorized agent.

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Selling
  Securityholder

  
	
   

  	
  (Print/type
  full legal name of beneficial owner of Registrable Securities)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-6

 

PLEASE
RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR
BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY’S COUNSEL AT:

 

David
A. Brittenham, Esq.

Debevoise
& Plimpton

919
Third Avenue

New
York, New York  10022

 

A-7

 

Exhibit B

 

NOTICE OF TRANSFER PURSUANT TO REGISTRATION
STATEMENT

 

Wells
Fargo Bank Minnesota, National Association

Graphic
Packaging International, Inc.

c/o  Wells Fargo Bank Minnesota, National
Association

213
Court Street, Suite 703

Middletown,
Connecticut  06457

 

Attention:  Trust Officer

 

Re:                               Graphic Packaging International, Inc. (the
“Company”)
9.50% Senior Subordinated Notes due
2013

 

Dear
Sirs:

 

Please
be advised that
                            
has transferred $                         
aggregate principal amount of the above-referenced Notes pursuant to an
effective Registration Statement on Form [        ]
(File No. 333-) filed by the Company.

 

We
hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the
above-named beneficial owner of the Notes is named as a “Selling Holder” in the
Prospectus dated [date] or in supplements thereto, and that the aggregate
principal amount of the Notes transferred are the Notes listed in such
Prospectus opposite such owner’s name.

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Authorized Signature)

  

 

B-1Exhibit
10.15

 

SECURITIES
PURCHASE AGREEMENT

 

THIS
SECURITIES PURCHASE AGREEMENT, dated as of
            , 2003,
is entered into by and between STRATUS SERVICES GROUP, INC., a Delaware
corporation, with headquarters located at 500 Craig Road, Suite 201, Manalapan,
New Jersey 07726 (the “Company”), and the undersigned (the “Buyer”).

 

WITNESSETH:

 

WHEREAS,
the Buyer wishes to purchase from the Company, upon the terms and subject to
the conditions of this
Agreement,            
shares of Series E Preferred Stock, having the rights, preferences and
privileges set forth on Schedule I attached hereto (the “Securities”);

 

WHEREAS,
in order to induce the Buyer to purchase the Securities, the Company desires to
enter into this Agreement and make the representations, warranties and
covenants contained herein.

 

NOW
THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

 

1.                                      AGREEMENT TO PURCHASE.

 

a.                                       Purchase. 
The undersigned hereby agrees to purchase the Securities from the
Company for an aggregate purchase price of
$                     .

 

b.                                       Form of Payment.  The Buyer shall pay the purchase price for the Securities by
wiring immediately available good funds in United States Dollars to the
Company.

 

2.  BUYER REPRESENTATIONS, WARRANTIES, ETC.;
ACCESS TO INFORMATION; INDEPENDENT INVESTIGATION.

 

The Buyer
represents and warrants to, and covenants and agrees with, the Company as
follows:

 

a.                                       The
Buyer is purchasing the Securities for its own account for investment only and
not with a view towards the public sale or distribution thereof and not with a
view to or for sale in connection with any distribution thereof;

 

b.                                       The
Buyer is (i) an “accredited investor” as that term is defined in Rule 501 of
the General Rules and Regulations under the Securities Act of 1933, as amended
(the “1933 Act”) by reason of Rule 501(a)(3), and (ii) experienced in making
investments of the kind described in this Agreement and the related documents,
(iii) able, by reason of the business and financial experience of its officers
(if an entity) and professional advisors (who are not affiliated with or
compensated in any way by the Company or any of its affiliates or selling
agents), to protect its own interests in connection with the transactions
described in this Agreement, and the related documents, and (iv) able to afford
the entire loss of its investment in the Shares;

 

c.                                       The
Buyer understands that the Securities are being offered and sold to it in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Buyer’s compliance with, the

 

 

representations,
warranties, agreements, acknowledgements and understandings of the Buyer set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Buyer to acquire the Securities;

 

e.                                       The
Buyer and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities which have been requested by the Buyer.  The Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the Company and have received
complete and satisfactory answers to any such inquiries.

