1
EXHIBIT 10.12
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (the "Agreement"), dated as of August 12,
1996, by and among Anker Coal Group, Inc., a Delaware corporation (the
"Company); JJF Group Limited Liability Company, a limited liability company
organized and existing under the laws of West Virginia ("JJF Group"); PPK Group
Limited Liability Company, a limited liability company organized and existing
under the laws of West Virginia ("PPK Group"); Anker Holding B.V., a corporation
organized and existing under the laws of the Netherlands ("Anker Holding"); and
the following parties sometimes hereinafter referred to as the "Funds": American
Oil & Gas Investors, Limited Partnership, a limited partnership organized and
existing under the laws of New York, AMGO II, Limited Partnership, a limited
partnership organized and existing under the laws of New York, First Reserve
Fund V, Limited Partnership, a limited partnership organized and existing under
the laws of Delaware, First Reserve Fund V-2, Limited Partnership, a limited
partnership organized and existing under the laws of Delaware, First Reserve
Fund VI, Limited Partnership, a limited partnership organized and existing under
the laws of Delaware, and First Reserve Fund VII, Limited Partnership a limited
partnership organized and existing under the laws of Delaware.
In consideration of the following premises and conditions, the parties
hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
The term "Common Stock" shall mean the Common Stock, par value $.01
per share of the Company.
The term "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute then in effect, and a reference
to a particular section thereof shall be deemed to include a reference to the
comparable section, if any, of any such similar federal statute.
The term "Holders" shall mean JJF Group, PPK Group, Anker Holding,
the Funds and persons or entities (other than the Company) to whom Common Stock
is transferred by any of the foregoing, other than any transfer in violation of
the Stockholders Agreement (the "Stockholders Agreement") entered into among the
parties hereto on or about the date hereof (such transferees hereinafter
"Permitted Transferees"), and any combination of them, and the term "Holder"
shall mean any such person.
The term "person" shall mean an individual, partnership,
corporation, limited liability company, trust, unincorporated organization or
government or political department or agency thereof or other entity.
2
The term "Registrable Securities" shall mean shares of Common Stock
outstanding as of the date hereof or acquired by any of the Holders after the
date hereof (and excluding any warrants or other securities convertible into
Common Stock). As to any Registrable Securities, such securities shall cease to
be Registrable Securities when (i) such securities shall have been registered
under the Securities Act, the registration statement with respect to the sale of
such securities shall have become effective under the Securities Act and such
securities shall have been disposed of pursuant to such effective registration
statement, (ii) such securities shall have been distributed pursuant to Rule
144, Rule 144A, or any similar provision then in force, under the Securities
Act, (iii) such securities shall have been otherwise transferred, new
certificates or other evidences of ownership for them not bearing a legend
restricting further transfer and not subject to any stop transfer order or other
restrictions on transfer shall have been delivered by the Company and subsequent
disposition of such securities shall not require registration or qualification
of such securities under the Securities Act or any state securities laws then in
force or (iv) such securities shall cease to be outstanding.
The term "Registration Expenses" shall mean all expenses incident to
the Company's performance of or compliance with this Agreement, including
without limitation, all SEC and stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees and expenses, fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel for the underwriters in connection with blue
sky qualifications of the Registrable Securities), printing expenses, messenger
and delivery expenses, internal expenses (including without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange on which
such securities are listed, fees and disbursements of counsel for the Company
and all independent certified public accountants (including the expenses of any
annual audit or "cold comfort" letters required by or incident to such
performance and compliance), the fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, the reasonable fees of one
counsel retained in connection with each such registration by the Holders of a
majority of the Registrable Securities being registered in an amount for each
such registration of up to a maximum of $25,000, the reasonable fees of counsel
retained by a Holder of Registrable Securities being registered not voting in
favor of the retention of the counsel referred to in the preceding clause up to
a maximum amount of $10,000 per such Holder and only to the extent that such
fees relate to the performance of legal services required by the Company or an
underwriter to be performed by counsel to such Holder, the reasonable fees and
expenses of any special experts retained by the Company in connection with such
registration and fees and expenses of other persons retained by the Company (but
not including (i) any underwriting discounts or commissions attributable to the
sale of Registrable Securities by the Holders of such Registrable Securities and
(ii) any transfer taxes payable by the Holders of Registrable Securities in
connection with the sale of Registrable Securities).
