EXHIBIT 10.13
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of ,
2004, between TTWF LP, a Delaware limited partnership ("TTWF"), and Westlake
Chemical Corporation, a Delaware corporation (the "Company").
WHEREAS, the Company has determined to offer to the public (the
"Public Offering") shares of Common Stock (as defined below); and
WHEREAS, in connection with the Public Offering, the Company has,
among other things, agreed to grant to TTWF and its Affiliates (other than the
Company or any of its Subsidiaries) who from time to time own Registrable
Securities certain registration rights applicable to Registrable Securities (as
defined below) held by TTWF and such Affiliates, and the parties hereto desire
to enter into this Agreement to set forth the terms of such registration rights;
and
NOW, THEREFORE, upon the premises and based on the mutual promises
herein contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. Certain Definitions. As used in this Agreement, the following
initially capitalized terms shall have the following meanings:
(a) "Affiliate" means, with respect to any person, any other
person who, directly or indirectly, is in control of, is controlled by or is
under common control with the former person; and "control" (including the terms
"controlling," "controlled by," and "under common control with") means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise.
(b) "Common Stock" means the common stock of the Company, par
value $0.01 per share.
(c) "Company Securities" has the meaning set forth in Section 3
hereof.
(d) "Fair Market Value" means, with respect to any security, (i)
if the security is listed on a national securities exchange or authorized for
quotation on a national market quotation system, the closing price, regular way,
of the security on such exchange or quotation system, as the case may be, or if
no such reported sale of the security shall have occurred on such date, on the
next preceding date on which there was such a reported sale, or (ii) if the
security is not listed for trading on a national securities exchange or
authorized for quotation on a national market quotation system, the average of
the closing bid and asked prices as reported by the National Association of
Securities Dealers Automated Quotation System or such other reputable entity or
system engaged in the regular reporting of securities prices and on which such
prices for
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such security are reported or, if no such prices shall have been reported for
such date, on the next preceding date for which such prices were so reported, or
(iii) if the security is not publicly traded, the fair market value of such
security as determined by a nationally recognized investment banking or
appraisal firm mutually acceptable to the Company and the Holders, the fair
market value of whose Registrable Securities is to be determined.
(e) "Holder" means (i) TTWF and any Affiliate of TTWF (other than
the Company or any of its Subsidiaries) who from time to time owns Registrable
Securities or (ii) any Permitted Transferee and any Affiliate of such Permitted
Transferee who from time to time owns Registrable Securities.
(f) "Initiating Holders" has the meaning set forth in Section 3(b)
hereof.
(g) "Initiating Holder Securities" has the meaning set forth in
Section 3(b) hereof.
(h) "Maximum Marketable Amount" means, when used in connection
with an underwritten offering, the aggregate number or principal amount of
securities which, in the opinion of the managing underwriter for such offering,
can be sold in such offering without materially and adversely affecting the
offering.
(i) "Other Holders" has the meaning set forth in Section 3(b)
hereof.
(j) "Other Securities" has the meaning set forth in Section 3
hereof.
(k) "Permitted Transferee" has the meaning set forth in Section 10
hereof.
(l) "Person" means any individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, or other entity of whatever nature.
(m) "Registrable After-Acquired Securities" means any securities
of the Company acquired by a Holder after the execution of this Agreement.
(n) "Registrable Securities" means any of the following held by a
Holder (i) the shares of Common Stock owned as of the date of this Agreement by
TTWF, (ii) all Registrable After-Acquired Securities, (iii) any stock or other
securities into which or for which such Common Stock or Registrable
After-Acquired Securities may hereafter be changed, converted or exchanged, and
(iv) any other securities issued to holders of such Common Stock or Registrable
After-Acquired Securities (or such stock or other securities into which or for
which such Common Stock or Registrable After-Acquired Securities are so changed,
converted or exchanged) upon any reclassification, share combination, share
subdivision, share dividend, merger, consolidation or similar transaction or
event, provided that any such securities shall cease to be Registrable
Securities when such securities are sold in any manner to a person who is not a
Permitted Transferee or after the registration rights with respect to the Holder
thereof has expired pursuant to Section 11(g).
