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REGISTRATION RIGHTS AGREEMENT
Dated as of December 14, 1998
by and among
AEI RESOURCES, INC.,
AND
AEI HOLDING COMPANY, INC.,
AS ISSUERS
AND
AEI RESOURCES HOLDING, INC.
AND
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
AS GUARANTORS
AND
WARBURG DILLON READ LLC
AS DEALER MANAGER
$200,000,000 10 1/2% SENIOR
NOTES DUE 2005
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This Registration Rights Agreement (the "Agreement") is made and
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entered into as of December 14, 1998 by and among AEI RESOURCES, INC., a
Delaware corporation (the "Company"), and AEI Holding Company, Inc. ("Old AEI"
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and, together with the Company, the "Issuers"), AEI RESOURCES HOLDING, INC., a
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Delaware corporation ("Holdings"), and the SUBSIDIARY GUARANTORS (as defined
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herein) and WARBURG DILLON READ LLC (the "Dealer Manager"). The execution and
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delivery of this Agreement is a condition to the obligations of Warburg Dillon
Read LLC to act as dealer manager, in connection with the exchange of the 10
1/2% Senior Notes due 2005 of the Issuers for up to $200,000,000 of the 10%
Senior Notes due 2007 of Old AEI, under the Dealer Manager Agreement, dated as
of November 9, 1998 (the "Dealer Manager Agreement"), by and among the Issuers,
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the Guarantors and the Dealer Manager.
The Issuers, the Guarantors and the Dealer Manager hereby agree as
follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended, and the rules and
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regulations promulgated by the Commission pursuant thereto.
Broker-Dealer: Any broker or dealer registered under the Exchange
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Act.
Closing Date: The date of consummation for the exchange of the Fixed
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Rate Senior Notes due 2005 of the Issuers for up to $200,000,000 of the 10%
Senior Notes due 2007 of Old AEI.
Commission: The Securities and Exchange Commission.
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Consummate: A Registered Exchange Offer shall be deemed "Consummated"
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for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Notes to be issued in the Exchange Offer, (ii) the maintenance
of such Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) of this Agreement and (iii) the delivery by the Issuers
to the Registrar under the Indenture of New Notes in the same aggregate
principal amount as the aggregate principal amount of Old Notes that were so
tendered.
Damages Payment Date: With respect to the Notes, each Interest
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Payment Date.
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Effectiveness Target Date: As defined in Section 5 of this Agreement.
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Exchange Act: The Securities Exchange Act of 1934, as amended, and
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the rules and regulations promulgated by the Commission pursuant thereto.
Exchange Offer: The registration under the Act by the Issuers and the
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Guarantors of the New Notes pursuant to a Registration Statement pursuant to
which the Issuers and the Guarantors offer the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such outstanding
Old Notes that are Transfer Restricted Securities held by such Holders for New
Notes in an aggregate principal amount equal to the aggregate principal amount
of the Old Notes that are Transfer Restricted Securities tendered in such
exchange offer by such Holders.
Exchange Offer Effective Date: The date on which the Exchange Offer
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Registration Statement is declared effective by the Commission.
Exchange Offer Registration Statement: The Registration Statement
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relating to the Exchange Offer, including the related Prospectus.
Guarantors: Holdings together with the Subsidiary Guarantors.
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Holders: As defined in Section 2(b) of this Agreement.
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Indenture: The Indenture, dated as of December 14, 1998, by and among
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the Issuers, the Guarantors and IBJ Schroder Bank & Trust Company, as trustee
(the "Trustee"), pursuant to which the Notes are to be issued, as such Indenture
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is amended or supplemented from time to time in accordance with its terms.
Interest Payment Date: As defined in the Notes.
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NASD: National Association of Securities Dealers, Inc.
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New Notes: The Issuers' 10 1/2% Senior Notes due 2005 to be issued
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pursuant to the Indenture in connection with the Exchange Offer and evidencing
the same debt as the Old Notes, including the guarantees by the Guarantors.
Notes: Old Notes and New Notes.
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Old Notes: The Issuers' 10 1/2% Senior Notes due 2005 to be issued
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pursuant to the Indenture on the Closing Date, including the guarantees by the
Guarantors.
Participating Broker Dealer: As defined in Section 6(a)(iii) of this
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Agreement.
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Person: An individual, partnership, corporation, trust or
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unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement, as
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amended or supplemented by any prospectus supplement and by all other amendments
and supplements thereto, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such Prospectus.
Registration Default: As defined in Section 5 of this Agreement.
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Registration Statement: Any registration statement of the Issuers and
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the Guarantors relating to (a) an offering of New Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement that is filed pursuant to the
provisions of this Agreement, in each case, including the Prospectus included
therein, all amendments and supplements thereto (including pre- and post-
effective amendments) and all exhibits and material incorporated by reference or
deemed to be incorporated by reference, if any, therein.
Shelf Filing Deadline: As defined in Section 4(a) of this Agreement.
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Shelf Registration Statement: As defined in Section 4(a) of this
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Agreement.
Subsidiary: With respect to any Person, any other Person of which a
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majority of the equity ownership or the voting securities is at the time owned,
directly or indirectly, by such Person or by one or more other subsidiaries of
such Person or a combination thereof.
Subsidiary Guarantors: Each Subsidiary of the Issuers that, pursuant
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to the Indenture, is, or is required to become, a guarantor of the obligations
of the Issuers under the Notes and the Indenture.