The term "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute then in effect, and a reference to a
particular section thereof shall be
2
3
deemed to include a reference to the comparable section, if any, of any such
similar federal statute.
The term "SEC" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act or the
Exchange Act.
2. Registration on Request.
(a) Request for Registration. Upon the written request of (i) JJF
Group, (ii) PPK Group, (iii) Anker Holding or the (iv) the Funds acting
collectively (the "Requesting Holder" or the "Requesting Holders") requesting
that the Company effect the registration under the Securities Act of all or part
of such Holder's or Holders' Registrable Securities and specifying the intended
method of disposition thereof, the Company will promptly give written notice of
such requested registration to all other Holders of Registrable Securities, and
thereupon will, as expeditiously as possible, use its best efforts to effect the
registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by the Requesting Holder(s); and
(ii) all other Registrable Securities which the Company has
been requested to register by any other Holder thereof by written request
given to the Company within 20 days after the giving of such written
notice by the Company (which request shall specify the intended method of
disposition of such Registrable Securities)
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; provided, that the Company shall only be obligated to register such
Registrable Securities pursuant to a request by: (i) the Funds on an aggregate
of three registration statements; (ii) (JJF Group on an aggregate of two
registration statements; (iii) PPK Group on one registration statement; and
((iv) Anker Holding on one registration statement, and provided further that (A)
the Company shall not be obligated to file a registration statement relating to
a registration request under this Section 2 at any time prior to the completion
of an initial public offering by the Company of Common Stock, (B) the Company
shall not be obligated to file a registration statement relating to a
registration request under this Section 2 (other than on Form S-3 or any similar
short-form registration statement) within a period of six months after the
effective date of any other registration statement of the Company which was not
effected on Form S-3 (or any similar short-form registration statement) and (C)
if the Requesting Holder(s) shall have requested the Company to effect a
registration under this Section 2 and prior to the effective date of the
registration statement relating to such registration such Holders shall have
revoked such request pursuant to the last sentence of this Section 2(a), then
the Company shall not be obligated to file a registration statement relating to
a registration request under this Section 2 within a period of six months after
the date of receipt by the Company of the registration request that was
subsequently revoked; provided, however, that a request which is revoked
pursuant to the last
3
4
sentence of this Section 2(a) shall not be considered a request for these
purposes. Promptly after the expiration of the 20-day period referred to in
subsection (ii) above, the Company will notify all the Holders to be included in
the registration of the other Holders and the number of shares of Registrable
Securities requested to be included therein. All of the Requesting Holders
acting jointly may, at any time prior to the effective date of the registration
statement relating to such registration, revoke such request by providing a
written notice to the Company revoking such request.
The Company shall have the right to select the investment banker (or
investment bankers) that shall manage the offering (collectively, the "managing
underwriter"), provided, that such managing underwriter must be reasonably
satisfactory to the Requesting Holder(s).
(b) Registration Statement Form. If a registration requested
pursuant to this Section 2 which is proposed by the Company to be effected by
the filing of a registration statement on Form S-3 (or any successor or similar
short-form registration statement) shall be in connection with any underwritten
public offering and if the managing underwriter shall advise the Company in
writing that, in its opinion, the use of another form of registration statement
is of material importance to the success of such proposed offering, then such
registration shall be effected on such other form.
(c) Expenses. The Company will pay the Registration Expenses in
connection with a registration requested pursuant to this Section 2, whether or
not such registration becomes effective under the Securities Act.
(d) Effective Registration Statement. A registration requested
pursuant to this Section 2 will not be deemed to have been effected unless the
registration statement relating thereto has become effective under the
Securities Act and all or any portion of the Registrable Securities initially
requesting such registration have actually been sold thereunder; provided,
however, that if, after such registration statement has become effective,
registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court, such registration
will be deemed not to have been effected.
