exv10w2



 






Exhibit 10.2



 



 





REGISTRATION RIGHTS AGREEMENT




Dated as of April 12, 2006




By and Among




BASIC ENERGY SERVICES, INC.,




the GUARANTORS named herein




and




UBS SECURITIES LLC,

BANC OF AMERICA SECURITIES LLC,

LEHMAN BROTHERS INC.,

CREDIT SUISSE SECURITIES (USA) LLC

and

GOLDMAN, SACHS & CO.,




as Initial Purchasers

7.125% Senior Notes due 2016




 



 











 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 1.
	 	Definitions	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2.
	 	Exchange Offer	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.
	 	Shelf Registration	 	 	7	 
	 
	 	 	 	 	 	 
	Section 4.
	 	Liquidated Damages	 	 	8	 
	 
	 	 	 	 	 	 
	Section 5.
	 	Registration Procedures	 	 	9	 
	 
	 	 	 	 	 	 
	Section 6.
	 	Market Making	 	 	17	 
	 
	 	 	 	 	 	 
	Section 7.
	 	Registration Expenses	 	 	22	 
	 
	 	 	 	 	 	 
	Section 8.
	 	Indemnification	 	 	23	 
	 
	 	 	 	 	 	 
	Section 9.
	 	Rules 144 and 144A	 	 	26	 
	 
	 	 	 	 	 	 
	Section 10.
	 	Underwritten Registrations	 	 	26	 
	 
	 	 	 	 	 	 
	Section 11.
	 	Miscellaneous	 	 	27	 
	 
	 	 	 	 	 	 
	(a)
	 	No Inconsistent Agreements	 	 	27	 
	(b)
	 	Adjustments Affecting Registrable Notes	 	 	27	 
	(c)
	 	Amendments and Waivers	 	 	27	 
	(d)
	 	Notices	 	 	27	 
	(e)
	 	Guarantors	 	 	28	 
	(f)
	 	Successors and Assigns	 	 	28	 
	(g)
	 	Counterparts	 	 	29	 
	(h)
	 	Headings	 	 	29	 
	(i)
	 	Governing Law	 	 	29	 
	(j)
	 	Severability	 	 	29	 
	(k)
	 	Securities Held by the Issuers or Their Affiliates	 	 	29	 
	(l)
	 	Third-Party Beneficiaries	 	 	29	 
	(m)
	 	Entire Agreement	 	 	29	 
	 
	 	 	 	 	 	 
	SIGNATURES	 	 	S-1	 




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REGISTRATION RIGHTS AGREEMENT




          This Registration Rights Agreement (this “Agreement”) is dated as of April 12, 2006,
by and among BASIC ENERGY SERVICES, INC., a Delaware corporation (the “Company”), and each
of the Guarantors (as defined herein) (the Company and the Guarantors are referred to collectively
herein as the “Issuers”), on the one hand, and UBS
SECURITIES LLC (the “Representative”)
and BANC OF AMERICA SECURITIES LLC, LEHMAN BROTHERS INC., CREDIT SUISSE SECURITIES (USA) LLC AND
GOLDMAN, SACHS & CO. (together with the Representative, the “Initial Purchasers”), on the
other hand.




          This Agreement is entered into in connection with the Purchase Agreement, dated as of April 7,
2006, by and among the Issuers and the Initial Purchasers (the “Purchase Agreement”),
relating to the offering of $225,000,000 aggregate principal amount of 7.125% Senior Notes due 2016
of the Company (including the guarantees thereof by the Guarantors, the “Notes”). The
execution and delivery of this Agreement is a condition to the Initial Purchasers’ obligation to
purchase the Notes under the Purchase Agreement.




          The parties hereby agree as follows:




     Section 1. Definitions



          As used in this Agreement, the following terms shall have the following meanings:




          “action” shall have the meaning set forth in Section 8(c) hereof.




          “Advice” shall have the meaning set forth in Section 5 hereof.




          “Affiliate” of any specified Person shall mean any other Person that, 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 shall mean 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” shall have meanings correlative
to the foregoing.




          “Agreement” shall have the meaning set forth in the first introductory paragraph
hereto.




          “Applicable Period” shall have the meaning set forth in Section 2(b) hereof.




          “Board of Directors” shall have the meaning set forth in Section 5 hereof.




          “Business Day” shall mean a day that is not a Legal Holiday.




          “Company” shall have the meaning set forth in the introductory paragraph hereto and
shall also include the Company’s permitted successors and assigns.




          “Commission” shall mean the Securities and Exchange Commission.










 



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          “day” shall mean a calendar day.




          “Delay Period” shall have the meaning set forth in Section 5 hereof.




          “Effectiveness Period” shall have the meaning set forth in Section 3(b) hereof.




          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.




          “Exchange Notes” shall have the meaning set forth in Section 2(a) hereof.




          “Exchange Offer” shall have the meaning set forth in Section 2(a) hereof.




          “Exchange Offer Registration Statement” shall have the meaning set forth in Section
2(a) hereof.




          “Guarantors” means each subsidiary of the Company listed on the signature page to this
Agreement and each Person who executes and delivers a counterpart of this Agreement after the date
hereof pursuant to Section 11(e) hereof.




          “Holder” shall mean any holder of a Registrable Note or Registrable Notes.




          “Indenture” shall mean the Indenture, dated as of April 12, 2006, by and among the
Issuers and The Bank of New York Trust Company, N.A., as trustee, pursuant to which the Notes are
being issued, as amended or supplemented from time to time in accordance with the terms thereof.




          “Initial Purchasers” shall have the meaning set forth in the first introductory
paragraph hereof.




          “Inspectors” shall have the meaning set forth in Section 5(n) hereof.




          “Issue Date” shall mean April 12, 2006, the date of original issuance of the Notes.




          “Issuers” shall have the meaning set forth in the first introductory paragraph hereto.




          “Legal Holiday” shall mean a Saturday, a Sunday or a day on which banking institutions
in New York, New York are required by law, regulation or executive order to remain closed.




          “Liquidated Damages” shall have the meaning set forth in Section 4(a) hereof.




          “Liquidated Damages Payment Date” shall have the meaning set forth in Section 4(b)
hereof.




          “Losses” shall have the meaning set forth in Section 8(a) hereof.




          “NASD” shall have the meaning set forth in Section 5(s) hereof.










 



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          “Notes” shall have the meaning set forth in the second introductory paragraph hereto.




          “Participant” shall have the meaning set forth in Section 8(a) hereof.




          “Participating Broker-Dealer” shall have the meaning set forth in Section 2(b) hereof.




          “Person” shall mean an individual, corporation, partnership, joint venture
association, joint stock company, trust, unincorporated limited liability company, government or
any agency or political subdivision thereof or any other entity.




          “Private Exchange” shall have the meaning set forth in Section 2(b) hereof.




          “Private Exchange Notes” shall have the meaning set forth in Section 2(b) hereof.




          “Prospectus” shall mean the prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a prospectus that includes
any information previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, and all other 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.




          “Purchase Agreement” shall have the meaning set forth in the second introductory
paragraph hereof.




          “Records” shall have the meaning set forth in Section 5(n) hereof.




          “Registrable Notes” shall mean each Note upon its original issuance and at all times
subsequent thereto, each Exchange Note as to which Section 2(c)(iv) hereof is applicable upon
original issuance and at all times subsequent thereto and each Private Exchange Note upon original
issuance thereof and at all times subsequent thereto, in each case until (i) a Registration
Statement (other than, with respect to any Exchange Note as to which Section 2(c)(iv) hereof is
applicable, the Exchange Offer Registration Statement) covering such Note, Exchange Note or Private
Exchange Note has been declared effective by the Commission and such Note, Exchange Note or such
Private Exchange Note, as the case may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Note has been exchanged pursuant to the Exchange Offer for an
Exchange Note or Exchange Notes that may be resold without restriction under state and federal
securities laws, (iii) such Note, Exchange Note or Private Exchange Note, as the case may be,
ceases to be outstanding for purposes of the Indenture or (iv) such Note, Exchange Note or Private
Exchange Note has been sold in compliance with Rule 144 or is salable pursuant to Rule 144(k).




          “Registration Default” shall have the meaning set forth in Section 4(a) hereof.




          “Registration Statement” shall mean any appropriate registration statement of the
Issuers covering any of the Registrable Notes filed with the Commission under the Securities Act,
and all amendments and supplements to any such Registration Statement, including post-effective
amend-







 



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ments, in each case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.