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section
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77aaa-77bbbb), as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note until the earliest to occur
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of (i) the date on which each such Old Note has been exchanged by a person other
than a Broker-Dealer for a New Note in the Exchange Offer, (ii) following the
exchange by a Broker-Dealer in the Exchange Offer of an Old Note for a New Note,
the date on which such New Note is sold to a purchaser who receives from such
Broker-Dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Note has been effectively registered under the Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Act.
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Underwritten Registration or Underwritten Offering: A registration in
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which securities of the Issuers are sold to an underwriter for reoffering to the
public pursuant to an effective Registration Statement.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
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benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
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be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
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Person beneficially owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless, due to a change in law or Commission policy after the
date hereof, the Exchange Offer shall not be permissible under applicable
federal law or Commission policy, the Issuers and the Guarantors shall (i) use
their reasonable best efforts to cause to be filed with the Commission as soon
as practicable after the Closing Date, a Registration Statement under the Act
relating to the New Notes and the Exchange Offer and (ii) use their reasonable
best efforts to cause such Registration Statement to be declared effective by
the Commission as soon as practicable after the Closing Date. In connection
with the foregoing, the Issuers and the Guarantors shall (A) file all pre-
effective amendments to such Registration Statement as may be necessary to cause
such Registration Statement to become effective, (B) if applicable, file a post-
effective amendment to such Registration Statement pursuant to Rule 430A under
the Act, (C) cause all necessary filings in connection with the registration and
qualification of the New Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer
(provided, however, that the Issuers and the Guarantors shall not be obligated
to qualify as foreign corporations in any jurisdiction in which they are not so
qualified or to take any action that would subject them to general service of
process or taxation in any jurisdiction where they are not so subject, except
service of process with respect to the offering and sale of the Notes and
Exchange Notes) and (D) upon the effectiveness of such Registration Statement,
commence the Exchange Offer and use their reasonable best efforts to issue on or
prior to 30 business days after the Exchange Offer Effective Date, New Notes in
exchange for all Old Notes tendered in the Exchange Offer. The Exchange Offer
shall be on the appropriate form permitting registration of the New Notes to be
offered in exchange for the Transfer Restricted Securities and to permit resales
of New Notes held by Broker-Dealers as contemplated by Section 3(c) below. If,
after such Exchange Offer Registration Statement initially is declared effective
by the Commission, the Exchange Offer or the issuance of New Notes under the
Exchange Offer or the resale of New Notes received by Broker-Dealers in the
Exchange Offer as contemplated by Section 3(c) be-
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low 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 shall be deemed not to have become effective for purposes
of this Agreement during the period that such stop order, injunction or other
similar order or requirement shall remain in effect.
(b) The Issuers shall cause the Exchange Offer Registration Statement
to be effective continuously and shall keep the Exchange Offer open for a period
of not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
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event shall such period be less than 20 business days. The Issuers and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. The Issuers and the Guarantors shall only offer to
exchange New Notes for Old Notes in the Exchange Offer, and only the New Notes
shall be registered under the Exchange Offer Registration Statement.
(c) The Issuers shall indicate in a "Plan of Distribution" section
contained in the Prospectus included in the Exchange Offer Registration
Statement that any Broker-Dealer that holds Old Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Issuers), may exchange such Old
Notes pursuant to the Exchange Offer; provided, however, that such Broker-Dealer
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may be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the New Notes received by such Broker-Dealer in
the Exchange Offer. Such "Plan of Distribution" section shall allow the use of
the Prospectus by all Persons subject to the prospectus delivery requirements of
the Act, including Participating Broker-Dealers, and shall also contain all
other information with respect to such resales by Broker-Dealers that the
Commission may require to permit such resales pursuant thereto, but such "Plan
of Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer except to the extent required by the
Commission as a result of a change in policy after the date of this Agreement.
The Issuers and the Guarantors shall use their reasonable best efforts
to keep the Exchange Offer Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 6(c) below to
the extent necessary to ensure that it is available for resales of Notes
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time. The Issuers shall provide
sufficient copies of the latest version of such Prospectus to Broker-Dealers
promptly upon request at any time during such period in order to facilitate such
resales.
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SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Issuers and the Guarantors are
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not required to file an Exchange Offer Registration Statement or to consummate
the Exchange Offer because the Exchange Offer is not permitted by applicable law
or Commission policy or (ii) any Holder of Transfer Restricted Securities shall
notify the Issuers within 20 business days of the commencement of the Exchange
Offer that such Holder (A) is prohibited by applicable law or Commission policy
from participating in the Exchange Offer, or (B) may not resell the New Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
is a Broker-Dealer and holds Old Notes (including the Dealer Manager who holds
Old Notes as part of an unsold allotment from the original offering of the
Notes) acquired directly from the Issuer or one of its affiliates or (iii) the
Issuers and the Guarantors do not consummate the Exchange Offer within 45 days
following the effectiveness date of the Exchange Offer Registration Statement,
then the Issuers and the Guarantors shall (x) use their reasonable best efforts
to file a shelf registration statement pursuant to Rule 415 under the Act, which
may be an amendment to the Exchange Offer Registration Statement (in either
event, the "Shelf Registration Statement") and have it declared effective by the
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Commission as soon as practicable, (such date being the Shelf Filing Deadline"),
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which the Shelf Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) of this Agreement, and (y) use their
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission as soon as practicable. The Issuers and
the Guarantors shall use their reasonable best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) of this Agreement to the
extent necessary to ensure that it is available for resales of Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a) and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a continuous period of two years following the
date on which such Shelf Registration Statement becomes effective under the Act
or such shorter period that will terminate when all the Notes covered by the
Shelf Registration Statement have been sold pursuant to such Shelf Registration
Statement.
