|
Exhibit 10.1
REGISTRATION RIGHTS
AGREEMENT
by and among
PETROLEUM DEVELOPMENT
CORPORATION
and
MORGAN STANLEY & CO.
INCORPORATED,
J.P. MORGAN SECURITIES
INC.,
BNP PARIBAS SECURITIES
CORP.,
and
WACHOVIA CAPITAL MARKETS,
LLC
Dated as of February 8,
2008
This Registration Rights
Agreement (this “ Agreement ”) is made and
entered into as of February 8, 2008, by and among Petroleum
Development Corporation, a Nevada corporation (the “
Company ”), and Morgan Stanley & Co.
Incorporated, J.P. Morgan Securities Inc., BNP Paribas Securities
Corp. and Wachovia Capital Markets, LLC (collectively, the “
Initial Purchasers ”), which have agreed to purchase
the Company’s 12% Senior Notes due 2018 (the “
Initial Notes ”) pursuant to the Purchase Agreement
(as defined below).
This Agreement is made
pursuant to the Purchase Agreement (the “ Purchase
Agreement ”), dated February 1, 2008, by and
among the Company and the Initial Purchasers. In order to induce
the Initial Purchasers to purchase the Initial Notes, the Company
has agreed to provide, subject to the conditions herein, the
registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the
Initial Purchasers set forth in the Purchase Agreement. Capitalized
terms used herein and not otherwise defined shall have the meaning
assigned to them in the Indenture, dated February 8, 2008, as
supplemented by the First Supplemental Indenture thereto, dated
February 8, 2008, between the Company and The Bank of New
York, as Trustee, relating to the Notes (together, the “
Indenture ”).
The parties hereby agree as
follows:
Section 1. Definitions
. As used in this Agreement, the following capitalized terms shall
have the following meanings:
“ Affiliate
” shall have the meaning set forth in Rule 144 of the
Securities Act.
“ Agreement
” shall have the meaning set forth in the preamble
hereof.
“ Broker-Dealer
” shall mean any broker or dealer registered under the
Exchange Act.
“ Business Day
” shall mean any day other than a Legal Holiday.
“ Closing Date
” shall mean the date hereof.
“ Commission
” shall mean the Securities and Exchange
Commission.
“ Company
” shall have the meaning set forth in the preamble
hereof.
“ Consummate
” shall mean, and an Exchange Offer shall be deemed
Consummated for purposes of this Agreement upon, the occurrence of
(a) the filing and effectiveness under the Securities Act of
the Exchange Offer Registration Statement relating to the Exchange
Notes to be issued in the Exchange Offer, (b) the maintenance
of such Exchange Offer Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period
not less than the period required pursuant to Section 2(b)
hereof and (c) the delivery by the Company to the Registrar
under the Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Initial Notes
tendered by Holders thereof pursuant to the Exchange Offer and not
withdrawn.
“ Consummation
Deadline ” shall have the meaning set forth in
Section 2(a) hereof.
“ Effectiveness
Target Date ” shall mean the Exchange Effectiveness
Deadline or the Shelf Effectiveness Deadline, as
applicable.
“ Exchange Act
” shall mean the Securities Exchange Act of 1934, as
amended.
“ Exchange
Effectiveness Deadline ” shall have the meaning set forth
in Section 2(a) hereof.
“ Exchange Offer
” shall mean the exchange and issuance by the Company,
pursuant to Section 2 hereof, of a principal amount of
Exchange Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal
amount of Initial Notes that are tendered by such Holders in
connection with such exchange and issuance.
“ Exchange Offer
Registration Statement ” shall mean the Registration
Statement relating to the Exchange Offer, including the related
Prospectus.
“ Exchange Notes
” shall mean the Company’s 12% Senior Notes due 2018 to
be issued pursuant to the Indenture (a) in the Exchange Offer
or (b) as contemplated by Section 3 hereof.
“ Holder ”
shall mean any Person whenever such Person owns Transfer Restricted
Securities.
“ Indemnified
Party ” shall have the meaning set forth in
Section 7(c) hereof.
“ Indemnifying
Party ” shall have the meaning set forth in
Section 7(c) hereof.
