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EXHIBIT 10.2
STOCK OWNERSHIP
AND
REGISTRATION RIGHTS AGREEMENT
BETWEEN
UNION OIL COMPANY OF CALIFORNIA
AND
XXX XXXXX, INC.
JUNE 29, 1999
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INDEX
STOCK OWNERSHIP AND
REGISTRATION RIGHTS AGREEMENT
ARTICLE I
Transfer Restrictions with Respect to TBI Common Stock............................................................1
Section 1.1 Restrictions on Resale or other Distribution..............................................1
Section 1.2 Acceleration Event........................................................................3
Section 1.3 Undertaking to File Reports and Cooperate in Rule 144 Transactions........................3
Section 1.4 Applicability of Article I................................................................3
ARTICLE II
Voting, Stock Legends.............................................................................................4
Section 2.1 Right to Vote Shares......................................................................4
Section 2.2 Legends...................................................................................4
ARTICLE III
Board Representation..............................................................................................4
Section 3.1 Board Seat; Nomination....................................................................4
Section 3.2 Unocal Representative.....................................................................5
ARTICLE IV
Acquisition Rights; Percentage Retention..........................................................................5
Section 4.1 Acquisition Rights........................................................................5
Section 4.2 Percentage Retention......................................................................6
ARTICLE V
Standstill........................................................................................................6
ARTICLE VI
Registration Rights...............................................................................................7
Section 6.1 Demand Registrations......................................................................7
Section 6.2 Piggyback Registrations..................................................................10
Section 6.3 Holdback Agreements......................................................................12
Section 6.4 Information to be Furnished by Unocal....................................................15
Section 6.5 Suspension of Offering Pending Prospectus Supplement or Amendment........................15
Section 6.6 Registration Expenses....................................................................15
Section 6.7 Underwritten Offerings...................................................................16
Section 6.8 Indemnification..........................................................................16
Section 6.9 Third Party Registration Rights..........................................................19
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ARTICLE VII
Miscellaneous.................................................................................................20
Section 7.1 Injunctive Relief.....................................................................20
Section 7.2 Severability..........................................................................20
Section 7.3 Amendments............................................................................20
Section 7.4 Descriptive Headings..................................................................20
Section 7.5 Counterparts..........................................................................20
Section 7.6 Notices...............................................................................20
Section 7.7 Law Applicable........................................................................21
Section 7.8 Successors and Assigns................................................................21
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STOCK OWNERSHIP AND
REGISTRATION RIGHTS AGREEMENT
BETWEEN
UNION OIL COMPANY OF CALIFORNIA
AND
XXX XXXXX, INC.
THIS STOCK OWNERSHIP AND REGISTRATION RIGHTS AGREEMENT (the
"Agreement"), dated as of June 29, 1999 (the "Closing Date"), is between UNION
OIL COMPANY OF CALIFORNIA, a California corporation ("Unocal"), and XXX XXXXX,
INC., a Delaware corporation ("TBI").
W I T N E S S E T H:
WHEREAS, Unocal and TBI have entered into a Purchase and Sale
Agreement (the "Purchase and Sale Agreement") pursuant to which, subject to the
terms and conditions set forth in the Purchase and Sale Agreement, Unocal will
sell certain assets (the "Assets") and TBI will purchase such Assets (the
"Acquisition"); and
WHEREAS, as part of the consideration for the Assets, TBI will issue
and sell to Unocal 5,800,000 shares as adjusted to reflect any stock dividend
or other adjustment (the "TBI Shares") of fully-paid, non-assessable common
stock, par value $.10 per share of TBI ("TBI Common Stock"), in the manner
specified in the Purchase and Sale Agreement; and
WHEREAS, as a condition to the transactions under the Purchase and
Sale Agreement, Unocal and TBI have agreed, upon the terms and subject to the
conditions set forth herein, to enter into this Agreement with respect to the
TBI Common Stock and the respective obligations of TBI and Unocal while Unocal
owns the TBI Common Stock;
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants contained herein and in the Purchase and Sale
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
TRANSFER RESTRICTIONS WITH RESPECT TO TBI COMMON STOCK
Section 1.1 Restrictions on Resale or other Distribution. As
a stockholder of TBI, and with respect to the TBI Common Stock it owns, Unocal
is free to sell, transfer or dispose of its shares as it desires, in its sole
discretion, subject only to the following restrictions:
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(a) Unocal covenants and agrees (except as provided in Section 1.1(c)
below) that for a period of twenty-four (24) months after the Closing Date, it
will not sell or transfer any beneficial interest in, or otherwise dispose of
any TBI Common Stock, except pursuant to the exercise of registration rights
afforded Unocal herein or otherwise approved by a majority of the
non-interested members of the TBI Board of Directors (the "TBI Board").
(b) After twenty-four (24) months following the Closing Date, Unocal
may sell, transfer or otherwise convey any TBI Common Stock held by it (i) in
accordance with the registration rights provided herein, (ii) in any other
manner, to any other party who Unocal reasonably believes, after diligent good
faith inquiry and consultation with the corporate secretary of TBI who, by the
end of the business day following such consultation, does not provide
information to the contrary, does not prior to or as a result of such sale,
transfer or conveyance, own an interest equal to or greater than ten percent
(10%) of the outstanding TBI Common Stock or (iii) in a transaction which
receives the prior approval of a majority of the non-interested members of the
TBI Board.
