1
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of July 8, 1998, among Queen Sand Resources, Inc., a Delaware
corporation (the "Company"), the subsidiary guarantors set forth on the
signature page hereof (the "Subsidiary Guarantors") and Nesbitt Burns Securities
Inc., CIBC Oppenheimer Corp. and Societe Generale Securities Corp.
(collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated June
30, 1998, among the Company, the Subsidiary Guarantors and the Initial
Purchasers (the "Purchase Agreement"), which provides for the issuance and sale
by the Company to the Initial Purchasers of $125,000,000 aggregate principal
amount of 12 1/2% Senior Notes due 2008 (the "Securities") (the "Initial
Placement"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company and the Subsidiary Guarantors have agreed to
provide to the Initial Purchasers and their respective direct and indirect
transferees, among other things, the registration rights for the Securities set
forth in this Agreement.
The parties hereby agree as follows:
1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following defined terms shall have the
following meanings:
"Affiliate" of any specified person means any other person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such specified person. For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Blocking Notice" means written notice from the Company that
(i) an amendment or supplement to the Exchange Offer Registration Statement, or
a distribution of Securities under a Shelf Registration Statement, as
applicable, would require the public disclosure of material non-public
information concerning any transaction or negotiation involving the Company or
any of its affiliates that, in the Company's judgment, exercised reasonably and
in good faith, would materially interfere with such transaction or negotiations,
or (ii) such amendment or supplement would otherwise require premature
disclosure of non-public information that, in the Company's judgment, exercised
reasonably and in good faith, would adversely affect or otherwise be detrimental
to the Company.
"Blocking Period" means the period of time beginning with the
receipt by the Holders of a Blocking Notice and ending on the earliest to occur
of (x) 30 days from the receipt by the Holders of a Blocking Notice, (y) the
date upon which the transactions or negotiations that
2
are the subject of the Blocking Notice have been publicly disclosed or
terminated and (z) the receipt by the Holders of a Blocking Termination Notice
or a Shelf Blocking Termination Notice, as applicable.
"Blocking Termination Notice" is defined in Section 2(e)
hereof.
"Closing Date" has the meaning set forth in the Purchase
Agreement.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Registration Period" means the 1 year period
following the consummation of the Registered Exchange Offer, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement or any Blocking
Period.
"Exchange Offer Registration Statement" means a registration
statement on an appropriate form under the Securities Act with respect to the
Registered Exchange Offer, all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Exchanging Dealer" means any Holder (which may include the
Initial Purchasers) which is a broker-dealer, electing to exchange Securities
acquired for its own account as a result of market-making activities or other
trading activities, for New Securities.
"Holder" means any holder of the Transfer Restricted
Securities.
"Indenture" means the Indenture relating to the Securities
dated as of July 1, 1998, among the Company, the Subsidiary Guarantors and the
Trustee, pursuant to which the Securities and the New Securities are being
issued, as amended or supplemented from time to time in accordance with the
terms thereof.
"Initial Placement" has the meaning set forth in the preamble
hereto.
"Majority Holders" means the Holders of a majority of the
aggregate principal amount of securities registered under a Registration
Statement.
"Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall administer an underwritten
offering.
2
3
"New Securities" means the 12 1/2% Series B Senior Notes due
2008 of the Company, to be issued pursuant to the Exchange Offer.
"Offering Memorandum" has the meaning set forth in the
Purchase Agreement.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or the New Securities, covered by such
Registration Statement, and all amendments and supplements to the Prospectus,
including post-effective amendments and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"Registered Exchange Offer" means the proposed offer to the
Holders to issue and deliver to such Holders, in exchange for the Securities, a
like principal amount of the New Securities, including the Subsidiary Guarantees
of the Subsidiary Guarantors.
"Registration Statement" means any Exchange Offer Registration
Statement or Shelf Registration Statement that covers any of the Transfer
Restricted Securities, in each case including the subsidiary guarantees of the
Subsidiary Guarantors, pursuant to the provisions of this Agreement, amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference therein.
"Securities" has the meaning set forth in the preamble hereto.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Shelf Blocking Termination Notice" has the meaning set forth
in Section 3(d).
"Shelf Registration" means a registration effected pursuant to
Section 3 hereof.
"Shelf Registration Period" has the meaning set forth in
Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf" registration
statement of the Company pursuant to the provisions of Section 3 hereof which
covers some or all of the Transfer Restricted Securities on an appropriate form
under Rule 415 under the Act, or any similar rule that may be adopted by the
Commission, amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference therein.
3
4
"Transfer Restricted Security" means a Security or a New
Security until the earlier to occur of (i) the date on which such Security has
been exchanged by a person other than a broker-dealer for a New Security in the
Exchange Offer, (ii) following the exchange by a broker-dealer in the Exchange
Offer of a Security for a New Security, the date on which such New Security is
sold to a purchaser who receives from such broker-dealer on or prior to the date
of such sale a copy of the prospectus contained in the Exchange Offer
Registration Statement, (iii) the date on which such Security has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iv) the date on which such Security is
distributed to the public pursuant to Rule 144 under the Securities Act.
"Trustee" means the trustee with respect to the Securities
under the Indenture.
"Underwriter" means any underwriter of Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of New Securities by
Exchanging Dealers; Private Exchange.