“ Indenture
” shall have the meaning set forth in the preamble
hereof.
“ Initial Notes
” shall have the meaning set forth in the preamble
hereof.
“ Initial
Purchasers ” shall have the meaning set forth in the
preamble hereof.
“ Legal Holiday
” shall mean a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain
closed.
“ Notes ”
shall mean the Initial Notes and the Exchange Notes.
“ Person ”
shall mean any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated
organization, limited liability company, government or other agency
or political subdivision thereof or any other entity.
“ Prospectus
” shall mean the prospectus included in a Registration
Statement at the time such Registration Statement is declared
effective, as amended or supplemented by any
2
prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all
material incorporated by reference into such Prospectus (including,
without limitation, any “issuer free writing
prospectus” as defined in Rule 433 under the Securities
Act).
“ Purchase
Agreement ” shall have the meaning set forth in the
preamble hereof.
“ Recommencement
Date ” shall have the meaning set forth in
Section 5(d) hereof.
“ Registration
Default ” shall have the meaning set forth in
Section 4 hereof.
“ Registration
Statement ” shall mean any registration statement of the
Company relating to (a) an offering of Exchange Notes pursuant
to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration
Statement, in each case, (i) that is filed pursuant to the
provisions of this Agreement and (ii) including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material
incorporated by reference therein.
“ Regulation S
” shall mean Regulation S promulgated under the Securities
Act.
“ Rule 144
” shall mean Rule 144 promulgated under the Securities
Act.
“ Securities Act
” shall mean the Securities Act of 1933, as
amended.
“ Shelf
Effectiveness Deadline ” shall have the meaning set forth
in Section 3(a) hereof.
“ Shelf Filing
Deadline ” shall have the meaning set forth in
Section 3(a) hereof.
“ Shelf Registration
Statement ” shall have the meaning set forth in
Section 3 hereof.
“ Suspension
Notice ” shall have the meaning set forth in
Section 5(d) hereof.
“ TIA ”
shall mean the Trust Indenture Act of 1939 as in effect on the date
of the Indenture.
“ Transfer
Restricted Securities ” means each Initial Note until the
earliest to occur of: (i) the date on which such Initial Note
has been exchanged by a Person other than a Broker-Dealer for a
Exchange Note in the Exchange Offer; (ii) following the
exchange by a Broker-Dealer in the Exchange Offer of a Initial Note
for a Exchange Note, the date on which such Exchange Note is sold
to a purchaser who receives from such Broker-Dealer on or prior to
the date of such sale a copy of the Prospectus contained in the
Exchange Offer Registration Statement; (iii) the date on which
such Initial Note has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf
Registration Statement; or (iv) the date on which such Initial
Note is distributed to the public pursuant to Rule 144 under the
Securities Act.
3
Section 2. Registered
Exchange Offer . (a) The Company shall (i) cause the
Exchange Offer Registration Statement to be filed with the
Commission and use its commercially reasonable efforts to cause
such Exchange Offer Registration Statement to become effective on
or prior to 365 days after the Closing Date (such 365 th day being the “ Exchange
Effectiveness Deadline ”), (ii) in connection
therewith, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order
to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Securities Act and
(C) cause all necessary filings, if any, in connection with
the registration and qualification of the Exchange Notes to be made
under the Blue Sky laws of such jurisdictions as are necessary to
permit Consummation of the Exchange Offer, and (iii) unless
the Exchange Offer shall not be permitted by applicable federal law
or Commission policy (after the procedures set forth in
Section 6(a)(i) have been complied with) commence the Exchange
Offer and use its commercially reasonable efforts to Consummate the
Exchange Offer on or prior to the 30th Business Day, or longer if
required by the federal securities laws, after such Exchange Offer
Registration Statement has been declared effective (such 30th
Business Day being the “ Consummation Deadline
”). The Exchange Offer shall be on the appropriate form
permitting (x) registration of the offer and issuance of the
Exchange Notes to be offered in exchange for the Initial Notes that
are Transfer Restricted Securities and (y) resales of Exchange
Notes by Broker-Dealers that tendered into the Exchange Offer
Initial Notes that such Broker-Dealer acquired for its own account
as a result of market-making activities or other trading activities
(other than Initial Notes acquired directly from the Company or any
of its Affiliates) as contemplated by Section 2(c)
hereof.