(c) The restrictions in Sections 1.1(a) and 1.1(b) shall not be
applicable to:
(i) any sale at any time pursuant to a tender offer, merger
or business combination by a person unaffiliated with Unocal, which offer,
merger or business combination has been recommended or approved by the TBI
Board; or
(ii) if the proposed sale, transfer or disposition occurs
pursuant to:
(a) any transfer of all or part of such TBI Common
Stock pursuant to the rights afforded to Unocal under Article VI
below;
(b) a pro rata rights offering or pro rata
distribution to all holders of Unocal common stock;
(c) Rule 144 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act") or any successor rule or regulation thereto;
(d) a pledge of or the granting of a security
interest in such shares to a lender to secure a bona fide loan,
guarantee or financial support to the pledgor;
(e) legislation, a final decree of a court of
competent jurisdiction or a governmental order or demand, requiring
divestiture of the TBI Common Stock, subject to the limitation set
forth in Section 1.1(b)(ii) above;
(f) a transfer of TBI Common Stock among Unocal or
any Unocal subsidiary in which Unocal beneficially owns 80% of the
voting power of the subsidiary's capital stock (a "Unocal
Subsidiary"), so long as (i) such Unocal Subsidiary shall have been
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required, prior to the transfer thereto, to execute a counterpart of
this Agreement agreeing to the obligations and restrictions applicable
to Unocal, (ii) at least 10-day's notice of the transfer shall be
given to TBI and (iii) Unocal has executed a covenant to retain not
less than 80% of the voting power of such Subsidiary's capital stock
(a "Permitted Unocal Subsidiary")
(g) a sale, transfer, or disposition following an
Acceleration Event (as defined in Section 1.2 below); or
(h) a sale, transfer or disposition which is made
after three (3) years following the date Unocal relinquishes or no
longer has a seat on the TBI Board.
Section 1.2 Acceleration Event. For the purposes of this
Agreement, "Acceleration Event" shall mean (i) the acquisition by any person or
group (within the contemplation of Rule 13d-1 of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of beneficial ownership or voting rights
with respect to more than 50% of the voting securities of TBI; (ii) the
consummation of any transaction that triggers the provisions of the Rights
Agreement by and between Xxx Xxxxx, Inc. and American Stock Transfer & Trust
Company of New York, dated March 5, 1991 (the "TBI Rights Plan"); (iii) the
removal and the replacement (at any annual or special meeting of stockholders
or otherwise) of a majority of the then current directors of TBI; (iv) the sale
or transfer of all or substantially all of the assets of TBI or (v) the
execution by TBI of an agreement which would, directly or indirectly, result
in, or the approval of the TBI Board or stockholders of, a transaction
referenced in subsections (i), (ii), (iii) or (iv) above.
Section 1.3 Undertaking to File Reports and Cooperate in Rule
144 Transactions. For as long as Unocal or any Unocal Subsidiary shall continue
to hold any TBI Common Stock, TBI shall file, on a timely basis, all annual,
quarterly and other reports required to be filed by it under Sections 13 and
15(d) of the Exchange Act, and the General Rules and Regulations promulgated by
the Commission thereunder, as amended from time to time during the term of this
Agreement. In the event of any proposed sale or transfer of TBI Common Stock by
Unocal or a Unocal Subsidiary, TBI shall cooperate with Unocal or such Unocal
Subsidiary so as to enable such sales to be made in accordance with applicable
laws, rules and regulations, the requirements of TBI's transfer agents, and the
reasonable requirements of the broker through which the sales are proposed to
be executed, and shall, upon request and subject to applicable law, furnish
unlegended certificates representing TBI Common Stock in such numbers and
denominations as Unocal or such Unocal Subsidiary shall reasonably require for
delivery pursuant to such sales.
Section 1.4 Applicability of Article I. The provisions in
Article I shall cease to be applicable at such time as Unocal has sold all of
the TBI Shares and TBI Common Stock acquired pursuant to Sections 4.1 or 4.2
hereof in accordance with or in a manner permitted under the provisions of this
Agreement.
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ARTICLE II
VOTING, STOCK LEGENDS
Section 2.1 Right to Vote Shares. As a stockholder of TBI,
Unocal will be free, notwithstanding any other provision in this Agreement, to
vote TBI Common Stock held by it in connection with any vote of the
stockholders of TBI provided that for so long as Unocal continues to own shares
of TBI Common Stock representing in excess of 10% of the issued and outstanding
shares of TBI Common Stock, Unocal shall vote its shares in favor of the
director nominees recommended by TBI management. This provision is not
intended, however, to absolve Unocal of any obligations it may have to the
other stockholders of TBI; provided that there should be no inference made from
this provision that obligations, of any kind or nature, are owing from Unocal
to any other stockholder of TBI.
Section 2.2 Legends. (a) To assist in effectuating the
provisions of this Agreement, Unocal hereby consents to the placement of the
following legend on all certificates representing ownership of TBI Common Stock
until such shares have been sold, transferred or disposed of in accordance with
the requirements of Article I hereof:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE PROVISIONS OF A STOCK OWNERSHIP AND REGISTRATION RIGHTS
AGREEMENT DATED JUNE 29, 1999 BETWEEN TBI AND UNOCAL AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE
THEREWITH. A COPY OF SAID AGREEMENT IS ON FILE AT THE OFFICE OF THE
SECRETARY OF TBI.
(b) TBI hereby agrees to remove the foregoing legend promptly upon the
request of Unocal in order to permit a sale or transfer permitted under this
Agreement.
ARTICLE III
BOARD REPRESENTATION
Section 3.1 Board Seat; Nomination. (a) TBI agrees that, as
of the Closing Date, TBI will increase the size of the TBI Board by one and
Unocal shall have the right to designate one person to fill the vacancy created
by such increase as soon as practicable after the Closing Date but no more than
30 days after the Closing Date. If the person designated to fill such vacancy
should die, become disabled, resign or be removed from serving as a director,
TBI agrees, subject to applicable law, to permit Unocal to designate a
successor as a nominee to fill the vacancy created by such death, disability,
resignation or removal.
(b) Unocal shall have a continuing right to designate a director
nominee for the TBI Board at each election of directors. The right of Unocal to
designate a member to the TBI Board
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shall cease at such time after the Closing Date as Unocal or a Permitted Unocal
Subsidiary as defined in Section 1.1(c)(ii)(f) is no longer a beneficial owner
(as defined in Rule 13d-3 of the General Rules and Regulations promulgated by
the Commission under the Exchange Act) of at least ten percent (10.0%) of the
TBI Common Stock outstanding at the time the determination is made. Unocal
hereby undertakes and agrees that not later than twenty (20) days following
written notice from TBI requesting such information to furnish to TBI for
inclusion in the proxy statement the name of the designee to serve as a member
of the TBI Board and such other information with respect to such designee as is
required to comply with the applicable requirements of Items 401 and 404(a) and
(c) of Regulation S-K with respect to such designee. If Unocal fails to timely
provide such information, Unocal will be deemed to have forfeited its right to
designate a director under this Article III, until the next succeeding election
of directors to the TBI Board pursuant to this Agreement. For so long as Unocal
or a Permitted Unocal Subsidiary continues to retain such 10% ownership, TBI
agrees to and shall include Unocal's designated director nominee in the slate
of directors recommended to the stockholders by the TBI Board in accordance
with this Article III and shall endorse and recommend such nominee to the
stockholders of TBI.
