EXHIBIT 10.5
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JANUARY 23, 1998
AMONG
GOTHIC ENERGY CORPORATION
AND
THE PURCHASERS NAMED HEREIN
TABLE OF CONTENTS
Page
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1. Definitions....................................... 1
2. Exchange Offer.................................... 4
3. Shelf Registration................................ 7
4. Additional Dividends.............................. 8
5. Registration Procedures........................... 9
6. Registration Expenses............................. 17
7. Indemnification................................... 18
8. Rules 144 and 144A................................ 21
9. Underwritten Registrations........................ 21
10. Miscellaneous..................................... 22
a. Remedies.................................... 22
b. No Inconsistent Agreements.................. 22
c. Adjustments Affecting Registrable Shares.... 22
d. Amendments and Waivers...................... 22
e. Notices..................................... 22
f. Successors and Assigns...................... 23
g. Counterparts................................ 23
h. Headings.................................... 23
i. Governing Law............................... 23
j. Severability................................ 23
k. Entire Agreement............................ 24
l. Shares Held by the Company or Its Affiliates 24
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is dated as of
January 23, 1998, by and among Gothic Energy Corporation, an Oklahoma
corporation (the "Company" and the purchasers named on the signature pages
hereto (the "Purchasers").
This Agreement is entered into in connection with the Securities Purchase
Agreement, dated as of January 23, 1998, among the Company and the Purchasers
(the "Purchase Agreement") relating to the sale by the Company to the Purchasers
of up to $45,000,000 aggregate liquidation value of the Company's Senior
Redeemable Preferred Stock, Series A, par value $.05 per share (together with
any dividends paid in the form of additional shares of Preferred Stock,
including the Additional Dividends, the "Preferred Shares"), along with warrants
("Warrants") for the purchase of shares of the Common Stock, par value $.0l per
share, of the Company ("Common Stock") constituting up to 50% of the Company's
fully diluted common stock. In order to induce the Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement for the benefit of the Purchasers and their direct
and indirect transferees. The execution and delivery of this Agreement is a
condition to the Purchasers' obligations to purchase the Preferred Shares and
the Warrants under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
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As used in this Agreement, the following terms shall have the
following meanings:
Additional Dividends: See Section 4.
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Advice: See Section 5.
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Applicable Period: See Section 2.
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Certificate of Designation: The Certificate of Designation duly
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adopted by the Board of Directors of the Company setting forth the rights,
preferences and priorities of the Preferred Shares and filed with, and accepted
for filing, so as to be effective, by the Secretary of State of the State of
Oklahoma prior to the Closing hereunder and which is substantially in the form
of Exhibit 1 to the Purchase Agreement.
Change of Control: See the meaning ascribed to such term in the
-----------------
Certificate of Designation.
Company: See the introductory paragraph to this Agreement.
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Effectiveness Date: The earlier of June 30, 1998 and the 30th day
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after a Change of Control.
Effectiveness Period: See Section 3.
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Event Date: See Section 4.
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Exchange Act: The Securities Exchange Act of 1934, as amended, and
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the rules and regulations of the SEC promulgated thereunder.
Exchange Offer: See Section 2.
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Exchange Registration Statement: See Section 2.
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Exchange Shares: See Section 2.
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Filing Date: The 60th day after the Issue Date.
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Holder: Any holder of a Registrable Share or Registrable Shares.
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Indemnified Person: See Section 7.
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Indemnifying Person: See Section 7.
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Initial Shelf Registration: See Section 3.
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Inspectors: See Section 5.
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Issue Date: the date Preferred Shares were issued pursuant to the
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Purchase Agreement.
NASD: See Section 5.
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Participant: See Section 7.
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Participating Broker-Dealer: See Section 2.
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2
Person: An individual, corporation, partnership, joint venture,
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association, joint stock company, trust, unincorporated organization or other
legal entity.
Preferred Shares: See the introductory paragraphs to this Agreement.
----------------
Prospectus: The prospectus included in any Registration Statement
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(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Shares covered by such Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs to this
------------------
Agreement.
Purchasers: See the introductory paragraphs to this Agreement.
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Records: See Section 5.
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Registrable Shares: The Preferred Shares upon original issuance of the
------------------
Preferred Shares and at all times subsequent thereto and until (i) a
Registration Statement covering such Preferred Shares has been declared
effective by the SEC and such Preferred Shares have been disposed of in
accordance with such effective Registration Statement, (ii) such Preferred
Shares are sold in compliance with Rule 144, (iii) in the case of any Preferred
Share, such Preferred Share has been exchanged for an Exchange Share or Exchange
Shares pursuant to an Exchange Offer or (iv) such Preferred Shares cease to be
outstanding.
