EXHIBIT 10.2
Execution Copy
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
as of October 28, 1997, among CROSS TIMBERS OIL COMPANY, a Delaware corporation
(the "Company"), XXXXXX BROTHERS INC., XXXXXX XXXXXXX & CO. INCORPORATED, X.X.
XXXXXX SECURITIES INC. and NATIONSBANC XXXXXXXXXX SECURITIES, INC. (the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated October 21,
1997 among the Company and the Initial Purchasers (the "Purchase Agreement"),
which provides for the sale by the Company to the Initial Purchasers of an
aggregate of $175,000,000 principal amount of the Company's 8 3/4% Series A
Senior Subordinated Notes due 2009 (the "Debt Securities"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree, and all other
Holders (as defined below) of Registrable Securities (as defined below) from
time to time, by their acceptance thereof, shall be conclusively deemed to have
agreed, as follows:
Section 1. Definitions.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Agreement" shall have the meaning set forth in the preamble.
"Business Day" shall mean any day except a Saturday, Sunday or other day in
the City of New York, or in the city of the corporate trust office of the
Trustee, on which banks are authorized to close.
"Closing Date" shall mean the date on which the Closing Time (as defined in
the Purchase Agreement) occurs.
"Company" shall have the meaning set forth in the preamble and also
includes the Company's successors.
"Damages Payment Date" shall mean with respect to the Debt Securities, the
Interest Payment Date under the Indenture.
"Debt Securities" shall have the meaning set forth in the preamble.
"Definitive Securities" shall mean a Debt Security issued in certificated
form pursuant to the Indenture.
"Depositary" shall mean the Trustee, or any other exchange agent appointed
by the Company.
"Effectiveness Target Date" shall have the meaning set forth in Section
2(e) hereof.
"Exchange Offer" shall mean the exchange offer by the Company of Exchange
Securities for Registrable Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933 Act
effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Securities" shall mean 8 3/4% Series B Senior Subordinated Notes
due 2009 issued by the Company under the Indenture containing terms identical in
all material respects to the Debt Securities (except that (i) interest on the
Exchange Securities shall accrue from the last date on which interest was paid
or duly provided for on the Debt Securities or, if no such interest has been
paid, from October 28, 1997, (ii) the transfer restrictions on the Debt
Securities shall be eliminated and (iii) certain provisions relating to an
increase in the stated rate of interest on the Debt Securities shall be
eliminated), to be offered to Holders of Debt Securities in exchange for Debt
Securities pursuant to the Exchange Offer.
"Global Security Holder" shall mean the registered Holder of a Debt
Security issued in global form pursuant to the Indenture.
"Holders" shall mean each of the Initial Purchasers, for so long as it owns
any Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who shall at the time be owners of Registrable Securities
under the Indenture; provided, however, that the term Holder
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shall exclude any underwriter who purchased Registrable Securities for
distribution in an underwritten public offering pursuant to an effective
Registration Statement.
"Indenture" shall mean the Indenture relating to the Debt Securities dated
as of October 28, 1997 between the Company and The Bank of New York, as trustee,
as the same may be amended from time to time in accordance with the terms
thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble.
"Liquidated Damages" shall have the meaning set forth in Section 2(e)
hereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Registrable Securities; provided, however, that
whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities directly or
indirectly held by the Company shall be disregarded in determining whether such
consent or approval was given by the Holders of such required percentage or
amount; and provided, further, that whenever the consent or approval of Holders
of Registrable Securities is required hereunder with regard to matters related
to a registered underwritten or similar offering or with regard to matters
pertaining to a Registration Statement, Registrable Securities held by Holders
not participating in such registered underwritten or similar offering, or
Registrable Securities not registered pursuant to such Registration Statement
(or, at any time prior to the filing of a Subject Registration Statement and
after the determination to file such Subject Registration Statement is made,
Registrable Securities whose Holders have not requested that such Registrable
Securities be included in such Subject Registration Statement), as the case may
be, shall be disregarded in determining whether such consent or approval was
given by the Holders of such required percentage or amount.
"Xxxxxx Brothers" shall mean Xxxxxx Brothers Inc., on behalf of the Initial
Purchasers.
"Person" shall mean an individual, partnership, corporation, trust,
unincorporated organization, limited liability company, joint stock company,
joint venture, charitable foundation or other entity, or a government or any
agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Subject Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated or deemed to be
incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
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"Purchaser Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b)(iii) of this
Agreement with respect to offers and sales of Registrable Securities held by any
or all of the Initial Purchasers (except Registrable Securities which the
Initial Purchasers have elected not to include in such Purchaser Shelf
Registration Statement or the Initial Purchasers of which have not complied with
their obligations under the penultimate paragraph of Section 3 hereof or under
the penultimate sentence of Section 2(b) hereof) after completion of the
Exchange Offer on an appropriate form under Rule 415 under the 1933 Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated or deemed to be incorporated by reference therein.
"Registrable Securities" shall mean the Debt Securities; provided, however,
that any Debt Securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Debt Securities shall have been
declared effective under the 1933 Act and such Debt Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Debt Securities
shall have been sold to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the 1933 Act, (iii) such Debt
Securities shall have become eligible for resale pursuant to Rule 144(k) under
the 1933 Act, (iv) such Debt Securities shall have ceased to be outstanding or
(v) such Debt Securities shall have been exchanged for Exchange Securities upon
consummation of the Exchange Offer.
"Registration Default" shall have the meaning set forth in Section 2(e)
hereof.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. ("NASD") registration and filing fees, (ii) all fees and expenses incurred
in connection with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of one firm of legal counsel for any
underwriters and Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities), (iii) all expenses of printing
and distributing any Registration Statement, any Prospectus and any amendments
or supplements thereto, (iv) all rating agency fees, (v) the fees and
disbursements of counsel(s) for the Company and of the independent public
accountants of the Company, including the expenses of "cold comfort" letters
required by this Agreement, (vi) the fees and expenses of the Trustee, and any
escrow agent or custodian, (vii) all fees and expenses incurred in connection
with listing the Debt Securities or the Exchange Securities, as the case may be,
on any securities exchange or on any securities quotation system and (viii) the
reasonable fees and expenses of any special experts retained by the Company in
connection with any Registration Statement, but excluding fees of counsel to the
underwriters or the Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.
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"Registration Statement" shall mean any registration statement of the
Company which covers any of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement, and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated or deemed to be incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to Section
2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2(b)(i) or (ii) of this
Agreement which covers all of the Registrable Securities (except Registrable
Securities which the Holders have elected not to include in such Shelf
Registration Statement or the Holders of which have not complied with their
obligations under the penultimate paragraph of Section 3 hereof or under the
penultimate sentence of Section 2(b) hereof) on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and
all amendments and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated or deemed to be incorporated
by reference therein.