(a) Unless the Registered Exchange Offer shall not be
permissible under applicable law or Commission policy, the Company and the
Subsidiary Guarantors shall use their best efforts to (i) file with the
Commission, within 60 days following the Closing Date, the Exchange Offer
Registration Statement and (ii) to use its reasonable best efforts to cause the
Exchange Offer Registration Statement to be declared effective by the Commission
as soon as practicable thereafter, but in no event later than 135 days after the
Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company and the Subsidiary Guarantors shall promptly commence the
Registered Exchange Offer, it being the objective of such Registered Exchange
Offer to enable each Holder electing to exchange Securities for New Securities
(assuming that such Holder is not an affiliate of the Company within the meaning
of the Securities Act, acquires the New Securities in the ordinary course of
such Holder's business and has no arrangements with any person to participate in
the distribution of the New Securities) to trade such New Securities from and
after their receipt without any limitations or restrictions under the Securities
Act and without material restrictions under the securities laws of a substantial
proportion of the several states of the United States.
(c) In connection with the Registered Exchange Offer, the
Company and the Subsidiary Guarantors shall:
(i) mail as promptly as practicable to each Holder a copy of
the Prospectus forming part of the Exchange Offer Registration
Statement, together with an appropriate letter of transmittal and
related documents as may be necessary;
4
5
(ii) keep the Registered Exchange Offer open for not less than
30 days and not more than 45 days after the date notice thereof is
mailed to the Holders (or longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offer with an office or agency located in the Borough of
Manhattan, The City of New York; and
(iv) comply in all material respects with all applicable laws.
(d) As soon as practicable after the close of the Registered
Exchange Offer, the Company and the Subsidiary Guarantors shall:
(i) accept for exchange all Securities properly tendered and
not validly withdrawn pursuant to and in accordance with the Registered
Exchange Offer;
(ii) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver
to each Holder of Securities, New Securities equal in principal amount
to the Securities of such Holder so accepted for exchange.
(e) The Initial Purchasers and the Company and the Subsidiary
Guarantors acknowledge that, pursuant to interpretations by the Commission's
staff of Section 5 of the Securities Act, and in the absence of an applicable
exemption therefrom, each Exchanging Dealer is required to deliver a Prospectus
in connection with a sale of any New Securities received by such Exchanging
Dealer pursuant to the Registered Exchange Offer in exchange for Securities
acquired for its own account as a result of market-making activities or other
trading activities. Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto on the
cover of the Exchange Offer Registration Statement, in Annex B hereto
in the forepart of the Exchange Offer Registration Statement in a
section setting forth details of the Exchange Offer, and in Annex C
hereto in the underwriting or plan of distribution section of the
Prospectus forming a part of the Exchange Offer Registration Statement,
and include the information set forth in Annex D hereto in the Letter
of Transmittal delivered pursuant to the Registered Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Securities Act
during the Exchange Offer Registration Period for delivery by
Exchanging Dealers in connection with sales of New Securities received
pursuant to the Registered Exchange Offer, as contemplated by Section
5(h) below; provided, that following the thirtieth day after the
consummation of the Exchange Offer, the Company shall not be required
to amend or supplement the Exchange Offer
5
6
Registration Statement during the occurrence of a Blocking Period. The
Company shall promptly send each Holder written notice (a "Blocking
Termination Notice") at the earliest of such times as (x) the
transactions or negotiations that are the subject of the Blocking
Period Notice that triggered the Blocking Period have been publicly
disclosed or terminated, (y) such non-public information has been
publicly disclosed or (z) counsel to the Company has determined that
such disclosure is not required due to subsequent events.
(f) In the event that any Initial Purchaser determines that it
is not eligible to participate in the Registered Exchange Offer with respect to
the exchange of Securities constituting any portion of an unsold allotment, at
the request of such Initial Purchaser, the Company shall issue and deliver to
such Initial Purchaser, or the party purchasing New Securities registered under
a Shelf Registration Statement as contemplated by Section 3 hereof from such
Initial Purchaser, in exchange for such Securities, a like principal amount of
New Securities registered for resale under the Shelf Registration Statement. The
Company shall seek to cause the CUSIP Service Bureau to issue the same CUSIP
number for such New Securities as for New Securities issued pursuant to the
Registered Exchange Offer.
