Exhibit 10.7
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered
into as of the 16th day of December, 1998 by and between Denbury
Resources Inc. (the "Company") and TPG Partners II, L.P.
("Buyer").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Company desires to sell to Buyer, and Buyer
desires to purchase from Company, 18,552,876 shares (the
"Shares") of the Company's common shares, no par value (the
"Common Shares"), for U.S.$100,000,000 pursuant to the terms and
conditions set forth herein;
WHEREAS, the Common Shares are traded on the New York Stock
Exchange (the "NYSE") and the rules of the NYSE require approval
of the sale of the Shares to Buyer by holders of a majority of
shares voting on the proposal that are held by disinterested
shareholders;
WHEREAS, the Common Shares are traded on the Toronto Stock
Exchange (the "TSE") and the rules of the TSE require the
approval by holders of a majority of shares voting on the
proposal that are held by disinterested shareholders of the sale
of the Shares to Buyer; and
WHEREAS, the Company is proposing to move its corporate
domicile from Canada to the United States as a Delaware
corporation (the "Continuance," the continued Delaware
corporation being the "Continued Company"), and such Continuance
requires shareholder approval by two-thirds (2/3) of all votes
cast at a duly constituted meeting of shareholders and
registration with the U.S. Securities and Exchange Commission
(the "Commission") of the deemed issuance of new securities of
the Company;
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
1.1 Issuance and Purchase and Sale of Shares; Purchase
Price. Subject to the terms and conditions set forth in this
Agreement, and in reliance upon the representations and
warranties hereinafter set forth, the Company agrees to sell and
deliver to Buyer, and Buyer agrees to subscribe for and purchase
from the Company, the Shares free and clear of all Liens for
U.S.$5.39 per Common Share, for an aggregate purchase price of
U.S.$100,000,000 (the "Buyer Purchase Price"). The parties agree
that the Shares will be issued upon the closing of the
transactions contemplated hereby (the "Closing") by the Company
if the Continuance is not consummated, and by the Continued
Company if the Continuance is consummated.
1.2 Mutual Conditions Precedent. The Company's obligation
to sell the Shares and Buyer's obligation to buy the Shares is
subject to and conditioned upon:
(a) approval of the sale of the Shares by the Company
to the Buyer by that proportion of shareholders voting at a
duly constituted meeting of shareholders required by
applicable Law or the rules of the NYSE or the TSE (subject
to Buyer and its Affiliates voting their Common Shares in
the same proportions as those shareholders other than Buyer
and such Affiliates voting thereon, or as otherwise
required by the applicable Law or the rules of the NYSE or
TSE);
(b) the receipt of any approval required to be
obtained from the TSE and compliance with Ontario
Securities Commission Policy Statement 9.1 and similar
policies from other Canadian securities regulators; and
(c) an amendment of the NationsBank Credit Facility
mutually acceptable to the Company and the Buyer, such
acceptance not to be unreasonably withheld.
1.3 Conditions Precedent to the Company's Obligations. The
Company's obligation to issue and sell the Shares hereunder shall
also be subject to and conditioned upon the satisfaction or
waiver of each of the following additional conditions:
(a) Representations and Warranties; Covenants. The
representations and warranties of Buyer set forth in
Article 2 hereof shall have been true and correct in all
material respects on and as of the date hereof and shall be
true and correct in all material respects as of the Closing
as if made on the Closing Date (except where such
representation and warranty speaks by its terms as of a
different date, in which case it shall be true and correct
as of such date). Buyer shall have performed in all
material respects all obligations and complied with all
agreements, undertakings and covenants required by it to be
performed at or prior to the Closing, and Buyer shall have
delivered to the Company at the Closing a certificate in
form and substance satisfactory to the Company dated the
Closing Date and signed by an executive officer of TPG
Advisors II, Inc. to the effect that the conditions set
forth in this Section 1.3(a) have been satisfied.
(b) Opinion of Counsel. The Company shall have
received at the Closing from Xxxxxxx X. Xxxxxxxxx, general
counsel to TPG Advisors II, Inc., a written opinion dated
the Closing Date, in form reasonably satisfactory to the
Company, with respect to the matters set forth in Sections
2.3, 2.4 and 2.5.
(c) Compliance with Laws; No Adverse Action or
Decision. Since the date hereof,
(i) no Law shall have been promulgated, enacted
or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes
illegal the performance of this Agreement or the
Registration Rights Agreement or the consummation of
the transactions contemplated hereby or thereby;
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(ii) no preliminary or permanent injunction or
other order by any Governmental Entity that restrains,
enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of this
Agreement or the Registration Rights Agreement or the
consummation of the transactions contemplated hereby
or thereby shall have been issued and remain in
effect; and
(iii) no Governmental Entity shall have
instituted any action, claim, suit, investigation or
other proceeding that seeks to restrain, enjoin,
prevent, materially delay, prohibit or otherwise make
illegal the performance of this Agreement or the
Registration Rights Agreement or the consummation of
the transactions contemplated hereby or thereby.
(d) Consents. All Regulatory Approvals from any
Governmental Entity and all consents, waivers or approvals
from any other Person required for or in connection with
the execution and delivery of this Agreement and the
Registration Rights Agreement and the consummation at the
Closing by the parties hereto and thereto of the
transactions contemplated hereby and thereby shall have
been obtained or made on terms reasonably satisfactory to
the Company, including proof of Buyer's timely filing of an
early warning disclosure report and private placement
questionnaire and undertaking required by the TSE, and all
waiting periods specified under applicable Law, the
expiration of which is necessary for such consummation,
shall have expired or been terminated.
(e) Registration Rights Agreement. The Company shall
have received counterpart originals or certified or other
copies of the Registration Rights Agreement and such other
documents as it may reasonably request.
1.4 Conditions Precedent to the Buyer's Obligations. The
obligation of Buyer to purchase the Shares hereunder shall also
be subject to and conditioned upon the satisfaction or waiver of
each of the following additional conditions:
(a) Representations and Warranties; Covenants. The
representations and warranties of the Company set forth in
Article 3 hereof shall have been true and correct in all
material respects on and as of the date hereof and shall be
true and correct in all material respects as of the Closing
as if made on the Closing Date (except where such
representation and warranty speaks by its terms as of a
different date, in which case it shall be true and correct
in all material respects as of such date), it being
understood that for the purposes of Section 4.6, the
representations and warranties made in the Agreement are
being made as of the date hereof and are not being made as
of the Closing Date. The Company shall have performed in
all material respects all obligations and complied with all
agreements, undertakings and covenants required hereunder
to be performed by it at or prior to the Closing. The
Company shall have delivered to Buyer at the Closing a
certificate in form and substance satisfactory to Buyer
dated the Closing Date and signed by the chief executive
officer and the chief financial officer of the Company to
the effect that the conditions set forth in this Section
1.4(a) have been satisfied; provided that any
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certificate delivered under this Section 1.4(a), insofar as
it relates to whether or not there has been a Material
Adverse Effect that results primarily and directly from
prevailing oil prices, prevailing natural gas prices or
levels of production, will be prepared and based upon,
respectively, the best knowledge of such officers with
respect to such prices and production levels using
information available to them at the time of preparation of
such certificate (including the use of estimates where
actual prices and production information are not available)
and prepared in a manner consistent with the Company's past
practices.
(b) Opinions of Counsel. Buyer shall have received at
the Closing from Jenkens & Xxxxxxxxx, a Professional
Corporation, and Burnet, Xxxxxxxxx & Xxxxxx, written
opinions dated the Closing Date, in form reasonably
satisfactory to Buyer, with respect to matters set forth in
Sections 3.1, 3.2, 3.3, 3.4, 3.5(a) and 3.9.
(c) Continuance and Merger. If the Continuance shall
have occurred and immediately thereafter the Significant
Subsidiary shall have been merged into the Continued
Company, the terms of such Continuance and merger shall
have been approved by a majority of not less than
two-thirds of all of the members of the Board of Directors
of the Company and shall provide that (A) the exchange
ratio of shares of common stock of the Continued Company
for Common Shares shall be one-to-one and (B) the
certificate of incorporation of the Continued Company shall
expressly exempt the Continued Company from the
applicability of Section 203 of the DGCL.
(d) Compliance with Laws; No Adverse Action or
Decision. Since the date hereof, (A) no Law shall have been
promulgated, enacted or entered that restrains, enjoins,
prevents, materially delays, prohibits or otherwise makes
illegal the performance of this Agreement or the
Registration Rights Agreement or the consummation of the
transactions contemplated hereby or thereby, (B) no
preliminary or permanent injunction or other order by any
Governmental Entity that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the
performance of this Agreement or the Registration Rights
Agreement or the consummation of the transactions
contemplated hereby or thereby shall have been issued and
remain in effect, and (C) no Governmental Entity shall have
instituted any Proceeding that seeks to restrain, enjoin,
prevent, materially delay, prohibit or otherwise make
illegal the performance of this Agreement or the
Registration Rights Agreement or the consummation of the
transactions contemplated hereby or thereby.
(e) Consents. All Regulatory Approvals from any
Governmental Entity and all consents, waivers or approvals
from any other Person required for or in connection with
the execution and delivery of this Agreement and the
Registration Rights Agreement and the consummation at the
Closing by the parties hereto and thereto of the
transactions contemplated hereby and thereby shall have
been obtained or made on terms reasonably satisfactory to
the Buyer, and all waiting periods specified under
applicable Law, the expiration of which is necessary for
such consummation, shall have expired or been terminated.
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(f) Registration Rights Agreement. Buyer shall have
received counterpart originals or certified or other copies
of the Registration Rights Agreement and such other
documents as it may reasonably request.
(g) No Material Adverse Effect, No Alternative
Transaction. Since the date of this Agreement, no event
shall have occurred which has had, or is reasonably likely
to have, a Material Adverse Effect, and no Alternative
Transaction shall have been consummated or agreement,
understanding, or arrangement with respect thereto entered
into.
1.5 No Registration. Buyer acknowledges and understands
that the Shares have not been registered under the Securities Act
and are being acquired by Buyer for its own account (subject to
the provisions of Section 1.7 hereof). Buyer will not sell,
assign, transfer, pledge, hypothecate or otherwise dispose of or
encumber the Shares, or any interest therein, except in
compliance with the registration requirements of the Securities
Act or an applicable exemption from registration thereunder, and
in compliance with applicable state securities laws. Buyer
understands that the certificates representing the Shares will
bear the following legend:
"The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended. Neither this certificate nor any interest
therein may be offered, sold, transferred, encumbered
or otherwise disposed of, unless either (i) there is
an effective registration statement under said Act
relating thereto, or (ii) the Company has received an
opinion of counsel, satisfactory in form and substance
to the Company, that such registration is not
required."
1.6 Closing. Subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Sections 1.2,
1.3 and 1.4, the Closing shall take place at the offices of
Jenkens & Xxxxxxxxx, a Professional Corporation, no later than
the first Business Day following such satisfaction or, if
permissible, waiver, or at such other time and place as the
parties may agree (the date on which the Closing occurs, the
"Closing Date"). At the Closing, the following documents shall be
exchanged:
(a) In full payment for the Shares, Buyer shall
deliver the Buyer Purchase Price in immediately available
funds to the Company by wire transfer to the bank account
designated by the Company at least two Business Days prior
to the Closing Date, or by such other means as may be
agreed upon by the parties hereto, together with the other
documents, certificates and opinions to be delivered
pursuant to Section 1.4 hereof.
(b) The Company shall deliver the certificate(s)
representing the Shares to Buyer (registered in the names
of Buyer and/or its Affiliates and in the denominations
designated by Buyer at least two Business Days prior to the
Closing Date), together with the other documents,
certificates and opinions to be delivered pursuant to
Section 1.3 hereof.
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(c) Buyer and the Company shall execute and deliver
each to the other at the closing a cross receipt for the
certificate(s) representing the Shares and the funds
representing the Buyer Purchase Price, respectively.
1.7 Assignment to Affiliates. Buyer may assign all or any
portion of its rights under this Agreement and the Registration
Rights Agreement to any of its Affiliates having TPG GenPar II,
L.P., as its general partner, provided that such Affiliate meets
the definition of "Permitted Holder" under the terms of the
Indenture dated as of February 26, 1998 (the "Indenture"),
between Denbury Management Inc., the Company and ChaseBank of
Texas, National Association, as Trustee, covering the Company's
9% Senior Subordinated Notes due 2008.