          “Representative” shall have the meaning set forth in the introductory paragraph
hereto.




          “Requesting Participating Broker-Dealer” shall have the meaning set forth in Section
2(b) hereof.




          “Rule 144” shall mean Rule 144 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter
adopted by the Commission providing for offers and sales of securities made in compliance therewith
resulting in offers and sales by subsequent holders that are not Affiliates of an issuer of such
securities being free of the registration and prospectus delivery requirements of the Securities
Act.




          “Rule 144A” shall mean Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter
adopted by the Commission.




          “Rule 415” shall mean Rule 415 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission.




          “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.




          “Shelf Filing Event” shall have the meaning set forth in Section 2(c) hereof.




          “Shelf Registration” shall have the meaning set forth in Section 3(a) hereof.




          “TIA” shall mean the Trust Indenture Act of 1939, as amended.




          “Trustee” shall mean the trustee under the Indenture and the trustee (if any) under
any indenture governing the Exchange Notes and Private Exchange Notes.




          “underwritten registration” or “underwritten offering” shall mean a
registration in which securities of the Issuers are sold to an underwriter for reoffering to the
public.




     Section 2. Exchange Offer



          (a) Unless the Exchange Offer would violate applicable law or interpretation of the staff of
the Commission, the Issuers shall (i) file a Registration Statement (the “Exchange Offer
Registration Statement”) with the Commission on an appropriate registration form with respect
to a registered offer (the “Exchange Offer”) to exchange any and all of the Registrable
Notes for a like aggregate principal amount of notes (including the guarantees with respect
thereto, the “Exchange Notes”) that are identical in all material respects to the Notes
(except that the Exchange Notes shall not contain restrictive legends, terms with respect to
transfer restrictions or Liquidated Damages upon a







 



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Registration Default), (ii) use their reasonable best efforts to cause the Exchange Offer
Registration Statement to be declared effective under the Securities Act and (iii) use their
reasonable best efforts to consummate the Exchange Offer within 270 days after the Issue Date.
Upon the Exchange Offer Registration Statement being declared effective by the Commission, the
Issuers will offer the Exchange Notes in exchange for surrender of the Notes. The Issuers shall
keep the Exchange Offer open for not less than 20 Business Days (or longer if required by
applicable law) after the date notice of the Exchange Offer is mailed to Holders.




          Each Holder that participates in the Exchange Offer will be required to represent to the
Issuers in writing that (i) any Exchange Notes to be received by it will be acquired in the
ordinary course of its business, (ii) it has no arrangement or understanding with any Person to
participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes in
violation of the provisions of the Securities Act, (iii) it is not an affiliate of the Company or
any Guarantor as defined by Rule 405 of the Securities Act, or if it is an affiliate, it will
comply with the registration and prospectus delivery requirements of the Securities Act to the
extent applicable, (iv) if such Holder is not a broker-dealer, it is not engaged in, and does not
intend to engage in, a distribution of Exchange Notes and (v) if such Holder is a broker-dealer
that will receive Exchange Notes for its own account in exchange for Notes that were acquired as a
result of market-making or other trading activities, it will deliver a prospectus in connection
with any resale of such Exchange Notes.




          (b) The Issuers and the Initial Purchasers acknowledge that the staff of the Commission has
taken the position that any broker-dealer that elects to exchange Notes that were acquired by such
broker-dealer for its own account as a result of market-making or other trading activities for
Exchange Notes in the Exchange Offer (a “Participating Broker-Dealer”) may be deemed to be
an “underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such Exchange Notes (other than
a resale of an unsold allotment resulting from the original offering of the Notes).




          The Issuers and the Initial Purchasers also acknowledge that the staff of the Commission has
taken the position that if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to the above effect and the means by which
Participating Broker-Dealers may resell the Exchange Notes, without naming the Participating
Broker-Dealers or specifying the amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligations under
the Securities Act in connection with resales of Exchange Notes for their own accounts, so long as
the Prospectus otherwise meets the requirements of the Securities Act.




          In light of the foregoing, if requested by a Participating Broker-Dealer (a “Requesting
Participating Broker-Dealer”), the Issuers agree to use their reasonable best efforts to keep
the Exchange Offer Registration Statement continuously effective for a period necessary to comply
with applicable law in connection with such resales but in no event more than 180 days after the
date on which the Exchange Registration Statement is declared effective, or such longer period if
extended pursuant to any Delay Period in accordance with the last paragraph of Section 5 hereof
(such period, the “Applicable Period”), or such earlier date as each Requesting
Participating Broker-Dealer shall have notified the Company in writing that such Requesting
Participating Broker-Dealer has resold all Exchange Notes acquired by it in the Exchange Offer.
The Issuers shall include a plan of distribution







 



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in such Exchange Offer Registration Statement that meets the requirements set forth in the
preceding paragraph.




          If, prior to consummation of the Exchange Offer, any Initial Purchaser or any other Holder
holds any Notes acquired by it that have, or that are reasonably likely to be determined to have,
the status of an unsold allotment in an initial distribution, or if any Holder is not entitled to
participate in the Exchange Offer, the Issuers upon the request of the Initial Purchasers or any
such Holder, as the case may be, shall simultaneously with the delivery of the Exchange Notes in
the Exchange Offer, issue and deliver to the Initial Purchasers or any such Holder, as the case may
be, in exchange (the “Private Exchange”) for such Notes held by such Initial Purchaser or
any such Holder a like principal amount of notes (the “Private Exchange Notes”) of the
Issuers that are identical in all material respects to the Exchange Notes except that the Private
Exchange Notes may be subject to restrictions on transfer and bear a legend to such effect. The
Private Exchange Notes shall be issued pursuant to the same indenture as the Exchange Notes and
bear the same CUSIP number as the Exchange Notes (if permitted by the CUSIP Service Bureau).




          Upon consummation of the Exchange Offer in accordance with this Section 2, the Issuers shall
have no further registration obligations other than the Issuers’ continuing registration
obligations with respect to (i) Private Exchange Notes, (ii) Exchange Notes held by Participating
Broker-Dealers and (iii) Notes or Exchange Notes as to which clause (c)(iv) of this Section 2
applies.




          In connection with the Exchange Offer, the Issuers shall:





        (1) mail or cause to be mailed to each Holder entitled to participate in the Exchange
Offer a copy of the Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;




        (2) utilize the services of a depositary for the Exchange Offer with an address in
the Borough of Manhattan, The City of New York;




        (3) permit Holders to withdraw tendered Notes at any time prior to the close of
business, New York time, on the last Business Day on which the Exchange Offer shall remain
open; and




        (4) otherwise comply in all material respects with all applicable laws, rules and
regulations.



          As soon as practicable after the close of the Exchange Offer and the Private Exchange, if any,
the Issuers shall:





        (1) accept for exchange all Notes validly tendered and not validly withdrawn by the
Holders pursuant to the Exchange Offer and the Private Exchange, if any;




        (2) deliver or cause to be delivered to the Trustee for cancellation all Registrable
Notes so accepted for exchange; and









 



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        (3) cause the Trustee to authenticate and deliver promptly to each such Holder of
Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal
amount to the Registrable Notes of such Holder so accepted for exchange.



          The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than
that (i) the Exchange Offer or Private Exchange, as the case may be, does not violate applicable
law or any applicable interpretation of the staff of the Commission, (ii) no action or proceeding
shall have been instituted or threatened in any court or by any governmental agency which might
materially impair the ability of the Issuers to proceed with the Exchange Offer or the Private
Exchange, and no material adverse development shall have occurred in any existing action or
proceeding with respect to the Issuers and (iii) all governmental approvals shall have been
obtained, which approvals the Company deems necessary for the consummation of the Exchange Offer or
Private Exchange.




          The Exchange Notes and the Private Exchange Notes shall be issued under (i) the Indenture or
(ii) an indenture identical in all material respects to the Indenture (in either case, with such
changes as are necessary to comply with any requirements of the Commission to effect or maintain
the qualification thereof under the TIA) and which, in either case, has been qualified under the
TIA and shall provide that (a) the Exchange Notes shall not be subject to the transfer restrictions
set forth in the Indenture and (b) the Private Exchange Notes shall be subject to the transfer
restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the
Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all
matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the Notes
will have the right to vote or consent as a separate class on any matter.