"Subject Registration Statement" shall mean a Shelf Registration Statement
or a Purchaser Shelf Registration Statement or both (as the context requires).
"Trustee" shall mean the trustee with respect to the Debt Securities under
the Indenture.
All references herein to information which is "included" or "contained" in
a Registration Statement or Prospectus, and all references of like import, shall
include the information (including financial statements) incorporated or deemed
to be incorporated by reference therein, and all references herein to amendments
or supplements to a Registration Statement or Prospectus shall include any
documents filed by the Company under the 1934 Act which are deemed to be
incorporated by reference therein.
Section 2. Registration Under the 1933 Act.
(a) Exchange Offer Registration. To the extent not prohibited by law
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(including, without limitation, any applicable interpretation of the staff of
the SEC), the Company shall use its reasonable best efforts (i) to file within
60 days after the Closing Date an Exchange Offer Registration Statement covering
the offer by the Company to the Holders to exchange all of the Registrable
Securities (except Registrable Securities held by an Initial Purchaser and
acquired directly from the Company if such Initial Purchaser is not permitted,
in the reasonable opinion of counsel to the Initial Purchasers, pursuant to
applicable law or SEC interpretation, to participate in the Exchange Offer) for
Exchange Securities, (ii) to cause such Exchange Offer Registration
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Statement to be declared effective by the SEC at the earliest practicable time,
but in no event later than 120 days after the Closing Date, and (iii) to
consummate the Exchange Offer on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 30 Business Days thereafter. The Exchange Securities will be issued
under the Indenture. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder (other than Participating
Broker-Dealers (as defined in Section 3(f) hereof) and broker-dealers who
purchased Debt Securities directly from the Company to resell pursuant to Rule
144A or any other available exemption under the 0000 Xxx) eligible and electing
to exchange Registrable Securities for Exchange Securities (assuming that such
Holder is not an affiliate of the Company, acquires the Exchange Securities in
the ordinary course of such Holder's business and has no arrangements or
understandings with any person to participate in the distribution (within the
meaning of the 0000 Xxx) of Exchange Securities) to trade or sell such Exchange
Securities from and after their receipt without any limitations or restrictions
under the 1933 Act and without material restrictions under the securities laws
of a substantial proportion of the several states of the United States.
In connection with the Exchange Offer, the Company shall:
(A) commence the Exchange Offer and use its reasonable best
efforts to issue on or prior to 30 Business Days after the date on
which the Exchange Offer Registration Statement is declared effective
by the SEC, Exchange Securities in exchange for all Registrable
Securities tendered prior thereto in the Exchange Offer;
(B) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(C) keep the Exchange Offer open for not less than 30 days
after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(D) use the services of the Depositary for the Exchange Offer;
(E) permit Holders to withdraw tendered Registrable Securities
at any time prior to the close of business, New York City time, on the
last business day on which the Exchange Offer shall remain open, by
sending to the institution specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Securities delivered for
exchange and a statement that such Holder is withdrawing his election
to have such Debt Securities exchanged; and
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(F) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(x) accept for exchange Registrable Securities duly
tendered and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration Statement
and the letter of transmittal which is an exhibit thereto;
(y) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange by
the Company; and
(z) cause the Trustee promptly to authenticate and deliver
Exchange Securities to each Holder of Registrable Securities equal in
amount to the Registrable Securities of such Holder so accepted for
exchange.
Interest on each Exchange Security will accrue from the last date on which
interest was paid or duly provided for on the Registrable Securities surrendered
in exchange therefor or, if no interest has been paid on the Registrable
Securities, from October 28, 1997. The Exchange Offer shall not be subject to
any conditions, other than (1) that the Exchange Offer, or the making of any
exchange by a Holder, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (2) that no action or proceeding shall
have been instituted or threatened in any court or by or before any governmental
agency or body with respect to the Exchange Offer, (3) that there shall not have
been adopted or enacted any law, statute, rule or regulation prohibiting or
limiting the Exchange Offer, (4) that there shall not have been declared by
United States federal or Texas or New York state authorities a banking
moratorium, (5) that trading on the New York Stock Exchange or generally in the
United States over-the-counter market shall not have been suspended by order of
the SEC or any other governmental authority and (6) such other conditions as may
be reasonably acceptable to Xxxxxx Brothers which, in the Company's judgment,
would reasonably be expected to impair the ability of the Company to proceed
with the Exchange Offer. In addition, each Holder of Registrable Securities
(other than Participating Broker-Dealers) who wishes to exchange such
Registrable Securities for Exchange Securities in the Exchange Offer will be
required to represent that (I) it is not an affiliate of the Company, (II) any
Exchange Securities to be received by it were acquired in the ordinary course of
business and (III) it is not engaged in, and does not intend to engage in, and
has no arrangement or understanding with any person to participate in, the
distribution (within the meaning of the 0000 Xxx) of the Exchange Securities.
Each Participating Broker-Dealer shall be required to make such representations
as, in the reasonable judgment of the Company, may be necessary under applicable
SEC rules, regulations or interpretations or customary in connection with
similar exchange offers. Each Holder (including Participating Broker-Dealers)
shall be required to make such other representations as may be reasonably
necessary under applicable SEC rules, regulations or interpretations to render
the use of Form S-4 or another appropriate form under the
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1933 Act available and will be required to agree to comply with their agreements
and covenants set forth in this Agreement. The Exchange Offer shall be subject
to the further condition that no stop order, injunction or similar order shall
have been issued or obtained by the SEC or any state securities authority
suspending the effectiveness of the Exchange Offer Registration Statement and no
proceedings shall have been initiated or, to the knowledge of the Company,
threatened for that purpose. To the extent permitted by law, the Company shall,
upon request of Xxxxxx Brothers, inform the Initial Purchasers of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right to, and, if requested by the Company, shall,
contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
Prior to effectiveness of the Exchange Offer Registration Statement, the
Company shall, if requested by the staff of the SEC, provide a supplemental
letter to the SEC (aa) stating that the Company is registering the Exchange
Offer in reliance on the position of the SEC enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988) and Xxxxxx Xxxxxxx and Co., Inc.
(available June 5, 1991) and (bb) including a representation that the Company
has not entered into any arrangement or understanding with any Person to
distribute the Exchange Securities and that, to the best of the Company's
information and belief, each Holder participating in the Exchange Offer is
acquiring the Exchange Securities in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the distribution
of the Exchange Securities received in the Exchange Offer.
If in the reasonable opinion of counsel to the Company there is a question
as to whether the Exchange Offer is permitted by applicable law, the Company
hereby agrees to seek a no-action letter or other favorable decision from the
SEC allowing the Company to consummate the Exchange Offer. The Company hereby
agrees to pursue the issuance of such a decision to the SEC staff level, but
shall not be required to take action to effect a change of stated or recognized
SEC policy. The Company hereby agrees, however, to (xx) participate in
telephonic conferences with the SEC and the staff of the SEC, (yy) deliver to
the staff of the SEC an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that the
Exchange Offer should be permitted and (zzz) diligently pursue a resolution
(which need not be favorable) by the staff of the SEC of such submission.