1.8 Costs of Transaction. Except as set forth in Sections
4.6 and 5.12, the parties agree that they shall bear their
respective costs of the transaction, including costs of their
respective counsel, provided that costs associated with
registration, if any, of the Shares under the Securities Act and
any applicable Canadian securities laws will be borne by the
Company.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to, and agrees with, the
Company as follows:
2.1 Informed Sophisticated Investor. By virtue of Buyer's
position as an Affiliate of the Company both directly and
indirectly through three members of the Company's Board of
Directors being Affiliates of Buyer, Buyer has access to
information regarding the Company's finances, properties, assets
and liabilities, and business prospects to a degree sufficient to
permit Buyer to make an informed investment decision as to the
purchase of the Shares. By reason of Buyer's business and
financial experience (and the business and financial experience
of any persons retained by Buyer to advise it with respect to its
investment in the Shares), Buyer (together with such advisers, if
any) has such knowledge, sophistication and experience in
business and financial matters as to be capable of evaluating the
merits and risks of the investment in the Shares. Nothing
contained in this Section 2.1 shall mitigate or diminish the
representations, warranties or covenants contained in this
Agreement.
2.2 No Distribution Intent. Buyer represents to the Company
that it is not acquiring the Shares with a view to, nor does it
have any current intent to engage in, a distribution or resale of
the Shares, and that the individual share of each participant in
the Buyer had an aggregate acquisition cost to such participant
of not less than Cnd.$97,000. Buyer acknowledges that it may only
resell the Shares in compliance with the registration
requirements of the Securities Act or an applicable exemption
from registration thereunder.
2.3. Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the Laws
of the State of Delaware and has all requisite power and
authority to own or lease and operate its properties and to
conduct its business as it is
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now being conducted and is proposed to be conducted.
2.4 Authority; No Consent. Buyer represents to the Company
that it is duly authorized to execute and deliver this Agreement
and the Registration Rights Agreement and that upon execution and
delivery by Buyer, this Agreement and the Registration Rights
Agreement will constitute legal, valid and binding obligations of
Buyer, enforceable against Buyer in accordance with their terms.
Buyer has the absolute and unrestricted right, power and
authority to execute and deliver this Agreement and the
Registration Rights Agreement and to perform its obligations
hereunder and thereunder. Buyer is not and will not be required
to obtain any consent from any Person in connection with the
execution and delivery of this Agreement or the Registration
Rights Agreement or the consummation or performance of any of the
transactions contemplated hereby or thereby.
2.5 No Violation. Buyer represents and warrants that
neither the execution and performance of this Agreement and the
Registration Rights Agreement nor the consummation of the
transactions contemplated hereby or thereby will (i) conflict
with, or result in a breach of the terms, conditions and
provisions of, or constitute a default (with or without the
passage of time) under, its organizational documents, any
agreement, indenture or other instrument under which it is bound,
or (ii) violate or conflict with any applicable Law.
2.6 The Toronto Stock Exchange. Buyer (i) undertakes not to
sell or otherwise dispose of the Shares, or any securities
derived therefrom, for a period of six (6) months from the
Closing Date without the prior consent of the TSE and any other
regulatory body having jurisdiction and (ii) agrees to execute
any undertaking to this effect that may be required by the TSE.
2.7 Permitted Holder. Buyer meets the definition of
"Permitted Holder" under the terms of the Indenture.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to, and agrees with,
Buyer as follows:
3.1. Corporate Organization and Qualification. Each of the
Company and its Significant Subsidiary is a corporation, limited
liability company or partnership duly incorporated, organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite power and
authority to own or lease and operate its properties and to
conduct its business in all material respects as it is currently
being conducted and is proposed to be conducted. Each of the
Company and its Significant Subsidiary is duly licensed,
authorized or qualified as a foreign corporation or partnership
for the transaction of business and is in good standing under the
laws of each other jurisdiction in which its ownership, lease or
operation of property or conduct of business requires such
qualification, except where the failure to be so licensed,
authorized or qualified and in good standing would not, taken as
a
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whole, have a Material Adverse Effect. The Company has made
available upon request by Buyer a complete and correct copy of
the Articles of Continuance in force on the date hereof and the
Bylaws of the Company and its Significant Subsidiary, each as
amended to date and each of which as so made available is in full
force and effect. The Company will make available upon request by
Buyer a complete and correct copy of the minute books of the
Company and its Significant Subsidiary, each such minute book to
include minutes of the meetings of, and resolutions adopted by,
the Board of Directors and the boards of directors of the
Significant Subsidiary and the committees thereof to date.
3.2 Shares. The Shares will be duly authorized and when
issued in accordance with this Agreement and upon the payment of
the Buyer Purchase Price set forth in Section 1.1 hereof, will be
duly and validly issued, fully paid and nonassessable, and the
Company will deliver an opinion of Burnet, Xxxxxxxxx & Xxxxxx or,
if the Continuance shall have occurred at or prior to Closing,
Jenkens & Xxxxxxxxx, a Professional Corporation, to that effect
at the Closing.
3.3 Authority; No Consent. Upon the execution and delivery
by the Company thereof, this Agreement and the Registration
Rights Agreement will constitute legal, valid and binding
obligations of the Company, enforceable against it in accordance
with their respective terms. The Company has the absolute and
unrestricted right, power and authority to execute and deliver
this Agreement and the Registration Rights Agreement and to
perform its obligations hereunder and thereunder. Except as set
forth in Schedule 3.3 hereof, the Company is not and will not be
required to obtain any consent from any Person in connection with
the execution and delivery of this Agreement or the consummation
or performance of any of the transactions contemplated hereby or
thereby.
3.4. No Violation. Other than the Continuance and merger
immediately thereafter of the Significant Subsidiary into the
Continued Company for which a waiver and amendment under the
NationsBank Credit Facility is being sought, the Company
represents and warrants that neither the execution and
performance of this Agreement and the Registration Rights
Agreement nor the consummation of the transactions contemplated
hereby or thereby will (i) conflict with, or result in the breach
of the terms, conditions and provision of, or constitute a
default (with or without notice or the passage of time) under, or
result in or give rise to a right of termination, cancellation,
acceleration or modification of any right or obligation under, or
give rise to a right to put or to compel a tender offer for
outstanding securities of the Company or any of its Subsidiaries
under, or require any consent, waiver or approval under, any
note, bond, debt instrument, indenture, mortgage, deed of trust,
lease, loan agreement, joint venture agreement, contract or any
other agreement, instrument or obligation to which the Company or
any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries or any property of the Company or any of its
Subsidiaries is bound, (ii) violate or conflict with any
applicable Law, (iii) violate or give rise to any preemptive
rights, rights of first refusal or other similar rights on behalf
of any Person (other than an Affiliate of Buyer) under any
applicable Law or any provision of the charter or bylaws of the
Company or the Continued Company or any agreement or instrument
applicable to the Company or (iv) result in the creation or
imposition of any Lien upon any assets or properties of the
Company or any of its Subsidiaries.
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3.5. Capitalization; Securities.
(a) As of the date hereof, the authorized capital
stock of the Company consists of:
(i) an unlimited number of Common Shares, of
which 26,801,680 are outstanding, 2,519,244 are
reserved for issuance under the Option Plan, 75,000
are reserved for issuance under warrants and 64,858
are reserved for issuance under the Purchase Plan;
(ii) an unlimited number of first and second
preferred shares, issuable in series, of which no
shares are outstanding and no shares are reserved for
issuance; and
(iii) all of such outstanding Common Shares were
duly authorized and validly issued and are fully paid
and non-assessable.
(b) Except for options to purchase in the aggregate
1,890,531 Common Shares with an average exercise price of
approximately U.S.$13.00 per share pursuant to the Option
Plan and the natural gas hedging agreements described in
Note 6 to the Consolidated Financial Statements of the
Company contained in its Form 10-Q filed with the
Commission on November 6, 1998, natural gas hedging
agreements entered into in the normal course of business
and options to purchase not more than 100,000 Common Shares
that may be granted in accordance with the policy of the
Board of Directors in connection with the hiring of new
employees since the disclosure in such Note 6 through the
Closing Date, and those certain options approved by the
Board of Directors of the Company on December 1, 1998 to be
granted as of January 1, 1999, there are no authorized or
outstanding (or any obligations to authorize or issue)
Derivative Securities.
(c) As of December 1, 1998, the Company and its
Subsidiaries have no outstanding Indebtedness other than
U.S.$100,000,000 of Indebtedness outstanding pursuant to
the NationsBank Credit Facility, U.S.$125,000,000 of the
Company's 9% Senior Subordinated Notes and no more than
U.S.$5,000,000 pursuant to all other credit arrangements,
notes and ordinary course of business credit facilities.
True, complete and correct copies of the NationsBank Credit
Facility and Indenture, including the exhibits and
schedules thereto and any other documents executed in
connection therewith, will be made available to Buyer upon
request.
(d) Other than pursuant to the registration rights
agreement dated as of December 21, 1995 among the Company
and certain of Buyer's Affiliates, or under the
Registration Rights Agreement, no Person has any right to
require the Company to register securities of the Company
under the Securities Act, and there are no shareholder or
similar agreements to which the Company is a party, except
as disclosed on Schedule 3.5(d) hereto. To the Company's
knowledge, there are no securities that the Company is
required to register pursuant to any agreement listed on
Schedule 3.5(d) hereto.
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3.6. Company Reports; Financial Statements.
(a) The Company has made available to Buyer a true
and complete copy of
(i) the Company's Annual Report on Form 10-K for
the years ended December 31, 1997 and 1996;
(ii) the Company's Quarterly Report on Form 10-Q
for the periods ended March 31, June 30 and September
30, 1998;
(iii) each registration statement, report on Form
8-K, proxy statement, information statement or other
report or statement filed by the Company with the
Commission since December 31, 1995 and prior to the
date hereof, in each case in the form (including
exhibits and any amendments thereto) filed with the
Commission (items (i) through (iii) collectively, the
"SEC Reports"); and
(iv) all documents forming part of its public
file with the Canadian provincial securities
commissions. As of their respective dates, the SEC
Reports and any registration statement, report, proxy
statement, information statement or other statement
filed by the Company with the Commission before the
Closing Date ("Subsequent Reports") (i) were, or will
be, as the case may be, timely filed with the
Commission; (ii) complied, or will comply, as the case
may be, in all material respects, with the applicable
requirements of the Exchange Act and the Securities
Act, and (iii) did not, or will not, as the case may
be, contain any untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary in order to make the statements
therein, in light of the circumstances under which
they were made, not misleading. The Company has filed
all reports and statements with the Commission
required to have been filed as of the date hereof for
the Company to register securities for sale on Form
S-3 under the Securities Act or any successor form
thereto.
(b) Each of the consolidated balance sheets
(including, where applicable, the related notes and
schedules) included in or incorporated by reference into
the SEC Reports and any Subsequent Reports fairly presents,
or will fairly present, as the case may be, in all material
respects, the consolidated financial position of the
Company and its Subsidiaries as of the date thereof, and
each of the consolidated statements of income (or
statements of results of operations), stockholders' equity
and cash flows (including the related notes and schedules)
included in or incorporated by reference into the SEC
Reports or any Subsequent Reports fairly presents or will
fairly present as the case may be, in all material
respects, the results of operations, retained earnings and
cash flows, as the case may be, of the Company and its
Subsidiaries (on a consolidated basis) for the periods or
as of the dates, as the case may be, set forth therein, in
each case in accordance with Canadian GAAP (or U.S. GAAP
after the change to U.S. GAAP anticipated if the
Continuance is consummated) applied on a consistent basis
throughout the periods covered (except as stated therein
or, where applicable, in the notes thereto, except in each
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of the foregoing instances in the case of interim
statements for the lack of footnote disclosure.