Section 3.2 Unocal Representative. Notwithstanding any
provision herein to the contrary, Unocal's representative on the TBI Board will
be free to take such actions as are consistent with discharging his or her
duties to TBI and its stockholders, in his or her capacity as a director of
TBI.
ARTICLE IV
ACQUISITION RIGHTS; PERCENTAGE RETENTION
Section 4.1 Acquisition Rights. Unocal shall not, during the
term of this Agreement, acquire any additional shares of TBI Common Stock other
than the TBI Shares, except: (i) for purchases approved by the majority of the
non-interested members of the TBI Board, (ii) purchases covered by the
percentage retention exceptions described in Section 4.2 below, (iii) for a
period of six months following the Closing Date, purchases on the open market,
from third parties or otherwise, so long as Unocal does not at the end of such
period or thereafter own, of record or beneficially, more than the Maximum
Percentage Ownership (as defined below) of the issued and outstanding shares of
TBI Common Stock and (iv) after the expiration of six months following the
Closing Date, purchases of additional shares of TBI Common Stock up to the
Maximum Percentage Ownership, if Unocal is advised in writing by its
independent public accountants that additional shares of TBI Common Stock are
required for Unocal to receive equity accounting treatment. To the extent
practicable, Unocal shall provide written notice to TBI prior to any
acquisition pursuant to this paragraph, and, in any event, Unocal shall provide
such notice within ten (10) days following such acquisition. For purposes
hereof, "Maximum Percentage Ownership" shall mean 19.5% less the percentage
interest represented by TBI Common Stock, if any, sold by Unocal. The
provisions of this Section 4.1 shall continue until the earlier of (i) such
time as Unocal has sold or disposed of all of the TBI Shares and TBI Common
Stock acquired pursuant to Sections 4.1 or 4.2 hereof or (ii) termination of
the Standstill set forth in Section 5.1(b).
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Section 4.2 Percentage Retention.
(a) In the event that TBI shall, after the Closing Date,
issue or sell or transfer additional shares of TBI Common Stock (including
treasury shares), Unocal would have the right to maintain its percentage
ownership of TBI Common Stock at the level it was immediately prior to the time
of each such issuance, sale or transfer through (i) acquiring shares of TBI
Common Stock from TBI at the price and on the same terms as the third party
purchaser (or if the issuance price is other than cash or the terms are such as
cannot be satisfied by Unocal then for cash at an agreed value which will not
exceed the average trading price for TBI Common Stock over the twenty (20)
trading days preceding the earlier of the execution of agreements to consummate
such third party transaction and public notice by TBI of such third party
transaction), Unocal's election to purchase such shares of TBI Common Stock
from TBI to be made by Unocal at any time following public notice of the
execution of a definitive agreement respecting the transaction but in any
event, within ten (10) business days following receipt of written notice from
TBI of its execution of a definitive agreement regarding the transaction or
(ii) the purchase of TBI Common Stock in the open market, provided such
acquisition is made within six (6) months of such issuance or sale. TBI shall
provide Unocal with written notice of the execution of such a definitive
agreement within 48 hours following the execution thereof.
(b) Notwithstanding subsection (a) above, following any
acquisition by a third party of shares of TBI Common Stock representing in
excess of 50% of the issued and outstanding shares of TBI Common Stock in a
transaction in which TBI survives as an ongoing entity, the right of Unocal to
acquire shares of TBI Common Stock directly from TBI pursuant to subsection
(a)(i) above shall lapse provided such transaction shall not restrict or impact
Unocal's right to acquire shares of TBI Common Stock from third parties or on
the open market as reflected in subsection (a)(ii) above.
ARTICLE V
STANDSTILL
Section 5.1 Standstill. (a) Except as provided in Section
5.1(d), Unocal will not, and will cause each of its Affiliates not to, singly
or as part of a "partnership, limited partnership, syndicate or other group"
(as those terms are used within the meaning of Section 13(d)(3) of the Exchange
Act, which meanings shall apply for all purposes of this Agreement), directly
or indirectly, through one or more intermediaries or otherwise:
(i) except as provided in Article IV, acquire, offer or
propose to acquire, or agree to acquire, by purchase or otherwise, any
securities entitled to, or that may be entitled to, vote generally in the
election of the TBI Board or any affiliate of TBI ("TBI Affiliate")
(collectively, "Voting Securities") or any direct or indirect rights or options
to acquire (through purchase, exchange, conversion or otherwise) any Voting
Securities;
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(ii) make, or in any way participate in, any "solicitation"
or "proxies" (as such terms are defined or used in Regulation 14A of the
Exchange Act) with respect to the Voting Securities (including by the execution
of action by written consent), become a "participant" in any "election contest"
(as such terms are defined or used in Rule 14a-11 of the Exchange Act) with
respect to TBI or any TBI Affiliate, seek to advise, encourage or influence any
person or entity with respect to the voting of any Voting Securities or demand
a copy of the stock ledger, list of stockholders, or other books and records of
TBI or any TBI Affiliate;
(iii) participate in or encourage the formation of any group
which owns or seeks or offers to acquire beneficial ownership of securities or
assets of TBI or any TBI Affiliates or rights to acquire such securities or
assets or which seeks or offers to affect control of TBI or any TBI Affiliate
or for the purpose of circumventing any provision of this Agreement; or
(iv) except as may be provided in Section 2.1 with respect to
voting on matters submitted to TBI stockholders for a vote, otherwise act,
alone or in concert with others (including by providing financing for another
party), to seek or offer to control or influence, in any manner, the
management, the TBI Board or policies of TBI or any TBI Affiliate.
(b) The standstill provisions in Section 5.1(a) shall remain in effect
until the earlier of (i) three (3) years after Unocal relinquishes or no longer
has its director's seat on the TBI Board or (ii) a Change of Control of TBI.