(b) The Company shall use its
commercially reasonable efforts to cause the Exchange Offer
Registration Statement to be effective continuously, and shall keep
the Exchange Offer open for a period of not less than the minimum
period required under applicable federal and state securities laws
to Consummate the Exchange Offer; provided , however
, that in no event shall such period be less than 20 Business Days.
The Company shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other
than the Exchange Notes shall be included in the Exchange Offer
Registration Statement.
(c) The Company shall include
a “Plan of Distribution” section in the Prospectus
contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted
Securities that were acquired for the account of such Broker-Dealer
as a result of market-making activities or other trading activities
(other than Initial Notes acquired directly from the Company or any
of its Affiliates) may exchange such Transfer Restricted Securities
pursuant to the Exchange Offer. Such “Plan of
Distribution” section shall also contain all other
information with respect to such sales by such Broker-Dealers that
the Commission may require in order to permit such sales pursuant
thereto, but such “Plan of Distribution” shall not name
any such Broker-Dealer or disclose the amount of Transfer
Restricted Securities held by any such Broker-Dealer, except to the
extent required by the Commission as a result of a change in
policy, rules or regulations after the date of this
Agreement.
Because such Broker-Dealer
may be deemed to be an “underwriter” within the meaning
of the Securities Act and must, therefore, deliver a prospectus
meeting the requirements of the Securities Act in connection with
the initial sale of any Exchange Notes received by such
4
Broker-Dealer in the Exchange Offer, the
Company shall permit the use of the Prospectus contained in the
Exchange Offer Registration Statement by such Broker-Dealer to
satisfy such prospectus delivery requirement. To the extent
necessary to ensure that the Prospectus contained in the Exchange
Offer Registration Statement is available for sales of Exchange
Notes by Broker-Dealers, the Company agrees to use its commercially
reasonable efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented, amended and current
as required by and subject to the provisions of Section 5(a)
and (c) hereof and in conformity with the requirements of this
Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a
period of 180 days from the date on which the Exchange Offer is
Consummated or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration
Statement have been sold pursuant thereto. The Company shall
provide sufficient copies of the latest version of such Prospectus
to such Broker-Dealers, promptly upon request, and in no event
later than two Business Days after such request, at any time during
such period.
Section 3. Shelf
Registration . (a) Shelf Registration . If
(i) the Company is not (A) required to file the Exchange
Offer Registration Statement or (B) permitted to Consummate
the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy or (ii) any Holder
notifies the Company prior to the 20 th Business Day following the Consummation of the Exchange Offer
that (A) it is prohibited by law or Commission policy from
participating in the Exchange Offer; or (B) it may not resell
the Exchange Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained
in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder; or (C) it is a
Broker-Dealer and holds Initial Notes acquired directly from the
Company or any of its Affiliates, then the Company
shall:
(x) use its commercially
reasonable efforts to file on or prior to 30 days after the earlier
of (i) the date on which the Company determines that the
Exchange Offer Registration Statement cannot be filed as a result
of clause (a)(i) of this Section 3 and (ii) the date on
which the Company receives the notice specified in clause (a)(ii)
of this Section 3 (such earlier date, the “ Shelf
Filing Deadline ”), a shelf registration statement
pursuant to Rule 415 under the Securities Act (which may be an
amendment to the Exchange Offer Registration Statement (the “
Shelf Registration Statement ”)), relating to all
Transfer Restricted Securities; and
(y) use its commercially
reasonable efforts to cause such Shelf Registration Statement to
become effective on or prior to 90 days after the Shelf Filing
Deadline (such 90 th day
the “ Shelf Effectiveness Deadline
”).
If, after the Company has
filed an Exchange Offer Registration Statement that satisfies the
requirements of Section 2(a) hereof, the Company is required
to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable law or
Commission policy, then the filing of the Exchange Offer
Registration Statement shall be deemed to satisfy the requirements
of clause (x) of this Section 3(a); provided ,
that in such event, the Company shall remain obligated to meet the
Shelf Effectiveness Deadline set forth in clause (y) of this
Section 3(a).