(b) Shelf Registration. If (i) because of any change in law or
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applicable interpretations thereof by the staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
(ii) any Holder of Registrable Securities notifies the Company prior to the 20th
day following consummation of the Exchange Offer that (A) it is prohibited by
law or Commission policy from participating in the Exchange Offer or (B) that it
may not resell the Exchange Securities acquired by it in the Exchange Offer to
the public without delivering a prospectus and the prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales or (C) that it is a broker-dealer and owns Debt Securities acquired
directly from the Company or an affiliate of the Company, (iii) for any other
reason the Exchange Offer Registration Statement is not declared effective
within 120 days after the
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Closing Date or the Exchange Offer is not consummated within 30 Business Days
from the date after the Exchange Offer Registration Statement becomes effective,
or (iv) upon the request of Xxxxxx Brothers (but only with respect to any
Registrable Securities which the Initial Purchasers acquired directly from the
Company) following the consummation of the Exchange Offer if any of the Initial
Purchasers shall hold Registrable Securities which such Initial Purchaser
acquired directly from the Company and if such Initial Purchaser is not
permitted, in the reasonable opinion of counsel to the Initial Purchasers,
pursuant to applicable law or applicable interpretation of the staff of the SEC
to participate in the Exchange Offer, then the Company shall, at its cost:
(A) in the event clause (i), (ii) or (iii) is applicable, as
promptly as practicable (but in no event (x) more than 30 days from
the date on which the Company determined that it is not permitted to
effect the Exchange Offer as contemplated by Section 2(a) hereof in
the case of clause (i) or (y) on the 150th day after the Closing Date
in the case of clause (iii)), file with the SEC a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities
(other than Registrable Securities owned by Holders who have elected
not to include such Registrable Securities in such Shelf Registration
Statement or who have not complied with their obligations under the
penultimate paragraph of Section 3 hereof or under the penultimate
sentence of this Section 2(b)) by the Holders from time to time in
accordance with the methods of distribution elected by the Majority
Holders of such Registrable Securities and set forth in such Shelf
Registration Statement, and use its reasonable best efforts to cause
such Shelf Registration Statement to be declared effective by the SEC
on or prior to 90 days after the obligation to file such Shelf
Registration Statement arises hereunder. In the event that the Company
is required to file a Purchaser Shelf Registration Statement upon the
request of Xxxxxx Brothers pursuant to clause (iv) above, the Company
shall use its reasonable best efforts (unless clause (i) or (iii)
above is applicable) to file and have declared effective by the SEC an
Exchange Offer Registration Statement pursuant to Section 2(a) with
respect to all Registrable Securities (other than Registrable
Securities acquired directly from the Company and held by the Initial
Purchasers) and use its reasonable best efforts to file, promptly
after any such request from Xxxxxx Brothers, and have declared
effective, a Purchaser Shelf Registration Statement (which may be a
combined Registration Statement with the Exchange Offer Registration
Statement or, if clause (i) or (iii) above is applicable, a combined
Registration Statement with the Shelf Registration Statement);
(B) use its reasonable best efforts to keep the relevant
Subject Registration Statement continuously effective in order to
permit the Prospectus forming part thereof to be usable by Holders for
a period of two years from the date a Shelf Registration Statement is
declared effective by the SEC (or, in the case of a Purchaser Shelf
Registration Statement, one year from the date a Purchaser Shelf
Registration Statement is declared effective) or in each case such
shorter period which will terminate when all of the Registrable
Securities covered by the relevant
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Subject Registration Statement have been sold pursuant to such Subject
Registration Statement or otherwise are no longer Registrable
Securities; and
(C) notwithstanding any other provisions hereof, use its
reasonable best efforts to ensure that (x) any Subject Registration
Statement and any amendment thereto and any Prospectus forming part
thereof and any supplement thereto complies in all material respects
with the 1933 Act and the rules and regulations thereunder, (y) any
Subject Registration Statement and any amendment thereto 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 the statements therein not misleading and (z) any
Prospectus forming part of any Subject Registration Statement, and any
supplement to such Prospectus (as amended or supplemented from time to
time), does not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements, in
light of the circumstances under which they were made, not misleading.
To the extent permitted by law, the Company further agrees, if necessary,
to supplement or amend the Shelf Registration Statement (if reasonably requested
by one firm of legal counsel selected by the Majority Holders) or the Purchaser
Shelf Registration Statement (if reasonably requested by Xxxxxx Brothers), as
the case may be, with respect to information relating to the Holders or the
Initial Purchasers, respectively, and otherwise as required by Section 3(b)
below, to use its reasonable best efforts to cause any such amendment to become
effective and such Subject Registration Statement to become usable as soon as
thereafter practicable and to furnish to the Holders of Registrable Securities
registered thereby or the relevant Initial Purchasers, as the case may be,
copies of any such supplement or amendment promptly after its being used or
filed with the SEC. The Company may require, as a condition to including the
Registrable Securities of any Holder in any Subject Registration Statement, that
such Holder shall have furnished to the Company a written agreement to the
effect that such Holder agrees to comply with and be bound by the provisions of
this Agreement. For further clarity, the Company shall have no obligation to
keep the Shelf Registration Statement effective after consummation of the
Exchange Offer, and the Company's obligations to use its reasonable best efforts
to file a Shelf Registration Statement and to keep such Shelf Registration
Statement effective shall immediately terminate upon effectiveness of the
Exchange Offer Registration Statement (regardless of when such effectiveness
shall occur).
(c) Expenses. The Company (i) shall pay all Registration Expenses in
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connection with the registration pursuant to Section 2(a) or 2(b) and (ii) in
connection with the Exchange Offer Registration Statement and the Shelf
Registration Statement, shall reimburse the Holders of Registrable Securities
being tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable (or to
the extent such fees and disbursements are paid to such counsel by the Initial
Purchasers, the Initial Purchasers), for the reasonable fees and disbursements
of not more than one counsel, to be chosen by the Holders of a majority in
principal
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amount of the Registrable Securities for whose benefit such Registration
Statement is being prepared. Each Holder (including each Initial Purchaser)
shall pay all expenses of its counsel other than as set forth in the preceding
sentence, underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to any Subject Registration Statement or the exchange of its
Registrable Securities pursuant to any Exchange Offer Registration Statement.
Notwithstanding anything in this Agreement to the contrary, the Company shall
not be required to pay the fees and disbursements of legal counsel for any
Holders (including Initial Purchasers) except (A) as provided in clause (ii) of
the first sentence of this paragraph, (B) to the extent such fees and
disbursements constitute Registration Expenses which the Company is required to
pay pursuant to the other provisions of this Agreement and (C) to the extent
required by Section 5 hereof.
