EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
by and among
Allis-Chalmers Energy Inc.
and
The Guarantors listed on Schedule A hereto
and
RBC Capital Markets Corporation
Dated as of August 14, 2006

 

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REGISTRATION RIGHTS AGREEMENT
          This Registration Rights Agreement (this “Agreement”) is made and
entered into as of August 14, 2006, by and among (i) Allis-Chalmers Energy Inc.,
a Delaware corporation (the “Company”), (ii) the subsidiaries of the Company
listed on Schedule A hereto (the “Guarantors”), and (iii) RBC Capital Markets
Corporation (the “Initial Purchaser”), who has agreed to purchase the Company’s
9.0% Senior Notes due 2014 (the “Initial Notes”) pursuant to the Purchase
Agreement (as defined below).
          This Agreement is made pursuant to the Purchase Agreement, dated as of
August 8, 2006 (the “Purchase Agreement”), by and among the Company, the
Guarantors and the Initial Purchaser. In order to induce the Initial Purchaser
to purchase the Initial Notes, the Company and the Guarantors have agreed to
provide the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchaser set forth in Section 5(h) of the Purchase Agreement.
          The parties hereby agree as follows:
          SECTION 1. Definitions. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to them in the Indenture (as
defined below), and the following capitalized terms shall have the following
meanings:
          Broker-Dealer: Any broker or dealer registered under the Exchange Act.
          Commission: The Securities and Exchange Commission.
          Company: As defined in the preamble hereto.
          Consummate: An Exchange Offer shall be deemed “Consummated” for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Securities Act of the Exchange Offer Registration
Statement relating to the Exchange Notes to be issued in the Exchange Offer,
(ii) the maintenance of such Exchange Offer Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than
the period required pursuant to Section 3(b) hereof, and (iii) the delivery by
the Company to the Registrar under the Indenture of Exchange Notes in the same
aggregate principal amount as the aggregate principal amount of Initial Notes
that were tendered by Holders thereof pursuant to the Exchange Offer.
          Effectiveness Target Date: As defined in Section 5 hereof.
          Exchange Act: The Securities Exchange Act of 1934, as amended.
          Exchange Notes: The 9.0% Senior Notes due 2014, to be issued pursuant
to the Indenture: (i) in the Exchange Offer or (ii) as contemplated by Section 4
hereof.

 

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          Exchange Offer: The exchange and issuance by the Company of a
principal amount of Exchange Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Initial Notes that are tendered by such Holders in connection with such
exchange and issuance.
          Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer.
          Holders: As defined in Section 2(b) hereof.
          Indenture: The Indenture, dated as of January 18, 2006, among the
Company, the Guarantors and the Trustee, pursuant to which the Initial Notes and
the Exchange Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
          Issue Date: January 18, 2006
          Initial Placement: The issuance and sale by the Company of the Initial
Notes to the Initial Purchaser pursuant to the Purchase Agreement.
          Initial Purchaser: As defined in the preamble hereto.
          Liquidated Damages: As defined in Section 5(a) hereof.
          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.
          Purchase Agreement: As defined in the recitals hereto.
          Registration Default: As defined in Section 5 hereof.
          Registration Statement: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Exchange Notes pursuant to an
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 all amendments and
supplements thereto (including post-effective amendments) and all exhibits and
material incorporated by reference therein.
          Securities Act: The Securities Act of 1933, as amended.
          Shelf Filing Deadline: As defined in Section 4(a) hereof.
          Shelf Registration Statement: As defined in Section 4(a) hereof.
          Transfer Restricted Securities: Each Initial Note until the earliest
to occur of (a) the date on which such Initial Note has been exchanged in the
Exchange Offer by a Person other than a Broker-Dealer for an Exchange Note
entitled to be resold to the public by the Holder