3.7. Absence of Certain Changes. Except for transactions
approved by two-thirds of all of the members of the Board of
Directors, transactions contemplated by this Agreement and the
Registration Rights Agreement, or as disclosed in the SEC Reports
or on Schedule 3.7 hereto, since September 30, 1998, the Company
and its Subsidiaries have conducted their consolidated business
in the ordinary and usual course, and there has not been any of
the following:
(a) any change or amendment to the charter, bylaws
or other organizational documents of the Company or any of
its Subsidiaries;
(b) any issuance or sale or purchase or redemption of
any shares of their respective Equity Securities or of any
Derivative Securities, other than pursuant to this
Agreement and the Option Plan or Purchase Plan;
(c) any dividend or other distribution declared, set
aside, paid or made with respect to their respective Equity
Securities or any direct or indirect redemption, purchase
or other acquisition of such Equity Securities by the
Company or any of its Subsidiaries, except dividends or
other distributions made to the Company or to any Wholly
Owned Subsidiary of the Company;
(d) any acquisition or disposition of assets by the
Company and its Subsidiaries having a fair value or for a
purchase price in excess of U.S.$10,000,000, in the
aggregate, other than acquisitions or dispositions made in
the ordinary course of business, acquisitions or
dispositions among the Company and its Wholly Owned
Subsidiaries or among such Wholly Owned Subsidiaries;
(e) except for borrowings under the NationsBank Credit
Facility up to U.S.$130,000,000, any increase in excess of
U.S.$5,000,000 in the Indebtedness of the Company and its
Subsidiaries, taken as a whole, other than repayments at
stated maturity and any change in intra-Company
Indebtedness among the Company and its Wholly Owned
Subsidiaries or among such Wholly Owned Subsidiaries;
(f) except with respect to the NationsBank Credit
Facility as contemplated by Sections 1.2(c) and 3.4 and
related instruments, or agreements in the ordinary course
of business, any material amendment of any mortgage, Lien,
lease, agreement, loan agreement, indenture or other
instrument or document;
(g) any default, event of default or breach (or any
event which, with notice or the passage of time or both,
would constitute a default, event of default or breach) by
the Company or any of its Subsidiaries of any credit,
financing or other agreement or instrument relating to any
material Indebtedness which has not been cured by the
Closing Date;
11
(h) any damage, destruction, theft or other casualty,
loss (whether or not covered by insurance) which causes a
Material Adverse Effect;
(i) except with respect to the NationsBank Credit
Facility as contemplated by Sections 1.2(c) and 3.4, any
material commitment, agreement or transaction entered into,
amended, or terminated (or any waiver of any rights or
remedies under any of the foregoing) by the Company or any
of its Subsidiaries (including any agreement with respect
to any ongoing or threatened litigation), other than in the
ordinary course of business;
(j) any entry into or amendment of any material
employment or severance compensation agreement or
consulting or similar agreement with, or any material
increase in the compensation or benefits payable or to
become payable by the Company or any of its Subsidiaries to
any employee of the Company or any of its Subsidiaries
(other than agreements terminable without penalty or
similar payment by the Company or such Subsidiary, as the
case may be, on not more than 30 days' notice and any other
increases in compensation payable or to become payable to
employees (other than directors or officers) in the
ordinary course of business;
(k) any change in the financial accounting methods,
principles or practices of the Company and its Subsidiaries
for financial accounting purposes, taken as a whole, except
as required by Canadian GAAP or applicable Law, other than
the contemplated change to U.S. GAAP if the Continuance is
consummated;
(l) any adoption of a plan of or any agreement or
arrangement with respect to or resolutions providing for
the liquidation, dissolution, merger, consolidation or
other reorganization of the Company or any of its
Significant Subsidiaries other than the merger of Denbury
Management Inc. into the Continued Company as contemplated
in Section 1.4(c) hereof;
(m) any change, condition, occurrence, circumstance or
other event that, individually or in the aggregate, has had
or is reasonably likely to have a Material Adverse Effect;
or
(n) any commitment or agreement to do any of the
foregoing, except as otherwise required or expressly
permitted by this Agreement;
12
3.8. Financial Advisors and Brokers.
(a) No Person has acted, directly or indirectly, as a
broker, finder or financial advisor of the Company in
connection with this Agreement or the Registration Rights
Agreement or the transactions contemplated hereby or
thereby, and no Person is entitled to receive any broker's,
finder's or similar fee or commission in respect thereof
based in any way on any agreement, arrangement or
understanding made by or on behalf of the Company, any of
its Subsidiaries or any of their respective directors,
officers or employees.
(b) The Board of Directors has received an opinion
from Credit Suisse First Boston Corporation to the effect
that the consideration to be received by the Company for
the Shares pursuant to the terms hereof is fair, from a
financial point of view, to the Company.
3.9. Exemption from Registration. Assuming the
representations and warranties of Buyer set forth in Article 3
hereof are true and correct in all material respects, the Company
believes that the offer and sale of the Shares made pursuant to
this Agreement will be in compliance with the Securities Act and
any applicable Canadian provincial and U.S. state securities laws
and rules of the NYSE and the TSE and will be, subject to the
Company's filing of a report of trade on Form 20 within ten days
of the Closing Date with the Alberta Securities Commission and
the Company's payment of any applicable fees relating to such
filing, and subject to compliance with the provisions of Section
18.2[2] of Ontario Securities Commission Policy 9.1, exempt from
the registration requirements of the Securities Act and any
applicable Canadian provincial and U.S. state securities laws and
rules of the NYSE and the TSE.
3.10. Disclosure. The representations and warranties made
by the Company in this Agreement, and the exhibits, documents,
statements, certificates or schedules furnished or to be
furnished to Buyer pursuant to the terms hereof or expressly
referenced herein or therein, taken as a whole, do not and will
not contain any untrue statement of a material fact, or omit to
state a material fact necessary to make the statements or facts
contained herein or therein not misleading.
3.11. Price Protection. The Company has given notice and
requested conditional listing approval from the TSE to the effect
that the Company can issue the Shares at a price of U.S.$5.39 to
Buyer pursuant to the terms hereof.
13
ARTICLE 4
COVENANTS
4.1. Taking of Necessary Action. Each of the parties hereto
agrees to use its reasonable best efforts promptly to take or
cause to be taken all actions and promptly to do or cause to be
done all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. Without limiting the
foregoing, Buyer and the Company will make all required filings
as promptly as possible after the date hereof, and shall obtain
all other Regulatory Approvals necessary or, in the opinion of
Buyer or the Company, advisable in order to permit the
consummation of the transactions contemplated hereby.
4.2. Conduct of Business. From the date hereof until the
Closing, the Company shall conduct its business and shall cause
its Subsidiaries to conduct their respective businesses in, and
only in, the ordinary course and shall use, and shall cause its
Subsidiaries to use, their best efforts to preserve intact their
respective present business organizations, operations, goodwill
and relationships with third parties and to keep available the
services of the present directors, officers and key employees.
Without limiting the generality of the foregoing, except as
required pursuant to outstanding agreements or obligations of the
Company or any of its Subsidiaries that have been disclosed to
Buyer and set forth in the Schedules hereto or the SEC Reports,
from the date hereof until the Closing, without the prior written
consent of Buyer (except as expressly permitted or required by
this Agreement), (i) the Company shall not, and shall cause each
of its Subsidiaries not to, take any action that would cause a
representation or warranty of the Company set forth herein to be
untrue if made at such time, or a covenant of the Company set
forth herein to fail to be satisfied; (ii) the Company shall not
adopt any shareholder rights plan or supermajority voting
requirement, issue any security or take any similar action that
would have an adverse effect upon the legal rights of Buyer as a
majority shareholder of the Company under applicable corporate
Law following the consummation of the transactions contemplated
in this Agreement; and (iii) the Company shall not, and shall
cause each of its Subsidiaries not to, commit or agree to do any
of the foregoing.
4.3. Notifications. At all times prior to the Closing Date,
Buyer shall promptly notify the Company and the Company shall
promptly notify Buyer in writing of any fact, change, condition,
circumstance or occurrence or nonoccurrence of any event which
will or is reasonably likely to result in the failure to satisfy
the conditions to be complied with or satisfied by it hereunder,
provided however, that the delivery of any notice pursuant to
this Section 4.3 shall not limit or otherwise affect the remedies
available hereunder to any party receiving such notice.
4.4. Alternative Transactions.
(a) From the date hereof until the earlier of the
Closing and the termination of this Agreement (the
"Exclusivity Period"), the Company shall not permit any of
its Subsidiaries or Affiliates to, and shall not authorize
or permit any of their Representatives to, directly or
indirectly,
14
(i) solicit or initiate, or encourage the
submission of, any Proposal,
(ii) participate in any discussions or
negotiations regarding, or furnish to any person any
information with respect to, or take any other action
to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be
expected to lead to, any Proposal or Alternative
Transaction, other than a transaction with Buyer, or
(iii) authorize, engage in, or enter into any
agreement or understanding with respect to, any
Alternative Transaction; provided however, to the
extent required by the fiduciary obligations of the
Board of Directors, as determined in good faith by the
Board of Directors based on the advice of outside
counsel, the Company may participate in such
discussions or negotiations or furnish such
information in response to an unsolicited Proposal
with respect to, or authorize, engage in or enter into
any agreement or understanding with respect to, a
Business Combination; and provided further, that if
the Company's Board of Directors, as determined in
good faith by the Board of Directors based on the
advice of outside counsel, deems it to be in the best
interests of its Shareholders, the Company, its
officers and its Directors may notify any party that
initiates discussions regarding a potential
Alternative Transaction, that it is engaged in the
transactions contemplated by this Agreement and will
not engage in any further communications while
pursuing such transactions.
(b) The Company will promptly advise Buyer of, and
inform Buyer of the terms of, any Proposal that the
Company, any of its Subsidiaries or Affiliates or any of
their Representatives may receive during the Exclusivity
Period.
4.5. Shareholders' Meeting.
(a) The Company will take, in accordance with
applicable Law and its organizational documents, all action
necessary to present a proposal for the approval by
shareholders of the transactions contemplated by this
Agreement (the "Shareholder Approval Proposal") for a vote
at a meeting of the Company's shareholders, which meeting
shall be held as promptly as possible but in any event
within such time periods as required by applicable
regulatory authorities (the "Shareholders' Meeting").
(b) The Company shall prepare and file with the
Commission as promptly as possible after the date hereof a
proxy statement for use in soliciting proxies in connection
with the Shareholders' Meeting (as amended or supplemented,
the "Proxy Statement"). The Proxy Statement shall contain
the recommendation of the Board of Directors of the Company
that the Company's shareholders approve the Shareholder
Approval Proposal. The Company shall notify Buyer promptly
of the receipt by it of any comments from the Commission or
its staff and of any request by the Commission for
amendments or supplements to the Proxy Statement or for
additional information and will supply Buyer with copies of
all correspondence between the Company and its
representatives, on the
15
one hand, and the Commission or the members of its staff or
of any other Governmental Entities, on the other hand, with
respect to the Proxy Statement. The Company shall give
Buyer and its counsel the reasonable opportunity to review
and comment on those portions of the Proxy Statement which
pertain to Buyer, the purchase of Shares hereunder or the
Shareholder Approval Proposal prior to its being filed with
the Commission and shall give Buyer and its counsel the
reasonable opportunity to review and comment on all
amendments and supplements to the Proxy Statement and all
responses to requests for additional information and
replies to comments prior to their being filed with, or
sent to, the Commission, provided that Buyer and its
counsel shall provide such comments as soon as possible.
The Company shall give reasonable consideration to any
comments Buyer or its counsel may provide with respect to
the Proxy Statement or any amendment or supplement thereto.
(c) Other than with respect to any information with
respect to Buyer supplied to the Company by Buyer in
writing specifically for inclusion in the Proxy Statement
as to which information the Company makes no representation
or warranty, the Company hereby represents and warrants
that the Proxy Statement, as of the date thereof and as of
the date of the Shareholders' Meeting, will not include 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, in light of the circumstances
under which they will be made, not misleading.
(d) Buyer hereby represents and warrants that the
Proxy Statement, as of the date thereof and as of the date
of the Shareholders' Meeting, will not include 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, in light of the circumstances under
which they will be made, not misleading, to the extent, and
only to the extent that such statement or omission was made
in reliance upon and in conformity with information with
respect to Buyer and its Affiliates supplied to the Company
by Buyer specifically for inclusion in the Proxy Statement.