3. Shelf Registration. If, (i) any change in law or applicable
interpretations thereof by the Commission's staff do not permit the Company and
the Subsidiary Guarantors to effect the Registered Exchange Offer as
contemplated by Section 2 hereof, or (ii) for any other reason the Exchange
Offer Registration Statement has not been filed with the Commission within 60
days of the Closing Date, or (iii) for any other reason the Registered Exchange
Offer is not consummated within 175 days of the Closing Date, or (iv) if any
Holder of Transfer Restricted Securities shall notify the Company on or prior to
the 20th business day following the consummation of the Exchange Offer (A) that
such Holder is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, or (B) that such Holder may not resell the
New Securities acquired by it in the 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 Securities
acquired directly from the Company or one of its affiliates (it being understood
that, for purposes of this Section 3, (x) the requirement that a Initial
Purchaser deliver a Prospectus containing the information required by Items 507
and/or 508 of Regulation S-B (or Regulation S-K, if then applicable) under the
Securities Act in connection with sales of New Securities acquired in exchange
for such Securities shall result in such New Securities being not "freely
tradeable" but (y) the requirement that an Exchanging Dealer deliver a
Prospectus in connection with sales of New Securities acquired in the Registered
Exchange Offer in exchange for Securities acquired as a result of market-making
activities or other trading activities shall not result in such New Securities
being not "freely tradeable"), the following provisions shall apply:
(a) The Company and the Subsidiary Guarantors shall as
promptly as practicable (but in no event more than 30 days after so required
pursuant to this Section 3 or after the Company receives notice under (iv)
above), file with the Commission and thereafter shall use its reasonable best
efforts to cause to be declared effective by the Commission under
6
7
the Securities Act a Shelf Registration Statement relating to the offer and sale
of Transfer Restricted Securities by the Holders from time to time in accordance
with the methods of distribution elected by such Holders and set forth in such
Shelf Registration Statement; provided, that with respect to New Securities
received by a Initial Purchaser in exchange for Securities constituting any
portion of an unsold allotment, the Company may, if permitted by current
interpretations by the Commission's staff, file a post-effective amendment to
the Exchange Offer Registration Statement containing the information required by
Regulation S-B (or Regulation S-K, if then applicable) Items 507 and/or 508, as
applicable, in satisfaction of its obligations under this paragraph (a) with
respect thereto, and any such Exchange Offer Registration Statement, as so
amended, shall be referred to herein as, and governed by the provisions herein
applicable to, a Shelf Registration Statement.
(b) Each of the Company and the Subsidiary Guarantors shall
use its reasonable best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming part thereof to
be usable by Holders for a period of two years from the date the Shelf
Registration Statement is declared effective by the Commission or such shorter
period that will terminate when all the Transfer Restricted Securities covered
by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (in any such case, such period being called the "Shelf
Registration Period").
(c) No Holder may include any of its Transfer Restricted
Securities in any Shelf Registration Statement pursuant to this Agreement unless
such Holder furnishes to the Company in writing, within 10 days after receipt of
a request therefor, such information as the Company may reasonably request for
use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein, and each such Holder 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. No Holder shall be entitled to Liquidated Damages
pursuant to this Agreement unless and until such Holder shall have provided all
such reasonably requested information.
(d) Upon the receipt by the Holders of a Blocking Notice from
the Company, the Holders shall cease any distribution of Transfer Restricted
Securities under a Shelf Registration Statement for the Blocking Period. The
Company shall promptly send each Holder written notice (a "Shelf Blocking
Termination Notice") at the earliest such time as (x) the transactions or
negotiations that are the subject of the Blocking Notice have been publicly
disclosed or terminated, (y) such non-public information has been publicly
disclosed or (a) counsel to the Company has determined that such disclosure is
not required due to subsequent events. In no event may a Blocking Notice be
delivered (i) prior to the consummation of the Exchange Offer or (ii) within the
first 60 days after the effectiveness of the Exchange Offer Registration
Statement or Shelf Registration Statement and, thereafter, only two Blocking
Notices may be delivered pursuant to this Agreement during any period of 360
consecutive days.
7
8
4. Liquidated Damages.
(a) The Company, the Subsidiary Guarantors and the Initial
Purchasers agree that the Holders of Securities will suffer damages if the
Company and the Subsidiary Guarantors fail to fulfill their obligations pursuant
to Section 2 or Section 3 hereof and that it would not be possible to ascertain
the extent of such damages. Accordingly, in the event of such failure by the
Company and the Subsidiary Guarantors to fulfill such obligations, each of the
Company and the Subsidiary Guarantors hereby agrees to pay liquidated damages
("Liquidated Damages") to each Holder of Securities under the circumstances and
to the extent set forth below:
(i) if either the Exchange Offer Registration Statement or, if
applicable, the Shelf Registration Statement has not been filed with
the Commission on or prior to the applicable date specified for such
filing; or
(ii) if either the Exchange Offer Registration Statement or,
if applicable, the Shelf Registration Statement is not declared
effective by the Commission on or prior to the applicable date
specified for such effectiveness; or
(iii) if an Exchange Offer Registration Statement becomes
effective, but the Company fails to consummate the Exchange Offer
within 60 days of the date specified for effectiveness of such
registration statement; or
(iv) if the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective by the Commission but
thereafter ceases to be effective or usable in connection with resales
of Securities during the Effectiveness Period without being succeeded
within 15 business days by a post-effective amendment or supplement to
such Registration Statement that cures such failure and that has been
declared effective;
(any of the foregoing, a "Registration Default"), then the Company (which
obligation is guaranteed by the Subsidiary Guarantors pursuant to the Indenture)
shall pay Liquidated Damages to each Holder from and including the date on which
any such Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. Liquidated Damages will accrue at a rate
of 0.5% per annum during the 90-day period immediately following the occurrence
of any Registration Default and shall increase by 0.25% per annum at the end of
each subsequent 90-day period, but in no event shall such rate exceed 1.50% per
annum. Following the cure of any Registration Default relating to any
Securities, the accrual of Liquidated Damages with respect to such Registration
Default will cease. A Registration Default under clause (i) above shall be cured
on the date that the Exchange Offer Registration Statement or the Shelf
Registration Statement, as applicable, is filed with the Commission, a
Registration Default under clause (ii) above shall be cured on the date that the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
applicable, is declared effective by the Commission; a Registration Default
under clause (iii) above shall be cured on the earlier of the date (A) the
Exchange Offer is consummated or (B) the Company delivers a notice to the
Holders that it will file a Shelf Registration Statement Securities; and a
Registration Default
8
9
under clause (iv) above shall be cured on the earlier (A) the date the Shelf
Registration Statement is declared effective and is usable or (B) the
Effectiveness Period expires.
