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EXHIBIT 99(f)
WARRANT
REGISTRATION RIGHTS AGREEMENT
KEY ENERGY SERVICES, INC.
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150,000 Warrants to Purchase an aggregate of 2,032,565 Shares of Common Stock
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Dated as of January 22, 1999
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XXXXXX BROTHERS INC.,
BEAR, XXXXXXX & CO. INC.,
F-A-C/EQUITIES,
A DIVISION OF FIRST ALBANY CORPORATION
AND
XXXX XXXXXXXX XXXXXXX,
a division of Xxxx Xxxxxxxx Incorporated
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This Warrant Registration Rights Agreement (this "Agreement") is made
and entered into as of January 22, 1999, by and among Key Energy Services, Inc.,
a Maryland corporation (the "Issuer"), and Xxxxxx Brothers Inc., Bear, Xxxxxxx &
Co. Inc., F.A.C/Equities, a division of First Albany Corporation, and Xxxx
Xxxxxxxx Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporated (the "Initial
Purchasers"), which have agreed to purchase the Warrants of the Issuer issued
pursuant to the warrant agreement (the "Warrant Agreement") between the Issuer
and The Bank of New York, a New York banking corporation, as warrant agent (the
"Warrant Agent").
The Warrants are being issued and sold in connection with the offering
by the Issuer of 150,000 Units each consisting of (i) $1,000 principal amount at
maturity of 14% Senior Subordinated Notes due 2009 (the "Notes") of the Issuer
and (ii) one warrant to purchase 13.5504 shares of common stock (each a
"Warrant" and collectively the "Warrants").
This Agreement is made pursuant to the Purchase Agreement, dated
January 19, 1999 (the "Purchase Agreement"), by and between the Issuer, the
Guarantors (as defined in the Purchase Agreement) and the Initial Purchasers. In
order to induce the Initial Purchasers to purchase the Warrants, the Issuer has
agreed to provide the registration rights set forth in this Agreement.
Capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Warrant Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144.
Black Out Notice: As defined in Section 4(b) hereof.
"Business Day": As defined in the Exchange Act
Black Out Period: As defined in Section 3(a) hereof.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Common Stock: The common stock, par value $.10 per share, of the
Issuer.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expiration Date: 5:00 p.m. New York City time on January 15, 2009.
Holders: As defined in Section 2 hereof.
Liquidated Damages: As defined in Section 3(b) hereof.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other
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amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Registration Statement: Any registration statement of the Issuer
relating to the registration for resale of Registrable Securities and the
issuance of the Warrant Shares that is filed pursuant to the provisions of this
Agreement and including the Prospectus included therein, all amendments and
supplements thereto, including post-effective amendments, and all exhibits and
material incorporated by reference therein.
Registrable Securities: The Registrable Warrants and the Registrable
Warrant Shares; provided that a security ceases to be a Registrable Security
when it is no longer a Transfer Restricted Security.
Registrable Warrant Shares: Warrant Shares issued upon exercise of the
Warrants the resale of which is required to be registered under the Act.
Registrable Warrants: All Warrants originally issued pursuant to the
Warrant Agreement.
Rule 144: Rule 144 promulgated under the Act.
Transfer Restricted Securities: The Registrable Securities upon
original issuance thereof; provided that a Registrable Security is no longer a
Transfer Restricted Security when such Registrable Security is sold pursuant to
the Registration Statement contemplated by Section 3 or is freely transferable
without restrictions pursuant to Rule 144(k) or any successor rule under the
Act.
Warrant Shares: The shares of Common Stock issued or issuable upon the
exercise of the Warrants.
2. HOLDERS
A Person is deemed to be a holder of Registrable Securities (each, a
"Holder") whenever such Person is the holder of record of Registrable
Securities.
3. SHELF REGISTRATION
(a) Shelf Registration Shelf Registration. The Issuer shall prepare
and cause to be filed with the Commission on or before 60 days from the Closing
Date pursuant to Rule 415 under the Act a Registration Statement on the
appropriate form relating to the resale of Warrants, the issuance of the Common
Stock upon exercise of the Warrants and, under certain circumstances if required
by law, the resale of the Common Stock issuable upon exercise of the Warrants.