For the purposes hereof, "Change of Control" shall mean either (i) the
acquisition by any person or group (within the contemplation of Rule 13d-1 of
the Exchange Act) of beneficial ownership of more than 50% of the voting
securities of TBI; (ii) the consummation of any transaction that triggers the
provisions of the TBI Rights Plan in effect at the time of the consummation of
such transaction; (iii) the removal and the replacement at any annual or
special meeting of stockholders of a majority of the current directors of TBI;
or (iv) the sale or transfer of all or substantially all of the assets of TBI.
(c) The standstill provisions in Section 5.1 above shall supersede and
replace the standstill provisions contained in that certain Confidentiality
Agreement dated June 16, 1998 between Unocal and TBI pertaining to the receipt
by Unocal of certain information relating to TBI.
(d) Notwithstanding any other provisions in this Article V, as a
stockholder of TBI, and with respect to the TBI Shares or such additional
shares of TBI Common Stock that it may acquire in accordance with Article IV,
Unocal may freely sell, transfer or dispose of such shares as it desires, in
its sole discretion (subject only to the restrictions in Article I).
ARTICLE VI
REGISTRATION RIGHTS
Section 6.1 Demand Registrations. (a) At any time after
twenty-four (24) months following the Closing Date, Unocal by written notice to
TBI (a "Demand Notice") may require TBI
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to effect a registration (a "Demand Registration") of Registrable Securities
(as defined below) under the Securities Act for sale; provided, that (i) Unocal
may not require TBI to effect more than two (2) Demand Registrations, and (ii)
the aggregate number of shares of Registrable Securities required to be
registered in each Demand Registration shall be at least 2 million shares. Upon
receipt of any Demand Notice, TBI will give prompt written notice of the
request for registration to each holder of Registrable Securities, and TBI will
include in the Demand Registration all Registrable Securities with respect to
which TBI receives written requests for inclusion therein during the thirty
(30) days after notice is given. "Registrable Securities" means (i) the TBI
Shares, (ii) any other shares of TBI Common Stock which Unocal acquires as
permitted under this Agreement and (iii) any securities issued or issuable with
respect to any such common stock by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. The terms "register,"
"registered" and "registration" as used in this Agreement shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
(b) Registration Statement Form. Demand Registrations shall be on such
appropriate registration form of the Commission (i) as shall be selected by TBI
and shall be acceptable to Unocal and (ii) as shall permit the disposition of
such Registrable Securities in accordance with the intended method or methods
of disposition specified in Unocal's request for such registration.
(c) TBI may utilize form S-2 or S-3 (or any similar "short form")
under the Securities Act to effect any Demand Registration so long as the use
of such form is permitted under the Securities Act and the regulations
promulgated thereunder and the use of such a form will not (in the reasonable
judgment of the participating holders of Registrable Securities) adversely
affect the marketing or sale price of the shares proposed to be sold in the
offering.
(d) Effective Registration Statement. A registration requested
pursuant to Section 6.1(a) shall not be deemed to have been effected and will
not be considered one of the Demand Registrations which may be requested
pursuant to this Agreement if (i) a registration statement with respect thereto
does not become effective or if the request for the Demand Registration is
withdrawn at the request of TBI or at the request of Unocal provided if Unocal
makes the withdrawal request, Unocal pays the reasonable out-of-pocket expenses
incurred by TBI with respect to such withdrawn offering prior to effectiveness,
(ii) after it has become effective, it does not remain effective for a period
of at least 180 days (unless Registrable Securities registered thereunder have
been sold or disposed of prior to the expiration of such 180-day period) or
such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court
for any reason and has not thereafter become effective, (iii) the conditions to
closing specified in any underwriting agreement entered into in connection with
such registration are not satisfied or waived other than by reason of the
failure or refusal of Unocal to satisfy or perform a condition to such closing
or (iv) Unocal is not able to register at least 2 million shares. Except as set
forth above, TBI shall pay all Registration Expenses (as defined in Section 6.7
herein) in connection with any such registration initiated but not so effected.
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(e) Other Securities; Priority on Demand Registrations. Whenever TBI
shall effect a Demand Registration pursuant to Section 6.1(a) in connection
with an underwritten offering by Unocal, no securities other than Registrable
Securities shall be included among the securities covered by such registration
unless the managing underwriter of such offering shall have advised TBI and
Unocal in writing that the inclusion of such other securities would not have a
material adverse effect on such offering. In the event that the managing
underwriters of a requested Demand Registration advise TBI in writing that in
their opinion the number of securities proposed to be included in any such
registration exceeds the number of securities which can be sold in such
offering without having a material adverse impact on the offering, TBI shall
include in such registration only the number of Registrable Securities which in
the opinion of such underwriters can be sold without having a material adverse
effect on the offering. If the number of securities which can be sold in a
Demand Registration exceeds the number of shares of securities requested to be
sold, TBI shall include in such Demand Registration (i) first, all of
Registrable Securities requested to be included therein by Unocal, and (ii)
second, securities to be included by TBI, and (iii) third, other securities
requested to be included in such registration.
(f) Restrictions on Demand Registrations. TBI shall not be obligated
to effect any Demand Registration within four (4) months after the effective
date of a previous public offering of TBI Common Stock. In addition, TBI may
postpone (such postponement is referred to herein as a "Permitted
Interruption") for a reasonable period of time (not to exceed 90 days, which
may not thereafter be extended) the filing of a registration statement for a
Demand Registration if, at the time it receives a request for such registration
(i) TBI is conducting an offering of TBI Common Stock and is advised by its
investment banker that such offering would be affected adversely by the
registration so demanded and TBI furnishes an officer's certificate to that
effect or (ii) the TBI Board shall determine in good faith that such offering
will interfere with a pending or contemplated financing, merger, acquisition,
sale of assets, recapitalization or other similar corporate action of TBI and
TBI furnishes an officer's certificate to that effect. After such Permitted
Interruption, TBI shall effect such registration as promptly as practicable
without further request from Unocal unless such request has been withdrawn. TBI
shall not invoke Permitted Interruptions more than twice per twelve (12) month
period but in any event shall not exceed 150 days in the aggregate. In the
event that TBI invokes a Permitted Interruption hereunder and in the reasonable
discretion of the TBI Board of Directors the need for TBI to continue the
Permitted Interruption ceases for any reason, including, without limitation,
abandonment or completion of the transaction giving rise to such Permitted
Interruption, TBI shall promptly provide written notice to Unocal that such
Permitted Interruption is no longer applicable and provide Unocal the
opportunity to then request a Demand Registration.
