EXHIBIT 10-1
ABRAXAS PETROLEUM CORPORATION
$125,000,000
Floating Rate Senior Secured Notes due 2009
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
October 28, 2004
Guggenheim Capital Markets, LLC
135 East 57th Street
8th Floor
New York, New York 10022
Ladies and Gentlemen:
Abraxas Petroleum Corporation, a Nevada corporation (the "Company"),
proposes to issue and sell to Guggenheim Capital Markets, LLC (the "Initial
Purchaser"), upon the terms and subject to the conditions set forth in a
purchase agreement dated October 21, 2004 (the "Purchase Agreement"),
$125,000,000 aggregate principal amount of its Floating Rate Senior Secured
Notes due 2009 (the "Notes") to be jointly and severally guaranteed (the
Guarantees and together with the Notes, the "Securities") by the subsidiaries of
the Company listed on Schedule 1 and signatories hereto (collectively, the
"Guarantors"). Each capitalized term used but not defined herein shall have the
meaning given to such term in the Purchase Agreement.
As an inducement to the Initial Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchaser thereunder, the Company and the Guarantors agree with the Initial
Purchaser, for the benefit of the holders (including the Initial Purchaser) of
the Securities, the Exchange Securities (as defined herein) and the Private
Exchange Securities (as defined herein) (collectively, the "Holders"), as
follows:
1. Registered Exchange Offer. The Company shall (i) prepare and, not
later than 60 days following the date of original issuance of the Securities
(the "Issue Date"), file with the Commission a registration statement (the
"Exchange Offer Registration Statement") on an appropriate form under the
Securities Act with respect to a proposed offer to the Holders of the Securities
(the "Exchange Offer") to issue and deliver to such Holders, in exchange for the
Securities, a like aggregate principal amount of debt securities of the Company
and guarantees thereof by the Guarantors (the "Exchange Securities") that are
identical in all material respects to the Securities, except for the transfer
restrictions relating to the Securities, (ii) use its reasonable best efforts to
cause the Exchange Offer Registration Statement to become effective under the
Securities Act no later than 180 days after the Issue Date and the Exchange
Offer to be consummated no later than 220 days after the Issue Date and (iii)
keep the Exchange Offer Registration Statement effective for not less than 30
days (or longer, if required by applicable law) after the date on which notice
of the Exchange Offer is mailed to the Holders (such period being called the
"Exchange Offer Registration Period"). The Exchange Securities will be issued
under the Indenture or an indenture (the "Exchange Securities Indenture")
between the Company, the Guarantors and the Trustee or such other bank or trust
company that is reasonably satisfactory to the Initial Purchaser, as trustee
(the "Exchange Securities Trustee"), such indenture to be identical in all
material respects to the Indenture, except for the transfer restrictions
relating to the Securities (as described above).
An Exchange Offer Registration Statement pursuant to this Section 1 or
a Shelf Registration Statement (as defined herein) pursuant to Section 2 hereof
will not be deemed to have become effective unless it has been declared
effective by the Commission; provided, however, that if, after it has been
declared effective, the offering of Exchange Securities pursuant to an Exchange
Offer Registration Statement or a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the
Commission or any other governmental agency or court, such Registration
Statement (as defined herein) will be deemed not to have become effective during
the period of such interference, until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume.
Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall, as soon as practicable, commence the Exchange Offer, it being
the objective of such Exchange Offer to enable each Holder electing to exchange
Securities for Exchange Securities (assuming that such Holder (a) is not an
affiliate of the Company or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not the Initial
Purchaser holding Securities that have, or that are reasonably likely to have,
the status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Securities in the ordinary course of such Holder's business and (d) has
no arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. The Company, the Guarantors and the
Initial Purchaser acknowledge that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, each Holder that is a
broker-dealer electing to exchange Securities, acquired for its own account as a
result of market-making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing substantially the information set forth in Annex A hereto on the
cover, in Annex B hereto in the "Exchange Offer Procedures" section and the
"Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the Exchange
Offer.
If, prior to the consummation of the Exchange Offer, any Holder holds
any Securities acquired by it that have, or that are reasonably likely to be
determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Exchange
Offer, the Company shall, upon the request of any such Holder, simultaneously
with the delivery of the Exchange Securities in the Exchange Offer, issue and
deliver to any such Holder, in exchange for the Securities held by such Holder
(the "Private Exchange"), a like aggregate principal amount of debt securities
of the Company and guarantees thereof by the Guarantors (the "Private Exchange
Securities") that are identical in all material respects to the Exchange
Securities, except for the transfer restrictions relating to such Private
Exchange Securities. The Private Exchange Securities will be issued under the
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same indenture as the Exchange Securities, and the Company shall use its
reasonable best efforts to cause the Private Exchange Securities to bear the
same CUSIP number as the Exchange Securities.
