REGISTRATION RIGHTS AGREEMENT

Exhibit 4.7

 

REGISTRATION RIGHTS AGREEMENT

Dated as of February 7, 2008

Among

Forbes Energy Services LLC,

as a Co-Issuer,

Forbes Energy Capital Inc.,

as a Co-Issuer,

The Guarantors

listed on the signature pages hereto

and

Jefferies & Company, Inc.,

as Initial Purchaser

$205,000,000 aggregate principal amount of 11% Senior Secured Notes due 2015

 

TABLE OF CONTENTS

 

 

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REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement, dated as of February 7, 2008 (this “ Agreement ”), is entered into among Forbes Energy Services LLC, a Delaware limited liability company (the “ Company ”), Forbes Energy Capital Inc., a Delaware corporation (“ Capital ”), the guarantors listed on the signature pages hereto (the “ Guarantors ”), and Jefferies & Company, Inc., as the initial purchaser (the “ Initial Purchaser ”).

This Agreement is entered into in connection with the Note Purchase Agreement, dated February 7, 2008, among the Company, Capital, the Guarantors and the Initial Purchaser (the “ Note Purchase Agreement ”), pursuant to which the Company agreed to issue and sell $205,000,000 in aggregate principal amount of the Company’s 11% Senior Secured Notes due 2015 (the “ Notes ”) to the Initial Purchaser (the “ Offering ”) in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission (the “ Commission ”) thereunder (collectively, the “ Securities Act ”). The execution and delivery of this Agreement is a condition to the Initial Purchaser’s obligation to purchase the Notes under the Note 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 7(c) hereof.

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

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

“ 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.

“ Co-Issuers ” shall mean the Company, Capital and the Guarantors, such that the obligations of the Company, Capital and the Guarantors under this Agreement shall be joint and several obligations in every respect including but not limited to the obligations to pay any Additional Interest, other amounts and any indemnification and contribution obligations, in each case, as set forth in this Agreement, and shall also include such parties’ permitted successors and assigns.

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

“ Company ” shall have the meaning set forth in the preamble hereof.

 

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“ Day ” shall mean a calendar day.

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

“ 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 ” shall have the meaning set forth in the preamble hereof.

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

“ Indenture ” shall mean the Indenture, dated as of February 12, 2008, among the Company, the Guarantors and Wells Fargo Bank, National Association, 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 Purchaser” shall have the meaning set forth in the preamble hereof.

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

“ Issue Date ” shall mean February 12, 2008, the date of original issuance of the Notes.

“ 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.

“ Losses ” shall have the meaning set forth in Section 7(a) hereof.

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

“ Note Purchase Agreement shall have the meaning set forth in the introductory paragraph hereto.

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

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

“ Participant ” shall have the meaning set forth in Section 7(a) hereof.

 

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“ 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.

“ 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 by a Person other than a broker-dealer pursuant to the Exchange Offer for an Exchange Note or Exchange Notes that may be resold without restriction under state and federal securities laws or, following the exchange by a broker-dealer in the Exchange Offer of a Note for an Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the Prospectus contained in the Exchange Offer Registration Statement, (iii) such Note, Exchange Note or Private Exchange Note, as the case may be, ceases to be outstanding 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) (or any similar provision then in force other than Rule 144A).

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

“ Registration Statement ” shall mean any appropriate registration statement of the Co-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 amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

 

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“ Regulation S Notes ” shall mean the Notes issued and sold outside the United States to the Initial Purchaser in a transaction exempt from the registration requirements of the Securities Act in reliance upon Regulation S promulgated under the Securities Act.

“ 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 have the meaning set forth in the introductory paragraph hereof.

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

“ 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.

“ Shelf Registration Statement ” shall mean a Registration Statement filed in connection with a Shelf Registration.

“ 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 any Co-Issuer are sold to an underwriter for reoffering to the public.

Section 2. Exchange Offer .

(a) The Co-Issuers shall (i) file within 90 days of the Issue Date 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 (the “ Exchange Notes ”) that are identical in all material respects to the Notes (except that the

 

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Exchange Notes shall not contain terms with respect to transfer restrictions or Additional Interest upon a Registration Default) and (ii) use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act within 210 days after the Issue Date. To the extent not prohibited by any applicable law or applicable interpretation of the Commission, upon the Exchange Offer Registration Statement being declared effective by the Commission, the Co-Issuers will: (i) commence the Exchange Offer as soon as practicable after the Exchange Offer Registration Statement is declared effective, (ii) 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, and (iii) use all commercially reasonable efforts to issue within 30 business days, or longer, if required by the federal securities laws, after the date on which the Exchange Offer Registration Statement is declared effective Exchange Notes in exchange for Notes tendered prior thereto in the Exchange Offer and to otherwise consummate the Exchange Offer

Each Holder that participates in the Exchange Offer will be required to represent to the Co-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 or, if it is an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iii) 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, (iv) 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 comply with the applicable provisions of the Securities Act in connection with any resale of such Exchange Notes, (v) such Holder has full power and authority to transfer the Notes in exchange for the Exchange Notes and that the Co-Issuers will acquire good and unencumbered title thereto free and clear of any liens, restrictions, charges or encumbrances and not subject to any adverse claims; and (vi) such Holder is not an “affiliate” (as defined in Rule 405 promulgated under the Securities Act) of the Co-Issuers.