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thereof without complying with the prospectus delivery requirements of the
Securities Act, (b) following the exchange by a Broker-Dealer in the Exchange
Offer of an Initial Note for an Exchange Note, the date on which such Exchange
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 Initial Note has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement (and the purchasers thereof have been
issued Exchange Notes) or (d) the date on which such Initial Note is distributed
to the public pursuant to Rule 144.
          Trustee: Wells Fargo Bank, N.A., a nationally chartered banking
association.
          Trust Indenture Act: The Trust Indenture Act of 1939 (15 U.S.C.
Section 77aaa 77bbbb) as in effect on the date of the Indenture.
          Underwritten Registration or Underwritten Offering: A registration
under a Shelf Registration Statement, pursuant to which securities of the
Company are sold to an underwriter for reoffering to the public.
          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 Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) hereof have been complied with), the Company and the Guarantors shall
(i) use their commercially reasonable efforts to cause to be filed with the
Commission after the Issue Date, a Registration Statement under the Securities
Act relating to the Exchange Notes and the Exchange Offer, (ii) use their
commercially reasonable efforts to cause such Registration Statement to become
effective not later than 270 days after the Issue Date, (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 Securities Act and
(C) cause all necessary filings in connection with the registration and
qualification of the Exchange Notes to be made under the state securities or
blue sky laws of such jurisdictions as are necessary to permit Consummation of
the Exchange Offer, and (iv) upon the effectiveness of such Registration
Statement, commence the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting (i) registration of the offer and issuance of the
Exchange Notes to be offered in exchange for the Initial Notes that are Transfer
Restricted Securities and (ii) resales of Exchange Notes by Broker Dealers who
currently hold Transfer Restricted Securities and that were acquired for their
own account as a result of market making activities or other trading

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activities (other than Initial Notes acquired directly from the Company or any
of its Affiliates) as contemplated by Section 3(c) below.
          (b) The Company and the Guarantors shall use their commercially
reasonable efforts to cause the Exchange Offer Registration Statement to be
effective continuously and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 30 days after the date notice of the
Exchange Offer is mailed to the Holders. The Company and the Guarantors shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Exchange Notes and the related
Guarantees shall be included in the Exchange Offer Registration Statement. The
Company and the Guarantors shall use their commercially reasonable efforts to
cause the Exchange Offer to be Consummated no later than 30 Business Days after
the date the Exchange Offer Registration Statement has become effective, or such
later date as may be required by United States federal securities laws.
          (c) The Company shall indicate in a “Plan of Distribution” section
contained in the Prospectus forming a part of the Exchange Offer Registration
Statement that any Broker-Dealer who holds 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 Initial Notes pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter”
within the meaning of the Securities Act and must, therefore, deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of the Exchange Notes received by such Broker-Dealer in the 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 resales by 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 Initial 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 commercially reasonable
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) hereof to the extent necessary to ensure that it is available for resales
of Initial Notes acquired by Broker-Dealers for their own accounts as a result
of market-making activities or other trading activities, and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period ending on the earlier of (i) 180 days from the date on which
the Exchange Offer Registration Statement is declared effective (ii) the date on
which a Broker-Dealer is no longer required to deliver a prospectus in
connection with market-making or other trading activities and (iii) the date on
which all the Initial Notes covered by such Exchange Offer Registration
Statement have been sold pursuant to such Exchange Offer Registration Statement.

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          The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time during such
180-day (or shorter as provided in the foregoing sentence) period in order to
facilitate such resales.
          SECTION 4. Shelf Registration.
          (a) Shelf Registration. If (i) the Company and the Guarantors are not
required to file an Exchange Offer Registration Statement or to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law or
Commission policy (after the procedures set forth in Section 6(a)(i) hereof have
been complied with), (ii) for any reason the Exchange Offer is not Consummated
within 30 Business Days after the Effectiveness Target Date with respect to the
Exchange Offer Registration Statement, or (iii) with respect to any Holder of
Transfer Restricted Securities, such holder notifies the Company prior to the
20th day following the consummation of the Exchange Offer that (A) such Holder
is prohibited by applicable law or Commission policy from participating in the
Exchange Offer, or (B) such Holder may not resell the Exchange Notes 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) such Holder is
a Broker-Dealer and holds Initial Notes acquired directly from the Company or
one of its Affiliates, then, upon such Holder’s request, the Company and the
Guarantors shall
     (x) use their commercially reasonable efforts to cause to be filed a shelf
registration statement pursuant to Rule 415 under the Securities Act, which may
be an amendment to the Exchange Offer Registration Statement (in either event,
the “Shelf Registration Statement”), on or prior to 90 days after the filing
obligation arises (such date being the “Shelf Filing Deadline”), 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 commercially reasonable efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on or prior to
270 days after the Shelf Filing Deadline.
          The Company and the Guarantors shall use their commercially reasonable
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
Initial 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 Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period until
the earlier of (i) the expiration of the period referred to in Rule 144(k) under
the Securities Act (or any successor rule) with respect to Transfer Restricted
Securities, (ii) two years following the effective date of such Shelf
Registration Statement and (iii) the date on which all the Initial Notes covered
by such Shelf Registration Statement have been sold pursuant to such Shelf
Registration Statement.
          (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