5
To the extent necessary to
ensure that the Shelf Registration Statement is available for sales
of Transfer Restricted Securities by the Holders thereof entitled
to the benefit of this Section 3(a) and the other securities
required to be registered therein pursuant to Section 5(b)(ii)
hereof, the Company shall use its commercially reasonable efforts
to keep any Shelf Registration Statement required by this
Section 3(a) continuously effective, supplemented, amended and
current as required by and subject to the provisions of Sections
5(b) and (c) hereof and in conformity with the requirements of
this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, until
the expiration of the period referred to in Rule 144(k) (as
extended pursuant to Section 5(c)(i) hereof) following the
Closing Date, or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Shelf Registration
Statement have been sold pursuant thereto.
(b) Provision by Holders
of Certain Information in Connection with the Shelf Registration
Statement . No Holder may include any of its Transfer
Restricted Securities in any Shelf Registration Statement pursuant
to this Agreement unless and until such Holder furnishes to the
Company in writing, within 20 days after receipt of a request
therefor, the information specified in Item 507 or 508 of
Regulation S-K, as applicable, of the Securities Act for use in
connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder shall be
entitled to liquidated damages pursuant to Section 4 hereof
unless and until such Holder shall have provided all such
information. Each Holder agrees to promptly furnish additional
information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not
materially misleading.
Section 4. Liquidated
Damages . If (a) any Registration Statement required by
this Agreement is not filed with the Commission on or prior to the
date specified for such filing, if any, (b) any such
Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Target Date,
(c) the Exchange Offer has not been Consummated on or prior to
the Consummation Deadline or (d) the Shelf Registration
Statement or the Exchange Offer Registration Statement is filed and
declared effective but thereafter ceases to be effective or usable
for its intended purpose without being succeeded within three days
by a post-effective amendment to such Registration Statement that
cures such failure and that is itself declared effective within
five days of filing such post-effective amendment to such
Registration Statement (each such event referred to in clauses
(a) through (d) above, a “ Registration
Default ”), then the Company hereby agrees to pay to each
Holder of Transfer Restricted Securities affected thereby
liquidated damages in an amount equal to $0.05 per week per $1,000
principal amount of Transfer Restricted Securities held by such
Holder with respect to the first 90-day period immediately
following the occurrence of the first Registration Default. The
amount of the liquidated damages shall increase by an additional
$0.05 per week per $1,000 principal amount of Transfer Restricted
Securities held by such Holder with respect to each subsequent
90-day period until all Registration Defaults have been cured, up
to a maximum amount of liquidated damages for all Registration
Defaults of $0.20 per week per $1,000 principal amount of Transfer
Restricted Securities held by such Holder; provided , that
the Company shall in no event be required to pay liquidated damages
for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein,
(i) upon filing of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the
case of clause (a) of this Section 4, (ii) upon the
effectiveness of the Exchange Offer Registration Statement (and/or,
if applicable, the Shelf Registration Statement), in the
case
6
of clause (b) of this
Section 4, (iii) upon Consummation of the Exchange Offer,
in the case of clause (c) of this Section 4, or
(iv) upon the filing of a post- effective amendment to the
Registration Statement or an additional Registration Statement that
causes the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of clause (d) of this
Section 4, the liquidated damages payable with respect to the
Transfer Restricted Securities as a result of such clauses (a),
(b), (c) or (d) of this Section 4, as applicable,
shall cease.
All accrued liquidated
damages will be paid by the Company to the Holders entitled
thereto, in the manner provided for the payment of interest in the
Indenture, on the next scheduled Interest Payment Date (as such
date is defined in the Indenture), as more fully set forth in the
Indenture and the Notes. Notwithstanding the fact that any Notes
for which liquidated damages are due cease to be Transfer
Restricted Securities, all obligations of the Company to pay
liquidated damages with respect to Notes shall survive until such
time as such obligations with respect to the Notes have been
satisfied in full.