 

f.                                         The
Buyer understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or
endorsement of the Securities;

 

g.                                      This
Agreement has been duly and validly authorized, executed and delivered on
behalf of the Buyer and is a valid and binding agreement of the Buyer
enforceable in accordance with its terms, subject as to enforceability to
general principles of equity and to bankruptcy, insolvency, moratorium and
other similar laws affecting the enforcement of creditors’ rights generally.

 

3.                                      COMPANY
REPRESENTATIONS, ETC.

 

The Company
represents and warrants to the Buyer that:

 

a.                                       Concerning
the Common Stock.  There are no
preemptive rights of any stockholder of the Company, as such, to acquire the
Company’s Common Stock.

 

b.                                       Reporting
Company Status.  The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted.  The Company is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such
qualification necessary other than those jurisdictions in which the failure to
so qualify would not have a material and adverse effect on the business,
operations, properties, prospects or condition (financial or otherwise) of the
Company.  The Company has registered its
Common Stock pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the “1934 Act”), and the Common Stock is listed and traded on the OTC
Bulletin Board.

 

c.                                       Authorized
Shares. The shares of Common Stock issuable upon conversion of the
Securities (the “Shares”) will be duly authorized and, when issued to Buyer,
will be duly and validly issued, fully paid and non-assessable and will not
subject the holder thereof to personal liability by reason of being such
holder.

 

d.                                       Securities
Purchase Agreement.  This Agreement
and the transactions contemplated hereby, have been duly and validly authorized
by the Company, this Agreement has been duly executed and delivered by the
Company and is a valid and binding agreement of the Company enforceable in
accordance with its terms, subject as to enforceability to general principles
of equity and to bankruptcy, insolvency, moratorium, and other similar laws
affecting the enforcement of creditors’ rights generally.

 

e.                                       Non-contravention.  The execution and delivery of this
Agreement by the Company, the issuance of the Securities, and the consummation
by the Company of the other transactions contemplated by this Agreement do not
and will not conflict with or result in a breach by the Company of any of the

 

2

 

terms or provisions of,
or constitute a default under (i) the articles of incorporation or by-laws of
the Company, (ii) any indenture, mortgage, deed of trust, or other material
agreement or instrument to which the Company is a party or by which it or any
of its properties or assets are bound, (iii) to its knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or (iv)
to its knowledge, order of any court, United States federal or state regulatory
body, administrative agency, or other governmental body having jurisdiction
over the Company or any of its properties or assets, except such conflict,
breach or default which would not have a material adverse effect on the
transactions contemplated herein. The Company is not in violation of any
material laws, governmental orders, rules, regulations or ordinances to which
its property, real, personal, mixed, tangible or intangible, or its businesses
related to such properties, are subject.

 

f.                                         Approvals.  No authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or
stock exchange or market is required to be obtained by the Company for the
issuance and sale of the Securities to the Buyer as contemplated by this
Agreement, except such authorizations, approvals and consents that have been
obtained.

 

g.                                      SEC
Documents, Financial Statements. 
The Common Stock of the Company is registered pursuant to Section 12(g)
of the 1934 Act and the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Exchange Act, including material filed pursuant
to Section 13(a) or 15(d), in addition to one or more registration statements
and amendments thereto heretofore filed by the Company with the SEC under the
Act (all of the foregoing including filings incorporated by reference therein
being referred to herein as the “SEC Documents”).  The Company, through its agent, has delivered to the Buyer true
and complete copies of the SEC Documents (except for exhibits and incorporated
documents).  The Company has not
provided to the Buyer any information which, according to applicable law, rule
or regulation, should have been disclosed publicly by the Company but which has
not been so disclosed, other than with respect to the transactions contemplated
by this Agreement.

