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EXHIBIT 10.14
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REGISTRATION RIGHTS AGREEMENT
Dated as of October 26, 1999
by and among
ANKER COAL GROUP, INC.
THE GUARANTORS LISTED ON SCHEDULE A
and
THE PURCHASERS AND EXCHANGING NOTEHOLDERS LISTED ON SCHEDULE B
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TABLE OF CONTENTS
Page
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SECTION 1. Definitions...................................................................2
SECTION 2. Securities Subject to this Agreement..........................................5
SECTION 3. Registered Exchange Offer.....................................................5
SECTION 4. Shelf Registration............................................................7
SECTION 5. Liquidated Damages............................................................9
SECTION 6. Registration Procedures......................................................10
SECTION 7. Registration Expenses........................................................18
SECTION 8. Indemnification..............................................................18
SECTION 9. Rule 144A....................................................................21
SECTION 10. Participation in Underwritten Registrations..................................21
SECTION 11. Selection of Underwriters....................................................21
SECTION 12. Miscellaneous................................................................21
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This Registration Rights Agreement (this "Agreement") is made and
entered into as of October 26, 1999 by and among Anker Coal Group, Inc., a
Delaware corporation (the "Company"), each of the entities listed on Schedule A
(each a "Guarantor" and collectively, the "Guarantors") and the persons or
entities listed on Schedule B, each of which has agreed to (i) purchase for
cash, the Company's 14.25% Series A Second Priority Senior Secured Notes due
2007 (PIK through April 1, 2000) (the "New Money Notes") and Warrants, or (ii)
receive in exchange for the Company's 9 3/4% Series B Senior Notes due 2007, the
Company's 14.25% Series A Second Priority Senior Secured Notes due 2007 (PIK
through April 1, 2000) (the "Exchange Notes") and Warrants; or (iii) receive in
exchange for cancellation of shares of Company Common Stock owned by and certain
contractual rights of JJF Group Limited Liability Company, the Company's 14.25%
Series A Second Priority Senior Secured Notes due 2007 (PIK through April 1,
2000) (the "JJF Secured Notes"). The Company also has the option to require
certain Purchasers to purchase additional 14.25% Series B Second Priority Senior
Secured Notes due 2007 (the "Optional Secured Notes") in the form of Registered
Notes (as defined herein) under certain circumstances on October 1, 2000. The
New Money Notes, the Exchange Notes, the JJF Secured Notes and the Optional
Secured Notes, together with Secondary Notes issued with respect thereto, are
hereinafter together referred to as the "Privately Placed Notes".
This Agreement is made pursuant to the Exchange and Purchase Agreement,
dated October 26, 1999 (the "Purchase Agreement"), by and among the Company, the
Guarantors, the Purchasers and the Exchanging Noteholders (each, a "Purchaser"
and collectively, the "Purchasers") named therein. Capitalized terms used herein
and not otherwise defined herein, have the meanings set forth in the Purchase
Agreement. To induce each Purchaser to purchase or accept the Privately Placed
Notes, the Company has agreed to provide the registration rights set forth in
this Agreement.
The Exchange Notes are proposed to be issued in a Private Exchange made
pursuant to the Purchase Agreement and the Company's Private Exchange and
Private Placement Memorandum and Consent Solicitation (the "Private Offering
Memorandum") dated October 26, 1999. The New Money Notes and the JJF Secured
Notes are proposed to be issued in a private sale pursuant to the Purchase
Agreement and the Private Offering Memorandum. The Optional Secured Notes, if
any, are proposed to be issued in a private sale pursuant to the Purchase
Agreement and the Private Offering Memorandum on October 1, 2000. The 14.25%
Series B Second Priority Senior Secured Notes due 2007 (other than the Optional
Secured Notes) are proposed to be issued in a Registered Exchange Offer made as
contemplated herein and pursuant to a separate Public Exchange Offer to holders
of Old Notes. The Secondary Notes are proposed to be issued in payment of
accrued interest through April 1, 2000 on outstanding Privately Placed Notes and
Registered Notes. The execution and delivery of this Agreement is a condition to
the obligations of the Purchasers and the Exchanging Noteholders set forth in
Section 6 of the Purchase Agreement.
The parties hereby agree as follows:
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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.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Registered Notes that are
acquired by a Broker-Dealer in the Registered Exchange Offer in exchange for
Privately Placed Notes that such Broker-Dealer acquired for its own account as a
result of market making activities or other trading activities (other than
Privately Placed Notes acquired directly from the Company or any of its
affiliates).
Closing Date: The date of this Agreement.
Commission: The United States Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
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 Registered Notes to be issued in the Registered Exchange Offer,
(ii) the maintenance of such Registration Statement continuously effective and
the keeping of the Registered Exchange Offer open for a period not less than the
minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery
by the Company to the Registrar under the Note Indenture of Registered Notes in
the same aggregate principal amount as the aggregate principal amount of
Privately Placed Notes that were tendered by Holders thereof pursuant to the
Registered Exchange Offer.
Damages Payment Date: With respect to the Privately Placed Notes, each
Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer Registration Statement: The Registration Statement on
Form S-4 (or, if applicable, another appropriate form) relating to the
Registered Exchange Offer and all amendments and supplements to such
Registration Statement, in each case, including the related prospectus and all
exhibits thereto and all material incorporated by reference therein.
Exchanging Noteholders: Those entities listed in Schedule III to the
Purchase Agreement.
Exempt Resales: The transactions in which any Purchaser may propose to
sell Privately Placed Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act, and to certain non-U.S. persons
outside the United States in reliance upon Regulation S under the Act.
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Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Interest Payment Date: As defined in each Note Indenture and the
Secured Notes.
Letter of Transmittal: Letter of Transmittal in the form sent by the
Company to all Exchanging Noteholders for use by such Exchanging Noteholders in
connection with the Private Exchange.
Majority Holders: The Holders (including Restricted Broker-Dealers) of a
majority of the aggregate principal amount of outstanding Transfer Restricted
Securities; provided that whenever the consent or approval of Holders of a
specified percentage of Transfer Restricted Securities is required hereunder,
Transfer Restricted Securities held by the Company or the Guarantors or any of
their affiliates (as such term is defined under Rule 405 of the Act) (other than
Recovery Fund or subsequent holders of Transfer Restricted Securities if such
subsequent holders are deemed to be such affiliates solely by reason of their
holding of such Transfer Restricted Securities) shall be disregarded in
determining whether such consent or approval was given by the Holders of such
required percentage or amount.