In connection with the Exchange Offer, the Company shall:
(a) mail, or caused to be mailed, to each Holder a copy of the
prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related
documents;
(b) keep the Exchange Offer open for not less than 30 days (or
longer, if required by applicable law) after the date on which notice
of the Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Exchange Offer
with an address in the Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York City time, on the last
business day on which the Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are
applicable to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and any
Private Exchange, as the case may be, the Company shall:
(a) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Exchange Offer and the Private Exchange, if
any;
(b) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as the
case may be, promptly to authenticate and deliver to each Holder,
Exchange Securities or Private Exchange Securities, as the case may be,
equal in principal amount to the Securities of such Holder so accepted
for exchange.
The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 180 days after the
consummation of the Exchange Offer.
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The Indenture or the Exchange Securities Indenture, as the case may be,
shall provide that the Securities, the Exchange Securities and the Private
Exchange Securities shall vote and consent together on all matters as one class
and that none of the Securities, the Exchange Securities or the Private Exchange
Securities will have the right to vote or consent as a separate class on any
matter.
Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Exchange Offer and in the Private Exchange will accrue from the
last interest payment date on which interest was paid on the Securities
surrendered in exchange therefor or, if no interest has been paid on the
Securities, from the Issue Date.
Each Holder participating in the Exchange Offer shall be required to
represent to the Company that at the time of the consummation of the Exchange
Offer (i) any Exchange Securities received by such Holder will be acquired in
the ordinary course of business, (ii) such Holder will have no arrangements or
understanding with any person to participate in the distribution of the
Securities or the Exchange Securities within the meaning of the Securities Act
and (iii) such Holder is not an affiliate of the Company or, if it is such an
affiliate, such Holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
The Exchange Offer and the Private Exchange shall be subject to the
condition that no action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency with respect to the
Exchange Offer or the Private Exchange which, in the judgment of the Company and
the Guarantors, would reasonably be expected to impair the ability of the
Company or the Guarantors to proceed with the Exchange Offer or the Private
Exchange. The Company and the Guarantors shall, to the extent such information
is available to the Company or the Guarantors, inform the Initial Purchaser of
the names and addresses of the Holders to whom the Exchange Offer is made,
subject to the right of any Holder to object to the disclosure of such
information with respect to such Holder, and the Initial Purchaser shall have
the right, subject to applicable law, to contact such Holders and otherwise
facilitate the tender of Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Agreement, the Company and the Guarantors shall have no further obligation to
register the Registrable Securities pursuant to this Section 1.
Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not, as of the consummation of the
Exchange Offer, include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
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2. Shelf Registration. If any of (i) because of any change in law or
applicable interpretations thereof by the Commission's staff the Company and the
Guarantors determine after consultation with their outside counsel that the
Company or the Guarantors is not permitted to effect the Exchange Offer as
contemplated by Section 1 hereof, (ii) for any other reason the Exchange Offer
is not consummated within 220 days after the Issue Date, (iii) the Initial
Purchaser so requests with respect to Securities or Private Exchange Securities
not eligible to be exchanged for Exchange Securities in the Exchange Offer and
held by it following the consummation of the Exchange Offer, (iv) any applicable
law or interpretation does not permit any Holder to participate in the Exchange
Offer, (v) any Holder that participates in the Exchange Offer does not receive
freely transferable Exchange Securities in exchange for tendered Securities or
(vi) the Company so elects, then the following provisions shall apply:
(a) The Company and the Guarantors shall file as promptly as
practicable (but in no event more than the later of 60 days after so
required or requested pursuant to this Section 2 or 180 days after the
Issue Date) with the Commission (the "Shelf Filing Date"), and
thereafter shall use their reasonable best efforts to cause to be
declared effective, a shelf registration statement on an appropriate
form under the Securities Act relating to the offer and sale of the
Transfer Restricted Securities (as defined below) by the Holders
thereof from time to time in accordance with the methods of
distribution set forth in such registration statement (hereafter, a
"Shelf Registration Statement" and, together with any Exchange Offer
Registration Statement, a "Registration Statement"). "Transfer
Restricted Securities" means each Security or Private Exchange Security
until the earliest to occur of: (i) the date on which such Security has
been exchanged for a freely transferable Exchange Security in the
Exchange Offer, (ii) the date on which the resale of such Security or
Private Exchange Security has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iii) the date on which such Security or
Private Exchange Security is distributed to the public pursuant to Rule
144 under the Securities Act or is saleable pursuant to Rule 144(k)
under the Securities Act.