(e) Pro Rata Participation in Requested Registration. If a requested
registration pursuant to this Section 2 involves an underwritten offering and
the managing underwriter shall advise the Company in writing that, in its
opinion, the number of securities requested to be included in such registration
(including securities of the Company which are not Registrable Securities)
exceeds the number which would have an adverse effect on such offering,
including the price at which such shares or securities can be sold, the Company
will include in such registration (i) first, all Registrable Securities
requested to be included in such registration by the Requesting Holders pursuant
to this Section 2 (provided that if the number of such Registrable Securities
exceeds the number which the Company has been advised can be sold in such
offering, without having the adverse effect referred to above, the number of
such Registrable Securities included in such registration shall be allocated pro
rata among the Requesting Holders on the basis of the relative number of shares
of Registrable Securities each
4
5
such Holder has requested to be included in such registration), and (ii) second,
to the extent that the Registrable Securities requested to be included in such
registration pursuant to this Section 2 are less than the number of securities
which the Company has been advised can be sold in such offering, without having
the adverse effect referred to above, the securities proposed to be sold by
other Holders, allocated pro rata among such other Holders on the basis of the
number of shares of Registrable Securities each such Holder has requested to be
included in such registration. If at least fifty percent of the Registrable
Securities requested to be registered pursuant to Section 2(a) by a Requesting
Holder are not included in such registration, the registration request of such
Requesting Holder shall not be counted toward the limit on registration requests
set forth in Section 2(a).
3. Incidental Registration.
(a) Right to Include Registrable Securities. If the Company at any
time proposes to register any of its securities under the Securities Act (other
than a registration on Form S-4 or S-8 or any successor or similar forms and
other than pursuant to a registration under Section 2 hereof), whether or not
for sale for its own account, it will each such time give prompt written notice
to all Holders of Registrable Securities of its intention to do so and of such
Holders' rights under this Section 3. Upon the written request of any such
Holder made within 20 days after the receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by such
Holder and the intended method of disposition thereof), the Company will use its
best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the Holders thereof, to the extent requisite to permit the disposition (in
accordance with such intended methods thereof) of the Registrable Securities so
to be registered; provided, that (i) if, at any time after giving written notice
of its intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company may, at its election, give written notice of such determination to each
Holder that made a request as hereinabove provided and thereupon the Company
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration, and (ii) if such registration involves an
underwritten offering, all Holders of Registrable Securities requesting to be
included in the Company's registration must sell their Registrable Securities to
the underwriters selected by the Company on the same terms and conditions as
apply to the Company. If a registration requested pursuant to this Section 3(a)
involves an underwritten public offering, any Holder of Registrable Securities
requesting to be included in such registration may elect, in writing prior to
the effectiveness of the registration statement filed in connection with such
registration, not to register such securities in connection with such
registration. No registration effected under this Section 3 shall relieve the
Company of its obligations to effect registration upon request under Section 2.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 3.
(b) Priority in Incidental Registrations. If a registration pursuant
to this Section 3 involves an underwritten offering and the managing underwriter
advises the Company
5
6
in writing that, in its opinion, the number of securities which the Company, the
Holders and any other persons intend to include in such registration exceeds the
number which would have an adverse effect on such offering, including the price
at which such securities can be sold, the Company will include in such
registration (i) first, all the securities the Company proposes to sell for its
own account, and (ii) second, the number of Registrable Securities requested to
be included in such registration by the Holders, which number, in the opinion of
such underwriters, can be sold without having the adverse effect referred to
above, such amount to be allocated pro rata among all such requesting Holders on
the basis of the relative number of shares of Registrable Securities and other
securities each Holder has requested to be included in such registration, and
(iii) third, the number of Registrable Securities requested to be included in
such registration by other persons, which number, in the opinion of such
underwriters, can be sold without having the adverse effect referred to above,
such amount to be allocated pro rata among all such requesting other persons on
the basis of the relative number of shares of Registrable Securities and other
securities each such other person has requested to be included in such
registration.