(b) The Company shall notify the Trustee within one business
day after each and every date on which a Registration Default first occurs.
Accrued and unpaid Liquidated Damages shall be paid by the Company to the
Holders by wire transfer of immediately available funds to the accounts
specified by them or by mailing checks to their registered addresses if no such
accounts have been specified on each interest payment date provided in the
Indenture (whether or not any interest is then payable on the Securities) and on
each payment date provided in the Indenture, including, without limitation,
whether upon redemption, maturity (by acceleration or otherwise), purchase upon
a change of control or purchase upon a sale of assets. Each obligation to pay
Liquidated Damages with respect to any Registration Default shall be deemed to
commence accruing on the date of such Registration Default and to cease accruing
when such Registration Default has been cured. In no event shall the Company pay
Liquidated Damages in excess of the applicable maximum weekly amount set forth
above, regardless of whether one or multiple Registration Defaults exist.
(c) The parties hereto agree that the Liquidated Damages
provided for in this Section 4 constitute a reasonable estimate of the damages
that will be suffered by Holders by reason of the failure to file the Exchange
Offer Registration Statement or the Shelf Registration Statement, the failure of
the Exchange Offer Registration Statement or the Shelf Registration Statement to
be declared effective, the failure to consummate the Exchange Offer or the
failure of the Shelf Registration Statement to remain effective, as the case may
be, in accordance with this Agreement.
5. Registration Procedures. In connection with any Shelf
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Initial Purchasers, prior
to the filing thereof with the Commission, a copy of any Shelf Registration
Statement and any Exchange Offer Registration Statement, and each amendment
thereof and each amendment or supplement, if any, to the Prospectus included
therein and shall use its best efforts to reflect in each such document, when so
filed with the Commission, such comments as the Initial Purchasers and counsel
for the Initial Purchasers reasonably may propose.
(b) The Company shall ensure that (i) any Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto complies in all material respects with the
Securities Act and the rules and regulations thereunder, (ii) any Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and (iii) any Prospectus forming part of any Registration Statement, and any
amendment or supplement to such Prospectus, does not include an untrue statement
of a material fact or omit to state a
9
10
material fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
(c) (1) The Company shall advise the Initial Purchasers and,
in the case of a Shelf Registration Statement, the Holders of Transfer
Restricted Securities covered thereby, and, if requested by the Initial
Purchasers or any such Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment
thereto has been filed with the Commission and when the
Registration Statement or any post-effective amendment thereto
has become effective; and
(ii) of any request by the Commission for amendments
or supplements to the Registration Statement or the Prospectus
included therein or for additional information.
(2) The Company shall advise the Initial Purchasers and, in
the case of a Shelf Registration Statement, the Holders of Transfer
Restricted Securities covered thereby, and, in the case of an Exchange
Offer Registration Statement, any Exchanging Dealer which has provided
in writing to the Company a telephone or facsimile number and address
for notices, and, if requested by you or any such Holder or Exchanging
Dealer, confirm such advice in writing:
(i) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that
purpose;
(ii) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the securities included therein for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(iii) of the happening of any event that requires the
making of any changes in the Registration Statement or the
Prospectus so that, as of such date, the statements therein
are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of
the circumstances under which they were made) not misleading
(which advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes
have been made).
(d) The Company shall use its reasonable best efforts to
obtain the withdrawal of any order suspending the effectiveness of any
Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of Transfer
Restricted Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one
10
11
copy of such Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Holder so
requests in writing, all exhibits (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Transfer Restricted Securities included within the
coverage of any Shelf Registration Statement, without charge, as many copies of
the Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders of Transfer
Restricted Securities in connection with the offering and sale of the securities
covered by the Prospectus or any amendment or supplement thereto.
(g) The Company shall furnish to each Exchanging Dealer which
so requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, any documents incorporated by reference
therein, and, if the Exchanging Dealer so requests in writing, all exhibits
(including those incorporated by reference).
(h) The Company shall, during the Exchange Offer Registration
Period, promptly deliver to each Exchanging Dealer, without charge, as many
copies of the Prospectus included in such Exchange Offer Registration Statement
and any amendment or supplement thereto as such Exchanging Dealer may reasonably
request for delivery by such Exchanging Dealer in connection with a sale of New
Securities received by it pursuant to the Registered Exchange Offer; and the
Company consents to the use of the Prospectus or any amendment or supplement
thereto by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or any other
offering of securities pursuant to any Registration Statement, the Company shall
register or qualify or cooperate with the Holders of Transfer Restricted
Securities included therein and their respective counsel in connection with the
registration or qualification of such securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such Holders reasonably
request in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the securities
covered by such Registration Statement; provided, however, that the Company will
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject it to general
service of process or to taxation in any such jurisdiction where it is not then
so subject.
(j) The Company shall cooperate with the Holders of Transfer
Restricted Securities to facilitate the timely preparation and delivery of
certificates representing Securities to be sold pursuant to any Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as Holders may request prior to sales of securities
pursuant to such Registration Statement.