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(o) "Registration Expenses" means all out-of-pocket expenses
incurred in connection with any registration of Registrable Securities pursuant
to this Agreement (other than Selling Expenses), including, without limitation,
the following; (i) SEC filing fees; (ii) all fees, disbursements and expenses of
the Company's counsel(s) and accountants in connection with the registration of
the Registrable Securities to be disposed of and the reasonable fees,
disbursements and expenses of counsel, other than the Company's counsel,
selected by the Holders of the Registrable Securities to be disposed of; (iii)
all expenses in connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to any Holders, underwriters and dealers and all expenses incidental to
delivery of the Registrable Securities; (iv) the cost of printing or producing
any underwriting agreement, agreement among underwriters, agreement between
syndicates, selling agreement, blue sky or legal investment memorandum or other
document in connection with the offering, sale or delivery of the Registrable
Securities to be disposed of; (v) all expenses in connection with the
qualification of the Registrable Securities to be disposed of for offering and
sale under state securities laws, including the fees and disbursements of
counsel for the underwriters in connection with such qualification and the
preparation of any blue sky and legal investments surveys; (vi) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Registrable Securities
to be disposed of; (vii) transfer agents', depositaries' and registrars' fees
and the fees of any other agent appointed in connection with such offering;
(viii) all security engraving and security printing expenses, (ix) all fees and
expenses payable in connection with the listing of the Registrable Securities on
any securities exchange or inter-dealer quotation system; (x) all expenses
incurred in connection with "roadshow" presentations and holding meetings with
potential investors to facilitate the distribution and sale of Registrable
Securities; and (xi) any one-time payment for directors and officers insurance
directly related to such offering, provided the insurer provides a separate
statement for such payment.
(p) "Rule 144" means Rule 144 promulgated under the Securities
Act, or any successor rule to similar effect.
(q) "SEC" means the United States Securities and Exchange
Commission.
(r) "Securities Act" means the Securities Act of 1933, as amended,
or any successor statute.
(s) "Selling Expenses" means all underwriting discounts and
commissions, selling concessions and stock transfer taxes applicable to the sale
by the Holders of Registrable Securities pursuant to this Agreement.
(t) "Selling Holder" has the meaning set forth in Section 5(e)
hereof.
2. Demand Registration.
(a) At any time prior to such time as the rights under this
Section 2 terminate with respect to a Holder as provided in Section 2(a)(iii)
hereof, upon written notice from such Holder in the manner set forth in Section
11(i) hereof requesting that the Company effect the
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registration under the Securities Act of any or all of the Registrable
Securities held by such Holder or any of its Affiliates which notice shall
specify the intended method or methods of disposition of such Registrable
Securities, the Company shall use its best efforts to effect, in the manner set
forth in Section 5, the registration under the Securities Act of such
Registrable Securities for disposition in accordance with the intended method or
methods of disposition stated in such request (including (1) in an offering on a
delayed or continuous basis under Rule 415 (or any successor rule of similar
effect) promulgated under the Securities Act and accordingly requiring the
filing of a "shelf" registration statement and/or (2) sales for cash or
dispositions upon exchange or conversion of securities or dispositions for any
form of consideration or no consideration), provided that:
(i) if, while a registration request is pending
pursuant to this Section 2(a), the Company determines,
following consultation with and receiving advice from its
legal counsel, that the filing of a registration statement
would require the disclosure of material information that the
Company has a bona fide business purpose for preserving as
confidential and the disclosure of which the Company
determines reasonably and in good faith would have a material
adverse effect on the Company, the Company shall not be
required to effect a registration pursuant to this Section
2(a) until the earlier of (A) the date upon which such
material information is otherwise disclosed to the public or
ceases to be material and (B) 30 days after the Company makes
such determination, provided, however, that the Company shall
not be permitted to delay a requested registration in reliance
on this clause (i) more than twice in any 12-month period;
(ii) the Company shall not be obligated to file a
registration statement relating to a registration request
pursuant to this Section 2 within a period of 60 calendar days
after the effective date of any other registration statement
of the Company demanded pursuant to this Section 2(a); and
(iii) the Company shall not be obligated to file a
registration statement relating to a registration request
pursuant to this Section 2: (A) in the case of a registration
request by TTWF or any of its Affiliates, on more than five
occasions after such time as TTWF and its Affiliates
collectively own less than a majority of the then outstanding
shares of Common Stock (it being acknowledged that so long as
TTWF and its Affiliates collectively own a majority of the
then outstanding shares of Common Stock, there shall be no
limit to the number of occasions on which TTWF or its
Affiliates may exercise their rights under this Section 2), or
(B) in the case of a registration request by a Permitted
Transferee or any of its Affiliates, on more than the number
of occasions permitted such Holder in accordance with Section
10 hereof (it being acknowledged that (1) the exercise by such
Permitted Transferee and its Affiliates of such rights shall
not limit the number of occasions on which TTWF and its
Affiliates may exercise their rights under this Section 2 and
(2) so long as such Permitted Transferee and its Affiliates
collectively own a majority of the then outstanding shares of
Common Stock, there shall be no limit to the number of
occasions on which such Permitted Transferee or its Affiliates
may exercise their rights under this Section 2).