(b) The Co-Issuers and the Initial Purchaser 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 Regulation S Notes).

The Co-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.

 

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In light of the foregoing, if requested by a Participating Broker-Dealer (a “ Requesting Participating Broker-Dealer ”), the Co-Issuers agree to use their reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective for a period not to exceed 120 days after the date on which the Exchange Offer Registration Statement is declared effective, or such longer period if extended pursuant to the last paragraph of Section 5 hereof (such period, the “ Applicable Period ”), or such earlier date as all Requesting Participating Broker-Dealers shall have notified the Co-Issuers in writing that such Requesting Participating Broker-Dealers have resold all Exchange Notes acquired in the Exchange Offer. The Co-Issuers shall include a plan of distribution in such Exchange Offer Registration Statement that meets the requirements set forth in the preceding paragraph.

If, prior to consummation of the Exchange Offer, the Initial Purchaser or any Holder, as the case may be, 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 any Holder is not entitled to participate in the Exchange Offer, the Co-Issuers upon the request of the Initial Purchaser 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 the Initial Purchaser or any such Holder, as the case may be, a like principal amount of notes (the “ Private Exchange Notes ”) of the Co-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 corresponding Exchange Notes.

For each Note surrendered in the Exchange Offer, the Holder will receive an Exchange Note having a principal amount equal to that of the surrendered Note. Interest on each Exchange Note and Private Exchange Note issued pursuant to the Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on the Notes, from the Issue Date.

Upon consummation of the Exchange Offer in accordance with this Section 2, the Co-Issuers shall have no further registration obligations other than the Co-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)(iii) of this Section 2 applies.

In connection with the Exchange Offer, the Co-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;

 

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(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 Co-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 Notes so accepted for exchange; and

(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 Co-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 Co-Issuers and (iii) all governmental approvals shall have been obtained, which approvals the Co-Issuers deem 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 Co-Issuers are not:

(A) required to file the Exchange Offer Registration Statement;

 

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(B) permitted to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or the applicable interpretations of the staff of the Commission;

(ii) for any reason the Exchange Offer is not consummated within 240 days of the Issue Date;

(iii) a Holder notifies the Company prior to the 20 ^th Business Day following consummation of the Exchange Offer that:

(A) it is prohibited by law or Commission policy from participating in the Exchange Offer;

(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; or

(C) it is a broker-dealer and owns notes acquired directly from the Issuers or an affiliate of the Issuers; or

(iv) the Initial Purchaser so requests with respect to Regulation S Notes or corresponding Private Exchange Notes that have, or that are reasonably likely to be determined to have, the status of unsold allotments in an initial distribution and such Holder so notifies the Company.

(each such event referred to in clauses (i) through (iv) of this sentence, a “ Shelf Filing Event ”), then the Co-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) The Co-Issuers shall file promptly 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) is applicable (the “ Shelf Registration ”). The Co-Issuers shall use their reasonable best efforts to file with the Commission the Shelf Registration as promptly as practicable but in any event within 30 days of notice of the Shelf Filing Event (the “ Shelf Filing Date ”). The Shelf Registration shall be 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 Co-Issuers shall not permit any securities other than the Registrable Notes to be included in the Shelf Registration.

(b) The Co-Issuers shall use their reasonable best efforts:

(i) to cause the Shelf Registration Statement to be declared effective under the Securities Act on or prior to the 90 ^th day after the Shelf Filing Event; and

 

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(ii) to keep the Shelf Registration Statement effective until the earliest of (A) the time when the Notes covered by the Shelf Registration Statement can be sold pursuant to Rule 144 without any information under clause (c), (e), (f) and (h) of Rule 144, (B) two years from the Issue Date and (c) the date on which all Notes registered thereunder are disposed of in accordance therewith subject to extension pursuant to the penultimate paragraph of Section 5 hereof (the “ Effectiveness Period ”); provided , however , that (x) 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 (y) the Co-Issuers may suspend the effectiveness of the Shelf Registration Statement by written notice to the Holders solely as a result of the filing of a post-effective amendment to the Shelf Registration Statement to incorporate annual audited financial information with respect to the Co-Issuers where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related Prospectus, provided that the Effectiveness Period in respect of the Shelf Registration shall be extended by such number of days for which effectiveness is suspended under this clause (y).

(c) Supplements and Amendments . The Co-Issuers agree to supplement or make amendments to the Shelf Registration Statement as and when required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration Statement 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. Additional Interest .

(a) The Co-Issuers and the Initial Purchaser agree that the Holders will suffer damages if the Co-Issuers fail 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 Co-Issuers agree that if:

(i) the Co-Issuers fail to file the Exchange Offer Registration Statement with the Commission on or prior to the 90 ^th day after the Issue Date,

(ii) the Exchange Offer Registration Statement is not declared effective on or prior to the 210 ^th day following the Issue Date or, if that day is not a Business Day, the next day that is a Business Day or is declared effective but thereafter ceases to be effective or usable in connection with the Exchange Offer;

(iii) the Exchange Offer is not consummated on or prior to the 30 ^th day following the date on which the Exchange Offer Registration Statement is declared effective;

 

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(iv) a Shelf Registration Statement required to be filed pursuant to Section 2(c) is not filed on or prior to the 30 ^th day following the Shelf Filing Event, or, if that day is not a Business Day, the next day that is a Business Day;

(v) a Shelf Registration Statement that is required to be filed pursuant to Section 2(c) is not declared effective by the 90 ^th day after the Shelf Filing Event (or if such day is not a Business Day, the next day that is a Business Day), or is declared effective by such date but thereafter ceases to be effective or usable, except if the Shelf Registration ceases to be effective or usable as specifically permitted by the penultimate paragraph of Section 5 hereof; or

(vi) the Shelf Registration Statement does not remain continuously effective for the Effectiveness Period

(each such event referred to in clauses (i) through (vi) a “ Registration Default ”), Additional Interest in the form of additional cash interest (“ Additional Interest ”) will accrue on the affected Notes and the affected Exchange Notes, as applicable. The amount of Additional Interest will be equal to $0.05 per week for $1,000 principal amount of Registrable Notes for the first 90-day period immediately following the occurrence of a Registration Default, increasing by $0.05 per week per $1,000 principal amount of Registrable Notes with respect to each subsequent 90-day period up to a maximum amount of additional interest for all Registration Defaults of $0.50 per week per $1,000 principal amount of Registrable Notes, 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 all the Notes and Exchange Notes otherwise become freely transferable by Holders other than affiliates of the Co-Issuers without further registration under the Securities Act.

The Company will pay such Additional Interest on regular Interest Payment Dates (as defined in the Indenture) in the same manner as other interest is paid on the Notes. Such Additional Interest will be in addition to any other payable from time to time with respect to the Notes. All Additional Interest will be paid by the Co-Issuers on the next scheduled interest payment date to DTC or its nominee by wire transfer of immediately available funds or by federal funds check and to holders of certificated Notes by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified.

Notwithstanding the foregoing, (1) the amount of Additional Interest payable shall not increase more than by the foregoing amounts because more than one Registration Default has occurred and is pending and (2) a Holder of Notes or Exchange Notes who is not entitled to the benefits of the Shelf Registration Statement ( i.e ., such Holder has not elected to include information) shall not be entitled to Additional Interest with respect to a Registration Default that pertains to the Shelf Registration Statement.

(b) So long as Notes remain outstanding, the Co-Issuers shall notify the Trustee within five Business Days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid. Any amounts of Additional Interest due pursuant to clauses (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable in cash semi-annually

 

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on each Interest Payment Date (each a “ Damages Payment Date ”), commencing with the first such date occurring after any such Additional Interest commence to accrue, to Holders to whom regular interest is payable on such Damages Payment Date with respect to Notes that are Registrable Securities. The amount of Additional Interest for Registrable Notes will be determined by multiplying the applicable rate of Additional Interest by the aggregate principal amount of all such Registrable Notes outstanding on the Damages Payment Date following such Registration Default in the case of the first such payment of Additional Interest with respect to a Registration Default (and thereafter at the next succeeding Damages Payment Date until the cure of such Registration Default), multiplied by a fraction, the numerator of which is the number of days such Additional Interest 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 Co-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 Co-Issuers hereunder, the Co-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 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 Co-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 such counsel is known to the Co-Issuers) 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 or such later date as is reasonable under the circumstances). The Co-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 on a timely basis.

(b) Prepare and file with the Commission such amendments and post-effective amendments to each Shelf Registration Statement 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, subject to any Delay Periods; 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

 

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provisions then in force) promulgated under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to it with respect to the disposition of all Registrable Notes 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.

(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 Co-Issuers have received writte