Section 5. Registration
Procedures . (a) Exchange Offer Registration
Statement . In connection with the Exchange Offer Registration
Statement, the Company shall (i) comply with all applicable
provisions of Section 5(c) hereof, (ii) use its
commercially reasonable efforts to effect such exchange and to
permit the resale of Exchange Notes by Broker-Dealers that tendered
in the Exchange Offer Initial Notes that such Broker-Dealer
acquired for its own account as a result of its market-making
activities or other trading activities (other than Initial Notes
acquired directly from the Company or any of its Affiliates) being
sold in accordance with the intended method or methods of
distribution thereof, and (iii) comply with all of the
following provisions:
(A) If, following the date
hereof there has been announced a change in Commission policy with
respect to exchange offers such as the Exchange Offer, that in the
reasonable opinion of counsel to the Company raises a substantial
question as to whether the Exchange Offer is permitted by
applicable federal law, the Company hereby agrees to seek a
no-action letter or other favorable decision from the Commission
allowing the Company to Consummate an Exchange Offer for such
Transfer Restricted Securities. The Company hereby agrees to pursue
the issuance of such a decision to the Commission staff level. In
connection with the foregoing, the Company hereby agrees to take
all such other actions as may be requested by the Commission or
otherwise required in connection with the issuance of such
decision, including without limitation (1) participating in
telephonic conferences with the Commission, (2) delivering to
the Commission staff an analysis prepared by counsel to the Company
setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and
(3) diligently pursuing a resolution (which need not be
favorable) by the Commission staff.
(B) As a condition to its
participation in the Exchange Offer, each Holder of Transfer
Restricted Securities (including, without limitation, any Holder
who is a Broker-Dealer) shall furnish, upon the request of the
Company, prior to the Consummation of the Exchange Offer, a written
representation to the Company (which may be contained in the letter
of transmittal contemplated by the Exchange Offer
7
Registration Statement) to
the effect that (1) it is not an Affiliate of the Company,
(2) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any Person to
participate in, a distribution of the Exchange Notes to be issued
in the Exchange Offer and (3) it is acquiring the Exchange
Notes in its ordinary course of business. As a condition to its
participation in the Exchange Offer, each Holder using the Exchange
Offer to participate in a distribution of the Exchange Notes shall
acknowledge and agree that, if the resales are of Exchange Notes
obtained by such Holder in exchange for Initial Notes acquired
directly from the Company or an Affiliate thereof, it
(x) could not, under Commission policy as in effect on the
date of this Agreement, rely on the position of the Commission
enunciated in Morgan Stanley and Co., Inc. (available
June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the
Commission’s letter to Shearman & Sterling
dated July 2, 1993, and similar no-action letters (including,
if applicable, any no-action letter obtained pursuant to clause
(a)(iii)(A) of this Section 5), and (y) must comply with
the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction
and that such a secondary resale transaction must be covered by an
effective registration statement containing the selling security
holder information required by Item 507 or 508, as applicable,
of Regulation S-K.
(C) Prior to effectiveness of
the Exchange Offer Registration Statement, the Company shall
provide a supplemental letter to the Commission (1) stating
that the Company is registering the Exchange Offer in reliance on
the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Morgan
Stanley and Co., Inc. (available June 5, 1991) as
interpreted in the Commission’s letter to
Shearman & Sterling dated July 2, 1993, and,
if applicable, any no-action letter obtained pursuant to clause
(a)(iii)(A) of this Section 5, (2) including a
representation that the Company has not entered into any
arrangement or understanding with any Person to distribute the
Exchange Notes to be received in the Exchange Offer and that, to
the best of the Company’s information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes
in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of
Exchange Notes received in the Exchange Offer and (3) any
other undertaking or representation required by the Commission as
set forth in any no-action letter obtained pursuant to clause
(a)(iii)(A) of this Section 5, if applicable.
(b) Shelf Registration
Statement . In connection with the Shelf Registration
Statement, the Company shall:
(i) comply with all the
provisions of Section 5(c) hereof and use its commercially
reasonable efforts to effect such registration to permit the sale
of the Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof (as
indicated in the informat
| 