 

As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the 1933 Act or the 1934 Act as the case may be and the rules
and regulations of the SEC promulgated thereunder and other federal, state and
local laws, rules and regulations applicable to such SEC Documents, and none of
the SEC Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.  The
financial statements of the Company included in the SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC or other applicable rules and
regulations with respect thereto.  Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial position
of the Company as of the dates thereof and the results of operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments).

 

h.                                      Absence
of Certain Changes.  Since March 31,
2003, there has been no material adverse change and no material adverse
development in the business, properties, operations, financial condition, or
results of operations of the Company, other than as disclosed in the Company’s
Form 10-Q filed with the Securities and Exchange Commission on May 15, 2003.

 

i.                                         Full
Disclosure.  There is no fact known
to the Company (other than general economic conditions known to the public
generally) or as disclosed in the documents referred to in Section 2(e), that

 

3

 

has not been disclosed in
writing to the Buyer that (i) would reasonably be expected to have a material
adverse effect on the business or financial condition of the Company or (ii)
would reasonably be expected to materially and adversely affect the ability of
the Company to perform its obligations pursuant to this Agreement.

 

4.                                      CERTAIN
COVENANTS AND ACKNOWLEDGMENTS.

 

a.                                       Filings.  The Company undertakes and agrees to make
all necessary filings in connection with the sale of the Shares to the Buyer
under any United States laws and regulations, or by any domestic securities exchange
or trading market, and to provide a copy thereof to the Buyer promptly after
such filing.

 

b.                                       Reporting Status.  So long as the Buyer beneficially owns any
of the Shares, the Company shall file all reports required to be filed with the
SEC pursuant to Section 13 or 15(d) of the 1934 Act,  and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination.

 

5.                                      COVENANT
TO REGISTER.

 

a.                                       For
purposes of this Section, the following definitions shall apply:

 

(i)                                     The
terms “register,” “registered,” and “registration” refer to a registration
under the 1933 Act, effected by preparing and filing a registration statement
or similar document in compliance with the 1933 Act, and the declaration or
ordering of effectiveness of such registration statement, document or amendment
thereto.

 

(ii)                                  The
term “Registrable Securities” means the Shares, and any securities of the
Company or securities of any successor corporation issued as or issuable upon
the conversion or exercise of any warrant, right or other security that is
issued as a dividend or other distribution with respect to, or in exchange for,
or in replacement of, the Shares.

 

(iii)                               The term “holder of
Registrable Securities” means the Purchaser and any permitted assignee of
registration rights pursuant to Section 5(g).

 

b.                                       (i)                                     The
Company shall use its best efforts to prepare and file a registration statement
on Form S-1 within sixty (60) days of the date hereof and cause such
registration statement to become effective as soon as possible, but no later
than one hundred and twenty (120) days from the date of this Agreement.

 

(ii)                                  The
Company may suspend, on no more than two (2) occassions per twelve-month
period, the effectiveness of any registration effected pursuant to this
Subsection (b) in the event and for such period of time as, such a suspension
is required by the rules and regulations of the Securities and Exchange
Commission (“SEC”).  The Company will
use its best efforts to cause such suspension to terminate at the earliest
possible date.

 

(iii)                               If a registration
statement covering all Registrable Securities is not effective by one hundred
and twenty (120) days after the date of this Agreement (the “Target Date”), the
Company shall pay Purchaser as liquidated damages an amount equal to fifteen
percent (15%) of the total Purchase Price of the Shares. Thereafter, the
Company will pay additional penalty payments of fifteen percent (15%) of the
purchase price of the Shares for every successive one hundred twenty (120) day
period that a registration statement has still not been declared
effective.  Each such payment shall be
made to the Buyer

 

4

 

by cashier’s check or
wire transfer in immediately available funds to such account as shall be
designated in writing by the Buyer.

