Exhibit 10.12
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of January 2,
1998, is by and between Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Investor"), and Boots & Xxxxx International Well Control,
Inc., a Delaware corporation (the "Company").
R E C I T A L S:
WHEREAS, the Company has requested that Investor purchase certain Notes of
the Company in connection with the purchase by IWC Services, Inc. of the issued
and outstanding stock of ITS Supply Corporation.
WHEREAS, Investor is willing to purchase certain Notes upon the terms and
conditions of that certain Note Purchase Agreement dated of even date herewith
(the "Note Purchase Agreement"), by and between the Company and Investor, and
subject to the representations, warranties, covenants and agreements set forth
herein and therein:
WHEREAS, it is a material inducement and a precondition to the entering
into of the Note Purchase Agreement by Investor that the Company enter into this
Agreement;
NOW, THEREFORE, in consideration of the terms and conditions contained
herein and of the purchase of Notes by Investor, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE I
REGISTRATION RIGHTS
Section 1.1 Requested Registration.
(a) If, at any time, the Company shall receive from Investor a written
request that the Company effect a registration under the Securities Act for the
sale of at least 25% of the Registrable Securities (as defined below) held or
obtainable by all of the Holders, the Company shall:
(i) within ten (10) days after receipt of such written request, give
written notice of the proposed registration to all other Holders (if any); and
(ii) as soon as practicable use its best efforts to register (including,
without limitation, the execution of an undertaking to file post-effective
amendments and any other governmental requirements) all Registrable Securities
which a Holder requests to be registered and all Registrable Securities which
any other Holder requests to be registered within twenty (20) days after receipt
of such written notice from the Company; provided, that the Company shall
not be obligated to file any additional registration statement pursuant to this
Section 1.1 after the Company has effected two such registrations at the request
of Investor and such registrations have been declared or ordered effective.
Subject to the foregoing, the Company shall file a registration statement
covering the Registrable Securities so requested to be registered as soon as
practicable, but in any event within sixty (60) days after receipt of the
request or requests of a Holder and shall use its best efforts to have such
registration statement promptly declared effective by the Securities Exchange
Commission whether or not all Registrable Securities requested to be registered
can be included. If, however, the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good-
faith judgment of the Board of Directors it would be materially detrimental to
the Company and its shareholders for such registration statement to be filed
within such sixty-day (60-day) period and it is therefore deferring the filing
of such registration statement, the Company shall have an additional period of
not more than sixty (60) days after the expiration of the initial sixty-day (60-
day) period within which to file such registration statement; provided, that
during such time the Company may not file a registration statement for
securities to be issued and sold for its own account or the account of an other
of its shareholders.
(b) If a Holder intends to distribute the Registrable Securities covered
by its request by means of an underwriting, such Holder shall so advise the
Company as part of its request and the Company shall include such information in
the written notice referred to in subsection 1.1(a)(i). The underwriter may be
selected by the Holders electing to sell their Registrable Securities, subject
to the reasonable approval of the Company. The right of any Holder to
registration pursuant to this Section 1.1 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. The
Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provisions of this Section 1.1, if the
representative of the underwriter advises the Company and the Holder(s) in
writing that marketing factors require a limitation on the number of shares to
be underwritten (a "Cutback"), the number of shares to be included in the
underwriting or registration shall be allocated first to the Holders, without
limitation, and thereafter shall be allocated among the Company and the other
holders requesting inclusion in the registration pro rata on the basis of the
number of shares each requesting other holder (or the Company, as the case may
be) requests to be included bears to the total number of shares of all
requesting other holders (and the Company) that have been requested to be
included in such registration. If a person who has requested inclusion in such
registration as provided above does not agree to the terms of any such
underwriting, such person shall be excluded therefrom by written notice from the
Company, the underwriter or the Holder(s). The securities so excluded shall
also be withdrawn from registration.
(c) If, at the time any written request for registration is received by the
Company pursuant to this Section, the Company has determined to proceed with the
actual preparation and filing of a registration statement under the Securities
Act in connection with the proposed offer
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and sale for cash of any of its securities by it or any of its security holders,
or in the event that Section 1.3 hereof is applicable, then such written request
shall be deemed to have been given pursuant to Section 1.2 and Section 1.3
hereof, as the case may be, rather than this Section 1.1, and the rights of the
Holders covered by such written request shall be governed by Section 1.2 or
Section 1.3, as the case may be.