Registration Default: See Section 4.
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Registration Statement: Any registration statement of the Company,
----------------------
including, but not limited to, the Exchange Registration Statement, which covers
any of the Registrable Shares pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
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amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers
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and sales by subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus delivery requirements
of the Securities Act.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
---------
amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 415: Rule 415 under the Securities Act, as such Rule may be
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amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
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Securities Act: The Securities Act of 1933, as amended, and the rules
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and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2.
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Shelf Registration: See Section 3.
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Subsequent Shelf Registration: See Section 3.
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Underwritten Registration or Underwritten Offering: A registration in
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which securities of the Company are sold to an underwriter(s) for reoffering to
the public.
2. Exchange Offer
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(a) The Company agrees to use its best efforts to file with the SEC as
soon as practicable after the Issue Date, but in no event later than the Filing
Date, an offer to exchange (the "Exchange Offer") any and all of the Registrable
Shares for a like aggregate liquidation value of preferred equity securities of
the Company which are substantially identical to the Preferred Shares (the
"Exchange Shares") (and which are entitled to the benefits of the Certificate of
Designation), except that the Exchange Shares shall have been registered
pursuant to an effective Registration Statement under the Securities Act. The
Exchange Offer will be registered under the Securities Act on the appropriate
form (the "Exchange Registration Statement") and will comply with all applicable
tender offer rules and regulations under the Exchange Act. The Company agrees to
use its best efforts to (x) cause the Exchange Registration Statement to become
effective under the Securities Act on or before the Effectiveness Date; (y) keep
the Exchange Offer open for at least 30 days (or longer if required
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by applicable law) after the date that notice of the Exchange Offer is mailed to
Holders; and (z) consummate the Exchange Offer on or prior to the 60th day
following the date on which the Exchange Registration Statement is declared
effective. Each Holder who participates in the Exchange Offer will be required
to represent that any Exchange Shares received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
person to participate in the distribution of the Exchange Shares, and that such
Holder is not an affiliate of the Company within the meaning of Rule 405 under
the Securities Act or if it is an affiliate, that it will comply with the
registration and prospectus delivery requirements of the Securities Act, to the
extent applicable. Upon consummation of the Exchange Offer in accordance with
this Section 2, the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to Exchange Shares held by Participating
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Broker-Dealers (as defined below), and the Company shall have no further
obligation to register Registrable Shares pursuant to Section 3 of this
Agreement.
(b) The Company shall include within the Prospectus contained in the
Exchange Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Purchasers, which shall contain a summary statement
of the positions taken or policies made by the Staff of the SEC with respect to
the potential "underwriter" status of any broker-dealer that is the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Shares
received by such broker-dealer in the Exchange Offer (a "Participating Broker-
Dealer"), whether such positions or policies have been publicly disseminated by
the Staff of the SEC or such positions or policies, in the reasonable judgment
of the Purchaser, represent the prevailing views of the Staff of the SEC. Such
"Plan of Distribution" section shall also allow the use of the prospectus by all
persons subject to the prospectus delivery requirements of the Securities Act,
including all Participating Broker-Dealers, and include a statement describing
the means by which Participating Broker-Dealers may resell the Exchange Shares.
The Company shall use its best efforts to keep the Exchange
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 Shares; provided that such period shall not
exceed 180 days (or such longer period if extended pursuant to the last
paragraph of Section 5) (the "Applicable Period").
Dividends on the Exchange Shares will accrue from the last
dividend payment date on which dividends were paid on the Preferred Shares
surrendered in exchange therefor or, if no dividends have been paid on the
Preferred Shares, from the date of original issue.
5
In connection with the Exchange Offer, the Company shall:
(i) mail 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;
(ii) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York; and
(iii) permit Holders to withdraw tendered Preferred Shares at any
time prior to the close of business, New York time, on the last business day on
which the Exchange Offer shall remain open.
As soon as practicable after the close of the Exchange Offer the
Company shall:
(i) accept for exchange all Preferred Shares properly tendered and not
validly withdrawn pursuant to the Exchange Offer; and
(ii) issue and deliver promptly to each Holder of Preferred Shares,
Exchange Shares equal in liquidation value to the Preferred Shares of such
Holder so accepted for exchange.
The Exchange Shares shall be issued pursuant to the Certificate of
Designation, will vote and consent together on all matters with the Preferred
Shares as one class to the extent the Preferred Shares have voting rights
pursuant to the Certificate of Designation or as provided by applicable law, and
will not have the right to vote or consent as a class separate from the
Preferred Shares on any matter.
