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Exhibit 4.1(b)
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of December 20, 1996, by and between Lomak
Petroleum, Inc., a Delaware corporation (the "Company"), and Forum Capital
Markets L.P., XxXxxxxx & Company Securities, Inc. and Xxxxxx Xxxxxx & Company,
Inc. (together, the "Initial Purchasers"). The Company proposes to issue and
sell to the Initial Purchasers, upon the terms set forth in a purchase
agreement dated concurrently herewith (the "Purchase Agreement") $55,000,000
aggregate principal amount of its Convertible Subordinated Debentures due 2007
(the "Debentures"). The Debentures are convertible into Common Stock (as
defined herein) as provided in the Debentures and the Indenture (as defined
herein). As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the Initial Purchasers'
obligations thereunder, the Company agrees with the Initial Purchasers, for the
benefit of the Initial Purchasers and the other Holders (as defined herein), as
follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"ACT" means the Securities Act of 1933, as amended from time to time.
"CLOSING DATE" has the meaning set forth in the Purchase Agreement.
"COMMON STOCK" means the Common Stock, par value $.01 per share, of
the Company, or any successor class thereto, issuable upon conversion of the
Debentures.
"COMMISSION" means the Securities and Exchange Commission.
"DAMAGES PAYMENT DATE" means February 1 and August 1 in each year.
"EFFECTIVENESS PERIOD" has the meaning set forth in Section 2 hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"HOLDERS" means Persons owning Transfer Restricted Securities.
"INDENTURE" means the Indenture, to be dated the date hereof, between
the Company and Keycorp Shareholder Services, Inc. or other comparable entity
selected by the Company, as trustee (the "TRUSTEE"), pursuant to which the
Debentures are to be issued, as such Indenture is amended or supplemented from
time to time in accordance with the terms thereof.
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"PERSON" means an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"PROSPECTUS" means the prospectus included in the Shelf Registration
Statement, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
"RECORD HOLDER" means with respect to any Damages Payment Date
relating to the Debentures, each Person who is a holder of Debentures on the
record date with respect to the interest payment on the Debentures due on such
date and with respect to any Damages Payment Date relating to the Common Stock,
each Person who is a holder of Common Stock on the day that is fifteen days
prior to such Damages Payment Date.
"REGISTRATION DEFAULT" has the meaning set forth in Section 4 hereof.
"SHELF REGISTRATION STATEMENT" has the meaning set forth in Section 2
hereof.
"SUPPLEMENTAL REGISTRATION PAYMENT" has the meaning set forth in
Section 4 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
"TRANSFER RESTRICTED SECURITIES" means each Debenture and, if such
Debenture has been converted, each share of Common Stock issued in connection
with such conversion, until (a) the date on which such Debenture or shares of
Common Stock, as applicable, have been effectively registered under the Act and
disposed of in accordance with the Shelf Registration Statement or (b) the date
on which such Debenture or shares of Common Stock, as applicable, are
distributed to the public pursuant to Rule 144 or any other applicable
exemption under the Act without additional restriction upon public resale.
"UNDERWRITTEN OFFERING" means a registration in which securities of
the Company are sold to an underwriter for re-offering to the public.
2. SHELF REGISTRATION. The Company shall use its reasonable best
efforts to file a registration statement with the Commission within 90 days
after the Closing Date relating to the offer and sale of the Transfer
Restricted Securities by Holders from time to time pursuant to Rule 415 under
the Act and in accordance with the methods of distribution set forth therein,
which registration statement may be substituted for by one or more subsequent
registration statements each relating to the offer and sale of the Transfer
Restricted Securities by Holders from time to time (as in effect from time to
time, the "Shelf Registration Statement"), and the Company shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission within 150 days after the Closing Date,
PROVIDED, HOWEVER, that the Company
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may delay such filing or effectiveness under the circumstances and during the
periods described in Section 3 hereof. In addition, the Company shall use its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective, supplemented and amended for a period (the "Effectiveness Period")
of not less than three years following the Closing Date or such shorter period
that will terminate when all the Debentures and shares of Common Stock covered
by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement.