(d) Effective Registration Statement. (i) The Company will be deemed
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not to have used its reasonable best efforts to cause the Exchange Offer
Registration Statement or any Subject Registration Statement, as the case may
be, to become, or to remain, effective during the requisite period if the
Company voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Registrable
Securities covered thereby not being able to exchange or offer and sell such
Registrable Securities during that period unless such action is, in the
reasonable judgment of the Company, required by applicable law (including,
without limitation, any interpretation of the SEC).
(ii) An Exchange Offer Registration Statement pursuant to Section
2(a) hereof or a Subject Registration Statement pursuant to Section 2(b) hereof
will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to such Subject
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Subject Registration Statement will be deemed not to have been effective during
the period of such interference, until the offering of Registrable Securities
pursuant to such Subject Registration Statement may legally resume.
(e) Liquidated Damages. If (i) any Registration Statement required by
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this Agreement is not filed with the SEC on or prior to the date specified for
such filing in this Agreement, (ii) any such Registration Statement has not been
declared effective by the SEC on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been consummated within 30 Business Days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement is first declared effective by the SEC or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective immediately; provided that such Registration Statement shall not cease
to be effective or useable in connection with resales of Registrable Securities
for more than 30 days in any calendar year (each such event referred to in
clauses (i) through (iv), a "Registration Default"), then the Company shall pay
liquidated damages ("Liquidated
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Damages") to each Holder of Registrable Securities with respect to the first 90-
day period immediately following the occurrence of such Registration Default, in
an amount equal to $.05 per week per $1,000 principal amount of Registrable
Securities held by such Holder for each week or portion thereof that the
Registration Default continues. The amount of the Liquidated Damages shall
increase by an additional $.05 per week per $1,000 in principal amount of
Registrable Securities with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $.50 per week per $1,000 principal amount of Registrable Securities;
provided that the Company shall in no event be required to pay Liquidated
Damages for more than one Registration Default at any given time; and provided
further that if the Exchange Offer Registration Statement is not declared
effective by the SEC on or prior to the 120th day following the Closing Date,
then Debt Securities owned by Persons who do not comply in all material respects
with their obligations under the penultimate paragraph of Section 3 will not be
entitled to Liquidated Damages. Notwithstanding anything to the contrary set
forth herein, (1) upon filing of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of (i)
above, (2) upon the effectiveness of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of (ii)
above, (3) upon consummation of the Exchange Offer, in the case of (iii) above,
or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable in the case of (iv) above, the
Liquidated Damages payable with respect to the Registrable Securities as a
result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued Liquidated Damages shall be paid to the Global Securities
Holders by wire transfer of immediately available funds or by federal funds
check and to Holders of Definitive Securities on each Damages Payment Date by
wire transfer to the accounts specified by them or by mailing checks to their
registered addresses if no such accounts have been specified. All obligations
of the Company set forth in the preceding paragraph that are outstanding with
respect to any Registrable Securities at the time such security ceases to be a
Registrable Security shall survive until such time as all such obligations with
respect to such security shall have been satisfied in full.
(f) Specific Enforcement. Without limiting the remedies available to
--------------------
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder may, to the
extent permitted by law, obtain such relief as may be required to specifically
enforce the Company's obligations under Section 2(a) and Section 2(b) hereof.
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Section 3. Registration Procedures.
In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Sections 2(a) and 2(b) hereof, but only so
long as the Company shall have an obligation under this Agreement to keep a
Registration Statement effective, the Company shall:
(a) use its reasonable best efforts to prepare and file with the SEC a
Registration Statement, within the relevant time period specified in Section 2,
on the appropriate form under the 1933 Act, which form (i) shall be selected by
the Company, (ii) shall, in the case of a Shelf Registration, be available for
the sale of the Registrable Securities by the selling Holders thereof and (iii)
shall comply as to form in all material respects with the requirements of the
applicable form and include or incorporate by reference all financial statements
required by the SEC to be filed therewith, and use its reasonable best efforts
to cause such Registration Statement to become effective and use its reasonable
best efforts to cause such Registration Statement to remain effective in
accordance with Section 2 hereof;
(b) to the extent permitted by law, use its reasonable best efforts to
(i) prepare and file with the SEC such amendments and post-effective amendments
to each Registration Statement as may be necessary under applicable law to keep
such Registration Statement effective for the applicable period, (ii) cause each
Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed (if required) pursuant to Rule 424 under the 1933 Act,
and (iii) comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by each Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least ten business days prior to filing, that the
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable Securities
will be made in accordance with the method elected by the Majority Holders; and
(ii) furnish to each Holder of Registrable Securities registered under the Shelf
Registration Statement, to a single firm of legal counsel for the Holders
(including the Initial Purchasers) and to the managing underwriters of an
underwritten offering of Registrable Securities, if any, and their counsel,
without charge, as many copies of each Prospectus, including each preliminary
prospectus, and any amendment or supplement thereto and documents incorporated
by reference therein as such Holder, counsel or underwriters may reasonably
request and, if the Holder so requests, all exhibits thereto (including those
incorporated by reference) in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) subject to Section 3(k)
hereof and the last paragraph of this Section 3, hereby consent to the use of
the Prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto but only during the period of time that the Company is
required to keep the Shelf Registration Statement effective pursuant to this
Agreement;
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(d) use its reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue sky" laws
of such jurisdictions in the United States as the Majority Holders of
Registrable Securities covered by a Registration Statement and the managing
underwriter of an underwritten offering of Registrable Securities shall
reasonably request prior to the time the applicable Registration Statement is
declared effective by the SEC, to cooperate with the Holders in connection with
any filings required to be made with the NASD, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition of such Registrable Securities in the jurisdiction of
such Holder pursuant to such Registration Statement; provided, however, that the
Company shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d) or (ii) take any action that would
subject it to general service of process or taxation in any such jurisdiction if
it is not then so subject;
(e) in the case of a Subject Registration Statement, promptly notify a
single firm of legal counsel for the Holders of Registrable Securities
registered thereby (including any Initial Purchasers) and Xxxxxx Brothers and,
if requested by such counsel or Xxxxxx Brothers, promptly confirm such advice in
writing (by notice to such counsel or to Xxxxxx Brothers) (i) when such
Registration Statement has become effective and when any post-effective
amendments thereto become effective, (ii) of any request by the SEC or any state
securities authority for post-effective amendments and supplements to such
Registration Statement and the related Prospectus or for additional information
after such Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of such
Registration Statement and the closing of any sale of Registrable Securities
covered thereby pursuant to an underwriting agreement to which the Company is a
party, the representations and warranties of the Company contained in such
underwriting agreement cease to be true and correct in all material respects,
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities covered by such
Registration Statement for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (vi) upon the Company
becoming aware thereof, of the happening of any event or the discovery of any
facts during the period such Registration Statement is effective which (A) makes
any statement made in such Registration Statement or the related Prospectus
untrue in any material respect or (B) causes such Registration Statement or the
related Prospectus to omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading;
(f) (i) in the case of the Exchange Offer, (A) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section covering
the use of the Prospectus included in the Exchange Offer Registration Statement
by Participating Broker-Dealers (as defined below) who have exchanged their
Registrable Securities for Exchange Securities for the resale of such Exchange
Securities, (B) furnish to each Participating Broker-Dealer who notifies the
Company in writing that it desires to participate in the Exchange Offer, without
charge, as many copies of each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary
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prospectus, and any amendment or supplement thereto, as such broker-dealer may