(c) If (1) prior to the consummation of the Exchange Offer, the Company or
Holders of at least a majority in aggregate liquidation value of the Registrable
Shares reasonably determine in good faith that (i) the Exchange Shares would
not, upon receipt, be tradeable by such Holders which are not affiliates (within
the meaning of the Securities Act) of the Company without restriction under the
Securities Act and without restrictions under applicable state securities laws,
(ii) the interests of the Holders under this Agreement would be adversely
affected by the consummation of the Exchange Offer or (iii) after conferring
with counsel, the SEC is unlikely to permit the consummation of the Exchange
Offer prior to the Effectiveness Date or (2) the Exchange Offer is commenced and
not consummated within 180 days of the Issue Date, then the Company shall
promptly deliver to the Holders written notice thereof (the "Shelf Notice") and
shall file an Initial Shelf Registration pursuant to Section 3. Following the
delivery of a Shelf
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Notice to the Holders of Registrable Shares, the Company shall not have any
further obligation to conduct the Exchange Offer under this Section 2.
3. Shelf Registration
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If a Shelf Notice is delivered as contemplated by Section 2(c), then:
(a) Initial Shelf Registration. The Company shall prepare and file
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with the SEC a Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Registrable Shares (the "Initial
Shelf Registration"). If the Company shall have not yet filed an Exchange
Registration Statement, the Company shall use its best efforts to file with the
SEC the Initial Shelf Registration on or prior to the Filing Date. In any other
instance, the Company shall use its best efforts to file with the SEC the
Initial Shelf Registration within 30 days of the delivery of the Shelf Notice.
The Initial Shelf Registration shall be on Form S-1 or another appropriate form
permitting registration of such Registrable Shares for resale by such Holders in
the manner or manners designated by them (including, without limitation, one or
more underwritten offerings). The Company shall not permit any securities other
than the Registrable Shares to be included in the Initial Shelf Registration or
any Subsequent Shelf Registration (as defined below), except pursuant to the
Warrant to purchase Common Stock of the Company expiring on November 24, 2002
held by Amoco Corporation (the "Amoco Warrant"). The Company shall use its best
efforts to cause the Initial Shelf Registration to be declared effective under
the Securities Act on or prior to the Effectiveness Date and to keep the Initial
Shelf Registration continuously effective under the Securities Act until the
date which is 36 months from the date on which such Initial Shelf Registration
is declared effective (subject to extension pursuant to the last paragraph of
Section 5 hereof) (the "Effectiveness Period"), or such shorter period ending
when (i) all Registrable Shares covered by the Initial Shelf Registration have
been sold in the manner set forth and as contemplated in the Initial Shelf
Registration or (ii) a Subsequent Shelf Registration covering all of the
Registrable Shares has been declared effective under the Securities Act.
(b) Subsequent Shelf Registrations. If the Initial Shelf Registration
------------------------------
or any Subsequent Shelf Registration ceases to be effective for any reason at
any time during the Effectiveness Period (other than because of the sale of all
of the securities registered thereunder), the Company shall use its best efforts
to obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within 45 days of such cessation of
effectiveness amend the Shelf Registration in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional "shelf" Registration Statement pursuant to Rule 415 covering all
of the Registrable Shares (a "Subsequent Shelf Registration"). If a Subsequent
Shelf Registration is filed, the Company shall use its best efforts to cause the
Subsequent Shelf Registration to be declared effective as soon as practicable
after such filing and
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to keep such Registration Statement continuously effective for a period equal to
the number of days in the Effectiveness Period less the aggregate number of days
during which the Initial Shelf Registration or any Subsequent Shelf Registration
was previously continuously effective. As used herein the term "Shelf
Registration" means the Initial Shelf Registration and any Subsequent Shelf
Registration.
(c) Supplements and Amendments. The Company shall promptly supplement
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and amend the Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if requested by the Holders
of a majority in aggregate liquidation value of the Registrable Shares covered
by such Registration Statement or by any underwriter(s) of such Registrable
Shares.