NASD: National Association of Securities Dealers, Inc.
Note Indenture: The Note Indenture, dated as of October 1, 1999, among
the Company, The Bank of New York, as trustee (the "Trustee"), and the
Guarantors, pursuant to which the Secured Notes are to be issued, as such Note
Indenture is amended or supplemented from time to time in accordance with the
terms thereof.
Old Notes: The Company's 9 3/4% Series B Senior Notes due 2007 issued
pursuant to an Indenture dated as of September 25, 1997 among the Company, as
issuer, the Guarantors signatory thereto and Marine Midland Bank (now known as
HSBC Bank USA), as trustee, as amended by a Supplemental Indenture dated as of
October 26, 1999.
Person: An individual, partnership, limited liability company,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
Private Exchange: The issuance and sale upon the terms and subject to
the conditions set forth in the Private Offering Memorandum and in the
accompanying Letter of Transmittal to exchange for each $1,000 principal amount
of Old Notes held by each Exchanging Noteholder, $800 principal amount of Series
A Secured Notes and Warrants of the Company.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Public Exchange Offer: The offer to be made by the Company pursuant to
Section 3(a)(9) of the Securities Act or a Registration Statement to exchange
Public Notes with a principal amount of $743 for each $1000 principal amount of
any Old Notes which were not exchanged in the Private Exchange.
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Public Notes: The Company's 14.25% Series B Second Priority Senior
Secured Notes due 2007 to be issued pursuant to the Note Indenture in the Public
Exchange Offer.
Purchasers: As defined in the preamble hereto.
Record Holder: With respect to any Damages Payment Date relating to
Privately Placed Notes, each Person who is a Holder of Privately Placed Notes on
the record date with respect to the Interest Payment Date on which such Damages
Payment Date shall occur.
Registered Exchange Offer: The registration by the Company under the Act
of the Registered Notes pursuant to a Registration Statement pursuant to which
the Company offers the Holders of all outstanding Transfer Restricted Securities
the opportunity to exchange all such outstanding Transfer Restricted Securities
held by such Holders for Registered Notes in an aggregate principal amount equal
to the aggregate principal amount of the Transfer Restricted Securities tendered
in the Registered Exchange Offer by such Holders.
Registration Default: As defined in Section 5 hereof.
Registered Notes: The Company's 14.25% Series B Second Priority Senior
Secured Notes due 2007 to be issued pursuant to the Note Indenture in the
Registered Exchange Offer.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Registered Notes pursuant to a Registered
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, which is filed pursuant
to the provisions of this Agreement, in each case, including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Restricted Broker-Dealers: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Secured Notes: The Privately Placed Notes, the Registered Notes and the
Public Notes.
Secondary Notes: The Company's 14.25% Second Priority Senior Secured
Notes due 2007 to be issued in payment of accrued interest through April 1, 2000
on outstanding Privately Placed Notes and Registered Notes and being of the same
series as the Outstanding Notes with respect to which they are issued.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Note Indenture.
Transfer Restricted Securities: Each Privately Placed Note, until the
earliest to occur of (a) the date on which such Privately Placed Note is
exchanged by a person other than a Broker-Dealer for a Registered Note in the
Registered Exchange Offer, (b) following the exchange by a
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Broker-Dealer in the Registered Exchange Offer of a Privately Placed Note for a
Registered Note, the date on which such Privately Placed 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, (c) the date on which such Privately Placed Note has been effectively
registered under the Act and disposed of in accordance with a Shelf Registration
Statement and (d) the date on which such Privately Placed Note is distributed to
the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
Warrant Agent: The Bank of New York, until a successor replaces it in
accordance with the applicable provisions of the Warrant Agreement and
thereafter means the successor serving thereunder.
Warrant Agreement: The Warrant Agreement dated as of October 26, 1999
between the Company and the Warrant Agent, as amended, waived or otherwise
modified from time to time in accordance with the provisions thereof.
Warrants: Warrants to purchase shares of the Company's Common Stock
issued pursuant to the Private Offering Memorandum in accordance with the
Warrant Agreement.
SECTION 2. Securities Subject to this Agreement.
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed
to be a holder of Transfer Restricted Securities (each, a "Holder") whenever
such Person owns Transfer Restricted Securities.
SECTION 3. Registered Exchange Offer.
(a) Unless the Registered Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company and the Guarantors shall (i)
cause to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than 20 days after the Closing Date, an Exchange
Offer Registration Statement under the Act relating to the Registered Notes and
the Registered Exchange Offer, (ii) use their reasonable best efforts to cause
such Registration Statement to become effective at the earliest possible time,
but in no event later than (A) 45 days after the Closing Date if the
Registration Statement is not selected for review by the Commission, or (B) 90
days after the Closing Date if the Registration Statement is selected for review
by the Commission, (iii) in connection with the foregoing, file (A) all
pre-effective amendments to such Registration Statement as may be necessary in
order to cause such Registration Statement to become effective, (B) if
applicable, a post-effective amendment to such Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings in connection
with the registration and qualification of the Registered Notes to be made under
the Blue Sky laws of such jurisdictions as are necessary to permit Consummation
of the
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Registered Exchange Offer, and (iv) upon the effectiveness of such Registration
Statement, commence the Registered Exchange Offer. The Exchange Offer
Registration Statement shall be on the appropriate form permitting registration
of the Registered Notes to be offered in exchange for the Transfer Restricted
Securities and to permit sales of Broker-Dealer Transfer Restricted Securities
held by Restricted Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their reasonable best
efforts to cause the Exchange Offer Registration Statement to be effective
continuously and shall keep the Registered Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Registered Exchange Offer; provided, however,
that in no event shall such period be less than 20 business days. The Company
shall cause the Registered Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Registered Notes shall
be included in the Exchange Offer Registration Statement. The Company shall use
its reasonable best efforts to cause the Registered Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Privately Placed 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 Company), may exchange
such Privately Placed Notes pursuant to the Registered Exchange Offer; however,
such Broker-Dealer 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 sales of the Broker-Dealer Transfer Restricted
Securities received by such Broker-Dealer in the Registered Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers that the Commission may require in order
to permit such resales pursuant thereto, but such "Plan of Distribution" shall
not name any such Broker-Dealer or disclose the amount of Secured 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 Company 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 sales of Transfer
Restricted Securities acquired by Restricted Broker-Dealers, 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
period equal to the lesser of (i) 180 days from the date on which the Exchange
Offer Registration Statement is declared effective or (ii) the period ending on
the date when all Restricted Broker-Dealers have sold all Broker-Dealer Transfer
Restricted Securities held by them.