11
12
(k) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) above, the Company shall promptly prepare a post-effective amendment
to any Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as thereafter delivered
to Initial Purchasers of the securities included therein, the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(l) Not later than the effective date of any such Registration
Statement hereunder, the Company shall provide a CUSIP number for the Securities
or New Securities, as the case may be, registered under such Registration
Statement, and provide the trustee with printed certificates for such Securities
or New Securities, in a form eligible for deposit with The Depository Trust
Company.
(m) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Act.
(n) The Company shall cause the Indenture or the New
Securities Indenture, as the case may be, to be qualified under the Trust
Indenture Act in a timely manner.
(o) The Company may require each Holder of securities to be
sold pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding the holder and the distribution of such securities as the
Company may from time to time reasonably require for inclusion in such
Registration Statement.
(p) The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriters and Majority Holders
reasonably agree should be included therein and shall make all required filings
of such Prospectus supplement or post-effective amendment as soon as notified of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment.
(q) In the case of any Shelf Registration Statement, the
Company shall enter into such agreements (including underwriting agreements) and
take all other appropriate actions in order to expedite or facilitate the
registration or the disposition of the Securities, and in connection therewith,
if an underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable than those set forth
in Section 7 (or such other provisions and procedures acceptable to the Majority
Holders and the Managing Underwriters, if any) with respect to all parties to be
indemnified pursuant to Section 7 from Holders of Securities to the Company.
12
13
(r) In the case of any Shelf Registration Statement, the
Company shall (i) make reasonably available for inspection by the Holders of
securities to be registered thereunder, any underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by the Holders or any such underwriter such
financial and other books and records of the Company reasonably requested by any
such Holder in connection with such Registration Statement subsequent to the
filing thereof and prior to its effectiveness; (ii) cause the Company's
officers, directors and employees to supply all relevant information reasonably
requested by the Holders or any such underwriter, attorney, accountant or agent
in connection with any such Registration Statement as is customary for similar
due diligence examinations; 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 or through a third party without an
accompanying obligation of confidentiality; (iii) make such representations and
warranties to the Holders of securities registered thereunder and the
underwriters, if any, in form, substance and scope as are customarily made by
issuers to underwriters in primary underwritten offerings and covering matters
including, but not limited to, those set forth in the Purchase Agreement; (iv)
obtain opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
Managing Underwriters, if any) addressed to each selling Holder and the
underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may be
reasonably requested by such Holders and underwriters; (v) obtain "cold comfort"
letters and updates thereof from the independent certified public accountants of
the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement), registered thereunder and the
underwriters, if any, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with primary
underwritten offerings; and (vi) deliver such documents and certificates as may
be reasonably requested by the Majority Holders and the Managing Underwriters,
if any, including those to evidence compliance with Section 5(k) and with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company. The foregoing actions set forth in clauses (iii),
(iv), (v) and (vi) of this Section 5(r) shall be performed at (A) the
effectiveness of such Registration Statement and each post-effective amendment
thereto and (B) each closing under any underwriting or similar agreement as and
to the extent required thereunder.
(s) In the case of any Exchange Offer Registration Statement,
the Company shall (i) make reasonably available for inspection by such Initial
Purchaser, and any attorney, accountant or other agent retained by such Initial
Purchaser, such financial and other information and books and records of the
Company reasonably requested by any such Holder in connection with such
Registration Statement subsequent to the filing thereof and prior to its
effectiveness; and (ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by such Initial Purchaser
or any such attorney, accountant or agent in
13
14
connection with any such Registration Statement as is customary for similar due
diligence examinations; 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 such Initial
Purchaser or any such 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 or through a third party
without an accompanying obligation of confidentiality.
(t) Each Holder shall (i) furnish each broker through whom it
offers the Securities such number of copies of the Prospectus included in the
Shelf Registration Statement and any supplements thereto or amendments thereof
which such broker may require and (ii) inform such broker (a) as to the
aggregate principal amount of Securities offered through such broker; (b) that
such Securities are part of a distribution and (c) that such broker may,
therefore, be subject to the provisions of Regulation M under the Exchange Act
until such time as such broker has completed the sale of all such Securities
pursuant to the Shelf Registration Statement.
(u) Each Holder shall promptly furnish to each person
(including each broker) to who such Holder has delivered copies of the
Prospectus included in a Shelf Registration Statement an equivalent number of
copies of any amendment thereof or supplement thereto.
(v) Each Holder shall, promptly upon completion of the
distribution of the Securities pursuant to the Shelf Registration Statement,
report to the Company such completion.
(w) Upon request from the Company, each Holder shall advise
the Company of such information as the Company may reasonably request in order
to supplement the Prospectus included in a Shelf Registration Statement in
accordance with the rules and regulations of the Commission.
(x) 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 2(e) or 3(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 2(e) or 3(d)
thereof, 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 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 2 or 3 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 2(e) or 3(d) hereof to and
including the date when each selling Holder covered by such Registration
Statement shall
14
15
have received the copies of the supplemented or amended Prospectus contemplated
by Section 2(e) or 3(d) hereof or shall have received the Advice.
