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EXHIBIT 99.5
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EQUITY REGISTRATION RIGHTS AGREEMENT
between
KEY ENERGY GROUP, INC.
and
XXXXXX BROTHERS INC.
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Dated as of September 14, 1998
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TABLE OF CONTENTS
1. Definitions.......................................................1
2. Securities Subject to this Agreement..............................3
3. Shelf Registration................................................3
4. Hold-Back Agreements..............................................4
5. Registration Procedures...........................................4
6. Registration Expenses.............................................8
7. Indemnification...................................................9
8. Rule 144.........................................................11
9. Miscellaneous....................................................11
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EQUITY REGISTRATION RIGHTS AGREEMENT
This EQUITY REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of September 14, 1998, between Key Energy Group, Inc., a
Maryland corporation (the "COMPANY"), and Xxxxxx Brothers Inc. ("LBI" and,
together with any successors and assigns, the "ARRANGER").
RECITALS
This Agreement is made pursuant to the Bridge Loan, dated as of September
14, 1998 (the "BRIDGE LOAN AGREEMENT"), between the Company and the Arranger. In
order to induce the Arranger to enter into the Bridge Loan Agreement, the
Company has agreed to the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the Closing under the Bridge Loan
Agreement.
AGREEMENT
The parties agree as follows:
1. Definitions
As used in this Agreement, the following capitalized terms shall have the
following meanings:
ESCROW AGREEMENT: The Escrow Agreement, dated as of September 14, 1998,
among the Company, LBI and The Bank of New York, as escrow agent.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE NOTE INDENTURE: The Indenture, dated as of September 14, 1998
among the Company, the guarantors party thereto and The Bank of New York, as
trustee, pursuant to which the Exchange Notes are issued, as the same may be
amended from time to time in accordance with the terms thereof.
EXCHANGE NOTES: The Exchange Notes issued pursuant to the Exchange Note
Indenture.
INDEMNIFIED PARTIES: See Section 7(a) hereof.
INDEMNIFYING PARTY: See Section 7(c) hereof.
ISSUER: Key Energy Group, Inc., a Maryland corporation.
LIQUIDATED DAMAGES: See Section 3(b) hereof.
NASD: National Association of Securities Dealers, Inc.
PERSON: An individual, partnership, corporation, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
PROSPECTUS: The prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
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prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
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: All Warrant Shares issuable to the holders of
Warrants upon exercise of such Warrants.
REGISTRABLE WARRANTS: All Warrants originally issued pursuant to the
Warrant Agreement, and released from the Escrow Agreement pursuant to Section
3(b) and (c) thereof.
REGISTRATION DEFAULT: See Section 3(b) hereof.
REGISTRATION EXPENSES: See Section 6 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and
all material incorporated by reference in such Registration Statement.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended.
SHELF REGISTRATION: See Section 3(a) hereof.
TRANSFER RESTRICTED SECURITY: 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 to the public.
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
WARRANT AGREEMENT: The Warrant Agreement, dated as of September 14, 1998,
between the Company and the warrant agent named therein.
WARRANT SHARES: The shares of capital stock of the Company issuable to the
holders of Warrants upon exercise of the Warrants, together with any other
securities that may in the future become issuable Xxxxx exercising the Warrants.
WARRANTS: Warrants to purchase capital stock of the Company issued in
accordance with the Warrant Agreement.
2. Securities Subject to this Agreement
(a) Registrable Securities. The securities entitled to the benefits
of this Agreement are the Registrable Securities.
(b) Holders of Registrable Securities. A Person is deemed to be a
holder of Registrable
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Securities whenever such Person owns Registrable Securities of record or has
provided evidence reasonably satisfactory to the Company that such Person has
the right to acquire such Registrable Securities, whether or not such
acquisition has actually been effected and disregarding any legal restrictions
upon the exercise of such right.