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The Company shall provide sufficient copies of the latest version of
such Prospectus to Restricted Broker-Dealers promptly upon request at any time
during such period in order to facilitate such sales.
The Company shall not be obligated to complete more than one Registered
Exchange Offer that conforms to the requirements of this Agreement.
SECTION 4. Shelf Registration.
(a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement or to consummate the Registered Exchange
Offer because the Registered Exchange Offer is not permitted by applicable law
or Commission policy (after the procedures set forth in Section 6(a) below have
been complied with) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 20 days of the Consummation of the Registered
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Registered Exchange Offer, or (B)
that such Holder may not resell the Registered Notes acquired by it in the
Registered Exchange Offer to the public without delivering a prospectus and that
the Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder, or (C) that such
Holder is a Broker-Dealer and holds Privately Placed Notes acquired directly
from the Company or one of its affiliates, then the Company and the Guarantors
shall:
(x) cause to be filed 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"), on or prior to the earlier to occur of (1) the 45th day
after the date on which the Company determines that it is not required
to file the Exchange Offer Registration Statement and (2) the 45th day
after the date on which the Company receives notice from a Holder of
Transfer Restricted Securities as contemplated by clause (ii) above,
which 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) hereof; and
(y) use their reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on or
before (i) if the Shelf Registration Statement is not selected for
review by the Commission, the 45th day after the obligation to file the
Shelf Registration Statement arises, or (ii) if the Shelf Registration
Statement is selected for review by the Commission, the 90th day after
the obligation to file the Shelf Registration Statement arises.
The Company 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) hereof to the
extent necessary to ensure that it is available for resales of Secured 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 period of two years following the Closing
Date (as extended pursuant to Section 6(c)(i)) or such shorter period (i) as may
be set forth in any amendment to Rule 144(k) of the Act, or any
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amendment thereto, when such amendment becomes effective, or (ii) that will
terminate when all the Transfer Restricted Securities covered by the
Registration Statement have been sold pursuant to such Registration Statement;
provided, that the Company and the Guarantors shall be deemed not to have used
their reasonable best efforts to keep the Registration Statement effective
during the requisite period if they voluntarily take any action that would
result in holders of the Transfer Restricted Securities covered thereby not
being able to offer and sell such Transfer Restricted Securities during that
period, unless such action is required by applicable law, and provided, further,
that the foregoing shall not apply if the Company determines, in its reasonable
judgment, upon advice of counsel, as authorized by a resolution of its Board of
Directors, that the continued effectiveness and usability of such Registration
Statement would (i) require the disclosure of material information, which the
Company has a bona fide business reason for preserving as confidential, or (ii)
interfere with any financing, acquisition, corporate reorganization or other
material transaction involving the Company or any of its Affiliates (as defined
in the rules and regulations adopted under the Exchange Act); provided, however,
that the failure to keep the Registration Statement effective and usable for
offers and sales of Transfer Restricted Securities for such reasons shall last
no longer than 30 days in any 12-month period (whereafter liquidated damages
(pursuant to Section 5 hereof) shall accrue and be payable), so long as the
Company promptly thereafter complies with the requirements of Section 6(c)(xvi)
hereof, if applicable. Any such period during which the Company and the
Guarantors fail to keep the Registration Statement effective and usable for
offers and sales of Transfer Restricted Securities is referred to as a
"Suspension Period." A Suspension Period shall commence on and include the date
that the Company gives notice that the Registration Statement is no longer
effective or the Prospectus included therein is no longer usable for offers and
sales of Transfer Restricted Securities and shall end on the earlier to occur of
(i) date when each seller of Transfer Restricted Securities covered by such
Registration Statement either receives the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xvi) hereof or is advised in writing by
the Company that use of the Prospectus may be resumed and (ii) the expiration of
the 30 days in any 12-month period during which one or more Suspension Periods
has been in effect.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
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 Company in writing, within 20 business days after receipt of a request
therefor, such information specified in item 507 of Regulation S-K under the Act
for use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder of Transfer Restricted
Securities shall be entitled to liquidated damages pursuant to Section 5 hereof
unless and until such Holder shall have used its reasonable best efforts to
provide all such reasonably requested information. Each Holder as to which any
Shelf Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
(c) In the event the Company determines to sell to any Purchaser any
Optional Secured Notes pursuant to Section 2(b) of the Purchase Agreement, the
Company shall cause to be filed and become effective on the Optional Secured
Notes Closing Date (as defined in the Purchase Agreement) a Shelf Registration
Statement pursuant to Rule 415 under the Act which Shelf Registration Statement
shall provide for resales of all Optional Secured Notes; provided,
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however, that if, in the written opinion of nationally recognized independent
counsel to the Company experienced in such matters, Commission policy does not
allow filing of such Shelf Registration Statement before the Optional Secured
Notes Closing Date in the form of a shelf registration pursuant to Rule
415(a)(1)(i), then the Company will cause such Shelf Registration Statement to
be filed no later than one business day following the Closing Date and shall
become effective (A) if such Shelf Registration Statement is not selected for
review by the Commission, within 45 days after the Optional Secured Notes
Closing Date, or (B) if such Shelf Registration Statement is selected for review
by the Commission, within 90 days after the Optional Secured Notes Closing Date.
In such event, the Liquidated Damages provisions of Section 5 shall apply to the
Optional Secured Notes. The provisions of this Agreement relating to Shelf
Registration shall apply mutatis mutandis to such Shelf Registration Statement.
SECTION 5. Liquidated Damages.