Section 1.2 Piggyback Registration. If at any time or from time to time,
the Company shall determine to register the sale of any of its securities, for
its own account or the account of any of its shareholders, other than a
registration relating solely to an employee benefit plan or a registration
relating solely to a transaction under Rule 145 of the Securities Act, the
Company will:
(i) give to each Holder written notice thereof as soon as
practicable prior to filing the registration statement; and
(ii) on behalf of all entities requesting inclusion in such
registration, include such securities in the offering and may
condition such offer on their acceptance of any other reasonable
conditions (including, without limitation, if such offering is
underwritten, that such requesting holders agree in writing to enter
into an underwriting agreement with usual and customary terms). If
the representative of the underwriter advises the Company in writing
that marketing factors require a Cutback, the number of shares to be
included in the underwriting or registration shall be allocated first
to the Company, and thereafter shall be allocated among the other
holders requesting inclusion in the registration pro rata on the basis
of the number of shares each requesting other holder requests to be
included bears to the total number of shares of all requesting other
holders that have been requested to be included in such registration.
If a person who has requested inclusion in such registration as
provided above does not agree to the terms of any such underwriting,
such person shall be excluded therefrom by written notice from the
Company or the underwriter. The securities so excluded shall also be
withdrawn from registration.
Section 1.3 Form S-2 or Form S-3.
(a) Each Holder will have the right to request and have effected
unlimited registrations of shares of its Registrable Securities on Form S-2
or Form S-3.
(b) Upon written request of a Holder delivered to the Company, the
Company will notify each other Holder of such request within three (3) days
after the receipt of such request. Each of such other Holders shall have
three (3) days after receipt of such notice from the Company to request
that all or any portion of its Registrable Securities be included in such
registration. After the expiration of all such request and notice periods
under this Section, the Company will use all reasonable efforts to cause
the registration of all Registrable Securities on Form S-2 or such
successor form or Form S-3
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or such successor form to the extent requested by such Holders.
(c) Any registration statement filed pursuant to this Section may
include other securities of the Company, with respect to which "piggyback"
registration rights have been granted, and may include securities of the
Company being sold for the account of the Company; provided, however, that
any Cutback shall be dealt with in the same manner as provided in Section
1.1.
Section 1.4 Registrable Securities. For the purposes of this Section 1,
the term "Registrable Securities" shall mean any shares of voting Common Stock
issuable to a Holder upon exercise of the Warrant, any shares of Common Stock
issued to a Holder as a dividend on the Warrant Shares, and any other shares of
Common Stock distributable on, with respect to, or in substitution for such
Registrable Securities, including those which have been transferred as permitted
under this Agreement, except for those that have been sold or transferred
pursuant to an effective registration statement or pursuant to Rule 144 under
the Securities Act.
Section 1.5 Procedure for Registration. Whenever the Company is required
under this Agreement to register Common Stock, it agrees do the following:
(a) Use all reasonable efforts to prepare, as soon as is feasible, for
filing with the Securities and Exchange Commission a registration statement
and such amendments and supplements to said registration statement and the
prospectus as may be necessary to keep the registration statement effective
and to comply with the provisions of the Securities Act for the period
necessary to complete the proposed public offering;
(b) Furnish to each selling Holder such copies of each preliminary and
final prospectus and such other documents as such holder may reasonably
request to facilitate the public offering of its Registrable Securities;
(c) Enter into any underwriting agreement with provisions reasonably
required by the proposed underwriter for the selling holders, if any; and
(d) Use all reasonable efforts to register or qualify the Registrable
Securities covered by the registration statement under the securities or
"blue-sky" laws of such jurisdictions as any selling Holder may reasonably
request, although the Company will not have to register in any states that
require it to qualify to do business or subject itself to general service
of process, and for a registration under Section 1.2. The Company will not
be required to register in more states than are necessary to permit the
sale of the securities.
Section 1.6. Indemnification.