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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 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. No Holder of
Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
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.
          SECTION 5. Liquidated Damages. (a) If (i) a Shelf Registration
Statement is required to be filed by this Agreement and is not filed with the
Commission on or prior to the date specified for such filing in this Agreement,
(ii) any of the Registration Statements required by this Agreement 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
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 (each such event referred to in clauses
(i) through (iv), a “Registration Default”), the Company hereby agrees to pay
damages (“Liquidated Damages”) to each Holder of the Transfer Restricted
Securities in an amount equal to 0.25% per annum on the principal amount of
Transfer Restricted Securities held by such Holder during the 90-day period
immediately following the occurrence of any Registration Default and such amount
shall increase by 0.25% per annum at the end of each subsequent 90-day period,
but in no event shall such increase exceed 1.00% per annum. Following the cure
of all Registration Defaults relating to any particular Transfer Restricted
Securities, the payment of Liquidated Damages shall cease; provided, however,
that, if after payment of Liquidated Damages has ceased, a different
Registration Default occurs, Liquidated Damages shall again be paid pursuant to
the foregoing provisions. All accrued Liquidated Damages shall be paid in the
manner provided for the payment of interest on the Initial Notes as set forth in
the Indenture.
          (b) A Registration Default referred to in Section 5(iv) hereof shall
be deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related Prospectus if (i) such Registration
Default has occurred solely as a result of material events with respect to the
Company and the Guarantors that would need to be described in such Shelf
Registration Statement or the related Prospectus and such event is not so
described therein and (ii) the Company and the Guarantors are proceeding
promptly and in good faith to amend or supplement such Shelf Registration
Statement and related Prospectus to describe such events; provided, however,
that in any case if such Registration Default occurs for a continuous period in
excess of 30 days in any 12 month period, Liquidated Damages shall be payable in
accordance with the above paragraph from the day such Registration Default
occurs until such Registration Default is cured.
          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 be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such Note
shall have been satisfied in full.

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          SECTION 6. Registration Procedures.
          (a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their commercially reasonable
efforts to effect such exchange to permit the sale of Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following provisions:
     (i) If in the reasonable opinion of counsel to the Company there is a
question as to whether the 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 an Exchange Offer for such Initial Notes. The Company and the
Guarantors each hereby agree 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 the
Guarantors each hereby agree, however, to (A) participate in telephonic
conferences with the Commission, (B) deliver to the Commission staff an analysis
prepared by counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be permitted
and (C) diligently pursue a favorable resolution by the Commission staff of such
submission.
     (ii) As a condition to its participation in the Exchange Offer pursuant to
the terms of this Agreement, each Holder of Transfer Restricted Securities shall
furnish, upon the request of the 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 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 Exchange Notes to be issued
in the Exchange Offer and (C) it is acquiring the Exchange Notes 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, including any Holder that is a Broker-Dealer, shall
acknowledge and agree that 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 &
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 (which may include
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 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 Initial Notes acquired by such Holder directly
from the Company.