4. Holdback Agreements.
If any registration shall be in connection with an underwritten
public offering, each Holder of Registrable Securities agrees not to effect any
public sale or distribution, including any sale pursuant to Rule 144 or Rule
144A under the Securities Act, of any Registrable Securities, and to use such
Holder's best efforts not to effect any such public sale or distribution of any
other equity security of the Company or of any security convertible into or
exchangeable or exercisable for any equity security, of the Company (in each
case, other than as part of such underwritten public offering) within 7 days
before or 90 days after the effective date of such registration, and the Company
hereby also so agrees and agrees to cause other holders of any equity security,
or of any security convertible into or exchangeable or exercisable for any
equity security, of the Company purchased from the Company (at any time other
than in a public offering) to so agree.
5. Registration Procedures.
If and whenever the Company is required to use its best efforts to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Company will, as expeditiously
as possible:
(a) prepare and file with the SEC within 90 days, and use its best
efforts to prepare and so file within 45 days, after receipt of a request for
registration with respect to such Registrable Securities, a registration
statement on any form for which the Company then qualifies or which counsel for
the Company shall deem appropriate, subject to 2(b) hereof, as the case may be,
and which form shall be available for the sale of the registrable Securities in
accordance with the intended methods of distribution thereof, and use its best
efforts to cause such registration statement to become effective; provided that
before filing with the SEC a registration statement or prospectus or any
amendments or supplements thereto, the Company
6
7
will (i) furnish to one counsel selected by the Holders of a majority of the
Registrable Securities covered by such registration statement copies of all such
documents proposed to be filed, which documents will be subject to the review of
such counsel, and the Company will give reasonable consideration to any comments
of such counsel, and (ii) notify each Holder of Registrable Securities covered
by such registration statement of any stop order issued or threatened by the SEC
and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for a period of
not less than 120 days or such shorter period which will terminate when all
Registrable Securities covered by such registration statement have been sold
(but not before the expiration of the 90-day period referred to in Section 4(3)
of the Securities Act and Rule 174 thereunder, if applicable), and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to each Holder of such Registrable Securities covered by
such registration statement such number of copies of such registration
statement, each amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in such registration statement
(including each preliminary prospectus), in conformity with the requirements of
the Securities Act and such other documents as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Holder;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions
within the United States as any Holder of Registrable Securities covered by such
registration statement reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such Holder; provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (d), (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction;
(e) use its best efforts to cause the Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the Holder or
Holders thereof to consummate the disposition of such Registrable Securities;
(f) immediately notify each Holder of such Registrable Securities at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits to state any material fact
7
8
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and will promptly
prepare and furnish to such Holder a reasonable number of copies of such
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such 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 therein not
misleading in light of the circumstances then existing;
(g) use its best efforts to cause all such Registrable Securities to
be listed on a national securities exchange and on each securities exchange on
which similar securities issued by the Company are then listed, if the
applicable listing requirements are satisfied, and to provide a transfer agent
and registrar for such Registrable Securities covered by such registration
statement no later than the effective date of such registration statement;
(h) enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other actions as the Holders of a
majority of the registrable Securities being sold or the underwriters retained
by such Holders, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities, including customary
indemnification;
(i) make available for inspection by any Holder of Registrable
Securities covered by such registration statement, any underwriter participating
in any disposition pursuant to such registration statement, and any attorney,
accountant or other agent retained by any such Holder or underwriter
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records")
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company officers, directors and employees to
supply all information reasonably requested by any such Inspector in connection
with such registration statement;
(j) use its best efforts to obtain a cold comfort letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by cold comfort letters as the Holders
of a majority of the Registrable Securities being sold reasonably request;
(k) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period of at
least twelve months, beginning with the first month after the effective date of
the registration statement (as the term "effective date" is defined in Rule
158(c) under the Securities Act), which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; and
(l) obtain for delivery to the underwriter an opinion or opinions
from counsel for the Company in customary form and in form and scope reasonably
satisfactory to such underwriter and its counsel.
8
9
The Company may require each Holder of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Securities as the
Company may from time to time reasonably request in writing.
Each Holder of Registrable Securities agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in Section 5(f) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5(f) hereof, and, if
so directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period mentioned in Section 5(b) hereof shall be
extended by the greater of (i) three months or (ii) the number of days during
the period from and including the date of the giving of such notice pursuant to
Section 5(f) hereof to and including the date when each Holder of Registrable
Securities covered by such registration statement shall have received the copies
of the supplemented or amended prospectus contemplated by Section 5(f) hereof.