(e) Buyer and its Affiliates hereby agree that they
will vote the Common Shares of the Company which they own
on the Shareholder Approval Proposal in the same
proportions as those shareholders other than Buyer and its
Affiliates voting thereon.
4.6. Indemnification.
(a) The Company agrees to indemnify and hold harmless
Buyer, each member of Buyer, each limited or general
partner of each such member, each limited or general
partner of each such limited or general partner, each of
their Affiliates and each of their Representatives
(collectively, the "Indemnified Parties") from and against
any and all losses, penalties, judgments, suits, costs,
claims, liabilities, damages and expenses (including,
without limitation, reasonable attorneys' fees and
disbursements but excluding Taxes imposed as a result of
being a direct or indirect owner of the Shares or realizing
income or gain with respect thereto) (collectively,
"Losses"), incurred by,
16
imposed upon or asserted against any of the Indemnified
Parties as a result of, relating to or arising out of (i)
the breach of any representation, warranty, agreement or
covenant made by the Company in this Agreement or the
Registration Rights Agreement or in any certificate
delivered by the Company pursuant hereto or thereto or (ii)
any litigation, claims, suits or proceedings by a third
party to which such Indemnified Party is made a party
(other than as a plaintiff) arising out of the transactions
contemplated by this Agreement, except, in the case of this
clause (ii), for such Losses which are finally judicially
determined (including, without limitation, in a separate
proceeding seeking declaratory relief specifically for this
purpose) to have resulted primarily from the conduct of the
Buyer or its Affiliates (other than the Company); provided
that unless and until a final and non-appealable judicial
determination shall be made that such Indemnified Party is
not entitled to indemnification under clause (ii) above,
each such Indemnified Party shall be reimbursed for all
indemnified Losses under clause (ii) above as they are
incurred; provided further that if a final and
non-appealable judicial determination shall be made that
such Indemnified Party is not entitled to be indemnified
for Losses under clause (ii) above, such Indemnified Party
shall repay to the Company the amount of such Losses for
which the Company shall have reimbursed such Indemnified
Party.
(b) Buyer agrees to indemnify and hold harmless the
Company and each of its Representatives (collectively, the
"Indemnified Company Parties") from and against any and all
Losses incurred by any of the Indemnified Company Parties
as a result of, or arising out of, the breach of any
representation, warranty, agreement or covenant made by
Buyer in this Agreement or the Registration Rights
Agreement or in any certificate delivered by Buyer pursuant
hereto or thereto.
(c) If any claim, suit or proceeding covered by
Section 4.6(a) above is brought against an indemnified
party and it gives notice to the indemnifying party of the
commencement of such proceeding, the indemnifying party
will be entitled to participate in such proceeding and, to
the extent that it wishes (unless (i) the indemnifying
party is also a party to such proceeding and the
Indemnified Party determines in good faith that joint
representation would be inappropriate or (ii) the actual or
potential defendants in, or targets of, any such action
include both the Indemnified Party and the indemnifying
party, and the Indemnified Party shall have reasonably
concluded, upon advice of counsel, that there may be legal
defenses available to it which are different from or
additional to those available to the indemnifying party),
to assume the defense of such proceeding and provide
indemnification with counsel satisfactory to the
Indemnified Party and, after notice from the indemnifying
party will not be liable to the Indemnified Party for any
fees of other counsel or any other expenses with respect to
the defense of such proceeding. If the indemnifying party
assumes the defense of a proceeding, no compromise or
settlement of such claims may be effected by the
indemnifying party or Indemnified Party without the other's
consent. If, upon receiving notice, the indemnifying party
does not timely undertake to defend such matter to which
the Indemnified Party is entitled to indemnification
hereunder, or fails to diligently pursue such defense, the
Indemnified
17
Party may undertake such defense through counsel of its
choice, at the cost and expense of the indemnifying party.
4.7. Antitakeover Statutes. The Company shall take all
reasonable action within its power to exempt the Company, the
Continued Company or Buyer from the provisions of any
antitakeover, business combination or similar provision of
applicable Law in connection with or following the transactions
contemplated hereby. Without limiting the generality of the
foregoing, the certificate of incorporation of the Continued
Company shall exempt the Continued Company from the applicability
of Section 203 of the DGCL.
ARTICLE 5
MISCELLANEOUS
5.1 Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties with respect to the
transactions contemplated hereby, and supersedes all prior
agreements, arrangements and understandings relating to the
subject matter hereof.
5.2 Survival of Representations. All representations,
warranties and agreements made by the Company and Buyer in this
Agreement or pursuant hereto shall survive the execution and
delivery of this Agreement.
5.3 Notices. All notices, payments and other required
communications ("Notices") to the parties shall be in writing,
and shall be addressed, respectively, as follows:
If to Company: Denbury Resources Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxx
If to Buyer: TPG Partners II, L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attn: Xxxxx X. X'Xxxxx
All Notices shall be given (i) by personal delivery, (ii) by
electronic communication, with a confirmation sent by registered
or certified mail, return receipt requested, or (iii) by
overnight courier. All Notices shall be deemed delivered (i) if
by personal delivery on the date of delivery if delivered during
normal business hours, and, if not delivered during normal
business hours, on the next business day following delivery, (ii)
if by electronic communication, on the date of receipt of the
electronic communication, and (iii) if by overnight courier on
the date for which delivery was contracted. A party may change
its address by Notice to the other party.
5.4 Applicable Law and Venue. All questions concerning the
construction, validity and interpretation of this Agreement shall
be governed by the internal laws, and not the law of
18
conflicts, of the State of Texas, except that (i) matters of
corporate law shall, until the consummation of the Continuance,
be governed by the Canada Business Corporations Act and,
thereafter, by the Law of the State of Delaware and (ii) matters
of securities laws shall be governed by the federal securities
laws of the United States and the securities laws of the several
provinces of Canada, as applicable. Any legal action relating to
this Agreement shall be brought only in the United States
District Court for the Northern District of Texas, Dallas
Division.
5.5 Waiver. The failure of a party to insist on the strict
performance of any provision of this Agreement or to exercise any
right, power or remedy upon a breach hereof shall not constitute
a waiver of any provision of this Agreement or limit the party's
right thereafter to enforce any provision or exercise any right.
5.6 Severability. If any term, provision, covenant, or
restriction of this Agreement is held by the final, nonappealable
order of a court of competent jurisdiction to be invalid, void,
or unenforceable, the remainder of the terms, provisions,
covenants and restrictions hereof shall remain in full force and
effect and shall in no way be affected, impaired, or invalidated.
5.7 Amendments. This Agreement may be amended, modified, or
superseded only by written instrument executed by all parties
hereto.
5.8 Headings. The Article and Section headings appearing in
this Agreement are for convenience of reference only and are not
intended, to any extent or for any purpose, to limit or define
the text of any Article or Section.
5.9 Gender and Number. Whenever required by the context, as
used in this Agreement, the singular number shall include the
plural and the neuter shall include the masculine or feminine
gender, and vice versa.
5.10 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all
of which together shall constitute one agreement binding on all
parties hereto, notwithstanding that all the parties have not
signed the same counterpart.
5.11 Specific Performance. The parties hereto specifically
acknowledge that monetary damages are not an adequate remedy for
violations of this Agreement, and that any party hereto may, in
its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as
such court may deem just and proper in order to enforce this
Agreement or prevent any violation hereof and, to the extent
permitted by applicable Law and to the extent the party seeking
such relief would be entitled on the merits to obtain such
relief, each party waives any objection to the imposition of such
relief.
5.12 Termination.
(a) Subject to Section 5.12(b), this Agreement may be
terminated by notice in writing at any time prior to the
Closing by Buyer or the Company if:
19
(i) the Shareholder Meeting shall have been held
and the Shareholder Approval Proposal shall not have
been approved thereat;
(ii) the Closing shall not have occurred on or
before the earlier of the last day of the Pricing
Period and the 180th day following the date hereof;
(iii) any Governmental Entity of competent
jurisdiction shall have issued any judgment,
injunction, order, ruling or decree or taken any other
action restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated by
this Agreement or the Registration Rights Agreement
and such judgment, injunction, order, ruling, decree
or other action becomes final and nonappealable;
provided that the party seeking to terminate this
Agreement pursuant to this Section 5.12(a)(iii) shall
have used its best efforts to have such judgment,
injunction, order, ruling or decree lifted, vacated or
denied;
(iv) the Company and Buyer so mutually agree in
writing;
provided however, that the right to terminate this
Agreement under Section 5.12(a)(i) or (ii) shall not be
available to any party whose failure to fulfill any
obligation under this Agreement has been the primary cause
of, or primarily resulted in, the failure of the Closing to
occur on or before such date.
(b) If this Agreement is terminated in accordance with
Section 5.12(a) hereof and the transactions contemplated
hereby are not consummated, this Agreement shall become
null and void and of no further force and effect except
that (i) the terms and provisions of Section 4.6 and this
Article 5 shall remain in full force and effect and (ii)
any termination of this Agreement shall not relieve any
party hereto from any liability for any breach of its
obligations hereunder.
(c) If this Agreement is terminated in accordance with
Section 5.12(a)(i) or a(ii) hereof, the Company shall pay
to Buyer, within one Business Day following such
termination, a fee in the amount of U.S.$1,000,000 in
immediately available funds.
(d) Within one Business Day of the later to occur of
(i) termination of this Agreement and (ii) the earlier of
(A) the entering into of a written agreement, letter of
intent, agreement in principle, memorandum of understanding
or similar writing with respect to an Alternative
Transaction and (B) the consummation of an Alternative
Transaction, the Company shall pay Buyer (or its assignees)
the Alternative Transaction Fee; provided that an
Alternative Transaction Fee shall be payable only in the
event that (i) a bona fide Alternative Transaction (whether
or not the same Alternative Transaction as is ultimately
consummated or as to which a written agreement, letter of
intent, agreement in principle, memorandum of understanding
or similar writing is ultimately entered into) is proposed
to, or an inquiry or contact with respect thereto is made
to, the Company or its Designated Representatives prior to
the Cut-Off Date (as defined below) or a Proposal with
respect to a bona fide Alternative Transaction is publicly
announced
20
by the Person contemplating such transaction or an agent of
such Person prior to the Cut-Off Date and (ii) an agreement
with respect to an Alternative Transaction is entered into
or an Alternative Transaction is consummated within one
year after the Cut-Off Date. The term "Cut-Off Date" shall
mean the earlier of (i) the last day of the Pricing Period,
or (ii) the termination of this Agreement. The term
"Designated Representatives" means (i) any officers,
directors or employees of the Company or its Subsidiaries
(the "Affiliated Representatives") or (ii) any other
Representative of the Company to the extent that such
Representative conveys the relevant information to the
Company or an Affiliated Representative.
5.13 No Third-Party Beneficiaries. This Agreement is for
the sole benefit of the parties hereto and their respective
successors and permitted assigns and nothing herein, express or
implied, is intended or shall confer upon any other Person any
legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except that the
provisions of Section 4.6 shall inure to the benefit of and be
enforceable by each of the Indemnified Parties.
5.14 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
"Affiliate" has the meaning set forth in Rule 12b-2 under
the Exchange Act. The term "Affiliated" has a correlative
meaning.
"Affiliated Representatives" has the meaning set forth in
Section 5.12(d).
"Agreement" has the meaning set forth in the preamble
hereto.
"Alternative Transaction" means any (A) direct or indirect
acquisition or purchase of any Equity Securities of the Company
or any of its Subsidiaries or any tender offer or exchange offer,
that if consummated would result in any Person (other than Buyer
or any of its Affiliates) Beneficially Owning 25% or more of any
class of Equity Securities of the Company or Equity Securities of
any of its Subsidiaries, (B) Business Combination, liquidation,
dissolution or similar transaction involving the Company or any
of its Subsidiaries, or (C) other transaction the consummation of
which would prevent or materially delay the transaction
contemplated hereby.
"Alternative Transaction Fee" means (i) U.S.$3,000,000 less
(ii) any amount paid to Buyer pursuant to Section 5.12(c).
"Articles of Continuance" means the Articles of Continuance
of the Company, as such may be amended from time to time.