(y) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
consummation thereof, a written representation to the Company and the Guarantors
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the 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 New Securities to be issued in the
Exchange Offer and (C) it is acquiring the New Securities in its ordinary course
of business. In addition, all such Holders of Transfer Restricted Securities
shall otherwise cooperate in the Company's preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any broker-dealer and any such
Holder using the Exchange Offer to participate in a distribution of the
securities to be acquired in the Exchange Offer (1) could not under Commission
policy as in effect on the date of this Agreement rely on the position of the
Commission enunciated in Morgan Stanley and Co. (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 Securities Act in connection with 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-B (or Regulation S-K, if then applicable) if the
resales are of New Securities obtained by such Holder in exchange for Securities
acquired by such Holder directly from the Company.
6. Registration Expenses. The Company and the Subsidiary
Guarantors shall bear all fees and expenses incurred in connection with the
performance of or compliance with their obligations under this Agreement and, in
the event of any Shelf Registration Statement, will reimburse the Holders for
the reasonable fees and disbursements (but not to exceed $10,000 in the
aggregate) of one firm or counsel designated by the Majority Holders to act as
counsel for the Holders in connection therewith, and, in the case of any
Exchange Offer Registration Statement, will reimburse the Initial Purchasers for
the reasonable fees and disbursements (but not to exceed $10,000 in the
aggregate) of counsel acting in connection therewith. Notwithstanding the
foregoing, the Holders of any Securities or New Securities being registered on
the Shelf Registration Statement shall pay all agency or brokerage fees and
commissions and underwriting discounts and commissions attributable to the sale
of such Securities or New Securities and the fees and disbursements of any
counsel retained by such Holders other that counsel referred to above.
15
16
7. Indemnification and Contribution.
(a) In connection with any Registration Statement, the Company
and the Subsidiary Guarantors agree to indemnify and hold harmless each Holder
of securities covered thereby (including each Initial Purchaser and, with
respect to any Prospectus delivery as contemplated in Section 5(h) hereof, each
Exchanging Dealer), the directors, officers, employees and agents of each such
Holder and each person who controls any such Holder within the meaning of either
the Securities Act or the Exchange Act from and against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, or in any
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agree to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company and the Subsidiary Guarantors will not be
liable in any case to the extent that any such loss, claim, damage or liability
arises out of or any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company or any underwriter by or on
behalf of any such Holder specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
The Company and the Subsidiary Guarantors also agree to
indemnify or contribute to Losses of, as provided in Section 7(d), any
underwriters of Securities registered under a Shelf Registration Statement,
their officers and directors and each person who controls such underwriters on
substantially the same basis as that of the indemnification of the Initial
Purchaser and the selling Holders provided in this Section 7(a) and shall, if
requested by any Holder, enter into an underwriting agreement reflecting such
agreement, as provided in Section 5(q) hereof.
(b) Each Holder of securities covered by any Registration
Statement (including each Initial Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 5(h) hereof, each Exchanging Dealer)
severally agrees to indemnify and hold harmless (i) the Company and the
Subsidiary Guarantors, their respective directors, officers, employees and
agents each person who controls the Company within the meaning of either the
Securities Act or the Exchange Act to the same extent as the foregoing indemnity
from the Company and the Subsidiary Guarantors to each such Holder, but only
with reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.
16
17
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying person") in writing; but the failure so to notify the indemnifying
party (i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice and reasonably satisfactory to the indemnified party at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below).
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel (and local counsel) if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party shall
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding. An indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
person agrees to indemnify any indemnified party from and against any loss or
liability by reason of such settlement or judgment to the extent of such
indemnifying party's indemnification obligation hereunder.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating
17
18
or defending same) (collectively "Losses") to which such indemnified party may
be subject in such proportion as is appropriate to reflect the relative benefits
received by such indemnifying party, on the one hand, and such indemnified
party, on the other hand, from the Initial Placement and the Registration
Statement which resulted in such Losses; provided, however, that in no case
shall any Initial Purchaser or any subsequent Holder of any Security or New
Security be responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Security, or in the case of a
New Security, applicable to the Security which was exchangeable into such New
Security, as set forth on the cover page of the Final Memorandum, nor shall any
underwriter be responsible for any amount in excess of the underwriting discount
or commission applicable to the securities purchased by such underwriter under
the Registration Statement which resulted in such Losses. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the indemnifying party and the indemnified party shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of such indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Subsidiary Guarantors
shall be deemed to be equal to the sum of (x) the total net proceeds from the
Initial Placement (before deducting expenses) as set forth on the cover page of
the Offering Memorandum and (y) the total amount of additional interest which
the Company was not required to pay as a result of registering the securities
covered by the Registration Statement which resulted in such Losses. Benefits
received by the Initial Purchasers shall be deemed to be equal to the total
purchase discounts and commissions as set forth on the cover page of the
Offering Memorandum, and benefits received by any other Holders shall be deemed
to be equal to the value of receiving Securities or New Securities, as
applicable, registered under the Securities Act. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Registration Statement which resulted in such Losses. Relative fault shall
be determined by reference to whether any alleged untrue statement or omission
relates to information provided by the indemnifying party, on the one hand, or
by the indemnified party, on the other hand. The parties agree that it would not
be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person who controls a Holder within the meaning of either
the Securities Act or the Exchange Act and each director, officer, employee and
agent of such Holder shall have the same rights to contribution as such Holder,
and each person who controls the Company within the meaning of either the Act or
the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
(e) The provisions of this Section 7 will remain in full force
and effect, regardless of any investigation made by or on behalf of any Holder
or the Company or the
18
19
Subsidiary Guarantors or any of their respective officers, directors or
controlling persons referred to in Section 7 hereof, and will survive the sale
by a Holder of securities covered by a Registration Statement.