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          (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, if any, the Company and the Guarantors shall comply with
all the provisions of Section 6(c) below and shall use their commercially
reasonable efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof, and pursuant thereto the Company and the
Guarantors will as promptly as practicable prepare and file with the Commission
a Registration Statement relating to the registration on any appropriate form
under the Securities 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 resales of Initial Notes
by Broker-Dealers), the Company and the Guarantors shall:
     (i) use their commercially reasonable efforts to keep such Registration
Statement continuously effective and provide all requisite financial statements
including, if required by the Securities Act or any regulation thereunder,
financial statements of the Guarantors for the period specified in Section 3 or
4 hereof, as applicable; upon the occurrence of any event that would cause any
such Registration Statement or the Prospectus contained therein (A) to contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading or (B) not to be
effective and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company and the Guarantors shall file
promptly an appropriate amendment to such Registration Statement, in the case of
clause (A), correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), use their commercially reasonable 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 applicable Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable period
set forth in Section 3 or 4 hereof; cause the Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Securities Act, and to comply fully with the applicable
provisions of Rules 424 and 430A under the Securities Act in a timely manner;
and comply with the provisions of the Securities 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) advise the underwriter(s), if any, and selling Holders promptly and,
if requested by such Persons, 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

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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 Securities 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 commercially
reasonable efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
     (iv) furnish without charge to the Initial Purchaser, each selling Holder
named in any Shelf Registration Statement, and each of the underwriter(s), if
any, before filing with the Commission, copies of any Shelf 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 Shelf Registration
Statement), which documents will be subject to the review and comment of the
Initial Purchaser and underwriter(s), if any, in connection with such sale 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 to which the Initial Purchaser or the
underwriter(s), if any, shall reasonably object in writing within five Business
Days after the receipt thereof (such objection to be deemed timely made upon
confirmation of telecopy transmission within such period). The objection of the
Initial Purchaser or an underwriter, if any, shall be deemed to be reasonable if
such Registration Statement, amendment, Prospectus or supplement, as applicable,
as proposed to be filed, contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein not
misleading;
     (v) in connection with any Underwritten Offering, make available at
reasonable times for inspection by the Initial Purchaser, any managing
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney or accountant retained by the Initial Purchaser 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 of any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness; provided, however, that such Persons first agree in writing with
the

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Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of such
information will be kept confidential by such Persons, unless (A) disclosure of
such information is required by court or administrative order or is necessary to
respond to inquires of regulatory authorities, (B) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of such Shelf
Registration Statement or the use of any Prospectus), (C) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard such information by such Person or (D) such information
becomes available to such Person from a source other than the Company and its
subsidiaries and such source is not known, after reasonable inquiry, by such
Person to be bound by a confidentiality agreement; provided further that, to the
extent the foregoing investigation is being made contemporaneously by more than
two Holders, there shall be one law firm and one accounting firm retained by all
Holders to make such investigation;
     (vi) in connection with any Underwritten Offering, if requested by any
selling Holders or the underwriter(s), incorporate in any Registration Statement
or Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders and underwriter(s), if any,
may reasonably request to have included therein, including, without limitation,
information relating to the “Plan of Distribution” of the Transfer Restricted
Securities, information with respect to the principal amount of Transfer
Restricted Securities being sold to such underwriter(s), the purchase price
being paid 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;
     (vii) furnish to the Initial Purchaser, each selling Holder, who so
reasonably requests, and each of the underwriter(s), if any, without charge, at
least one copy of the Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto, including financial statements and
schedules and all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);
     (viii) deliver to each selling Holder 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 selling
Holders 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;
     (ix) in the case of a Shelf Registration Statement involving an
Underwritten Offering, 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 facilitate the
disposition of the Transfer Restricted Securities pursuant to such Underwritten
Offering, all to such extent as may be reasonably