The Company shall use its reasonable best efforts to cause the Registration
Statement to be declared effective by the Commission on or before 150 days after
the Closing Date; provided that the Registration Statement with respect to the
issuance of the Common Stock or the resale of the Common Stock need not be
declared effective before the Warrants first become exercisable.
To the extent necessary to ensure that the Registration Statement is
available for sales of Registrable Securities by the Holders thereof entitled to
the benefit of this Section 3(a), the Issuer shall use its reasonable best
efforts to keep any Registration Statement required by this Section 3(a)
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Section 4(a) hereof and
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in conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the earlier of (A) the Expiration Date and (B) the first date as of which all
Warrants have been exercised by the Holders thereof; provided that such
obligation shall expire before such date if the Issuer delivers to the Warrant
Agent a written opinion of counsel to the Issuer (which opinion of counsel shall
be satisfactory to the Issuer) that all Holders of Warrants and Warrant Shares
may resell the Warrants and the Warrant Shares without registration under the
Act and without restriction as to the manner, timing or volume of any such sale.
Notwithstanding the foregoing, the Issuer shall not be required to amend or
supplement any Registration Statement, any related prospectus or any document
incorporated therein by reference, or otherwise keep any Registration Statement
continuously effective for a period (a "Black Out Period") not to exceed, for so
long as this Agreement is in effect, two 45 consecutive-day periods (except for
the 45 consecutive-day period immediately before the Expiration Date) in any
calendar year, in the event that (i) an event occurs and is continuing as a
result of which the Registration Statement, any related prospectus or any
document incorporated therein by reference as then amended or supplemented
would, in the Issuer's good faith judgment, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (ii)(A) the Issuer determines in its good faith
judgment that the disclosure of such event at such time would have a material
adverse effect on the business, operations or prospects of the Issuer or (B) the
disclosure otherwise relates to a material business transaction which has not
yet been publicly disclosed; provided that such Black Out Period shall be
extended for any period, not to exceed an aggregate of 30 days in any calendar
year, during which the Commission is reviewing any proposed amendment or
supplement to the Registration Statement, any related prospectus or any document
incorporated therein by reference which has been filed by the Issuer; and
provided, further, if any Black Out Period is in effect during the three months
prior to January 15, 2009 the Expiration Date shall be extended by one day for
each day that any Black Out Period is in effect during such three month period.
(b) Liquidated Damages. If (i) the Registration Statement has not been
declared effective by the Commission in the time period required by subsection
(a) above or (ii) the Registration Statement is filed and declared effective but
shall thereafter cease to be effective or fail to be usable for its intended
purpose at any time within the time period required for effectiveness in
subsection (a) above without being succeeded immediately by a post-effective
amendment to the Registration Statement that cures such failure and that is
itself immediately declared effective (each such event referred to in clauses
(i) and (ii), a "Registration Default"), the Company shall pay liquidated
damages ("Liquidated Damages") to each holder of Registrable Securities in an
amount equal to $0.05 per Warrant held by such holder for each week or portion
thereof during which any Registration Default continues. The amount of such
Liquidated Damages shall increase on each 90-day anniversary of the day the
first Registration Default occurred by an additional $0.05 per Warrant Share for
each week or portion thereof during which any Registration Default continues
until all Registration Defaults have been cured, up to a maximum amount of
Liquidated Damages of $0.20 per week or portion thereof per Warrant Share. All
accrued Liquidated Damages shall be paid by wire transfer of immediately
available funds or by federal funds check on each Interest Payment Date, as
defined in the Indenture relating to the Notes, by and between the Issuer, the
Guarantors and The Bank of New York, as trustee, and dated as of the date
hereof. Liquidated Damages will be paid to the Warrant Agent for the benefit of
the Holders of record of a Warrant on the corresponding record date for the
interest payment on the Notes. Following the cure of all Registration Defaults
relating to any particular Registrable Security, the accrual of Liquidated
Damages with respect to such Registrable Security will cease. Except as provided
in Section 6 hereof, no holder of Registrable Securities shall be entitled to
any damages for a Registration Default beyond the Liquidated Damages provided
for herein.