          (c) In the event that (i) the applicable law or interpretations of the staff of the Commission
do not permit the Issuers to effect the Exchange Offer, (ii) for any reason the Exchange Offer is
not consummated within 270 days of the Issue Date, (iii) any Holder notifies the Company prior to
the 20th Business Day following consummation of the Exchange Offer that it is prohibited by law or
the applicable interpretations of the staff of the Commission from participating in the Exchange
Offer, (iv) in the case of any Holder who participates in the Exchange Offer, such Holder does not
receive Exchange Notes on the date of the exchange that may be sold without restriction under state
and federal securities laws (other than due solely to the status of such Holder as an affiliate of
any Issuer within the meaning of the Securities Act) or (v) any Initial Purchaser so requests with
respect to Notes or Private Exchange Notes that have, or that are reasonably likely to be
determined to have, the status of unsold allotments in an initial distribution (each such event
referred to in clauses (i) through (v) of this sentence, a “Shelf Filing Event”), then the
Issuers shall file a Shelf Registration pursuant to Section 3 hereof.




          Section 3. Shelf Registration




          If at any time a Shelf Filing Event shall occur, then:




          (a) Shelf Registration. The Issuers shall file with the Commission a Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Notes not exchanged in the Exchange Offer, Private Exchange Notes and Exchange Notes as
to which Section 2(c)(iv) is applicable (the “Shelf Registration”). The Shelf Registration
shall be







 



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on Form S-1 or another appropriate form permitting registration of such Registrable Notes for
resale by Holders in the manner or manners designated by them (including, without limitation, one
or more underwritten offerings). The Issuers shall not permit any securities other than the
Registrable Notes to be included in the Shelf Registration.




          (b) The Issuers shall use all their reasonable best efforts (x) to cause the Shelf
Registration to be declared effective under the Securities Act on or prior to the later of (A) the
150th day after the Issue Date and (B) the 120th day after the occurrence of the applicable Shelf
Filing Event and (y) to keep the Shelf Registration continuously effective under the Securities Act
for the period ending on the date which is two years from the Issue Date, subject to extension
pursuant to the penultimate paragraph of Section 5 hereof (the “Effectiveness Period”), or
such shorter period ending when all Registrable Notes covered by the Shelf Registration have been
sold in the manner set forth and as contemplated in the Shelf Registration; provided,
however, that (i) the Effectiveness Period in respect of the Shelf Registration shall be
extended to the extent required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the Securities Act and as otherwise provided herein and (ii) the
Company may suspend the effectiveness of the Shelf Registration by written notice to the Holders
solely (A) as a result of the filing of a post-effective amendment to the Shelf Registration to
incorporate annual audited financial information with respect to the Company where such
post-effective amendment is not yet effective and needs to be declared effective to permit Holders
to use the related Prospectus or (B) to the extent and for so long as permitted by the penultimate
paragraph of Section 5.




          (c) Supplements and Amendments. The Issuers agree to supplement or make amendments to
the Shelf Registration as and when required by the rules, regulations or instructions applicable to
the registration form used for such Shelf Registration or by the Securities Act or rules and
regulations thereunder for shelf registration, or if reasonably requested by the Holders of a
majority in aggregate principal amount of the Registrable Notes covered by such Registration
Statement or by any underwriter of such Registrable Notes.




     Section 4. Liquidated Damages



          (a) The Issuers and the Initial Purchasers agree that the Holders will suffer damages if the
Issuers fails to fulfill their obligations under Section 2 or Section 3 hereof and that it would
not be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers
agree that if:





     (i) the Exchange Offer is not consummated on or prior to the 270th day following the
Issue Date, or, if that day is not a Business Day, the next day that is a Business Day; or




     (ii) the Shelf Registration is required to be filed but is not declared effective
within the time period specified in Section 3(b)(x), or is declared effective by such date
but thereafter ceases to be effective or usable (unless the Shelf Registration ceases to be
effective or usable as specifically permitted by the penultimate paragraph of Section 5
hereof),


(each such event referred to in clauses (i) and (ii) a “Registration Default”), additional
interest in the form of additional cash interest (“Liquidated Damages”) will accrue on the
affected Registrable Notes.










 



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The rate of Liquidated Damages will be 0.25% per annum for the first 90-day period immediately
following the occurrence of a Registration Default, increasing by an additional 0.25% per annum
with respect to each subsequent 90-day period up to a maximum amount of Liquidated Damages of 1.00%
per annum, from and including the date on which any such Registration Default shall occur to, but
excluding, the earlier of (1) the date on which all Registration Defaults have been cured or (2)
the date on which such Registrable Note ceases to be a Registrable Note or otherwise become freely
transferable by Holders other than Affiliates of the Issuers without further registration under the
Securities Act. If, after the cure of all Registration Defaults then in effect, there is a
subsequent Registration Default, the rate of Liquidated Damages for such subsequent Registration
Default shall initially be 0.25% regardless of the rate in effect with respect to any prior
Registration Default at the time of cure of such Registration Default and shall increase in the
manner and be subject to the maximum Liquidated Damages rate contained in the preceding sentence.




          Notwithstanding the foregoing, (1) the amount of Liquidated Damages payable shall not increase
because more than one Registration Default has occurred and is pending and (2) a Holder of
Registrable Notes that is not entitled to the benefits of the Shelf Registration (e.g.,
such Holder has not elected to include information) shall not be entitled to Liquidated Damages
with respect to a Registration Default that pertains to the Shelf Registration.




          (b) So long as Notes remain outstanding, the Company shall notify the Trustee within five
Business Days after each and every date on which an event occurs in respect of which Liquidated
Damages is required to be paid. Any amounts of Liquidated Damages due pursuant to clauses (a)(i)
or (a)(ii) of this Section 4 will be payable in cash semi-annually on each April 15 and October 15
(each a “Liquidated Damages Payment Date”), commencing with the first such date occurring
after any such Liquidated Damages commences to accrue, to Holders to whom regular interest is
payable on such Liquidated Damages Payment Date with respect to Notes that are Registrable Notes.
The amount of Liquidated Damages for each Registrable Note will be determined by multiplying the
applicable rate of Liquidated Damages by the aggregate principal amount of such Registrable Note
outstanding on the Liquidated Damages Payment Date following such Registration Default in the case
of the first such payment of Liquidated Damages with respect to a Registration Default (and
thereafter at the next succeeding Liquidated Damages Payment Date until the cure of such
Registration Default), and multiplying the product of the foregoing by a fraction, the numerator of
which is the number of days such Liquidated Damages rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a
partial month, the actual number of days elapsed), and the denominator of which is 360.




     Section 5. Registration Procedures



          In connection with the filing of any Registration Statement pursuant to Section 2 or 3 hereof,
the Issuers shall effect such registrations to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Issuers hereunder, the Issuers shall:




     (a) Prepare and file with the Commission the Registration Statement or Registration
Statements prescribed by Section 2 or 3 hereof, and use their reasonable best efforts to
cause each such Registration Statement to become effective and remain effective as provided









 



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herein; provided, however, that, if (1) such filing is pursuant to
Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period relating thereto, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Issuers shall furnish to and afford the Holders of
the Registrable Notes covered by such Registration Statement or each such Participating
Broker-Dealer, as the case may be, their counsel (if requested by any such person) and the
managing underwriters, if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be incorporated by reference therein and all
exhibits thereto) proposed to be filed (in each case at least five Business Days prior to
such filing). The Issuers shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto if the Holders of a majority in aggregate principal amount
of the Registrable Notes covered by such Registration Statement, or any such Participating
Broker-Dealer, as the case may be, their counsel, or the managing underwriters, if any,
shall reasonably object.




     (b) Prepare and file with the Commission such amendments and post-effective amendments
to each Shelf Registration or Exchange Offer Registration Statement, as the case may be, as
may be necessary to keep such Registration Statement continuously effective for the
Effectiveness Period or the Applicable Period, as the case may be; cause the related
Prospectus to be supplemented by any Prospectus supplement required by applicable law, and
as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act; and comply with the applicable provisions of
the Securities Act and the Exchange Act with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being sold by a
Participating Broker-Dealer covered by any such Prospectus, in each case, in accordance with
the intended methods of distribution set forth in such Registration Statement or Prospectus,
as so amended or supplemented.