If a registration pursuant to Section 2 involves an underwritten offering,
the Company agrees, if so required by the managing underwriter, not to effect
any public sale or distribution of any of its securities (other than pursuant to
Form S-4 or S-8) during a period commencing seven calendar days before and
ending 90 calendar days after the effective date of such registration, except
for such underwritten offering.
6. Indemnification.
(a) Indemnification by the Company. In the event of any registration
of any securities of the Company under the Securities Act pursuant to Section 2
or 3 hereof, the Company will, and it hereby does, indemnify and hold harmless,
to the full extent permitted by law, each of the Holders of any Registrable
Securities covered by such registration statement, its directors and officers,
employees, agents, general partners, limited partners, managers and managing
directors thereof), each other person who participates as an underwriter in the
offering or sale of such securities and each other person, if any, who controls
such Holder or any such underwriter within the meaning of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several,
and expenses (including any amounts paid in any settlement effected with the
Company's consent) to which such Holder, any such director, officer, employee,
agent, general, limited partner, manager or managing director or any such
underwriter or controlling person may become subject under the Securities Act,
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) or expenses arise out of or are
based upon (a) any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary, final or summary
9
10
prospectus, or any amendment or supplement thereto, including all documents
incorporated therein by reference or (b) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Company will reimburse such
Holder and each such director, officer, employee, agent, general partner,
limited partner, manager, managing director or underwriter and controlling
person for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending such loss, claim, liability, action
or proceedings commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any alleged untrue statement or omission;
provided, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expenses arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by such Holder or underwriter specifically stating that it is for use in the
preparation thereof; and provided, further, that the Company will not be liable
to any person who participates as an underwriter in the offering or sale of
Registrable Securities or any other person, if any, who controls such
underwriter within the meaning of the Securities Act, under the indemnity
agreement in this Section 6(a) with respect to any preliminary prospectus as
amended or supplemented as the case may be, to the extent that any such loss,
claim, damage or liability of such underwriter or controlling person results
from the fact that such underwriter sold Registrable Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final prospectus (including any documents incorporated
by reference therein), whichever is most recent, if the Company has previously
furnished copies thereof to such underwriter and such final prospectus, as then
amended or supplemented, has corrected any such misstatement or omission. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Holder or any such director, officer, employee,
agent, general partner, limited partner, manger, managing director, underwriter
or controlling person and shall survive the transfer of such securities by such
Holder.
(b) Indemnification by the Holders. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed in accordance with Sections 2 and 3 hereof, that the Company shall have
received an undertaking reasonably satisfactory to it from the Holders of such
Registrable Securities or any underwriter, to indemnify and hold harmless (in
the same manner and to the same extent as set forth in subdivision (a) of this
Section 6) the Company and its controlling persons and all other prospective
sellers and their respective controlling persons with respect to any statement
or alleged statement in or omission or alleged omission from such registration
statement, any preliminary, final or summary prospectus contained therein, or
any amendment or supplement, if such statement or alleged statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by such
Holder or underwriter specially stating that it is for use in the preparation of
such registration statement, preliminary, final or summary prospectus or
amendment or
10
11
supplement, or a document incorporated by reference into any of the foregoing.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any of the Holders or any
of their respective directors, officers and controlling persons and shall
survive the transfer of such securities by such Holder; provided, however, that
no such Holder shall be liable under this Section 6 for any amounts exceeding
the product of the purchase price per Registrable Security and the number of
Registrable Securities being sold pursuant to such registration statement or
prospectus by such Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 6, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of this
Section 6, except to the extent that the indemnifying party is actually
materially prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified party's
reasonable judgement a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnified party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defense thereof. No indemnifying party will consent to entry of any judgment or
enter into any settlement without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld) unless such settlement
requires no more than a monetary payment for which the indemnifying party agrees
to indemnify the indemnified party and includes a full, unconditional and
complete release of the indemnified party from all liability in respect to such
claim or litigation. The indemnified party shall be entitled to take control of
the defense of any claim as to which, in the reasonable judgment of the