3. Shelf Registration
(a) Filing of Shelf Registration. The Company shall use its
reasonable best efforts to file a "shelf" registration statement on any
appropriate form pursuant to Rule 415 (or similar rule that may be adopted by
the SEC) under the Securities Act (a "SHELF REGISTRATION") as promptly as
practicable and in no event later than the date that is 300 days following the
initial making of the Loans (the "FILING DATE") to permit resales of all of the
Registrable Securities. The Company agrees to use its reasonable best efforts to
cause such Shelf Registration to become effective as promptly as possible after
the filing thereof, but in no event later than 60 days after the Filing Date
(the "EFFECTIVE DATE"), and thereafter to keep it continuously effective for the
period that will terminate upon the earlier of (1) when all the Registrable
Securities covered by the Shelf Registration have been sold pursuant to such
Shelf Registration or have been sold to the public pursuant to Rule 144 and (2)
no Registrable Securities are outstanding.
(b) Liquidated Damages. If (i) the Registration Statement has not
been declared effective by the SEC on or prior to the Effective Date 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 (or if the Registrable
Securities are still in escrow, to LBI) 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 Exchange Note
Indenture. 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 7 hereof,
no holder of Registrable Securities shall be entitled to any damages for a
Registration Default beyond the Liquidated Damages provided for herein.
All obligations of the Company set forth in the preceding paragraph that
are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations have been paid in full.
4. Hold-Back Agreements
(a) Restrictions on Public Sale by Holder of Registrable Securities.
Each holder of Registrable Securities whose Registrable Securities are covered
by a Registration Statement filed pursuant to Section 3 hereof agrees, if
requested by the managing underwriters in an underwritten offering, not to
effect any public sale or distribution of securities of the Company of the same
class as the securities included in such Registration Statement, including a
sale pursuant to Rule 144 under the Securities Act
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(except as part of such underwritten registration), during the 30-day period
prior to, and during the 90-day period beginning on, the closing date of each
underwritten offering made pursuant to such Registration Statement, to the
extent timely notified in writing by the Company or the managing underwriters;
provided, however, that each holder of Registrable Securities shall be subject
to the hold-back restrictions of this Section 4(a) only once during the term of
this Agreement.
The foregoing provisions shall not apply to any holder of Registrable
Securities if such holder is prevented by applicable statute or regulation from
entering any such agreement; provided, however, that any such holder shall
undertake, in its request to participate in any such underwritten offering, not
to effect any public sale or distribution of any Registrable Securities held by
such holder and covered by a Registration Statement commencing on the date of
sale of the Registrable Securities unless it has provided 45 days prior written
notice of such sale or distribution to the underwriter or underwriters.
(b) Restrictions on Sale of Securities by the Company and Others. The
Company agrees (1) not to effect any public or private offer, sale or
distribution of any of its equity securities or any class or series of its
capital stock having a preference in liquidation or with respect to dividends,
including a sale pursuant to Regulation D under the Securities Act (other than
any such sale or distribution of such securities in connection with any merger
or consolidation by the Company or any subsidiary of the Company or the
acquisition by the Company or a subsidiary of the Company of the capital stock
or substantially all the assets of any other Person or in connection with any
employee stock option or other benefit plan), during the 10-day period prior to,
and during the 90-day period beginning with, the effectiveness of a Registration
Statement filed under Section 3 to the extent timely notified in writing by a
holder of Registrable Securities or the managing underwriters in an underwritten
offering (except as part of such if permitted, or pursuant to registrations on
Forms S-4 or S-8 or any successor form to such registration Forms) and (2)
during the aforementioned period to use reasonable best efforts to cause each
holder of each of its privately placed equity securities or any class or series
of its capital stock having a preference in liquidation or with respect to
dividends purchased from the Company at any time on or after the date of this
Agreement to agree not to effect any public sale or distribution of any such
securities during such period, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such registration, if permitted).