(b) Provision by Holders of Certain Information in Connection with
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the Shelf Registration Statement. No Holder of Transfer Restricted Securities
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may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Issuers in writing, within 10 business days after receipt of a request
therefor, such information regarding such Holder as the Issuers may reasonably
request for use in connection with any Shelf Registration Statement or
Prospectus or
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preliminary Prospectus included in such Shelf Registration Statement. Each
Holder as to which any Shelf Registration Statement is being effected agrees to
furnish promptly to the Issuers all information required to be disclosed to make
the information previously furnished to the Issuers by such Holder not
materially misleading.
SECTION 5. LIQUIDATED DAMAGES
Until the Issuers complete the Exchange Offer, the Issuers and the
Guarantors will pay liquidated damages to each Holder of Transfer Restricted
Securities in an amount equal to $.15 per week per $1,000 principal amount of
Notes constituting Transfer Restricted Securities held by such Holder, such
amount of liquidated damages to increase by an additional $.05 per week per
$1,000 principal amount of Notes constituting Transfer Restricted Securities for
the 90-day period commencing December 8, 1998 and with respect to each
subsequent 90-day period until the Issuers complete the Exchange Offer. In
addition, if (i) any of the Registration Statements required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date") or (iii) any
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Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or usable in connection
with resales of Transfer Restricted Securities during the periods required by
this Agreement (each such event referred to in clauses (i) through (iii), a
"Registration Default"), the Issuers and the Guarantors will pay liquidated
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damages to each Holder of Transfer Restricted Securities, in an amount equal to
$.05 per week per $1,000 principal amount of Notes constituting Transfer
Restricted Securities held by such Holder. The amount of the liquidated damages
shall increase by an additional $.05 per week per $1,000 principal amount of
Notes constituting Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, if any
and the consummation of the Exchange Offer has occurred up to a maximum amount
of liquidated damages of $.50 per week per $1,000 in principal amount of Notes
constituting Transfer Restricted Securities. Notwithstanding the foregoing, the
Issuers and the Guarantors shall not be required to pay liquidated damages to
each Holder of Transfer Restricted Securities if the Registration Default arises
from the failure of the Issuers or the Guarantors to file, or cause to become
effective, a Shelf Registration Statement within the time period required by
Section 4 of this Agreement and such Registration Default is by reason of the
failure of the Holders to provide the information regarding the Holder
reasonably requested by the Issuers, the NASD or any other regulatory agency
having jurisdiction over any of the Holders at least 10 business days prior to
such Registration Default or consummation of the Exchange Offer.
All accrued liquidated damages shall be paid by the Issuers and the
Guarantors on each Damages Payment Date to the Holders by wire transfer of
immediately available funds or by federal funds check and to the Holders of
Certificated Securities by mailing a
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check to such Holders' registered addresses. Following the cure of all
Registration Defaults if any and the Consummation of the Exchange Offer relating
to any particular Transfer Restricted Securities, the accrual of liquidated
damages with respect to such Transfer Restricted Securities will cease.
All obligations of the Issuers and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
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Exchange Offer, the Issuers and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their reasonable best efforts to
effect such exchange to permit the sale of Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof,
and shall comply with all of the following provisions:
(i) If, due to a change in law or Commission policy after the date
hereof, in the reasonable opinion of counsel to the Issuers there is a
question as to whether the Exchange Offer is permitted by applicable
federal law or Commission policy, the Issuers hereby agree to seek a no-
action letter or other favorable decision from the Commission allowing the
Issuers and the Guarantors to Consummate an Exchange Offer for such Old
Notes. The Issuers hereby agrees to pursue the issuance of such a no-action
letter or favorable decision to the Commission staff level but shall not be
required to take commercially unreasonable action to effect a change of
Commission policy. The Issuers hereby agree, however, to (A) participate in
telephonic conferences with the Commission, (B) deliver to the Commission
an analysis prepared by counsel to the Issuers setting forth the legal
bases, if any, upon which such counsel has concluded that such an Exchange
Offer should be permitted and (C) diligently pursue a resolution (which
need not be favorable) by the Commission of such submission. The Dealer
Manager shall be given prior notice of any action taken by the Issuers
under this clause (i).
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Issuers, prior to the
Consummation of the Exchange Offer, a written representation to the Issuers
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Issuers or any of the Guarantors, (B) it is not engaged
in,
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and does not intend to engage in, and has no arrangement or understanding
with any person to participate in, a distribution of the New Notes to be
issued in the Exchange Offer and (C) it is acquiring the New Notes in its
ordinary course of business. In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Issuers'
preparations for the Exchange Offer.
(iii) The Issuers, the Guarantors and the Dealer Manager
acknowledge that the staff of the Commission has taken the position that
any broker-dealer that owns New Notes that were received by such broker-
dealer for its own account in the Exchange Offer (a "Participating Broker-
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Dealer") may be deemed to be an "underwriter" within the meaning of the Act
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and must deliver a prospectus meeting the requirements of the Act in
connection with any resale of such New Notes (other than a resale of an
unsold allotment resulting from the original offering of the Notes).
The Issuers, the Guarantors and the Dealer Manager also acknowledge
that it is the Commission staff's position that if the Prospectus contained
in the Exchange Offer Registration Statement includes a plan of
distribution containing a statement to the above effect and the means by
which Participating Broker-Dealers may resell the New Notes, without naming
the Participating Broker-Dealers or specifying the amount of New Notes
owned by them, such Prospectus may be delivered by Participating Broker-
Dealers to satisfy their prospectus delivery obligations under the Act in
connection with resales of New Notes for their own accounts, so long as the
Prospectus otherwise meets the requirements of the Act.