(a) Subject to applicable law, the Company will indemnify each Holder
and each person controlling such Holder against all claims, losses, damages and
liabilities, including legal
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and other expenses reasonably incurred, arising out of any untrue or allegedly
untrue statement of a material fact contained in the registration statement, or
any omission or alleged omission to state a material fact required to be stated
in the registration statement or necessary to make the statements not
misleading, or arising out of any violation by the Company of the Securities
Act, any state securities or "blue-sky" laws or any applicable rule or
regulation.
(b) Subject to applicable law, each Holder will indemnify the
Company, and each person controlling the Company, against all claims, losses,
damages and liabilities, including legal and other expenses reasonably incurred,
arising out of any untrue or allegedly untrue statement of a material fact
contained in the registration statement, or required to be stated in the
registration statement or necessary to make the statements contained therein not
misleading, to the extent, but only to the extent, that such untrue statement or
omission is contained in any information or affidavit furnished in writing by
such Holder to the Company specifically for inclusion in such registration
statement. In no event shall the liability of such Holder under this paragraph
be greater in amount than the dollar amount of the proceeds received by such
Holder upon the sale of the Common Stock pursuant to the registration statement
giving rise to such indemnification obligation.
Section 1.7 Transfer of Registration Rights. The registration rights of a
Holder under Section 1 may be transferred to any transferee of Registrable
Securities. Any such transferee will be deemed to be a Holder for purposes of
this Agreement, and as a condition precedent to transfer, such transferee must
agree to be bound by the terms of this Agreement.
Section 1.8 Obligations of a Holder and Others in a Registration. Each
Holder agrees to timely furnish such information regarding such person and the
securities sought to be registered and to take such other action as the Company
may reasonably request, including the entering into of agreements and the
providing of documents, in connection with the registration or qualification of
such securities and/or the compliance of such registration statement with all
applicable laws. Each Holder severally agrees that, in connection with any
offering undertaken pursuant to Section 1.2 or Section 1.3, the Company shall
have the right to, if it deems an underwriter or underwriters necessary or
appropriate, designate such underwriter(s); provided, however, that if the
Company does not within sixty (60) days from the date of the last written notice
of the Holder(s) delivered pursuant to Section 1.2 or Section 1.3, as the case
may be, designate such underwriter(s) in writing to the Holder(s), the Holder(s)
shall have the right to designate their own underwriter(s). If the registration
involves an underwriter, each Holder agrees, upon the request of such
underwriter, not to sell any unregistered securities of the Company for a period
of one hundred eighty (180) days following the effective date of the
registration statement for such offering and to enter into an underwriting
agreement with such underwriters containing usual and customary terms and
provisions.
Section 1.9 Limitations on Subsequent Registration Rights. The Company
will not, without the prior written consent of Investor, enter into any
agreement with any holder or prospective holder of any securities of the Company
which would allow such holder or prospective holder to make a demand
registration which could result in such registration
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statement being declared effective prior to the 180th day subsequent to the
effective date of any registration effective pursuant to Section 1.2 or Section
1.3. If the Company grants any subsequent registration rights more favorable
than the registration rights granted to Investor in this Section, the Company
will also grant the more favorable registration rights to Investor.
Section 1.10 Expenses of Registration. All expenses incurred in
connection with registrations pursuant to this Agreement, including, without
limitation, all registration, federal and state filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Company and one
counsel for the Holders and expenses of any special audits of the Company's
financial statements incidental to or required by such registration, shall be
borne by the Company, except that the Company shall not be required to pay
underwriters' fees, discounts or commissions relating to Registrable Securities
being sold by any Holders.
ARTICLE II
BOARD OF DIRECTOR REPRESENTATIVE
At the election of Investor or Geneva Associates, L.L.C. ("Geneva"), for a
period of six (6) years from the date hereof, the Company shall elect a
representative of Investor or Geneva Associates, L.L.C. ("Geneva"), to the
Company's Board of Directors as soon as possible after the date hereof. Until
such time, Investor and Geneva shall have Board of Director visitation rights
which will entitle it to participation in (and receive copies of all materials
distributed at) all meetings of the Board of Directors and any committees
thereof.