(g) Selection of Underwriters. Unocal shall have the right to select
such investment banker(s) and manager(s) as shall be reasonably acceptable to
TBI to administer the offering of Registrable Securities for which a Demand
Registration is requested. Unocal and TBI shall negotiate the terms of the
underwriters' fees and expenses, the underwriting discount and commission and
the transfer taxes, provided, however, that TBI shall not be required to pay
any fees, expenses, or other costs attributable to the Demand Registration
except as stated herein or that are otherwise not usual and customary.
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(h) Acceleration Event. In the event of an occurrence or transaction
constituting an Acceleration Event, TBI shall, upon request of Unocal and
subject to compliance with applicable law and SEC rules and regulations,
proceed (without regard to or application of any Permitted Interruption) to
immediately register all of Unocal's remaining unregistered Registrable
Securities at or before such occurrence or the consummation of any such
transaction.
Section 6.2 Piggyback Registrations. (a) General. Whenever
TBI proposes to register any shares of TBI Common Stock under the Securities
Act (other than registrations solely for shares to be issued in connection with
any employee benefit plan on Form S-8 (or any successor form thereto) or a
merger, consolidation or other business combination registered on Form S-4 (or
any successor form thereto)) and the registration form to be used may be used
for the registration of Registrable Securities (a "Piggyback Registration"), at
any time after the Closing Date, TBI shall give prompt written notice (in any
event within 10 business days after its receipt of notice of any exercise of
other registration rights) to Unocal of its intention to effect such a
registration and shall use commercially reasonable efforts to include in such
registration all of Registrable Securities with respect to which TBI receives
from Unocal a written request for inclusion therein within 20 days after
Unocal's receipt of TBI's notice, which request shall specify the number of the
shares of Registrable Securities to be disposed of by Unocal. If TBI elects,
prior to effectiveness, not to proceed with a primary registration of TBI
Common Stock, it shall not be obligated to register any Registrable Securities,
unless such primary registration was initiated as provided in Section 6.1(a)
after TBI received a request for a Demand Registration.
(b) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of TBI and the managing
underwriter(s) of such offering advise TBI in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can reasonably be sold in such offering without having a material
adverse impact on the offering, then TBI shall include in such registration (i)
first, subject to Section 6.2(c) below, the securities that TBI proposes to
sell, (ii) second, Registrable Securities requested to be included therein by
Unocal and parties which as of the Closing Date had registration rights on a
pari passu basis with Unocal and (iii) third, other securities requested to be
included in such registration.
(c) Mandatory Inclusion of Registrable Securities. In the event that
the number of Registrable Securities requested to be included by Unocal in any
registration pursuant to the piggyback registration rights afforded herein is
reduced, then TBI will, to the extent requested by Unocal, reduce the number of
shares which TBI desires to offer so that Unocal can include in such offering
shares representing up to 20% of the entire offering.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of TBI's
securities other than Unocal and the managing underwriter(s) of such offering
advise TBI in writing that in their opinion the number of securities requested
to be included in such registration exceeds the number which can reasonably be
sold in such offering, then TBI shall include in such registration (i) first,
if such registration is being made on behalf of other stockholders of TBI
exercising demand registration rights, then the securities so
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requested to be included therein in accordance with such demand registration
rights, (ii) second, Registrable Securities requested to be included in such
registration by Unocal and parties which as of the Closing Date had
registration rights on a pari passu basis with Unocal and (iii) third, other
securities requested to be included in such registration. If the managing
underwriter of such offering subsequently advises TBI in writing that the
number of securities which can be sold exceeds the number of securities
included in the offering, TBI shall include in the registration such additional
securities that (i) first, Unocal had originally requested be included in the
registration and (ii) second, others had originally proposed to include in the
registration.
(e) Other Registrations. If (i) TBI has previously filed a
registration statement with respect to any of Registrable Securities pursuant
to Section 6.1(a) or 6.2(b) and (ii) such previous registration has not been
withdrawn or abandoned, TBI shall not file or cause to be effective any other
registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Form S-8 or S-4 or any successor form), whether on its own
behalf or at the request of any holder or holders of such securities, until a
period of at least ninety (90) days has elapsed from the effective date of such
previous registration.
(f) Piggyback Not A Demand Registration. Should Unocal's participation
in a registration be pursuant to a Piggyback Registration in connection with
(i) an underwritten primary registration on behalf of TBI as described in
Section 6.2(a), or (ii) an underwritten secondary registration on behalf of
holders of TBI's securities other than Unocal as described in Section 6.2(d),
then such participation by Unocal shall not constitute a Demand Registration
for purposes of determining the number of Demand Registrations Unocal is
entitled to pursuant to Section 6.1(a).
(g) Universal Shelf. TBI reserves the right to file and secure the
effectiveness under the Securities Act of a registration statement on Form S-3
covering undifferentiated debt and equity securities (the "Shelf Registration
Statement"). The undifferentiated securities may be converted into specific
types of debt or equity securities by describing the security in a supplement
to the prospectus set forth in the Shelf Registration Statement (a "Prospectus
Supplement"). In the event that TBI specifically considers proposing to offer
and sell TBI Common Stock pursuant to a Prospectus Supplement ("Offering"), it
shall give Unocal notice of such consideration. Such notice shall not, in any
circumstance, be delivered less than five (5) business days prior to delivery
of the Acceleration Notice (as defined below). TBI shall notify Unocal, in
writing, of its intention to file the Prospectus Supplement and shall specify
the number of shares of TBI Common Stock that it proposes to sell in the
Offering (the "Accelerated Notice"). Unocal may elect to include Registrable
Securities in the Offering by providing written notice to TBI within twenty
four hours after its receipt of the Accelerated Notice that it desires to
include Registrable Securities in the Offering, with such notice to specify the
number of shares of Registrable Securities to be included on behalf of Unocal.