3. DELAY PERIODS; SUSPENSION OF SALES.
(a) If at any time prior to the expiration of the
Effectiveness Period, counsel to the Company (which counsel shall be
experienced in securities laws matters) has determined in good faith that the
filing of the Shelf Registration Statement or the compliance by the Company
with its disclosure obligations in connection with the Shelf Registration
Statement would require the disclosure of material information which the
Company has a bona fide business purpose for preserving as confidential, then
the Company may delay the filing of the Shelf Registration Statement (if not
then filed) and shall not be required to maintain the effectiveness thereof or
amend or supplement the Shelf Registration Statement for a period (an
"Information Delay Period") expiring upon the earlier to occur of (A) the date
on which such material information is disclosed to the public or ceases to be
material or the Company is able to so comply with its disclosure obligations
and Commission requirements or (B) 30 days after counsel to the Company makes
such good faith determination. There shall not be more than four Information
Delay Periods during the Effectiveness Period, and there shall not be two
Information Delay Periods during any contiguous 90 day period.
(b) If at any time prior to the expiration of the
Effectiveness Period, the Company is advised by a nationally recognized
investment banking firm selected by the Company that, in such firm's written
reasonable opinion addressed to the Company (a copy of which shall be delivered
to each Holder of Transfer Restricted Securities registered under the Shelf
Registration Statement), sales of Common Stock pursuant to the Shelf
Registration Statement at such time would materially adversely affect any
immediately planned underwritten public equity financing by the Company of at
least $5 million, the Company shall not be required to maintain the
effectiveness of the Shelf Registration Statement or amend or supplement the
Shelf Registration Statement for a period (a "Transaction Delay Period")
commencing on the date of pricing of such equity financing and expiring upon
the earliest to occur of (i) the abandonment of such financing or (ii) 90 days
after the completion of such financing. There shall not be more than two
Transaction Delay Periods during the Effectiveness Period.
(c) A Transaction Delay Period and an Information Delay
Period are hereinafter collectively referred to as "Delay Periods" or a "Delay
Period." The Company will give prompt written notice, in the manner prescribed
by Section 10(a) hereof, to each Holder of each Delay Period. Such notice
shall be given (i) in the case of a Transaction Delay Period, 30 days in
advance of the commencement of such Delay Period and (ii) in the case of an
Information Delay Period, as soon as practicable after the circumstances giving
rise thereto are identified. Such
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notice shall state to the extent, if any, as is practicable, an estimate of the
duration of such Delay Period. Each Holder, by his acceptance of any Transfer
Restricted Securities, agrees that (i) upon receipt of such notice of an
Information Delay Period it will forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, (ii) upon
receipt of such notice of a Transaction Delay Period it will forthwith
discontinue disposition of the Common Stock pursuant to the Shelf Registration
Statement and (iii) in either such case, will not deliver any prospectus
forming a part of the Shelf Registration Statement in connection with any sale
of Transfer Restricted Securities or Common Stock, as applicable until the
expiration of such Delay Period.
4. SUPPLEMENTAL REGISTRATION PAYMENT.
(a) Except as provided in Section 4(b), if (i) the Shelf
Registration Statement is not filed with the Commission within 60 days after
the Closing Date, (ii) the Shelf Registration Statement has not been declared
effective by the Commission within 150 days after the Closing Date (the
"Effectiveness Target Date"), or (iii) at any time prior to the third
anniversary of the Closing Date the Shelf Registration Statement is filed and
declared effective but shall thereafter cease to be effective (other than as a
result of the effectiveness of a successor registration statement) or fail to
be useable for its intended purpose without being succeeded promptly by a
post-effective amendment to the Shelf Registration Statement that cures such
failure and that is itself declared effective within 75 days after the Shelf
Registration Statement ceases to be effective (each such event referred to in
clauses (i) through (iii), a "Registration Default"), the Company will pay
supplemental registration payments (a "Supplemental Registration Payment") to
each Holder who has complied with its obligations under this Agreement. During
the first 90-day period immediately following the occurrence of such
Registration Default, the amount of such Supplemental Registration Payment $.05
per week per $1,000 principal amount of Debentures and, if applicable, $.0005
per week per share of Common Stock constituting Transfer Restricted Securities
registered under the Shelf Registration Statement (subject to adjustment in the
event of stock splits, stock consolidations, stock dividends and the like).