 

c.                                       Whenever
required under this Section 5 to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:

 

(i)                                     Prepare
and file with the SEC a registration statement or amendment thereto with
respect to such Registrable Securities and use its best efforts to cause such
registration to become effective as provided in Section 5(b)(i) hereof, and
keep such registration statement effective for so long as any holder of
Registrable Securities desires to dispose of the securities covered by such
registration statement; provided, however, that
in no event shall the Company be required to keep the Registration statement
effective for a period greater than three (3) years from the Closing Date;

 

(ii)                                  Prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the 1933 Act
with respect to the disposition of all securities covered by such registration
statement and notify the holders of the filing and effectiveness of such Registration
statement and any amendments or supplements;

 

(iii)                               Furnish to each holder
of Registrable Securities such numbers of copies of a current prospectus,
including a preliminary prospectus, conforming with the requirements of the
1933 Act, copies of the registration statement, any amendment or supplement
thereto and any documents incorporated by reference therein, and such other
documents as such holder of Registrable Securities may reasonably require in
order to facilitate the disposition of Registrable Securities  owned by such holder of Registrable
Securities;

 

(iv)                              Use
its best efforts to register and qualify the securities covered by such
registration statement under such other securities or “Blue Sky” laws of such
jurisdictions as shall be reasonably requested by the holder of Registrable
Securities;

 

(v)                                 Notify
each holder of Registrable Securities immediately of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and use its best efforts to promptly update and/or correct such prospectus.

 

d.                                       Upon
request of the Company, each holder of Registrable Securities will furnish to
the Company in connection with any registration under this Section such
information regarding itself, the Registrable Securities and other securities
of the Company held by it, and the intended method of disposition of such
securities as shall be reasonably required to effect the registration of the  Registrable Securities held by such holder
of Registrable Securities.

 

e.                                       (i)                                     To
the fullest extent permitted by law, the Company shall indemnify, defend and
hold harmless each holder of Registrable Securities which are included in a
registration statement and each of its officers, directors, employees, agents,
partners or controlling persons (within the meaning of the 1933 Act) (each, an
“indemnified party”) from and against, and shall reimburse such indemnified
party with respect to, any and all claims, suits, demands, causes of action,
losses, damages, liabilities, costs or expenses (“Liabilities”) to which such
indemnified party may become subject under the 1933 Act or otherwise, arising
from or relating to (A) any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or (B) the omission
or alleged omission to state therein a material fact required to

 

5

 

be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading; provided,
however, that the Company shall not be liable in any such case to
the extent that any such Liability arises out of or is based upon an untrue
statement or omission so made in strict conformity with information furnished
by such indemnified party in writing specifically for use in the registration
statement.

 

(ii)                                  In
the event of any registration under the 1933 Act of Registrable Securities,
each holder of such Registrable Securities hereby severally agrees to
indemnity, defend and hold harmless the Company, and its officers, directors,
employees, agents, partners, or controlling persons (within the meaning of the
1933 Act) (each, an “indemnified party”) from and against, and shall reimburse
such indemnified party with respect to, any and all Liabilities to which such
indemnified party may become subject under the 1933 Act or otherwise, arising
from or relating to (A) any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or (B) the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, that such holders will be liable
in any such case to the extent and only to the extent, that any such Liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, prospectus
or amendment or supplement thereto in reliance upon and in conformity with
written information furnished by such holder specifically for use in the
preparation thereof, and such Liability may in no event exceed the value of the
Registrable Securities so registered.

 

(iii)                               Promptly after receipt
by any indemnified party of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
another party (the “indemnifying party”) hereunder, notify such party in
writing thereof, but the omission so to notify such party shall not relieve
such party from any Liability which it may have to the indemnified party other
than under this Section and shall only relieve it from any Liability which it
may have to the indemnified party under this Section if and to the extent an
indemnifying party is materially prejudiced by such omission.  In case any such action shall be brought
against any indemnified party and such indemnified party shall notify an
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to the
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to the indemnified party
under this Section for any legal expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided, however, that if the defendants
in any such action include both parties and the indemnified party shall have
reasonably concluded that there may be reasonable defenses available to them
which are different from or additional to those available to the indemnifying
party or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the indemnified party
shall have the right to select a separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of one such separate counsel and other reasonable
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.