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"), (iii) the
Registered Exchange Offer has not been Consummated within 30 business days after
the Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself immediately declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Company and the
Guarantors hereby jointly and severally agree to pay liquidated damages to each
Holder of Transfer Restricted Securities (other than Optional Secured Notes)
with respect to the first 90-day period immediately following the occurrence of
such Registration Default, in an amount equal to $.03 per week per $1,000
principal amount of Transfer Restricted Securities held by such Holder for each
week or portion thereof that the Registration Default continues. Until all
Registration Defaults have been cured, the amount of the liquidated damages
shall increase by an additional $.09 per week per $1,000 in principal amount of
Transfer Restricted Securities with respect to the second 90-day period
immediately following the occurrence of such Registration Default, and by an
additional $.03 per week per $1,000 in principal amount of Transfer Restricted
Securities with respect to the third 90-day period immediately following the
occurrence of such Registration Default. Thereafter, the amount of the
liquidated damages shall increase by an additional $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of $.50 per week per $1,000 principal
amount of Transfer Restricted Securities. All accrued liquidated damages shall
be paid to Record Holders by the Company by wire transfer of immediately
available funds or by federal funds check on each Damages Payment Date, as
provided in the Note Indenture. Following the cure of all Registration Defaults
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 Company 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
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be a Transfer Restricted Security shall survive until such time as all such
obligations with respect to such Security shall have been satisfied in full. The
provisions of this Section 5 shall apply mutatis mutandis to the Optional
Secured Notes.
SECTION 6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the
Registered Exchange Offer, the Company and the Guarantors shall comply with all
of the applicable provisions of Section 6(c) below, shall use their reasonable
best efforts to effect such exchange to permit the sale of Transfer Restricted
Securities, and shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company
there is a question as to whether the Registered Exchange Offer is
permitted by applicable law, the Company and the Guarantors hereby agree
to seek a no-action letter or other favorable decision from the
Commission allowing the Company and the Guarantors to Consummate a
Registered Exchange Offer for such Privately Placed Notes. The Company
and each of the Guarantors each hereby agrees to pursue the issuance of
such a decision to the Commission staff level but shall not be required
to take commercially unreasonable action to effect a change of
Commission policy. The Company and each of the Guarantors each hereby
agrees, however, to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to the Company or holders of Secured Notes setting forth the
legal bases, if any, upon which such counsel has concluded that such a
Registered Exchange Offer should be permitted and (C) diligently pursue
a resolution (which need not be favorable) by the Commission staff of
such submission.
(ii) As a condition to its participation in the Registered
Exchange Offer pursuant to the terms of this Agreement, each Holder of
Transfer Restricted Securities shall furnish, upon the request of the
Company, prior to the Consummation thereof, a written representation to
the Company (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 (as defined in Rule 405 under the Act)
of the Company, (B) it is not engaged in, and does not intend to engage
in, and has no arrangement or understanding with any person to
participate in, a distribution of the Registered Notes to be issued in
the Registered Exchange Offer, (C) it is acquiring the Registered Notes
in its ordinary course of business, (D) if such Holder is a
Broker-Dealer, that it will receive Registered Notes for its own account
in exchange for Privately Placed Notes that were acquired as a result of
market-making activities or other trading activities and that it will
deliver a prospectus in connection with any resale of such Registered
Notes and (E) to the knowledge of such Holder, it is not acting on
behalf of any person who could not make the representations in clauses
(A) - (D). In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Company's preparations of
the Registered Exchange Offer. Each Holder hereby acknowledges and
agrees that any Broker-Dealer and any such Holder using the Registered
Exchange Offer to participate in a distribution of the securities to be
acquired in the Registered Exchange Offer (1) could not under Commission
policy as in effect on the date of this Agreement rely on the
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position of the Commission enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including any no-action letter obtained pursuant to clause (i) above),
and (2) must comply with the registration and prospectus delivery
requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale transaction should be
covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable,
of Regulation S-K if the resales are of Exchange Notes obtained by such
Holder in exchange for Privately Placed Notes acquired by such Holder
directly from the Company.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, if requested by the Commission, the Company and
the Guarantors shall provide a supplemental letter to the Commission (A)
stating that the Company and the Guarantors are registering the
Registered Exchange Offer in reliance on the position of the Commission
enunciated in Exxon Capital Holdings Corporation (available May 13,
1988), Morgan Stanley and Co. Incorporated (available June 5, 1991) and,
if applicable, any no-action letter obtained pursuant to clause (i)
above and (B) including a representation that neither the Company nor
any of the Guarantors has entered into any arrangement or understanding
with any Person to distribute the Registered Notes to be received in the
Registered Exchange Offer and that, to the best of the Company's
information and belief, each Holder participating in the Registered
Exchange Offer is acquiring the Registered Notes in its ordinary course
of business and has no arrangement or understanding with any Person to
participate in the distribution of the Registered Notes received in the
Registered Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their reasonable best efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities, and pursuant thereto the Company will as expeditiously as possible
prepare and file with the Commission a 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 thereof.