During each subsequent 90-day period following the occurrence of such
Registration Default, the amount of the Supplemental Registration Payment shall
increase by an additional $.05 per week per $1,000 principal amount of
Debentures and $.0005 per week per share of Common Stock constituting Transfer
Restricted Securities registered under the Shelf Registration Statement
(subject to adjustment as set forth above); provided, however, the maximum
amount of the Supplemental Registration Payment shall be $.20 per week per
$1,000 principal amount of Debentures and $.002 per week per share of Common
Stock constituting Transfer Restricted Securities registered under the Shelf
Registration Statement (subject to adjustment as set forth above). All accrued
Supplemental Registration Payments shall be paid by the Company to Record
Holders entitled thereto on the next succeeding Damages Payment Date by wire
transfer of immediately available funds or by federal funds check. Following
the cure of all Registration Defaults, the accrual of Supplemental Registration
Payments will cease, but any Supplemental Registration Payments accrued through
the date of cure shall be paid to Record Holders on the next succeeding Damages
Payment Date. If the Registration Defaults described in either of clauses (i)
or (ii) above arose solely because the applicable Holder
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or Holders failed to provide the Company with certain information within 20
business days after request therefor pursuant to Section 5(m), Supplemental
Registration Payments in respect thereof will not begin to accrue until five
business days after such information has been provided to the Company.
All of the Company's obligations set forth in the preceding
paragraph which are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
security shall have been satisfied in full.
(b) Notwithstanding the foregoing, the time periods
specified in Section 4(a) shall be tolled during the pendency of any
circumstances beyond the Company's control that prevent performance by the
Company of its obligations hereunder despite the Company's best efforts. Such
matters include events affecting issuers generally, such as the temporary
closure of federal agencies, and events directly affecting the Company, such as
the Company's inability to obtain all information regarding an acquisition
entity within a time period that would permit independent auditors to prepare
any required audited financial information on a timely basis.
5. REGISTRATION PROCEDURES.
In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities, the following provisions shall apply:
(a) The Company shall furnish to each Holder, prior to
the filing thereof with the Commission, a copy of the Shelf Registration
Statement and each amendment thereto or each amendment or supplement to the
Prospectus included therein, and shall use its reasonable best efforts to
reflect in each such document, when so filed with the Commission, such comments
as any Holder reasonably may propose.
(b) The Company shall take such action as may be
necessary so that (i) the Shelf Registration Statement and any amendment
thereto and any Prospectus forming a part thereof and any supplement or
amendment thereto complies in all material respects with the Act and the rules
and regulations thereunder, (ii) the Shelf Registration and any amendment
thereto (in either case, other than with respect to written information
furnished to the Company by or on behalf of any Holder specifically for
inclusion therein) does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make any statement therein not misleading and
(C) the Prospectus and any supplement thereto (in either case, other than with
respect to such information from Holders), does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
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(c) The Company shall promptly advise the Holders of
Transfer Restricted Securities registered under the Shelf Registration
Statement (which advice pursuant to clauses (ii) - (iv) shall be accompanied by
an instruction to suspend the use of the Prospectus until the requisite changes
have been made) and, if requested by such Persons, to confirm such advice in
writing;
(i) when the Shelf Registration Statement and any
amendment thereto has been filed with the Commission and when
the Shelf Registration Statement or any post-effective
amendment thereto has become effective;
(ii) of any request by the Commission for amendments
to the Shelf Registration Statement or amendments or
supplements to the Prospectus or for additional information
relating thereto;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Shelf Registration
Statement or of the suspension by any state securities
commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding
purposes; and
(iv) of the happening of any event that requires the
making of any changes in the Shelf Registration Statement or
the Prospectus so that, as of such date, the Shelf
Registration Statement and the Prospectus do not contain an
untrue statement of a material fact and do not omit to state a
material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not
misleading.
(d) If at any time the Commission shall issue any stop
order suspending the effectiveness of the Shelf Registration Statement, or any
state securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company
shall use its reasonable best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time.