4. Additional Dividends
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(a) The Company and the Purchasers agree that the Holders of
Registrable Shares will suffer damages if the Company fails to fulfill its
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Company agrees to pay additional dividends on the Preferred Shares
("Additional Dividends") under the circumstances set forth below:
(i) if the Exchange Offer Registration Statement or the Initial
Shelf Registration has not been filed on or prior to the Filing Date;
(ii) if the Exchange Offer Registration Statement or the Initial
Shelf Registration has not been declared effective on or prior to the
Effectiveness Date; and
(iii) if either (A) the Company has not exchanged the Exchange
Shares for all Preferred Shares validly tendered in accordance with the terms of
the Exchange Offer on or prior to 60 days after the date on which the Exchange
Offer Registration Statement was declared effective or (B) the Exchange Offer
Registration Statement ceases to be effective at any time prior to the time that
the Exchange Offer is consummated or (C) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration Statement
ceases to be effective at any time during the Effectiveness Period; (each such
event referred to in clauses (i) through (iii) above is a "Registration
Default"), the sole remedy available to holders of the Preferred Shares will be
the immediate accrual of Additional Dividends as follows: the per annum dividend
rate on the Preferred Shares will increase by 100 basis points; and the per
annum dividend rate will increase by an additional 25 basis points for each
subsequent 90-day period during which the Registration Default remains uncurred,
up to a maximum additional dividend rate of 150 basis points per annum;
provided, however, that (1) upon the filing of the Exchange Registration
Statement or the Initial Shelf Registration (in the case of (i) above), (2) upon
the
8
effectiveness of the Exchange Registration Statement or a Shelf Registration (in
the case of (ii) above) or (3) upon the exchange of Exchange Shares for all
Preferred Shares tendered (in the case of (iii)(A) above), or upon the
effectiveness of the Exchange Registration Statement which had ceased to remain
effective (in the case of (iii)(B) above), or upon the effectiveness of the
Shelf Registration which had ceased to remain effective (in the case of (iii)(C)
above), any Additional Dividends on the Preferred Shares as a result of such
clause (i), (ii) or (iii) (or the relevant subclause thereof), as the case may
be, shall cease to accrue and the dividend rate on the Preferred Shares will
revert to the dividend rate originally borne by the Preferred Shares.
(b) The Company shall notify the Holders within one business day after
each and every date on which an event occurs in respect of which any Additional
Dividend is required to be paid (an "Event Date"). Any amounts of Additional
Dividends due pursuant to clause (a)(i), (a)(ii) or (a)(iii) of this Section 4
will be payable in additional Preferred Shares as contemplated by the
Certificate of Designation quarterly on each April 1, July 1, October 1 and
January 1 to the Holders of record on the fifteenth day immediately preceding
such dates, commencing with the first such date occurring after any such
Additional Dividend commences to accrue. The amount of an Additional Dividend
will be determined by multiplying the applicable Additional Dividend rate by the
liquidation value of the Registrable Shares, multiplied by a fraction, the
numerator of which is the number of days such Additional Dividend 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.
5. Registration Procedures
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In connection with the registration of any Registrable Shares pursuant
to Section 2 or 3 hereof, the Company shall effect such registrations to permit
the sale of such Registrable Shares in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company shall:
(a) Prepare and file with the SEC, prior to the Filing Date, a
Registration Statement or Registration Statements as prescribed by Section 2 or
3, and to use its best efforts to cause each such Registration Statement to
become effective and remain effective as provided herein; provided that, if (1)
such filing is pursuant to Section 3, or (2) a Prospectus contained in an
Exchange Registration Statement filed pursuant to Section 2 is required to be
delivered under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Shares during the Applicable Period, before filing any
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company shall, if requested, furnish to and afford the Holders of the
Registrable Shares and each such Participating Broker-Dealer, as the case may
be, covered by such Registration Statement, their counsel and the managing
underwriter(s), if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be
9
incorporated by reference therein and all exhibits thereto) proposed to be filed
(at least 5 business days prior to such filing). The Company shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto in
respect of which the Holders must be afforded an opportunity to review prior to
the filing of such document, if the Holders of a majority in aggregate
liquidation value of the Registrable Shares covered by such Registration
Statement, or such Participating Broker-Dealer, as the case may be, their
counsel, or the managing underwriter(s), if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Registration Statement, as the
case may be, as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period or the Applicable Period, as
the case may be; cause the related Prospectus to be supplemented by any
Prospectus supplement required by applicable law, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to them with respect to the disposition of all securities covered by
such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being
sold by a Participating Broker-Dealer covered by any such Prospectus; the
Company shall be deemed not to have used its best efforts to keep a Registration
Statement effective during the Applicable Period if it voluntarily takes any
action that would result in selling Holders of the Registrable Shares covered
thereby or Participating Broker-Dealers seeking to sell Exchange Shares not
being able to sell such Registrable Shares or such Exchange Shares during that
period unless such action is required by applicable law or unless the Company
complies with this Agreement, including, without limitation, the provisions of
clause 5(c)(v) below.
