1
EXHIBIT 4.1(u)
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS AGREEMENT is made as of October 31, 1995, by and between Lomak
Petroleum, Inc., a Delaware corporation (the "Company"), and Forum Capital
Markets L.P. and Hanifen, Imhoff, 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"), up to 1,150,000 shares of its $2.03 Convertible
Exchangeable Preferred Stock, par value $1.00 per share (the "Preferred
Stock"). The Preferred Stock is exchangeable at the option of the Company for
up to $28,750,000 aggregate principal amount of the Company's 8.125%
Convertible Subordinated Notes due 2005 (the "Notes"), and the Preferred Stock
and the Notes are each convertible into Common Stock (as defined herein) as
provided in the Notes 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
Preferred Stock or the Notes.
"COMMISSION" means the Securities and Exchange Commission.
"DAMAGES PAYMENT DATE" means March 31, June 30, September 30 and
December 31 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
Notes are to be issued, as such Indenture is amended or supplemented from time
to time in accordance with the terms thereof.
"OPTION CLOSING DATE" has the meaning set forth in the Purchase
Agreement.
2
"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 (i) with respect to any Damages Payment Date
relating to the Preferred Stock, each Person who is a holder of Preferred Stock
on the record date with respect to the record date established for purposes of
determining the holders entitled to receive the dividend on the Preferred Stock
due on such date (if any) or, if no such record date has been established, the
day that is 15 days prior to such Damages Payment Date, (ii) with respect to
any Damages Payment Date relating to the Notes, each Person who is a holder of
Notes on the record date with respect to the interest payment on the Notes due
on such date and (iii) 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 share of Preferred Stock
or if the Preferred Stock has been exchanged for Notes, each Note and, if such
Preferred Stock or Note has been converted, each share of Common Stock issued
in connection with such conversion, until (a) the date on which such Preferred
Stock, Note 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 Preferred Stock, Note 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 reoffering to the public.
2. SHELF REGISTRATION. The Company shall use its reasonable best
efforts to file a registration statement with the Commission within 60 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
## CT01/SCHIJ/68170.34
- 2 -
3
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 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 later of the Closing Date or any Option Closing
Date or such shorter period that will terminate when all the Preferred Stock,
Notes 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 Preferred Stock of the Company or 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
## CT01/SCHIJ/68170.34
- 3 -
4
Period, as soon as practicable after the circumstances giving rise thereto are
identified. Such 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 later of the Closing Date or any Option
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 per $1,000
principal amount of Notes 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 $.00125 per week per share of Preferred Stock or $.05 per week
per $1,000 principal amount of Notes 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
$.005 per week per share of Preferred Stock or $.20 per week per $1,000
principal amount of Notes and $.0002 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 or Holders failed to
provide the Company with certain information within 20 business days after
request therefor pursuant to Section 5(m),
## CT01/SCHIJ/68170.34
- 4 -
5
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.
(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;
## CT01/SCHIJ/68170.34
- 5 -
6
(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
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
## CT01/SCHIJ/68170.34
- 6 -
7
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 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
## CT01/SCHIJ/68170.34
- 7 -
8
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) If the Company elects to exchange the Preferred Stock for
Notes, the Company shall cause the Indenture to be qualified under the TIA in a
timely manner not later than the effective date of the exchange of the
Preferred Stock for Notes, and, in connection therewith, cooperate with the
Trustee and the Holders of Notes 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 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
## CT01/SCHIJ/68170.34
- 8 -
9
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 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 the outstanding shares of Preferred Stock of a majority in aggregate
principal amount of Notes, to list the Preferred Stock or the Notes 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
## CT01/SCHIJ/68170.34
- 9 -
10
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 Nasdaq Stock Market. The Company will reimburse the Holders
for the reasonable fees and disbursements of one firm of attorneys chosen by
the Holders of a majority of the shares of Preferred Stock or a majority in
aggregate principal amount of the Notes 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 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
## CT01/SCHIJ/68170.34
- 10 -
11
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, 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
## CT01/SCHIJ/68170.34
- 11 -
12
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 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
## CT01/SCHIJ/68170.34
- 12 -
13
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 Preferred
Stock or Notes 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 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 Notes (calculated as if all of the then
outstanding Notes 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
## CT01/SCHIJ/68170.34
- 13 -
14
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.
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,
## CT01/SCHIJ/68170.34
- 14 -
15
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 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.
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: ______________________________________________
Its:______________________________________________
XXXXXXX, XXXXXX INC.
By: ______________________________________________
Its:______________________________________________
## CT01/SCHIJ/68170.34
- 15 -