(b) The Company and the Guarantors shall use their reasonable
best efforts to keep the Shelf Registration Statement continuously
effective in order to permit the prospectus forming part thereof to be
used by Holders of Transfer Restricted Securities for a period ending
on the earlier of (i) two years from the Issue Date or such shorter
period that will terminate when all the Transfer Restricted Securities
covered by the Shelf Registration Statement have been sold pursuant
thereto and (ii) the date on which the Securities become eligible for
resale without volume restrictions pursuant to Rule 144 under the
Securities Act (in any such case, such period being called the "Shelf
Registration Period"). The Company and the Guarantors shall be deemed
not to have used their reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if they
voluntarily take any action that would result in Holders of Transfer
Restricted Securities covered thereby not being able to offer and sell
such Transfer Restricted Securities during that period, unless such
action is required by applicable law.
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(c) Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment
thereto and any prospectus forming part thereof and any supplement
thereto complies in all material respects with the Securities Act and
the rules and regulations of the Commission thereunder, (ii) any Shelf
Registration Statement and any amendment thereto (in either case, other
than with respect to information included therein in reliance upon or
in conformity with written information furnished to the Company by or
on behalf of any Holder specifically for use therein (the "Holders'
Information")) does not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any
prospectus forming part of any Shelf Registration Statement, and any
supplement to such prospectus (in either case, other than with respect
to Holders' Information), does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) In the absence of the events described in clauses (i) through
(vi) of the first paragraph of this Section 2, the Company and the
Guarantors shall not be permitted to discharge its obligations
hereunder by means of the filing of a Shelf Registration Statement.
3. Additional Interest.
(a) The parties hereto agree that the Holders of Transfer
Restricted Securities will suffer damages if the Company and the Guarantors fail
to fulfill their obligations under Section 1 or Section 2, as applicable, and
that it would not be feasible to ascertain the extent of such damages.
Accordingly, if (i) the Exchange Offer Registration Statement is not filed with
the Commission on or prior to 60 days after the Issue Date or the Shelf
Registration Statement is not filed with the Commission on or before the Shelf
Filing Date, (ii) the Exchange Offer Registration Statement is not declared
effective within 180 days after the Issue Date or the Shelf Registration
Statement is not declared effective within 60 days after the Shelf Filing Date
or (iii) the Exchange Offer is not consummated on or prior to 220 days after the
Issue Date (each such event referred to in clauses (i) through (iii), a
"Registration Default"), the Company and the Guarantors will be jointly and
severally obligated to pay additional interest ("Additional Interest") to each
Holder of Transfer Restricted Securities, during the period of one or more such
Registration Defaults, in an amount equal to one-half of one percent (0.50%) per
annum upon the occurrence of each Registration Default, which rate will increase
by one half of one percent (0.50%) at the beginning of each succeeding 90-day
period (or portion thereof) that such Additional Interest continues to accrue
under any such circumstance; provided, however, that the maximum aggregate
increase in the interest rate will in no event exceed one and one-half percent
(1.5%) per annum; provided further, that no Additional Interest shall be payable
if the Exchange Offer Registration Statement is not filed or declared effective
or the Exchange Offer is not consummated on account of the reasons set forth in
clause (i) of the first paragraph of Section 2 (it being understood, however,
that in any such case the Company and the Guarantors shall be obligated to file
a Shelf Registration Statement and additional interest shall be payable if the
Shelf Registration Statement is not declared effective in accordance with clause
(ii) of this paragraph (a)); provided further, that no Additional Interest shall
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be payable if the Shelf Registration Statement is not declared effective as set
forth above because of a request under clause (iii) of Section 2; and provided
further, that Additional Interest shall only be payable in case the Shelf
Registration Statement is not declared effective as aforesaid. Immediately
following the cure of a Registration Default, the accrual of Additional Interest
with respect to that particular Registration Default will cease. Immediately
following the cure of all Registration Defaults or the date on which the
Exchange Securities are saleable pursuant to Rule 144(k) under the Securities
Act or any successor provision, the accrual of Additional Interest will cease
and the interest rate will revert to the original rate.
(b) If the Shelf Registration Statement is declared effective but
becomes unusable by the Holders of Registrable Securities covered by such Shelf
Registration Statement ("Shelf Registrable Securities") for any reason, except
during a Blackout Period (as defined herein), and the aggregate number of days
in any consecutive 365 day period for which the Shelf Registration Statement
shall not be usable exceeds 30 days in the aggregate, then the interest rate
borne by the Shelf Registrable Securities will be increased by 0.50% per annum
of the principal amount of the Securities for the first 90-day period (or
portion thereof) beginning on the 31st such day that such Shelf Registration
Statement remains unusable. If the Shelf Registration Statement remains unusable
for 30 days during any 90-day period for which Additional Interest shall be
payable pursuant to this paragraph, then the interest rate borne by the Shelf
Registrable Securities during such 90-day period shall be increased by an
additional 0.50% per annum of the principal amount of the Securities at the
beginning of each such subsequent 90-day period; provided, however, that the
maximum aggregate increase in the interest rate as a result of a Shelf
Registration Statement being unusable will in no event exceed one and one-half
percent (1.5%) per annum. Upon the Shelf Registration Statement once again
becoming usable, the interest rate borne by the Shelf Registrable Securities
will be reduced to the interest rate in effect prior to the Shelf Registration
Statement becoming unusable. Additional Interest shall be computed based on the
actual number of days elapsed in each 90-day period for which Additional
Interest is due.