(c) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, notify the selling Holders of Registrable Shares, or each
such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriter(s), if any, promptly (but in any event within two business
days), and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment thereto has been filed, and,
with respect to a Registration Statement or any post-effective amendment
thereto, when the same has become effective (including in such notice a written
statement that any Holder may, upon request, obtain, without charge, one
conformed copy of such Registration Statement or post-effective amendment
thereto including financial statements and schedules, documents incorporated or
deemed to be incorporated by reference and exhibits), (ii) of the issuance by
the SEC of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any preliminary
10
prospectus or the initiation of any proceedings for that purpose, (iii) if at
any time when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Shares the representations and
warranties of the Company contained in any agreement (including any underwriting
agreement) contemplated by Section 5(n) below cease to be true and correct, (iv)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of a Registration Statement
or any of the Registrable Shares or the Exchange Shares to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event or any information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in, or
amendments or supplements to, such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (vi) of the
Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Shares or the
Exchange Shares to be sold by any Participating Broker-Dealer, for sale in any
jurisdiction, and, if any such order is issued, to use its best efforts to
obtain the withdrawal of any such order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter(s), if any, or the Holders of a majority
in aggregate liquidation value of the Registrable Shares being sold in
connection with an underwritten offering, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment thereto such information as
the managing underwriter(s), if any, or such Holders or counsel reasonably
request to be included therein, (ii) make all required filings of such
Prospectus supplement or such post-effective amendment thereto as soon as
practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment thereto
and (iii) supplement or make amendments to such Registration Statement.
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(f) If (1) a Shelf Registration is filed pursuant to section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, furnish to each selling Holder of Registrable Shares and to
each such Participating Broker-Dealer who so requests and to counsel and the
managing underwriter(s), if any, without charge, one conformed copy of the
Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, deliver to each selling Holder of Registrable Shares, or each
such Participating Broker-Dealer, as the case may be, their counsel, and the
managing underwriter or underwriters, if any, without charge, as many copies of
the Prospectus or Prospectuses (including each form of preliminary prospectus)
and each amendment or supplement thereto and any documents incorporated by
reference therein as such Persons may reasonably request; and, subject to the
last paragraph of this Section 5, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders of Registrable Shares or each such Participating Broker-Dealer, as the
case may be, and the managing underwriter or underwriters or agents, if any, and
dealers (if any), in connection with the offering and sale of the Registrable
Shares covered by or the sale by Participating Broker-Dealers of the Exchange
Shares pursuant to such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Shares or any delivery
of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, to use its best efforts to register or qualify, and to
cooperate with the selling Holders of Registrable Shares or each such
Participating Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Shares for offer and sale under the state
securities or "blue sky" laws of such jurisdictions within the United States as
any selling Holder, Participating Broker-Dealer, or the managing underwriter or
underwriters, if any, reasonably request in writing; provided that where
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Exchange Shares held by Participating Broker-Dealers or Registrable Shares are
offered other than through an underwritten offering, the Company agrees to cause
its counsel to perform 'blue sky' investigations and file registrations and
qualifications required to be filed pursuant to this Section 5(h); keep each
such registration or qualification (or exemption therefrom) effective during the
period such Registration Statement
12
is required to be kept effective and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Shares held by Participating Broker-Dealers or the
Registrable Shares covered by the applicable Registration Statement; provided
--------
that the Company shall not be required to (A) qualify generally to do business
in any jurisdiction where it is not then so qualified, (B) take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction.
(i) If a Shelf Registration is filed pursuant to Section 3, cooperate
with the selling Holders of Registrable Shares and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Shares to be sold, which certificates
shall not bear any restrictive legends and, if requested by the selling Holders,
shall be in a form eligible for deposit with The Depository Trust Company; and
enable such Registrable Shares to be in such denominations and registered in
such names as the managing underwriter or underwriters, if any, or Holders may
reasonably request.
(j) Use its best efforts to cause the Registrable Shares covered by
the Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller or
sellers thereof or the managing underwriter or underwriters, if any, to
consummate the disposition of such Registrable Shares, except as may be required
solely as a consequence of the nature of such selling Holder's business, in
which case the Company will cooperate in all reasonable respects with the filing
of such Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, upon the occurrence of any event contemplated by paragraph
5(c)(v) or 5(c)(vi) above, as promptly as reasonably practicable prepare and
(subject to Section 5(a) above) file with the SEC, at the expense of the
Company, a supplement or post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Shares being
sold thereunder or to the purchasers of the Exchange Shares to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
13
(l) Prior to the effective date of the first Registration Statement
relating to the Registrable Shares, (i) provide the Holders with printed
certificates for the Registrable Shares in a form eligible for deposit with The
Depository Trust Company if the Holders so request and (ii) provide a CUSIP
number for the Registrable Shares.