ARTICLE III
MISCELLANEOUS
Section 3.1 Modification of Agreement, Sale of Interest.
(a) This Agreement may not be modified, altered or amended, except by an
agreement in writing signed by Investor and the Company. The Company may not
sell, assign or transfer this Agreement, or the Warrant, or any portion thereof,
including, without limitation, any of the Company's rights, titles, interests,
remedies, powers, obligations and/or duties hereunder or thereunder. Investor
may, subject to the provisions of the Section 3.1(b) below, assign, transfer or
otherwise dispose of, at any time or times hereafter, this Agreement or the
Warrant, or any portion hereof or thereof, including, without limitation, such
party's rights, title, interest, remedies, powers, and/or duties hereunder or
thereunder, and such transferee or assignee must agree to be bound by the terms
and conditions of this Agreement. This Agreement and Warrant shall be binding
upon and inure to the benefit of the successors and permitted assigns of
Investor.
(b) Anything to the contrary in this Agreement notwithstanding, if Investor
has assigned any of its rights as permitted hereunder, the rights of Investor,
including the right to
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grant any consent or waiver or to enter into any amendment to this Agreement may
be exercised only by the holders of the majority in interest of the Warrant
Shares issued or issuable under the Warrant and such action taken by such
majority shall be binding on all others, including Investor and its successors
and permitted assigns. Investor will give notice to Borrower of any such
assignment within a reasonable period thereafter.
Section 3.2 Expenses and Attorney's Fees. If, at any time or times,
whether prior or subsequent to the date hereof, Investor employs counsel for
advice or other representation or incurs reasonable legal and/or other costs and
expenses in connection with:
(a) the negotiation, preparation or execution of this Agreement or any
amendment of or modification of this Agreement;
(b) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Investor, the Company or any other person) in any way relating to
this Agreement or the Warrant, unless a court of competent jurisdiction finds in
favor of the Company as the prevailing party, and awards court costs and
attorneys' fees to the such prevailing party; or
(c) any attempt to enforce any rights of Investor or any participant
against the Company or any other person that may be obligated to Investor by
virtue of this Agreement or the Warrant in accordance with the terms of this
Agreement;
then, in any such event, the reasonable attorneys' fees arising from such
services and all reasonable expenses, costs, charges, and fees of counsel or of
Investor in any way or respect arising in connection with or relating to any of
the events or actions described in this subsection shall be payable on demand by
the Company, to Investor.
Section 3.3 Waiver by Investor. Investor's failure, at any time or times
hereafter, to require strict performance by the Company of any provision of this
Agreement or the Warrant shall not waive, affect or diminish any right of
Investor thereafter to demand strict compliance and performance therewith. None
of the undertakings, agreements, warranties, covenants and representations of
the Company or any of its Subsidiaries contained in this Agreement, the Warrant,
or the other Documents shall be deemed to have been suspended or waived by
Investor, unless such suspension or waiver is by an instrument in writing signed
by an officer of Investor and specifying such suspension or waiver.
Section 3.4 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
Section 3.5 Parties. This Agreement, the Warrant and the Other Agreements
shall be binding upon and inure to the benefit of the successors and permitted
assigns of Borrower, each of its Subsidiaries, the Company and Investor.
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Section 3.6 Entire Agreement; Conflict of Terms. This Agreement, the
Warrant and the other Documents constitute the entire agreement of the parties
with respect to the Warrant and may not be modified or supplemented by any prior
or contemporaneous oral understanding.
Section 3.7 Equitable Relief. The Company recognized that, in the event
the Company fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to Investor, therefore, the Company agrees that Investor, if Investor so
requests, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
Section 3.8 Governing Law; Jurisdiction; Venue; Waiver of Jury Trial and
Service of Process. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE AT TEXAS
AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES APPLICABLE THERETO
AND THE INTERNAL LAWS OF THE STATE OF TEXAS, APPLICABLE TO AGREEMENTS EXECUTED,
DELIVERED AND PERFORMED WITHIN SUCH STATE, AND THE COMPANY HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO SUCH PARTY AT ITS
ADDRESS SET FORTH IN SECTION 3.9 BELOW. THE COMPANY WAIVES TRIAL BY JURY, ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
3.8 SHALL AFFECT THE RIGHT OF INVESTOR TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF INVESTOR TO BRING ANY ACTION OR
PROCEEDING AGAINST BORROWER, ANY OF ITS SUBSIDIARIES AND/OR THEIR RESPECTIVE
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHERE SUCH PARTY MAINTAINS
OFFICES OR HAS PROPERTY.