indemnifying party's counsel, representation of both the indemnifying party and
the indemnified party would be inappropriate under the applicable standards of
professional conduct due to actual or potential differing interests between
them. An indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of more
than one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
11
12
7. Contribution
In order to provide for just and equitable contribution in circumstances
under which the indemnity contemplated by Section 6 is for any reason not
available or insufficient for any reason to hold harmless an indemnified party
in respect of any losses, claims, damages or liabilities referred to therein,
the parties required to indemnify by the terms thereof shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company, any Holder of
Registrable Securities and one or more of the underwriters. In determining the
amounts which the respective parties shall contribute, there shall be considered
the relative benefits received by each party from the offering of the
Registrable Securities by taking into account the portion of the proceeds of the
offering realized by each, and the relative fault of each party by taking into
account the parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to correct
and prevent any statement or omission and any other equitable consideration
appropriate under the circumstances. The Company and each Holder selling
securities agree with each other that no seller of Registrable Securities shall
be required to contribute any amount in excess of the amount such Holder would
have been required to pay to an indemnified party if the indemnity under Section
6 were available. The Company and each such Holder agree with each other and the
underwriters of the Registrable Securities, if requested by such underwriters,
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the underwriters were
treated as one entity for such purpose) or for the underwriter's portion of such
contribution to exceed the percentage that the underwriters discount bears to
the initial public offering price of the Registrable Securities. For purposes of
this Section 7, each Person, if any, who controls an underwriter within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as such underwriter, and each director and each officer of the
Company who signed the registration statement, and each person, if any, who
controls the Company or a seller of Registrable Securities within the meaning of
Section 15 of the Securities Act shall have the same rights to contribution as
the Company or a seller of Registrable Securities as the case may be.
8. Miscellaneous.
(a) The Company will not hereafter enter into any agreement with
respect to its securities which is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement. The Company has not
previously entered into any agreement with respect to any of its debt or equity
securities granting any registration rights to any person.
(b) The Company acknowledges and agrees that in the event of any
breach of this Agreement by it, the Holders would be irreparably harmed and
could not be made whole by monetary damages. The Company accordingly agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate and that the Holders, in addition to any other remedy to which
they may be entitled at law or in equity, shall be entitled to compel specified
performance of this Agreement in any action instituted in the United States
12
13
District Court for the Southern District of New York, or, in the event said
Court would not have jurisdiction for such action, in any court of the United
States or any state thereof having subject matter jurisdiction for such action.
The Company consents to personal jurisdiction in any such action brought in the
United States District Court for the District of Delaware or any such other
court and to service of process upon it or him in the manner set forth in
Section 8(d) hereof.
(c) This Agreement, together with the Stock Purchase Agreement dated
on or about the date hereof between the Company and the Funds (the "Stock
Purchase Agreement") and the Stockholders Agreement referred to herein in
Section 1 constitute the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein, and there are no
restrictions, promises, representations, warranties, covenants, or undertakings
with respect to the subject matter hereof, other than those expressly set forth
or referred to herein or therein. This Agreement, the Stock Purchase Agreement
and the Stockholders Agreement referred to herein supersede all prior agreements
and understandings between the parties hereto with respect to the subject matter
hereof.
(d) Any notice, request, instruction or other document to be given
hereunder by any party hereto to another party hereto shall be in writing, shall
be delivered personally or sent by registered mail, postage prepaid, return
receipt requested, to the address of the party set forth in Appendix I hereto
or, in the case of a Permitted Transferee, to the address set forth in the
written agreement executed pursuant to Section 8(g) hereof, or to such other
address as the party to whom notice is to be given may provide in a written
notice to the Company, a copy of which written notice shall be on file with the
Secretary. No notice shall be effective except upon actual delivery.
(e) The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under applicable principles of
conflicts of laws.
(f) The invalidity or unenforceability of any provisions of this
Agreement in any jurisdiction shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction.
(g) Notwithstanding anything to the contrary contained in this
Agreement, no shares of Registrable Securities or any securities of the Company
convertible into, or exercisable or exchangeable for, Registrable Securities,
may be sold, transferred or otherwise disposed of to any Permitted Transferee,
unless such Permitted Transferee, prior to such sale, transfer or other
disposition, agrees in writing to be bound by the terms of this Agreement to the
same extent and in the same manner as the transferor of such shares or
securities, a copy of which agreement shall be on file with the Secretary of the
Company.