(b) Shelf Registration Statement. In the event that a Shelf
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Registration Statement is required by this Agreement, the Issuers and the
Guarantors shall comply with all the provisions of Section 6(c) of this
Agreement and shall use their reasonable best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution of such
Transfer Restricted Securities and, in connection therewith, the Issuers and the
Guarantors will as expeditiously as possible prepare and file with the
Commission a Shelf Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution of such Transfer Restricted Securities.
(c) General Provisions. In connection with any Registration
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Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus, to the extent that the same
are required to be available to permit resales of Notes by Broker-Dealers), the
Issuers and the Guarantors shall:
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(i) use their reasonable best efforts to keep such Registration
Statement continuously effective for the applicable time period required
hereunder and provide all requisite financial statements (including, if
required by the Act or any regulation thereunder, financial statements of
the Guarantors) for the period specified in Section 3 or 4 of this
Agreement, as applicable; upon the occurrence of any event that would cause
any such Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period
required by this Agreement, the Issuers shall promptly notify the Holders
to suspend use of the Prospectus, and the Holders shall suspend use of the
Prospectus, and such Holders shall not communicate non-public information
to any third party, in violation of the securities laws, until the Issuers
and the Guarantors have made an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), the Issuers and the
Guarantors shall use their reasonable best efforts to cause such amendment
to be declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 of this Agreement, as applicable, or
such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Act during the
applicable time period required hereunder and to comply fully with the
applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act and the Exchange Act with
respect to the disposition of all Transfer Restricted Securities covered by
such Registration Statement during such period in accordance with the
intended method or methods of distribution by the sellers of such
securities set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented;
(iii) advise the underwriter(s), if any, the Dealer Manager, and,
in the case of a Shelf Registration Statement, each of the selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any prospectus supplement or post-
effective amendment has been filed and, with respect to any Registration
Statement or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or
for ad-
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ditional information relating to such Registration Statement or Prospectus,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement to such Registration Statement or
Prospectus, as the case may be, or any document incorporated by reference
in such Registration Statement or Prospectus untrue in any material
respect, or that requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements in
such Registration Statement or Prospectus not misleading and that in the
case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time
the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Issuers and the Guarantors shall use
their best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(iv) furnish to each of the underwriter(s), if any, the Dealer
Manager, and, in the case of a Shelf Registration Statement, each of the
selling Holders before filing with the Commission, copies of any
Registration Statement or any Prospectus included in such Registration
Statement or Prospectus or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents incorporated
by reference after the initial filing of such Registration Statement),
which documents will be subject to the reasonable review of such
underwriter(s), if any, the Dealer Manager, and such Holders for a period
of at least three business days, and the Issuers and the Guarantors will
not file any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus, as the case
may be, (including all such documents incorporated by reference) to which
any underwriter, the Dealer Manager or any selling Holder shall reasonably
object within three business days after the receipt of such Registration
Statement or Prospectus;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, (A)
provide copies of such document to the selling Holders and to the
underwriter(s), if any, (B) make the Issuers'
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and the Guarantors' representatives available for discussion of such
document and other customary due diligence matters; provided that such
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discussion and due diligence shall be coordinated on behalf of the selling
Holders by one counsel designated by and on behalf of such selling Holders
and (C) include such information in such document prior to the filing of
such document as such selling Holders or underwriter(s), if any, may
reasonably request;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), if any, at the offices
where normally kept, during reasonable business hours, all relevant
financial and other records, pertinent corporate documents and properties
of the Issuers and the Guarantors and cause the Issuers' and the
Guarantors' officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney or
accountant in connection with such Registration Statement subsequent to the
filing thereof and prior to its effectiveness; provided, however, that such
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persons shall first agree in writing with the Issuers that any information
that is reasonably and in good faith designated by the Issuers in writing
as confidential at the time of delivery of such information shall be kept
confidential by such persons, unless and to the extent that (A) disclosure
of such information is required by court or administrative order or is
necessary to respond to inquiries of regulatory authorities, (B) disclosure
of such information is required by law (including any disclosure
requirements pursuant to federal securities laws in connection with the
filing of the Shelf Registration Statement or the use of any Prospectus),
(C) such information becomes generally available to the public other than
as a result of a disclosure or failure to safeguard such information by
such person or (D) such information becomes available to such person from a
source other than the Issuers and their Subsidiaries and such source is not
bound by a confidentiality agreement;
(vii) if requested by any selling Holders or the underwriter(s),
if any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the
purchase price being paid for Transfer Restricted Securities and any other
terms of the offering of the Transfer Restricted Securities to be sold in
such offering; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after the Issuers are
notified of the matters to be incorporated in such Prospectus sup-
-13-
plement or post-effective amendment; provided, however, that the Issuers
-------- -------
shall not be required to take any action pursuant to this Section 6(c)(vii)
that would, in the opinion of counsel for the Issuers, violate applicable
law;
(viii) furnish to each underwriter, if any, the Dealer Manager and
upon request to the Issuers to a selling Holder without charge, at least
one conformed copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including, upon the request of
such Person, all documents incorporated by reference therein and all
exhibits to the extent requested (including exhibits incorporated therein
by reference);
(ix) deliver to each selling Holder, each of the underwriter(s),
if any, and the Dealer Manager, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; the Issuer and
the Guarantors hereby consent to the use of the Prospectus and any
amendment or supplement to the Prospectus by each of the selling Holders
and each of the underwriter(s), if any, in connection with the offering and
the sale of the Transfer Restricted Securities in accordance with the terms
thereof and with U.S. Federal securities laws and Blue Sky laws covered by
the Prospectus or any amendment or supplement thereto;
(x) enter into such agreements (including an underwriting
agreement in form, scope and substance as is customary in underwritten
offerings of securities of this type) and take all such other reasonable
actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any
Registration Statement contemplated by this Agreement, all as may be
reasonably requested by any Holder of Transfer Restricted Securities or the