Registrable Securities shall not be deemed to be registered under Securities
Act for purposes of this Agreement until a Prospectus Supplement expressly
referring to the offering and sale of TBI Common Stock for the account of
Unocal is filed with the Commission. In order to assure that sufficient
securities have been registered under the Shelf Registration Statement to
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accommodate the sale by Unocal of Registrable Securities from time to time
pursuant to one or more Prospectus Supplements, TBI shall reflect in the Shelf
Registration Statement that 20% of the securities registered thereunder have
been reserved for sale by Unocal if and only if (i) TBI elects to sell TBI
Common Stock pursuant to a Prospectus Supplement and (ii) Unocal timely elects
to include Registrable Securities for sale therein as required by this Section
6.2(g). To the extent that the express terms of this Section 6.2(g) are
inconsistent with the other provisions of Section 6.2, the terms of this
Section 6.2(g) shall prevail.
Section 6.3 Holdback Agreements. (a) General. Unocal agrees
not to effect any public sale or distribution of equity securities of TBI, or
any securities convertible into or exchangeable or exercisable for such
securities, including, without limitation, sales pursuant to Rule 144 (or any
similar rule then in effect), during the 10 days prior to and the 90 days
beginning on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration in which shares of Registrable Securities
are included (except as part of such underwritten registration) unless the
underwriters managing the registered public offering otherwise agree.
(b) Agreement by TBI. TBI agrees not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10 days prior to
and during the 90 days beginning on the effective date of any underwritten
Demand Registration or any underwritten Piggyback Registration in which shares
of Registrable Securities are included unless the underwriters managing the
registered public offering and Unocal otherwise agree.
(c) Registration Procedures. Whenever Unocal requests registration
pursuant to this Agreement, TBI shall use commercially reasonable efforts to
effect the registration and the sale of such shares of Registrable Securities
for which registration is requested in accordance with the intended method of
disposition thereof, and pursuant thereto TBI shall as expeditiously as
possible:
(i) prepare and file with the Commission a registration
statement with respect to such securities and use commercially reasonable
efforts to cause such registration statement to become effective (provided that
before filing a registration statement or prospectus or any amendments or
supplements thereto, TBI will furnish to Unocal and the counsel selected by
Unocal copies of all documents proposed to be filed, which documents will be
subject to the review of such counsel);
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for a period of not less than 180 days after such registration
statement is declared effective, provided that TBI shall have no obligation
pursuant to this Agreement to maintain the effectiveness of such registration
statement after the sale of the securities registered thereunder, and shall
comply with the provisions of the Securities Act with respect to the
disposition of all securities owned by Unocal that are covered by such
registration statement during such period in accordance with the intended
methods of disposition by Unocal;
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(iii) furnish to Unocal such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as Unocal may request in order to facilitate the
disposition of the shares owned by Unocal;
(iv) use commercially reasonable efforts to register or
qualify such shares of Registrable Securities under such other securities or
Blue Sky Laws of such jurisdictions as Unocal requests and do any and all other
commercially reasonable acts and things which may be necessary or advisable to
enable Unocal to consummate the disposition in such jurisdictions of
Registrable Securities (provided that TBI will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subclause (iv), (B) subject itself to taxation
in any such jurisdiction or (C) consent to general service of process in such
jurisdiction);
(v) cause all such Registrable Securities to be listed on
each securities exchange on which securities issued by TBI that are of the same
class as Registrable Securities are then listed;
(vi) provide a transfer agent and registrar for all such
Registrable Securities no later than the effective date of such registration
statement;
(vii) obtain a "cold comfort" letter from TBI's independent
public accountants in customary form, covering such matters of the type usually
and customarily covered by "cold comfort" letters delivered to underwriters,
and covering such other matters as Unocal may reasonably request; and obtain an
opinion of counsel for TBI in customary form, covering such matters of the type
usually and customarily covered in opinions of legal counsel delivered to
underwriters, and covering such other matters as Unocal may reasonably request;
(viii) if underwriters are engaged in connection with any
registration referred to in this Agreement, TBI shall provide usual and
customary indemnification, representations, covenants, opinions, and other
assurances to the underwriters in form and substance reasonably satisfactory to
such underwriter as consistent with current practice in the marketplace;
(ix) notify Unocal and the managing underwriters, if any,
promptly, and (if requested by any such person) confirm such advice in writing,
(A) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, and, with respect to a registration statement or any
post-effective amendment, when the same has become effective, (B) of any
request by the Commission for amendments or supplements to a registration
statement or related prospectus or for additional information, (C) of the
issuance by the Commission of any stop order suspending the effectiveness of a
registration statement or the initiation of any proceedings for that purpose,
(D) of the receipt by TBI of any notification with respect to the suspension of
the qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (E) of the happening of any event which requires the making of any
changes in a registration statement or related prospectus so that such
documents will not contain any
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untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, in light of the circumstances under which such statements are made,
and (F) of TBI's reasonable determination that a post-effective amendment to a
registration statement would be required;
(x) notify Unocal at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the occurrence
of any event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
Unocal, TBI shall prepare a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such shares such amended or
supplemented prospectus shall not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(xi) use commercially reasonable efforts to obtain as soon as
reasonably practicable the withdrawal of any order suspending the effectiveness
of a registration statement, or the lifting of any suspension of the
qualification of any of Registrable Securities for sale in any jurisdiction;
(xii) if requested by the managing underwriters or Unocal,
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter(s) and Unocal agree should be included
therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of
Registrable Securities being sold to such underwriters, the purchase price
being paid therefor by such underwriters and with respect to any other terms of
the underwritten (or best efforts underwritten) offering of Registrable
Securities to be sold in such offering; make all required filings of such
prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment; and supplement or make amendments to any registration statement if
requested by Unocal or any underwriter of such shares;
(xiii) furnish to Unocal and each managing underwriter,
without charge, such signed copies of the registration statement or statements
and any post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference) as Unocal or managing underwriter
may reasonably request;
(xiv) cooperate with Unocal and the managing underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates
representing shares to be sold and not bearing any restrictive legends unless
required by applicable law; and enable such shares to be in such denominations
and registered in such names as the managing underwriter(s) may request at
least two business days prior to any sale of shares to the underwriters;
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(xv) in the case of an underwritten offering, enter into such
usual and customary agreements (including underwriting agreements in usual and
customary form) and take all such other actions as Unocal or the
underwriter(s), if any, request and which TBI can reasonably perform in order
to expedite or facilitate the disposition of such Registrable Securities; and
(xvi) make available for inspection by Unocal, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate
documents and properties of TBI, and cause TBI's officers, directors, employees
and independent accountants to supply all information reasonably requested by
any such seller, underwriter, attorney, accountant or agent in connection with
such registration statement.