(c) The Company shall notify the Trustee and the Paying Agent
under the Indenture immediately upon the happening of each and every
Registration Default. The Company and the Guarantors shall pay the Additional
Interest due on the Transfer Restricted Securities by depositing with the Paying
Agent (which may not be the Company for these purposes), in trust, for the
benefit of the Holders thereof, prior to 10:00 a.m., New York City time, on the
next interest payment date specified by the Indenture and the Securities, sums
sufficient to pay the Additional Interest then due. The Additional Interest due
shall be payable on each interest payment date specified by the Indenture and
the Securities to the record Holder entitled to receive the interest payment to
be made on such date. Each obligation to pay Additional Interest shall be deemed
to accrue from and including the date of the applicable Registration Default.
(d) The parties hereto agree that the Additional Interest
provided for in this Section 3 constitute a reasonable estimate of and are
intended to constitute the sole damages that will be suffered by Holders of
Transfer Restricted Securities by reason of the failure of (i) the Shelf
Registration Statement or the Exchange Offer Registration Statement to be filed,
(ii) the Shelf Registration Statement to remain effective or (iii) the Exchange
Offer Registration Statement to be declared effective and the Exchange Offer to
be consummated, in each case to the extent required by this Agreement.
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4. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to the Initial Purchaser, prior
to the filing thereof with the Commission, a copy of the Registration Statement
and each amendment thereof and each supplement, if any, to the prospectus
included therein and shall use its reasonable best efforts to reflect in each
such document, when so filed with the Commission, such comments as the Initial
Purchaser may reasonably propose; (ii) include the information set forth in
Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section and in Annex
C hereto in the "Plan of Distribution" section of the prospectus forming a part
of the Exchange Offer Registration Statement, and include the information set
forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the
Exchange Offer; and (iii) if requested by the Initial Purchaser, include the
information required by Items 507 or 508 of Regulation S-K, as applicable, in
the prospectus forming a part of the Exchange Offer Registration Statement.
(b) The Company shall advise the Initial Purchaser, each
Exchanging Dealer and the Holders (if applicable) and, if requested by any such
person, confirm such advice in writing (which advice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment thereto
has been filed with the Commission and when such Registration Statement
or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities, the
Exchange Securities or the Private Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(v) of the happening of any event that, in the Company's
reasonable determination, requires the making of any changes in any
Registration Statement or the prospectus included therein in order that
the statements therein are not misleading and do not omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) The Company and the Guarantors will make every reasonable
effort to obtain the withdrawal at the earliest practicable time of any order
suspending the effectiveness of any Registration Statement.
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(d) The Company will furnish to each Holder of Transfer
Restricted Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one conformed copy of such Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if any such Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by
reference).
(e) The Company will, during the Shelf Registration Period,
promptly deliver to each Holder of Transfer Restricted Securities included
within the coverage of any Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus) included in
such Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Company consents to the use of such
prospectus or any amendment or supplement thereto by each of the selling Holders
of Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.
(f) The Company will furnish to the Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge, at
least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if the Initial Purchaser or Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated
by reference).
(g) The Company will, during the Exchange Offer Registration
Period or the Shelf Registration Period, as applicable, promptly deliver to the
Initial Purchaser, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Exchange Offer, without charge,
as many copies of the final prospectus included in the Exchange Offer
Registration Statement or the Shelf Registration Statement and any amendment or
supplement thereto as the Initial Purchaser, Exchanging Dealer or other persons
may reasonably request; and the Company and the Guarantors consent to the use of
such prospectus or any amendment or supplement thereto by the Initial Purchaser,
Exchanging Dealer or other persons, as applicable, as aforesaid.
(h) In the case of a Shelf Registration, the Company will notify
each Holder of Registrable Securities, at least five business days prior to
filing, that a Shelf Registration Statement with respect to the Registrable
Securities is being filed and advising such Holders that the distribution of
Registrable Securities will be made in accordance with the method selected by
the Initial Purchaser, if any, or if the Initial Purchaser is not participating
in the Shelf Registration, by the Holders of a majority of the aggregate
principal amount of Registrable Securities participating in the Shelf
Registration.
(i) Prior to the effective date of any Registration Statement,
the Company and the Guarantors will use their reasonable best efforts to
register or qualify, or cooperate with the Holders of Securities, Exchange
Securities or Private Exchange Securities included therein and their respective
counsel in connection with the registration or qualification of, such
Securities, Exchange Securities or Private Exchange Securities for offer and
sale under the securities or blue sky laws of such jurisdictions as any such
Holder reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of the
Securities, Exchange Securities or Private Exchange Securities covered by such
Registration Statement; provided that the Company and the Guarantors will not be
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required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it to general
service of process or to taxation in any such jurisdiction where it is not then
so subject.