(m) In connection with an underwritten offering of Registrable Shares
pursuant to a Shelf Registration, enter into an underwriting agreement as is
customary in underwritten offerings of preferred equity securities similar to
the Preferred Shares and take all such other actions as are reasonably requested
by the managing underwriter(s), if any, in order to expedite or facilitate the
registration or the disposition of such Registrable Shares and, in such
connection, (i) make such representations and warranties to the managing
underwriter or underwriters on behalf of any underwriters, with respect to the
business of the Company and its subsidiaries and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings of preferred equity securities, and
confirm the same if and when requested; (ii) obtain opinions of counsel to the
Company and updates thereof in form and substance reasonably satisfactory to the
managing underwriter or underwriters, addressed to the managing underwriter or
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings of preferred equity securities and such other matters as
may be reasonably requested by underwriters; (iii) obtain "cold comfort" letters
and updates thereof in form and substance reasonably satisfactory to the
managing underwriter or underwriters from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to the
managing underwriter or underwriters on behalf of any underwriters, such letters
to be in customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings of preferred
equity securities and such other matters as reasonably requested by the managing
underwriter or underwriters; and (iv) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 7 hereof (or such other provisions and
procedures acceptable to Holders of a majority in aggregate liquidation value of
Registrable Shares covered by such Registration Statement and the managing
underwriter or underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section. The above shall be done at each closing
under such underwriting agreement, or as and to the extent required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Prospectus contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Shares during the
Applicable Period, make available for inspection by any selling
14
Holder of such Registrable Shares being sold, or each such Participating Broker-
Dealer, as the case may be, the managing underwriter or underwriters
participating in any such disposition of Registrable Shares, if any, and any
attorney, accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and employees of
the Company and its subsidiaries to supply all information in each case
reasonably requested by any such Inspector in connection with such Registration
Statement. Records which the Company determines, in good faith, to be
confidential and any Records which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or material
omission in such Registration Statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction or (iii) the information in such Records has been made generally
available to the public. Each selling Holder of such Registrable Shares and each
such Participating Broker-Dealer or underwriter and each Inspector will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company or its
subsidiaries or for any other purpose other than to fulfill their due diligence
responsibilities unless and until such is made generally available to the
public. Each selling Holder of such Registrable Shares and each such
Participating Broker-Dealer and each Inspector will be required to further agree
that it will, upon learning that disclosure of such Records is sought in a court
of competent jurisdiction, give notice to the Company and allow the Company to
undertake appropriate action to prevent disclosure of the Records deemed
confidential at its expense.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Shares are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(p) Upon consummation of an Exchange Offer, obtain an opinion of
counsel to the Company in a form customary for underwritten offerings of
preferred equity securities similar to the Preferred Shares, addressed to the
Holders of Registrable Shares participating in the Exchange Offer and which
includes an opinion that the Exchange Shares are duly authorized,
15
validly issued and fully paid and each of the Exchange Shares constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms (with customary exceptions).
(q) If an Exchange Offer is to be consummated, upon delivery of the
Registrable Shares by Holders to the Company (or to such other Person as
directed by the Company) in exchange for the Exchange Shares, the Company shall
xxxx, or cause to be marked, on such Registrable Shares that such Registrable
Shares are being cancelled in exchange for the Exchange Shares.
(r) Cooperate with each seller of Registrable Shares covered by any
Registration Statement and the managing underwriter(s), if any, participating in
the disposition of such Registrable Shares and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD").
(s) Use its best efforts to take all other steps necessary to effect
the registration of the Registrable Shares covered by a Registration Statement
contemplated hereby.
The Company may require each seller of Registrable Shares or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company in writing such information and agreements regarding such
seller or Participating Broker-Dealer and the distribution of such Registrable
Shares or Exchange Shares to be sold by such Participating Broker-Dealer, as the
case may be, as the Company may, from time to time, reasonably request. The
Company may exclude from such registration the Registrable Shares of any seller
or Participating Broker-Dealer who unreasonably fails to furnish such
information or agreement within a reasonable time after receiving such request.
Each Holder of Registrable Shares and each Participating Broker-Dealer
agrees by acquisition of such Registrable Shares or Exchange Shares to be sold
by such Participating Broker-Dealer, as the case may be, that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in section 5(c)(ii), 5(c)(iii), 5(c)(iv), 5(c)(v) or 5(c)(vi), such Holder will
forthwith discontinue disposition of such Registrable Shares covered by such
Registration Statement or Prospectus or Exchange Shares to be sold by such
Holder or Participating Broker-Dealer, as the case may be, until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 5(k), or until it is advised in writing (the "Advice") by the Company
that the use of the applicable Prospectus may be resumed, and has received
copies of any amendments or supplements thereto. In the event the Company shall
give any such notice, each of the Effectiveness Period and the Applicable Period
shall be extended by the number of days during such periods from and including
the date of the giving of such notice to and including the date when each seller
of Registrable Shares covered by
16
such Registration Statement or Exchange Shares to be sold by such Holder or
Participating Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 5(k) or
(y) the Advice.