8. Underwritten Offerings. No Holder may participate in any
underwritten registration hereunder unless such Holder (i) agrees to sell such
Holder's Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangement entered
into in connection therewith and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements. The
investment bankers and managers selected for such underwriting must be
reasonably satisfactory to the Company.
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company and the Subsidiary
Guarantors have not entered into, as of the date hereof, and the Company and the
Subsidiary Guarantors shall not, after the date of this Agreement, enter into,
any agreement with respect to any of its securities that is inconsistent with
the rights granted to the Holders herein or otherwise conflicts with the
provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Holders of at least a majority of the then outstanding aggregate
principal amount of Transfer Restricted Securities; provided, that, with respect
to any matter that directly or indirectly affects the rights of any Initial
Purchaser hereunder, the Company shall obtain the written consent of each such
Initial Purchaser against which such amendment, qualification, supplement,
waiver or consent is to be effective. Notwithstanding the foregoing (except the
foregoing proviso), a waiver or consent to departure from the provisions hereof
with respect to a matter that relates exclusively to the rights of Holders whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by the
Majority Holders, determined on the basis of securities being sold rather than
registered under such Registration Statement.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given
by such holder to the Company in accordance with the
provisions of this Section 9(c), which address initially is,
with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture, with a copy
in like manner to Salomon Brothers Inc;
19
20
(2) if to you, the Initial Purchasers initially at
the respective addresses set forth in the Purchase Agreement;
and
(3) if to the Company, or any Subsidiary Guarantor
initially at its address set forth in the Purchase Agreement.
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 acknowledged, if telecopied; and on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
The Initial Purchasers or the Company or any Subsidiary Guarantor by
notice to the other may designate additional or different addresses for
subsequent notices or communications.
(d) 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 the need for an express assignment or any consent by
the Company thereto, subsequent Holders of Securities and/or New 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 Securities from a Holder.
(e) 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.
(f) Headings. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State, without regard to principles
of conflicts of law.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent
or approval of Holders of a specified percentage of principal amount of
Securities or New Securities is required hereunder, Securities or New
Securities, as applicable, held by the Company or its
20
21
Affiliates (other than subsequent Holders of Securities or New Securities if
such subsequent Holders are deemed to be Affiliates solely by reason of their
holdings of such Securities or New Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
10. 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 tot he registration rights granted by the Company with
respect to the Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[Signatures appear on next page]
21
22
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
QUEEN SAND RESOURCES, INC.
By: /s/ EDWARD J. MUNDEN
-------------------------------------
Name: Edward J. Munden
Title: Chief Executive Officer, President
and Chairman of the Board
QUEEN SAND RESOURCES, INC.,
a Nevada corporation
By: /s/ EDWARD J. MUNDEN
-------------------------------------
Name: Edward J. Munden
Title: President
CORRIDA RESOURCES, INC.
By: /s/ EDWARD J. MUNDEN
-------------------------------------
Name: Edward J. Munden
Title: President
NORTHLAND OPERATING CO.
By: /s/ EDWARD J. MUNDEN
-------------------------------------
Name: Edward J. Munden
Title: President
22
23
Accepted in New York, New York
July 8, 1998
NESBITT BURNS SECURITIES INC.
CIBC OPPENHEIMER CORP.
SOCIETE GENERALE SECURITIES CORP.
BY: NESBITT BURNS SECURITIES INC.
By: /s/ MARK A. ROCHE
-------------------------------------
Name: Mark A. Roche
Title: Managing Director
23
24
[FORM OF OFFERING MEMORANDUM DESCRIPTION OF
REGISTRATION AGREEMENT]
EXCHANGE OFFER; REGISTRATION RIGHTS
The Company, the Subsidiary Guarantors and the Initial Purchasers have
entered into a Registration Rights Agreement (the "Registration Rights
Agreement") pursuant to which the Company and the Subsidiary Guarantors have
agreed, for the benefit of the holders of the Notes, (i) to file with the
Commission, within 60 days following the Closing, a Registration Statement (the
"Exchange Offer Registration Statement") under the Securities Act relating to
the Exchange Offer pursuant to which Exchange Notes would be offered in exchange
for the then outstanding Notes tendered at the option of the holders thereof and
(ii) to use its reasonable best efforts to cause the Exchange Offer Registration
Statement to become effective as soon as practicable thereafter, but in no event
later than 120 days after the Closing. The Company has further agreed to
commence the Exchange Offer promptly after the Exchange Offer Registration
Statement has become effective, hold the offer open for at least 20 business
days, and exchange the Exchange Notes for all Notes validly tendered and not
withdrawn before the expiration of the Exchange Offer.