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(c) Provision by Holders of Certain Information in Connection
with the Registration Statement Provision by Holders of Certain Information in
Connection with the Registration Statement. No Holder of Registrable Securities
may include any of its Registrable Securities for resale in any Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Issuer in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Registration Statement or Prospectus or
preliminary Prospectus included therein. Each selling Holder agrees to promptly
furnish additional information required to be disclosed in order to make the
information previously furnished to the Issuer by such Holder not materially
misleading. No such information shall be required with respect to the
registration of the issuance of the Warrant Shares upon exercise of the
Warrants.
4. REGISTRATION PROCEDURES
(a) In connection with the Registration Statement and any
related Prospectus required by this Agreement and, where applicable, subject to
any Black Out Period, the Issuer shall:
(i) use its reasonable best efforts to effect such registration
to permit the sale of the Registrable Securities being sold in
accordance with the intended method or methods of distribution
thereof (as indicated in the information furnished to the Issuer
pursuant to Section 3(c) hereof), and pursuant thereto the Issuer
will use its reasonable best efforts to prepare and file with the
Commission a Registration Statement relating to the registration
on any appropriate form under the Act, which form shall be
available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution
thereof within the time periods and otherwise in accordance with
the provisions hereof;
(ii) use its reasonable best efforts to keep such Registration
Statement continuously effective. Upon the occurrence of any
event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain an untrue statement
of material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading or (B) not to be
effective and usable for resale of Registrable Securities during
the period required by this Agreement, the Issuer shall file
promptly an appropriate amendment to such Registration Statement
or a supplement to the Prospectus, as applicable, curing such
defect, and, in the case of an amendment, use its reasonable best
efforts to cause such amendment to be declared effective as soon
as practicable;
(iii) use its reasonable best efforts to prepare and file with
the Commission such amendments and post-effective amendments to
the applicable Registration Statement as may be necessary to keep
such Registration Statement effective for the applicable period
set forth in Section 3; cause the Prospectus contained therein to
be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act, and
to comply fully with Rules 424, 430A and 462, as applicable,
under the Act in a timely manner; and comply with the provisions
of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable
period in accordance with the intended
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method or methods of distribution by the sellers thereof set
forth in such Registration Statement or supplement to the
Prospectus contained therein;
(iv) advise the Initial Purchasers promptly and, if requested
by the Initial Purchasers, confirm such advice in writing, (A)
when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
applicable Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request
by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any
state securities commission of the qualification of the
Registrable Securities for offering or sale in any jurisdiction,
or the initiation of any proceeding for any of the preceding
purposes, and (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in
the Registration Statement, the Prospectus, any amendment or
supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to
or changes in the Registration Statement in order to make the
statements therein not misleading, or that requires the making of
any additions to or changes in the Prospectus in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the
Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from
qualification of the Registrable Securities under state
securities or Blue Sky laws, the Issuer shall use its reasonable
best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time;
(v) subject to Section 4(a)(ii), if any fact or event
contemplated by Section 4(a)(iv)(D) hereof shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of
Registrable Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vi) furnish to the Initial Purchasers, promptly after the time
of filing with the Commission, copies of any Registration
Statement or any Prospectus included therein or any amendments or
supplements (excluding Prospectus Supplements relating solely to
the resale of Registrable Securities under a Registration
Statement) to any such Registration Statement or Prospectus
(excluding all documents incorporated by reference).