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requested by the Initial Purchaser or, to the extent customary for such
transaction, by any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to such Underwritten Offering; and
the Company and the Guarantors shall:
     (A) furnish to each underwriter in such substance and scope as they may
request and as are customarily made by issuers to underwriters in primary
underwritten offerings:
     (1) a certificate, dated the date of the effectiveness of the closing of
such Underwritten Offering signed by (y) the President or any Vice President and
(z) a principal financial or accounting officer of the Company, confirming, as
of the date thereof, such matters set forth in the underwriting agreement as
such parties may reasonably and customarily request;
     (2) an opinion, dated the date of the closing of such Underwritten Offering
of counsel for the Company and the Guarantors, covering such matters as such
parties may reasonably request; and
     (3) a customary comfort letter, dated the date of the pricing of such
Underwritten Offering, from (i) the Company’s independent accountants and
(ii) the independent accountants of any other Person for which financial
statements are included in or incorporated by reference into such Shelf
Registration Statement, in the customary form and covering matters of the type
customarily requested to be covered in comfort letters by underwriters in
connection with primary underwritten offerings;
     (B) deliver such other documents and certificates as may be reasonably
requested by such parties to evidence compliance with Section 6(c)(ix)(A) hereof
and with any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company or the Guarantors pursuant to this
clause (ix), if any; and
     (C) 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 state 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 Underwritten Offering pursuant to 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 then 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 then so subject;

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     (x) 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 Holders or
underwriter(s);
     (xi) use its commercially reasonable 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, subject to
the proviso contained in Section 6(c)(ix)(C) hereof;
     (xii) if any fact or event contemplated by Section 6(c)(iii)(D) hereof
shall exist or have occurred, prepare a supplement or post-effective amendment
to the Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not misleading;
     (xiii) provide a CUSIP number for all Exchange Notes not later than the
effective date of a Registration Statement covering such Exchange Notes and
provide the Trustee under the Indenture with printed certificates for the
Exchange Notes, which are in a form eligible for deposit with the Depository
Trust Company;
     (xiv) 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 their
commercially reasonable 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;
     (xv) otherwise use their commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to securityholders, 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 commitment 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; and

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     (xvi) cause the Indenture to be qualified under the Trust Indenture Act not
later than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with, and cause the
Guarantors to cooperate with, the Trustee and the Holders to effect such changes
to the Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the Trust Indenture Act; and to execute, and cause
the Guarantors to execute, and use their commercially reasonable 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 such Indenture to be so qualified in a timely manner; and
          (d) Restrictions on Holders. 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)(xii) 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)(xii) hereof or shall have received the Advice.
          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
and 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 the Initial 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 securities or blue sky laws; (iii) all expenses of printing (including
printing certificates for the Exchange Notes to be issued in the Exchange Offer
and printing of Prospectuses), messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel for the Company, and the Guarantors
and, subject to Section 7(b) hereof, the Holders of Transfer Restricted
Securities; and (v) 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).
          The Company and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing

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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 or
the Guarantors.
          (b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchaser and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or resold pursuant to the
“Plan of Distribution” contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Shearman & Sterling LLP 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 Registration Statement is being prepared.
          (c) Each Holder will pay all underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such Holder’s
Transfer Restricted Securities pursuant to the Shelf Registration Statement.
          SECTION 8. Indemnification.
          (a) Each of the Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless each Holder, its directors, officers and
employees, and each Person, if any, who controls any Holder within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act against
any loss, claim, damage, liability or expense, as incurred, to which such Holder
or such controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, or at common
law or otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of the Company and/or the Guarantors),
insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (or any amendment or supplement thereto) or
any free writing prospectus or preliminary prospectus used in any transaction
contemplated hereby, or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and to reimburse each
Holder and each such controlling person for any and all expenses (including the
fees and disbursements of counsel chosen by such Holder or such controlling
person) as such expenses are reasonably incurred by such Holder or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense (including without
limitation and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing, settling, compromising, paying 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 such indemnified person) to the extent, but only to
the extent, arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by any of the
Holders expressly for use in any Registration Statement