Under existing Commission interpretations set forth in no-action
letters issued to third parties, the Exchange Notes would in general be freely
transferable after the Exchange Offer without further registration under the
Securities Act, except that broker-dealers ("Participating Broker-Dealers")
receiving Exchange Notes in the Exchange Offer will be subject to a prospectus
delivery requirement with respect to resales of Exchange Notes. The Commission
has taken the position that Participating Broker-Dealers may fulfill their
prospectus delivery requirements with respect to the Exchange Notes (other than
a resale of an unsold allotment from the original sale of the Notes) by delivery
of the prospectus contained in the Exchange Offer Registration Statement. Under
the Registration Rights Agreement, the Company and the Subsidiary Guarantors are
required to allow Participating Broker-Dealers and other persons, if any,
subject to similar prospectus delivery requirements to use the prospectus
contained in the Exchange Offer Registration Statement in connection with the
resale of such Exchange Notes. The Exchange Offer Registration Statement will be
kept effective for a period of up to 90 days after the Exchange Offer has been
consummated in order to permit resales of Exchange Notes acquired by
broker-dealers in after-market transactions. Each holder of Notes (other than
certain specified holders) who wishes to exchange such Notes for Exchange Notes
in the Exchange Offer will be required to represent that any Exchange Notes to
be received by it will be acquired in the ordinary course of its business, that
at the time of the commencement of the Exchange Offer it is not participating,
does not intend to participate and has no arrangement or understanding with any
person to participate in, the distribution (within the meaning of the Securities
Act) of the Exchange Notes and that it is not an Affiliate of the Company.
However, if (i) on or before the date of consummation of the Exchange
Offer, the existing Commission interpretations are changed such that the
Exchange Notes would not in general be
25
2
freely transferable in such manner on such date or (ii) the Exchange Offer has
not been consummated within the 175 days following the Closing, the Company
will, in lieu of effecting the registration of the Exchange Notes, use its
reasonable best efforts to cause a registration statement under the Securities
Act relating to a shelf registration of the Notes for resale by holders (the
"Resale Registration") to become effective and to remain effective for a period
of up to two years after the effective date of such registration statement. The
Company will, in the event of the Resale Registration, provide to the holders of
the Notes copies of the prospectus that is a part of the registration statement
filed in connection with the Resale Registration, notify such holders when the
Resale Registration for the Notes has become effective and take certain other
actions as are required to permit unrestricted resales of the Notes. A holder of
Notes that sells such Notes pursuant to the Resale Registration generally would
be required to be named as a selling securityholder in the related prospectus
and to deliver a prospectus to purchasers, will be subject to certain of the
civil liability provisions under the Securities Act in connection with such
sales and will be bound by the provisions of the Registration Rights Agreement
that are applicable to such a holder (including certain indemnification
obligations).
Although the Company intends to file the registration statement
previously described, there can be no assurance that the registration statement
will be filed, or if filed, that it will become effective. In the event that (i)
the Company has not filed the registration statement relating to the Exchange
Offer within 60 days following the Closing, (ii) such registration statement has
not become effective within 120 days following the Closing, (iii) the Exchange
Offer has not been consummated within 30 business days after the effectiveness
deadline for the Exchange Offer Registration Statement, (iv) the Company has not
filed the resale registration statement within 30 days of the date on which the
obligation to file such resale registration statement arose, (v) the resale
registration statement has not been declared effective within 105 days of the
date on which the obligation to file such resale registration statement arose or
(vi) any registration statement required by the Registration Rights Agreement is
filed and declared effective but shall thereafter cease to be effective (except
as specifically permitted therein) without being succeeded within 30 days by an
additional registration statement filed and declared effective (any such event
referred to in clauses (i) through (vi), the "Registration Default"), interest
("Liquidated Damages") will accrue on the Notes and the Exchange Notes (in
addition to the stated interest on the Notes and the Exchange Notes) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured.
Liquidated Damages will accrue at a rate of 0.5% per annum during the 90-day
period immediately following the occurrence of any Registration Default and
shall increase by 0.25% per annum at the end of each subsequent 90-day period,
but in no event shall such rate exceed 1.50% per annum.
All accrued Liquidated Damages shall be paid to Holders in the same
manner in which payments of other interest are made pursuant to the Indenture.
See "Description of Notes -- General."
26
3
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which will be available upon request to the Company.
The Notes and the Exchange Notes will be considered collectively to be
a single class for all purposes under the Indenture, including, without
limitation, waivers, amendments, redemptions and Offers to Purchase, and for
purposes of the Description of Notes (except under this "Exchange Offer;
Registration Rights") all references herein to the "Notes" shall be deemed to
refer collectively to the Notes and any Exchange Notes, unless the context
otherwise requires.
27
ANNEX A
Each broker-dealer that receives New Securities for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Securities. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of New
Securities received in exchange for Securities where such New Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Company has agreed that, starting on the Expiration Date
(as defined herein) and ending on the close of business on the first anniversary
of the Expiration Date, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
28
ANNEX B
Each broker-dealer that receives New Securities for its own account in exchange
for Securities, where such Securities were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Securities. See "Plan of Distribution."
29
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of New Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business on the
first anniversary of the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
The Company will not receive any proceeds from any sale of New
Securities by broker-dealers. New Securities received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such New
Securities. Any broker-dealer that resells New Securities that were received by
it for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such New Securities may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Securities and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
For a period of 1 year after the Expiration Date, the Company
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
[If applicable, add information required by Regulation S-K
Items 507 and/or 508.]
30
ANNEX D
Rider A
-------
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE
10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
------------------------------
Address:
------------------------------
------------------------------
Rider B
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of New
Securities. If the undersigned is a broker-dealer that will receive New
Securities for its own account in exchange for Securities, it represents that
the Securities to be exchanged for New Securities were acquired by it as a
result of market-making activities or other trading activities and acknowledges
that it will deliver a prospectus in connection with any resale of such New
Securities; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.