"Beneficially Own" with respect to any securities means
having "beneficial ownership" of such securities (as determined
pursuant to Rule 13d-3 under the Exchange Act as in effect on the
date hereof, except that a Person shall be deemed to Beneficially
Own all such securities that such Person has the right to acquire
whether such right is exercisable immediately or after the
21
passage of time). The terms "Beneficial Ownership" and
"Beneficial Owner" have correlative meanings.
"Board of Directors" means the board of directors of the
Company.
"BOE" means one barrel of oil equivalent using the ratio of
one barrel of crude oil, condensate or natural gas liquids to six
Mcf of natural gas.
"Business Combination" means a merger or consolidation in
which the Company is a constituent corporation and pursuant to
which Voting Securities of the Company are exchanged for cash,
securities or other property, a recapitalization of the Company
or a sale of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole; provided that a
transaction or series of transactions as a result of which the
Beneficial Ownership of the Equity Securities of the Company or
of the surviving entity of the transaction (or of the ultimate
parent of the Company or of such surviving entity) immediately
after the consummation of such transaction is the same (other
than in respect of fractional shares or odd lots) as the
Beneficial Ownership of the Company's Equity Securities
immediately prior to the consummation thereof shall not be deemed
a "Business Combination."
"Business Day" means any day, other than a Saturday, Sunday
or a day on which banking institutions in the State of New York
are authorized or obligated by Law or executive order to close.
"Buyer" has the meaning set forth in the preamble hereto.
"Buyer Purchase Price" has the meaning set forth in Section
1.1 hereof.
"Bylaws" means the Bylaws of the Company, as amended from
time to time.
"Canadian GAAP" means Canadian generally accepted
accounting principles as in effect at the relevant time or for
the relevant period.
"Closing" has the meaning set forth in Section 1.1 hereof.
"Closing Date" has the meaning set forth in Section 1.4
hereof.
"Commission" has the meaning set forth in the recitals
hereto.
"Common Shares" has the meaning set forth in the recitals
hereto.
"Company" has the meaning set forth in the preamble hereto.
"Continued Company" has the meaning set forth in the
recitals hereto.
"Continuance" has the meaning set forth in the recitals
hereto.
22
"Cut-Off Date" has the meaning set forth in Section 5.12(d).
"Derivative Securities" means any subscriptions, options,
conversion rights, warrants, or other agreements, securities or
commitments of any kind obligating the Company or any of its
Subsidiaries to issue, grant, deliver or sell, or cause to be
issued, granted, delivered or sold, any Equity Securities of the
Company or any of its Subsidiaries.
"Designated Representatives" has the meaning set forth in
Section 5.12(d).
"DGCL" means the Delaware General Corporation Law.
"Equity Securities" of any Person means any and all common
stock, preferred stock and any other class of capital stock of,
and any partnership or limited liability company interests of
such Person or any other similar interests of any Person that is
not a corporation, partnership or limited liability company.
"Exchange Act" means the U.S. Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
"Exclusivity Period" has the meaning set forth in Section
4.4(a) hereof.
"Governmental Entity" means any government or political
subdivision or department thereof, any governmental or regulatory
body, commission, board, bureau, agency or instrumentality, or
any court or arbitrator or alternative dispute resolution body,
in each case whether U.S. or Canadian federal, state, provincial,
local or foreign.
"Group" has the meaning set forth in Rule 13d-5 under the
Exchange Act.
"Guarantee" means any direct or indirect obligation,
contingent or otherwise, to guarantee (or having the economic
effect of guaranteeing) Indebtedness in any manner, including,
without limitation, any monetary obligation to purchase or pay
(or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of another Person (whether
arising by agreement to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement
conditions or otherwise).
"Indebtedness" means, with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) any obligation of such Person for
money borrowed, (ii) any obligation of such Person evidenced by
bonds, debentures, notes, Guarantees or other similar
instruments, (iii) any reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or
similar facilities issued for the account of such Person, (iv)
any obligation of such Person issued or assumed as the deferred
purchase price of property, assets or services (but excluding
trade accounts payable and other accrued liabilities arising in
the ordinary course of business), (v) any interest rate or
currency swap or similar hedging agreement, and (vi) any capital
lease obligation of such Person.
23
"Indemnified Parties" has the meaning set forth in Section
4.6(a) hereof.
"Indemnified Company Parties" has the meaning set forth in
Section 4.6(b) hereof.
"Law" means any law, treaty, statute, ordinance, code, rule
or regulation of a Governmental Entity or judgment, decree,
order, writ, award, injunction or determination of an arbitrator
or court or other Governmental Entity.
"Lien" means any mortgage, pledge, lien, security interest,
claim, voting agreement, conditional sale agreement, title
retention agreement, restriction, option or encumbrance of any
kind, character or description whatsoever.
"Losses" has the meaning set forth in Section 4.6(a) hereof.
"Material Adverse Effect" means a material adverse effect
on the financial condition, results of operations, business or
assets of the Company and its Subsidiaries taken as a whole,
provided however, that any such adverse effect (including,
without limitation, (i) an adverse effect on the Company's
financial statements, (ii) non-cash writedowns in the book value
of the Company's oil and gas properties, (iii) a decline in the
Company's reserve quantities or value, (iv) a decline in the
Company's production volumes, or (v) a decrease in the borrowing
base under the NationsBank Credit Facility) shall not be
considered to be a Material Adverse Effect if it results
primarily and directly from (x) prevailing oil prices, provided
that the weighted average oil price realized by the Company over
any 28 consecutive day period between the date hereof and the
Closing Date does not fall below 80% of the per barrel price
realized by the Company for the week commencing December 6, 1998,
or (y) prevailing natural gas prices, provided that the weighted
average gas price realized by the Company (after giving effect to
any benefit received by the Company from natural gas hedging
contracts covering the Company's gas production) over any 28
consecutive day period between the date hereof and the Closing
Date does not fall below 80% of the per Mcf price realized by the
Company for the week commencing December 6, 1998, or (z) a
decrease in the Company's production, provided that the average
daily production (on a BOE basis) during any 28 consecutive day
period between the date hereof and the Closing Date does not fall
to a level below 13,000 BOE per day.
"Mcf" means one thousand cubic feet of natural gas.
"NationsBank Credit Facility" means the credit facility
established pursuant to the First Restated Credit Agreement, by
and among Denbury Management, Inc., as borrower, the Company, as
guarantor, NationsBank of Texas, N.A., as administrative agent,
NationsBank Xxxxxxxxxx Securities LLC, as syndication agent and
arranger and the financial institutions listed on Schedule I
thereto, as banks, dated December 29, 1997, as amended.
"NYSE" has the meaning set forth in the recitals hereto.
24
"Option Plan" means the Company's employee stock option
plan made effective August 9, 1995.
"Person" means any individual, corporation, company,
association, partnership, joint venture, trust or unincorporated
organization, or Governmental Entity.
"Pricing Period" means the period from the date hereof to
the 90th day following the date of filing of the Proxy Statement;
provided however, that, if (i) the Closing has not occurred prior
to the 90th day following the date hereof due solely to delays by
the Commission or its staff in reviewing the Proxy Statement or
any amendment thereto, (ii) the Company has received written
confirmation from the TSE to the effect that the Company can
issue the Shares at a price of U.S.$5.39 to Buyer at any time
prior to a date subsequent to the 90th day following the date
hereof and (iii) the Company provides a written copy of such
confirmation to Buyer, then "Pricing Period" shall mean the
period from the date hereof to such subsequent date.
"Proceeding" means any claim, suit, action, proceeding,
arbitration or investigation.
"Proposal" means any inquiry, proposal or offer from any
person relating to an Alternative Transaction.
"Proxy Statement" has the meaning set forth in Section
4.4(b) hereof.
"Purchase Plan" means the Company's employee stock purchase
plan made effective February 1, 1996.
"Registration Rights Agreement" means the Registration
Rights Agreement to entered into on the Closing Date among the
Company, TPG Partners, L.P., TPG Parallel I, L.P., Buyer and any
assignees of Buyer, in the form attached hereto as Exhibit A.
"Regulatory Approvals" means (i) any and all certificates,
permits, licenses, franchises, concessions, grants, consents,
approvals, orders, registrations, authorizations, waivers,
variances or clearances from, or filings or registrations with,
Governmental Entities and (ii) any and all waiting periods
imposed by applicable Laws.
"Representatives" means, with respect to any Person, any of
such Person's officers, directors, employees, agents, attorneys,
accountants, actuaries, consultants, equity financing partners or
financial advisors or other Person associated with, or acting on
behalf of, such Person.
"SEC Reports" has the meaning set forth in Section 3.6(a)
hereof.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Shareholder Approval Proposal" has the meaning set forth
in Section 4.5(a) hereof.
25
"Shareholder' Meeting" has the meaning set forth in Section
4.5(a) hereof.
"Shares" has the meaning set forth in the recitals hereto.
"Significant Subsidiary" means Denbury Management Inc. and
any successor thereto.
"Subsequent Reports" has the meaning set forth in Section
3.6(a) hereof.
"Subsidiary" means, as to any Person, any other Person of
which more than 50% of the Voting Securities are owned or
controlled, or the ability to select or elect 50% or more of the
directors or similar managers is held, directly or indirectly, by
such first Person or one or more of its Subsidiaries or by such
first Person and one or more of its Subsidiaries.
"TSE" has the meaning set forth in the recitals hereto.
"Voting Power" means, with respect to any Voting
Securities, the aggregate number of votes attributable to such
Voting Securities that could generally be cast by the holders
thereof for the election of directors at the time of
determination (assuming such election were then being held).
"Voting Securities" means, (i) with respect to the Company,
the Equity Securities of the Company entitled to vote generally
for the election of directors of the Company and (ii) with
respect to any other Person, any securities of or interests in
such Person entitled to vote generally for the election of
directors or any similar managing person of such Person.
"Wholly Owned Subsidiary" means, as to any Person, a
Subsidiary of such Person of which 100% of the Equity Securities
(other than directors' qualifying shares or similar shares) is
owned, directly or indirectly, by such Person.
26
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the date first above written.
Company: DENBURY RESOURCES INC.
By: /s/ Xxxx Xxxxxxx
----------------
Name: Xxxx Xxxxxxx
Title: C.F.O.
Buyer: TPG PARTNERS II, L.P.
By: TPG GenPar II, L.P.,
General Partner
By: TPG Advisors II, Inc.,
General Partner
By: /s/ Xxxxxxx X. Xxxxx, III
--------------------------
Name: Xxxxxxx X. Xxxxx, III
Title: Vice President
27
EXHIBIT A
---------
REGISTRATION RIGHTS AGREEMENT
Dated as of [________________, ____]
by and among
DENBURY RESOURCES INC.,
TPG PARTNERS II, L.P.,
TPG PARTNERS, L.P.
and
TPG PARALLEL I, L.P.
Table of Contents
-----------------
Page
----
1. Definitions.................................................1
2. Incidental Registration.....................................2
(a) Incidental Registration.................................2
(b) Priority on Registrations...............................3
3. Shelf Registration..........................................3
(a) Filing..................................................3
(b) Continued Effectiveness.................................4
(c) Delay in Filing; Suspension of Registration.............4
(d) Underwritten Offering...................................4
4. Demand Registration Right...................................5
(a) Right to Demand; Notice to Holders......................5
(b) Number of Demand Registrations..........................5
(c) Limitation on Demand Registration.......................6
(d) Delay in Filing; Suspension of Registration.............6
(e) Underwritten Offering...................................6
5. Black-Out Periods...........................................7
(a) Restrictions on Public Sale by Holders..................7
(b) Restrictions on Public Sale by Company..................7
6. Registration Procedures.....................................7
7. Registration Expenses......................................10
(a) Registration in the United States or Any
Political Subdivision Thereof..........................10
(b) Qualification in Canada or Any Political
Subdivision Thereof....................................10
i
8. Indemnification; Contribution..............................11
(a) Indemnification by the Company.........................11
(b) Indemnification by Holders.............................12
(c) Conduct of Indemnification Proceedings.................12
(d) Contribution...........................................13
9. Miscellaneous..............................................13
(a) Limitations on Subsequent Registration
Rights.................................................13
(b) Amendments and Waivers.................................14
(c) Notices................................................14
(d) Successors and Assigns.................................13
(e) Counterparts...........................................14
(f) Headings...............................................14
(g) Governing Law..........................................15
(h) Severability...........................................15
(i) Entire Agreement.......................................15
(j) Attorneys' Fees........................................14
(k) No Inconsistent Agreements.............................14
(l) Enforcement............................................14
ii
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is
made and entered into effective as of [______________, ____] (the
"Effective Date"), by and among Denbury Resources Inc., a
[Delaware/Canadian] corporation (the "Company"), TPG Partners II,
L.P., a Delaware limited partnership ("Partners II"), TPG
Partners, L.P., a Delaware limited partnership ("Partners I") and
TPG Parallel I, L.P., a Delaware limited partnership ("Parallel
I").