(e) The Company shall furnish to each Holder of Transfer
Restricted Securities included under the Shelf Registration Statement, without
charge, at least one copy of the Shelf Registration Statement and each
post-effective amendment thereto, including all financial statements and
schedules, documents incorporated by reference therein and, if the Holder so
requests in writing, all exhibits (including exhibits incorporated therein by
reference).
(f) The Company shall, during the Effectiveness Period,
deliver to each Holder of Transfer Restricted Securities included under the
Shelf Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
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request; and the Company consents to the use of the Prospectus and any
amendment or supplement thereto by each of the selling Holders in connection
with the offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto during the Effectiveness
Period.
(g) Prior to any public offering pursuant to the Shelf
Registration Statement, the Company shall use its reasonable best efforts to
register or qualify or cooperate with the Holders of Transfer Restricted
Securities registered thereunder, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of
such Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as such Holders or underwriters reasonably request in
writing and do any and all other acts or things necessary or advisable to
enable the offer and sale in such jurisdictions of such Transfer Restricted
Securities; provided, however, that the Company will not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process or to
taxation in any jurisdiction where it is not then so subject.
(h) Unless any Transfer Restricted Securities shall be in
book-entry form only, the Company shall cooperate with the Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold under the
Shelf Registration Statement, free of any restrictive legends and in such
denominations and registered in such names as the Holders or the
underwriter(s), if any, may request in connection with the sales of Transfer
Restricted Securities pursuant to the Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by
Section 5(c)(ii) - (iv), the Company shall file (and use its reasonable best
efforts to have declared as soon as possible) a post-effective amendment to the
Shelf Registration Statement or an amendment or supplement to the Prospectus or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities registered under the Shelf
Registration Statement, 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 light of the circumstances under which they were made not
misleading. Each Holder of Transfer Restricted Securities registered under the
Shelf Registration Statement agrees by acquisition of such Transfer Restricted
Securities that, upon receipt of any notice from the Company of the existence
of any fact of the kind described in Section 5(c)(ii) - (iv) hereof, such
Holder will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the Shelf Registration Statement until such Holder receives copies
of the supplemented or amended Prospectus contemplated by this Section 5(i), or
until such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and such Holder has received copies of any
additional or supplemental filings which are incorporated by reference in the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities current at the time of receipt of such notice. In the
event the Company shall give any such notice, the time
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period regarding the Company's obligations to maintain the effectiveness of the
Shelf Registration Statement set forth in Section 2 hereof shall be extended by
the number of days during the period from and including the date of the giving
of such notice pursuant to Section 5(c) hereof to and including the date when
such Holder shall have received the copies of the supplemented or amended
Prospectus contemplated by this Section 5(i).
(j) The Company shall provide CUSIP numbers for all
Transfer Restricted Securities registered under the Shelf Registration
Statement, in the event of and at the time of any distribution thereof to
Holders, not later than the effective date of the Shelf Registration Statement
and provide the Trustee and the transfer agent for the Common Stock with
printed certificates for such Transfer Restricted Securities which are in a
form eligible for deposit with the Depository Trust Company.
(k) The Company shall use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission, and make
generally available to its security holders or otherwise provide in accordance
with Section 11(a) of the Act, as soon as practicable after the effective date
of the Shelf Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the Act.
(l) The Company shall cause the Indenture to be qualified
under the TIA in a timely manner not later than the effective date of the Shelf
Registration Statement, and, in connection therewith, cooperate with the
Trustee and the Holders of Debentures to effect such changes to the Indenture
as may be required for such Indenture to be so qualified in accordance with the
terms of the TIA.
(m) The Company may require each Holder of Transfer
Restricted Securities to be registered under the Shelf Registration Statement
to furnish to the Company such information regarding such Holder and the
distribution of such Holder's securities thereunder as the Company may from
time to time reasonably require for inclusion in the Shelf Registration
Statement and the Company may exclude from such registration the Transfer
Restricted Securities of any Holder that fails to furnish such information
within a reasonable time after receiving such request.