(vii) make available, at reasonable times, for inspection by
the Initial Purchasers and any attorney or accountant retained by
the Initial Purchasers, all financial and other records,
pertinent corporate documents of the Issuer, and cause the
Issuer's officers, directors and employees to supply all
information reasonably requested by the Initial Purchasers or
then attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to
the filing thereof and prior to its effectiveness;
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(viii) if requested by the Initial Purchasers, promptly include in
any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as the Initial
Purchasers may reasonably request to have included therein, including,
without limitation, information relating to the "Plan of Distribution"
of the Registrable Securities and the use of the Registration
Statement or Prospectus for market-making activities; and make all
required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Issuer is notified of the
matters to be included in such Prospectus supplement or post-effective
amendment;
(ix) furnish to the Initial Purchasers and each Holder, upon request,
without charge, at least one copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto,
including, upon request and without change, all documents incorporated
by reference therein and all exhibits (including exhibits incorporated
therein by reference);
(x) deliver to the Initial Purchasers and each Holder, without
charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as the Initial
Purchasers or such Holder reasonably may request; the Issuer hereby
consents to the use (in accordance with law and subject to Section
4(b) hereof) of the Prospectus and any amendment or supplement thereto
by each selling Person in connection with the offering and the sale of
the Registrable Securities covered by the Prospectus or any amendment
or supplement thereto and all market-making activities of the Initial
Purchasers, as the case may be;
(xi) upon the request of the Initial Purchasers, enter into such
agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the
disposition of the Registrable Securities pursuant to any applicable
Registration Statement contemplated by this Agreement as may be
reasonably requested by the Initial Purchasers in connection with any
sale or resale pursuant to any applicable Registration Statement but
only in connection with an underwritten public offering for a minimum
of 800,000 Warrant Shares. In such connection, the Issuer shall:
(A) upon request of the Initial Purchasers, furnish (or in the
case of paragraphs (2) and (3), use its reasonable best efforts
to cause to be furnished) to the Initial Purchasers, upon the
effectiveness of the Registration Statement:
(1) a certificate, dated such date, signed on behalf of
the Issuer by (x) the President or any Vice President and
(y) a principal financial or accounting officer of the
Issuer, confirming, as of the date thereof, the matters set
forth in Sections 1, 7(h), 7(i) and 7(j) of the Purchase
Agreement and such other similar matters as such Person may
reasonably request;
(2) an opinion, dated the date of effectiveness of the
Registration Statement, of counsel for the Issuer covering
matters similar to those set
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forth in Section 7(d) of the Purchase Agreement, and in any
event including a statement to the effect that such counsel
has participated in conferences with officers and other
representatives of the Issuer, representatives of the
independent public accountants for the Issuer and have
considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or
fairness of such statements; and that such counsel advises
that, on the basis of the foregoing (relying as to
materiality to the extent such counsel deems appropriate
upon the statements of officers and other representatives of
the Issuer and without independent check or verification),
no facts came to such counsel's attention that caused such
counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the
Prospectus contained in such Registration Statement as of
its date contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading. Without limiting
the foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or
fairness of the financial statements, notes and schedules
and other financial data included in any Registration
Statement contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated the date of
effectiveness of the Registration Statement, from the
Issuer's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in connection with underwritten
offerings, and affirming the matters set forth in the
comfort letters delivered pursuant to Sections 7(f) and 7(g)
of the Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the Initial Purchasers to evidence compliance
with the matters covered in clause (A) above and with any customary
conditions contained in any agreement entered into by the Issuer
pursuant to this clause;
(xii) prior to any public offering of Registrable Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Registrable Securities under the
securities or Blue Sky laws of such jurisdictions as the selling Holders
may reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the applicable Registration Statement;
provided that the Issuer shall not be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
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(xiii) in connection with any sale of Registrable Securities that will
result in such securities no longer being Registrable Securities, cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing
any restrictive legends; and to register such Registrable Securities in
such denominations and such names as the selling Holders may request at
least two Business Days prior to such sale of Registrable Securities;
(xiv) use its reasonable best efforts to cause the disposition of the
Registrable Securities 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 to
consummate the disposition of such Registrable Securities, subject to the
proviso contained in clause (xiii) above;
(xv) provide a CUSIP number for all Registrable Securities not later than
the effective date of a Registration Statement covering such Registrable
Securities and provide the Warrant Agent with certificates for the
Registrable Securities which are in a form eligible for deposit with The
Depository Trust Company;
(xvi) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in Rule 158(c) under the
Act); and
(xvii) provide promptly to the Initial Purchasers, upon request, each
document filed with the Commission pursuant to the requirements of Section
13 or Section 15(d) of the Exchange Act.