This Agreement is made pursuant to the Stock Purchase
Agreement dated as of December 16, 1998 by and between the
Company and Partners II (the "Stock Purchase Agreement").
The parties hereby agree as follows:
1. Definitions.
Except as set forth below, or as otherwise defined in
this Agreement, all capitalized terms shall have the meanings
ascribed to them in the Stock Purchase Agreement. For purposes of
this Agreement, the following terms shall have the meanings so
provided:
(a) "Adverse Disclosure" means (x) filing with the
Commission of financial statements (or modifications to
previously filed financial statements required by Applicable
Securities Laws that pertain to the completeness of financial
statements or updating of financial statements) of the Company or
an acquired business as defined under Rule 3-05 of Regulation S-X
under or (y) public disclosure of material non-public
information, which disclosure in the good faith judgment of the
board of directors of the Company, after consultation with
counsel to the Company, (i) would be required to be made in any
Registration Statement so that such Registration Statement would
not be materially misleading; (ii) would not be required to be
made at such time but for the filing of such Registration
Statement; and (iii) the Company has a bona fide business purpose
for not disclosing publicly.
(b) "Applicable Securities Laws" means the securities
laws, rules and regulations of the United States of America or of
Canada, or any political subdivision of either and the by-laws,
rules and regulations of the TSE, the NYSE and any other exchange
upon which Common Shares are listed applicable to the subject
offering or placement.
(c) "Holder" or "Holders" means any holder or holders
of Registrable Common Shares.
(d) "Participating Holder" means any Holder requesting
the registration of Registrable Common Shares pursuant to
Sections 2 or 4.
(e) "Prospectus" means the prospectus included in any
Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering
of all or any portion of the securities covered by the
Registration Statement and
all other amendments and supplements to the prospectus, including
post-effective amendments and all other material incorporated by
reference in such prospectus.
(f) "Registrable Common Shares" means the Subject
Common Shares, provided, that Subject Common Shares shall cease
to be Registrable Common Shares when (i) such Subject Common
Shares are sold (A) pursuant to a Registration Statement or other
qualified document filed, when declared effective, under
Applicable Securities Laws or (B) without registration pursuant
to Rule 144 under the Securities Act or as otherwise permitted
under Applicable Securities Laws, or (ii) the Company delivers to
the Holders an opinion of counsel satisfactory to the Holders of
a majority of the Subject Common Shares then outstanding to the
effect that such Subject Common Shares may be publicly offered
without registration under Rule 144 under the Securities Act or
as otherwise permitted under Applicable Securities Laws.
(g) "Registration Statement" means any Registration
Statement of the Company filed with, or to be filed with, the
Commission under the rules and regulations promulgated under the
Securities Act, including the Prospectus, amendments and
supplements to such Registration Statement, including
post-effective amendments, and all exhibits and all material
incorporated by reference in such Registration Statement.
(h) "Shelf Registration Statement" means a
Registration Statement of the Company filed with the Commission
on Form S-3 (or any successor form or other appropriate form
under the Securities Act) for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act
(or any similar rule that may be adopted by the Commission).
(i) "Subject Common Shares" means the 27,274,314
Common Shares Beneficially Owned as of the Closing Date by any
limited partnership, limited liability company or other
investment fund managed directly or indirectly by the principals
of TPG Advisors, Inc., a Delaware corporation, or TPG Advisors
II, Inc., a Delaware corporation.
(j) "Underwritten Offering" means an offering in which
securities of the Company are sold to an underwriter on a firm
commitment basis for reoffering to the public.
2. Incidental Registration.
(a) Incidental Registration. If the Company proposes
to register or qualify any of its Common Shares under any
Applicable Securities Laws for sale (other than a registration on
Form X-0, X-0 or any similar form), it will serve written notice
of such proposed registration or qualification to all Holders at
least 21 days before the anticipated filing date of a
Registration Statement or other document required for
qualification, as applicable, relating thereto. Written notices
served by the Company pursuant to the preceding sentence of this
Section 2(a) shall be referred to hereinafter as "Notices."
Subject to the restrictions and in accordance with the procedures
set forth below, the Company will use its best efforts to include
in any registration or qualification to which a Notice relates
all Registrable Common Shares with respect to which the Company
has received from any Holder written requests for inclusion
therein within 7 days prior to such filing.
2
(b) Priority on Registrations.
(i) Notwithstanding the provisions of Section
2(a) hereof, in the case of an Underwritten Offering by the
Company of Common Shares or securities convertible into or
exchangeable or exercisable for Common Shares, the managing
underwriter or underwriters of the Underwritten Offering may
limit the number of Registrable Common Shares included in the
Underwritten Offering pursuant to any Registration Statement or
qualification if, in its or their reasonable opinion, the number
of Registrable Common Shares proposed to be sold in such
Underwritten Offering exceeds the number that can be sold without
materially adversely interfering with the orderly sale and
distribution of the securities being offered pursuant to such
Registration Statement or qualification. In the event the number
is to be so limited in the Underwritten Offering, qualification
or registration, a sufficient number of securities shall be
eliminated to reduce the total amount of securities to be
included in such Underwritten Offering, qualification or
registration to the amount recommended by such underwriter. In
reducing the amount of securities to be included in such
Underwritten Offering, qualification or registration, the Company
will include in such Underwritten Offering, qualification or
registration (A) first, all securities the Company proposes to
sell, and (B) second, to the extent not inconsistent with the
Stock Purchase Agreement or the Securities Purchase Agreement
dated as of November 13, 1995 by and among the Company, Partners
I and Parallel I, as amended, and all documents related thereto,
all Registrable Common Shares Beneficially Owned by Holders
requested to be included in the Underwritten Offering,
qualification or registration and Common Shares requested to be
included by other holders of Common Shares who have registration
rights in respect thereof pari passu with the registration rights
granted hereby, reduced pro rata according to the number of
Registrable Common Shares or Common Shares which are Beneficially
Owned by Holders and each such other holder, as the case may be,
and requested to be included in such registration or
qualification in good faith with the bona fide intention of
selling the same.
(ii) The Company shall use its best efforts to
enable the Registrable Common Shares of Holders, if inclusion in
a registration or qualification and related Underwritten Offering
is properly requested, to be included in such registration or
qualification and Underwritten Offering.
3. Shelf Registration.
(a) Filing. As promptly as practicable following a
demand by Holders of not less than 25% of the Registrable Common
Shares at any time up until the sixth (6th) anniversary of the
Closing Date, the Company shall file with the Commission a Shelf
Registration Statement relating to the offer and sale of the
Registrable Common Shares by Holders from time to time in
accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement and,
thereafter, shall use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective under the
Securities Act. If, on the date of any such demand, the Company
does not qualify to file a Shelf Registration Statement, then the
provisions of this Section 3 shall not apply, but, if at any time
thereafter, the Company does so qualify, it shall, as promptly as
practicable following a subsequent demand by Holders of not less
than 25% of the Registrable Common Shares, file a Shelf
Registration Statement and use its
3
reasonable best efforts to cause the Shelf Registration Statement
to be declared effective. Any such requested registration that
results in the declaration of effectiveness of a Shelf
Registration Statement shall hereinafter be referred to as a
"Shelf Registration."
(b) Continued Effectiveness. The Company shall use its
reasonable best efforts to keep any Shelf Registration Statement
filed and declared effective pursuant to Section 3(a)
continuously effective in order to permit the Prospectus forming
a part thereof to be usable by Holders until the earlier of the
date as of which (i) all the Registrable Common Shares have been
sold pursuant to such Shelf Registration Statement (but in no
event prior to the applicable period referred to in Section 4(3)
of the Securities Act and Rule 174 thereunder) or (ii) each of
the Holders is permitted to sell its Registrable Common Shares
without registration pursuant to Rule 144 under the Securities
Act or as otherwise permitted under Applicable Securities Laws
(such period of effectiveness being the "Shelf Period"). Subject
to Section 3(c), below, the Company shall not be deemed to have
used its reasonable best efforts to keep the Shelf Registration
Statement effective during the Shelf Period if the Company
voluntarily takes any action or omits to take any action that
would result in Holders not being able to offer and sell any such
Registrable Common Shares during the Shelf Period, unless such
action or omission is required by applicable Law.
(c) Delay in Filing; Suspension of Registration. If
the continued effectiveness of the Shelf Registration Statement
at any time would require the Company to make an Adverse
Disclosure, the Company may, upon giving prompt written notice of
such action to the Holders, suspend use of the Shelf Registration
Statement (a "Shelf Suspension"); provided, however, that the
Company shall not be permitted to exercise a Shelf Suspension (i)
more than one time during any twelve-month period or (ii) for a
period exceeding fifty (50) days on any such occasion (or
seventy-five (75) days if such Adverse Disclosure relates to the
filing of audited financial statements, or audited statements of
revenues and expenses, of an acquired business). In the case of a
Shelf Suspension, the Holders agree to suspend use of the
Prospectus in the Shelf Registration Statement in connection with
any such sale or purchase of or offer to sell or purchase
Registrable Common Shares upon receipt of the notice referred to
above. The Company shall immediately notify the Holders upon the
termination of any Shelf Suspension, amend or supplement the
Prospectus, if necessary, so it does not contain any untrue
statement or omission therein and furnish to the Holders such
numbers of copies of the Prospectus as so amended or supplemented
as the Holders may reasonably request. The Company agrees, if
necessary, to supplement or make amendments to the Shelf
Registration Statement, if required by the registration form used
by the Company for the Shelf Registration or by the instructions
applicable to such registration form or by the Securities Act or
the rules or regulations promulgated thereunder or as may
reasonably be requested by the Holders of a majority of the
Registrable Common Shares then outstanding.
(d) Underwritten Offering. If the Holders of a
majority of the Registrable Common Shares included in any
offering pursuant to the Shelf Registration Statement so elect
prior to the filing of any supplement to the Prospectus contained
therein relating to such offering, such offering shall be in the
form of an Underwritten Offering and the Company shall amend or
supplement the Shelf Registration Statement, if appropriate. If
any offering pursuant to a Shelf
4
Registration Statement involves an Underwritten Offering, the
Holders of a majority of the Registrable Common Shares included
in such Underwritten Offering shall, after consulting with the
Company, have the right to select the managing underwriter or
underwriters to administer such Underwritten Offering, subject to
the right of the Company to select one co-managing underwriter
reasonably acceptable to such Holders for such Underwritten
Offering.
4. Demand Registration Right.
(a) Right to Demand; Notice to Holders. If, on or at
any time after the Closing Date there is no currently effective
Shelf Registration Statement on file with the Commission pursuant
to which Holders may, from time to time in accordance with the
methods of distribution elected by such Holders and set forth in
such Shelf Registration Statement, offer and sell Registrable
Common Shares, then, at any time up until the sixth (6th)
anniversary of the Closing Date, the Holders of not less than 25%
of the Registrable Common Shares may make a written request to
the Company for registration of an offering under the Securities
Act or other Applicable Securities Laws of all or part of the
Registrable Common Shares held by such Holders, provided that the
estimated market value of the Registrable Common Shares to be so
registered is at least U.S.$20 million in the aggregate. Any such
requested registration shall hereinafter be referred to as a
"Demand Registration." Each request for a Demand Registration
shall specify the aggregate amount of Registrable Common Shares
to be registered and the intended methods of disposition thereof.