Section 6.4 Information to be Furnished by Unocal. In
connection with any registration of Registrable Securities hereunder, TBI may
require Unocal to furnish TBI with such information regarding Unocal and the
distribution of such shares as TBI may from time to time reasonably request in
writing in order to comply with the Securities Act. Unocal agrees to notify TBI
as promptly as practicable of any inaccuracy or change in information
previously furnished to TBI or of the occurrence of any event in either case as
a result of which any prospectus relating to such registration contains untrue
statements of a material fact regarding Unocal or the distribution of such
shares required to be stated therein or necessary to make the statement therein
not misleading in light of the circumstances under which such statements were
made, and to promptly furnish to TBI any additional information required to
correct and update any previously furnished information or required such that
such prospectus shall not contain, with respect to Unocal or the distribution
of such shares, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which such
statements are made.
Section 6.5 Suspension of Offering Pending Prospectus
Supplement or Amendment. Unocal agrees that, upon receipt of any notice from
TBI of the occurrence of any event of the kind described in Section
6.3(c)(ix)(B), (C), (D), (E) or (F) hereof, Unocal will forthwith discontinue
disposition of Registrable Securities covered by such registration statement or
prospectus until such holder's receipt of the copies of the supplemented or
amended prospectus relating to such registration statement or prospectus, or
until it is advised in writing by TBI that the use of the applicable 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 TBI, Unocal will deliver to TBI (at TBI's expense) all copies,
other than permanent file copies then in Unocal's possession, of the prospectus
covering Registrable Securities current at the time of receipt of such notice.
Section 6.6 Registration Expenses. (a) General. All expenses
incident to TBI's performance and execution of Demand Registrations or
Piggyback Registrations, and TBI's performance of, or compliance with, this
Agreement, including without limitation, all registration and filing fees, fees
and expenses of compliance with securities or Blue Sky Laws, expenses and fees
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for listing the securities on the appropriate securities exchanges, cost of
liability insurance, all internal expenses, the expense of any annual audit or
quarterly review, printing expenses, messenger and delivery expenses, fees and
disbursements of counsel for TBI and all independent certified public
accountants (including the expenses of any special audit and "cold comfort"
letters required by or incident to such performance), and usual and customary
fees and costs of underwriters (excluding gross spreads, discounts and
commissions and fees of underwriters, selling brokers, dealer managers or
similar securities industry professionals relating to the distribution of
Registrable Securities) and other persons retained by TBI (all such expenses
being herein called "Registration Expenses"), shall be borne by TBI.
(b) Reimbursement for Counsel Fees. In connection with each Demand
Registration, TBI shall also reimburse Unocal for its reasonable legal fees of
outside counsel up to $20,000.
(c) Payment of Expenses by Unocal. Unocal shall pay the underwriters'
fees and expenses, the underwriters' gross spreads, discount and commissions
and the commissions and fees, if any, payable in respect of selling brokers,
dealer managers or similar securities industry professionals, and transfer
taxes allocable to the registration of Unocal's securities so included in any
Demand or Piggyback Registration pursuant to this Agreement.
Section 6.7 Underwritten Offerings. (a) Underwriting
Agreement. In any offering by Unocal pursuant to a registration requested under
Sections 6.1(a) or 6.2(a), TBI shall enter into a standard form of underwriting
agreement which shall be reasonably satisfactory in form and substance to TBI
and Unocal and the underwriters and which shall contain representations,
warranties and agreements (including indemnification agreements to the effect
and consistent with that provided in Section 6.8 hereof) as are usually and
customarily included by an issuer in underwriting agreements with respect to
primary distributions. Unocal shall be a party to such underwriting agreement
and may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, TBI to and for the
benefit of such underwriters shall also be made to and for the benefit of
Unocal and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement be conditions precedent to
the obligations of Unocal.
(b) Condition to Participation and Qualifications to Obligations Under
Registration Covenants. The obligations of TBI to use commercially reasonable
efforts to cause Registrable Securities to be registered under the Securities
Act are subject to each of the conditions that Unocal may not participate in
any underwritten offering hereunder unless Unocal (a) agrees to sell
Registrable Securities on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
Section 6.8 Indemnification. (a) By TBI. In the event of any
registration of any shares of Registrable Securities under the Securities Act,
TBI will, and hereby does, indemnify and
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hold harmless, to the fullest extent permitted by law, Unocal, its directors
and officers, each other person who participates as an underwriter in the
offering or sale of such securities and each other person, if any, who controls
any such underwriter within the meaning of the Securities Act, against any and
all losses, claims, damages, liabilities and expenses, joint or several, (or
actions or proceedings, whether commenced or threatened, in respect thereof) to
which they or any of them may become subject under the Securities Act or any
other statute or common law, including any amount paid in settlement of any
litigation, commenced or threatened, and to reimburse them for any legal or
other expenses incurred by them in connection with investigating any claims and
defending any actions, insofar as any such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement relating to the sale of such securities or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under Blue Sky or other securities laws or
jurisdictions in which Registrable Securities are offered ("Blue Sky Filing"),
or the omission or alleged omission to state therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, if used
prior to the effective date of such registration statement (unless such
statement is corrected in the final prospectus and TBI has previously furnished
copies thereof to Unocal and the underwriters), or contained in the final
prospectus (as amended or supplemented if TBI shall have filed with the
Commission, and furnished to Unocal and the underwriters of such offering
copies thereof, prior to the written confirmation of any sale to the person
asserting liability, any amendment thereof or supplement thereto) if used
within the period during which TBI is required to keep the registration
statement to which such prospectus relates current, or the omission or alleged
omission to state therein (if so used) a material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the indemnification
agreement contained herein shall not (i) apply to such losses, claims, damages,
liabilities, expenses or actions arising out of, or based upon, any such untrue
statement or alleged untrue statement, or any such omission or alleged
omission, if such statement or omission was made in reliance upon and in
conformity with written information furnished to TBI by Unocal or such
underwriter specifically for use in connection with preparation of the
registration statement, any preliminary prospectus or final prospectus
contained in the registration statement, any such amendment or supplement
thereto or any Blue Sky Filing or (ii) inure to the benefit of any underwriter
or any person controlling such underwriter, to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the person
asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such seller
or any such director, officer or controlling person and shall survive the
transfer of such securities by such seller.