reasonably request, (C) include in the Exchange Offer Registration Statement a
statement that any broker-dealer who holds Registrable Securities acquired for
its own account as a result of market-making activities or other trading
activities (a "Participating Broker-Dealer"), and who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer, may be a
statutory underwriter and must deliver a prospectus meeting the requirements of
the 1933 Act in connection with any resale of such Exchange Securities, (D)
subject to Section 3(k) hereof and the last paragraph of this Section 3, hereby
consent to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto by any
Participating Broker-Dealer in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement
thereto for a period ending 180 days following consummation of the Exchange
Offer or, if earlier, when all Exchange Securities received by such
Participating Broker-Dealer in exchange for Registrable Securities acquired for
their own account as a result of market-making or other trading activities have
been disposed of by such Participating Broker-Dealer, and (E) include in the
letter of transmittal or similar documentation to be executed by an exchange
offeree in order to participate in the Exchange Offer a provision substantially
in the following form (or such similar provision as is reasonably acceptable to
counsel for the Initial Purchasers and as, in the reasonable opinion of the
Company, may at the time be required by applicable law or SEC interpretation):
"the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Securities. If the undersigned is a broker-
dealer that will receive Exchange Securities for its own account in
exchange for Registrable Securities, it represents that the
Registrable Securities to be exchanged for Exchange Securities were
acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale
of such Exchange Securities pursuant to the Exchange Offer; however,
by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the
meaning of the 1933 Act"; and
(ii) to the extent any Participating Broker-Dealer participates
in the Exchange Offer, the Company shall use its reasonable best efforts to
cause to be delivered at the request of an entity representing the
Participating Broker-Dealers (which entity shall be Xxxxxx Brothers or
another Initial Purchaser) (A) a "cold comfort" letter addressed to the
Participating Broker-Dealers from the Company's independent certified
public accountants with respect to the Prospectus in the Exchange Offer
Registration Statement in the form existing on the last date for which
exchanges are accepted pursuant to the Exchange Offer and (B) an opinion of
counsel to the Company addressed to the Participating Broker-Dealers in
customary form relating to the Exchange Securities; and
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(iii) to the extent any Participating Broker-Dealer participates
in the Exchange Offer and notifies the Company or causes the Company to be
notified in writing that it is a Participating Broker-Dealer, the Company
shall use its reasonable best efforts to maintain the effectiveness of the
Exchange Offer Registration Statement for a period of 180 days following
the last date on which exchanges are accepted pursuant to the Exchange
Offer, or, if earlier, when all Exchange Securities received by
Participating Broker-Dealers in exchange for Registrable Securities
acquired for their own account as a result of market-making or other
trading activities have been disposed of by such Participating Broker-
Dealers; and
(iv) not be required, however, to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as would
otherwise be contemplated by Section 3(b) hereof, or take any other action
as a result of this Section 3(f), at any time after 180 days after the last
date for which exchanges are accepted pursuant to the Exchange Offer (or
such earlier date referred to in Paragraph (C) above), and Participating
Broker-Dealers shall not be authorized by the Company to, and shall not,
deliver such Prospectus after such period in connection with resales
contemplated by this Section 3 or otherwise;
it being understood that, notwithstanding anything in this Agreement to the
contrary, the Company shall not be required to comply with any provision of this
Section 3(f) or any other provision of this Agreement relating to the
distribution of Exchange Securities by Participating Broker-Dealers, to the
extent that the Company reasonably concludes (with the consent of Xxxxxx
Brothers, not to be unreasonably withheld) that compliance with such provision
is no longer required by applicable law or interpretation of the staff of the
SEC;
(g) in the case of an Exchange Offer, furnish to one firm of legal
counsel for the Initial Purchasers and (ii) in the case of a Shelf Registration,
furnish to one firm of legal counsel for the Holders of Registrable Securities
covered thereby copies of any request received by or on behalf of the Company,
from the SEC or any state securities authority for amendments or supplements to
the relevant Registration Statement and Prospectus or for additional
information;
(h) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as practicable
and provide prompt notice to one firm of legal counsel for the Holders of the
withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities registered thereby, without charge, at least one
conformed copy of each Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
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(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legend (except any customary legend borne by securities
held through The Depository Trust Company or any similar depository); and cause
such Registrable Securities to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling Holders
or the underwriters, if any, may reasonably request at least two business days
prior to the closing of any sale of Registrable Securities;
(k) in the case of a Shelf Registration, upon the Company becoming
aware of the occurrence of any event or the discovery of any facts, each as
contemplated by Section 3(e)(vi) hereof, use its reasonable best efforts to
prepare a supplement or post-effective amendment to the relevant Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, such Prospectus will not
contain at the time of such delivery any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. The Company
agrees to notify each Holder of Registrable Securities registered under the
relevant Subject Registration Statement to suspend use of the Prospectus as
promptly as practicable after the Company becomes aware of the occurrence of
such an event, and each Holder of Registrable Securities registered under the
relevant Subject Registration Statement hereby agrees to suspend use of the
Prospectus after receipt of such notice until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission or has
advised such Holders that use of such Prospectus may be resumed. At such time as
such public disclosure is otherwise made or the Company determines that such
disclosure is not necessary, in each case to correct any misstatement of a
material fact or to include any omitted material fact, or the Company otherwise
determines that use of such Prospectus may be resumed, the Company agrees
promptly to notify each Holder of Registrable Securities registered under the
relevant Subject Registration Statement of such determination and (if
applicable) to furnish each such Holder such numbers of copies of the
Prospectus, as amended or supplemented, as such Holder may reasonably request;
(l) obtain a CUSIP number for all Exchange Securities, or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with printed certificates for
the Exchange Securities or the Registrable Securities, as the case may be, in a
form eligible for deposit with The Depository Trust Company; provided, however,
that the Company shall not be required to provide printed certificates for any
Exchange Securities or Registrable Securities to be so-called "book-entry only"
securities;
(m) unless the Indenture, as it relates to the Exchange Securities or
the Registrable Securities, as the case may be, has already been so qualified,
use its reasonable best efforts to (i) cause the Indenture to be qualified under
the Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Securities or Registrable Securities, as the case
may be, (ii) cooperate with the Trustee and the Holders to effect such changes
to the Indenture as
-17-
may be required for the Indenture to be so qualified in accordance with the
terms of the TIA and (iii) execute, and use its reasonable best efforts to cause
the Trustee to execute, all documents as may be required to effect such changes,
and all other forms and documents required to be filed with the SEC to enable
the Indenture to be so qualified in a timely manner;
(n) in the case of a Shelf Registration, take all customary and
appropriate actions (including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the disposition of the Registrable
Securities registered thereby. If requested as set forth below, the Company
agrees that it will in good faith negotiate the terms of an Underwriting
Agreement, which shall be in form and scope as is customary for similar
offerings of debt securities with similar credit ratings (including, without
limitation, representations and warranties to the underwriters) and shall
otherwise be reasonably satisfactory to the Company and the managing
underwriters; and:
(i) if requested by the managing underwriters, obtain opinions
of counsel to the Company (which counsel shall be reasonably satisfactory
to the managing underwriters) addressed to such underwriters, covering the
matters customarily covered in opinions requested in underwritten sales of
securities in substantially the forms specified in the Underwriting
Agreement;
(ii) if requested by the managing underwriters, obtain a "cold
comfort" letter and an update thereto not later than two weeks after the
date of the original letter (or if not available under applicable
accounting pronouncements or standards, a single "procedures" letter and a
single update thereto) from the Company's independent certified public
accountants addressed to the underwriters named in the Underwriting
Agreement and use its reasonable best efforts to have such letter addressed
to the selling Holders of Registrable Securities (provided, however, that
such letter need not be addressed to any Holders to whom, in the reasonable
opinion of the Company's independent certified public accountants,
addressing such letter is not permissible under applicable accounting
standards), such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" (or "procedures") letters to
underwriters in connection with similar underwritten offerings; and
(iii) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
underwritten offerings.