underwriter(s), if any, in connection with any sale or resale of Transfer
Restricted Securities pursuant to any Registration Statement contemplated
by this Agreement; and whether or not an underwriting agreement is entered
into and whether or not the registration is an Underwritten Registration,
the Issuers and the Guarantors shall (A) make such representations and
warranties to the Holders of such Transfer Restricted Securities and the
underwriters, if any, with respect to the business of the Issuers and its
Subsidiaries (including with respect to businesses or assets acquired or to
be acquired by any of them), and the Shelf Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated
by reference therein, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when customarily requested; (B) obtain opinions of
counsel to the Issuers and the Guarantors and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the underwriters, if any, and special counsel to the
Holders of the Transfer Restricted Secu-
-14-
rities being sold), addressed to each selling Holder of Transfer Restricted
Securities and each of the underwriters, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such underwriters, if
any, and special counsel to Holders of Transfer Restricted Securities; (C)
use their reasonable best efforts to obtain customary "cold comfort"
letters and updates thereof from the independent certified public
accountants of the Issuers (and, if necessary, any other independent
certified public accountants of any subsidiary of the Issuers or of any
business acquired by the Issuers or any such subsidiary for which financial
statements and financial data is, or is required to be, included in the
Registration Statement), addressed (where reasonably possible) to each
selling Holder of Transfer Restricted Securities and each of the
underwriters, if any, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings; (D) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable to the selling Holders and the underwriters,
if any, than those set forth in Section 8 hereof (or such other provisions
and procedures acceptable to Holders of a majority in aggregate principal
amount of Transfer Restricted Securities covered by such Shelf Registration
Statement and the underwriters, if any); and (E) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities being sold
and the underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (A) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Issuers.
If at any time the representations and warranties of the Issuers and
the Guarantors contemplated in clause (A) above cease to be true and
correct, the Issuers shall so advise the Dealer Manager and the
underwriter(s), if any, and each selling Holder promptly and, if requested
by any of them, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with and cause the Guarantors to cooperate with the
selling Holders, the underwriter(s), if any, and their respective counsel
in connection with the registration and qualification (or exemption from
such registration or qualification) of the Transfer Restricted Securities
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the selling Holders and underwriter(s), if any, may
reasonably request in writing and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by the Registration Statement;
provided, however, that neither the Issuers nor the Guarantors shall be
-------- -------
required to register or qualify as a foreign corporation where it is not
now so
-15-
qualified or to take any action that would subject it to the service of
process or to taxation, other than as to matters and transactions relating
to the Registration Statement, in any jurisdiction where it is not now so
subject;
(xii) if a Shelf Registration is filed pursuant to Section 4(a),
cooperate with the selling Holders of Registrable Securities and the
managing Underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to be
sold, which certificates shall not bear any restrictive legends and shall
be in a form eligible for deposit with The Depository Trust Company; and
enable such Transfer Restricted Securities to be in such denominations and
registered in such names as the managing Underwriters, if any, or Holders
may reasonably request;
(xiii) in connection with any sale or transfer of Transfer
Restricted Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with and cause the Guarantors to
cooperate with the selling Holders and the underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any restrictive
legends; and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to any
sale of Transfer Restricted Securities made by such underwriter(s);
(xiv) use their reasonable best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers of such
Transfer Restricted Securities or the underwriter(s), if any, to consummate
the disposition of such Transfer Restricted Securities, subject to the
proviso contained in clause (xi) above;
(xv) if any fact or event contemplated by Section 6(c)(iii)(D) of
this Agreement shall exist or have occurred, prepare a supplement or post-
effective amendment to the Registration Statement or related Prospectus or
any document incorporated in such Registration Statement or Prospectus by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Registration Statement will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading and the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements contained therein, in
the light of the circumstances under which they were made, not misleading;
-16-
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration Statement
and provide the Trustee under the Indenture with printed certificates for
the Transfer Restricted Securities that are in a form eligible for deposit
with The Depository Trust Issuers;
(xvii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter (including any "qualified independent underwriter" that is
required to be retained in accordance with the rules and regulations of the
NASD);
(xviii) otherwise use their reasonable best efforts to comply with
all applicable rules and regulations of the Commission in regards to any
Registration Statement, and make generally available to its
securityholders, as soon as practicable, a consolidated earning statement
of the Issuers meeting the requirements of Rule 158 (which need not be
audited) for the twelve-month period (A) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm commitment or reasonable best efforts Underwritten
Offering or (B) if not sold to underwriters in such an offering, beginning
with the first month of the Issuers' first fiscal quarter commencing after
the effective date of the Registration Statement;
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders to effect such changes to the Indenture, if any, as may be
required for such Indenture to be so qualified in accordance with the terms
of the TIA; and execute, and use their best efforts to cause the Trustee to
execute, all customary documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Issuers of the existence of any fact
of the kind described in Section 6(c)(iii)(D) of this Agreement, such Holder
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) of this Agreement, or until it is advised in writing (the "Advice") by
------
the Issuers that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. If so directed by the Issuers, each Holder will
deliver to the Issuers (at the Issuers' expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice. In the event that the Issuers shall give any such
notice, the time period regarding the effectiveness of
-17-
such Registration Statement set forth in Section 3 or 4 of this Agreement, as
applicable, shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to Section 6(c)(iii)(D)
of this Agreement to and including the date when each selling Holder covered by
such Registration Statement shall have received the copies of the supplemented
or amended Prospectus contemplated by Section 6(c)(xv) of this Agreement or
shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All fees and expenses incident to the Issuers' and the
Guarantors' performance of or compliance with this Agreement will be borne by
the Issuers regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
(including filings made with the NASD (and, if applicable, the fees and expenses
of any "qualified independent underwriter" and its counsel that may be required
by the rules and regulations of the NASD)); (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the New Notes to
be issued in the Exchange Offer and printing of Prospectuses); (iv) all fees and
disbursements of counsel for the Issuers, the Guarantors and, subject to Section
7(b) below, the Holders of Transfer Restricted Securities; and (v) all fees and
disbursements of independent certified public accountants of the Issuers and the
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Issuers and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of their
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by them.