(c) General Provisions. In connection with any Registration 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 required to permit sales of Broker-Dealer
Transfer Restricted Securities), the Company shall:
(i) use its reasonable best efforts to keep such Registration
Statement continuously effective 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
14
period required by this Agreement, the Company shall file promptly an
appropriate amendment or supplement to such Registration Statement or
Prospectus, in the case of clause (A), correcting any such misstatement
or omission, and, in the case of either clause (A) or (B), use its
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 the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, 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,
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 with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iii) in the case of (x) a Shelf Registration Statement,
pursuant to Section 4 hereof or (y) an Exchange Offer Registration
Statement pursuant to Section 3 hereof to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers, advise the
underwriter(s), if any, and selling Holders or Restricted
Broker-Dealers, as the case may be, 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 additional
information relating thereto, (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 thereto, or any document incorporated by
reference therein untrue, or that requires the making of any additions
to or changes in the Registration Statement or the Prospectus in order
to make the statements therein 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 Company and the Guarantors
shall use their reasonable best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
15
(iv) in the case of (x) a Shelf Registration Statement,
pursuant to Section 4 hereof or (y) an Exchange Offer Registration
Statement pursuant to Section 3 hereof to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers, furnish to
each of the selling Holders or Restricted Broker-Dealers, as the case
may be, and each of the underwriter(s), if any, before filing with the
Commission, copies of any Registration Statement or any Prospectus
included therein 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 review of such
Holders and underwriter(s), if any, for a period of at least five
business days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which any selling Holder or Restricted
Broker-Dealer, as the case may be, or the underwriter(s), if any, shall
reasonably object within five business days after the receipt thereof. A
selling Holder or underwriter, if any, shall be deemed to have
reasonably objected to such filing if such objection is based upon the
fact that such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission;
(v) in the case of (x) a Shelf Registration Statement,
pursuant to Section 4 hereof or (y) an Exchange Offer Registration
Statement pursuant to Section 3 hereof to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers, promptly
prior to the filing of any document that is to be incorporated by
reference into a Registration Statement or Prospectus, provide copies of
such document at their request to the selling Holders or Restricted
Broker-Dealers, as the case may be, and to the underwriter(s), if any,
make the Company's representatives (and representatives of the
Guarantors) available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as the Majority Holders or
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by
representatives appointed by the Majority Holders, any underwriter
participating in any disposition pursuant to such Registration
Statement, and any attorney or accountant retained by such Majority
Holders or any of the underwriter(s), all financial and other records,
pertinent corporate documents and properties of the Company and the
Guarantors and cause the Company's 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 any information that
is designated in writing by the Company, in good faith, as confidential
at the time of delivery of such information shall be kept confidential
by the Holders or any such underwriter, attorney, accountant or agent,
unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public
generally through a third party without an accompanying obligation of
confidentiality;
16
(vii) in the case of (x) a Shelf Registration Statement,
pursuant to Section 4 hereof or (y) an Exchange Offer Registration
Statement pursuant to Section 3 hereof to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers, if
requested by a representative of the selling Majority Holders or a
Restricted Broker-Dealer, as the case may be, 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 Majority 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 therefor 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
Company is notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(viii) use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be rated
with the appropriate rating agencies, if so requested by the Majority
Holders or the underwriter(s), if any, unless the Transfer Restricted
Securities are already so rated;
(ix) furnish (x) each Restricted Broker-Dealer selling
pursuant to an Exchange Offer Registration Statement and each other
selling Holder thereunder that so requests, and (y) each Holder selling
pursuant to a Shelf Registration Statement, and each of the
underwriter(s), if any, without charge, at least one conformed copy of
the Registration Statement, as first filed with the Commission, and of
each amendment thereto, including, if requested, all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(x) deliver to (x) each Restricted Broker-Dealer selling
pursuant to an Exchange Offer Registration Statement and each other
selling Holder thereunder that is required to deliver a prospectus
following the Registered Exchange Offer, and (y) each Holder selling
pursuant to a Shelf Registration Statement, and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Company and the
Guarantors hereby consent to the use of the Prospectus and any amendment
or supplement thereto by each of the Restricted Broker-Dealers or
selling Holders, as the case may be, and each of the underwriter(s), if
any, in connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;
(xi) in the case of (x) a Shelf Registration Statement
pursuant to Section 4 hereof or (y) an Exchange Offer Registration
Statement pursuant to Section 3 hereof to permit sales of Broker-Dealer
Restricted Securities by Restricted Broker-Dealers, enter into, and
cause the Guarantors to enter into, such agreements (including an
underwriting agreement), and make, and cause the Guarantors to make,
such representations and warranties, and take all such other actions in
connection therewith in order to expedite or
17
facilitate the disposition of the Transfer Restricted Securities
pursuant to such Registration Statement, all to such extent as may be
requested by any Purchaser or by the selling Majority Holders or any
Restricted Broker-Dealer, as the case may be, or underwriter in
connection with any sale or resale pursuant to any Registration
Statement contemplated by this Agreement; and the Company and the
Guarantors shall:
(A) obtain for each Purchaser, each selling Holder or
any Restricted Broker-Dealer, as the case may be, and each
underwriter, if any, upon the effectiveness of the Shelf
Registration Statement and to each Restricted Broker-Dealer upon
Consummation of the Registered Exchange Offer:
(1) a certificate, dated the date of
Consummation of the Registered Exchange Offer or the
date of effectiveness of the Shelf Registration
Statement, as the case may be, signed by the President,
any Vice President or a principal financial or
accounting officer of each of the Company and the
Guarantors, confirming, as of the date thereof, the
matters set forth in paragraphs (a), (b), (c) and (d) of
Section 6 of the Purchase Agreement and such other
matters as such parties may reasonably request;
(2) an opinion or opinions, dated the date of
Consummation of the Registered Exchange Offer on the
date of effectiveness of the Shelf Registration
Statement, as the case may be, of counsel for the
Company and the Guarantors, covering the matters set
forth in paragraphs (f), (g) and (h) of Section 6 of the
Purchase Agreement and such other matters as such
parties may reasonably request; and
(3) customary comfort letters, dated as of the
date of Consummation of the Registered Exchange Offer or
the date of effectiveness of the Shelf Registration
Statement, as the case may be, from the Company's
independent accountants, and addressed to the
underwriters, if any, such letters in the customary form
and covering matters of the type customarily covered in
comfort letters by underwriters in connection with
primary underwritten offerings;
(B) set forth in the underwriting agreement, if any,
indemnification provisions and procedures no less favorable from
those set forth in Section 8 hereof with respect to all parties
to be indemnified pursuant to said Section (or other provisions
and procedures acceptable to the Majority Holders or the
underwriters, if any); and
(C) deliver such other documents and certificates as
may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company pursuant to this clause
(xi), if any.