Notwithstanding anything herein to the contrary, the Company shall have no
obligation to enter into any underwriting agreement or permit an underwritten
offering of Registrable Securities unless a request therefor shall have been
received from at least 33 1/3% of the Holders of all Registrable Securities then
outstanding. In the case of such a request for an underwritten offering, the
Company shall provide written notice to the Holders of all Registrable
Securities of such underwritten offering at least 30 days prior to the filing of
a Shelf Registration Statement or a prospectus supplement providing for such
underwritten offering. Such notice shall (A) offer each such Holder the right to
participate in such underwritten offering (but may indicate that whether or
-18-
not all Registrable Securities are included will be at the discretion of the
underwriters), (B) specify a date, which shall be no earlier than ten business
days following the date of such notice, by which such Holder must inform the
Company of its intent to participate in such underwritten offering and (C)
include the instructions such Holder must follow in order to participate in such
underwritten offering;
(o) in the case of a Shelf Registration, and to the extent customary
in connection with a "due diligence" investigation for an offering of debt
securities with a similar credit rating to that of the Registrable Securities,
make reasonably available for inspection by representatives appointed by the
Majority Holders and any underwriters participating in any disposition pursuant
to a Shelf Registration Statement and one firm of legal counsel retained for all
Holders participating in such Shelf Registration, and one firm of legal counsel
to the underwriters, if any, all financial and other records, pertinent
corporate documents and properties of the Company reasonably requested by any
such persons, and cause the respective officers, employees and any other agents
of the Company to supply all information reasonably requested by any such
representative, underwriters or counsel in connection with the Shelf
Registration Statement; provided, however, that, if any such records, documents
or other information relates to pending or proposed acquisitions or
dispositions, or otherwise relates to matters reasonably considered by the
Company to constitute sensitive or proprietary information, the Company need not
provide such records, documents or information unless the foregoing parties
enter into a confidentiality agreement in customary form and reasonably
acceptable to such parties and the Company;
(p) (i) a reasonable time prior to the filing of any Exchange Offer
Registration Statement, any Prospectus forming a part thereof, any amendment to
an Exchange Offer Registration Statement or amendment or supplement to such
Prospectus, provide copies of such document to the Initial Purchasers, and make
such changes in any such document prior to the filing thereof as Xxxxxx Brothers
or one firm of legal counsel to the Initial Purchasers may reasonably request;
(ii) in the case of a Shelf Registration, a reasonable time prior to filing any
Shelf Registration Statement, any Prospectus forming a part thereof, any
amendment to such Shelf Registration Statement or amendment or supplement to
such Prospectus, provide copies of such document to Xxxxxx Brothers, one firm of
legal counsel appointed by the Majority Holders to represent the Holders
participating in such Shelf Registration, the managing underwriters of an
underwritten offering of Registrable Securities, if any, and their counsel, and
make such changes in any such document prior to the filing thereof as Xxxxxx
Brothers, such one firm of legal counsel for the Holders, such managing
underwriters or their counsel may reasonably request; and (iii) cause the
representatives of the Company to be available for discussion of such document
as shall be reasonably requested by Xxxxxx Brothers, one firm of legal counsel
to the Holders, the managing underwriters and their counsel; and shall not at
any time make any filing of any such document of which Xxxxxx Brothers, one firm
of legal counsel to the Holders, the managing underwriters and their counsel
shall not have previously been advised and furnished a copy or to which Xxxxxx
Brothers, one firm of legal counsel to the Holders, the managing underwriters
and their counsel shall reasonably object; provided, however, that the
provisions of this paragraph (p) shall not apply to any
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document filed by the Company pursuant to the 1934 Act which is incorporated or
deemed to be incorporated by reference in any Registration Statement or
Prospectus;
(q) in the case of a Shelf Registration and if requested by the
managing underwriters, if any, or the Majority Holders, (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
such information or revisions to information therein relating to such
Underwriters or selling Holders as the managing underwriters, if any, or such
Holders or their counsel reasonably request to be included or made therein, (ii)
make all required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment and (iii) if required, supplement or make amendments to such Shelf
Registration Statement;
(r) upon delivery of the Registrable Securities by Holders to the
Company (or to such other Person as directed by the Company) in exchange for the
Exchange Securities, the Company shall xxxx, or cause to be marked, on such
Registrable Securities that such Registrable Securities are being canceled in
exchange for the Exchange Securities; in no event shall such Registrable
Securities be marked as paid or otherwise satisfied;
(s) use its reasonable best efforts to cause the Exchange Securities,
if applicable, and, in the event of a Shelf Registration, the Debt Securities to
be rated with not more than two rating agencies selected by the Company, if so
requested by the Majority Holders or by the managing underwriters of an
underwritten offering of Registrable Securities, if any, unless the Exchange
Securities or the Registrable Securities, as the case may be, are already so
rated or unless the Company has obtained such ratings for its long-term debt
securities generally;
(t) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC and make generally available to its
security holders, as soon as reasonably practicable, an earnings statement
covering at least 12 months which shall satisfy the provisions of Section 11(a)
of the 1933 Act and Rule 158 thereunder; and
(u) reasonably cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by any
managing underwriters and their counsel.