(h) Nothing contained in this Agreement shall be deemed to be a
waiver of, or release from, any obligations any party hereto may have under, or
any restrictions on the
13
14
transfer of Registrable Securities or other securities of the Company imposed
by, any other agreement including, but not limited to, the Stock Purchase
Agreement and the Stockholders Agreement.
(i) Each of the Holders agrees that substantially the following
legend shall be placed on the certificates representing any shares of
Registrable Securities acquired by it:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS CONTAINED IN A REGISTRATION RIGHTS AGREEMENT DATED AS
OF AUGUST 12, 1996, A COPY OF WHICH IS ON FILE AT THE OFFICE OF THE
SECRETARY OF THE COMPANY."
(j) The provisions of this Agreement shall be binding upon and
accrue to the benefit of the parties hereto and their respective heirs,
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended to, or shall be construed to, give any person or entity, other than (i)
the parties hereto (ii) their respective successors and permitted assigns or
(iii) the persons and entities indemnified pursuant to Sections 6(a) and 6(b)
(and then only to the extent of such indemnification), any legal or equitable
right, remedy or claim under or in respect to this Agreement or any provision
contained herein. Notwithstanding the foregoing, neither this Agreement nor any
right, remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by the Company or any Holder without the prior written
consent of the Company and such Holder; provided, however, that a Holder may
assign his rights, remedies, obligations and liabilities hereunder concurrently
with a transfer of his shares of Registrable Securities to a Permitted
Transferee in accordance with Section 8(g) hereof without obtaining the prior
written consent of the Company or the Holders specified in this Section 8(j).
(k) A default by any party to the Agreement in such party's
compliance with any of the conditions or covenants hereof or performance of any
of the obligations of such party hereunder shall not constitute a default by any
other party.
(l) This Agreement may not be amended, modified or supplemented and
no waivers of or consents to departures from the provisions hereof may be given
unless consented to in writing by the Company and each of the Holders.
(m) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same Agreement.
(n) In any action or proceeding brought to enforce any provision of
this Agreement, or where any provision hereof is validly asserted as a defense,
the successful party shall be entitled to recover reasonable attorneys' fees in
addition to any other available remedy.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
14
15
ANKER COAL GROUP, INC.
By: /s/ John J. Faltis
Name: John J. Faltis
Title: President
JJF GROUP LIMITED LIABILITY COMPANY
By: /s/ John J. Faltis
Name: John J. Faltis
Title: Manager
PPK GROUP LIMITED LIABILITY COMPANY
By: /s/ P. Bruce Sparks
Name: P. Bruce Sparks
Title: Manger
ANKER HOLDING B.V.
By: /s/ Willem G. Rottier
Name: Willem G. Rottier
Title: Managing Director
AMERICAN GAS & OIL INVESTORS,
LIMITED PARTNERSHIP
By First Reserve Corporation, its general partner
By: /s/ Bruce Rothstein
Name: Bruce Rothstein
Title: Vice-President
15
16
AMGO II, LIMITED PARTNERSHIP
By First Reserve Corporation, its general partner
By: /s/ Bruce Rothstein
Name: Bruce Rothstein
Title: Vice-President
FIRST RESERVE FUND V, LIMITED PARTNERSHIP
By First Reserve Corporation, its general partner
By: /s/ Bruce Rothstein
Name: Bruce Rothstein
Title: Vice-President
FIRST RESERVE FUND V-2, LIMITED PARTNERSHIP
By First Reserve Corporation, its general partner
By: /s/ Bruce Rothstein
Name: Bruce Rothstein
Title: Vice-President
FIRST RESERVE FUND VI, LIMITED PARTNERSHIP
By First Reserve Corporation, its general partner
By: /s/ Bruce Rothstein
Name: Bruce Rothstein
Title: Vice-President
16
17
FIRST RESERVE FUND VII, LIMITED PARTNERSHIP
By First Reserve Corporation, its general partner
By: /s/ Bruce Rothstein
Name: Bruce Rothstein
Title: Vice-President
17