EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
as of April 2, 1997, among CROSS TIMBERS OIL COMPANY, a Delaware corporation
(the "Company"), and XXXXXXX XXXXX & CO., XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED, BEAR, XXXXXXX & CO. INC. and XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION (the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated March 26,
1997 among the Company and the Initial Purchasers (the "Purchase Agreement"),
which provides for the sale by the Company to the Initial Purchasers of an
aggregate of $125,000,000 principal amount of the Company's 9 1/4% Series A
Senior Subordinated Notes due 2007 (the "Debt Securities"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree, and all other
Holders (as defined below) of Registrable Securities (as defined below) from
time to time, by their acceptance thereof, shall be conclusively deemed to have
agreed, as follows:
Section 1. Definitions.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Agreement" shall have the meaning set forth in the preamble.
"Closing Date" shall mean the date on which the Closing Time (as defined in
the Purchase Agreement) occurs.
"Company" shall have the meaning set forth in the preamble and also
includes the Company's successors.
"Debt Securities" shall have the meaning set forth in the preamble.
"Depositary" shall mean the Trustee, or any other exchange agent appointed
by the Company.
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"Exchange Offer" shall mean the exchange offer by the Company of Exchange
Securities for Registrable Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933 Act
effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Securities" shall mean 9 1/4% Series B Senior Subordinated Notes
due 2007 issued by the Company under the Indenture containing terms identical in
all material respects to the Debt Securities (except that (i) interest on the
Exchange Securities shall accrue from the last date on which interest was paid
or duly provided for on the Debt Securities or, if no such interest has been
paid, from April 2, 1997, (ii) the transfer restrictions on the Debt Securities
shall be eliminated and (iii) certain provisions relating to an increase in the
stated rate of interest on the Debt Securities shall be eliminated), to be
offered to Holders of Debt Securities in exchange for Debt Securities pursuant
to the Exchange Offer.
"Holders" shall mean each of the Initial Purchasers, for so long as it owns
any Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who shall at the time be owners of Registrable Securities
under the Indenture; provided, however, that the term Holder shall exclude any
underwriter who purchased Registrable Securities for distribution in an
underwritten public offering pursuant to an effective Registration Statement.
"Indenture" shall mean the Indenture relating to the Debt Securities dated
as of April 1, 1997 between the Company and The Bank of New York, as trustee, as
the same may be amended from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble.
"Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Registrable Securities; provided, however, that
whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities directly or
indirectly held by the Company shall be disregarded in determining whether such
consent or approval was given by the Holders of such required percentage or
amount; and provided, further, that whenever the consent or approval of Holders
of Registrable Securities is required hereunder with regard to matters related
to a registered underwritten or similar offering or with regard to matters
pertaining to a Registration Statement, Registrable Securities held by Holders
not participating in such registered underwritten or similar offering, or
Registrable Securities not registered pursuant to such Registration Statement
(or, at any time prior to the filing of a Subject Registration Statement and
after the determination to file such Subject Registration Statement is made,
Registrable Securities whose Holders have not requested that such Registrable
Securities be
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included in such Subject Registration Statement), as the case may be, shall be
disregarded in determining whether such consent or approval was given by the
Holders of such required percentage or amount.
"Xxxxxxx Xxxxx" shall mean Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, on behalf of the Initial Purchasers.
"Person" shall mean an individual, partnership, corporation, trust,
unincorporated organization, limited liability company, joint stock company,
joint venture, charitable foundation or other entity, or a government or any
agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Subject Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated or deemed to be
incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
"Purchaser Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b)(iii) of this
Agreement with respect to offers and sales of Registrable Securities held by any
or all of the Initial Purchasers (except Registrable Securities which the
Initial Purchasers have elected not to include in such Purchaser Shelf
Registration Statement or the Initial Purchasers of which have not complied with
their obligations under the penultimate paragraph of Section 3 hereof or under
the penultimate sentence of Section 2(b) hereof) after completion of the
Exchange Offer on an appropriate form under Rule 415 under the 1933 Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated or deemed to be incorporated by reference therein.
"Registrable Securities" shall mean the Debt Securities; provided, however,
that any Debt Securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Debt Securities shall have been
declared effective under the 1933 Act and such Debt Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Debt Securities
shall have been sold to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the 1933 Act, (iii) such Debt
Securities shall have become eligible for resale pursuant to Rule 144(k) under
the 1933 Act, (iv) such Debt Securities shall have ceased to be outstanding or
(v) such Debt Securities have been exchanged for Exchange Securities upon
consummation of the Exchange Offer.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National
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Association of Securities Dealers, Inc. ("NASD") registration and filing fees,
(ii) all fees and expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and disbursements of one
firm of legal counsel for any underwriters and Holders in connection with blue
sky qualification of any of the Exchange Securities or Registrable Securities),
(iii) all expenses of printing and distributing any Registration Statement, any
Prospectus and any amendments or supplements thereto, (iv) all rating agency
fees, (v) the fees and disbursements of counsel(s) for the Company and of the
independent public accountants of the Company, including the expenses of "cold
comfort" letters required by this Agreement, (vi) the fees and expenses of the
Trustee, and any escrow agent or custodian, (vii) all fees and expenses incurred
in connection with listing the Debt Securities or the Exchange Securities, as
the case may be, on any securities exchange or on any securities quotation
system and (viii) the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration Statement, but
excluding fees of counsel to the underwriters or the Holders and underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
Company which covers any of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement, and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated or deemed to be incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to Section
2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2(b)(i) or (ii) of this
Agreement which covers all of the Registrable Securities (except Registrable
Securities which the Holders have elected not to include in such Shelf
Registration Statement or the Holders of which have not complied with their
obligations under the penultimate paragraph of Section 3 hereof or under the
penultimate sentence of Section 2(b) hereof) on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and
all amendments and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated or deemed to be incorporated
by reference therein.
"Subject Registration Statement" shall mean a Shelf Registration Statement
or a Purchaser Shelf Registration Statement or both (as the context requires).
"Trustee" shall mean the trustee with respect to the Debt Securities under
the Indenture.
All references herein to information which is "included" or "contained" in
a Registration Statement or Prospectus, and all references of like import, shall
include the information (including financial statements) incorporated or deemed
to be incorporated by reference therein, and all references herein to amendments
or supplements to a Registration Statement or Prospectus shall
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include any documents filed by the Company under the 1934 Act which are deemed
to be incorporated by reference therein.
Section 2. Registration Under the 1933 Act.