(n) The Company shall, if requested by the Holders of
Transfer Restricted Securities being sold in an Underwritten Offering or the
underwriter(s) thereof, promptly incorporate in the Shelf Registration
Statement or Prospectus, pursuant to a supplement or post-effective amendment,
if necessary, such information as such underwriters and Holders reasonably
agree should be included therein and to which the Company does not reasonably
object including, without limitation, information relating to the plan of
distribution of the Transfer Restricted Securities, information with respect to
the principal amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and with respect to any
other terms of the offering of the Transfer Restricted Securities to be sold in
such offering; and shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as
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practicable after the Company is notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment.
(o) The Company shall enter into such customary
agreements (including an underwriting agreement in customary form, if
applicable) and take all such other appropriate actions in order to expedite or
facilitate the disposition of the Transfer Restricted Securities pursuant to
the Shelf Registration Statement, and in connection therewith, the Company
shall (1) make such representations and warranties to the Holders of Transfer
Restricted Securities registered thereunder and the underwriter(s), if any, in
form, substance and scope as are customarily made by issuers to underwriters in
primary underwritten offerings; (2) obtain opinions of counsel to the Company
and updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to such underwriters and the Holders of a
majority of the Transfer Restricted Securities being sold) addressed to each
such Holder and underwriter covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may be
reasonably requested by such Holders and underwriters; (3) if and to the extent
permitted by Statement of Auditing Standards No. 72, obtain comfort letters and
updates thereof from the Company's independent certified public accountants
addressed to the underwriters requesting the same, such letters to be in
customary form and covering matters of the type customarily covered in comfort
letters in connection with primary underwritten offerings; (4) in connection
with an Underwritten Offering only, set forth in full or incorporate by
reference in the underwriting agreement the indemnification provisions and
procedures of Section 6 hereof with respect to all parties to be indemnified
pursuant to said Section; and (5) deliver such documents and certificates as
may be reasonably requested by such Holders or underwriters to evidence
compliance with Section 5(i) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company pursuant
to this Section 5(o). The foregoing actions set forth in clauses (1), (2), (3)
and (5) of this Section 5(o) shall be performed at each closing under any
underwriting or similar agreement as and to the extent required thereunder.
(p) The Company shall make available at reasonable times
for inspection by the Holders of the Transfer Restricted Securities, any
underwriter participating in any disposition pursuant to the Shelf Registration
Statement, and any attorney or accountant retained by any such Holders or
underwriters, all financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries; and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in connection
with the Shelf Registration Statement subsequent to the filing thereof as is
customary for similar due diligence examinations; PROVIDED, HOWEVER, that any
information that is designated in writing by the Company, in good faith, as
confidential at the time of delivery of such information shall be kept
confidential by such Holders or any such underwriter, attorney or accountant,
unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public generally
or through a third party without an accompanying obligation of confidentiality;
and PROVIDED, FURTHER that the foregoing inspection and information gathering
shall, to the greatest extent possible, be
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coordinated on behalf of the Holders and the other parties entitled thereto by
one counsel designated by and on behalf of such Holders and other parties.
(q) The Company shall use its reasonable best efforts,
subject to any applicable rules thereto, to cause all Common Stock included
among the Transfer Restricted Securities to be listed on each securities
exchange on which the Common Stock is listed and, if requested by the Holders
of a majority of in aggregate principal amount of Debentures, to list the
Debentures registered under the Shelf Registration Statement on a national
securities exchange or the Nasdaq Stock Market.
6. REGISTRATION EXPENSES.
(a) Except as otherwise provided in Section 8, the
Company shall bear all expenses incurred in connection with the performance of
or compliance with its obligations under Sections 2, 4 and 5 hereof, including
without limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses and fees and disbursements of counsel for the Company and all
independent certified public accountants, and other persons retained by the
Company (all such expenses being herein called "Registration Expenses").
Registration Expenses shall also include the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any liability insurance and the
expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed or on the New York Stock Exchange. The Company will reimburse the
Holders for the reasonable fees and disbursements of one firm of attorneys
chosen by the Holders of a majority in aggregate principal amount of the
Debentures to be sold pursuant to the Shelf Registration Statement to act as
counsel therefor in connection therewith.