     (c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto
from whom the Company has received written notice that such Broker-Dealer will be a
Participating Broker-Dealer in the applicable Exchange Offer, notify the selling Holders of
Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their
counsel (if such counsel is known to the Issuers) and the managing underwriters, if any, as
promptly as possible, and, if requested by any such Person, confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective amendment, when
the same has become effective under the Securities Act (including in such notice a written
statement that any Holder may, upon request, obtain, at the sole expense of the Issuers, one
conformed copy of such Registration Statement or post-effective amendment including
financial statements and schedules, documents incorporated or deemed to be incorporated by
reference and exhibits), (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of a Registration









 



-11-



Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when
a Prospectus is required by the Securities Act to be delivered in connection with sales of
the Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers the
representations and warranties of the Issuers contained in any agreement (including any
underwriting agreement) contemplated by Section 5(m) hereof cease to be true and correct in
all material respects, (iv) of the receipt by any of the Issuers of any notification with
respect to the suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Notes or the Exchange Notes for offer or
sale in any jurisdiction, or the initiation or threatening of any proceeding for such
purpose, (v) of the happening of any event, the existence of any condition or any
information becoming known to any Issuer that makes any statement made in such Registration
Statement or related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making of any
changes in or amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, and (vi) of
the Company’s determination that a post-effective amendment to a Registration Statement
would be appropriate.



     (d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use their
reasonable best efforts to prevent the issuance of any order suspending the effectiveness of
a Registration Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any of the Registrable
Notes or the Exchange Notes, as the case may be, for sale in any jurisdiction, and, if any
such order is issued, to use their reasonable best efforts to obtain the withdrawal of any
such order at the earliest practicable moment.



     (e) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period and if requested
by the managing underwriter or underwriters (if any), the Holders of a majority in aggregate
principal amount of the Registrable Notes covered by such Registration Statement or any
Participating Broker-Dealer, as the case may be, (i) promptly incorporate in such
Registration Statement or Prospectus a prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters (if any), such Holders or any
Participating Broker-Dealer, as the case may be (based upon advice of counsel), determine is
reasonably required to be included therein and (ii) make all required filings of such
prospectus supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment;









 



-12-


provided, however, that the Issuers shall not be required to take any
action hereunder that would, in the written opinion of counsel to the Issuers, violate
applicable laws.



     (f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to each
selling Holder of Registrable Notes or each such Participating Broker-Dealer, as the case
may be, who so requests, their counsel (if requested by any such person) and each managing
underwriter, if any, at the sole expense of the Issuers, one conformed copy of the
Registration Statement or Registration Statements and each post-effective amendment thereto,
including financial statements and schedules, and, if requested, all documents incorporated
or deemed to be incorporated therein by reference and all exhibits.



     (g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each
selling Holder of Registrable Notes or each such Participating Broker-Dealer, as the case
may be, their respective counsel (if requested) and the underwriters, if any, at the sole
expense of the Issuers, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably request; and, subject to
the last paragraph of this Section 5, the Issuers hereby consent to the use of such
Prospectus and each amendment or supplement thereto by each of the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the
underwriters or agents, if any, and dealers (if any), in connection with the offering and
sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the
Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto.



     (h) Prior to any public offering of Registrable Notes or Exchange Notes or any delivery
of a Prospectus contained in the Exchange Offer Registration Statement by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use their
reasonable best efforts to register or qualify, and to cooperate with the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing
underwriter or underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or qualification) of such
Registrable Notes or Exchange Notes, as the case may be, for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably
request; provided, however, that where Exchange Notes or Registrable Notes
are offered other than through an underwritten offering, the Issuers agree to cause the
Issuers’ counsel to perform Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 5(h); keep each such
registration or qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other acts or
things reasonably necessary or advisable to enable the disposition in
such juris-









 



-13-



dictions of such Exchange Notes or Registrable Notes covered by the applicable
Registration Statement; provided, however, that no Issuer shall be required
to (A) qualify generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or (C) subject itself to taxation in
excess of a nominal dollar amount in any such jurisdiction where it is not then so subject.



     (i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the
selling Holders of Registrable Notes and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing Registrable
Notes to be sold, which certificates shall not bear any restrictive legends and shall be in
a form eligible for deposit with The Depository Trust Company; and enable such Registrable
Notes to be in such denominations and registered in such names as the managing underwriter
or underwriters, if any, or selling Holders may request at least two Business Days prior to
any sale of such Registrable Notes.



     (j) Use their reasonable best efforts to cause the Registrable Notes or Exchange Notes
covered by any Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be reasonably necessary to enable the seller or
sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of
such Registrable Notes or Exchange Notes, except as may be required solely as a consequence
of the nature of such selling Holder’s business, in which case the Issuers will cooperate in
all reasonable respects with the filing of such Registration Statement and the granting of
such approvals.



     (k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the
occurrence of any event contemplated by Section 5(c)(v) or 5(c)(vi) hereof, as promptly as
practicable prepare and (subject to Section 5(a) and the penultimate paragraph of this
Section 5) file with the Commission, at the sole expense of the Issuers, a supplement or
post-effective amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by reference,
or file any other required document so that, as thereafter delivered to the purchasers of
the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to
whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus
will not 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, in the light of
the circumstances under which they were made, not misleading.



     (l) Prior to the effective date of the first Registration Statement relating to the
Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes in a
form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number
for the Registrable Notes.









 



-14-


     (m) In connection with any underwritten offering of Registrable Notes pursuant to a
Shelf Registration, enter into an underwriting agreement as is customary in underwritten
offerings of debt securities similar to the Notes and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order to expedite or
facilitate the registration or the disposition of such Registrable Notes and, whether or not
such offering is an underwritten offering, (i) make such representations and warranties to
the underwriter or underwriters (and to any Holder that has advised the Company that such
Holder may have a “due diligence” defense under Section 11 of the Securities Act), and
covenants with, the underwriters with respect to the business of the Issuers and their
subsidiaries (including any acquired business, properties or entity, if applicable), and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings of debt securities similar to the Notes, and confirm
the same in writing if and when requested; (ii) use their reasonable best efforts to obtain
the written opinions of counsel to the Issuers and written updates thereof in form, scope
and substance reasonably satisfactory to the managing underwriter or underwriters, addressed
to the underwriters (and to any Holder that has advised the Company that such Holder may
have a “due diligence” defense under Section 11 of the Securities Act) covering the matters
customarily covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by the managing underwriter or underwriters; (iii) use their
reasonable best efforts to obtain “cold comfort” letters and updates thereof in form, scope
and substance reasonably satisfactory to the managing underwriter or underwriters from the
independent certified public accountants of the Issuers (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 or incorporated by reference in the Registration Statement),
addressed to each of the underwriters (and to any Holder that has advised the Company that
such Holder may have a “due diligence” defense under Section 11 of the Securities Act), such
letters to be in customary form and covering matters of the type customarily covered in
“cold comfort” letters in connection with underwritten offerings; and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification provisions
and procedures no less favorable than those set forth in Section 8 hereof (or such other
provisions and procedures acceptable to Holders of a majority in aggregate principal amount
of Registrable Notes covered by such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified pursuant to said
Section; provided that the Issuers shall not be required to provide indemnification
to any underwriter selected in accordance with the provisions of Section 10 hereof with
respect to information relating to such underwriter furnished in writing to the Company by
or on behalf of such underwriter expressly for inclusion in such Registration Statement.
The above shall be done at each closing under such underwriting agreement, or as and to the
extent required thereunder.



     (n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available
for inspection by any selling Holder of such Registrable Notes being sold or each such
Participating Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registra-









 



-15-



ble Notes, if any, and any attorney, accountant or other agent retained by any such
selling Holder or each such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the “Inspectors”), at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent corporate documents
and instruments of the Company and its subsidiaries (collectively, the “Records”) as
shall be reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the Company and its
subsidiaries to supply all information reasonably requested by any such Inspector in
connection with such Registration Statement and Prospectus. Each Inspector shall agree in
writing that it will keep the Records confidential and that it will not disclose, or use in
connection with any market transactions in violation of any applicable securities laws, any
Records that the Company determines, in good faith, to be confidential and that it notifies
the Inspectors in writing are confidential unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such Registration Statement or
Prospectus, (ii) the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, (iii) disclosure of such information is
necessary or advisable in the opinion of counsel for an Inspector in connection with any
action, claim, suit or proceeding, directly or indirectly, involving or potentially
involving such Inspector and arising out of, based upon, relating to, or involving this
Agreement or the Purchase Agreement, or any transactions contemplated hereby or thereby or
arising hereunder or thereunder, or (iv) the information in such Records has been made
generally available to the public; provided, however, that (i) each
Inspector shall agree to use reasonable best efforts to provide notice to the Company of the
potential disclosure of any information by such Inspector pursuant to clause (i), (ii) or
(iii) of this sentence to permit the Issuers to obtain a protective order (or waive the
provisions of this paragraph (n)) and (ii) each such Inspector shall take such actions as
are reasonably necessary to protect the confidentiality of such information (if practicable)
to the extent such action is otherwise not inconsistent with, an impairment of or in
derogation of the rights and interests of the Holder or any Inspector.