(a) Exchange Offer Registration. To the extent not prohibited by
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law (including, without limitation, any applicable interpretation of the staff
of the SEC), the Company shall use its reasonable best efforts (i) to file
within 45 days after the Closing Date an Exchange Offer Registration Statement
covering the offer by the Company to the Holders to exchange all of the
Registrable Securities (except Registrable Securities held by an Initial
Purchaser and acquired directly from the Company if such Initial Purchaser is
not permitted, in the reasonable opinion of counsel to the Initial Purchasers,
pursuant to applicable law or SEC interpretation, to participate in the Exchange
Offer) for Exchange Securities, (ii) to cause such Exchange Offer Registration
Statement to be declared effective by the SEC within 105 days after the Closing
Date, (iii) to cause such Exchange Offer Registration Statement to remain
effective until the closing of the Exchange Offer and (iv) to consummate the
Exchange Offer within 180 days following the Closing Date. The Exchange
Securities will be issued under the Indenture. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to enable each
Holder (other than Participating Broker-Dealers (as defined in Section 3(f)
hereof) and broker-dealers who purchased Debt Securities directly from the
Company to resell pursuant to Rule 144A or any other available exemption under
the 0000 Xxx) eligible and electing to exchange Registrable Securities for
Exchange Securities (assuming that such Holder is not an affiliate of the
Company, acquires the Exchange Securities in the ordinary course of such
Holder's business and has no arrangements or understandings with any person to
participate in the distribution (within the meaning of the 0000 Xxx) of Exchange
Securities) to trade or sell such Exchange Securities from and after their
receipt without any limitations or restrictions under the 1933 Act and without
material restrictions under the securities laws of a substantial proportion of
the several states of the United States.
In connection with the Exchange Offer, the Company shall:
(A) mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(B) keep the Exchange Offer open for not less than 30 days
after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(C) use the services of the Depositary for the Exchange
Offer;
(D) permit Holders to withdraw tendered Registrable
Securities at any time prior to the close of business, New York City
time, on the last business day on which the Exchange Offer shall
remain open, by sending to the institution specified
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in the notice, a telegram, telex, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of
Registrable Securities delivered for exchange and a statement that
such Holder is withdrawing his election to have such Debt Securities
exchanged; and
(E) otherwise comply in all respects with all applicable
laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(x) accept for exchange Registrable Securities duly
tendered and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration Statement
and the letter of transmittal which is an exhibit thereto;
(y) deliver, or cause to be delivered, to the Trustee
for cancellation all Registrable Securities so accepted for exchange
by the Company; and
(z) cause the Trustee promptly to authenticate and
deliver Exchange Securities to each Holder of Registrable Securities
equal in amount to the Registrable Securities of such Holder so
accepted for exchange.
Interest on each Exchange Security will accrue from the last date on which
interest was paid or duly provided for on the Registrable Securities surrendered
in exchange therefor or, if no interest has been paid on the Registrable
Securities, from April 2, 1997. The Exchange Offer shall not be subject to any
conditions, other than (1) that the Exchange Offer, or the making of any
exchange by a Holder, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (2) that no action or proceeding shall
have been instituted or threatened in any court or by or before any governmental
agency or body with respect to the Exchange Offer, (3) that there shall not have
been adopted or enacted any law, statute, rule or regulation prohibiting or
limiting the Exchange Offer, (4) that there shall not have been declared by
United States federal or Texas or New York state authorities a banking
moratorium, (5) that trading on the New York Stock Exchange or generally in the
United States over-the-counter market shall not have been suspended by order of
the SEC or any other governmental authority and (6) such other conditions as may
be reasonably acceptable to Xxxxxxx Xxxxx which, in the Company's judgment,
would reasonably be expected to impair the ability of the Company to proceed
with the Exchange Offer. In addition, each Holder of Registrable Securities
(other than Participating Broker-Dealers) who wishes to exchange such
Registrable Securities for Exchange Securities in the Exchange Offer will be
required to represent that (I) it is not an affiliate of the Company, (II) any
Exchange Securities to be received by it were acquired in the ordinary course of
business and (III) it is not engaged in, and does not intend to engage in, and
has no arrangement or understanding with any person to participate in, the
distribution (within the meaning of the 0000 Xxx) of the Exchange Securities.
Each Participating Broker-Dealer shall be required to make such representations
as, in the reasonable judgment of the Company, may be necessary under applicable
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SEC rules, regulations or interpretations or customary in connection with
similar exchange offers. Each Holder (including Participating Broker-Dealers)
shall be required to make such other representations as may be reasonably
necessary under applicable SEC rules, regulations or interpretations to render
the use of Form S-4 or another appropriate form under the 1933 Act available and
will be required to agree to comply with their agreements and covenants set
forth in this Agreement. The Exchange Offer shall be subject to the further
condition that no stop order, injunction or similar order shall have been issued
or obtained by the SEC or any state securities authority suspending the
effectiveness of the Exchange Offer Registration Statement and no proceedings
shall have been initiated or, to the knowledge of the Company, threatened for
that purpose. To the extent permitted by law, the Company shall, upon request of
Xxxxxxx Xxxxx, inform the Initial Purchasers of the names and addresses of the
Holders to whom the Exchange Offer is made, and the Initial Purchasers shall
have the right to, and, if requested by the Company, shall, contact such Holders
and otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
Prior to effectiveness of the Exchange Offer Registration Statement, the
Company shall, if requested by the staff of the SEC, provide a supplemental
letter to the SEC (aa) stating that the Company is registering the Exchange
Offer in reliance on the position of the SEC enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988) and Xxxxxx Xxxxxxx and Co., Inc.
(available June 5, 1991) and (bb) including a representation that the Company
has not entered into any arrangement or understanding with any Person to
distribute the Exchange Securities and that, to the best of the Company's
information and belief, each Holder participating in the Exchange Offer is
acquiring the Exchange Securities in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the distribution
of the Exchange Securities received in the Exchange Offer.
If in the reasonable opinion of counsel to the Company there is a question
as to whether the Exchange Offer is permitted by applicable law, the Company
hereby agrees to seek a no-action letter or other favorable decision from the
SEC allowing the Company to consummate the Exchange Offer. The Company hereby
agrees to pursue the issuance of such a decision to the SEC staff level, but
shall not be required to take action to effect a change of stated or recognized
SEC policy. The Company hereby agrees, however, to (xx) participate in
telephonic conferences with the SEC and the staff of the SEC, (yy) deliver to
the staff of the SEC an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that the
Exchange Offer should be permitted and (zzz) diligently pursue a resolution
(which need not be favorable) by the staff of the SEC of such submission.