5. Registration Procedures
In connection with the Company's Shelf Registration obligations
pursuant to Section 3 hereof, the Company will use its reasonable best efforts
to effect such registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company will, as expeditiously as possible:
(a) prepare and file with the SEC, within the time period provided
in Section 3 hereof, a Registration Statement or Registration Statements
relating to the Shelf Registration on any appropriate form under the Securities
Act, which form shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution thereof and shall
include all financial statements (including, if applicable, financial statements
of any Person which shall have guaranteed any indebtedness of the Company)
required by the SEC to be filed therewith, cooperate and assist in any filings
required to be made with the NASD, and use its reasonable best efforts to cause
such Registration Statement to become effective within such time period;
provided that before filing a Registration Statement or any amendments or
supplements thereto, the Company will furnish to the holders of the Registrable
Securities covered by such Registration Statement and the underwriters, if any,
copies of all such
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documents proposed to be filed, which documents will be subject to the review by
such holders and underwriters, and the Company will not file any Registration
Statement or any amendments or supplements thereto to which the holders of a
majority of the Registrable Securities or such managing underwriters, if any,
shall reasonably object within 14 days;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep the
Registration Statement effective until all Registrable Securities covered by
such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act; and comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
(c) notify the selling holders of Registrable Securities and the
managing underwriters, if any, promptly, and (if requested by any such Person)
confirm such advice in writing, (1) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective, (2) of any request by the SEC for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (3) of
the issuance by the SEC of any stop order of which the Company or its counsel is
aware suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (4) if at any time the
representations and warranties of the Company contemplated by paragraph (n)
below cease to be true and correct in any material respect, (5) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose and (6) of the
Company's becoming aware that the Prospectus (including any document
incorporated therein by reference), as then in effect, includes an untrue
statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(d) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the earliest
possible moment;
(e) if reasonably requested by the managing underwriter or
underwriters or a holder of Registrable Securities being sold in connection with
an underwritten offering, promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriter or
underwriters or the holders of a majority of the Registrable Securities being
sold agree should be included therein relating to the plan of distribution with
respect to such Registrable Securities, including, without limitation,
information with respect to the amount of Registrable Securities being sold to
such managing underwriter or underwriters, the purchase price being paid
therefor by such underwriters and any other terms of the underwritten (or best
efforts underwritten) offering of the Registrable Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as promptly as practicable upon being notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(f) furnish to each selling holder of Registrable Securities and
each managing underwriter, if any, without charge, if requested, at least one
signed copy of the Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, all documents
incorporated
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therein by reference and all exhibits (including those incorporated by
reference);
(g) deliver to each selling holder of Registrable Securities and the
underwriters, if any, without charge, if requested, as many copies of the
Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; the Company consents
to the use (subject to the limitations set forth in the last paragraph of this
Section 5) of the Prospectus or any amendment or supplement thereto by each of
the selling holders of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling holders of
Registrable Securities, the underwriters, if any, and their respective counsel
in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions as any such seller or underwriter reasonably requests in writing
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of such Registrable Securities; provided 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 which would
subject it to general service of process or taxation in any such jurisdiction
where it is not then so subject;
(i) cooperate with the selling holders of Registrable Securities and
the managing underwriters, if any, to facilitate to the extent commercially
reasonable under the circumstances the timely preparation and delivery of
certificates representing such Registrable Securities to be sold and not bearing
any restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as such managing underwriters may
request at least two business days prior to any sale of such Registrable
Securities to the underwriters;
(j) use its reasonable best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Registrable Securities;