6. Registration Expenses
---------------------
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company, whether or not
the Exchange Offer or a Shelf Registration is filed or becomes effective,
including, without limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required to be made with
the NASD in connection with an underwritten offering and (B) fees and expenses
of compliance with state securities or "blue sky" laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with
`blue sky' qualifications of the Registrable Shares or Exchange Shares and
determination of the eligibility of the Registrable Shares or Exchange Shares
for investment under the laws of such jurisdictions (x) where the holders of
Registrable Shares are located, in the case of the Exchange Shares, or (y) as
provided in Section 5(h), in the case of Registrable Shares or Exchange Shares
to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Shares or Exchange Shares in a form eligible for
deposit with The Depository Trust Company and of printing prospectuses if the
printing of prospectuses is reasonably requested by the managing underwriter or
underwriters, if any, or, in respect of Registrable Shares or Exchange Shares to
be sold by any Participating Broker-Dealer during the Applicable Period, by the
Holders of a majority in aggregate liquidation value of the Registrable Shares
included in any Registration Statement or of such Exchange Shares, as the case
may be), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and fees and disbursements of special
counsel for the sellers of Registrable Shares (subject to the provisions of
Section 6(b)), (v) fees and disbursements of all independent certified public
accountants referred to in Section 5(m)(iii) (including, without limitation, the
expenses of any special audit and "cold comfort" letters required by or incident
to such performance), (vi) Securities Act liability insurance, if the Company
desires such insurance, (vii) fees and expenses of all other Persons retained by
the Company, (viii) internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees of the Company
performing legal or accounting duties), (ix) the expense of any annual or
special audit, (x) the fees and expenses incurred in connection with the listing
of the securities to be registered on any securities exchange or market, (xi)
the fees and disbursements of underwriters, if any, customarily paid by issuers
or sellers of securities, and (xii) the expenses relating to printing, word
processing and distributing all Registration Statements, underwriting
agreements, securities sales agreements and any other documents necessary in
order to comply with this Agreement.
17
(b) In connection with the Exchange Offer and any Shelf Registration
hereunder, the Company shall reimburse the Holders of the Registrable Shares
being registered in such registration for the fees and disbursements, not to
exceed $25,000, of not more than one counsel (in addition to appropriate local
counsel) chosen by the Holders of a majority in aggregate liquidation value of
the Registrable Shares to be included in such Registration Statement and other
reasonable out-of-pocket expenses of the Holders of Registrable Shares incurred
in connection with the registration of the Registrable Shares.
7. Indemnification
---------------
(a) The Company agrees to indemnify and hold harmless each Holder of
Registrable Shares and each Participating Broker-Dealer selling Exchange Shares
during the Applicable Period, the officers and directors of each such person,
and each person, if any, who controls any such person within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act (each,
a "Participant"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, the reasonable legal fees and other
expenses actually incurred in connection with any suit, action or proceeding or
any claim asserted) caused by, arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by, arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Participant furnished to the Company in writing by such
Participant expressly for use therein; provided that the foregoing indemnity
with respect to any preliminary prospectus shall not inure to the benefit of any
Participant (or to the benefit of any person controlling such Participant) from
whom the person asserting any such losses, claims, damages or liabilities
purchased Registrable Shares or Exchange Shares if such untrue statement or
omission or alleged untrue statement or omission made in such preliminary
prospectus is completely eliminated or remedied in the related Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) and a copy of the related Prospectus (as so amended or
supplemented) shall have been furnished to such Participant at or prior to the
sale of such Registrable or Exchange Shares, as the case may be, to such person,
and such Holder failed to send or deliver a copy of the Prospectus with or prior
to the delivery of written confirmation of the sale of Registrable Shares.