(b) Shelf Registration. (i) If, because of any change in law or
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applicable interpretations thereof by the staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
or (ii) if for any other reason the Exchange Offer Registration Statement is not
declared effective within 105 days after the Closing Date or the Exchange Offer
is not consummated within 180 days after the Closing Date, or (iii) upon the
request of Xxxxxxx Xxxxx (but only with respect to any Registrable Securities
which the Initial Purchasers acquired directly from the Company) following the
consummation of the Exchange Offer if any of the Initial Purchasers shall hold
Registrable Securities which such Initial Purchaser acquired directly
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from the Company and if such Initial Purchaser is not permitted, in the
reasonable opinion of counsel to the Initial Purchasers, pursuant to applicable
law or applicable interpretation of the staff of the SEC to participate in the
Exchange Offer, then the Company shall, at its cost:
(A) in the event clause (i) or (ii) is applicable, as
promptly as practicable (but in no event (x) more than 30 days from
the date on which the Company determined that it is not permitted to
effect the Exchange Offer as contemplated by Section 2(a) hereof in
the case of clause (i) or (y) on the 135th day after the Closing Date
in the case of clause (ii)), file with the SEC a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities
(other than Registrable Securities owned by Holders who have elected
not to include such Registrable Securities in such Shelf Registration
Statement or who have not complied with their obligations under the
penultimate paragraph of Section 3 hereof or under the penultimate
sentence of this Section 2(b)) by the Holders from time to time in
accordance with the methods of distribution elected by the Majority
Holders of such Registrable Securities and set forth in such Shelf
Registration Statement, and use its reasonable best efforts to cause
such Shelf Registration Statement to be declared effective by the SEC
by the 180th day after the Closing Date. In the event that the Company
is required to file a Purchaser Shelf Registration Statement upon the
request of Xxxxxxx Xxxxx pursuant to clause (iii) above, the Company
shall use its reasonable best efforts (unless clause (i) or (ii) above
is applicable) to file and have declared effective by the SEC an
Exchange Offer Registration Statement pursuant to Section 2(a) with
respect to all Registrable Securities (other than Registrable
Securities acquired directly from the Company and held by the Initial
Purchasers) and use its reasonable best efforts to file, promptly
after any such request from Xxxxxxx Xxxxx, and have declared
effective, a Purchaser Shelf Registration Statement (which may be a
combined Registration Statement with the Exchange Offer Registration
Statement or, if clause (i) or (ii) above is applicable, a combined
Registration Statement with the Shelf Registration Statement);
(B) use its reasonable best efforts to keep the relevant
Subject Registration Statement continuously effective in order to
permit the Prospectus forming part thereof to be usable by Holders for
a period of two years from the date a Shelf Registration Statement is
declared effective by the SEC (or, in the case of a Purchaser Shelf
Registration Statement, one year from the date a Purchaser Shelf
Registration Statement is declared effective) or in each case such
shorter period which will terminate when all of the Registrable
Securities covered by the relevant Subject Registration Statement have
been sold pursuant to such Subject Registration Statement or otherwise
are no longer Registrable Securities; and
(C) notwithstanding any other provisions hereof, use its
reasonable best efforts to ensure that (x) any Subject Registration
Statement and any amendment thereto and any Prospectus forming part
thereof and any supplement thereto complies in all material respects
with the 1933 Act and the rules and regulations thereunder, (y)
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any Subject Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (z) any
Prospectus forming part of any Subject Registration Statement, and any
supplement to such Prospectus (as amended or supplemented from time to
time), does not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements, in
light of the circumstances under which they were made, not misleading.
To the extent permitted by law, the Company further agrees, if necessary,
to supplement or amend the Shelf Registration Statement (if reasonably requested
by one firm of legal counsel selected by the Majority Holders) or the Purchaser
Shelf Registration Statement (if reasonably requested by Xxxxxxx Xxxxx), as the
case may be, with respect to information relating to the Holders or the Initial
Purchasers, respectively, and otherwise as required by Section 3(b) below, to
use its reasonable best efforts to cause any such amendment to become effective
and such Subject Registration Statement to become usable as soon as thereafter
practicable and to furnish to the Holders of Registrable Securities registered
thereby or the relevant Initial Purchasers, as the case may be, copies of any
such supplement or amendment promptly after its being used or filed with the
SEC. The Company may require, as a condition to including the Registrable
Securities of any Holder in any Subject Registration Statement, that such Holder
shall have furnished to the Company a written agreement to the effect that such
Holder agrees to comply with and be bound by the provisions of this Agreement.
For further clarity, the Company shall have no obligation to keep the Shelf
Registration Statement effective after consummation of the Exchange Offer, and
the Company's obligations to use its reasonable best efforts to file a Shelf
Registration Statement and to keep such Shelf Registration Statement effective
shall immediately terminate upon effectiveness of the Exchange Offer
Registration Statement (regardless of when such effectiveness shall occur).
(c) Expenses. The Company (i) shall pay all Registration Expenses in
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connection with the registration pursuant to Section 2(a) or 2(b) and (ii) in
connection with the Exchange Offer Registration Statement and the Shelf
Registration Statement, shall reimburse the Holders of Registrable Securities
being tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable (or to
the extent such fees and disbursements are paid to such counsel by the Initial
Purchasers, the Initial Purchasers), for the reasonable fees and disbursements
of not more than one counsel, to be chosen by the Holders of a majority in
principal amount of the Registrable Securities for whose benefit such
Registration Statement is being prepared. Each Holder (including each Initial
Purchaser) shall pay all expenses of its counsel other than as set forth in the
preceding sentence, underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to any Subject Registration Statement or the exchange of its
Registrable Securities pursuant to any Exchange Offer Registration Statement.
Notwithstanding anything in this Agreement to the contrary, the Company shall
not be required to pay the fees and disbursements of legal counsel for any
Holders (including Initial Purchasers) except (A) as provided in clause (ii) of
the first sentence of this paragraph, (B) to the extent such fees and
disbursements constitute Registration Expenses which the Company is
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required to pay pursuant to the other provisions of this Agreement and (C) to
the extent required by Section 5 hereof.