Notwithstanding the foregoing or anything in this Agreement to the
contrary, each Holder of Transfer Restricted Notes shall pay all underwriting
discounts and commissions of any underwriters with respect to any Notes sold by
or on behalf of it.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Issuers will reimburse the
Dealer Manager and the Holders of Transfer Restricted Securities being tendered
in the Exchange Offer and/or resold pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or registered pursuant to
the Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
-18-
SECTION 8. INDEMNIFICATION
(a) Each of the Issuers and the Guarantors, on a joint and several
basis, agrees to indemnify and hold harmless (i) the Dealer Manager, each Holder
of Transfer Restricted Securities and each Participating Broker Dealer, (ii)
each person, if any, who controls any of the foregoing within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
-----------
person") and (iii) its agents, employees, officers and directors and the agents,
- ------
employees, officers and directors of any such controlling person (collectively,
the "Indemnified Persons") from and against any and all losses, liabilities,
-------------------
claims, damages and expenses whatsoever (including but not limited to reasonable
fees of not more than one separate law firm (in addition to local counsel) and
any and all reasonable expenses whatsoever incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all reasonable amounts paid in settlement of any claim
or litigation) to which they or any of them may become subject under the Act,
the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or Prospectus, or in any amendment
thereof 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, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Issuers
-------- -------
and the Guarantors will not be liable in any such case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Issuers by or on behalf of any
Indemnified Person relating to such Indemnified Person expressly for use
therein. This indemnity agreement will be in addition to any liability that the
Issuers and the Guarantors may otherwise have, including, but not limited to,
liability under this Agreement.
If any action is brought against any Indemnified Persons or any such
person in respect of which indemnity may be sought against the Issuers and the
Guarantors pursuant to the foregoing paragraph, such Indemnified Persons or such
person shall promptly notify the indemnifying party in writing of the
institution of such action and the indemnifying party shall assume the defense
of such action, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses, provided, however,
that the omission to so notify the indemnifying party shall not relieve the
indemnifying party from any liability which they may have to the Indemnified
Persons or any such person or otherwise. Such Indemnified Persons shall have
the right to employ its own counsel in any such case, but the reasonable fees
and expenses of such counsel shall be at the expense of such In-
-19-
demnified Persons unless the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action or the indemnifying party shall not have employed counsel to have
charge of the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the indemnifying
party (in which case the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such reasonable fees and expenses shall be borne by the
indemnifying party and paid as incurred (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) in any one action or
series of related actions in the same jurisdiction representing the indemnified
parties who are parties to such action). The indemnifying party shall not be
liable for any settlement of any such claim or action effected without its
written consent but if settled with the written consent of the indemnifying
party, the indemnifying party agrees to indemnify and hold harmless any
Indemnified Persons and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(b) In connection with any Registration Statement pursuant to which a
Holder of Transfer Restricted Securities offers or sells Transfer Restricted
Securities, such Holder agrees, severally and not jointly, to indemnify and hold
harmless the Issuers and the Guarantors, their respective directors and officers
and any person controlling either of the Issuers or a Guarantor within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and each of
their agents, employees, officers and directors and the agents, employees,
officers and directors of such controlling person from and against any losses,
liabilities, claims, damages and expenses (including but not limited to
reasonable fees of not more than one separate law firm (in addition to local
counsel) and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any
-20-
claim whatsoever and any and all reasonable amounts paid in settlement of any
claim or litigation) to which they or any of them may become subject under the
Act, the Exchange Act or otherwise insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or in any amendment thereof 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, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information relating to such Holder furnished to the Issuers by
such Holder in writing expressly for use therein.