18
If at any time the representations and warranties of the Company and the
Guarantors contemplated in clause (A)(1) above cease to be true and correct, the
Company or the Guarantors shall so advise the Purchasers and the underwriter(s),
if any, and each selling Holder promptly and, if requested by such Persons,
shall confirm such advice in writing;
(xii) 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 of the
Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as the selling Holders or underwriter(s) may
reasonably request 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 Shelf Registration
Statement; provided, however, that neither the Company nor the
Guarantors shall be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits 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;
(xiii) in the case of (x) a Shelf Registration Statement,
pursuant to Section 4 hereof or (y) an Exchange Offer Registration
Statement pursuant to Section 3 hereof to permit sales of Broker-Dealer
Restricted Securities by Restricted Broker-Dealers, 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 its 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 thereof
or the underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities;
(xv) 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 Note Indenture with printed
certificates for the Transfer Restricted Securities which are in a form
eligible for deposit with the Depositary Trust Company;
(xvi) 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, and use its reasonable best efforts to cause
such Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
19
(xvii) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders, as soon as practicable, a
consolidated earnings statement 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 or best efforts Underwritten Offering
or (B) if not sold to underwriters in such an offering, beginning with
the first month of the Company's first fiscal quarter commencing after
the effective date of the Registration Statement;
(xviii) cause the Note 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, and
cause the Guarantors to cooperate, with the Trustee and the Holders of
Secured Notes to effect such changes to the Note Indenture as may be
required for the Note Indenture to be so qualified in accordance with
the terms of the TIA; and execute, and cause the Guarantors to execute,
and use its reasonable best efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable
the Note Indenture to be so qualified in a timely manner; and
(xix) use their reasonable best efforts to cause all Transfer
Restricted Securities which are Privately Placed Notes, as the case may
be, covered by the Registration Statement to be listed on each
securities exchange on which similar securities issued by the Company
are then listed if requested by the Holders of a majority in aggregate
principal amount of the Privately Placed Notes, as the case may be, or
the managing underwriter(s), if any.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, 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) hereof, or
until it is advised in writing (the "Advice") by the Company 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 Company, each 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 Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
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) hereof 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)(xvi) hereof or
shall have received the Advice.
20
SECTION 7. Registration Expenses.
(a) All expenses incident to the Company's or the Guarantors'
performance of or compliance with this Agreement will be borne by the Company or
the Guarantors, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made by any Purchaser or Holder 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 Registered Notes to be issued in the Registered
Exchange Offer and printing of Prospectuses), messenger and delivery services
and telephone; (iv) in the case of a Shelf Registration Statement, all fees and
disbursements of counsel for the Company, the Guarantors and, subject to Section
7(b) below, the Holders of Transfer Restricted Securities; (v) all application
and filing fees in connection with any listing of Secured Notes on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; (vi) all fees and disbursements of independent certified public
accountants of the Company and the Guarantors (including the expenses of any
special audit and comfort letters required by or incident to such performance)
and (vii) the reasonable fees of the Trustee and the exchange agent under the
Registered Exchange Offer and the reasonable fees and expenses of their counsel.
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
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 the Company.
(b) In connection with any Shelf Registration Statement, the Company
will reimburse the Purchasers and the Holders of Transfer Restricted Securities
for the reasonable fees and disbursements of not more than one counsel, who
shall be Coudert Brothers or such other counsel as may be chosen by the Holders
of a majority in principal amount of the Transfer Restricted Securities for
whose benefit such Shelf Registration Statement is being prepared.
SECTION 8. Indemnification.
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder and (ii) each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) any Holder (any of the persons referred to in this clause (ii)
being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Holder"), to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without limitation and
as incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing or defending any claim or action, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to any Indemnified Holder) directly or
indirectly caused by, related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact
contained in
21
any Registration Statement or Prospectus (or any amendment or supplement
thereto), or 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, except insofar as such losses, claims, damages, liabilities or
expenses are caused by an untrue statement or omission or alleged untrue
statement or omission that is made in reliance upon and in conformity with
information relating to any of the Holders furnished in writing to the Company
by any of the Holders expressly for use therein; provided, that with respect to
any such untrue statement in or omission from the preliminary prospectus, the
indemnity agreement contained in this Section 8 shall not inure to the benefit
of any such Holder to the extent that the sale to the person asserting any such
loss, claim, damage, liability or action was an initial resale by such Holder
and any such loss, claim, damage, liability or action of or with respect to such
Holder results from the fact that (A) a copy of the Prospectus was not sent or
given to such person at or prior to the written confirmation of the sale of such
Transfer Restricted Securities to such person, (B) the untrue statement in or
omission from the preliminary prospectus was corrected in the Prospectus and
such statement or omission formed the basis for the claim giving rise to such
loss, and (C) sufficient quantities of the Prospectus were delivered to the
Holder on a timely basis.
In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
of the Indemnified Holders with respect to which indemnity may be sought against
the Company or the Guarantors, such Indemnified Holder (or the Indemnified
Holder controlled by such controlling person) shall promptly notify the Company
and the Guarantors in writing; provided, that the failure to give such notice
shall not relieve the Company or the Guarantors of their obligations pursuant to
this Agreement, unless such failure materially prejudices the Company or the
Guarantors. Such Indemnified Holder shall have the right to employ its own
counsel in any such action and the fees and expenses of such counsel shall be
paid, as incurred, by the Company and the Guarantors (regardless of whether it
is ultimately determined that an Indemnified Holder is not entitled to
indemnification hereunder). The Company and the Guarantors shall not, in
connection with any one such action or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for such Indemnified Holders, which firm shall be
designated by the Holders. The Company shall be liable for any settlement of any
such action or proceeding effected with the Company's prior written consent,
which consent shall not be withheld unreasonably, and the Company agrees to
indemnify and hold harmless any Indemnified Holder from and against any loss,
claim, damage, liability or expense by reason of any settlement of any action
effected with the written consent of the Company. The Company shall not, without
the prior written consent of each Indemnified Holder, settle or compromise or
consent to the entry of judgment in or otherwise seek to terminate any pending
or threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Holder is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Holder from all liability arising out of such action, claim, litigation or
proceeding.