(d) Effective Registration Statement. (i) The Company will be deemed
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not to have used its reasonable best efforts to cause the Exchange Offer
Registration Statement or any Subject Registration Statement, as the case may
be, to become, or to remain, effective during the requisite period if the
Company voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Registrable
Securities covered thereby not being able to exchange or offer and sell such
Registrable Securities during that period unless such action is, in the
reasonable judgment of the Company, required by applicable law (including,
without limitation, any interpretation of the SEC).
(ii) An Exchange Offer Registration Statement pursuant to Section
2(a) hereof or a Subject Registration Statement pursuant to Section 2(b)
hereof will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that if, after it has
been declared effective, the offering of Registrable Securities pursuant to
such Subject Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other
governmental agency or court, such Subject Registration Statement will be
deemed not to have been effective during the period of such interference,
until the offering of Registrable Securities pursuant to such Subject
Registration Statement may legally resume.
(e) Increase in Interest Rate. In the event that (i) the Exchange
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Offer Registration Statement is not filed with the SEC on or prior to the 45th
calendar day after the Closing Date, (ii) the Exchange Offer Registration
Statement is not declared effective by the SEC on or prior to the 105th calendar
day after the Closing Date or (iii) the Exchange Offer is not consummated or a
Shelf Registration Statement is not declared effective by the SEC on or prior to
the 180th calendar day after the Closing Date, the interest rate borne by the
Debt Securities shall be increased by 0.50% per annum, as liquidated damages,
following such 45th day in the case of clause (i) above, such 105th day in the
case of clause (ii) above, or such 180th day in the case of clause (iii) above;
provided, however, that the aggregate amount of any such increase in such
interest rate will in no event exceed 0.50% per annum; and provided, further
that if the Exchange Offer Registration Statement is not declared effective by
the SEC on or prior to the 105th day following the Closing Date, then Debt
Securities owned by Persons who do not comply in all material respects with
their obligations under the penultimate paragraph of Section 3 will not be
entitled to any such increase in the interest rate for any day after the 180th
day following the Closing Date. Upon (A) the filing of the Exchange Offer
Registration Statement after the 45th day described in clause (i) above, (B) the
effectiveness of the Exchange Offer Registration Statement after the 105th day
described in clause (ii) above or (C) the consummation of the Exchange Offer or
the effectiveness of a Shelf Registration Statement, as the case may be, after
the 180th day described in clause (iii) above, the interest rate borne by the
Debt Securities from the date of such filing, effectiveness or consummation
(effective immediately preceding such consummation), as the case may be, will be
reduced to the original interest rate; provided, however, that the interest rate
borne by the Debt Securities will be reduced to the original
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interest rate only if there is not then continuing a default with respect to any
of the events set forth in the immediately preceding sentence causing the
interest rate borne by the Debt Securities to increase.
(f) Specific Enforcement. Without limiting the remedies available to
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the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder may, to the
extent permitted by law, obtain such relief as may be required to specifically
enforce the Company's obligations under Section 2(a) and Section 2(b) hereof.
Section 3. Registration Procedures.
In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Sections 2(a) and 2(b) hereof, but only so
long as the Company shall have an obligation under this Agreement to keep a
Registration Statement effective, the Company shall:
(a) use its reasonable best efforts to prepare and file with the SEC
a Registration Statement, within the relevant time period specified in Section
2, on the appropriate form under the 1933 Act, which form (i) shall be selected
by the Company, (ii) shall, in the case of a Shelf Registration, be available
for the sale of the Registrable Securities by the selling Holders thereof and
(iii) shall comply as to form in all material respects with the requirements of
the applicable form and include or incorporate by reference all financial
statements required by the SEC to be filed therewith, and use its reasonable
best efforts to cause such Registration Statement to become effective and use
its reasonable best efforts to cause such Registration Statement to remain
effective in accordance with Section 2 hereof;
(b) to the extent permitted by law, use its reasonable best efforts
to (i) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under applicable
law to keep such Registration Statement effective for the applicable period,
(ii) cause each Prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed (if required) pursuant to Rule
424 under the 1933 Act, and (iii) comply with the provisions of the 1933 Act
with respect to the disposition of all securities covered by each Registration
Statement during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least ten business days prior to filing, that the
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable Securities
will be made in accordance with the method elected by the Majority Holders; and
(ii) furnish to each Holder of Registrable Securities registered under the Shelf
Registration Statement, to a single firm of legal counsel for the Holders
(including the Initial Purchasers) and to the managing underwriters of an
underwritten offering of Registrable Securities, if any, and their
-11-
counsel, without charge, as many copies of each Prospectus, including each
preliminary prospectus, and any amendment or supplement thereto and documents
incorporated by reference therein as such Holder, counsel or underwriters may
reasonably request and, if the Holder so requests, all exhibits thereto
(including those incorporated by reference) in order to facilitate the public
sale or other disposition of the Registrable Securities; and (iii) subject to
Section 3(k) hereof and the last paragraph of this Section 3, hereby consent to
the use of the Prospectus or any amendment or supplement thereto by each of the
selling Holders of Registrable Securities in connection with the offering and
sale of the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto but only during the period of time that the Company is
required to keep the Shelf Registration Statement effective pursuant to this
Agreement;
(d) use its reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue sky" laws
of such jurisdictions in the United States as the Majority Holders of
Registrable Securities covered by a Registration Statement and the managing
underwriter of an underwritten offering of Registrable Securities shall
reasonably request prior to the time the applicable Registration Statement is
declared effective by the SEC, to cooperate with the Holders in connection with
any filings required to be made with the NASD, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition of such Registrable Securities in the jurisdiction of
such Holder pursuant to such Registration Statement; provided, however, that the
Company shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d) or (ii) take any action that would
subject it to general service of process or taxation in any such jurisdiction if
it is not then so subject;
(e) in the case of a Subject Registration Statement, promptly notify
a single firm of legal counsel for the Holders of Registrable Securities
registered thereby (including any Initial Purchasers) and Xxxxxxx Xxxxx and, if
requested by such counsel or Xxxxxxx Xxxxx, promptly confirm such advice in
writing (by notice to such counsel or to Xxxxxxx Xxxxx) (i) when such
Registration Statement has become effective and when any post-effective
amendments thereto become effective, (ii) of any request by the SEC or any state
securities authority for post-effective amendments and supplements to such
Registration Statement and the related Prospectus or for additional information
after such Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of such
Registration Statement and the closing of any sale of Registrable Securities
covered thereby pursuant to an underwriting agreement to which the Company is a
party, the representations and warranties of the Company contained in such
underwriting agreement cease to be true and correct in all material respects,
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities covered by such
Registration Statement for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (vi) upon the Company