(b) Restrictions on Holders. Each Holder agrees by acquisition of a
Registrable Security and the Initial Purchasers agrees that, upon receipt of the
notice from the Issuer of the commencement of a Black Out Period (in each case,
a "Black Out Notice"), such Person will forthwith discontinue disposition of
Registrable Securities pursuant to the applicable Registration Statement until
such Person is advised in writing by the Issuer of the termination of the Black
Out Period. Each Person receiving a Black Out Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Person's possession which have been replaced by the Issuer with more
recently dated Prospectuses or (ii) deliver to the Issuer (at the Issuer's
expense) all copies, other than permanent file copies, then in such Person's
possession of the Prospectus covering such Registrable Securities that was
current at the time of receipt of the Black Out Notice.
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5. REGISTRATION EXPENSES
All expenses incident to the Issuer's performance of or compliance with
this Agreement will be borne by the Issuer, regardless of whether a Registration
Statement becomes effective, including, without limitation: (i) all registration
and filing fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses of
printing (including printing Prospectuses (whether for sales, market-making or
otherwise), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Issuer; (v) all application and filing fees in
connection with listing the Warrant Shares on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the Issuer
(including the expenses of any special audit and comfort letters required by or
incident to such performance). The Issuer will not be responsible for the
payment of any brokerage commissions, underwriting discounts or other expenses
of the Holders.
The Issuer will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Issuer.
6. INDEMNIFICATION
(a) The Issuer agrees to indemnify and hold harmless each Holder, its
directors, officers and each Person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments,
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Issuer to any Holder or
any purchaser of Registrable Securities, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the Issuer by
any of the Holders.
(b) Each Holder of Registrable Securities agrees, severally and not
jointly, to indemnify and hold harmless the Issuer, its directors and officers,
and each Person, if any, who controls (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) the Issuer, to the same extent as the
foregoing indemnity from the Issuer set forth in Section 6(a) hereof, but only
with reference to information relating to such Holder furnished in writing to
the Issuer by such Holder expressly for use in any Registration Statement. In no
event shall any Holder, its directors, officers or any Person who controls such
Holder be liable or responsible for any amount in excess of the amount by which
the total amount received by such Holder with respect to its sale of Registrable
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Registrable Securities and (ii) the amount of any damages
that such Holder, its directors, officers or any Person who controls such Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
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(c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to Section 6(a) or 6(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing,
and the indemnifying party assume the defense of such action, including the
employment of counsel reasonably satisfactory to the indemnified party and the
payment of all reasonable fees and expenses of such counsel, as incurred (except
that, in the case of any action in respect of which indemnity may be sought
pursuant to both Sections 6(a) and 6(b), a Holder shall not be required to
assume the defense of such action pursuant to this Section 6(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party,
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or failed to employ
counsel reasonably satisfactory to the indemnified party or (iii) the named
parties to any such action (including any impleaded parties) include both the
indemnified party and the indemnifying party, and the indemnified party shall
have been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified pursuant to Section 6(a), and by
the Issuer, in the case of parties indemnified pursuant to Section 6(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than 20 Business Days after the indemnifying party shall have received a request
from the indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this
Section 6 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Issuer, on
the one hand, and the Holders, on the other hand, from their sale of Registrable
Securities or (ii) if the allocation provided by clause 6(d)(i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 6(d)(i) hereof but also the relative
fault of the Issuer, on the one hand, and of the Holders, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable
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considerations. The relative fault of the Issuer, on the one hand, and
of the Holders, on the other hand, 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 Issuer, on the one hand, or by the Holders, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 6(a),
any legal or other fees or expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments.