(b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company and the Guarantors,
and their respective directors, officers, and any person controlling (within the
meaning of Section 15 of the Act or Section 20
22
of the Exchange Act) the Company, and the respective officers, directors,
partners, employees, representatives and agents of each such person, to the same
extent as the foregoing indemnity from the Company and the Guarantors to each of
the Indemnified Holders, but only with respect to claims and actions based on
information relating to such Holder furnished in writing by such Holder
expressly for use in any Registration Statement. In case any action or
proceeding shall be brought against the Company or its directors or officers or
any such controlling person in respect of which indemnity may be sought against
a Holder of Transfer Restricted Securities, such Holder shall have the rights
and duties given the Company and the Company or its directors or officers or
such controlling person shall have the rights and duties given to each Holder by
the preceding paragraph. In no event shall the liability of any selling Holder
hereunder be in excess of (i) the amount of the proceeds received by such Holder
upon the sale of the Transfer Restricted Securities giving rise to such
indemnification obligation and (ii) the amount of any damages which such Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof
(other than by reason of exceptions provided in those Sections) in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Holders on the other hand from their sale of
Transfer Restricted Securities or if such allocation is not permitted by
applicable law, the relative fault of the Company on the one hand and of the
Indemnified Holder on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Guarantors on the one hand and of the Indemnified Holder on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Guarantors or by the Indemnified Holder and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in the second paragraph
of Section 8(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company, the Guarantors and each Holder of Transfer Restricted
Securities agree that it would not be just and equitable if contribution
pursuant to this Section 8(c) were determined by pro rata allocation (even if
the Holders were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 8, none of the Holders (and its related Indemnified
Holders) shall be required to contribute, in the aggregate, any amount in excess
of (i) the amount of the proceeds received by such Holder upon the sale of the
Transfer Restricted Securities giving rise to such contribution obligation and
(ii) the amount of any damages which such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
23
omission. 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. The Holders'
obligations to contribute pursuant to this Section 8(c) are several in
proportion to the respective principal amount of Series A Secured Notes held by
each of the Holders hereunder and not joint.
SECTION 9. Rule 144A.
The Company hereby agrees with each Holder, 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
thereof and any prospective purchaser of such Transfer Restricted Securities
from such Holder or beneficial 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 hereunder
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 hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, 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 Company.
SECTION 12. Miscellaneous.
(a) Remedies. The Company and the Guarantors agree that monetary
damages (including the liquidated damages contemplated hereby) 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. The Company will not, and will cause
the Guarantors not to, 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 hereof. Except for the Registration Rights Agreement dated August 12,
1996 among the Company and certain Stockholders of the Company and the Common
Stock Registration Rights Agreement being entered into between the Company and
24
certain Purchasers and the Exchanging Noteholders on the date hereof, neither
the Company nor any of the Guarantors has previously entered into any agreement
granting any registration rights with respect to any of its or their securities
to any Person. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Secured Notes. The Company will not
take any action with respect to the Secured Notes that would materially and
adversely affect the ability of the Holders to Consummate any Registered
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 hereof may not be given unless (i) in the case of Section 8
hereof and this Section 12(d)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of the Majority Holders. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Registered
Exchange Offer and that does not affect directly or indirectly the rights of
other Holders whose securities are not being tendered pursuant to such
Registered Exchange Offer may be given by the Majority Holders.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, 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 Note Indenture, with a copy to the Registrar
under the Note Indenture and a copy to:
Coudert Brothers
1114 Avenue of the Americas
New York, NY 10036
Telecopier No.: (212) 626-4120
Attention: Theodore N. Farris
(ii) if to the Company:
Anker Coal Group, Inc.
2708 Cranberry Square
Morgantown, West Virginia 26508
Telecopier No.: (304) 594-1685
Attention: P. Bruce Sparks
With a copy to:
Klett Lieber Rooney & Schorling, a Professional Corporation
One Oxford Centre, 40th Floor
Pittsburgh, PA 15219-6498
Telecopier No.: (412) 392-2128
25
Attention: Craig S. Heryford
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and 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 Note Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(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) Severability. If any one or more of the provisions contained
herein, or the application thereof 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
herein shall not be affected or impaired thereby.
(k) 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 hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
26
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
ANKER COAL GROUP, INC.
By: /s/ Bruce Sparks
--------------------------------
Name: Bruce Sparks
Title: President
EACH OTHER ENTITY LISTED ON
SCHEDULE A HERETO
By: /s/ B. Judd Hartman
--------------------------------
Name: B. Judd Hartman
Title: Secretary
ROTHSCHILD RECOVERY FUND L.P.
By Rothschild Recovery Associates, L.L.C.,
General Partner
By: /s/ Wilbur Ross, Jr.
--------------------------------
Name: Wilbur Ross, Jr.
Title: Managing Member
JJF GROUP LIMITED LIABILITY COMPANY
By: /s/ James Boyd
--------------------------------
Name: James Boyd
Title: Manager (General Manager)
AIG SPECIAL SITUATIONS HOLDING FUND
LTD.
By: /s/ Andrew W. Gitlin
--------------------------------
Name: Andrew W. Gitlin
Title: Director
Intrepid Management Company LLC
as Investment Manager
By: /s/ Victor Consoli
------------------------
Name: Victor Consoli
Title: Portfolio Manager
27
Pilgrim High Yield Fund
By: /s/ Kevin Mathews
--------------------------------
Name: Kevin Mathews
Title: Senior Vice President/Portfolio Manager
PILGRIM INVESTMENTS INC.
By: /s/ Kevin Mathews
--------------------------------
Name: Kevin Mathews
Title: Senior Vice President/Portfolio Manager
PROSPECT STREET HIGH INCOME
PORTFOLIO
By: /s/ John Frabotta
--------------------------------
Name: John Frabotta
Title: Portfolio Manager
Putnam Investment Management Inc., Putnam
Fiduciary Trust Company and The Putnam Advisory
Company, Inc. on behalf of their clients listed
on Attachments A
By: /s/ John R. Verani
--------------------------------
Name: John R. Verani
Title: Senior Vice President
PRUDENTIAL HIGH YIELD TOTAL RETURN
FUND
PRUDENTIAL HIGH YIELD FUND, INC.
PRUDENTIAL DISTRESSED SECURITIES
FUND, INC.