In the case of a Subject Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) (i) require
each Holder of Registrable Securities to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing and such other information as, in the reasonable opinion of the
Company, is required for inclusion in the Subject Registration Statement, (ii)
require each Holder to agree in writing to be subject to the provisions of
Section 5 hereof with respect to the information provided in (i) above and the
information provided pursuant to the penultimate sentence of this paragraph or
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the failure to provide such information, as the case may be, and (iii) further
require each Holder of Registrable Securities, through one firm of legal counsel
on behalf of all such Holders, to furnish to the Company any comments on the
Subject Registration Statement and the Prospectus included therein or any
amendment or supplement to any of the foregoing not later than such times as the
Company reasonably may request. Each Holder of Securities included in a Subject
Registration Statement agrees promptly to notify the Company of any inaccuracy
or change in information previously furnished to the Company or the occurrence
of any event, in either case, as a result of which the relevant Registration
Statement or the related Prospectus contains or would contain an untrue
statement of a material fact or omits or would omit to state any material fact
regarding such Holder, its intended method of distribution of Registrable
Securities or otherwise that is required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing. As soon as practicable, the Company will, subject to the reasonable
approval of its counsel, incorporate in a supplement or post-effective amendment
to the relevant Registration Statement or related Prospectus such information
furnished in writing to the Company and requested to be included therein, and
furnish to such Holder copies of the Prospectus, as amended or supplemented, as
reasonably requested.
In the case of a Subject Registration Statement, each Holder agrees and, in
the case of the Exchange Offer Registration Statement, each Participating
Broker-Dealer agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts, each of the kind described
in Section 3(e)(ii)-(vi) or Section 3(k) hereof (it being understood and agreed
that, for purposes of this paragraph, all references in Sections 3(e)(ii)-(vi)
and Section 3(k) to a "Subject Registration Statement", a "Shelf Registration
Statement" or a "Registration Statement" shall be deemed to mean and include the
Shelf Registration Statement, the Purchaser Shelf Registration Statement or the
Exchange Offer Registration Statement or all or any combination thereof (as the
context requires), mutatis mutandis), such Holder or Participating Broker-
Dealer, as the case may be, will forthwith discontinue disposition of
Registrable Securities pursuant to such Registration Statement and discontinue
use of the Prospectus included therein until such Holder's or Participating
Broker-Dealer's receipt, as the case may be, of (A) copies of the supplemented
or amended Prospectus contemplated by Section 3(k) hereof or (B) notice from the
Company that the sale of the Registrable Securities may be resumed, and, if so
directed by the Company, such Holder or Participating Broker-Dealer, as the case
may be, will deliver to the Company (at its expense) all copies in its
possession, other than permanent file copies then in its possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Securities pursuant to a Registration Statement as a
result of the happening of any event or the discovery of any facts, each of the
kind described in Section 3(e) (ii)-(vi) or 3(k) hereof, the Company shall be
deemed to have used its reasonable best efforts to keep such Registration
Statement effective during such period of suspension, provided that the Company
shall use its reasonable best efforts to file and have declared effective (if an
amendment) as soon as practicable an amendment or supplement to such
Registration Statement or the related Prospectus and shall extend the period
during which such Registration Statement shall be maintained effective pursuant
to this Agreement by the number of days during the period from and including the
date of the giving of such notice to and including the date when
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the Holders shall have received copies of the supplemented or amended Prospectus
necessary to resume such dispositions or the date on which the Company has given
notice that the sale of Registrable Securities may be resumed, as the case may
be. Each Holder of Registrable Securities hereby agrees that it will at all
times use the then most current Prospectus, as then amended or supplemented,
which has been provided to it by the Company in connection with the resale or
transfer of any Registrable Securities pursuant to a Registration Statement or
Prospectus.
Section 4. Underwritten Registrations.
If any of the Registrable Securities covered by the Shelf Registration
Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage the offering will be
selected by the Company and shall be reasonably acceptable to the Majority
Holders of such Registrable Securities included in such offering.
No Holder of Registrable Securities may participate in any underwritten
offering hereunder unless such Holder (a) agrees to sell such Holder's
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, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
Section 5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless (i) each Holder
and (ii) each person, if any, who controls (within the meaning of Section 15 of
the 1933 Act or Section 20 of the 0000 Xxx) any Holder (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "controlling
person") and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Holder or any controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an
"Indemnified Holder"), to the fullest extent lawful, from and against any and
all losses, claims, damages, liabilities, judgments, actions and expenses
(including without limitation and as incurred, reimbursement of all reasonable
expenses of investigating, preparing, pursuing or defending any claim or action,
or any investigation or proceeding by any governmental agency or body, commenced
or threatened, including the reasonable fees and expenses of counsel to any
Indemnified Holder) caused by, related to, based upon, arising out of or in
connection with any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement, preliminary prospectus or
Prospectus (or any amendment or supplement thereto), 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, except insofar as such
losses, claims, damages, liabilities or expenses are caused by an untrue
statement or omission or alleged untrue statement or omission that is made in
reliance upon and in conformity with information relating to any of the Holders
furnished in writing to the Company by or on behalf of any of the Holders
expressly for use therein; provided, however, that this indemnity agreement with
respect to any Prospectus shall not inure to the benefit of any Initial
Purchaser or Holder from
-22-
whom the person asserting any such losses, claims, damages or liabilities
purchased Registrable Securities or Exchange Securities (or any person who
controls such Initial Purchaser or Holder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 0000 Xxx) if a copy of the Prospectus (as then
amended or supplemented and furnished by the Company to such Initial Purchaser
or Holder, as the case may be) was not sent or given by or on behalf of such
Initial Purchaser or Holder, as the case may be, to such person at or prior to
the sale of such Registrable Securities or Exchange Securities and if the
Prospectus (as so amended or supplemented) would have corrected any untrue
statement or omission, or alleged untrue statement or omission, giving rise to
such loss, liability, claim, damage or expense (provided the Company has
delivered the Prospectus (as then amended or supplemented) to the several
Initial Purchasers or Holders in requisite quantity on a timely basis to permit
such delivery or sending).
In case any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against any of the
Indemnified Holders with respect to which indemnity may be sought against the
Company, such Indemnified Holder (or the Indemnified Holder controlled by such
controlling person) shall promptly notify the Company in writing (provided, that
the failure to give such notice shall not relieve the Company of any of its
obligations pursuant to this Agreement, except to the extent that the Company is
materially prejudiced as a result thereof). Notwithstanding the foregoing, in
case any action or proceeding shall be instituted and such Indemnified Holder
shall notify the Company of the commencement thereof, the Company shall be
entitled to participate therein, and, after written notice from the Company to
such Indemnified Holder, to assume the defense thereof with counsel of its
choice reasonably acceptable to the Indemnified Holders in such action.