If any action is brought against either of the Issuers or a Guarantor
or any such person in respect of which indemnity may be sought against any
Holder of Transfer Restricted Securities pursuant to the foregoing paragraph,
the Issuers, the Guarantors or such person shall promptly notify such Holder in
writing of the institution of such action and such Holder shall assume the
defense of such action, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses,
provided, however, that the omission to so notify such Holder shall not relieve
such Holder from any liability which they may have to the Issuers, the
Guarantors or any such person or otherwise. The Issuers, the Guarantors or such
person shall have the right to employ its own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of the Issuers or such
person unless the employment of such counsel shall have been authorized in
writing by such Holder of Transfer Restricted Securities in connection with the
defense of such action or such Holder shall not have employed counsel to have
charge of the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to such Holder (in
which case such Holder shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties, but such Holder may employ
counsel and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Holder), in any of which events such
fees and expenses shall be borne by such Holder and paid as incurred (it being
understood, however, that such Holder shall not be liable for the expenses of
more than one separate counsel in any one action or series of related actions in
the same jurisdiction representing the indemnified parties who are parties to
such action). Anything in this paragraph to the contrary notwithstanding, any
Holder of Transfer Restricted Securities shall not be liable for any settlement
of any such claim or action effected without the written consent of such Holder
but if settled with the written consent of such Holder, such Holder agrees to
indemnify and hold harmless the Issuers, the Guarantors and any such person
-21-
from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(c) In order to provide for contribution in circumstances in which
the indemnification provided for in paragraphs (a) and (b) of this Section 8 is
for any reason held to be unavailable from the indemnifying party, or is
insufficient to hold harmless a party indemnified under this Section 8, the
Issuers, the Guarantors and the Indemnified Persons shall contribute to the
amount paid or payable by such indemnified party as a result of such aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action or any claims asserted) to which the Issuers and/or the Guarantors and
the Indemnified Persons may be subject, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Issuers and the Guarantors, on
the one hand, and the Indemnified Persons, on the other hand, from the offering
of the Old Notes or, (ii) if such allocation 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 Issuers and
the Guarantors, on the one hand, and the Indemnified Persons, on the other hand,
in connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Issuers and the
Guarantors, on the one hand, and the Indemnified Persons, on the other hand,
shall be deemed to be in the same proportion as the total proceeds from the
offering of Old Notes (net of discounts and commissions but before deducting
expenses) received by the Issuers as set forth in the table on the cover page of
the Offering Memorandum bear to the total proceeds received by such Holder with
respect to its sale of Transfer Restricted Securities or New Notes. The relative
fault of the Issuers and the Guarantors, on the one hand, and the Indemnified
Persons, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement
-22-
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuers, the Guarantors or the
Indemnified Persons and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission.
The Issuers, the Guarantors and the Dealer Manager agree that it
would not be just and equitable if contribution pursuant to this paragraph (c)
of this Section 8 were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to above. Notwithstanding the provisions of paragraph (c) of this
Section 8, (i) in no case shall an Indemnified Person be required to contribute
any amount in excess of the amount by which the total proceeds received by such
Indemnified Person with respect to its sale of its Transfer Restricted
Securities or New Notes, as the case may be, exceeds the amount of any damages
that such Indemnified Person has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (c)
of this Section 8, each person, if any, who controls an Indemnified Person
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such Indemnified Person, and each
person, if any, who controls either of the Issuers or a Guarantor within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Issuers or the Guarantors, respectively,
where applicable, subject in each case to clauses (i) and (ii) of this
paragraph. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made against another party or parties under this
paragraph 8(c), notify such party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this paragraph (c) of this Section 8 or otherwise;
provided, however, that no additional notice shall be required with respect to
- -------- -------
any action for which notice has been given under paragraphs (a) or (b) of this
Section 8 for purposes of indemnification. No party shall be liable for
contribution with respect to any action or claim settled without its written
consent, provided, however, that such written consent was not unreasonably
-------- -------
withheld.
SECTION 9. RULE 144A
The Issuers and the Guarantors shall use their best efforts, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale of such securities and any prospective purchaser of
such Transfer Restricted Securities from such Holder or benefi-
-23-
cial owner, the information required by Rule 144A(d)(4) under the Act in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration under this
Agreement unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled under this Agreement to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorneys, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such 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 the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
--------
reasonably satisfactory to the Issuers.
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
--------
all rights provided in this Agreement, in the Indenture, the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The
Issuers and the Guarantors agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Each of the Issuers and the
--------------------------
Guarantors will not on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions of this Agreement. The Issuers will not have previously entered into
any agreement granting any registration rights with respect to its securities to
any Person. The rights granted to the Holders under this Agreement do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Issuers' securities under any agreement in effect on the date of
this Agreement.
-24-
(c) Adjustments Affecting the Notes. Without the written consent of
-------------------------------
the Holders of a majority in aggregate principal amount of outstanding Transfer
Restricted Notes, the Issuers and the Guarantors will not take any action, or
permit any change to occur, with respect to the Notes that would materially and
adversely affect the ability of the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not
----------------------
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions of this Agreement may not be given unless the Issuers have
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions of this
Agreement that relates exclusively to the rights of Holders whose securities are
being sold or tendered pursuant to a Registration Statement and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being sold or tendered pursuant to such Registration Statement may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities being so sold or tendered.
(e) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivering, first-class
mail (registered or certified, return receipt requested), telex, telecopier or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Issuers or the Guarantors, at:
AEI Resources, Inc.
1500 North Big Run Road
Ashland, Kentucky 41102
Facsimile: (606) 928-0450
Attention: Treasurer/Controller
with a copy to:
Brown, Todd & Heyburn PLLC
2700 Lexington Financial Center
Lexington, Kentucky 40507-1749
Facsimile: (606) 231-0011
Attention: Paul Sullivan, Esq.
-25-
All such notices and communications shall be deemed to have been duly
given: (i) at the time delivered by hand, if personally delivered; (ii) five
business days after being deposited in the mail, postage prepaid, if mailed;
(iii) when answered back, if telexed; (iv) when receipt acknowledged, if
telecopied; and (v) on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and permitted assigns of each of
the parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties to this Agreement in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Captions. The captions included in this Agreement are included
--------
solely for convenience of reference and are not to be considered a part of this
Agreement.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Submission to Jurisdiction. The Issuers and the Guarantors
--------------------------
irrevocably submit to the nonexclusive jurisdiction of any State or Federal
court sitting in New York over any suit, action or proceeding arising out of or
relating to this agreement. The Issuers and the Guarantors irrevocably waive, to
the fullest extent permitted by law, any objection it may now or thereafter have
to the laying of venue of any such court and any claim that any such suit,
action or proceeding brought in such a court has been brought in an inconvenient
forum. The Issuers and the Guarantors agree that a final judgment in any such
suit, action or proceeding brought in any such court shall be conclusive and
binding upon the Issuers and the Guarantors and may be enforced in any other
courts to the jurisdiction of which the Issuers and the Guarantors are or may be
subject, by suit upon such judgment. The Issuers and the Guarantors hereby
appoint, without power of revocation, CT Corporation System as its agent to
accept and acknowledge on its behalf service of any and all process which may be
served in any suit, action or proceeding arising out of or relating to this
letter.