becoming aware thereof, of the happening of any event or the discovery of any
facts during the period such Registration Statement is effective which (A) makes
any statement made in such Registration Statement or the related Prospectus
untrue in any material respect or (B) causes such Registration Statement or the
related Prospectus to omit to state a material fact necessary in order to
-12-
make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(f) (i) in the case of the Exchange Offer, (A) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section covering
the use of the Prospectus included in the Exchange Offer Registration Statement
by Participating Broker-Dealers (as defined below) who have exchanged their
Registrable Securities for Exchange Securities for the resale of such Exchange
Securities, (B) furnish to each Participating Broker-Dealer who notifies the
Company in writing that it desires to participate in the Exchange Offer, without
charge, as many copies of each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary prospectus, and any amendment
or supplement thereto, as such broker-dealer may reasonably request, (C) include
in the Exchange Offer Registration Statement a statement that any broker-dealer
who holds Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities (a "Participating Broker-
Dealer"), and who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer, may be a statutory underwriter and must deliver
a prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Securities, (D) subject to Section 3(k) hereof and the
last paragraph of this Section 3, hereby consent to the use of the Prospectus
forming part of the Exchange Offer Registration Statement or any amendment or
supplement thereto by any Participating Broker-Dealer in connection with the
sale or transfer of the Exchange Securities covered by the Prospectus or any
amendment or supplement thereto for a period ending 180 days following
consummation of the Exchange Offer or, if earlier, when all Exchange Securities
received by such Participating Broker-Dealer in exchange for Registrable
Securities acquired for their own account as a result of market-making or other
trading activities have been disposed of by such Participating Broker-Dealer,
and (E) include in the letter of transmittal or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange Offer a
provision substantially in the following form (or such similar provision as is
reasonably acceptable to counsel for the Initial Purchasers and as, in the
reasonable opinion of the Company, may at the time be required by applicable law
or SEC interpretation):
"the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to
engage in, a distribution of Exchange Securities. If the
undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Registrable
Securities, it represents that the Registrable Securities to
be exchanged for Exchange Securities were acquired by it as
a result of market-making activities or other trading
activities and acknowledges that it will deliver a
prospectus meeting the requirements of the 1933 Act in
connection with any resale of such Exchange Securities
pursuant to the Exchange Offer; however, by so acknowledging
and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the
meaning of the 1933 Act"; and
-13-
(ii) to the extent any Participating Broker-Dealer participates
in the Exchange Offer, the Company shall use its reasonable best efforts to
cause to be delivered at the request of an entity representing the
Participating Broker-Dealers (which entity shall be Xxxxxxx Xxxxx or
another Initial Purchaser) (A) a "cold comfort" letter addressed to the
Participating Broker-Dealers from the Company's independent certified
public accountants with respect to the Prospectus in the Exchange Offer
Registration Statement in the form existing on the last date for which
exchanges are accepted pursuant to the Exchange Offer and (B) an opinion of
counsel to the Company addressed to the Participating Broker-Dealers in
customary form relating to the Exchange Securities; and
(iii) to the extent any Participating Broker-Dealer participates
in the Exchange Offer and notifies the Company or causes the Company to be
notified in writing that it is a Participating Broker-Dealer, the Company
shall use its reasonable best efforts to maintain the effectiveness of the
Exchange Offer Registration Statement for a period of 180 days following
the last date on which exchanges are accepted pursuant to the Exchange
Offer, or, if earlier, when all Exchange Securities received by
Participating Broker-Dealers in exchange for Registrable Securities
acquired for their own account as a result of market-making or other
trading activities have been disposed of by such Participating Broker-
Dealers; and
(iv) not be required, however, to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as would
otherwise be contemplated by Section 3(b) hereof, or take any other action
as a result of this Section 3(f), at any time after 180 days after the last
date for which exchanges are accepted pursuant to the Exchange Offer (or
such earlier date referred to in Paragraph (C) above), and Participating
Broker-Dealers shall not be authorized by the Company to, and shall not,
deliver such Prospectus after such period in connection with resales
contemplated by this Section 3 or otherwise;
it being understood that, notwithstanding anything in this Agreement to the
contrary, the Company shall not be required to comply with any provision of this
Section 3(f) or any other provision of this Agreement relating to the
distribution of Exchange Securities by Participating Broker-Dealers, to the
extent that the Company reasonably concludes (with the consent of Xxxxxxx Xxxxx,
not to be unreasonably withheld) that compliance with such provision is no
longer required by applicable law or interpretation of the staff of the SEC;
(g) in the case of an Exchange Offer, furnish to one firm of legal
counsel for the Initial Purchasers and (ii) in the case of a Shelf Registration,
furnish to one firm of legal counsel for the Holders of Registrable Securities
covered thereby copies of any request received by or on behalf of the Company,
from the SEC or any state securities authority for amendments or supplements to
the relevant Registration Statement and Prospectus or for additional
information;
(h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon as
practicable and provide prompt notice to one firm of legal counsel for the
Holders of the withdrawal of any such order;
-14-
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities registered thereby, without charge, at least one
conformed copy of each Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legend (except any customary legend borne by securities
held through The Depository Trust Company or any similar depository); and cause
such Registrable Securities to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling Holders
or the underwriters, if any, may reasonably request at least two business days
prior to the closing of any sale of Registrable Securities;
(k) in the case of a Shelf Registration, upon the Company becoming
aware of the occurrence of any event or the discovery of any facts, each as
contemplated by Section 3(e)(vi) hereof, use its reasonable best efforts to
prepare a supplement or post-effective amendment to the relevant Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, such Prospectus will not
contain at the time of such delivery any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. The Company
agrees to notify each Holder of Registrable Securities registered under the
relevant Subject Registration Statement to suspend use of the Prospectus as
promptly as practicable after the Company becomes aware of the occurrence of
such an event, and each Holder of Registrable Securities registered under the
relevant Subject Registration Statement hereby agrees to suspend use of the
Prospectus after receipt of such notice until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission or has
advised such Holders that use of such Prospectus may be resumed. At such time as
such public disclosure is otherwise made or the Company determines that such
disclosure is not necessary, in each case to correct any misstatement of a
material fact or to include any omitted material fact, or the Company otherwise
determines that use of such Prospectus may be resumed, the Company agrees
promptly to notify each Holder of Registrable Securities registered under the
relevant Subject Registration Statement of such determination and (if
applicable) to furnish each such Holder such numbers of copies of the
Prospectus, as amended or supplemented, as such Holder may reasonably request;
(l) obtain a CUSIP number for all Exchange Securities, or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with printed certificates for
the Exchange Securities or the Registrable Securities, as the case may be, in a
form eligible for deposit with The Depository Trust Company; provided, however,
that the Company shall not be required to provide printed certificates for any
Exchange Securities or Registrable Securities to be so-called "book-entry only"
securities;
(m) unless the Indenture, as it relates to the Exchange Securities or