Section 3.9 Notices. All notices, requests, consents, approvals or
demands to or upon the respective parties hereto shall be given or made as
follows:
If to Investor, at: Main Street Merchant Partners II, L.P.
Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to: Xxxxxxxxx & Xxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxx Xxxxxxxxxx
Telephone: 000-000-0000
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Facsimile: 000-000-0000
If to the Company: Boots & Xxxxx International Well Control, Inc.
with a copy to:
Unless otherwise specified herein, all such notices, requests, consents,
approvals and demands given or made in connection with the terms and provisions
of this Agreement shall be deemed to have been given or made when personally
delivered, or, if mailed, upon the earlier of actual receipt by the addressee or
three (3) days after sent by registered or certified mail, postage prepaid, or,
in the case of overnight courier service (which may be utilized hereunder), when
delivered by the overnight courier company to the respective address specified
above, or, in the case of telecopy or facsimile transmission (which may be
utilized hereunder), within the first business hour (9:00 a.m. to 5:00 p.m.,
local time for the recipient, on any Business Day) after receipt by the
respective addressee. Any party may change the address or transmission number
to which notices shall be directed hereunder by giving ten (10) days written
notice of such change to the other parties.
Section 3.10 Section Titles. The section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
Section 3.11 Defined Terms. Capitalized terms, when used herein, shall
have the meanings set forth in the Note Purchase Agreement.
Section 3.12 Indemnification. The Company hereby agrees to pay, indemnify
and hold Investor and its partners, directors, officers, agents, employees and
attorneys harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, performance or administration of this Agreement, including all
expenses of litigation, court costs and attorneys' fees reasonably incurred, for
any and all claims, losses, damages, causes of action, suits and liability of
any kind arising out of or in connection with this Agreement, regardless of
whether such claims, losses damages, causes of action, suits or liability of any
other kind are caused in whole or in part by the negligence of Investor, but
excluding any and all obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements directly or indirectly,
arising out of, or arising out of the failure by Investor to properly comply
with any law, regulation or rule imposed on Investor by any state or federal
regulatory agency or department. It is the express intention of the parties
hereto that the
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indemnity provided for in this paragraph is an indemnity by the Company to
indemnify and protect Investor from the consequences of Investor's own
negligence, whether that negligence is the sole or concurring cause of any
claim, loss, damage, cause of action, suit or liability of any other kind,
except for any claim, loss, damage, cause of action, suit or liability of any
other kind arising out of, or directly or indirectly caused by, the gross
negligence or wilful misconduct of Investor.
Section 3.13 Counterparts. This Agreement may be executed in a number of
identical counterparts, each of which, for all purposes, is to be deemed an
original, and all of which collectively constitute one agreement, but in making
proof of this Agreement, it shall not be necessary to produce or account for
more than one such counterpart. A facsimile or photocopy of an executed
counterpart of this Agreement shall be sufficient to bind the party or parties
whose signature(s) appear thereon.
Section 3.14 Legal Compliance. The parties acknowledge that this
Agreement and the Warrant are being given as part of a "Qualified Commercial
Loan" pursuant to Vernon's Texas Civil Statutes, Article 5069 - Chapter 1.H, and
as such the Warrant and rights under this Agreement will not constitute
"interest" for any purpose, including under the Note Purchase Agreement.
IN WITNESS WHEREOF, this Registration Rights Agreement has been duly
executed and delivered as of the day and year specified at the beginning hereof.
MAIN STREET MERCHANT PARTNERS II, L.P.
By: _____________________________________
Name: Xxxxx X. Xxxxxx
Title: Managing Director
BOOTS & XXXXX INTERNATIONAL WELL
CONTROL, INC.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
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