Notwithstanding the election of the Company to assume the defense of such action
or proceeding, the Indemnified Holder shall have the right, at its own expense,
to employ one additional firm as separate counsel and to participate in the
defense of the action or proceeding; provided that the Company shall pay the
reasonable fees and expenses of such separate counsel reasonably satisfactory to
the Company if (i) the Company shall have failed to employ counsel to represent
the Indemnified Holder in a reasonably timely manner or (ii) the defendants in
any such action or proceeding include both the Indemnified Holder and the
Company and counsel to such Indemnified Holder shall have concluded and notified
the Company that in its reasonable judgment representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for such Indemnified Holders, which firm shall be designated by the Holders.
The Company shall be liable for any settlement of any such action or proceeding
effected with the Company's prior written consent, which consent shall not be
withheld unreasonably, and the Company agrees to indemnify and hold harmless
each Indemnified Holder from and against any loss, claim, damage, liability or
expense by reason of any settlement of any action effected with the written
consent of the Company. The Company shall not, without the prior written
consent of each Indemnified Holder, settle or compromise or consent to the entry
of judgment in or otherwise seek to terminate any pending or threatened action,
claim, litigation or
-23-
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Holder is a party thereto), unless
such settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Holder from all liability arising out of such
action, claim, litigation or proceeding.
(b) Each Holder of Registrable Securities agrees, severally and not
jointly, to indemnify and hold harmless the Company, and its respective
directors, officers, and any person controlling (within the meaning of Section
15 of the 1933 Act or Section 20 of the 0000 Xxx) the Company, and the
respective officers, directors, partners, employees, representatives and agents
of each such person, to the same extent as the foregoing indemnity from the
Company to each of the Indemnified Holders, but only with respect to claims and
actions based on information relating to such Holder furnished in writing by or
on behalf of such Holder expressly for use in any Registration Statement. In
case any action or proceeding shall be brought against the Company or its
directors or officers or any such controlling person in respect of which
indemnity may be sought against a Holder of Registrable Securities, such Holder
shall have the rights and duties of the Company, and the respective directors,
officers, and any such controlling person in the preceding paragraph, such
directors or officers or such controlling person shall have the rights and
duties of each Indemnified Holder in the preceding paragraph. In no event shall
any Holder be liable or responsible for any amount in excess of the amount by
which the total received by such Holder with respect to its sale of Registrable
Securities pursuant to a Registration Statement exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
(c) If the indemnification provided for in this Section 5 is
unavailable to an indemnified party under Section 5(a) or Section 5(b) hereof
(other than by reason of exceptions provided in those Sections) 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 party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Indemnified Holder, on the other hand, from
its sale of Registrable Securities or if such allocation is not permitted by
applicable law, the relative fault of the Company, on the one hand, and of the
Indemnified Holder, on the other hand, 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 Company, on the one hand, and of the Indemnified Holder, on the
other hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Indemnified Holder and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 5(a),
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
-24-
The Company and each Holder of Registrable Securities agree that it would
not be just and equitable if contribution pursuant to this Section 5(c) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5, no Holder or
its related Indemnified Holders shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of its Registrable Securities pursuant to a
Registration Statement exceeds the amount of any damages which such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 5(c) are several in proportion to the respective principal amount of
Debt Securities held by each of the Holders hereunder and not joint.
Section 6. Miscellaneous.
(a) Rule 144 and Rule 144A. Until the earliest of (i) the completion
----------------------
of the Exchange Offer, (ii) two years following the Closing Date (or such
shorter period as may be specified in Rule 144(k) as then amended) and (iii) the
date when all Registrable Securities have been sold pursuant to the Subject
Registration Statement or are no longer Registrable Securities, the Company
covenants that it will file the reports required to be filed by it under Section
13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC
thereunder for so long as the Company is subject to the reporting requirements
of Section 13 or 15 of the 1934 Act, and if the Company ceases to be so required
to file such reports, it will upon the request of any Holder of Registrable
Securities (i) make publicly available such information as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver such
information to a prospective purchaser as is necessary to permit sales pursuant
to Rule 144A under the 1933 Act and (iii) take such further action that is
reasonable in the circumstances, in each case, to the extent required from time
to time to enable such Holder to sell its Registrable Securities without
registration under the 1933 Act within the limitation of the exemptions provided
by (A) Rule 144 under the 1933 Act, as such Rule may be amended from time to
time, (B) Rule 144A under the 1933 Act, as such Rule may be amended from time to
time or (C) any similar rules or regulations hereafter adopted by the SEC
(provided that the obligations of the Company under any such similar rules or
regulations shall not be more burdensome in any substantial respect than those
referred to in clauses (A) or (B)). Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
-25-
(b) No Inconsistent Agreements. The Company has not entered into nor
--------------------------
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure; provided, however, that to the extent any provision of this
Agreement relates to the Purchaser Shelf Registration Statement or otherwise to
the Initial Purchasers, such provision may be amended, modified or supplemented,
and waivers or consents to departures from such provisions thereof may be given,
by Xxxxxx Brothers; and provided, further, that no amendment, modification,
supplement or waiver or consent to any departure from the provisions of Section
5 hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company and Xxxxxx Brothers to
the extent that any such amendment, modification, supplement, waiver or consent
is, in their reasonable judgment, necessary or appropriate to comply with
applicable law (including any interpretation of the staff of the SEC) or any
change therein.
(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered or
certified first-class mail, telex, telecopier or any courier providing overnight
delivery (i) if to a Holder, at its address appearing in the register of the
Debt Securities and/or Exchange Securities kept by the Registrar (as defined in
the Indenture) or at such other address as shall have been given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 6(d), which address initially is, with respect to the Initial
Purchasers, the address care of Xxxxxx Brothers set forth in the Purchase
Agreement, and (ii) if to the Company initially at or in care of the Company's
address set forth in the Purchase Agreement, or in each case to such other
address notice of which is given in accordance with the provisions of this
Section 6(d).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier providing
overnight delivery.
-26-
(e) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof or of the Purchase Agreement, the
Indenture or the Offering Memorandum dated October 21, 1997; and provided,
further, that Holders of Registrable Securities may not assign their rights
under this Agreement except in connection with the permitted transfer of
Registrable Securities and then only insofar as relates to such Registrable
Securities. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement, including the restrictions on resale
set forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.
(f) Third-Party Beneficiary. The Holders from time to time shall each
-----------------------
be a third-party beneficiary to the agreements made hereunder between the
Company, on the one hand, and the Initial Purchasers, on the other hand, and
Xxxxxx Brothers shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
-27-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CROSS TIMBERS OIL COMPANY
By: /s/ XXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President & Chief
Financial Officer
XXXXXX BROTHERS INC.
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
-28-