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(b) By Unocal. TBI may require, as a condition to including any TBI
Common Stock in any registration statement filed pursuant to Section 6.1 or
6.2, that TBI shall have received an undertaking satisfactory to it from
Unocal, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in Section 6.8(a)) TBI, each director of TBI, each officer
of TBI and each other person, if any, who controls TBI within the meaning of
the Securities Act, each other person who participates as an underwriter in the
offering or sale of such securities and each other person, if any, who controls
any such underwriter within the meaning of the Securities Act with respect to
any untrue statement or alleged untrue statement in, or omission or alleged
omission from, such registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, if such
statement or omission was made in reliance upon and in conformity with written
information furnished to TBI by Unocal relating to Unocal specifically for use
in the preparation of such registration statement, preliminary prospectus,
final prospectus, amendment or supplement. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of TBI
or any such director, officer or controlling person and shall survive the
transfer of such securities by such seller. In no event shall any indemnity
paid by Unocal to TBI pursuant to this Section 6.8(b), or otherwise, exceed the
proceeds received by Unocal in such offering.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Sections 6.8(a) or 6.8(b), such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligations under Section 6.8(a) or
6.8(b), as the case may be, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, the indemnifying party shall be entitled
to participate in and, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may
exist in respect of such claim, to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs
of investigation. In the event that the indemnifying party advises an
indemnified party that it will contest a claim for indemnification hereunder,
or fails, within 30 days of receipt of any indemnification notice to notify, in
writing, such person of its election to defend, settle or compromise, at its
sole cost and expense, any action, proceeding or claim (or discontinues its
defense at any time after it commences such defense), then the indemnified
party may, at its option, defend, settle or otherwise compromise or pay such
action or claim. In any event, unless and until the indemnifying party elects
in writing to assume and does so assume the defense of any such claim,
proceeding or action, the indemnified party's costs and expenses arising out of
the defense, settlement or compromise of any such action, claim or proceeding
shall be losses subject to indemnification hereunder. The indemnified party
shall cooperate fully with the indemnifying party
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in connection with any negotiation or defense of any such action or claim by
the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to such
action or claim. The indemnifying party shall keep the indemnified party fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense. If the indemnifying party does not assume such defense, the
indemnified party shall keep the indemnifying party apprised at all times as to
the status of the defense; provided, however, that the failure to keep the
indemnifying party so informed shall not affect the obligations of the
indemnifying party hereunder. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its written
consent; provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the consent of the indemnified party, 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 indemnified party of a release from
all liability in respect to such claim or litigation.
(d) Contribution. If the indemnification provided for in or pursuant
to Section 6.8(a) or 6.8(b) is due in accordance with the terms thereof, but is
held by a court to be unavailable or unenforceable in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified person as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses as well as any other relevant equitable
considerations. The relative fault of the indemnifying party on the one hand
and of the indemnified person on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party, by such party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement, or omission. In no event
shall the liability of Unocal be greater in amount than the amount of proceeds
received by Unocal upon such sale.
Section 6.9 Third Party Registration Rights. TBI will not
hereafter grant any registration rights to third parties which are prior to or
pari passu with the registration rights afforded Unocal hereunder, without
Unocal's prior written consent.
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ARTICLE VII
MISCELLANEOUS
Section 7.1 Injunctive Relief. Each party acknowledges and
agrees that the other party could be irreparably damaged in the event any of
the provisions of this Agreement were not performed by the party required to
perform the same in accordance with their specific terms or were otherwise
breached. Each party accordingly agrees that the other party shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement in any court of the United States or any state thereof having
jurisdiction, in addition to any remedy to which a party may be entitled at law
or equity.
Section 7.2 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void, or unenforceable, the remainder of the terms, provisions,
covenants and restrictions 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 which may be hereafter declared invalid, void or enforceable.
Section 7.3 Amendments. This Agreement contains the entire
understanding of the parties with respect to TBI Common Stock, and may be
amended only by an agreement in writing signed by the parties hereto.
Section 7.4 Descriptive Headings. Descriptive headings are
for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
Section 7.5 Counterparts. For the convenience of the parties,
any number of counterparts of this Agreement may be executed by one or more
parties hereto and each such executed counterpart shall be, and shall be deemed
to be, an original instrument.
Section 7.6 Notices. All notices, consents, requests,
instructions, approvals and other communications provided for herein and all
legal process in regard hereto shall be validly given, made or served, if in
writing and delivered personally, by facsimile transmission (except for legal
process) or sent by registered mail, postage prepaid, if to:
To Unocal:
Union Oil Company of California
00000 Xxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxx 00000
Fax No. (000) 000-0000
Attention: Director, Business Development
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with a copy to:
Union Oil Company of California
d.b.a. Spirit Energy 76
00000 Xxxxxxxxx Xxxxxxx
Xxxxx Xxxx, Xxxxx 00000
Fax No. (000) 000-0000
Attention: Vice President and General Counsel
To TBI:
Xxx Xxxxx, Inc.
000 00xx Xx., Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
Attention: General Counsel
or to such other address and facsimile numbers as any part hereto may, from
time to time, designate in a written notice given in a like manner. Notice
given by facsimile transmission shall be deemed delivered on the day the sender
receives facsimile transmission confirmation that such notice was received at
the facsimile number of the addressee. Notice given by mail as set out above
shall be deemed delivered three days after the date the same is postmarked.
Section 7.7 Law Applicable. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of Texas
(without regard to the principles of conflicts of law thereof).
Section 7.8 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by Unocal and TBI
and their respective successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers, each of whom is duly and validly
authorized and empowered, all as of the day and year first above written.
XXX XXXXX, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
UNION OIL COMPANY OF CALIFORNIA
By: /s/ XXXXXX X. XXXXX
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Attorney-In-Fact
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