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(b) Notwithstanding any other provision of this Agreement to the
contrary, a registration requested by a Holder pursuant to this Section 2 shall
not be deemed to have been effected (and, therefore, not requested for purposes
of Section 2(a)), (i) unless the registration statement filed in connection
therewith has become effective, (ii) if after such registration statement has
become effective, it becomes subject to any stop order, or there is issued an
injunction or other order or decree of the SEC or other governmental agency or
court for any reason other than a misrepresentation or an omission by such
Holder, which injunction, order or decree prohibits or otherwise materially and
adversely affects the offer and sale of the Registrable Securities so registered
prior to the completion of the distribution thereof in accordance with the plan
of distribution set forth in the registration statement or (iii) if the
conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied
other than by reason of some act, misrepresentation or omission by a Holder and
are not waived by the purchasers or underwriters.
(c) In the event that any registration pursuant to this Section 2
shall involve, in whole or in part, an underwritten offering, Holders owning at
least 50.1% of the Fair Market Value of the Registrable Securities to be
registered in connection with such offering shall have the right to designate an
underwriter reasonably satisfactory to the Company as the lead managing
underwriter of such underwritten offering.
(d) The Company shall have the right to cause the registration of
additional securities for sale for the account of any person (including the
Company) in any registration of Registrable Securities requested by any Holder
pursuant to Section 2(a); provided, however, that if the managing underwriter or
other independent marketing agent for such offering (if any) determines that, in
its opinion, the additional securities proposed to be sold will materially and
adversely affect the offering and sale of the Registrable Securities to be
registered in accordance with the intended method or methods of disposition then
contemplated by such Holder only the number or principal amount of such
additional securities, if any (in excess of the number or principal amount of
Registrable Securities), which, in the opinion of such underwriter or agent, can
be so sold without materially and adversely affecting such offering shall be
included in such registration. The rights of a Holder to cause the registration
of additional Registrable Securities held by such Holder in any registration of
Registrable Securities requested by another Holder pursuant to Section 2(a)
shall be governed by the agreement of the Holders with respect thereto as
provided in Section 10(a).
3. Piggyback Registration. If the Company at any time proposes to
register any of its Common Stock or any of its other securities (such Common
Stock and other securities collectively, "Other Securities") under the
Securities Act, whether or not for sale for its own account, in a manner which
would permit registration of Registrable Securities under the Securities Act, it
will at such time give prompt written notice to each Holder of its intention to
do so at least 20 business days prior to the anticipated filing date of the
registration statement relating to such registration. Such notice shall offer
each such Holder the opportunity to include in such registration statement such
number of Registrable Securities as each such Holder may request. Upon the
written request of any such Holder made within 15 business days after the
receipt of the Company's notice (which request shall specify the number of
Registrable Securities intended to be disposed of and the intended method of
disposition thereof), the Company shall effect, in the manner set forth in
Section 5, in connection with the registration of
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the Other Securities, the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register, to
the extent required to permit the disposition (in accordance with such intended
methods thereof) of the Registrable Securities so requested to be registered,
provided that:
(a) if at any time after giving written notice of its intention to
register any securities and prior to the effective date of such registration,
the Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to the Holders and, thereupon, (A) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration and
(B) in the case of a determination to delay such registration, the Company shall
be permitted to delay registration of any Registrable Securities requested to be
included in such registration for the same period as the delay in registering
such Other Securities, but, in either such case, without prejudice to the rights
of the Holders under Section 2;
(b) (i) if the registration referred to in the first sentence of
this Section 3 is to be a registration in connection with an underwritten
offering on behalf of any of the Company, holders of securities (other than
Registrable Securities) of the Company ("Other Holders") or Holders of
Registrable Securities, and the managing underwriter for such offering advises
the Company in writing that, in such firm's opinion, such offering would be
materially and adversely affected by the inclusion therein of Registrable
Securities requested to be included therein pursuant to this Section 3 because
such Registrable Securities are not of the same type, class or series as the
securities to be offered and sold in such offering on behalf of the Company, the
Other Holders and/or the Holders of Registrable Securities, the Company may
exclude all such Registrable Securities requested to be included therein
pursuant to this Section 3 from such offering;