Upon such request for a Demand Registration, the Company shall
file a Registration Statement relating to such Demand
Registration (the "Demand Registration Statement"), and shall use
its reasonable best efforts promptly to cause to become effective
the Demand Registration of such Registrable Common Shares under
(i) the Securities Act and (ii) the "Blue Sky" laws of such
jurisdictions as any Holder of Registrable Common Shares being
registered under such Demand Registration or any underwriter, if
any, reasonably requests. Promptly upon receipt of a request for
a Demand Registration, the Company shall give notice of the
request to all other Holders not a signatory to such request,
notifying each such Holder of its right to participate in the
Demand Registration.
(b) Number of Demand Registrations. Subject to and in
accordance with the provisions of Section 4(c), the Company shall
be obligated to carry out up to four (4) Demand Registrations;
provided, however, that, if a Shelf Registration is requested
pursuant to Section 3(a) and a Shelf Registration Statement in
connection therewith is declared effective by the Commission,
such Shelf Registration shall count as a Demand Registration for
purposes of the foregoing obligation of the Company to carry out
up to four (4) Demand Registrations. The Company shall not be
deemed to have effected a Demand Registration unless and until
the Demand Registration Statement is declared effective and
remains in effect until the earlier of (i) the completion of the
distribution pursuant thereto and (ii) such period of time, not
exceeding two years, as requested by a majority of the
Participating Holders. In the event that a Demand Registration is
requested under this Section and Holders of the Registrable
Common Shares requesting such Demand Registration later determine
not to sell any of their Registrable Common Shares in connection
with the Demand Registration requested, then prompt notice shall
be given by such Holders to the Company that the registration
requested is no longer required and that the request is thereby
withdrawn. Upon receipt of such notice, the Company shall cease
5
all efforts to secure registration and shall take all action
necessary and reasonably practicable to prevent the commencement
of effectiveness for any Demand Registration Statement that it is
preparing or has prepared in connection with the withdrawn
request; provided, however, that such registration shall be
deemed a Demand Registration for purposes of Section 2.2(b),
above, unless the (i) withdrawing Holders shall have paid or
reimbursed the Company for all of the reasonable out-of-pocket
fees and expenses incurred by the Company in connection with the
registration of such withdrawn Registrable Common Shares or (ii)
two previous such withdrawals have occurred. No Demand
Registration shall be deemed to have been effected if (i) during
the Demand Period such registration is interfered with by any
stop order, injunction or other order or requirement of the
Commission or other governmental agency or court or (ii) the
conditions to closing specified in the underwriting agreement, if
any, entered into in connection with such registration are not
satisfied by reason of a wrongful act, misrepresentation or
breach of an applicable underwriting agreement by the Company.
(c) Limitation on Demand Registration. The Company
shall be entitled to postpone for a reasonable period of time
(not to exceed 90 days) the filing of any Registration Statement
or other qualified document otherwise required to be prepared and
filed by it pursuant to Section 4(a) hereof if, at the time it
receives a request for such registration, (i) the Company is
conducting or about to conduct an offering of its securities and
the Company is advised by its investment banking firm that
inclusion of such Registrable Common Shares will, in the opinion
of such investment banking firm, materially interfere with the
orderly sale and distribution of the securities being offered
under such Registration Statement or other qualified document or
(ii) compliance with such filing requirement would materially
adversely affect (including, without limitation, through
premature disclosure thereof) a proposed financing,
reorganization, recapitalization, merger, acquisition,
consolidation or similar transaction involving the Company.
(d) Delay in Filing; Suspension of Registration. If
the continued effectiveness of the Demand Registration Statement
at any time would require the Company to make an Adverse
Disclosure, the Company may, upon giving prompt written notice of
such action to the Participating Holders, suspend use of the
Demand Registration Statement (a "Demand Suspension"); provided,
however, that the Company shall not be permitted to exercise a
Demand Suspension (i) more than one time with respect to any one
Demand Registration or (ii) for a period exceeding fifty (50)
days on any such occasion (or seventy-five (75) days if such
Adverse Disclosure relates to the filing of audited financial
statements, or audited statements of revenues and expenses, of an
acquired business). In the case of a Demand Suspension, the
Participating Holders agree to suspend use of the Prospectus
related to the Demand Registration in connection with any such
sale or purchase or offer to sell or purchase of Registrable
Common Shares upon receipt of the notice referred to above. The
Company shall immediately notify the Participating Holders upon
the termination of any Demand Suspension, amend or supplement the
Prospectus, if necessary, so it does not contain any untrue
statement or omission therein and furnish to the Participating
Holders such numbers of copies of the Prospectus as so amended or
supplemented as the Participating Holders may reasonably request.
The Company agrees, if necessary, to supplement or make
amendments to the Demand Registration Statement, if required by
the registration form used by the Company for the Demand
Registration or by the instructions applicable to such
registration form or by the Securities Act or the rules or
regulations
6
promulgated thereunder or as may reasonably be requested by the
Holders of a majority of the Registrable Common Shares included
in the offering pursuant to such Demand Registration Statement.
(e) Underwritten Offering. If the Holders of a
majority of the Registrable Common Shares included in any
offering pursuant to a Demand Registration Statement so elect
prior to the filing thereof, such offering shall be in the form
of an Underwritten Offering. If any offering pursuant to a Demand
Registration involves an Underwritten Offering, the Holders of a
majority of the Registrable Common Shares included in such
Underwritten Offering shall, after consulting with the Company,
have the right to select the managing underwriter or underwriters
to administer such Underwritten Offering, subject to the right of
the Company to select one co- managing underwriter reasonably
acceptable to such Holders for such Underwritten Offering.
5. Black-Out Periods.
(a) Restrictions on Public Sale by Holders. To the
extent not inconsistent with applicable Law, each Holder agrees
not to effect any public sale or distribution of Subject Common
Shares, other Common Shares or a security of the Company or any
securities convertible into or exchangeable or exercisable for
Common Shares, during the seven days prior to, and during the
90-day period beginning on, the effective date of any
Registration Statement or other qualified document, or, in the
case of an Underwritten Offering pursuant to a Shelf Registration
Statement, the date of the closing under the underwriting
agreement entered into in connection therewith (except for a sale
or distribution that is part of the registration to which such
Registration Statement relates), if and to the extent requested
in writing (with reasonable prior notice), by (i) the Company in
the case of a public offering by the Company other than an
Underwritten Offering, or (ii) the managing underwriter or
underwriters in the case of an Underwritten Offering.
(b) Restrictions on Public Sale by Company. To the
extent not inconsistent with applicable Law, the Company agrees
not to effect any public sale or distribution of Subject Common
Shares, other Common Shares or a security of the Company or any
securities convertible into or exchangeable or exercisable for
Common Shares, during the seven days prior to, and during the
90-day period beginning on, the effective date of any
Registration Statement or other qualified document, or, in the
case of an Underwritten Offering pursuant to a Shelf Registration
Statement, the date of the closing under the underwriting
agreement entered into in connection therewith (except for a sale
or distribution that is part of the registration to which such
Registration Statement relates), if and to the extent requested
in writing (with reasonable prior notice), by (i) Holders of a
majority of the Registrable Common Shares in the case of a public
offering by the Company other than an Underwritten Offering or
(ii) the managing underwriter or underwriters in the case of an
Underwritten Offering. The Company agrees to use all reasonable
efforts to obtain from each holder of restricted Common Shares or
restricted securities convertible into or exchangeable or
exercisable for Common Shares of the Company, which restricted
Common Shares or securities are acquired on or after the date
hereof and with respect to which the Company has granted
registration rights in accordance with Section 9(a), an agreement
not to effect any public sale or distribution of such securities
(other than securities
7
purchased in a public offering) during any such period referred
to in this paragraph, except as part of any such registration if
permitted. Without limiting the foregoing, if after the date
hereof the Company grants any Person (other than a Holder) any
rights to demand or participate in, a registration, the Company
agrees that the agreement with respect thereto shall include such
Person's agreement as contemplated by the previous sentence.
6. Registration Procedures.
In connection with the Company's registration
obligations under Sections 2, 3, or 4 hereof, the Company will
use its best efforts to effect the registration and the sale of
such Registrable Common Shares in accordance with the intended
method of disposition, as quickly as practicable, and in
connection with any such request and with any Demand
Registration, the Company will as expeditiously as possible:
(a) prepare and file a Registration Statement or other
qualified document under the Applicable Securities Laws which
includes the Registrable Common Shares and use its best efforts
to cause such Registration Statement or other qualified document
to become effective;
(b) prepare and file such amendments and
post-effective amendments to the Registration Statement and
Prospectus used in connection therewith as may be necessary to
keep the Registration Statement or other qualified document
effective for a period of not less than 120 days (in the case of
a registration referred to in Section 2) or, in the case of a
Demand Registration, such period of time, not exceeding two
years, as requested by the Holders requesting such Demand
Registration (or such shorter period as shall be necessary to
permit Participating Holders to complete the distribution of the
Registrable Common Shares to which such Registration Statement or
other qualified document relates in accordance with its intended
methods of distribution) and to comply with the provisions of
Applicable Securities Laws with respect to the disposition of all
Registrable Common Shares covered by the Registration Statement
or other qualified document for the period required to effect the
distribution thereof, but in no event shall the Company be
required to do so for a period of more than 120 days (in the case
of a registration referred to in Section 2) or two years (in the
case of a Demand Registration) following the effective date of
such Registration Statement or other qualified document;
(c) furnish to Participating Holders and the
underwriter or underwriters, if any, and to counsel to
Participating Holders and underwriters such number of conformed
copies of the Registration Statement and post-effective amendment
thereto, upon request, and such number or copies of the
Prospectus (including each preliminary Prospectus) and any
amendments or supplements thereto, and any documents incorporated
by reference therein, as Participating Holders or such
underwriter(s) may reasonably request in order to facilitate the
disposition of the Registrable Common Shares being sold by
Participating Holders (it being understood that the Company
consents to the use of the Prospectus and any amendment or
supplement thereto by Participating Holders and the underwriter
or underwriters, if any, in connection with the offering and sale
of the Registrable Common Shares covered by the Prospectus or any
amendment or supplement thereto);
8
(d) notify all Participating Holders and the
underwriters, if any, at any time when a Prospectus relating
thereto is required to be delivered under Applicable Securities
Laws, when the Company becomes aware of the happening of any
event as a result of which any Prospectus included in such
Registration Statement or other qualified document (as then in
effect) contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading and, as promptly as possible thereafter,
prepare and file pursuant to Applicable Securities Laws and
furnish a supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable Common
Shares, such Prospectus will not contain 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.
(e) on or prior to the date on which the Registration
Statement or other qualified document is declared effective, use
its best efforts to register or qualify the Registrable Common
Shares covered by the Registration Statement or other qualified
documents for offer and sale under the Applicable Securities Laws
of each jurisdiction as any Participating Holder or underwriter
requests in writing, and to cooperate with each Participating
Holder, the underwriter or underwriters, if any, and their
counsel, in connection therewith; to use its best efforts to keep
each such registration or qualification effective, including
through new filings, or amendments or renewals, during the period
such Registration Statement or other qualified document is
required to be kept effective and to do any and all other acts or
things necessary or advisable to enable the disposition in all
such jurisdictions of the Registrable Common Shares covered by
the applicable Registration Statement or other qualified
document;
(f) cooperate with Participating Holders and the
managing underwriter or underwriters, if any, to facilitate the
timely preparation and delivery of certificates (not bearing any
restrictive legends) representing Common Shares to be sold under
the Registration Statement or other qualified document, and
enable such Common Shares to be in such denominations and
registered in such names as the managing underwriter or
underwriters, if any, or any Participating Holder may request;
(g) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
actions (including, without limitation, delivery of customary
legal opinions and officers' certificates) as any Participating
Holder reasonably requests in order to expedite or facilitate the
disposition of such Registrable Common Shares;
(h) make available for inspection by any underwriter
participating in any disposition pursuant to such Registration
Statement, and any attorney, accountant or other agent retained
by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, as
shall be reasonably necessary to enable it to exercise its due
diligence responsibility provided such parties, if requested,
have entered into a confidentiality agreement with the Company;
and
9
(i) use its best effort to obtain a "cold comfort"
letter from the Company's independent public accountants in
customary form and covering such matters of the type customarily
covered by "cold comfort" letters as any Participating Holder or
the underwriter reasonably requests.