 

f.                                         (i)                                     With
respect to the inclusion of Registrable Securities in a registration statement,
all fees, costs and expenses of and incidental to such registration, inclusion
and public offering shall be borne by the Company; provided, however, that any security holders participating
in such registration shall bear their pro-rata share of the underwriting
discounts and commissions, if any, incurred by them in connection with such
registration.

 

6

 

(ii)                                  The
fees, costs and expenses of registration to be borne by the Company as provided
in this Subsection (f) shall include, without limitation, all registration,
filing and NASD fees, printing expenses, fees and disbursements of counsel and
accountants for the Company, and all legal fees and disbursements and other
expenses of complying with state securities or Blue Sky laws of any
jurisdiction or jurisdictions in which securities to be offered are to be
registered and qualified.  Subject to
appropriate agreements as to confidentiality, the Company shall make available
to the holders of Registrable Securities and their counsel its documents and
personnel for due diligence purposes, provided that the fees and disbursements
of counsel and accountants for the selling security holders shall be borne by
the respective selling security holders.

 

g.                                      The
rights to cause the Company to register all or any portion of Registrable
Securities pursuant to this Section 5 may be assigned by Buyer to a proper
transferee or assignee as described herein. 
Within a reasonable time after such transfer, the Buyer shall notify the
Company of the name and address of such transferee or assignee, and the
securities with respect to which such registration rights are being
assigned.  Such assignment shall be
effective only if, (i) the Buyer agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such transfer or assignment (subject
to the purchase price of the shares being kept confidential by the Buyer and
such transferee or assignee, (ii) the Company is, within a reasonable time
after such transfer or assignment, furnished with written notice of (A) the
name and address of such transferee or assignee, (B) the Registrable Securities
with respect to which such registration rights are being assigned, (iii)
following such transfer or assignment, the further disposition of the
Registrable Securities by the transferee or assignee is restricted under the
1933 Act and applicable state securities laws, (iv) at or before the time that
the Company receives the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein, (v) such transfer shall have
been made in accordance with the applicable requirements of the purchase
agreement covering the transaction and (vi) such transferee shall be an
“accredited investor”, as that term is defined in Rule 501 of Regulation D,
promulgated under the 1933 Act.

 

6.                                      GOVERNING LAW; MISCELLANEOUS.  This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York.  A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto.  This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.  If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.  This Agreement may be amended only by an
instrument in writing signed by the party to be charged with enforcement.  This Agreement, and the related agreements
referred to herein, contain the entire agreement of the parties with respect to
the subject matter hereto, superceding all prior agreements, understandings or
discussions.

 

7.                                      NOTICES. 
Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be deemed effectively given, (i)
on the date delivered, (a) by personal delivery, or (b) if advance copy is
given by fax, (ii) seven business days after deposit in the United States
Postal Service by regular or certified mail, or (iii) three business days
mailing by international express courier, with postage and fees prepaid,
addressed to each of the other parties thereunto entitled at the following
addresses, or at such other addresses as a party may designate by ten days
advance written notice to each of the other parties hereto.

 

7

 

	
   

  	
  COMPANY:

  	
   

  	
  STRATUS SERVICES GROUP, INC.

  
	
   

  	
   

  	
   

  	
  500 Craig Road, Suite 201

  
	
   

  	
   

  	
   

  	
  Manalapan, NJ 07726

  
	
   

  	
   

  	
   

  	
  Attn: 
  Suzette Nanovic Berrios, Esq.

  
	
   

  	
   

  	
   

  	
  Telecopier No.: (732) 294-1133

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BUYER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Telecopier No.

  	
   

  	
   

  

 

8.                                      SUCCESSORS
AND ASSIGNS.  This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

 

IN
WITNESS WHEREOF, the Company and Buyer have caused this
Agreement to be executed by their duly authorized representatives on the date
as first written above.

 

 

	
   

  	
  STRATUS
  SERVICES GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: 
  Michael Maltzman

  
	
   

  	
  Title:  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  

 

8

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