-26-
(k) Severability. In the event that any one or more of the
------------
provisions contained in this Agreement, or the application of any such provision
in any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained in this Agreement shall not be affected or
impaired thereby.
(l) Entire Agreement. This Agreement together with the other
----------------
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties to
this Agreement in respect of the subject matter contained in this Agreement.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to in this Agreement with respect to the
registration rights granted by the Issuers with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[Signatures on Next Page]
IN WITNESS WHEREOF, the parties have executed this Senior Note
Registration Rights Agreement as of the date first written above.
AEI RESOURCES, INC.
By: /s/ John E. Baum
_____________________________
Name: John E. Baum
Title:
AEI HOLDING COMPANY, INC.
By: /s/ John E. Baum
_____________________________
Name: John E. Baum
Title:
Confirmed and Accepted and agreed as of the date
first above written:
WARBURG DILLON READ LLC,
as Dealer Manager
By: /s/ Kaj Ahlburg
_____________________________
Name: Kaj Ahlbug
Title: Executive Director Leveraged Finance
By: /s/ David W. Barth
_____________________________
Name: David W. Barth
Title: Associate Director Leveraged Finance
Confirmed and Accepted and agreed to
as Guarantors:
17 WEST MINING, INC.,
ACECO, INC.,
ADDINGTON MINING, INC.,
AEI COAL SALES COMPANY, INC.,
AEI RESOURCES HOLDING, INC.,
AMERICOAL DEVELOPMENT COMPANY,
APPALACHIAN REALTY COMPANY,
AYRSHIRE LAND COMPANY,
BELLAIRE TRUCKING COMPANY,
BLUEGRASS COAL DEVELOPMENT
COMPANY,
BOWIE RESOURCES LIMITED
CC COAL COMPANY,
COAL VENTURES HOLDING
COMPANY, INC.,
EAST KENTUCKY ENERGY CORPORATION,
EMPLOYEE BENEFITS MANAGEMENT, INC.,
ENCOAL CORPORATION,
ENERZ CORPORATION,
EVERGREEN MINING COMPANY,
FAIRVIEW LAND COMPANY,
FRANKLIN COAL SALES COMPANY,
GRASSY COVE COAL MINING COMPANY,
HERITAGE MINING COMPANY,
HIGHLAND COAL, INC.,
IKERD-BANDY CO., INC.,
KERMIT COAL COMPANY,
LESLIE RESOURCES, INC.,
LESLIE RESOURCES MANAGEMENT, INC.,
MEADOWLARK, INC.,
MEGA MINERALS, INC.,
MIDWEST COAL SALES COMPANY,
MID-VOL LEASING, INC.
MINING TECHNOLOGIES, INC.,
MOUNTAIN-CLAY, INCORPORATED (d/b/a
Mountain Clay, Inc.),
PHOENIX LAND COMPANY,
PREMIUM PROCESSING, INC.,
PREMIUM COAL DEVELOPMENT COMPANY,
PRO-LAND, INC. (d/b/a Kem Coal Company)
R. & F. COAL COMPANY,
RIVER COAL COMPANY, INC.,
ROARING CREEK COAL COMPANY,
SHIPYARD RIVER COAL TERMINAL COMPANY,
STRAIGHT CREEK COAL RESOURCES COMPANY,
TENNESSEE MINING, INC.,
TURRIS COAL COMPANY,
WYOMING COAL TECHNOLOGY, INC.,
ZEIGLER COAL HOLDING COMPANY,
ZEIGLER ENVIRONMENTAL SERVICES COMPANY
ZENERGY, INC.,
each as Guarantor
By: /s/ John E. Baum
_____________________________________
Name: John E. Baum
Title:
BEECH COAL COMPANY,
CANNELTON, INC.,
CANNELTON INDUSTRIES, INC.,
CANNELTON LAND COMPANY,
CANNELTON SALES COMPANY,
DUNN COAL & DOCK COMPANY,
HAYMAN HOLDINGS, INC.,
KANAWHA CORPORATION,
KINDILL HOLDING, INC.,
KINDILL MINING, INC.,
MIDWEST COAL COMPANY ,
MOUNTAINEER COAL DEVELOPMENT
COMPANY,
MOUNTAIN COALS CORPORATION,
OLD BEN COAL COMPANY,
WEST VIRGINIA-INDIANA COAL HOLDING
COMPANY, INC.,
each as Guarantor
By: /s/ William H. Haselhoff
____________________________________
Name: William H. Haselhoff
Title:
BENTLEY COAL COMPANY,
SKYLINE COAL COMPANY,
KENTUCKY PRINCE MINING COMPANY,
each as Guarantor
By: GRASSY COVE COAL MINING COMPANY,
ROARING CREEK COAL COMPANY,
each as General Partner of each of the
entities listed above
By: /s/ John E. Baum
_________________________________________
Name: John E. Baum
Title:
NUCOAL, LLC,
as Guarantor
By: AMERICOAL DEVELOPMENT COMPANY
ENCOAL CORPORATION
each as Member
By: /s/ John E. Baum
____________________________________
Name: John E. Baum
Title: