PARALLEL PETROLEUM CORPORATION 10 1/4% SENIOR NOTES DUE 2014 REGISTRATION RIGHTS AGREEMENT
Exhibit 10.2
$150,000,000
PARALLEL PETROLEUM CORPORATION
10 1/4% SENIOR NOTES DUE 2014
July 31, 2007
Xxxxxxxxx & Company, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BNP Paribas Securities Corp.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BNP Paribas Securities Corp.
c/o:
|
Xxxxxxxxx & Company, Inc. | |
| 000 Xxxxxxx Xxxxxx | ||
| Xxx Xxxx, Xxx Xxxx 00000 |
Dear Sirs:
Parallel Petroleum Corporation, a Delaware corporation (the “Company”), proposes to issue and
sell to Xxxxxxxxx & Company, Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and BNP
Paribas Securities Corp. (collectively, the “Initial Purchasers”), upon the terms set forth in a
purchase agreement dated July 26, 2007 (the “Purchase Agreement”), $150,000,000 aggregate principal
amount of its 10 1/4% Senior Notes due 2014 (the “Initial Securities”). The Initial Securities
will be issued pursuant to an Indenture, dated as of July 31, 2007 (the “Indenture”), between the
Company and Xxxxx Fargo Bank, National Association (the “Trustee”). As an inducement to the
Initial Purchasers, the Company agrees with the Initial Purchasers, for the benefit of the holders
of the Initial Securities (including, without limitation, the Initial Purchasers), the Exchange
Securities (as defined below) and the Private Exchange Securities (as defined below) (collectively,
the “Holders”), as follows:
1. Registered Exchange Offer. Unless the Registered Exchange Offer (defined below)
would not be permitted for any reason referred to in clause (i) of the first sentence of Section 2
below, the Company shall, at its own cost, use commercially reasonable efforts to prepare and, not
later than 180 days after (or if the 180th day is not a business day, the first business day
thereafter) the date of original issue of the Initial Securities (the “Issue Date”), file with the
Securities and Exchange Commission (the “Commission”) a registration statement (the “Exchange Offer
Registration Statement”) on an appropriate form under the Securities Act of 1933, as amended (the
“Securities Act”), with respect to a proposed offer (the “Registered Exchange Offer”) to the
Holders of Transfer Restricted Securities (as defined in Section 6(d) hereof), who are not
prohibited by any law or policy of the Commission from participating in the Registered Exchange
Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like
aggregate principal amount of debt securities (the “Exchange Securities”) of the Company issued
under the Indenture and identical in all material respects to the Initial Securities (except for
the transfer restrictions relating to the Initial Securities and the provisions relating to the
matters described in Section 6(d) hereof) that would be registered under the Securities Act. The
Company shall use its reasonable best efforts to cause such Exchange Offer
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Registration Statement to be declared effective under the Securities Act within 210 days (or
if the 210th day is not a business day, the first business day thereafter) after the Issue Date and
shall keep the Registered Exchange Offer open for not less than 20 business days (or longer, if
required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the
Holders (such period being called the “Exchange Offer Registration Period”).
If the Company commences the Registered Exchange Offer, the Company will be entitled to close
the Registered Exchange Offer in as few as 20 business days after the commencement thereof provided
that the Company has accepted all the Initial Securities theretofore validly tendered, and not
withdrawn, in accordance with the terms of the Registered Exchange Offer.
Following the declaration of the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the objective of such
Registered Exchange Offer to enable each Holder of Transfer Restricted Securities electing to
exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an
affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities
in the ordinary course of such Holder’s business and has no arrangements or understanding with any
person to participate in the distribution of the Exchange Securities and is not prohibited by any
law or policy of the Commission from participating in the Registered Exchange Offer) to trade such
Exchange Securities from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of the several states of
the United States; provided, however, that the Exchanging Dealers (as defined below) will be
required to deliver a prospectus in connection with resales of Exchange Securities.
The Company acknowledges that, pursuant to current interpretations by the Commission’s staff
of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each
Holder that is a broker-dealer electing to exchange Initial Securities, acquired for its own
account as a result of market making activities or other trading activities, for Exchange
Securities (an “Exchanging Dealer”), is required to deliver a prospectus containing the information
set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the “Exchange
Offer Procedures” section and the “Purpose of the Exchange Offer” section, and (c) Annex C
hereto in the “Plan of Distribution” section of such prospectus in connection with a sale of any
such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange
Offer and (ii) an Initial Purchaser that elects to sell Exchange Securities acquired in exchange
for Initial Securities constituting any portion of an unsold allotment is required to deliver a
prospectus containing the information required by Items 507 or 508 of Regulation S-K under the
Securities Act, as applicable, in connection with such sale.
The Company shall use its reasonable best efforts to keep the Exchange Offer Registration
Statement effective and to amend and supplement the prospectus contained therein, in order to
permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such persons must comply with such
requirements in order to resell the Exchange Securities; provided, however, that such period shall
not exceed the lesser of 180 days and the date on which all persons subject to the prospectus
delivery requirements of the Securities Act have sold all Exchange Securities held by them.
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If, upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial
Securities acquired by it as part of its initial distribution, the Company (upon written request
from the Initial Purchaser), simultaneously with the delivery of the Exchange Securities pursuant
to the Registered Exchange Offer, shall issue and deliver to such Initial Purchaser, in exchange
(the “Private Exchange”) for the Initial Securities held by such Initial Purchaser, a like
principal amount of debt securities of the Company issued under the Indenture and identical in all
material respects (including the existence of restrictions on transfer under the Securities Act and
the securities laws of the several states of the United States, but excluding provisions relating
to the matters described in Section 6 hereof) to the Initial Securities (the “Private Exchange
Securities”). The Initial Securities, the Exchange Securities and the Private Exchange Securities
are herein collectively called the “Securities.”
In connection with the Registered Exchange Offer, the Company shall:
(a) deliver to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate Letter of Transmittal
and related documents;
(b) keep the Registered Exchange Offer open for not less than 20 business
days (or longer, if required by applicable law) after the date notice thereof is mailed to
the Holders;
(c) utilize the services of a depositary for the Registered Exchange Offer,
which may be the Trustee or an affiliate of the Trustee;
(d) permit Holders to withdraw tendered Securities at any time prior to the
close of business, New York time, on the last business day on which the Registered Exchange
Offer shall remain open; and
(e) otherwise comply in all material respects with all applicable laws.
As soon as practicable after the close of the Registered Exchange Offer or the Private
Exchange, as the case may be, the Company shall:
(x) accept for exchange all the Securities validly tendered and not withdrawn pursuant
to the Registered Exchange Offer and the Private Exchange; and
(y) cause the Trustee to deliver promptly to each Holder of the Initial Securities,
Exchange Securities or Private Exchange Securities, as the case may be, equal in principal
amount to the Initial Securities of such Holder so accepted for exchange.
The Indenture will provide that the Exchange Securities will not be subject to the transfer
restrictions set forth in the Indenture and that all the Securities will vote and consent together
on all matters as one class and that none of the Securities will have the right to vote or consent
as a class separate from one another on any matter.
Interest on each Exchange Security and Private Exchange Security issued pursuant to the
Registered Exchange Offer and in the Private Exchange will accrue (i) from the later of (A) the
last interest payment date on which interest was paid on the Initial Securities surrendered in
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exchange therefor or (B) if the Initial Securities are surrendered for exchange on a date in a
period which includes the record date for an interest payment date to occur on or after the date of
such exchange and as to which interest was paid, the date of such interest payment date or (ii) if
no interest has been paid on the Initial Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be required as a condition to
participation in the Registered Exchange Offer to represent to the Company that (i) any Exchange
Securities received by such Holder will be acquired in the ordinary course of its business, (ii)
that at the time of the commencement and consummation of the Registered Exchange Offer, such Holder
has no arrangements or understandings with any person to participate in the distribution of the
Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder
is not an “affiliate,” as defined in Rule 405 of the Securities Act, of the Company or if it is an
affiliate, such Holder 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, that it is
not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and
(v) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account
in exchange for Initial Securities that were acquired as a result of market-making activities or
other trading activities and that it will be required to acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities.
Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange
Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and
any supplement thereto comply in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto do
not, when they become effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and
any supplement to such prospectus, do not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
2. Shelf Registration. If, (i) because of any change in law or in applicable
interpretations thereof by the staff of the Commission, the Company is not permitted to effect a
Registered Exchange Offer, as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer
is not consummated within 250 days of the Issue Date, (iii) any Initial Purchaser so requests with
respect to the Initial Securities (or the Private Exchange Securities) not eligible to be exchanged
for Exchange Securities in the Registered Exchange Offer and held by it following consummation of
the Registered Exchange Offer or (iv) any Holder (other than an Exchanging Dealer) is not eligible
to participate in the Registered Exchange Offer or, in the case of any Holder (other than an
Exchanging Dealer) that participates in the Registered Exchange Offer, such Holder does not receive
freely tradeable Exchange Securities on the date of the exchange and, with respect to (iii) and
(iv) above, the Initial Purchaser has so notified the Company within 90 days after the consummation
of the Registered Exchange Offer, the Company shall take the following actions:
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(a) The Company shall, at its cost, as promptly as practicable file with the
Commission and thereafter shall use its reasonable best efforts to cause to be declared
effective (unless it becomes effective automatically upon filing) a registration statement
(the “Shelf Registration Statement” and, together with the Exchange Offer Registration
Statement, a “Registration Statement”) on an appropriate form under the Securities Act
relating to the offer and sale of the Transfer Restricted Securities by the Holders thereof
from time to time in accordance with the methods of distribution set forth in the Shelf
Registration Statement and Rule 415 under the Securities Act (hereinafter, the “Shelf
Registration”) on or prior to the 210th day following the Issue Date in the case of clause
(i) above and on or prior to the 90th day after the date on which the Shelf Registration
Statement is required to be filed in the case of clauses (ii), (iii) and (iv) above;
provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to
have the Securities held by it covered by such Shelf Registration Statement unless such
Holder agrees in writing to be bound by all the provisions of this Agreement applicable to
such Holder.
(b) The Company shall use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective, in order to permit the prospectus included
therein to be lawfully delivered by the Holders of the relevant Securities, for a period of
two years (or for such longer period if extended pursuant to Section 3(j) below) from the
date hereof or such shorter period that will terminate when all the Securities covered by
the Shelf Registration Statement (i) have been sold pursuant thereto, (ii) may be sold
without any limitations under clauses (c), (e), (f) and (h) of Rule 144 under the Securities
Act, or any successor rule thereof) or (iii) all such Securities cease to be outstanding
(the “Shelf Registration Period”).
(c) Notwithstanding any other provisions of this Agreement to the contrary,
the Company shall cause (i) the Shelf Registration Statement and any amendment thereto and
any related prospectus and any supplement thereto, as of the effective date of the Shelf
Registration Statement, amendment or supplement, to comply in all material respects with the
Securities Act and the rules and regulations thereunder, (ii) the Shelf Registration
Statement and any amendment thereto not to contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in order to make
the statements therein not misleading and (iii) the prospectus related to the Shelf
Registration Statement, and any supplement to such prospectus, not to include an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
3. Registration Procedures. In connection with any Shelf Registration contemplated
by Section 2 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by
Section 1 hereof, the following provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to the
filing thereof with the Commission, a copy of the Registration Statement and each amendment
thereof and each supplement, if any, to the prospectus included therein and, in the event
that an Initial Purchaser (with respect to any portion of an unsold allotment from the
original offering) is participating in the Registered Exchange Offer or the Shelf
Registration
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Statement, the Company shall use its reasonable best efforts to reflect in each such
document, when so filed with the Commission, such comments as such Initial Purchaser
reasonably may propose; (ii) include the information set forth in Annex A hereto on
the cover, in Annex B hereto in the “Exchange Offer Procedures” section and the
“Purpose of the Exchange Offer” section and in Annex C hereto in the “Plan of
Distribution” section of the prospectus forming a part of the Exchange Offer Registration
Statement and include the information set forth in Annex D hereto in the Letter of
Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by an
Initial Purchaser, include the information required by Items 507 or 508 of Regulation S-K
under the Securities Act, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement; (iv) include within the prospectus contained in the Exchange
Offer Registration Statement a section entitled “Plan of Distribution,” reasonably
acceptable to the Initial Purchasers, which shall contain a summary statement of the
positions taken or policies made by the staff of the Commission with respect to the
potential “underwriter” status of any broker-dealer that is the beneficial owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of
Exchange Securities received by such broker-dealer in the Registered Exchange Offer (a
“Participating Broker-Dealer”), whether such positions or policies have been publicly
disseminated by the staff of the Commission or such positions or policies, in the reasonable
judgment of the Initial Purchasers based upon advice of counsel (which may be in-house
counsel), represent the prevailing views of the staff of the Commission; and (v) in the case
of a Shelf Registration Statement, include in the prospectus included in the Shelf
Registration Statement (or, if permitted by Commission Rule 430B(b), in a prospectus
supplement that becomes a part thereof pursuant to Commission Rule 430B(f)) that is
delivered to any Holder pursuant to Section 3(d) and (f), the names of the Holders, who
propose to sell Securities pursuant to the Shelf Registration Statement, as selling
securityholders.
(b) The Company shall give written notice to the Initial Purchasers, the
Holders of the Securities proposed to be sold under the Shelf Registration Statement and any
Participating Broker-Dealer from whom the Company has received prior written notice that it
will be a Participating Broker-Dealer in the Registered Exchange Offer (which notice
pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the
use of the prospectus until the requisite changes have been made):
(i) when the Registration Statement or any amendment thereto has been
filed with the Commission and when the Registration Statement or any post-effective
amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements to
the Registration Statement or the prospectus included therein or for additional
information;
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings for
that purpose, of the issuance by the Commission of a notification of objection to the
use of the form on which the Registration Statement has been filed, and of the
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happening of any event that causes the Company to become an “ineligible issuer,” as
defined in Commission Rule 405;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and
(v) of the happening of any event that requires the Company to make
changes in the Registration Statement or the prospectus in order that the Registration
Statement or the prospectus do not contain an untrue statement of a material fact nor
omit to state a material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in light of the circumstances under
which they were made) not misleading.
(c) The Company shall make every reasonable effort to obtain the withdrawal
at the earliest possible time, of any order suspending the effectiveness of the Registration
Statement.
(d) The Company shall furnish to each Holder of Securities included within
the coverage of the Shelf Registration, without charge, at least one copy of the Shelf
Registration Statement and any post-effective amendment or supplement thereto, including
financial statements and schedules, and, if the Holder so requests in writing, all exhibits
thereto (including those, if any, incorporated by reference). The Company shall not,
without the prior consent of the Initial Purchasers, make any offer relating to the
Securities that would constitute a “free writing prospectus,” as defined in Commission Rule
405.
(e) The Company shall deliver to each Initial Purchaser, and to any other
Holder who so requests, without charge, at least one copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including financial statements and
schedules, and, if any Initial Purchaser or any such Holder requests, all exhibits thereto
(including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period, deliver to each
Holder of Securities included within the coverage of the Shelf Registration, without charge,
as many copies of the prospectus (including each preliminary prospectus) included in the
Shelf Registration Statement and any amendment or supplement thereto as such person may
reasonably request. Subject to the other provisions of this Agreement, the Company consents
to the use of the prospectus or any amendment or supplement thereto by each of the selling
Holders of the Securities in connection with the offering and sale of the Securities covered
by the prospectus, or any amendment or supplement thereto, included in the Shelf
Registration Statement.
(g) The Company shall deliver to each Initial Purchaser, any Exchanging
Dealer, any Participating Broker-Dealer and such other persons required to deliver a
prospectus following the Registered Exchange Offer, without charge, as many copies of the
final prospectus included in the Exchange Offer Registration Statement and any amendment or
supplement thereto as such persons may reasonably request. Subject to the other
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provisions of this Agreement, the Company consents to the use of the prospectus or any
amendment or supplement thereto by any Initial Purchaser, if necessary, any Participating
Broker-Dealer and such other persons required to deliver a prospectus following the
Registered Exchange Offer in connection with the offering and sale of the Exchange
Securities covered by the prospectus, or any amendment or supplement thereto, included in
such Exchange Offer Registration Statement.
(h) Prior to any public offering of the Securities, pursuant to any
Registration Statement, the Company shall use its reasonable best efforts to register or
qualify or cooperate with the Holders of the Securities included therein and their
respective counsel in connection with the registration or qualification of the Securities
for offer and sale under the securities or “blue sky” laws of such states of the United
States as any Holder of the Securities reasonably requests in writing and do any and all
other acts or things reasonably necessary or advisable to enable the offer and sale in such
jurisdictions of the Securities covered by such Registration Statement; provided, however,
that the Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified or (ii) take any action which would subject
it to general service of process or to taxation in any jurisdiction where it is not then so
subject.
(i) To the extent the Securities are not in book-entry form, the Company
shall cooperate with the Holders of the Securities to facilitate the timely preparation and
delivery of certificates representing the Securities to be sold pursuant to any Registration
Statement free of any restrictive legends and in such denominations and registered in such
names as the Holders may request a reasonable period of time prior to sales of the
Securities pursuant to such Registration Statement.
(j) Upon the occurrence of any event contemplated by clauses (ii) through (v)
of Section 3(b) above during the period for which the Company is required to maintain an
effective Registration Statement, the Company shall promptly prepare and file a
post-effective amendment to the Registration Statement or a supplement to the related
prospectus and any other required document so that, as thereafter delivered to Holders of
the Securities or purchasers of Securities, the prospectus will not contain an 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 light of the circumstances under
which they were made, not misleading. If the Company notifies the Initial Purchasers, the
Holders of the Securities and any known Participating Broker-Dealer in accordance with
clauses (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until
the requisite changes to the prospectus have been made, then the Initial Purchasers, the
Holders of the Securities and any such Participating Broker-Dealers shall suspend use of
such prospectus, and the period of effectiveness of the Shelf Registration Statement
provided for in Section 2(b) above and the Exchange Offer Registration Statement provided
for in Section 1 above shall each be extended by the number of days from and including the
date of the giving of such notice to and including the date when the Initial Purchasers, the
Holders of the Securities and any known Participating Broker-Dealer shall have received such
amended or supplemented prospectus pursuant to this Section 3(j). During the period during
which the Company is required to maintain an effective Shelf Registration Statement pursuant
to this Agreement, the Company will,
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prior to the three-year expiration of that Shelf Registration Statement, file and use
its reasonable best efforts to cause to be declared effective (unless it becomes effective
automatically upon filing) within a period that avoids any interruption in the ability of
Holders of Securities covered by the expiring Shelf Registration Statement to make
registered dispositions, a new registration statement relating to the Securities, which
shall be deemed the “Shelf Registration Statement” for purposes of this Agreement.
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Initial Securities, the Exchange
Securities or the Private Exchange Securities, as the case may be, and provide the Trustee
with certificates for the Initial Securities, the Exchange Securities or the Private
Exchange Securities, as the case may be, in a form eligible for deposit with The Depository
Trust Company.
(l) The Company will comply in all material respects with all rules and
regulations of the Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration.
(m) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any,
as shall be necessary for such qualification. In the event that such qualification would
require the appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.
(n) The Company may require each Holder of Securities to be sold pursuant to
the Shelf Registration Statement to furnish to the Company such information regarding the
Holder and the distribution of the Securities as the Company may from time to time
reasonably require for inclusion in the Shelf Registration Statement, and the Company may
exclude from such registration the Securities of any Holder that unreasonably fails to
furnish such information within a reasonable time after receiving such request.
(o) The Company shall enter into such customary agreements (including, if
requested, an underwriting agreement in customary form) and take all such other action, if
any, as any Holder of the Securities shall reasonably request in order to facilitate the
disposition of the Securities pursuant to any Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall (i) make
reasonably available for inspection by the Holders of the Securities, any underwriter
participating in any disposition pursuant to the Shelf Registration Statement and any
attorney, accountant or other agent retained by the Holders of the Securities or any such
underwriter all relevant financial and other records, pertinent corporate documents and
properties of the Company and (ii) cause the Company’s officers, directors, employees,
accountants and auditors to supply all relevant information reasonably requested by the
Holders of the Securities or any such underwriter, attorney, accountant or agent in
connection with the Shelf Registration Statement, in each case, as shall be reasonably
necessary to enable such persons, to conduct a reasonable investigation within the meaning
of Section 11 of the Securities Act; provided, however, that the foregoing inspection and
information gathering shall be coordinated on behalf of the Initial Purchasers by you and on
behalf of
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the other parties, by one counsel designated by and on behalf of such other parties as
described in Section 4 hereof; provided further, however, that any information that is
designated in writing by the Company, in good faith, as confidential at the time of delivery
of such information shall be kept confidential by the Holders or any such underwriter,
attorney, accountant or other agent, unless such disclosure is made in connection with a
court proceeding or required by law, or such information is or becomes available to the
public generally or through a third party without, to the knowledge of any recipient of
confidential information, an accompanying obligation of confidentiality or is independently
developed.
(q) In the case of any Shelf Registration, the Company, if requested by any
Holder of the Securities covered thereby, shall cause (i) its counsel to deliver an opinion
and updates thereof relating to the Securities in customary form addressed to such Holders
and the managing underwriters, if any, thereof and dated, in the case of the initial
opinion, the effective date of such Shelf Registration Statement; (ii) its officers to
execute and deliver all customary documents and certificates and updates thereof requested
by any underwriters of the applicable Securities and (iii) its independent public
accountants and the independent public accountants with respect to any other entity for
which financial information is provided in the Shelf Registration Statement to provide to
the selling Holders of the applicable Securities and any underwriter therefor a comfort
letter in customary form and covering matters of the type customarily covered in comfort
letters in connection with primary underwritten offerings, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by Statement of Auditing Standards No.
72.
(r) If a Registered Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Initial Securities by Holders to the Company (or to such
other Person as directed by the Company) in exchange for the Exchange Securities or the
Private Exchange Securities, as the case may be, the Company shall xxxx, or cause to be
marked, on the Initial Securities so exchanged that such Initial Securities are being
canceled in exchange for the Exchange Securities or the Private Exchange Securities, as the
case may be; in no event shall the Initial Securities be marked as paid or otherwise
satisfied.
(s) The Company will use its reasonable best efforts to (a) if the Initial
Securities have been rated prior to the initial sale of such Initial Securities, confirm
such ratings will apply to the Securities covered by a Shelf Registration Statement, or (b)
if the Initial Securities were not previously rated, cause the Securities covered by a Shelf
Registration Statement to be rated with the appropriate rating agencies, but in each case
only if so requested by Holders of a majority in aggregate principal amount of Securities
covered by such Registration Statement, or by the managing underwriters, if any.
(t) In the event that any broker-dealer registered under the Exchange Act
shall underwrite any Securities or participate as a member of an underwriting syndicate or
selling group or “assist in the distribution” (within the meaning of the Conduct Rules (the
“Rules”) of the National Association of Securities Dealers, Inc. (“NASD”)) thereof, whether
as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker
or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in
complying with the requirements of such Rules, including, without limitation,
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by (i) if such Rules, including Rule 2720, shall so require, engaging a “qualified
independent underwriter” (as defined in Rule 2720) to participate in the preparation of the
Registration Statement relating to such Securities, to exercise usual standards of due
diligence in respect thereto and, if any portion of the offering contemplated by such
Registration Statement is an underwritten offering or is made through a placement or sales
agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified
independent underwriter to the extent of the indemnification of underwriters provided in
Section 5 hereof and (iii) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the requirements of the Rules.
(u) The Company shall use its reasonable best efforts to take all other steps
necessary to effect the registration of the Securities covered by a Registration Statement
contemplated hereby.
4. Registration Expenses. The Company shall bear all fees and expenses incurred in
connection with the performance of its obligations under Sections 1 through 3 hereof (including the
reasonable fees and expenses, if any, of counsel for the Initial Purchasers incurred in connection
with blue sky qualifications in connection with the Registered Exchange Offer), whether or not the
Registered Exchange Offer or a Shelf Registration is filed or becomes effective, and, in the event
of a Shelf Registration, shall bear or reimburse the Holders of the Securities covered thereby for
the reasonable fees and disbursements of one firm of counsel designated by the Holders of a
majority in principal amount of the Initial Securities covered thereby to act as counsel for the
Holders of the Initial Securities in connection therewith. Each Holder shall be responsible for
paying all underwriting discounts and commissions, if any, relating to the sale or disposition of
such Holder’s Securities pursuant to a Shelf Registration Statement.
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Holder of the
Securities, any Participating Broker-Dealer and each person, if any, who controls such
Holder or such Participating Broker-Dealer within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act (each Holder, any Participating
Broker-Dealer and such controlling persons are referred to collectively as the “Indemnified
Parties”) from and against any losses, claims, damages or liabilities, joint or several, or
any actions in respect thereof (including, but not limited to, any losses, claims, damages
or liabilities relating to purchases and sales of the Securities) to which each Indemnified
Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as
such losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a Registration
Statement or prospectus or in any amendment or supplement thereto or in any preliminary
prospectus or “issuer free writing prospectus,” as defined in Commission Rule 433 (“Issuer
FWP”), relating to a Shelf Registration, or arise out of, or are based upon, the omission or
alleged omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and shall reimburse, as incurred, the
Indemnified Parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss,
- 11 -
claim, damage, liability or action in respect thereof; provided, however, that (i) the
Company will not be liable in any such case to the extent that such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in a Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus or Issuer FWP relating to a
Shelf Registration in reliance upon and in conformity with written information pertaining to
such Holder and furnished to the Company by or on behalf of such Holder specifically for
inclusion therein and (ii) with respect to any untrue statement or omission or alleged
untrue statement or omission of a material fact made in any preliminary prospectus relating
to a Shelf Registration Statement, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any Holder or Participating Broker-Dealer from whom the
person asserting any such losses, claims or damages purchased the Securities concerned, to
the extent that a prospectus relating to such Securities was required to be delivered
(including through satisfaction of the conditions of Commission Rule 172) by such Holder or
Participating Broker-Dealer under the Securities Act in connection with such purchase and
any such loss, claim, damage or liability of such Holder or Participating Broker-Dealer
results from the fact that there was not sent or given to such person, at or prior to the
time of the sale of such Securities to such person, an amended or supplemented prospectus
or, if permitted by Section 3(d), an Issuer FWP correcting such untrue statement or omission
or alleged untrue statement or omission of a material fact if the Company had previously
furnished copies thereof to such Holder or Participating Broker-Dealer; provided further,
however, that this indemnity agreement will be in addition to any liability which the
Company may otherwise have to such Indemnified Party. The Company shall also indemnify any
underwriters, their officers and directors and each person who controls such underwriters
within the meaning of the Securities Act or the Exchange Act to the same extent as provided
above with respect to the indemnification of the Holders of the Securities if requested by
such Holders.
(b) Each Holder of the Securities, severally and not jointly, will indemnify
and hold harmless the Company and its directors, officers, employees and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act from and against any losses, claims, damages or
liabilities in respect thereof (including, but not limited to, any losses, claims, damages
or liabilities relating to purchases and sales of the Securities), to which the Company or
any such Guarantor, their directors, officers, employees or any such controlling person may
become subject under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in a Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary prospectus or
Issuer FWP relating to a Shelf Registration, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse, as incurred,
the Company and its directors, officers, employees and controlling persons for any legal or
other expenses reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage or liability in respect thereof, but in each case only to the
extent that the untrue statement or omission or alleged untrue
- 12 -
statement or omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by or on behalf of such
Holder specifically for inclusion therein; and, subject to the limitation set forth
immediately preceding this clause, shall reimburse, as incurred, the Company or its
directors, officers and employees or any such controlling person for any legal or other
expenses reasonably incurred by the Company or its directors, officers and employees or any
such controlling person in connection with investigating or defending any loss, claim,
damage, liability or action in respect thereof. This indemnity agreement will be in
addition to any liability that such Holder may otherwise have to the Company, its directors,
officers and employees or any such controlling person.
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 5, notify the indemnifying party of the
commencement thereof; but the failure to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have under subsection (a) or (b) above
except to the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided further that the failure to
notify the indemnifying party shall not relieve it from any liability that it may have to an
indemnified party otherwise than under subsection (a) or (b) above. In case any such action
is brought against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof the indemnifying party will not be liable
to such indemnified party under this Section 5 for any legal or other expenses, other than
reasonable costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or threatened action
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 (i) includes an
unconditional release of such indemnified party from all liability on any claims that are
the subject matter of such action, and (ii) 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) If the indemnification provided for in this Section 5 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then
each indemnifying party shall contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate
to reflect the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the exchange of the Securities, pursuant to
the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing clause
(i) is
- 13 -
not permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on the other in
connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant equitable
considerations. 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
Company on the one hand or such Holder or such other indemnified party, as the case may be,
on the other, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection (d). Notwithstanding
any other provision of this Section 5(d), the Holders of the Securities shall not be
required to contribute any amount in excess of the amount by which the net proceeds received
by such Holders from the sale of the Securities pursuant to a Registration Statement exceeds
the amount of damages which such Holders have otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this subsection (d), each person, if any, who controls
such indemnified party within the meaning of the Securities Act or the Exchange Act shall
have the same rights to contribution as such indemnified party and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange Act shall have
the same rights to contribution as the Company.
(e) The agreements contained in this Section 5 shall survive the sale of the
Securities pursuant to a Registration Statement 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.
6. Additional Interest Under Certain Circumstances.
(a) By way of liquidated damages, additional interest (the “Additional
Interest”) with respect to the Initial Securities shall be assessed as follows if any of the
following events occur (each such event in clauses (i) through (vi) below a “Registration
Default”):
(i) If an Exchange Offer Registration Statement is not filed with the
Commission on or prior to the 180th day after the Issue Date;
(ii) If an Exchange Offer Registration Statement or, if required pursuant
to Section 2(i) above, a Shelf Registration Statement has not been declared effective by
the Commission (or become effective automatically) on or prior to the 210th day after
the Issue Date;
- 14 -
(iii) If the Registered Exchange Offer has not been consummated on or
before the 30th business day after the Exchange Offer Registration Statement is declared
effective;
(iv) If obligated to file the Shelf Registration Statement pursuant to
pursuant to Section 2(ii)-(iv) above, the Shelf Registration Statement does not become,
or is not declared, effective by the Commission on or prior to the 90th day after the
date on which the Shelf Registration Statement is required to be filed; or
(v) If after either the Exchange Offer Registration Statement or the
Shelf Registration Statement is declared (or becomes automatically) effective (A) such
Registration Statement thereafter ceases to be effective and is not declared effective
again within 30 days or (B) such Registration Statement or the related prospectus ceases
to be usable (except as permitted in subsection (b) below) and does not become usable
again within 30 days in connection with resales of Transfer Restricted Securities
(defined below) during the periods specified herein because either (1) any event occurs
as a result of which the related prospectus forming part of such Registration Statement
would include any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances under which
they were made not misleading, or (2) it shall be necessary to amend such Registration
Statement or supplement the related prospectus, to comply with the Securities Act or the
Exchange Act or the respective rules thereunder.
Additional Interest shall accrue on the Initial Securities over and above the interest
set forth in the title of the Securities from and including the date on which any such
Registration Default shall occur to but excluding the date on which all such Registration
Defaults have been cured. The rate of the Additional Interest will be 0.25% per year for
the first 90-day period immediately following the occurrence of a Registration Default, and
such rate will increase by an additional 0.25% per year with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum Additional
Interest rate of 1.0% per year. The Company will pay such Additional Interest on regular
interest payment dates. Such Additional Interest will be in addition to any other interest
payable from time to time with respect to the Notes and the Exchange Securities. The
Company will not be required to pay Additional Interest for more than one Registration
Default at any given time. Following the cure of all Registration Defaults, the accrual of
Additional Interest will cease and the interest rate will revert to the original rate,
10.25%.
(b) A Registration Default referred to in Section 6(a)(v)(B) hereof shall be
deemed not to have occurred and be continuing in relation to a Shelf Registration Statement
or the related prospectus if (i) such Registration Default has occurred solely as a result
of (x) the filing of a post-effective amendment to such Shelf Registration Statement 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 (y) other material events have occurred that would
need to be described in such Shelf Registration Statement or the related prospectus
- 15 -
and (ii) in the case of clause (y) a majority of the Company’s board of directors (the
“Board”) has determined in good faith that the offer or sale of Securities thereunder would
(A) materially impede, delay or interfere with any material pending or proposed financing,
acquisition, corporate reorganization or other similar transaction involving the Company for
which the Board has authorized negotiations or (B) require disclosure of material nonpublic
information which, if disclosed at such time, would be materially harmful to the Company’s
interests; provided, however, that in any case if one or more such Registration Defaults
occur for a period aggregating in excess of 90 days in any 12-month period, Additional
Interest shall be payable in accordance with the above paragraph from the day such
Registration Default would have been deemed to occur but for this Section 6(b) until such
Registration Default is cured.
(c) Any amounts of Additional Interest due pursuant to Section 6(a) above
will be payable in cash on the regular interest payment dates with respect to the Initial
Securities. The amount of Additional Interest will be determined by multiplying the
applicable Additional Interest rate by the principal amount of the Initial Securities,
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 the denominator of which is 360.
(d) “Transfer Restricted Securities” means each Security until (i) the date
on which such Transfer Restricted Security has been exchanged by a person other than a
broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer,
(ii) following the exchange by a broker-dealer in the Registered Exchange Offer of an
Initial Security for an Exchange Security, the date on which such Exchange Security is sold
to a purchaser who receives from such broker-dealer on or prior to the date of such sale a
copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such Initial Security has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (iv) the date on
which such Initial Securities is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.
7. Rules 144 and 144A. The Company shall use its reasonable best efforts to file
the reports required to be filed by it under the Securities Act and the Exchange Act in a timely
manner and, if at any time the Company is not required to file such reports, it will, upon the
request of any Holder of Initial Securities, make publicly available other information so long as
necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company
covenants that it will take such further action as any Holder of Initial Securities may reasonably
request, all to the extent required from time to time to enable such Holder to sell Initial
Securities without registration under the Securities Act within the limitation of the exemptions
provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will
provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the
Company by the Initial Purchasers upon request. Upon the request of any Holder of Initial
Securities, the Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities pursuant to the Exchange Act.
- 16 -
8. Underwritten Registrations. If any of the Transfer Restricted Securities 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 administer the offering will be selected by
the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to
be included in such offering; provided, that such investment banker or investment bankers and
manager or managers must be reasonably acceptable to the Company.
No person may participate in any underwritten registration hereunder unless such person (i)
agrees to sell such person’s Transfer Restricted Securities on the basis reasonably provided in any
underwriting arrangements approved by the persons entitled hereunder to approve such arrangements
and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such underwriting
arrangements.
9. Miscellaneous.
(a) 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 by the Company and the written consent of the Holders of a
majority in principal amount of (or, in the case of any Additional Interest, all) the
Securities affected by such amendment, modification, supplement, waiver or consent.
(b) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, first-class mail, facsimile
transmission, or air courier that guarantees overnight delivery:
(i) if to a Holder of the Securities, at the most current address given
by such Holder to the Company;
(ii) if to the Initial Purchasers:
Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Leveraged Finance
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Leveraged Finance
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
2500 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: T. Xxxx Xxxxx;
2500 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: T. Xxxx Xxxxx;
- 17 -
(iii) if to the Company:
Parallel Petroleum Corporation
0000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
0000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to:
Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: W. Xxxxx Xxxxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: W. Xxxxx Xxxxxxx
All such notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; three business days after being deposited
in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient’s
facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if
sent by overnight air courier guaranteeing next day delivery.
Unless otherwise indicated, all references herein to “days” are to calendar days.
(c) No Inconsistent Agreements. The Company has not, as of the date hereof,
entered into, nor shall it, on or after the date hereof, enter into, any agreement with
respect to its securities that is inconsistent with the rights granted to the Holders herein
or otherwise conflicts with the provisions hereof.
(d) Successors and Assigns. This Agreement shall be binding upon the Company
and its successors and assigns.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute
one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(h) Severability. If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired thereby.
- 18 -
(i) Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required hereunder,
Securities held by the Company or its affiliates (other than subsequent Holders of
Securities if such subsequent Holders are deemed to be affiliates solely by reason of their
holdings of such Securities) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(j) Submission to Jurisdiction. By the execution and delivery of this
Agreement, the Company submits to the nonexclusive jurisdiction of any competent federal or
state court in the City and State of New York in any suit or proceeding arising out of or
relating to this Agreement or brought under federal or state securities laws.
- 19 -
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the several Initial Purchasers and the Company in accordance
with its terms.
| Very truly yours, | ||||||
| PARALLEL PETROLEUM CORPORATION, | ||||||
| a Delaware corporation | ||||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Xxxxx X. Xxxxxx | ||||||
| President and Chief Executive Officer | ||||||
Signature Page to the Registration Rights Agreement
The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
Xxxxxxxxx & Company, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
BNP Paribas Securities Corp.
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
BNP Paribas Securities Corp.
By: Xxxxxxxxx & Company, Inc.
By:
|
/s/ Xxxxx Xxxxxxx
|
Signature Page to the Registration Rights Agreement
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account pursuant to the
Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter”
within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Initial Securities where such Initial Securities were acquired by such
broker-dealer as a result of market-making activities or other trading activities. The Company has
agreed that, for a period of up to 180 days after the consummation of the Registered Exchange
Offer, it will make this Prospectus available to any broker-dealer for use in connection with any
such resale. See “Plan of Distribution.”
A-1
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in exchange for
Securities, where such Initial Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. See “Plan of Distribution.”
B-1
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account pursuant to the
Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Initial Securities where such Initial Securities were acquired as a result
of market-making activities or other trading activities. The Company has agreed that, for a period
ending on the earlier of (a) 180 days after the consummation of the Registered Exchange Offer and
(b) the date on which a broker-dealer is no longer required to deliver a prospectus in connection
with market-making or other trading activities, it will make this prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such resale. In
addition, until , 200 (90 days after the consummation of the Registered
Exchange Offer), all dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange Securities by
broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to
the Exchange Offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices prevailing at the time of
resale, at prices related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may receive compensation
in the form of commissions or concessions from any such broker-dealer or the purchasers of any such
Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it
for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an “underwriter” within the meaning of
the Securities Act and any profit on any such resale of Exchange Securities and any commission or
concessions received by any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter”
within the meaning of the Securities Act.
For a period of 180 days after the consummation of the Registered Exchange Offer, the Company
will promptly send additional copies of this Prospectus and any amendment or supplement to this
Prospectus to any broker-dealer that requests such documents as provided in the Letter of
Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including
the expenses of one counsel for the Holders of the Securities) other than commissions or
concessions of any brokers or dealers and will indemnify the Holders of the Securities (including
any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
C-1
ANNEX D
o
|
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. |
| Name: | ||||||
| Address: | ||||||
If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in,
and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a
broker-dealer that will receive Exchange Securities for its own account in exchange for Initial
Securities that were acquired as a result of market-making activities or other trading activities,
it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange
Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not
be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
D-1