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or Prospectus (or any amendment or supplement thereto) or any free writing
prospectus or preliminary prospectus used in any transaction contemplated
hereby. The indemnity agreement set forth in this Section 8(a) shall be in
addition to any liabilities that the Company or the Guarantors may otherwise
have.
          (b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Guarantors and each of their respective
directors, officers and employees and each Person, if any, who controls the
Company or any Guarantor within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, against any loss, claim, damage, liability or
expense, as incurred, to which the Company or the Guarantors or any such
director, officer, employee or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Holder or such controlling person), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
(i) arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus (or any
amendment or supplement thereto) or any free writing prospectus or preliminary
prospectus used in connection with any transaction contemplated hereby, or
(ii) arises out of or is 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, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Registration Statement or Prospectus (or any
amendment or supplement thereto) or any free writing prospectus or preliminary
prospectus used in connection with any transaction contemplated hereby, in
reliance upon and in conformity with written information furnished to the
Company by such Holder expressly for use therein; and to reimburse the Company,
the Guarantors or any such director, officer, employee or controlling person for
any legal and other expenses reasonably incurred by the Company, the Guarantors
or any such director, officer, employee or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. The indemnity agreement set forth in this
Section 8(b) shall be in addition to any liabilities that such Holder may
otherwise have. In no event shall the liability of any selling Holder hereunder
be greater than the dollar amount of the proceeds received by such Holder upon
the sale of the Transfer Restricted Securities giving rise to such
indemnification obligation.
          (c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 8 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in and, to the
extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the

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indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action or 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, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party’s election so to assume the defense of such
action and approval by the indemnified party of counsel, which such approval
shall not be unreasonably withheld, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local counsel),
approved by the indemnifying party, representing the indemnified parties who are
parties to such action) or (ii) 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 commencement of the action, in each of
which cases the reasonable fees and expenses of counsel shall be at the expense
of the indemnifying party.
          The indemnifying party under this Section 8 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 party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such action,
suit or proceeding.
          (d) If the indemnification provided for in this Section 8 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors, on the one hand, and the
Holders, on the other hand, from the Initial Placement (which in the case of the
Company and the Guarantors shall be deemed to be equal to the total gross
proceeds to the Company and the Guarantors from the Initial Placement and the
Registration Statement) or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and the Guarantors, on the one hand, and the
Holders, on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein which resulted in such
losses, claims,

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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 the Holders, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company or the Guarantors, on the one hand, or the
Holders, on the other hand, 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 this Section 8, any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made hereunder; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
          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 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 this Section 8.
          Notwithstanding the provisions of this Section 8, none of the Holders
(or any Person who controls such Holder within the meaning of the Securities Act
and the Exchange Act) shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the net proceeds received by such Holder
from the sale of the Transfer Restricted Securities pursuant to a Registration
Statement exceeds 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. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11 of the Securities 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(d) are several, and not joint, in proportion to the respective
principal amount of Initial Notes held by each of the Holders hereunder and not
joint. For purposes of this Section 8(d), each director, officer and employee of
each Holder and each Person, if any, who controls any Holder within the meaning
of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Holder, and each director, officer and employee of the
Company or any Guarantor, and each Person, if any, who controls the Company or
any Guarantor within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Company or any Guarantor.
          SECTION 9. Rule 144A. The Company and the Guarantors each 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

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Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Securities Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A under the Securities Act.
          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, however, that such
investment bankers and managers must be reasonably satisfactory to the Company.
          SECTION 12. Miscellaneous.
          (a) Remedies. Each of the Company and the Guarantors hereby agree that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agree to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
          (b) No Inconsistent Agreements. Each of the Company and the Guarantors
will not, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any of the Guarantors have previously entered into any
agreement granting any registration rights with respect to its securities to any
Person pursuant to which any such Person would have the right to include any
securities in any Registration Statement to be filed with the Commission as
required under this Agreement. 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 Notes. The Company and the Guarantors
will not take any action, or permit any change to occur, with respect to the
Initial Notes and/or the Exchange Notes that would materially and adversely
affect their ability to Consummate the 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 the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities.