     (o) Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as
the case may be, and cause the Indenture or the trust indenture provided for in Section 2(a)
hereof to be qualified under the TIA not later than the effective date of the Exchange Offer
or the first Registration Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and the Holders of the
Registrable Notes or Exchange Notes, as applicable, to effect such changes to such indenture
as may be required for such indenture to be so qualified in accordance with the terms of the
TIA; and execute, and use their reasonable best efforts to cause such trustee to execute,
all documents as 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.



     (p) Comply with all applicable rules and regulations of the Commission and make
generally available to the Company’s securityholders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which Registrable Notes or Exchange
Notes are sold to underwriters in a firm commitment or best efforts underwritten offering
and (ii) if









 



-16-



not sold to underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration Statement, which
statements shall cover said 12-month periods consistent with the requirements of Rule 158.



     (q) Upon the request of a Holder, upon consummation of the Exchange Offer or a Private
Exchange, use their reasonable best efforts to obtain an opinion of counsel to the Issuers,
in a form customary for underwritten transactions, addressed to the Trustee for the benefit
of all Holders of Registrable Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, that the Exchange Notes or Private Exchange Notes, as the case
may be, and the related indenture constitute legal, valid and binding obligations of the
Issuers, enforceable against the Issuers in accordance with its respective terms, subject to
customary exceptions and qualifications.



     (r) If the Exchange Offer or a Private Exchange is to be consummated, upon delivery of
the Registrable Notes by Holders to the Company (or to such other Person as directed by the
Company) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may
be, mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are
being cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be; provided that in no event shall such Registrable Notes be marked as
paid or otherwise satisfied.



     (s) Cooperate with each seller of Registrable Notes covered by any Registration
Statement and each underwriter, if any, participating in the disposition of such Registrable
Notes and their respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers (the “NASD”).



     (t) Use their reasonable best efforts to take all other steps reasonably necessary or
advisable to effect the registration of the Exchange Notes and/or Registrable Notes covered
by a Registration Statement contemplated hereby.



          The Company may require each seller of Registrable Notes or Exchange Notes as to which any
registration is being effected to furnish to the Company such information regarding such seller and
the distribution of such Registrable Notes or Exchange Notes as the Company may, from time to time,
reasonably request. The Company may exclude from such registration the Registrable Notes of any
seller so long as such seller fails to furnish such information within a reasonable time after
receiving such request and in the event of such an exclusion, the Issuers shall have no further
obligation under this Agreement (including, without limitation, the obligations under Section 4)
with respect to such seller or any subsequent Holder of such Registrable Notes. Each seller as to
which any Shelf Registration is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make any information previously furnished to the
Company by such seller not materially misleading.




          If any such Registration Statement refers to any Holder by name or otherwise as the holder of
any securities of the Company or the Guarantors, then such Holder shall have the right to require
(i) the insertion therein of language, in form and substance reasonably satisfactory to such
Holder, to the effect that the holding by such Holder of such securities is not to be construed as
a rec-








 



-17-



ommendation by such Holder of the investment quality of the securities covered thereby and
that such holding does not imply that such Holder will assist in meeting any future financial
requirements of the Company or the Guarantors, or (ii) in the event that such reference to such
Holder by name or otherwise is not required by the Securities Act or any similar federal statute
then in force, the deletion of the reference to such Holder in any amendment or supplement to the
applicable Registration Statement filed or prepared subsequent to the time that such reference
ceases to be required.




          Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of
such Registrable Notes or Exchange Notes that, upon the Company providing notice to such Holder or
Participating Broker-Dealer, as the case may be, (x) of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv), or 5(c)(v) hereof, or (y) that the Board of
Directors of the Company (the “Board of Directors”) has resolved that the Company has a
bona fide business purpose for doing so, then, upon providing such notice (which shall refer to the
penultimate paragraph of this Section 5), the Issuers may delay the filing or the effectiveness of
the Exchange Offer Registration Statement or the Shelf Registration (if not then filed or
effective, as applicable) and shall not be required to maintain the effectiveness thereof or amend
or supplement the Exchange Offer Registration Statement or the Shelf Registration, in all cases,
for a period (a “Delay Period”) expiring upon the earlier to occur of (i) in the case of
the immediately preceding clause (x), such Holder’s or Participating Broker-Dealer’s receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or until it is
advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus
may be resumed, and has received copies of any amendments or supplements thereto or (ii) in the
case of the immediately preceding clause (y), the date which is the earlier of (A) the date on
which such business purpose ceases to interfere with the Issuers’ obligations to file or maintain
the effectiveness of any such Registration Statement pursuant to this Agreement or (B) 60 days
after the Company notifies the Holders of such good faith determination. There shall not be more
than 90 days of Delay Periods during any 12-month period. The maximum length of the Applicable
Period set forth in Section 2(b) shall be extended by a number of days equal to the number of days
during any Delay Period. Any Delay Period will not alter the obligations of the Issuers to pay
Liquidated Damages under the circumstances set forth in Section 4 hereof.




          Each Holder or Participating Broker-Dealer, by its acceptance of any Registrable Note, agrees
that during any Delay Period, each Holder or Participating Broker-Dealer will discontinue
disposition of such Notes or Exchange Notes covered by such Registration Statement or Prospectus or
Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be.




     Section 6. Market Making.



          (a) At such time and for so long as any of the Notes or Exchange Notes are outstanding and any
of the Initial Purchasers (each in such capacity, the “Market Maker”) or any of their
Affiliates is an Affiliate of the Company, the Guarantors or any of their Affiliates and proposes
to make a market in the Notes or the Exchange Notes as applicable, as part of its business in the
ordinary course, the following provisions shall apply for the sole benefit of the Market Maker:





     (i) The Company and the Guarantors shall (A) on the date that the Exchange Offer
Registration Statement or, if required hereby, the Shelf Registration is filed with the
Commission, file one or more registration statements (the “Market Making Registration
State-









 



-18-



ments”) (which may be the Exchange Offer Registration Statement or the Shelf
Registration if permitted by the rules and regulations of the Commission) and use their
commercially reasonable best efforts to cause such Market Making Registration Statements to
be declared effective by the Commission on or prior to the consummation of the Exchange
Offer or the effective date of the Shelf Registration, as applicable; (B) periodically amend
such Market Making Registration Statements so that the information contained therein
complies with the requirements of Section 10(a) under the Securities Act; (C) amend the
Market Making Registration Statements or amend or supplement the related Prospectuses when
necessary to reflect any material changes in the information provided therein; and (D) amend
the Market Making Registration Statements when required to do so in order to comply with
Section 10(a)(3) of the Securities Act; provided, however, that (1) prior to filing the
Market Making Registration Statements, any amendment thereto or any supplement to the
related Prospectuses, the Company shall furnish to the Market Maker copies of all such
documents proposed to be filed, which documents will be subject to the review of the Market
Maker and its counsel and (2) the Company and the Guarantors will not file any Market Making
Registration Statement, any amendment thereto or any amendment or supplement to the related
Prospectus to which the Market Maker and its counsel shall reasonably object unless the
Company is advised by counsel that such Market Making Registration Statement, amendment or
supplement is required to be filed under applicable securities laws and the Company will
provide the Market Maker and its counsel with copies of such Market Making Registration
Statement and each amendment and supplement filed. The Company, in its sole discretion, may
determine to include Prospectuses relating to each of the Notes or the Exchange Notes in the
same or different Market Making Registration Statements so long as each such registration
statement complies with this Section 6. The term “Prospectus” in this Section 6 includes
any Prospectus contained in a Market Making Registration Statement relating to any or all of
the Notes or the Exchange Notes, as applicable.




     (ii) The Company shall notify the Market Maker and, if requested by the Market Maker,
confirm such advice in writing, (A) when any Market Making Registration Statement, any
post-effective amendment to any Market Making Registration Statement or any amendment or
supplement to the related Prospectus has been filed, and, with respect to any Market Making
Registration Statement or any post-effective amendment, when the same has become effective;
(B) of any request by the Commission for any post-effective amendment to any Market Making
Registration Statement, any supplement or amendment to the related Prospectus or for
additional information; (C) the issuance by the Commission of any stop order suspending the
effectiveness of any Market Making Registration Statement or the initiation of any
proceedings for that purpose; (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes or the Exchange Notes, as
applicable, for sale in any jurisdiction or the initiation or threatening of any proceedings
for that purpose; and (E) of the happening of any event that makes any statement made in any
Market Making Registration Statement, the related Prospectus or any amendment or supplement
thereto untrue or that requires that making of any changes in any Market Making Registration
Statement, such Prospectus or any amendment or supplement thereto, in order to make the
statements therein not misleading.