(k) upon the occurrence of any event contemplated by paragraph
(c)(6) above, prepare a supplement or post-effective amendment to the related
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the holders of the 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 not misleading in light of the
circumstances then existing;
(l) use reasonable efforts to cause all Registrable Securities
covered by a Registration Statement to be listed on each securities exchange on
which similar securities issued by the Company are then listed if such listing
is permitted under the rules of such exchange and if requested by the holders of
a majority of such Registrable Securities or the managing underwriters, if any;
(m) not later than the effective date of the Shelf Registration,
provide a CUSIP number for all Registrable Securities and provide the transfer
agent with printed certificates for the Registrable Securities which are in a
form eligible for deposit with The Depository Trust Company;
(n) enter into such agreements (including an underwriting agreement)
and take all such other
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appropriate and reasonable actions in connection therewith in order to expedite
or facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration (1) make such
representations and warranties to the holders of such Registrable Securities and
the underwriters, if any, in form, substance and scope as are customarily made
by issuers to underwriters in primary underwritten offerings and covering
matters including, but not limited to, those set forth in the Bridge Loan
Agreement by the Company; (2) obtain opinions of counsel to the Company (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the holders of a majority
of the Registrable Securities) addressed to each selling holder and the
underwriters, if any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such holders and underwriters; (3) obtain "cold comfort" letters
and updates thereof from the Company's independent certified public accountants
addressed to such holders and underwriters, if any, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters by underwriters in connection with primary underwritten
offerings; (4) if an underwriting agreement is entered into, if permitted by the
managing underwriter the same shall set forth in full the indemnification
provisions and procedures of Section 7 hereof with respect to all parties to be
indemnified pursuant to said Section; provided that, the indemnification
provisions and procedures set forth in such underwriting agreement shall be no
less favorable to the selling holders of Registrable Securities and the
underwriters than the indemnification provisions and procedures of Section 7
hereof; and (5) the Company shall deliver such documents and certificates as may
be requested by the holders of a majority of the Registrable Securities being
sold and the managing underwriters, if any, to evidence compliance with
paragraph (k) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The above
shall be done at each closing under such underwriting or similar agreement or as
and to the extent required thereunder;
(o) make available for inspection by any underwriter participating
in any disposition of such Registrable Securities pursuant to a Shelf
Registration, and any attorney or accountant retained by such holders or
underwriters, if any, all financial and other records, pertinent corporate
documents and properties of the Company as may be reasonably necessary to enable
them to exercise their due diligence responsibilities, and provide reasonable
access to appropriate officers of the Company in connection with such due
diligence responsibilities;
(p) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC; and
(q) make appropriate officers of the Company available to such
holders and underwriters for meetings with prospective purchasers of the
Registrable Securities and prepare and present to potential investors customary
"road show" material in a manner consistent with other new issuances of other
securities similar to the Registrable Securities.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish to the Company such information
regarding the distribution of such securities as the Company may from time to
time reasonably request in writing.
Each holder of Registrable Securities agrees by acceptance of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(c)(3), (5) or (6)
hereof that, in the reasonable judgment of the Company's Board of Directors, it
is advisable to suspend use of the prospectus for a discrete period of time due
to pending corporate
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developments, public filings with the SEC or similar events, such holder will
forthwith discontinue disposition of Registrable Securities until such holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 5(k) hereof, or until it is advised in writing (the "ADVICE") by the
Company that the use of such Prospectus may be resumed, and has received copies
of any additional or supplemental filings which are incorporated by reference in
such Prospectus, and, if so directed by the Company such 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 such Prospectus covering such
Registrable Securities current at the time of receipt of such notice. The
Company shall use all reasonable efforts to insure that the use of the
prospectus may be resumed as soon as practicable, and in any event shall not be
entitled to require the Holder to suspend use of any prospectus for more than
thirty (30) business days in any twelve-month period.