the Registrable Securities, as the case may be, has already been so qualified,
use its reasonable best efforts to (i) cause
-15-
the Indenture to be qualified under the Trust Indenture Act of 1939, as amended
(the "TIA"), in connection with the registration of the Exchange Securities or
Registrable Securities, as the case may be, (ii) cooperate with the Trustee and
the Holders to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA and (iii)
execute, and use its reasonable best efforts to cause the Trustee to execute,
all documents as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(n) in the case of a Shelf Registration, take all customary and
appropriate actions (including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the disposition of the Registrable
Securities registered thereby. If requested as set forth below, the Company
agrees that it will in good faith negotiate the terms of an Underwriting
Agreement, which shall be in form and scope as is customary for similar
offerings of debt securities with similar credit ratings (including, without
limitation, representations and warranties to the underwriters) and shall
otherwise be reasonably satisfactory to the Company and the managing
underwriters; and:
(i) if requested by the managing underwriters, obtain opinions
of counsel to the Company (which counsel shall be reasonably satisfactory
to the managing underwriters) addressed to such underwriters, covering the
matters customarily covered in opinions requested in underwritten sales of
securities in substantially the forms specified in the Underwriting
Agreement;
(ii) if requested by the managing underwriters, obtain a "cold
comfort" letter and an update thereto not later than two weeks after the
date of the original letter (or if not available under applicable
accounting pronouncements or standards, a single "procedures" letter and a
single update thereto) from the Company's independent certified public
accountants addressed to the underwriters named in the Underwriting
Agreement and use its reasonable best efforts to have such letter addressed
to the selling Holders of Registrable Securities (provided, however, that
such letter need not be addressed to any Holders to whom, in the reasonable
opinion of the Company's independent certified public accountants,
addressing such letter is not permissible under applicable accounting
standards), such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" (or "procedures") letters to
underwriters in connection with similar underwritten offerings; and
(iii) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
underwritten offerings.
Notwithstanding anything herein to the contrary, the Company shall have no
obligation to enter into any underwriting agreement or permit an underwritten
offering of Registrable Securities unless a request therefor shall have been
received from at least 33 1/3% of the Holders of all Registrable Securities then
outstanding. In the case of such a request for an underwritten offering, the
Company shall provide written notice to the Holders of all Registrable
Securities of such underwritten offering at least 30 days prior to the filing of
a Shelf Registration Statement or a prospectus supplement
-16-
providing for such underwritten offering. Such notice shall (A) offer each such
Holder the right to participate in such underwritten offering (but may indicate
that whether or not all Registrable Securities are included will be at the
discretion of the underwriters), (B) specify a date, which shall be no earlier
than ten business days following the date of such notice, by which such Holder
must inform the Company of its intent to participate in such underwritten
offering and (C) include the instructions such Holder must follow in order to
participate in such underwritten offering;
(o) in the case of a Shelf Registration, and to the extent customary
in connection with a "due diligence" investigation for an offering of debt
securities with a similar credit rating to that of the Registrable Securities,
make reasonably available for inspection by representatives appointed by the
Majority Holders and any underwriters participating in any disposition pursuant
to a Shelf Registration Statement and one firm of legal counsel retained for all
Holders participating in such Shelf Registration, and one firm of legal counsel
to the underwriters, if any, all financial and other records, pertinent
corporate documents and properties of the Company reasonably requested by any
such persons, and cause the respective officers, employees and any other agents
of the Company to supply all information reasonably requested by any such
representative, underwriters or counsel in connection with the Shelf
Registration Statement; provided, however, that, if any such records, documents
or other information relates to pending or proposed acquisitions or
dispositions, or otherwise relates to matters reasonably considered by the
Company to constitute sensitive or proprietary information, the Company need not
provide such records, documents or information unless the foregoing parties
enter into a confidentiality agreement in customary form and reasonably
acceptable to such parties and the Company;
(p) (i) a reasonable time prior to the filing of any Exchange Offer
Registration Statement, any Prospectus forming a part thereof, any amendment to
an Exchange Offer Registration Statement or amendment or supplement to such
Prospectus, provide copies of such document to the Initial Purchasers, and make
such changes in any such document prior to the filing thereof as Xxxxxxx Xxxxx
or one firm of legal counsel to the Initial Purchasers may reasonably request;
(ii) in the case of a Shelf Registration, a reasonable time prior to filing any
Shelf Registration Statement, any Prospectus forming a part thereof, any
amendment to such Shelf Registration Statement or amendment or supplement to
such Prospectus, provide copies of such document to Xxxxxxx Xxxxx, one firm of
legal counsel appointed by the Majority Holders to represent the Holders
participating in such Shelf Registration, the managing underwriters of an
underwritten offering of Registrable Securities, if any, and their counsel, and
make such changes in any such document prior to the filing thereof as Xxxxxxx
Xxxxx, such one firm of legal counsel for the Holders, such managing
underwriters or their counsel may reasonably request; and (iii) cause the
representatives of the Company to be available for discussion of such document
as shall be reasonably requested by Xxxxxxx Xxxxx, one firm of legal counsel to
the Holders, the managing underwriters and their counsel; and shall not at any
time make any filing of any such document of which Xxxxxxx Xxxxx, one firm of
legal counsel to the Holders, the managing underwriters and their counsel shall
not have previously been advised and furnished a copy or to which Xxxxxxx Xxxxx,
one firm of legal counsel to the Holders, the managing underwriters and their
counsel shall reasonably object; provided, however, that the provisions of this
paragraph (p) shall not apply to any document filed by the Company pursuant to
the 1934 Act which is incorporated or deemed to be incorporated by reference in
any Registration Statement or Prospectus;
-17-
(q) in the case of a Shelf Registration and if requested by the
managing underwriters, if any, or the Majority Holders, (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
such information or revisions to information therein relating to such
Underwriters or selling Holders as the managing underwriters, if any, or such
Holders or their counsel reasonably request to be included or made therein, (ii)
make all required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment and (iii) if required, supplement or make amendments to such Shelf
Registration Statement;
(r) upon delivery of the Registrable Securities by Holders to the
Company (or to such other Person as directed by the Company) in exchange for the
Exchange Securities, the Company shall xxxx, or cause to be marked, on such
Registrable Securities that such Registrable Securities are being canceled in
exchange for the Exchange Securities; in no event shall such Registrable
Securities be marked as paid or otherwise satisfied;
(s) use its reasonable best efforts to cause the Exchange Securities,
if applicable, and, in the event of a Shelf Registration, the Debt Securities to
be rated with not more than two rating agencies selected by the Company, if so
requested by the Majority Holders or by the managing underwriters of an
underwritten offering of Registrable Securities, if any, unless the Exchange
Securities or the Registrable Securities, as the case may be, are already so
rated or unless the Company has obtained such ratings for its long-term debt
securities generally;
(t) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC and make generally available to its
security holders, as soon as reasonably practicable, an earnings statement
covering at least 12 months which shall satisfy the provisions of Section 11(a)
of the 1933 Act and Rule 158 thereunder; and
(u) reasonably cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence investigation by
any managing underwriters and their counsel.