(ii) if the registration referred to in the first sentence of
this Section 3 is to be a registration in connection with an underwritten
primary offering on behalf of the Company, and the managing underwriter for such
offering advises the Company in writing that, in such firm's opinion, such
offering would be materially and adversely affected by the inclusion therein of
the Holder's Registrable Securities requested to be included therein pursuant to
this Section 3 because the number or principal amount of such Registrable
Securities, considered together with the number or principal amount of
securities proposed to be offered by the Company, exceeds the Maximum Marketable
Amount, the Company shall include in such registration (1) first, the lesser of
(A) all securities the Company proposes to sell for its own account ("Company
Securities") and (B) the number or principal amount of Company Securities that
represents 80% of the total number or principal amount of the Maximum Marketable
Amount (or the fair market value of the Maximum Marketable Amount if such
Registrable Securities are not of the same type, class or series as the Company
Securities) included in such registration; (2) second, the lesser of (A) the
number or principal amount of Registrable Securities requested to be included
therein pursuant to this Section 3 and (B) the number or principal amount of
such Registrable Securities that represents 20% of the total number or principal
amount of the Maximum Marketable Amount (or the fair market value of the Maximum
Marketable Amount if such Registrable Securities are not of the same type, class
or series as the Company Securities) included in such registration (in either
case, allocated among
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the Holders in accordance with the agreement of the Holders with respect thereto
as provided in Section 10(a)) ; and (3) third, the number or principal amount of
securities, if any, requested to be included therein by Other Holders (in excess
of the number or principal amount of Company Securities and such Registrable
Securities) which, in the opinion of such underwriter, can be so sold without
materially and adversely affecting such offering (allocated among such Other
Holders on the basis of the number or principal amount (or the fair market value
of such securities if the securities are not of the same type, class or series)
of the securities requested to be included therein by each such Other Holder);
and
(iii) if the registration referred to in the first sentence of
this Section 3 is to be a registration in connection with an underwritten
secondary offering on behalf of Other Holders made pursuant to demand
registration rights granted by the Company to such Other Holders or on behalf of
a Holder of Registrable Securities made pursuant to Section 2 of this Agreement
(the "Initiating Holders"), and the managing underwriter for such offering
advises the Company in writing that, in such firm's opinion, such offering would
be materially and adversely affected by the inclusion therein of the Holder's
Registrable Securities requested to be included therein pursuant to this Section
3 because the number or principal amount of such Registrable Securities,
considered together with the number or principal amount of securities proposed
to be offered by the Initiating Holders, exceeds the Maximum Marketable Amount,
the Company shall include in such registration: (1) first, all securities any
such Initiating Holder proposes to sell for its own account (the "Initiating
Holder Securities"); (2) second, the number or principal amount of such
Registrable Securities (in excess of the number or principal amount of
Initiating Holder Securities) which, in the opinion of such underwriter, can be
sold without materially and adversely affecting such offering (allocated among
the Holders in accordance with the agreement of the Holders with respect thereto
as provided in Section 10(a)); and (3) third, the number or principal amount of
securities, if any, requested to be included therein by Other Holders to which
clause (1) does not apply or the Company (in excess of the number or principal
amount of Initiating Holder Securities and such Registrable Securities) which,
in the opinion of such underwriter, can be so sold without materially and
adversely affecting such offering (allocated among such Other Holders and the
Company on the basis of the number or principal amount (or the fair market value
of such securities if the securities are not of the same type, class or series)
of the securities requested to be included therein by each such Other Holder or
the Company; and
(c) the Company shall not be required to effect any registration
of Registrable Securities under this Section 3 incidental to the registration of
any of its securities in connection with stock option or other executive or
employee benefit or compensation plans of the Company; and
(d) no registration of Registrable Securities effected under this
Section 3 shall relieve the Company of its obligation to effect any registration
of Registrable Securities required of the Company pursuant to Section 2 hereof.
4. Expenses. The Company agrees to pay all Registration Expenses with
respect to a registration pursuant to this Agreement. All internal expenses of
the Company or a Holder in connection with any offering pursuant to this
Agreement, including, without limitation, the salaries and expenses of officers
and employees, including in-house attorneys, shall be borne by the party
incurring them. All Selling Expenses of the Holders participating in any
registration
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pursuant to this Agreement shall be borne by such Holders pro rata based on each
Holder's number of Registrable Securities included in such registration.