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Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
Transfer Restricted Securities are being tendered pursuant to the Exchange Offer
and that does not affect directly or indirectly the rights of other Holders
whose securities are not being tendered pursuant to such Exchange Offer may be
given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered; provided that, with respect to
any matter that directly or indirectly affects the rights of the Initial
Purchaser hereunder, the Company shall obtain the written consent of the Initial
Purchaser (which consent shall not be unreasonably withheld) with respect to
which such amendment, qualification, supplement, waiver, consent or departure is
to be effective.
          (e) Additional Guarantors. The Company shall cause any of its
Restricted Subsidiaries (as defined in the Indenture) that becomes, prior to the
consummation of the Exchange Offer, a Guarantor in accordance with the terms and
provisions of the Indenture to become a party to this Agreement as a Guarantor.
It is understood and agreed that if, prior to the Exchange Offer, a Guarantor
that has executed this Agreement is no longer a Guarantor under the Indenture
pursuant to and in accordance with the provisions of the Indenture, such
Guarantor shall no longer be a Guarantor for purposes of this Agreement.
          (f) 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 Indenture, with a copy to the Registrar under the Indenture;
and
     (ii) if to the Company or the Guarantors:
Allis-Chalmers Energy Inc.
5075 Westheimer, Suite 890
Houston, TX 77056
Facsimile: (713) 369-0555
Attention: Theodore F. Pound III, Esq.
With a copy (which shall not constitute notice) to:
Andrews Kurth LLP
600 Travis, Suite 400
Houston, TX 77002
Facsimile: (713) 238-7135
Attention: Robert V. Jewell, Esq.
     (iii) if to the Initial Purchaser:
RBC Capital Markets Corporation
1211 Avenue of the Americas, 32nd Floor
New York, NY 10036
Facsimile: (212) 703-2295

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Attention: High Yield Capital Markets
With a copy (which shall not constitute notice) to:
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7179
Attention: Bruce Czachor, Esq.
          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.
          Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
          (g) 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.
          (h) 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.
          (i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
          (j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
          (k) Severability. In the event that 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.
          (l) Entire Agreement. This 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

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or referred to herein with respect to the registration rights granted by the
Company and the Guarantors with respect to the Transfer Restricted Securities.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

            Very truly yours,

COMPANY:

ALLIS-CHALMERS ENERGY INC.
      By:   /s/ David Wilde         Name:   David Wilde        Title:  
President and Chief Operating Officer        GUARANTORS:

ALLIS-CHALMERS GP, LLC
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary        ALLIS-CHALMERS LP, LLC
      By:   /s/ Jeffrey R. Freedman         Name:   Jeffrey R. Freedman       
Title:   Vice President and Secretary        ALLIS-CHALMERS MANAGEMENT, LP

By: Allis-Chalmers GP, LLC, its sole general partner
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary   

 

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            ALLIS-CHALMERS PRODUCTION SERVICES, INC.
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary        ALLIS-CHALMERS RENTAL TOOLS, INC.
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary        ALLIS-CHALMERS TUBULAR SERVICES,
INC.
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary        AIRCOMP L.L.C.
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary   

 

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            MOUNTAIN COMPRESSED AIR, INC.
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary        OILQUIP RENTALS INC.
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary        ROGERS OIL TOOL SERVICES, INC.
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary        STRATA DIRECTIONAL TECHNOLOGY,
INC.
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary   

 

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            TARGET ENERGY INC.
      By:   /s/ Theodore F. Pound III         Name:   Theodore F. Pound III     
  Title:   Vice President and Secretary   

 

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          The forgoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written:

     
 
    RBC CAPITAL MARKETS CORPORATION
 
   
 
   
By:
  /s/ Nicholas P. Daifotis
 
   
 
  Name:  Nicholas P. Daifotis
 
  Title:  Managing Director

 

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SCHEDULE A
Guarantors
Allis-Chalmers GP, LLC
Allis-Chalmers LP, LLC
Allis-Chalmers Management, LP
Allis-Chalmers Production Services, Inc.
Allis-Chalmers Rental Tools, Inc.
Allis-Chalmers Tubular Services, Inc.
Aircomp L.L.C.
Mountain Compressed Air, Inc.
OilQuip Rentals Inc.
Rogers Oil Tool Services, Inc.
Strata Directional Technology, Inc.
Target Energy Inc.