(j) The Company and the Guarantors will cooperate with the
Holders of Securities, Exchange Securities or Private Exchange Securities to
facilitate the timely preparation and delivery of certificates representing
Securities, Exchange Securities or Private Exchange Securities to be sold
pursuant to any Registration Statement free of any restrictive legends and in
such denominations and registered in such names as the Holders thereof may
request in writing prior to sales of Securities, Exchange Securities or Private
Exchange Securities pursuant to such Registration Statement.
(k) If any event contemplated by Section 4(b)(ii) through (v)
occurs during the period for which the Company and the Guarantors are required
to maintain an effective Registration Statement, the Company will promptly
prepare and file with the Commission a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to purchasers of the
Securities, Exchange Securities or Private Exchange Securities from a Holder,
the prospectus will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, the Company shall not be required to amend or
supplement a Registration Statement, or amend or supplement any related
prospectus, in the event that, and for any period or periods (each, a "Blackout
Period") not to exceed an aggregate of 30 days if, (x) an event occurs and is
continuing as a result of which a Registration Statement as then amended or
supplemented, or any related prospectus as then amended or supplemented, would,
in the Company's good faith judgment, contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading and (y)(1) the Company determines in good faith that the disclosure
of such event at such time would have a material adverse effect on the business,
operations or prospects of the Company or (2) the disclosure otherwise relates
to a material business transaction which has not yet been publicly disclosed.
(l) Not later than the effective date of the applicable
Registration Statement, the Company will provide a CUSIP number for the
Securities, the Exchange Securities and the Private Exchange Securities, as the
case may be, and provide the applicable trustee with printed certificates for
the Securities, the Exchange Securities or the Private Exchange Securities, as
the case may be, in a form eligible for deposit with The Depository Trust
Company.
(m) The Company and the Guarantors will comply with all
applicable rules and regulations of the Commission and will make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act; provided that in no event
shall such earning statement be delivered later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning with the
first month of the Company's first fiscal quarter commencing after the effective
date of the applicable Registration Statement, which statement shall cover such
12-month period.
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(n) The Company and the Guarantors will cause the Indenture or
the Exchange Securities Indenture, as the case may be, to be qualified under the
Trust Indenture Act as required by applicable law in a timely manner.
(o) The Company may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Company such information concerning the Holder and the
distribution of such Transfer Restricted Securities as the Company may from time
to time reasonably require for inclusion in such Shelf Registration Statement,
and the Company may exclude from such registration the Transfer Restricted
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request. Notwithstanding anything to the
contrary contained in Section 3, if a Holder of Transfer Restricted Securities
so fails to furnish such reasonably required information to the Company within
30 days of such request and there then exists no other reason for which
Additional Interest is owing to such Holder in respect of its Transfer
Restricted Securities, such Holder shall not be entitled to receive any
Additional Interest unless and until it furnishes the Company with such
information. Each Holder of Transfer Restricted Securities as to which any Shelf
Registration Statement is being effected shall also be required to promptly
furnish to the Company all information required to make any information
previously furnished to the Company by such Holder for use in connection with
the preparation of such Shelf Registration Statement not materially misleading.
(p) In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 4(b)(ii) through (v), such Holder
will discontinue disposition of such Transfer Restricted Securities until such
Holder's receipt of copies of the supplemental or amended prospectus
contemplated by Section 4(k) or until advised in writing (the "Advice") by the
Company that the use of the applicable prospectus may be resumed. If the Company
shall give any notice under Section 4(b)(ii) through (v) during the period that
the Company is required to maintain an effective Registration Statement (the
"Effectiveness Period"), such Effectiveness Period shall be extended by the
number of days during such period from and including the date of the giving of
such notice to and including the date when each seller of Transfer Restricted
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemental or amended prospectus contemplated by Section 4(k)
(if an amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).
(q) In the case of a Shelf Registration Statement, the Company
and the Guarantors shall (i) enter into customary agreements (including, if
requested, an underwriting agreement in customary form), (ii) cause the same to
set forth indemnification provisions and procedures comparable in scope to the
indemnification provisions and procedures set forth in Section 6 hereof with
respect to the Initial Purchaser and all other parties to be indemnified
pursuant to said Section 6 or, at the request of any underwriters, such other
indemnification provisions customarily provided to underwriters under the
circumstances applicable to the offering; provided, however, that such
underwriting agreement shall contain indemnification provisions and procedures
regarding the indemnification of the Company and the Guarantors with respect to
information provided by the underwriter or by any other party to be indemnified
under Section 6 hereof, comparable in scope to the indemnification provisions
and procedures set forth in Section 6 hereof or, at the request of the Company
11
or the Guarantors, such other indemnification provisions customarily provided
under the circumstances applicable to the offering, and (iii) take all such
other action, if any, as Holders of a majority in aggregate principal amount of
the Securities, Exchange Securities and Private Exchange Securities being sold
or the managing underwriters (if any) shall reasonably request in order to
facilitate any disposition of Securities, Exchange Securities or Private
Exchange Securities pursuant to such Shelf Registration Statement.