(b) Each Holder will pay any discounts and commissions
incurred upon the sale of securities by it under the Shelf Registration
Statement.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) In connection with any Shelf Registration Statement,
the Company shall indemnify and hold harmless each Holder, its officers and
directors and each Person who controls such Holder within the meaning of the
Act against any and all losses, claims, damages or liabilities and expenses
whatsoever as incurred, insofar as such losses, claims, damages, liabilities
and expenses arise out of or are based upon any untrue or alleged untrue
statement of material fact contained in the Shelf Registration Statement, or
any Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or arise out of or are 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 not misleading, and agrees to reimburse each such
indemnified Person, as incurred, for any legal or other expense reasonably
incurred by them in connection with
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investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that (i) the Company will not be liable in any case to the
extent that any loss, claim, damage, liability or expense arises out of or is
based upon any such untrue or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder
specifically for inclusion therein and (ii) the foregoing indemnity with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus relating to the Shelf
Registration Statement shall not inure to the benefit of any Holder (or any
person controlling such Holder) from whom the person asserting any such loss,
claim, damage or liability purchases any of the Transfer Restricted Securities
that are the subject thereof if such person did not receive a copy of the final
prospectus (or the final prospectus as supplemented) at or prior to the written
confirmation of the sale of such Transfer Restricted Securities to such person
and the untrue statement or alleged omission contained in the preliminary
prospectus was corrected in the final prospectus (or the final prospectus as
supplemented).
The Company also agrees to indemnify or contribute to losses
of, as provided in Section 7(d), any underwriters of Transfer Restricted
Securities registered under the Shelf Registration Statement, their officers
and directors and each Person, if any, who controls any such underwriter
(within the meaning of the Act) on substantially the same basis as that of the
indemnification of the Holders provided in this Section 7(a) and shall, if
requested by any Holder, enter into an underwriting agreement reflecting such
agreement, as provided in Section 5(o) hereof.
(b) Each Holder shall indemnify and hold harmless the
Company, its directors and officers and each Person, if any, who controls the
Company (within the meaning of the Act) against any and all losses, claims,
damages, liabilities and expenses described in the indemnity contained in
Section 7(a) hereof, as incurred, resulting from any untrue or alleged untrue
statement of material fact contained in the Shelf Registration Statement or any
amendment thereof or supplement thereto or 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 to the extent, but only to the
extent, that such loss, claim, damage, liability or expense relates to or
arises from information relating to such Holder furnished in writing by such
Holder specifically for use in the Shelf Registration Statement; PROVIDED,
HOWEVER, that the obligation to indemnify will be individual to each Holder and
will be limited to the amount of net proceeds received by such Holder from the
sale of Transfer Restricted Securities pursuant to the Shelf Registration
Statement.
(c) Any Person entitled to indemnification hereunder
shall give notice as promptly as reasonably practicable to each indemnifying
party of any claim or action commenced against it in respect of which indemnity
may be sought hereunder; PROVIDED, HOWEVER, that failure to so notify an
indemnifying party shall not relieve such indemnifying party from any
obligation that it may have pursuant to this Section except to the extent that
it has been materially prejudiced (through the forfeiture of substantive rights
or defenses) by such failure; PROVIDED FURTHER,
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HOWEVER, that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have to an indemnified party otherwise than on
account of this indemnity agreement. If any such claim or action shall be
brought against an indemnified party, the indemnified party shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof; PROVIDED, HOWEVER, that an indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be
at the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm of
attorneys (in addition to any local counsel) at any one time for all such
indemnified party or parties. Each indemnified party, as a condition to the
indemnity agreements contained in Sections 7(a) and 7(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. No indemnifying party shall be liable for any
settlement or any such action effected without its written consent, but if
settled with its written consent or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of
any pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding.
(d) If a claim by an indemnified party for
indemnification under this Section 7 is found unenforceable in a final judgment
by a court of competent jurisdiction (not subject to further appeal or review)
even though the express provisions hereof provide for indemnification in such
case, then each applicable 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
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losses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified party in connection with the actions,
statements or omissions that resulted in such losses as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such
indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a
result of any losses shall be deemed to include, subject to the limitations set
forth in Section 7(c), any legal or other fees or expenses reasonably incurred
by such party in connection with any investigation or proceedings.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 7(d), an
indemnifying party that is a Holder shall not be required to contribute any
amount in excess of the amount by which the total price at which the Transfer
Restricted Securities sold by such indemnifying party and distributed to the
public were offered to the public exceeds the amount of any damages that such
indemnifying party 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 any contribution from any person who was not guilty of
such fraudulent misrepresentation.