 



-19-



     (iii) If any event contemplated by Section 6(a)(ii)(B) through (E) occurs during the
period for which the Company and the Guarantors are required to maintain an effective Market
Making Registration Statement, the Company and the Guarantors shall promptly prepare and
file with the Commission a post-effective amendment to each Market Making Registration
Statement or an amendment or supplement to the related Prospectus or file any other required
document so that the Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.




     (iv) In the event of the issuance of any stop order suspending the effectiveness of any
Market Making Registration Statement or of any order suspending the qualification of the
Notes or Exchange Notes for sale in any jurisdiction, the Company and the Guarantors shall
promptly use their reasonable best efforts to obtain its withdrawal.




     (v) The Company shall furnish to the Market Maker, without charge, (A) at least one
conformed copy of any Market Making Registration Statement and any post-effective amendment
thereto and (B) as many copies of the related Prospectus and any amendment or supplement
thereto as the Market Maker may reasonably request.




     (vi) The Company and the Guarantors shall consent to the use of any Prospectus
contained in any Market Making Registration Statement or any amendment or supplement thereto
by the Market Maker in connection with its market-making activities.




     (vii) Notwithstanding the foregoing provisions of this Section 6, the Company and the
Guarantors may for valid business reasons, including without limitation, a potential
material acquisition, divestiture of assets or other material corporate transaction, notify
the Market Maker in writing that a Market Making Registration Statement is no longer
effective or the Prospectus included therein is no longer usable for offers and sales of
Notes or Exchange Notes; provided that the use of a Market Making Registration Statement or
the Prospectus contained therein shall not be suspended for more than 75 days (whether or
not consecutive) in the aggregate in any 12-month period. The Market Maker agrees that upon
receipt of any notice from the Company pursuant to this Section 6(a)(vii), it will
discontinue use of the Prospectus contained in such Market Making Registration Statement
until receipt of copies of the supplemented or amended Prospectus relating thereto or until
advised in writing by the Company that the use of the Prospectus contained in such Market
Making Registration Statement may be resumed.



          (b) In connection with any Market Making Registration Statement, the Company and the
Guarantors shall (i) make reasonably available for inspection by a representative of, and counsel
acting for, the Market Maker all relevant financial and other records, pertinent corporate
documents and properties of the Company, the Guarantors and their respective subsidiaries and (ii)
use their respective reasonable best efforts to have their respective officers, directors,
employees, accountants and counsel supply all relevant information reasonably requested by such
representative or counsel or the Market Maker; provided, however, that any information that is
designated in writing by the Company or the Guarantors, in good faith, as confidential at the time
of delivery of such information shall be kept confidential by the Market Maker or any
representative or counsel, unless such disclosure







 



-20-




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;




          (c) Prior to the effective date of any Market Making Registration Statement, the Company and
the Guarantors shall arrange, if necessary, for the qualification of the Notes or Exchange Notes,
as applicable, for sale under the laws of such jurisdictions as the Market Maker reasonably
requests in writing and will maintain such qualification in effect so long as required to enable
the offer and sale in such jurisdictions of the Notes or Exchange Notes, as applicable, covered by
such Market Making Registration Statement; provided that in no event shall the Company and the
Guarantors be obligated to (i) qualify as a foreign corporation or other entity or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so qualify, (ii) file
any general consent to subject itself to service of process in any such jurisdictions or (iii)
subject itself to taxation in any such jurisdiction if it not so subject.




          (d) The Company and the Guarantors represent and agree that any Market Making Registration
Statement, any post-effective amendments thereto, any amendments or supplements to the related
Prospectus and any documents filed by them under the Exchange Act will, when they become effective
or are filed with the Commission, as the case may be, conform in all respects to the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the Commission
thereunder and will not, as of the effective date of such Market Making Registration Statement or
post-effective amendments and as of the filing date of amendments or supplements to such Prospectus
or filings under the Exchange Act, 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, in the
light of the circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted from any Market Making
Registration Statement or the related Prospectus in reliance upon and in conformity with written
information furnished to the Company by the Market Maker specifically for inclusion therein, which
information the parties hereto agree will be limited to the statements concerning the market-making
activities of the Market Maker to be set forth on the cover page and in the “Plan of Distribution”
section of the related Prospectus (the “Market Maker’s Information”).




          (e) At the time of effectiveness of any Market Making Registration Statement and concurrently
with each time such Market Making Registration Statement or the related Prospectus shall be amended
or such Prospectus shall be supplemented, the Company shall (if requested by the Market Maker)
furnish the Market Maker and its counsel with a certificate of its Chief Executive Officer and its
Chief Financial Officer to the effect that:





     (i) such Market Making Registration Statement has been declared effective;




     (ii) in the case of an amendment to such Market Making Registration Statement, such
amendment has become effective under the Act as of the date and time specified in such
certificate, if applicable; and in the case of an amendment or supplement to the Prospectus,
such amendment or supplement to the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Act specified in such certificate on the date
specified therein;









 



-21-



     (iii) to the knowledge of such officers, no stop order suspending the effectiveness of
such Market Making Registration Statement has been issued and no proceeding for that purpose
is pending or threatened by the Commission; and




     (iv) such officers have carefully examined such Market Making Registration Statement
and the Prospectus (and, in the case of an amendment or supplement, such amendment or
supplement) and as of the date of such Market Making Registration Statement, amendment or
supplement, as applicable, the Market Making Registration Statement and the Prospectus, as
amended or supplemented, if applicable, did not include any untrue statement of a material
fact and did not omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.



          (f) At the time of effectiveness of any Market Making Registration Statement and concurrently
with each time any Market Making Registration Statement or the related Prospectus shall be amended
or such Prospectus shall be supplemented, the Company shall (if requested by the Market Maker)
furnish the Market Maker and its counsel with the written opinion of counsel for the Company
satisfactory to the Market Maker to the effect that:





     (i) such Market Making Registration Statement has been declared effective;




     (ii) in the case of an amendment to such Market Making Registration Statement, such
amendment has become effective under the Securities Act as of the date and time specified in
such opinion, if applicable; and in the case of an amendment or supplement to the
Prospectus, such amendment or supplement to the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) under the Act specified in such opinion on the
date specified therein;




     (iii) to the knowledge of such counsel, no stop order suspending the effectiveness of
such Market Making Registration Statement has been issued and no proceeding for that purpose
is pending or threatened by the Commission; and




     (iv) such counsel has reviewed such Market Making Registration Statement and the
Prospectus (and, in the case of an amendment or supplement, such amendment or supplement)
and participated with officers of the Company and independent public accountants for the
Company in the preparation of such Market Making Registration Statement and Prospectus (and,
in the case of an amendment or supplement, such amendment or supplement) and has no reason
to believe that (except for the financial statements and other financial and statistical
data contained therein as to which such counsel need express no belief) as of the date of
such Market Making Registration Statement, amendment or supplement, as applicable, the
Market Making Registration Statement and the Prospectus, as amended or supplemented, if
applicable, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein not
misleading.



          (g) At the time of effectiveness of any Market Making Registration Statement and concurrently
with each time such Market Making Registration Statement or the related Prospectus shall be amended
or such Prospectus shall be supplemented to include audited annual
financial infor-









 



-22-




mation, the Company shall (if requested by the Market Maker) furnish the Market Maker and its
counsel with a letter of KPMG LLP (or other independent public accountants for the Company or the
Guarantors of nationally recognized standing) in form satisfactory to the Market Maker, addressed
to the Market Maker and dated the date of delivery of such letter, (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission and (ii) in all other respects, substantially in the form of the
letter delivered to the Initial Purchasers pursuant to the Purchase Agreement, with, in the case of
an amendment or supplement that includes audited financial information, such changes as may be
necessary to reflect the amended or supplemented financial information.




          (h) The Company and the Guarantors, on the one hand, and the Market Maker, on the other hand,
hereby agree to indemnify each other, and, if applicable, contribute to the other, in accordance
with Section 8 of this Agreement.