18
(b) Each Participant will be required to agree, severally and not
jointly, to indemnify and hold harmless the Company, its directors and officers
and each person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to each Participant, but only with
reference to information relating to such Participant furnished to the Company
in writing by such Participant expressly for use in any Registration Statement
or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus. The liability of any Participant under this paragraph (b) shall in
no event exceed the proceeds received by such Participant from sales of
Registrable Shares giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either
paragraph (a) or (b) of this Section 7, such person (the `Indemnified Person')
shall promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain one counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding. In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Person unless (i) the Indemnifying Person
and the Indemnified Person shall have mutually agreed in writing to the
contrary, (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representations of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them, including situations in which one or
more legal defenses may be available to such Indemnified Person that are
different from or additional to those available to the Indemnifying Person. It
is understood that, unless there is a conflict among Indemnified Persons, the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate law firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred. Any such separate firm for the Participants and such control
persons of Participants shall be designated in writing by Participants who sold
a majority in interest of Registrable Shares sold by all such Participants and
any such separate firm for the Company, its directors, officers and such control
persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such
19
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for reasonable fees and expenses actually incurred by
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement; provided, however, that the Indemnifying Person shall not be liable
for any settlement effected without its consent pursuant to this sentence if the
Indemnifying Person is contesting, in good faith, the request for reimbursement.
No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in paragraphs (a) and (b) of this
Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraphs, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and the Participants on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and the Participants on the other 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 or by the Participants and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The parties shall agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no
20
event shall a Participant be required to contribute any amount in excess of the
amount by which proceeds received by such Participant from sales of Registrable
Shares or Exchange Shares exceeds the amount of any damages that such
Participant has 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.
The indemnity and contribution agreements contained in this Section 7
will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
------------------
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder 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 Registrable Shares, make publicly available other information of a
like nature so long as necessary to permit sales pursuant to Rule 144 or Rule
144A under the Securities Act. The Company further covenants that so long as
any Registrable Shares remain outstanding to make available to any Holder of
Registrable Shares in connection with any sale thereof, the information required
by Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Registrable Shares pursuant to (a) such Rule 144A, or (b) any similar rule or
regulation hereafter adopted by the SEC.
9. Underwritten Registrations
--------------------------
If any of the Registrable Shares covered by any Shelf Registration are
to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate liquidation value of such Registrable
Shares included in such offering and reasonably acceptable to the Company.
No Holder of Registrable Shares may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Shares on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
21
10. Miscellaneous
-------------
(a) Remedies. In the event of a breach by the Company of any of its
--------
obligations under this Agreement, other than the occurrence of an event which
requires payment of Additional Dividends, each Holder of Registrable Shares, in
addition to being entitled to exercise all rights provided herein or, in the
case of a Purchaser, in the Purchase Agreement or granted by law, including
recovery of damages, will be entitled to a specific performance of its rights
under this Agreement.
(b) No Inconsistent Agreements. The Company has not, as of the date
--------------------------
hereof, and the Company shall not, after the date of this Agreement, enter into
any agreement with respect to any of its securities that is inconsistent in all
material respects with the rights granted to the Holders of Registrable Shares
in this Agreement or otherwise conflicts with the provisions hereof in all
material respects. The Company has not entered and will not enter into any
agreement (except the Amoco Warrant) with respect to any of its securities which
will grant to any Person piggyback rights with respect to a Registration
Statement.
(c) Adjustments Affecting Registrable Shares. The Company shall not,
----------------------------------------
directly or indirectly, take any action with respect to the Registrable Shares
as a class that would adversely affect, in any material respect, the ability of
the Holders of Registrable Shares to include such Registrable Shares in a
registration undertaken pursuant to this Agreement.
(d) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of at least a majority of the then outstanding aggregate liquidation value of
Registrable Shares. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Shares whose securities are
being sold pursuant to a Registration Statement and that does not directly or
indirectly affect, impair, limit or compromise the rights of other Holders of
Registrable Shares may be given by Holders of at least a majority in aggregate
liquidation value of the Registrable Shares being sold by such Holders pursuant
to such Registration Statement; provided that the provisions of this sentence
may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(e) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, next-day air courier or telecopier:
22
(i) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 10(e), which address initially is, with respect to each Purchaser,
the address set forth in the Purchase Agreement; and
(ii) if to the Company, to Gothic Energy Corporation, 0000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxx, President.
All such notices and communications shall be deemed to have been duly
given: (i) when delivered by hand, if personally delivered; (ii) five business
days after being deposited in the mail, postage prepaid, if mailed; (iii) one
business day after being timely delivered to a next-day air courier; and (iv)
when receipt is acknowledged by the addressee, if telecopied.
(f) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Registrable Shares.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve
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the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction.
(k) Entire Agreement. This Agreement, together with the Purchase
----------------
Agreement, is intended by the parties as a final expression of their agreement,
and is intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein.
(1) Shares Held by the Company or Its Affiliates. Whenever the
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consent or approval of Holders of a specified percentage of Registrable Shares
is required hereunder, Registrable Shares held by the Company or its affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Gothic Energy Corporation
By: /s/ Xxxxxxx Xxxxx
-----------------
Xxxxxxx Xxxxx, President
Purchaser
By:
_____________________________
Name:
Title:
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