8. RULES 144 AND 144A. The Company shall use commercially
reasonable efforts to file the reports required to be filed by it under the Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the written request of any Holder
of Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of such Holder's securities pursuant to Rules
144 and 144A. The Company covenants that it will take such further action as
any Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time to enable such Holder to sell securities
without registration under the Act within the limitation of the exemptions
provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)).
9. UNDERWRITTEN REGISTRATIONS. If any of the Transfer Restricted
Securities included under the Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders
of a majority of the shares of Common Stock included among such Transfer
Restricted Securities (calculated as if all of the then outstanding Debentures
were converted into Common Stock at the time of such selection), PROVIDED,
HOWEVER, that such managing underwriters shall be reasonably satisfactory to
the Company and the Company shall
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14
not be obligated to arrange for more than one underwritten offering during the
Effectiveness Period.
No Person may participate in any underwritten registration
hereunder unless such Person (i) agrees to sell such Person's Transfer
Restricted Securities on the basis reasonably provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents reasonably required under the terms of such underwriting arrangements
and (iii) at least 20% of the outstanding Transfer Restricted Securities are
included in such underwritten offering. The Holders participating in any
underwritten offering shall be responsible for any expenses customarily borne
by selling securityholders, including underwriting discounts and commissions
and fees and expenses of counsel to the selling securityholders.
10. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority of the Common Stock
issued or issuable upon conversion of the Debentures (calculated as if all of
the then outstanding Debentures were converted into Common Stock at the time of
such consent). 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 the Holders of Transfer Restricted Securities being sold pursuant
to the Shelf Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of a majority of the
shares of Common Stock included among such Transfer Restricted Securities.
(b) NOTICES. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand- delivery,
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(1) if to a Holder, at the address of such Holder
maintained by the Registrar under the Indenture;
(2) if to the Initial Purchaser, at the address set
forth in the Purchase Agreement;
(3) if to the Company, at its address set forth in
the Purchase Agreement;
or to such other addresses as the recipient party has specified to the sending
party by prior written notice to the sending party.
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15
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; one business
day after being delivered to a next-day air courier; five business days after
being deposited in the mail; when answered back, if faxed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(c) REMEDIES. In the event of a breach by the Company or
by a Holder of any of their respective obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of
any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(d) SEVERABILITY. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law. 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. It is hereby stipulated and declared to be the intention of
the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(e) NO INCONSISTENT AGREEMENTS. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the Holders in this
Agreement.
(f) SUCCESSORS AND ASSIGNS. All covenants and agreements
in this Agreement by or on behalf of any of the parties hereto will bind and
inure to the benefit of their respective heirs, executors, administrators,
successors, legal representatives and assigns. In addition, whether or not any
express assignment has been made, the provisions of this Agreement which are
for the benefit of Holders are also for the benefit of, and enforceable by, any
subsequent Holder.
(g) COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
will constitute one and the same Agreement.
(h) DESCRIPTIVE HEADINGS. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
(i) GOVERNING LAW. All questions concerning the
construction, validity and interpretation of this Agreement shall be governed
by and construed in accordance with the
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16
domestic laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
LOMAK PETROLEUM, INC.
By: _____________________________________
Its: ____________________________________
Acting on behalf of themselves and as the
representatives of the Holders:
FORUM CAPITAL MARKETS L.P.
By: _____________________________________
Name: Xxxxxxx X. XxXxxxx
Title: Managing Director
XxXXXXXX & COMPANY SECURITIES,INC.
By: _____________________________________
Name: Xxxxxxx X. XxXxxxx
Title: Attorney-in-fact
XXXXXX XXXXXX & COMPANY,INC.
By: _____________________________________
Name: Xxxxxxx X. XxXxxxx
Title: Attorney-in-fact
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