6. Registration Expenses
(a) All reasonable expenses incident to the Company's performance of
or compliance with this Agreement, including without limitation all (i)
registration and filing fees, fees and expenses associated with filings required
to be made with the NASD (including, if applicable, the fees and expenses of any
"qualified independent underwriter" and its counsel as may be required by the
rules and regulations of the NASD), (ii) fees and expenses of compliance with
securities or blue sky laws (including fees and disbursements of counsel for the
underwriters or selling holders in connection with blue sky qualifications of
the Registrable Securities and determination of their eligibility for investment
under the laws of such jurisdictions as the managing underwriters or holders of
a majority of the Registrable Securities being sold may reasonably designate),
(iii) printing expenses (including expenses of printing certificates for the
Registrable Securities in a form eligible for deposit with The Depository Trust
Company and of printing prospectuses), (iv) fees and disbursements of counsel
for the Company and customary out of pocket expenses and fees paid by issuers to
the extent provided for in an underwriting agreement (excluding discounts,
commissions or fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals relating to the distribution of the
Registrable Securities, transfer taxes or legal expenses of any Person other
than the Company and the selling holders), (v) the cost of securities acts
liability insurance if the Company so desires and (vi) fees and expenses of
other Persons retained by the Company (all such expenses being herein called
"REGISTRATION EXPENSES") will be borne by the Company regardless whether the
Registration Statement becomes effective. Each holder of Registrable Securities
will pay any fees or disbursements of counsel to such holder (other than as
provided in Section 6(b)) and all underwriting discounts and commissions and
transfer taxes, if any, and other fees, costs and expenses of such holder (other
than Registration Expenses) relating to the sale or disposition of such holder's
Registrable Securities. The Company, in any event, will pay the Company's own
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, the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed, rating agency fees and
the fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with the Shelf Registration hereunder, the Company
will reimburse the selling holders of Registrable Securities being registered in
such registration for the reasonable fees and disbursements of not more than one
law firm (which shall be reasonably acceptable to the Company) chosen by the
selling holders of a majority of such Registrable Securities.
7. Indemnification
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(a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, each holder of
Registrable Securities, their officers, directors and employees and each Person
who controls such holder (within the meaning of the Securities Act) (the
"INDEMNIFIED PARTIES") against all losses, claims, damages, liabilities and
expenses incurred by such party in connection with any actual or threatened
action arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or preliminary
Prospectus or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a Prospectus or a preliminary Prospectus, in light of the
circumstances then existing) not misleading, except insofar as the same arise
out of or are based upon any such untrue statement or omission made in reliance
on and in conformity with any information furnished in writing to the Company by
such holder or its counsel expressly for use therein; provided, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission in the Prospectus,
if such untrue statement or alleged untrue statement or omission or alleged
omission is completely corrected in an amendment or supplement to the Prospectus
and the holder of Registrable Securities thereafter fails to deliver such
Prospectus as so amended or supplemented prior to or concurrently with the sale
of the Registrable Securities to the person asserting such loss, claim, damage,
liability or expense after the Company had furnished such holder with a
sufficient number of copies of the same. The Company shall also indemnify
underwriters, their officers and directors and each Person who controls such
Persons (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Indemnified Parties,
if requested.
(b) Indemnification by Holder of Registrable Securities. In
connection with the Shelf Registration, each holder of Registrable Securities
will furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any Registration
Statement or Prospectus and agrees to indemnify and hold harmless, to the full
extent permitted by law, the Company, its directors and officers and each Person
who controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses resulting from any untrue
statement of a material fact contained in any Registration Statement or
Prospectus or any omission of a material fact required to be stated in the
Registration Statement or Prospectus or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, to the extent, but only to the extent, that such untrue statement or
omission relates to a holder and is made in reliance on and in conformity with
any information or affidavit furnished in writing by such holder to the Company
specifically for inclusion in such Registration Statement or Prospectus. In no
event shall the liability of any selling holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the proceeds received
by such holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation. The Company shall be entitled to receive indemnities
from underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution of such Registrable
Securities to the same extent above with respect to information or affidavit
furnished writing by such Persons as provided specifically for any Prospectus or
Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt notice to the Company or holder
of Registrable Securities, as the case may be (in either case, as applicable, an
"INDEMNIFYING PARTY"), of any claim with respect to which it seeks
indemnification and (ii) permit such Indemnifying Party to assume the defense of
such claim with counsel reasonably satisfactory to such Person; provided,
however, that any Person entitled to indemnification hereunder shall have the
right to employ separate counsel and to participate in the defense of such
claim, but the fees and expenses of such counsel shall be at the expense of such
Person unless (a) the Indemnifying Party has
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agreed to pay such fees or expenses, (b) the Indemnifying Party has failed to
assume the defense of such claim or (c) in the reasonable judgment of any such
Person, based upon written advice of its counsel, a conflict of interest may
exist between such Person and the Indemnifying Party with respect to such claims
(in which case, if the Person notifies the Indemnifying Party in writing that
such Person elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense of
such claim on behalf of such Person). If such defense is not assumed by the
Indemnifying Party, the Indemnifying Party will not be subject to any liability
for any settlement made without its consent (but such consent will not be
unreasonably withheld). No Indemnifying Party will be required to consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Person entitled to indemnification a release from all liability in respect to
such claim or litigation. Any Indemnifying Party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all Persons entitled to
indemnification by such Indemnifying Party with respect to such claim in any one
jurisdiction, unless in the reasonable judgment of such Person a conflict of
interest may exist between such Person and any other Person entitled to
indemnification hereunder with respect to such claim, in which event the
Indemnifying Party shall be obligated to pay the fees and expenses of such
additional counsel or counsels, but only of one such additional counsel for each
group of similarly situated Persons in any one jurisdiction.