          (i) The Company and the Guarantors will comply with the provisions of this Section 6 at their
own expense and will reimburse the Market Maker for its expenses associated with this Section 6
(including reasonable fees of counsel for the Market Maker).




          (j) The agreements contained in this Section 6 and the representations, warranties and
agreements contained in this Agreement shall survive all offers and sales of the Notes and Exchange
Notes and shall remain in full force and effect, regardless of any termination or cancellation of
this Agreement or any investigation made by or on behalf of any indemnified party.




          (k) For purposes of this Section 6, (i) any reference to the terms “amend”, “amendment” or
“supplement” with respect to any Market Making Registration Statement or the Prospectus contained
therein shall be deemed to refer to and include the filing under the Exchange Act of any document
deemed to be incorporated therein by reference and (ii) any reference to the terms “Notes” or
“Exchange Notes” shall be deemed to refer to and include any securities issued in exchange for or
with respect to such Notes or Exchange Notes.




     Section 7. Registration Expenses



          All fees and expenses incident to the performance of or compliance with this Agreement by the
Issuers (other than any underwriting discounts or commissions) shall be borne by the Issuers,
whether or not the Exchange Offer Registration Statement or the Shelf Registration is filed or
becomes effective or the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses of compliance with
state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel
in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and
determination of the eligibility of the Registrable Notes or Exchange Notes for investment under
the laws of such jurisdictions (x) where the holders of Registrable Notes are located, in the case
of an Exchange Offer, or (y) as provided in Section 5(h) hereof, in the case of a Shelf
Registration or in the case of Exchange Notes to be sold by a Participating Broker-Dealer during
the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes in a form eligible for deposit with
The Depository Trust Company and of printing prospectuses if the printing of







 



-23-




prospectuses is requested by the managing underwriter or underwriters, if any, or by the
Holders of a majority in aggregate principal amount of the Registrable Notes included in any
Registration Statement or in respect of Exchange Notes to be sold by any Participating
Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Issuers and the reasonable fees
and disbursements of one special counsel for all of the sellers of Registrable Notes (exclusive of
any counsel retained pursuant to Section 8 hereof) selected by the Holders of a majority in
aggregate principal amount of Notes, Exchange Notes and Private Exchange Notes being registered and
reasonably satisfactory to the Issuers, (v) fees and disbursements of all independent certified
public accountants referred to in Section 5(m)(iii) hereof (including, without limitation, the
expenses of any special audit and “cold comfort” letters required by or incident to such
performance), (vi) Securities Act liability insurance, if the Issuers desire such insurance, (vii)
fees and expenses of all other Persons retained by any of the Issuers, (viii) internal expenses of
the Issuers (including, without limitation, all salaries and expenses of officers and employees of
the Company performing legal or accounting duties), (ix) the expense of any annual audit, (x) the
fees and expenses incurred in connection with the listing of the securities to be registered on any
securities exchange, and the obtaining of a rating of the securities, in each case, if applicable,
(xi) any required fees and expenses incurred in connection with any filing required to be made with
the NASD and (xii) the expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, indentures and any other documents necessary in
order to comply with this Agreement. Notwithstanding the foregoing or anything to the contrary,
each Holder shall pay all underwriting discounts and commissions of any underwriters with respect
to any Registrable Notes sold by or on behalf of it.




     Section 8. Indemnification



          (a) The Issuers, jointly and severally, agree to indemnify and hold harmless each Holder of
Registrable Notes and each Participating Broker-Dealer selling Exchange Notes during the Applicable
Period, each Person, if any, who controls any such Person within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, the agents, employees, officers and directors
of each Holder and each such Participating Broker-Dealer and the agents, partners, members,
employees, officers, managers and directors of any such controlling Person (each, a
“Participant”) from and against any and all losses, liabilities, claims, damages and
expenses whatsoever (including, but not limited to, reasonable attorneys’ fees and any and all
reasonable expenses whatsoever actually incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and all reasonable
amounts paid in settlement of any claim or litigation) (collectively, “Losses”) to which
they or any of them may become subject under the Securities Act, the Exchange Act or otherwise
insofar as such Losses (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 any Registration Statement
(or any amendment thereto) or Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in the case of the
Prospectus, in the light of the circumstances under which they were made, not misleading,
provided that the foregoing indemnity shall not be available to any Participant insofar as
such Losses are caused by any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with information relating to such Participant furnished to
the Company in writing







 



-24-




by or on behalf of such Participant expressly for use therein. This indemnity agreement will
be in addition to any liability that the Issuers may otherwise have, including, but not limited to,
liability under this Agreement.




          (b) Each Participant agrees, severally and not jointly, to indemnify and hold harmless each
Issuer, each Person, if any, who controls any Issuer within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, and each of their respective agents, partners,
members, employees, officers and members of the board of directors from and against any Losses to
which they or any of them may become subject under the Securities Act, the Exchange Act or
otherwise insofar as such Losses (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 any Registration
Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in the case of the
Prospectus, in the light of the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that any such Loss arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information relating to such Participant furnished in writing to the Company
by or on behalf of such Participant expressly for use therein.




          (c) Promptly after receipt by an indemnified party under subsection 8(a) or 8(b) above of
notice of the commencement of any action, suit or proceeding (collectively, an “action”),
such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is to be sought in
writing of the commencement of such action (but the failure so to notify an indemnifying party
shall not relieve such indemnifying party from any liability that it may have under this Section 8
except to the extent that it has been prejudiced in any material respect by such failure). In case
any such action is brought against any indemnified party, and it notifies an indemnifying party of
the commencement of such action, the indemnifying party will be entitled to participate in such
action, and to the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the defense of
such action with counsel reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its or their own counsel
in any such action, but the reasonable fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such counsel shall have been
authorized in writing by the indemnifying parties in connection with the defense of such action,
(ii) the indemnifying parties shall not have employed counsel to take charge of the defense of such
action within a reasonable time after notice of commencement of the action, or (iii) the named
parties to such action (including any impleaded parties) include such indemnified party and the
indemnifying party or parties (or such indemnifying parties have assumed the defense of such
action), and such indemnified party or parties shall have reasonably concluded, after consultation
with counsel, that there may be defenses available to it or them that are different from or
additional to those available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such reasonable fees and expenses of counsel
shall be borne by the indemnifying parties. In no event shall the indemnifying party be liable for
the reasonable fees and







 



-25-




expenses of more than one counsel (together with appropriate local counsel) at any time for
all indemnified parties in connection with any one action or separate but substantially similar or
related actions arising in the same jurisdiction out of the same general allegations or
circumstances. Any such separate firm for the Participants shall be designated in writing by
Participants who sold a majority in interest of Registrable Notes sold by all such Participants and
shall be reasonably acceptable to the Company and any such separate firm for the Issuers, their
Affiliates, officers, directors, representatives, employees and agents and such control Person of
such Issuers shall be designated in writing by such Issuers and shall be reasonably acceptable to
the Holders. An indemnifying party shall not be liable for any settlement of any claim or action
effected without its written consent, which consent may not be unreasonably withheld.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of counsel as
contemplated by paragraph (a) or (b) of this Section 8, then the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 45 days’ prior notice of its intention to settle.
No indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement (x) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding and (y) does not include a
statement as to or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.




          (d) In order to provide for contribution in circumstances in which the indemnification
provided for in this Section 8 is for any reason held to be unavailable from the indemnifying party
for any Losses referred to therein, or is insufficient to hold harmless a party indemnified under
this Section 8 for any Losses referred to therein, each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such aggregate Losses (i) in such
proportion as is appropriate to reflect the relative benefits received by each indemnifying party,
on the one hand, and each indemnified party, on the other hand, from the sale of the Notes to the
Initial Purchasers or the resale of the Registrable Notes by such Holder, as applicable, or (ii) if
such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the relative fault of each
indemnified party, on the one hand, and each indemnifying party, on the other hand, in connection
with the statements or omissions that resulted in such Losses, as well as any other relevant
equitable considerations. The relative benefits received by the Issuers, on the one hand, and each
Participant, on the other hand, shall be deemed to be in the same proportion as (x) the total
proceeds from the sale of the Notes to the Initial Purchasers (net of discounts and commissions but
before deducting expenses) received by the Issuers are to (y) the total net profit received by such
Participant in connection with the sale of the Registrable Notes. The relative fault of the
parties shall be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuers or such Participant and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission or alleged statement or omission.









 



-26-




          (e) The parties agree that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to above. Notwithstanding the provisions
of this Section 8, (i) in no case shall any Participant be required to contribute any amount in
excess of the amount by which the net profit received by such Participant in connection with the
sale of the Registrable Notes exceeds the amount of any damages that such Participant has otherwise
been required to pay by reason of any untrue or alleged untrue statement or omission or alleged
omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action against such party in respect of which a claim for
contribution may be made against another party or parties under this Section 8, notify such party
or parties from whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 8 or otherwise, except to the extent that it has
been prejudiced in any material respect by such failure; provided, however, that no
additional notice shall be required with respect to any action for which notice has been given
under this Section 8 for purposes of indemnification. Anything in this section to the contrary
notwithstanding, no party shall be liable for contribution with respect to any action or claim
settled without its written consent, provided, however, that such written consent
was not unreasonably withheld.




     Section 9. Rules 144 and 144A



          The Issuers covenant that they will file the reports required, if any, to be filed by them
under the Securities Act and the Exchange Act and the rules and regulations adopted by the
Commission thereunder in a timely manner in accordance with the requirements of the Securities Act
and the Exchange Act and, if at any time the Issuers are not required to file such reports, they
will, upon the request of any Holder or beneficial owner of Registrable Notes, make available such
information necessary to permit sales pursuant to Rule 144A under the Securities Act. The Issuers
further covenant that for so long as any Registrable Notes remain outstanding they will take such
further action as any Holder of Registrable Notes may reasonably request from time to time to
enable such Holder to sell Registrable Notes without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities
Act, as such Rules may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the Commission.




     Section 10. Underwritten Registrations



          If any of the Registrable Notes covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager or managers that
will manage the offering will be selected by the Holders of a majority in aggregate principal
amount of such Registrable Notes included in such offering and shall be reasonably acceptable to
the Company.




          No Holder of Registrable Notes may participate in any underwritten registration hereunder if
such Holder does not (a) agree to sell such Holder’s Registrable Notes on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder
to approve such ar-









 



-27-




rangements and (b) complete and execute all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such underwriting
arrangements.




     Section 11. Miscellaneous



          (a) No Inconsistent Agreements. The Issuers have not, as of the date hereof, and
shall not, after the date of this Agreement, enter into any agreement with respect to any of their
securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not conflict with and are not inconsistent with, in any material respect, the rights
granted to the holders of any of the Issuers’ other issued and outstanding securities under any
such agreements. The Issuers have not entered and will not enter into any agreement with respect
to any of their securities which will grant to any Person piggy-back registration rights with
respect to any Registration Statement.




          (b) Adjustments Affecting Registrable Notes. The Issuers shall not, directly or
indirectly, take any action with respect to the Registrable Notes as a class that would adversely
affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a
registration undertaken pursuant to this Agreement.




          (c) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not
be given except pursuant to a written agreement duly signed and delivered by (I) the Company (on
behalf of all Issuers) and (II)(A) the Holders of not less than a majority in aggregate principal
amount of the then outstanding Registrable Notes and (B) in circumstances that would adversely
affect the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a
majority in aggregate principal amount of the Exchange Notes held by all Participating
Broker-Dealers; provided, however, that Section 8 and this Section 11(c) may not be amended,
modified or supplemented except pursuant to a written agreement duly signed and delivered by the
Issuers and each Holder and each Participating Broker-Dealer (including any Person who was a Holder
or Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case may be, disposed
of pursuant to any Registration Statement) affected by any such amendment, modification, waiver or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable
Notes whose securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other Holders of
Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of
the Registrable Notes being sold pursuant to such Registration Statement.




          (d) Notices. All notices and other communications (including, without limitation, any notices or other
communications to the Trustee) provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or telecopier:





     (i) if to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the
most current address of such Holder or Participating Broker-Dealer, as the case may be, set
forth on the records of the registrar under the Indenture.







 




-28-




(ii) if to any Issuer, to it



c/o Basic Energy Services, Inc.

400 W. Illinois, Suite 800

Midland, TX 79701



Fax: (432) 620-5501

Attention: Alan Krenek, Vice President, Chief Financial Officer and
Treasurer





with a copy to:


Andrews Kurth LLP

600 Travis, Suite 4200

Houston, TX 77002



Fax: (713) 220-4285

Attention: David C. Buck, Esq.





(iii) if to the Initial Purchasers, at the address as follows:


UBS Securities LLC

677 Washington Blvd.

Stamford, Connecticut 06901

Fax number: (203) 719-1075

Attention: High Yield Syndicate Department




          All such notices and communications shall be deemed to have been duly given: when delivered
by hand, if personally delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt is acknowledged by the recipient’s telecopier machine, 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 and in the manner specified in such
Indenture.




          (e) Guarantors. So long as any Registrable Notes remain outstanding, the Issuers shall cause each Person
that becomes a guarantor of the Notes under the Indenture to execute and deliver a counterpart to
this Agreement which subjects such Person to the provisions of this Agreement as a Guarantor. Each
of the Guarantors agrees to join the Issuers in all of their undertakings hereunder to effect the
Exchange Offer for the Exchange Notes and the filing of any Shelf Registration required hereunder.




          (f) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto, the Holders and the
Participating Broker-Dealers; provided, however, that this Agreement shall not inure to the benefit
of or be binding









 



-29-



upon a successor or assign of a Holder unless and to the extent such successor or
assign holds Registrable Notes.




          (g) Counterparts. This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement.




          (h) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.




          (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.




          (j) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or unenforceable.




          (k) Securities Held by the Issuers or Their Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Notes is required hereunder,
Registrable Notes held by the Issuers or any of their affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.




          (l) Third-Party Beneficiaries. Holders and beneficial owners of Registrable Notes and
Participating Broker-Dealers are intended third-party beneficiaries of this Agreement, and this
Agreement may be enforced by such Persons. No other Person is intended to be, or shall be
construed as, a third-party beneficiary of this Agreement.




          (m) Entire Agreement. This Agreement, together with the Purchase Agreement and the
Indenture, is intended by the parties as a final and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein and therein
and any and all prior oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda between the Holders on the one hand and
the Issuers on the other, or between or among any agents, representatives, parents, subsidiaries,
Affiliates, predecessors in interest or successors in interest with respect to the subject matter
hereof and thereof are merged herein and replaced hereby.










 


 



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




	 	 	 	 	 	 	 
	 	 	BASIC ENERGY SERVICES, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President and Chief Executive Officer
	 
	 	 	 	 	 	 
	 	 	FIRST ENERGY SERVICES COMPANY,
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	H. B. & R., INC., as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	FESCO ALASKA, INC., as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	BASIC ENERGY SERVICES, L.P., as a Guarantor
	 
	 	 	 	 	 	 
	 	 	By:	 	BASIC ENERGY SERVICES GP, LLC,
	 	 	 	 	its General Partner
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President












 




 



	 	 	 	 	 	 	 
	 	 	BASIC ENERGY SERVICES GP, LLC,
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	BASIC ENERGY SERVICES LP, LLC,
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Scott Kinnamon
	 	 	 	 	 
	 

	 	 	 	Name:	 	Scott Kinnamon
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	BASIC ESA, INC., as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	WESTERN OIL WELL SERVICE CO.,
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	BASIC MARINE SERVICES, INC.,
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:

Title:
	 	Kenneth V. Huseman

President












 



 


	 	 	 	 	 	 	 
	 	 	ENERGY AIR DRILLING SERVICE CO.,
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	R&R HOT OIL SERVICE INC.,
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	OILWELL FRACTURING SERVICES, INC.,
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President
	 
	 	 	 	 	 	 
	 	 	LEBUS OIL FIELD SERVICE CO.,
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth V. Huseman
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Kenneth V. Huseman
	 

	 	 	 	Title:
	 	President












 



 


	 	 	 	 	 	 	 
	 	 	UBS SECURITIES LLC
	 	 	BANC OF AMERICA SECURITIES LLC
	 	 	LEHMAN BROTHERS INC.
	 	 	CREDIT SUISSE SECURITIES (USA) LLC
	 	 	GOLDMAN, SACHS & CO.
	 
	 	 	 	 	 	 
	 	 	By:	 	UBS SECURITIES LLC, as
Representative of the Initial Purchasers
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Mark Hobbs
	 	 	 	 	 
	 

	 	 	 	Name:	 	Mark Hobbs
	 

	 	 	 	Title:	 	Executive Director
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Samuel Pitts
	 	 	 	 	 
	 

	 	 	 	Name:	 	Samuel Pitts
	 

	 	 	 	Title:	 	Executive Director