In the case of a Subject Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) (i) require
each Holder of Registrable Securities to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing and such other information as, in the reasonable opinion of the
Company, is required for inclusion in the Subject Registration Statement, and
(ii) further require each Holder of Registrable Securities, through one firm of
legal counsel on behalf of all such Holders, to furnish to the Company any
comments on the Subject Registration Statement and the Prospectus included
therein or any amendment or supplement to any of the foregoing not later than
such times as the Company reasonably may request. Each Holder of Securities
included in a Subject Registration Statement agrees promptly to notify the
Company of any inaccuracy or change in information previously furnished to the
Company or the occurrence of any event, in either case, as a result of which the
-18-
relevant Registration Statement or the related Prospectus contains or would
contain an untrue statement of a material fact or omits or would omit to state
any material fact regarding such Holder, its intended method of distribution of
Registrable Securities or otherwise that is required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing. As soon as practicable, the Company will, subject
to the reasonable approval of its counsel, incorporate in a supplement or post-
effective amendment to the relevant Registration Statement or related Prospectus
such information furnished in writing to the Company and requested to be
included therein, and furnish to such Holder copies of the Prospectus, as
amended or supplemented, as reasonably requested.
In the case of a Subject Registration Statement, each Holder agrees and, in
the case of the Exchange Offer Registration Statement, each Participating
Broker-Dealer agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts, each of the kind described
in Section 3(e)(ii)-(vi) or Section 3(k) hereof (it being understood and agreed
that, for purposes of this paragraph, all references in Sections 3(e)(ii)-(vi)
and Section 3(k) to a "Subject Registration Statement", a "Shelf Registration
Statement" or a "Registration Statement" shall be deemed to mean and include the
Shelf Registration Statement, the Purchaser Shelf Registration Statement or the
Exchange Offer Registration Statement or all or any combination thereof (as the
context requires), mutatis mutandis), such Holder or Participating Broker-
Dealer, as the case may be, will forthwith discontinue disposition of
Registrable Securities pursuant to such Registration Statement and discontinue
use of the Prospectus included therein until such Holder's or Participating
Broker-Dealer's receipt, as the case may be, of (A) copies of the supplemented
or amended Prospectus contemplated by Section 3(k) hereof or (B) notice from the
Company that the sale of the Registrable Securities may be resumed, and, if so
directed by the Company, such Holder or Participating Broker-Dealer, as the case
may be, will deliver to the Company (at its expense) all copies in its
possession, other than permanent file copies then in its possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Securities pursuant to a Registration Statement as a
result of the happening of any event or the discovery of any facts, each of the
kind described in Section 3(e) (ii)-(vi) or 3(k) hereof, the Company shall be
deemed to have used its reasonable best efforts to keep such Registration
Statement effective during such period of suspension, provided that the Company
shall use its reasonable best efforts to file and have declared effective (if an
amendment) as soon as practicable an amendment or supplement to such
Registration Statement or the related Prospectus and shall extend the period
during which such Registration Statement shall be maintained effective pursuant
to this Agreement by the number of days during the period from and including the
date of the giving of such notice to and including the date when the Holders
shall have received copies of the supplemented or amended Prospectus necessary
to resume such dispositions or the date on which the Company has given notice
that the sale of Registrable Securities may be resumed, as the case may be.
Each Holder of Registrable Securities hereby agrees that it will at all times
use the then most current Prospectus, as then amended or supplemented, which has
been provided to it by the Company in connection with the resale or transfer of
any Registrable Securities pursuant to a Registration Statement or Prospectus.
-19-
Section 4. Underwritten Registrations.
If any of the Registrable Securities covered by the Shelf Registration
Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage the offering will be
selected by the Company and shall be reasonably acceptable to the Majority
Holders of such Registrable Securities included in such offering.
No Holder of Registrable Securities may participate in any underwritten
offering hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
Section 5. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Initial
Purchaser, each Holder and each Person, if any, who controls any such Person
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all losses, liabilities, claims, damages
and expenses whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which
Exchange Securities or Registrable Securities were registered under the
1933 Act, including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all losses, liabilities, claims, damages
and expenses whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
5(e) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expenses whatsoever, as incurred
(including (subject to Section 5(c) below) the reasonable fees and
disbursements of counsel chosen by Xxxxxxx Xxxxx or, in the event that
Xxxxxxx Xxxxx is not an indemnified party, by a majority of the indemnified
parties), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body,
-20-
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
of this Section 5(a);
provided, however, that this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of any Initial Purchaser, any Holder or any underwriter expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto); and provided, further, that this
indemnity agreement with respect to any Prospectus shall not inure to the
benefit of any Initial Purchaser or Holder from whom the person asserting any
such losses, claims, damages or liabilities purchased Registrable Securities or
Exchange Securities (or any person who controls such Initial Purchaser or Holder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 0000 Xxx)
if a copy of the Prospectus (as then amended or supplemented and furnished by
the Company to such Initial Purchaser or Holder, as the case may be) was not
sent or given by or on behalf of such Initial Purchaser or Holder, as the case
may be, to such person at or prior to the sale of such Registrable Securities or
Exchange Securities and if the Prospectus (as so amended or supplemented) would
have corrected any untrue statement or omission, or alleged untrue statement or
omission, giving rise to such loss, liability, claim, damage or expense
(provided the Company has delivered the Prospectus (as then amended or
supplemented) to the several Initial Purchasers or Holders in requisite quantity
on a timely basis to permit such delivery or sending).