(d) Contribution. If for any reason the indemnification provided for
in the preceding paragraphs (a) and (b) is unavailable to a Person entitled to
indemnification or is insufficient to hold it harmless as contemplated by the
preceding paragraphs (a) and (b), then the Indemnifying Party shall contribute
to the amount paid or payable by such Person as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Person and the Indemnifying Party, but also
the relative fault of such Person and the Indemnifying Party, as well as any
other relevant equitable considerations, provided that no holder of Registrable
Securities shall be required to contribute an amount greater than the dollar
amount of the proceeds received by such holder of Registrable Securities with
respect to the sale of any securities. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
8. Rule 144
The Company covenants that it will file the reports required to be filed
by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if it is not required to file
such reports, it will, upon the request of any holder of Registrable Securities,
make publicly available other information so long as necessary to permit sales
pursuant to Rule 144 under the Securities Act), and it will take such further
action as any holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any holder of Registrable
Securities, the Company will deliver to such holder a written statement as to
whether it has complied with such information and filing requirements.
9. Miscellaneous
(a) Remedies. Each holder of Registrable Securities, in addition to
being entitled to exercise
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all rights provided herein or granted by law, including recovery of damages, in
connection with the breach by the Company of its obligations to register the
Registrable Securities will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the holders of Registrable Securities hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any other agreements. The Company has
not previously entered into any inconsistent agreement with respect to its
securities granting any registration rights to any Person.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions of this
Agreement may not be given unless the Company has obtained the written consent
of holders of a majority of the outstanding Registrable Securities (excluding
Registrable Securities held by the Company, any Guarantor or one of their
respective affiliates).
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, facsimile or air courier guaranteeing overnight delivery:
(i) if to a holder of Registrable Securities, at the most current
address given by such holder to the Company in accordance with the
provisions of this Section 9(d), which address initially is, with respect
to each Interim Lender, the address set forth next to such Interim
Lender's name on the signature pages of the Bridge Loan Agreement, with a
copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Xxxxxxx X. Xxx, Esq.; and
(ii) if to the Company, initially to it at the address set forth in
the Bridge Loan Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 9(d),
with copies to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 0000 Xxx Xxxx
Xxxxxx, X.X., Xxxxxxxxxx, XX, 00000, Attention: Xxxxxxx Xxxxx, Esq. and to
Xxxxxx & Xxxxxx, 000 Xxxxxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx, 00000,
Attention: Xxxxxxx X. Xxxxxxx, Esq.
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 if mailed; when answered back,
if delivered by facsimile; and on the next business day if timely delivered to
an air courier guaranteeing overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, including without limitation and without the need for an express
assignment, subsequent holders of Registrable Securities.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the
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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.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) New York Law; Submission to Jurisdiction; Waiver of Jury Trial.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(i) 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.
(j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement with respect to the subject matter contained
herein 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 by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Equity Registration Rights
Agreement as of the date first written above.
KEY ENERGY GROUP, INC.
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------------
Name:
Title:
XXXXXX BROTHERS INC.
By: /s/ XXXXXXX XXXXXXXXXX
-------------------------------------
Name:
Title:
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