(r) In the case of a Shelf Registration Statement, the Company
shall (i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and Private
Exchange Securities being sold and any underwriter participating in any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement, all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries and (ii) use its reasonable best efforts to have its officers,
directors, employees, accountants and counsel supply all relevant information
reasonably requested by such representative, Special Counsel or any such
underwriter (each, an "Inspector") in connection with such Shelf Registration
Statement; provided, that, the Company shall be entitled to require an Inspector
to execute a confidentiality agreement, in form and substance customary for
participants in the preparation of a registration statement, prior to providing
such information to such Inspector.
(s) In the case of a Shelf Registration Statement, the Company
shall, if requested by Holders of a majority in aggregate principal amount of
the Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any) in connection with
such Shelf Registration Statement, use its reasonable best efforts to cause (i)
its counsel to deliver an opinion relating to the Shelf Registration Statement
and the Securities, Exchange Securities or Private Exchange Securities, as
applicable, that (x) the Company and the Guarantors have duly authorized,
executed and delivered the Exchange Securities and/or Private Exchange
Securities, as applicable, and the related indenture, and (y) each of the
Exchange Securities and related indenture constitutes a legal, valid and binding
obligation of the Company and the Guarantors, enforceable against the Company
and the Guarantors in accordance with its terms (with customary exceptions);
(ii) its officers to execute and deliver all customary documents and
certificates requested by Holders of a majority in aggregate principal amount of
the Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any); and (iii) its
independent public accountants to provide a comfort letter or letters in
customary form, subject to receipt of appropriate documentation as contemplated,
and only if permitted, by Statement of Auditing Standards No. 72.
(t) In the case of a Shelf Registration, if so requested by the
Initial Purchaser, if any, or the Holders of a majority of the aggregate
principal amount of Registrable Securities, or if requested by the underwriter
or underwriters as appointed by the Initial Purchaser, if any, the Company shall
use its reasonable best efforts to cause all Exchange Securities and Shelf
Registrable Securities to be listed on any securities exchange on which similar
debt securities issued by the Company or the Guarantors are then listed.
(u) The Company shall cooperate and assist in any filings
required to be made with the NASD and, in the case of a Shelf Registration, in
the performance of any due diligence investigation by any underwriter as
appointed by the Initial Purchaser, if any, or the Holders of a majority of the
12
aggregate principal amount of Registrable Securities and such underwriter's
counsel (including any "qualified independent underwriter" that is required to
be retained in accordance with the rules and regulations of the NASD).
5. Registration Expenses. The Company and the Guarantors will bear all
expenses incurred in connection with the performance of its obligations under
Sections 1, 2, 3 and 4 and the Company will reimburse the Initial Purchaser and
the Holders for the reasonable fees and disbursements of one firm of attorneys
(in addition to any local counsel) chosen by the Holders of a majority in
aggregate principal amount of the Securities, the Exchange Securities and the
Private Exchange Securities to be sold pursuant to each Registration Statement
(the "Special Counsel") acting for the Initial Purchaser or Holders in
connection therewith.