(b) In the case of a Shelf Registration, each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, each
Initial Purchaser, each underwriter who participates in an offering of
Registrable Securities and the other Holders and each of their respective
directors and officers (including each officer of the Company who signed the
Registration Statement in question) and each Person, if any, who controls the
Company, any Initial Purchaser, any underwriter or any other Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
and all losses, liabilities, claims, damages and expenses described in the
indemnity contained in Section 5(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Holder
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto); provided, however, that
no such Holder shall be liable for any claims hereunder in excess of the amount
of net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have other than on account of this
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indemnity agreement or the contribution agreement set forth in Section 5(d)
below. In the case of parties indemnified pursuant to Section 5(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx (or, in
the event that Xxxxxxx Xxxxx is not an indemnified party, by a majority in
interest of the indemnified parties), and, in the case of parties indemnified
pursuant to Section 5(b) above, counsel to the indemnified parties shall be
selected by the Company. Notwithstanding the foregoing, in case any action or
proceeding shall be instituted and the indemnified party shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein, and, after written notice from the indemnifying
party to such indemnified party, to assume the defense thereof with counsel of
its choice reasonably acceptable to the indemnified parties in such action.
Notwithstanding the election of the indemnifying party to assume defense of such
action or proceeding, the indemnified party shall have the right, at its own
expense, to employ one additional firm as separate counsel and to participate in
the defense of the action or proceeding; provided that the indemnifying party
shall pay the reasonable fees and expenses of such separate counsel reasonably
satisfactory to the indemnifying party if (i) the indemnifying party shall have
failed to employ counsel to represent the indemnified party in a reasonably
timely manner or (ii) the defendants in any such action or proceeding include
both the indemnified party and the indemnifying party and counsel to the
indemnified party shall have concluded and notified the indemnifying party that
in its reasonable judgment representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. In no event shall the indemnifying parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) (which
counsels shall be selected by Xxxxxxx Xxxxx or, in the event that Xxxxxxx Xxxxx
is not an indemnified party, by a majority in interest of the indemnified
parties) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 5 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances in which any of the indemnity provisions set forth in this Section
5 are for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Initial
Purchasers and the Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company, the Initial Purchasers and the
Holders, as incurred; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company, the Initial Purchasers and the
Holders, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such
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indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company on the one hand, the Initial Purchasers on another
hand, and the Holders on another hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand, the Initial
Purchasers on another hand, and the Holders on another hand shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Initial
Purchasers or by the Holders and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue or alleged
untrue statement or omission. The Company, the Initial Purchasers and the
Holders agree that it would not be just and equitable if contribution pursuant
to this Section 5(d) were to be determined by pro rata allocation or by any
other method of allocation that does not take into account the relevant
equitable considerations. For purposes of this Section 5(d), each Person, if
any, who controls an Initial Purchaser or a Holder within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such Initial Purchaser or such Holder, and each director of the
Company, each officer of the Company who signed the Registration Statement in
question, and each Person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
(e) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 5(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Section 6. Miscellaneous.
(a) Rule 144 and Rule 144A. Until the earliest of (i) the completion
----------------------
of the Exchange Offer, (ii) two years following the Closing Date (or such
shorter period as may be specified in Rule 144(k) as then amended) and (iii) the
date when all Registrable Securities have been sold pursuant to the Subject
Registration Statement or are no longer Registrable Securities, the Company
covenants that it will file the reports required to be filed by it under Section
13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC
thereunder for so long as the Company is subject to the reporting requirements
of Section 13 or 15 of the 1934 Act, and if the Company ceases to be so required
to file such reports, it will upon the request of any Holder of Registrable
Securities (i) make publicly available such information as is necessary to
permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver such
information to a prospective purchaser as is necessary to permit sales pursuant
to Rule 144A under the 1933 Act and (iii) take such further action that is
reasonable in the circumstances, in each case, to the extent required from time
to time to enable such Holder to sell its Registrable Securities without
registration under the 1933 Act within the limitation of the exemptions
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provided by (A) Rule 144 under the 1933 Act, as such Rule may be amended from
time to time, (B) Rule 144A under the 1933 Act, as such Rule may be amended from
time to time or (C) any similar rules or regulations hereafter adopted by the
SEC (provided that the obligations of the Company under any such similar rules
or regulations shall not be more burdensome in any substantial respect than
those referred to in clauses (A) or (B)). Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered into nor
--------------------------
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure; provided, however, that to the extent any provision of this
Agreement relates to the Purchaser Shelf Registration Statement or otherwise to
the Initial Purchasers, such provision may be amended, modified or supplemented,
and waivers or consents to departures from such provisions thereof may be given,
by Xxxxxxx Xxxxx; and provided, further, that no amendment, modification,
supplement or waiver or consent to any departure from the provisions of Section
5 hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company and Xxxxxxx Xxxxx to
the extent that any such amendment, modification, supplement, waiver or consent
is, in their reasonable judgment, necessary or appropriate to comply with
applicable law (including any interpretation of the staff of the SEC) or any
change therein.
(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered or
certified first-class mail, telex, telecopier or any courier providing overnight
delivery (i) if to a Holder, at its address appearing in the register of the
Debt Securities and/or Exchange Securities kept by the Registrar (as defined in
the Indenture) or at such other address as shall have been given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 6(d), which address initially is, with respect to the Initial
Purchasers, the address care of Xxxxxxx Xxxxx set forth in the Purchase
Agreement, and (ii) if to the Company initially at or in care of the Company's
address set forth in the Purchase Agreement, or in each case to such other
address notice of which is given in accordance with the provisions of this
Section 6(d).
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All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier providing
overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof or of the Purchase Agreement, the
Indenture or the Offering Memorandum dated March 26, 1997; and provided,
further, that Holders of Registrable Securities may not assign their rights
under this Agreement except in connection with the permitted transfer of
Registrable Securities and then only insofar as relates to such Registrable
Securities. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement, including the restrictions on resale
set forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.
(f) Third-Party Beneficiary. The Holders from time to time shall each
-----------------------
be a third-party beneficiary to the agreements made hereunder between the
Company, on the one hand, and the Initial Purchasers, on the other hand, and
Xxxxxxx Xxxxx shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CROSS TIMBERS OIL COMPANY
By: _________________________________________
Name:
Title:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: _________________________________________
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By: _________________________________________
Name:
Title:
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES
CORPORATION
By: _________________________________________
Name:
Title:
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