By: The Prudential Investment Corporation, as
Investment Advisor
By: /s/ Peter Allegrini
--------------------------------
Name: Peter Allegrini
Title: Vice President
28
THE PRUDENTIAL SERIES FUND, INC. HIGH
YIELD BOND PORTFOLIO
By: The Prudential Insurance Company of America,
as Investment Advisor
By: /s/ Peter Allegrini
--------------------------------
Name: Peter Allegrini
Title: Second Vice President
DREYFUS HIGH YIELD STRATEGIES FUND
By:The Dreyfus Corporation, as Investment Manager
By: /s/ Stephanie Pierce
--------------------------------
Name: Stephanie Pierce
Title: Vice President
29
ATTACHMENT A
PUTNAM INVESTMENT MANAGEMENT, INC. ON BEHALF OF:
The George Putnam Fund of Boston
Putnam Income Fund
Putnam Equity Income Fund
Putnam Balanced Retirement Fund
Putnam High Yield Advantage Fund
Putnam High Income Convertible and Bond Fund
Putnam Variable Trust-Putnam VT High Yield Fund
Putnam Variable Trust-Putnam VT Global Asset Allocation Fund
Putnam Master Income Trust
Putnam Premier Income Trust
Putnam Master Intermediate Income Trust
Putnam Diversified Income Trust
Putnam Convertible Opportunities and Income Trust
Putnam Asset Allocation Funds-Growth Portfolio
Putnam Asset Allocation Funds-Balanced Portfolio
Putnam Asset Allocation Funds-Conservative Portfolio
Putnam Funds Trust-Putnam High Yield Trust II
Travelers Series Fund Inc.- Putnam Diversified Income Portfolio
Lincoln National Global Asset Allocation Fund, Inc.
Putnam Variable Trust-Putnam VT Diversified Income Fund
PUTNAM FIDUCIARY TRUST COMPANY ON BEHALF OF:
Putnam High Yield Managed Trust
Putnam High Yield Fixed Income Fund, LLC
THE PUTNAM ADVISORY COMPANY, INC. ON BEHALF OF:
Abbott Laboratories Annuity Retirement Plan
Strategic Global Fund-High Yield Fixed Income (Putnam) Fund
Southern Farm Bureau Annuity Insurance Company
30
SCHEDULE A
Company State of Incorporation
Anker Group, Inc. Delaware
Anker Energy Corporation Delaware
Bronco Mining Company, Inc. West Virginia
Anker Power Services, Inc. West Virginia
Anker West Virginia Mining Company, Inc. West Virginia
Juliana Mining Company, Inc. West Virginia
King Knob Coal Co., Inc. West Virginia
Vantrans, Inc. Delaware
Melrose Coal Company, Inc. West Virginia
Marine Coal Sales Company Delaware
Hawthorne Coal Company, Inc. West Virginia
Upshur Property, Inc. Delaware
Heather Glen Resources, Inc. West Virginia
New Allegheny Land Holding Company, Inc. West Virginia
Patriot Mining Company, Inc. West Virginia
Vindex Energy Corporation West Virginia
Anker Virginia Mining Company, Inc. Virginia
Simba Group, Inc. Delaware
31
SCHEDULE B
[Names and Addresses of Each Purchaser;
Number of Warrants and Privately Placed Notes Being Purchased or Received]
==================================================================================================================
PRINCIPAl Amount of
PRIVATELy Placed Notes
NUMBER OF WARRANTS BEING PUrchased or
PURCHASER RECEIVED RECEIVED
==================================================================================================================
Rothschild Recovery Fund L.P.
c/o Rothschild, Inc.
1251 Avenue of the Americas
New York, NY 10020 1,782 $45,947,000
- ------------------------------------------------------------------------------------------------------------------
AIG Special Situations Holding Fund Ltd.
c/o Intrepid Management Company LLC
1281 East Main Street
Stamford, CT 06902 19 $800,000
- ------------------------------------------------------------------------------------------------------------------
Pilgrim High Yield Fund 94 $4,000,000
ML CLO XV Pilgrim America 19 $800,000
ML CBO XX Pilgrim America 37 $1,600,000
40 North Central Avenue, Suite 1200
Phoenix, AZ 85004
- ------------------------------------------------------------------------------------------------------------------
Prospect Street High Income Portfolio, Inc.
60 State Street, Suite 3750
Boston, MA 02109 131 $5,600,000
- ------------------------------------------------------------------------------------------------------------------
The George Putnam Fund of Boston 3 $120,000
Putnam Income Fund 4 $160,000
Putnam Equity Income Fund 1 $8,000
Putnam Balanced Retirement Fund 1 $24,000
Putnam High Yield Advantage Fund 256 $10,944,000
Putnam High Income Convertible and Bond Fund 1 $64,000
Putnam Variable Trust - Putnam 57 $2,416,000
VT High Yield Fund
Putnam Variable Trust - Putnam 1 $32,000
VT Global Asset Allocation Fund
Putnam Master Income Trust 7 $280,000
Putnam Premier Income Trust 16 $680,000
Putnam Master Intermediate 4 $160,000
Income Trust
Putnam Diversified Income Trust 66 $2,828,000
==================================================================================================================
32
==================================================================================================================
Putnam Convertible 1 $64,000
Opportunities and Income Trust
Putnam Asset Allocation Funds - 11 $480,000
Growth Portfolio
Putnam Asset Allocation Funds - 21 $900,000
Balanced Portfolio
Putnam Asset Allocation Funds - 7 $320,000
Conservative Portfolio
Putnam Funds Trust - Putnam 1 $28,000
High Yield Trust II
Travelers Series Fund Inc. 3 $120,000
Putnam Diversified Income Portfolio
Lincoln National Global Asset 4 $172,000
Allocation Fund, Inc.
Putnam Variable Trust - Putnam 6 $276,000
VT Diversified Income Fund
Putnam High Yield Managed Trust 23 $988,000
Putnam High Yield Fixed Income 10 $440,000
Fund, LLC
Abbott Laboratories Annuity 2 $72,000
Retirement Plan
Strategic Global Fund - High 9 $400,000
Yield Fixed Income
(Putnam) Fund
Southern Farm Bureau Annuity
Insurance Company 9 $400,000
1 Post Office Square, 7th Floor
Boston, MA 02109
- ------------------------------------------------------------------------------------------------------------------
Prudential High Yield Total Return Fund, Inc. 19 $800,000
Prudential High Yield Fund, Inc. 201 $8,600,000
Prudential Distressed Securities Fund, Inc. 9 $400,000
The Prudential Series Fund, Inc. High Yield Bond 56 $2,400,000
Portfolio
100 Mulberry Street
Gateway Center Building No. 2, 3rd Floor
Mail Stop No. 04-03-01
Newark, NJ 07102
- ------------------------------------------------------------------------------------------------------------------
Dreyfus High Yield Strategies Fund
200 Park Avenue, 55th Floor
New York, NY 10166 156 $6,680,000
==================================================================================================================