6. Indemnification. (a) In the event of a Shelf Registration Statement
or in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by the Initial Purchaser or Exchanging Dealer, as
applicable, the Company and each of the Guarantors shall jointly and severally
indemnify and hold harmless each Holder (including, without limitation, the
Initial Purchaser or Exchanging Dealer), its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls such Holder within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 6 and
Section 7 as a Holder) from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, without
limitation, any loss, claim, damage, liability or action relating to purchases
and sales of Securities, Exchange Securities or Private Exchange Securities), to
which that Holder may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse each Holder promptly upon demand for
any legal or other expenses reasonably incurred by that Holder in connection
with investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company and
the Guarantors shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with any Holders'
Information; and provided, further, that with respect to any such untrue
statement in or omission from any related preliminary prospectus, the indemnity
agreement contained in this Section 6(a) shall not inure to the benefit of any
Holder from whom the person asserting any such loss, claim, damage, liability or
action received Securities, Exchange Securities or Private Exchange Securities
to the extent that such loss, claim, damage, liability or action of or with
respect to such Holder results from the fact that both (A) a copy of the final
prospectus and any amendment or supplement thereto was not sent or given to such
person at or prior to the written confirmation of the sale of such Securities,
Exchange Securities or Private Exchange Securities to such person and (B) the
untrue statement in or omission from the related preliminary prospectus was
corrected in the final prospectus or any amendment or supplement thereto unless,
13
in either case, such failure to deliver the final prospectus or any amendment or
supplement thereto was a result of non-compliance by the Company with Section
4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each Holder
shall indemnify and hold harmless the Company, each Guarantor and their
respective affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls the Company or
any Guarantor within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 6(b), Section 6(d) and
Section 7 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Holders' Information furnished to
the Company by such Holder, and shall reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that no such Holder
shall be liable for any indemnity claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Securities, Exchange
Securities or Private Exchange Securities pursuant to such Shelf Registration
Statement.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
(and only to such extent) that it has been prejudiced by such failure; and
provided, further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 6. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than the
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based upon written advice of
14
counsel to the indemnified party) that there may be legal defenses available to
it or other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based upon written advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not in fact employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 6(a) and 6(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement (i) includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding and (ii) does not include a statement or admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) The Company shall not be liable for any settlement of any
proceedings effected without its written consent (which consent shall not be
unreasonably withheld). Notwithstanding the immediately preceding sentence, if
at any time an indemnified party shall have requested the Company to reimburse
such indemnified party for legal or other expenses in connection with
investigating, responding to or defending any proceedings as contemplated by
Section 6(a), the Company shall be liable for any settlement of any proceedings
effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by the Company of such request for the reimbursement,
(ii) the Company shall not have reimbursed such indemnified party in accordance
with such request prior to the date of such settlement and (iii) the Company
shall not have responded in writing to such request, specifying those expenses
that it has chosen not to reimburse and the reason for such non-reimbursement,
prior to the date of such settlement. The Company shall not, without the prior
written consent of an indemnified party (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened proceedings in
respect of which indemnity could have been sought hereunder by such indemnified
party unless such settlement (x) includes an unconditional release of such
indemnified party in form and substance satisfactory to such indemnified party
from all liability on claims that are the subject matter of such proceedings and
(y) does not include any statement as to or any admission of fault, culpability
or failure to act by or on behalf of any indemnified party. In addition, except
as otherwise set forth in this paragraph, an indemnified party shall not,
without the prior written consent of the Company (which consent shall not be
15
unreasonably withheld), effect any settlement of any pending or threatened
proceedings in respect of which indemnity could have been sought hereunder by
such indemnified party unless such settlement (x) includes an unconditional
release of the Company in form and substance satisfactory to the Company from
all liability on claims that are the subject matter of such proceedings and (y)
does not include any statement as to or any admission of fault, culpability or
failure to act by or on behalf of the Company.
7. Contribution. If the indemnification provided for in Section 6 is
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Guarantors from the offering and sale
of the Securities, on the one hand, and a Holder with respect to the sale by
such Holder of Securities, Exchange Securities or Private Exchange Securities,
on the other, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and each of the Guarantors on the one hand and such Holder
on the other with respect to the statements or omissions that resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and each of the Guarantors on the one hand and a Holder on the other
with respect to such offering and such sale shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities (before
deducting expenses) received by or on behalf of the Company and each of the
Guarantors, on the one hand, and the total net proceeds received by such Holder
with respect to the Securities, Exchange Securities or Private Exchange
Securities, on the other, bear to the total gross proceeds from the sale of
Securities, Exchange Securities or Private Exchange Securities. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to the Company and each of the
Guarantors or information supplied by the Company and each of the Guarantors on
the one hand or to any Holders' Information supplied by such Holder on the
other, the intent of the parties and their relative knowledge, access to
information, opportunity to correct or prevent such untrue statement or omission
and other equitable consideration appropriate in the circumstances. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 7 was to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section 7 shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, an indemnifying party that is
a Holder of Securities, Exchange Securities or Private Exchange Securities shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities, Exchange Securities or Private Exchange
Securities sold by such indemnifying party to any purchaser exceeds the amount
of any damages which such indemnifying party has otherwise paid or become liable
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission.
16
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.