The Issuer and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the preceding paragraph. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred to in the preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with the
investigating or defending any matter, including any action that could have
given use to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 6, no Holder, its directors, its
officers or any Person, if any, who controls such Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of Registrable Securities
pursuant to a Registration Statement exceeds (i) the amount paid by such Holder
for such Registrable Securities and (ii) the amount of any damages which such
Holder 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 6(d) are several in proportion to the respective principal amount of
Registrable Securities held by each Holder.
The Issuer agrees that the indemnity and contribution
provisions of this Section 6 shall apply to the Initial Purchasers to the same
extent, on the same conditions, as it applies to Holders.
7. RULE 144
The Issuer agrees with each Holder, for so long as any Registrable
Securities remain outstanding and during any period in which the Issuer is
subject to Section 13 or 15(d) of the Exchange Act, to make all filings required
thereby in a timely manner in order to permit resales of such Registrable
Securities pursuant to Rule 144.
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8. MISCELLANEOUS
(a) Remedies. The Issuer acknowledges and agrees that any failure
by the Issuer to comply with its obligations under Section 3 hereof may result
in material irreparable injury to the Initial Purchasers or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Issuer's obligations under Section 3
hereof. The Issuer further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuer will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Issuer's securities
under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the case of
this Section 8(c), the Issuer has obtained the written consent of Holders of all
outstanding Registrable Securities, and (ii) in the case of all other provisions
hereof, the Issuer has obtained the written consent of Holders of a majority of
the outstanding principal amount of Registrable Securities (excluding
Registrable Securities held by the Issuer, any Guarantor, or any of their
respective Affiliates); provided that this Agreement may be amended or
supplemented without the consent of any Holder in the same manner and to the
same extent to which the Warrant Agreement may be amended or supplemented
pursuant to Section 22 thereof.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements granting rights to Holders made hereunder
between the Issuer, on the one hand, and the Initial Purchasers, on the other
hand, and shall have the right to enforce such agreements directly to the extent
they may deem such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records
of the Warrant Agent, with a copy to the Warrant Agent; and
(ii) if to the Issuer:
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Key Energy Services, Inc.
Xxx Xxxxx Xxxxxx - 00xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: General Counsel
With a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Warrant Agent at the
address specified in Warrant Agreement.
(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; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms hereof or of the Purchase Agreement or the Warrant
Agreement. If any transferee of any Holder shall acquire Registrable Securities
in any manner, whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Registrable Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale
set forth in this Agreement and, if applicable, the Purchase Agreement, and
such Person shall be entitled to receive the benefits hereof.
(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, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
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(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and 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. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the
Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
(l) Universal Shelf Registration Statement. The Initial Purchasers
acknowledge that the Company currently has on file with the Commission a shelf
registration statement on Form S-3 covering a specific dollar amount of
unspecified securities (the "UNIVERSAL SHELF REGISTRATION STATEMENT"). The
Initial Purchasers agree that the Company may amend the Universal Shelf
Registration Statement to satisfy the requirements to file a Registration
Statement within the applicable filing deadline specified in Section 3(a)
hereof; provided that the Universal Shelf Registration Statement covers the type
of transactions required to be registered herein in accordance with applicable
law and the rules and regulations of the Commission; and provided, that such use
of the Universal Shelf Registration Statement does not affect the exemption from
registration under the Act of the issuance and sale of the Units to the Initial
Purchasers.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
KEY ENERGY SERVICES, INC.
By: ________________________________
Name:
Title:
XXXXXX BROTHERS INC.
By: ________________________________
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By: ________________________________
Name:
Title:
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F.A.C/EQUITIES,
a division of First Albany Corporation
By: ________________________________
Name:
Title:
XXXX XXXXXXXX XXXXXXX,
a division of Xxxx Xxxxxxxx Incorporated
By: ________________________________
Name:
Title:
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