Each Participating Holder, upon receipt of any notice
from the Company of the happening of any event of the kind
described in subsection (d) of this Section 6, will immediately
discontinue disposition of the Registrable Common Shares until
receipt by such Participating Holder of the copies of the
supplemented or amended Prospectus contemplated by subsection (d)
of this Section 6 and copies of any additional or supplemental
filings which are incorporated by reference in the Prospectus, or
until it is advised in writing (the "Advice") by the Company that
the use of the Prospectus may be resumed, and, if so directed by
the Company, each Participating Holder will, or will request the
managing underwriter or underwriters, if any, to deliver to the
Company (at the Company's expense) all copies, other than
permanent file copies then in each such Participating Holder's
possession, of the Prospectus covering such Registrable Common
Shares current at the time of receipt of such notice. In the
event the Company shall give any such notice, the time periods
mentioned in subsection (b) of this Section 6 shall be extended
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
each Participating Holder shall have received (y) the copies of
the supplemented or amended Prospectus contemplated by subsection
(d) of this Section 6 and copies of any additional or
supplemental filings which are incorporated by reference in the
Prospectus or (z) the Advice.
7. Registration Expenses.
(a) Registration in the United States or Any Political
Subdivision Thereof. In the event of distribution of Registrable
Common Shares in the United States or any political subdivision
thereof pursuant to this Agreement, the Company will bear all
expenses incident to the Company's performance of or compliance
with this Agreement, including, without limitation, all
Commission, National Association of Securities Dealers, Inc.,
NYSE and TSE registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with
determination of eligibility for investment and blue sky
qualifications of the Registrable Common Shares), printing
expenses, messenger and delivery expenses, internal expenses
(including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties),
fees and disbursements of counsel for the Company and its
independent certified public accountants (including the expenses
of any special audit or "cold comfort" letters (if requested by
the underwriter) required by or incident to such performance),
reasonable fees and disbursements of counsel selected by
Participating Holders, securities acts liability insurance (if
the Company elects to obtain such insurance), the reasonable fees
and expenses of any special experts retained by the Company in
connection with such registration, the reasonable fees and
disbursements of underwriters customarily paid by issuers or
sellers of securities and fees and expenses of other Persons
retained by the Company (all such expenses being referred to
herein as "Registration Expenses") and excluding any fees and
disbursements of underwriters not customarily paid by the issuers
or sellers of securities, including underwriting discounts and
commissions and
10
transfer taxes, if any, attributable to the sale of Registrable
Common Shares and the fees and expenses of counsel to the
underwriters other than as provided above; provided, however,
that, the Holders shall be responsible for Registration Expenses
in connection with any one (1) of the four (4) permitted Demand
Registrations (including any Shelf Registration) so elected by
the Holders of a majority of the Registrable Common Shares
included in such Demand Registration (or by Holders of a majority
of the Registrable Common Shares outstanding at the time a Shelf
Registration is requested).
(b) Qualification in Canada or Any Political
Subdivision Thereof. In the event that any Participating Holder
exercises its rights pursuant to Section 2 of this Agreement in
connection with a qualification or registration of Registrable
Common Shares under Applicable Securities Laws of Canada or any
political subdivision thereof, each Participating Holder shall
pay its allocable share of the expenses incurred by the Company
in connection with the registration or other qualification based
upon the offering price of the Registrable Common Shares it has
sold divided by the total offering price of the securities
covered by the registration or other qualification.
8. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees
to indemnify, protect and hold harmless, to the full extent
permitted by applicable Law, each Holder, its partners, officers,
directors, employees and agents, the general partner of any
general partner, the partners, officers, directors, employees and
agents of any general partner's general partner, any investment
partnership of which a Holder is the general partner, and each
partner of such investment partnership, and any agent or
investment adviser of any thereof, and each person who controls
any such person (within the meaning of the Securities Act),
against all losses, claims, damages, liabilities and expenses
arising out of or based on any untrue or allegedly untrue
statement of material fact contained in any Registration
Statement, other qualified document or any amendment thereof or
supplement thereto or any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein in light of the
circumstances under which they were made, not misleading, except
to the extent, and only to the extent, that the same are caused
by or contained in any information which any such Holder
furnished in writing to the Company expressly for use therein or
by any such Holder's failure to deliver to a purchaser of
securities a copy of the Prospectus, other qualified document or
any amendments thereof or supplements thereto at a time when such
Holder is required by Applicable Securities Laws to do so after
the Company has furnished it with a sufficient number of copies
of the same. In connection with an underwritten offering, the
Company will indemnify, protect and hold harmless the
underwriters thereof, selling brokers, dealer managers, and
similar securities industries professionals, their officers,
directors, employees, agent and each person who controls any such
person (within the meaning of the Securities Act) to the same
extent as provided above with respect to the indemnification of
Holders.
(b) Indemnification by Holders. In connection with any
Registration Statement or other qualified document in which a
Holder is participating, such Holder will furnish to the Company
in writing such customary information with respect to such Holder
as the
11
Company reasonably requests for use in connection with any such
Registration Statement, other qualified document or any amendment
thereof or supplement thereto and agrees to indemnify, to the
extent permitted by applicable Law, the Company, its directors,
employees, agents, officers, and each person who controls the
Company (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses arising out of
or based on any untrue or allegedly untrue statement of a
material fact contained in any Registration Statement, other
qualified document or any amendment thereof or supplement thereto
or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, to the extent, but only to the
extent, that such untrue statement or omission is caused by or
contained in any information which such Holder furnished in
writing to the Company expressly for use therein or by such
Holder's failure to deliver to a purchaser of securities a copy
of the Prospectus, or other qualified document or any amendments
thereof or supplements thereto at a time when such Holder is
required by the Securities Act to do so after the Company has
furnished it with a sufficient number of copies of the same. In
no event shall the liability of any Holder hereunder be greater
in amount than the dollar amount of the net proceeds received by
such Holder upon the sale of the Registrable Common Shares giving
rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any person
entitled to indemnification hereunder agrees to give prompt
written notice to the indemnifying party after the receipt by
such person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made
in writing for which such person will claim indemnification or
contribution pursuant to this Agreement and, unless in the
reasonable judgment of such indemnified party a conflict of
interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to such indemnified party.
Whether or not such defense is assumed by the indemnifying party,
the indemnifying party will not be subject to any liability for
any settlement made without its consent (but such consent will
not be unreasonably withheld or delayed). No indemnifying party
will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of
such claim or litigation. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it
will not be obligated to pay the fees and expenses with respect
to such claim of more than one counsel (and one local counsel)
for the indemnified party with respect to which a claim has been
asserted (which fees and expenses will be paid as they are billed
to the indemnified party) unless in the reasonable judgment of
such indemnified party (based on a written opinion of counsel) a
conflict of interest may exist between such indemnified party and
any other of such indemnified parties with respect to such claim,
in which event the indemnifying party shall be obligated to pay
the fees and expenses of such additional counsel or counsels as
shall be necessary to eliminate such conflicts in connection with
the representation of indemnified parties, such fees and expenses
to be paid as they are billed to the indemnified party.
(d) Contribution. In order to provide for just and
equitable contribution in circumstances in which the
indemnification provided for in this Section 8 is for any reason
held
12
to be unenforceable although applicable in accordance with its
terms, the Company and each Holder shall contribute to the
losses, claims, damages, liabilities and expenses described
herein, in such proportions so that the portion thereof for which
each Holder shall be responsible shall be limited to the portion
determined by a court or the parties to any settlement to arise
out of or to be based on any untrue statement of material fact
contained in a Registration Statement, or other qualified
document, or any amendment thereof or supplement thereto or any
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading,
caused by or contained in any information which each such Holder
furnished in writing to the Company expressly for use therein or
by such Holder's failure to deliver to a purchaser of securities
a copy of the Prospectus, or other qualified document or any
amendments to supplements thereto at a time when such Holder is
required by Applicable Securities Laws to do so after the Company
has furnished it with a sufficient number of copies of the same,
and the Company shall be responsible for the balance (subject to
any other rights the Company may have against any other selling
holder the securities of which were included in such Registration
Statement, or other qualified document, amendment or supplement);
provided, that the liability of each Holder shall in no event
exceed the net proceeds from the Registrable Common Shares sold
by it thereunder. The Company and Holders agree that it would not
be just and equitable if their respective obligations to
contribute were to be determined by pro rata allocation, by
reference to the proceeds realized by them or in any manner which
does not take into account the equitable considerations set forth
in this Section 8(d).
9. Miscellaneous.
(a) Limitations on Subsequent Registration Rights. The
Company agrees and covenants that it will not grant or allow, or
amend or waive any provision of any agreement providing
registration rights to provide, any persons or entities any
registration rights with respect to any securities of the Company
held by such persons or entities that are better than the rights
granted to Holders hereunder, nor shall the Company grant any
persons or entities any registration rights which would result in
such persons or entities being able to register their shares
prior to Registrable Common Shares held by all Holders or on
demand without the full, pro rata participation of all Holders in
any such Demand Registration.
(b) Amendments and Waivers. Except as otherwise
provided herein, the provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of a majority
of Registrable Common Shares.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent
by telex or telecopier, registered or certified mail (return
receipt requested), postage prepaid to (i) the Company and
Partners II as provided in the Stock Purchase Agreement and to
(ii) Partners I and Parallel I as set forth below. Notices sent
by mail shall be effective two days after mailing; notices sent
by telex shall be effective when answered back; notices sent by
telecopier shall be effective when receipt is acknowledged; and
notices sent by courier
13
guaranteeing next day delivery shall be effective on the next
business day after timely delivery to the courier.
If to Partners I: TPG Partners, L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx X. X'Xxxxx
If to Parallel I: TPG Parallel I, L.P.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx X. X'Xxxxx
(d) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns
of each of the parties, it being understood that no assignment
shall increase the number of Demand Registrations (including
Shelf Registrations) available under this Agreement.
(e) 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.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas.
(h) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended that all of the rights
and privileges of the Holders shall be enforceable to the fullest
extent permitted by law.
(i) Entire Agreement. This Agreement, together with
the Stock Purchase Agreement and the documents contemplated
thereby, is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and
therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein
and therein. This Agreement and the Stock Purchase Agreement
(including the exhibits thereto) and the documents contemplated
thereby supersede all prior agreements and understandings between
the parties with respect to such subject matter,
14
including the Registration Rights Agreement dated as of December
21, 1995 by and among the Company, Partners I and Parallel I, as
amended.
(j) Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement or the Stock
Purchase Agreement, or where any provision hereof or thereof is
validly asserted as a defense, the successful party shall be
entitled to recover reasonable attorneys' fees in addition to any
other available remedy.
(k) No Inconsistent Agreements. None of the Company,
Partners I, Partners II or Parallel I will on or after the date
of this Agreement enter into any agreement with respect to the
Subject Common Shares which is inconsistent with the rights
granted in this Agreement or otherwise conflicts with the
provisions hereof. Nothing herein shall limit the rights of
Partners I, Partners II and Parallel I pursuant to securities
rules, regulations and laws of Canada.
(l) Enforcement. It is specifically agreed and
understood that monetary damages would not adequately compensate
the non-breach parties for the breaching of this Agreement and
this Agreement shall therefore be specifically enforceable, and
any breach or threatened breach of this Agreement shall be the
proper subject of a temporary or permanent injunction or
restraining order, without necessity of bond or other security.
15
IN WITNESS WHEREOF, the parties shave executed this
Agreement as of the Effective Date.
DENBURY RESOURCES INC.
By:________________________
TPG PARTNERS, L.P.
By: TPG GenPar, L.P., its
general partner
By: TPG Advisors, Inc., its
general partner
By:________________________
TPG PARALLEL I, L.P.
By: TPG GenPar, L.P., its
general partner
By: TPG Advisors, Inc., its
general partner
By:________________________
TPG PARTNERS II, L.P.
By: TPG GenPar II, L.P., its
general partner
By: TPG Advisors II, Inc., its
general partner
By:________________________
16
Schedules
---------
There are no schedules to this Agreement.