8. Rules 144 and 144A. The Company shall use its reasonable best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the written request of any Holder
of Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of such Holder's securities pursuant to Rules
144 and 144A. The Company and the Guarantors covenant that they will take such
further action as any Holder of Transfer Restricted Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Transfer Restricted Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rules 144 and 144A
(including, without limitation, the requirements of Rule 144A(d)(4)). Upon the
written request of any Holder of Transfer Restricted Securities, the Company and
the Guarantors shall deliver to such Holder a written statement as to whether it
has complied with such requirements. Notwithstanding the foregoing, nothing in
this Section 8 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
9. Underwritten Registrations. If any of the Transfer Restricted Securities
covered by any Shelf Registration Statement are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by the Holders of a majority
in aggregate principal amount of such Transfer Restricted Securities included in
such offering, subject to the consent of the Company (which shall not be
unreasonably withheld or delayed), and such Holders shall be responsible for all
underwriting commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
10. Miscellaneous. (a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Securities, the Exchange Securities and the Private Exchange
Securities, taken as a single class. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities, Exchange
Securities or Private Exchange Securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of a majority in aggregate
principal amount of the Securities, the Exchange Securities and the Private
Exchange Securities being sold by such Holders pursuant to such Registration
Statement.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:
17
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
10(b), which address initially is, with respect to each Holder, the
address of such Holder maintained by the Registrar under the Indenture,
with a copy in like manner to Guggenheim Capital Markets, LLC and the
Initial Purchaser;
(2) if to the Initial Purchaser, initially at its address set
forth in the Purchase Agreement;
(3) if to the Company, initially at the address of the
Company set forth in the Purchase Agreement; and
(4) if to the Guarantors, initially at the address of the
Guarantors set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors And Assigns. This Agreement shall be binding upon
the Company, the Guarantors and their respective successors and assigns,
including, without limitation and without the need for an express assignment,
subsequent Holders; provided, however, that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement and the Indenture, and such person shall
be entitled to receive the benefits hereof.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopier) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) Third Party Beneficiaries. The Initial Purchaser (even if the
Initial Purchaser is not a Holder of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, and shall have
the right to enforce such agreements directly to the extent they deem such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchaser, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights hereunder.
18
(f) Definition of Terms. For purposes of this Agreement, (a) the
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
(g) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(i) Remedies. In the event of a breach by the Company or any of
the Guarantors or by any Holder of any of their respective obligations under
this Agreement, each Holder or the Company or any Guarantor, as the case may be,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages (other than the recovery of damages for a breach by the
Company or any Guarantor of their obligations under Sections 1 or 2 hereof for
which additional interest has been paid pursuant to Section 3 hereof), will be
entitled to specific performance of its rights under this Agreement. The
Company, each Guarantor and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(j) No Inconsistent Agreements. The Company and each Guarantor
represents, warrants and agrees that (i) it has not entered into, shall not, on
or after the date of this Agreement, enter into any agreement that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof, (ii) it has not previously
entered into any agreement which remains in effect granting any registration
rights with respect to any of its debt securities to any person and (iii)
without limiting the generality of the foregoing, without the written consent of
the Holders of a majority in aggregate principal amount of the then outstanding
Transfer Restricted Securities, it shall not grant to any person the right to
request the Company to register any debt securities of the Company under the
Securities Act unless the rights so granted are not in conflict or inconsistent
with the provisions of this Agreement.
(k) No Piggyback on Registrations. Neither the Company nor the
Guarantors nor any of its security holders (other than the Holders of Transfer
Restricted Securities in such capacity) shall have the right to include any
securities of the Company in any Shelf Registration or Exchange Offer other than
Transfer Restricted Securities.
(l) Severability. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
19
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
[signature page follows]
20
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Guarantors and the Initial Purchaser.
Very truly yours,
ABRAXAS PETROLEUM CORPORATION
By:
-------------------------------------------
Name:
Title:
EASTSIDE COAL COMPANY, INC.
By:
-------------------------------------------
Name:
Title:
SANDIA OIL & GAS CORPORATION
By:
-------------------------------------------
Name:
Title:
SANDIA OPERATING CORP.
By:
-------------------------------------------
Name:
Title:
WAMSUTTER HOLDINGS, INC.
By:
-------------------------------------------
Name:
Title:
WESTERN ASSOCIATED ENERGY CORPORATION
By:
-------------------------------------------
Name:
Title:
[signature page to Registration Rights Agreement]
Accepted:
GUGGENHEIM CAPITAL MARKETS, LLC
By:
--------------------------------------------
Name:
Title:
[signature page to Registration Rights Agreement]
SCHEDULE I
GUARANTORS
Eastside Coal Company, Inc.
Sandia Oil & Gas Corporation
Sandia Operating Corp.
Wamsutter Holdings, Inc.
Western Associated Energy Corporation
S-1
ANNEX A
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Securities received in exchange for Securities where
such Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 180 days after the Expiration Date (as defined herein), it will make
this Prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution".
A-1
ANNEX B
Each broker-dealer that receives Exchange Securities for its own
account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution".
B-1
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until _______________, 200_,
all dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.
The Company will not receive any proceeds from any sale of
Exchange Securities by broker-dealers. Exchange Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Securities may be deemed to be an "underwriter" within the meaning
of the Securities Act and any profit on any such resale of Exchange Securities
and any commission or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker- dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Securities) other than commissions or concessions of any broker-
dealers and will indemnify the Holders of the Securities (including any broker-
dealers) against certain liabilities, including liabilities under the Securities
Act.
C-1
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that 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, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.