5. Registration and Qualification. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Section 2 or 3 hereof, the
Company shall:
(a) prepare and file a registration statement under the Securities
Act relating to the Registrable Securities to be offered as soon as practicable,
but in no event later than 30 days (45 days if the applicable registration form
is other than Form S-3) after the date notice is given, and use its best efforts
to cause the same to become effective as soon as practicable thereafter, but in
no event later than 75 days after the date notice is given (90 days if the
applicable registration form is other than Form S-3); provided that, a
reasonable time before filing a registration statement or prospectus, or any
amendments or supplements thereto (other than reports required to be filed by it
under the Exchange Act and the rules and regulations adopted by the SEC
thereunder), the Company will furnish to the Holders and their counsel and other
representatives (including underwriters) for review and comment, copies of all
documents proposed to be filed and provided further, that if TTWF so requests
(i) it and its counsel and other representatives (including underwriters) may
participate in the drafting and preparation of such registration statement and
prospectus and (ii) such information as it believes may be beneficial to be
included in the registration statement and prospectus for marketing purposes
shall be included therein so long as disclosure of such information (A) is in
compliance with applicable law and (B) does not competitively harm the Company;
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective with respect
to the disposition of all Registrable Securities included therein and to
otherwise comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities included therein until the earlier of
(i) such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition set forth in such
registration statement and (ii) the expiration of nine months after such
registration statement becomes effective; provided, that such nine-month period
shall be extended for such number of days that equals the number of days
elapsing from (A) the date the written notice contemplated by paragraph (f)
below is given by the Company to (B) the date on which the Company delivers to
the Holders of Registrable Securities the supplement or amendment contemplated
by paragraph (f) below; and provided further, that in the case of a registration
to permit the exercise or exchange of Exchangeable Securities for, or the
conversion of Exchangeable Securities into, Registrable Securities, the time
limitation contained in clause (ii) above shall be disregarded to the extent
that, in the written opinion of TTWF's counsel delivered to the Company, such
Registrable Securities are required to be covered by an effective registration
statement under the Securities Act at the time such Registrable Securities are
issued upon exercise, exchange or conversion of Registrable Securities in order
for such Registrable Securities to be freely tradeable by any person who is not
an Affiliate of the Company or TTWF;
(c) furnish to the Holders and to any underwriter of such
Registrable Securities such number of conformed copies of such registration
statement and of each
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amendment thereto (in each case including all exhibits), such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus) and of each supplement
thereto, in conformity with the requirements of the Securities Act, and such
other documents, as the Holders or such underwriter may reasonably request in
order to facilitate the public sale of the Registrable Securities, and a copy of
any and all transmittal letters or other correspondence to, or received from,
the SEC or any other governmental agency or self-regulatory body or other body
having jurisdiction (including any domestic or foreign securities exchange)
relating to such offering;
(d) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under the securities or blue
sky laws of such jurisdictions (domestic or foreign) as the Holders or any
underwriter of such Registrable Securities shall request, and use its best
efforts to obtain all appropriate registrations, permits and consents required
in connection therewith, and do any and all other acts and things which may be
necessary or advisable to enable the Holders or any such underwriter to
consummate the disposition in such jurisdictions of its Registrable Securities
covered by such registration statement; provided that the Company shall not for
any such purpose be required to register or qualify generally to do business as
a foreign corporation in any jurisdiction wherein it is not so qualified, or to
subject itself to taxation in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(e) (i) use its best efforts to furnish an opinion of counsel for
the Company addressed to the underwriters dated the date of the closing under
the underwriting agreement (if any) (or if such offering is not underwritten,
dated the effective date of the registration statement), and (ii) use its best
efforts to furnish a "cold comfort" letter addressed to the underwriters and
each Holder of Registrable Securities included in such registration (each a
"Selling Holder"), if permissible under applicable accounting practices, and
signed by the independent public accountants who have audited the Company's
financial statements included in such registration statement, in each such case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as the Selling Holders may reasonably request and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements;
(f) immediately notify the Selling Holders in writing (i) at any
time when a prospectus relating to a registration pursuant to Section 2 or 3
hereof is required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any 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, (ii) of any request by the SEC or any other regulatory
body or other body having jurisdiction for any amendment of or supplement to any
registration statement or other document relating to such offering, and (iii) of
the issuance by the SEC of any stop order suspending the effectiveness of any
registration statement relating to such offering or the initiation of
proceedings for that purpose and in any such case (i), (ii) or (iii) at the
request of the Selling Holders, promptly prepare and furnish to the Selling
Holders a reasonable number of copies of a
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supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall 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 are made, not
misleading or to remove such stop order;
(g) use its best efforts to list all such Registrable Securities
covered by such registration on each securities exchange and inter-dealer
quotation system on which the Common Stock is then listed;
(h) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange or
inter-dealer quotation system (in each case, domestic or foreign) not described
in paragraph (g) above as the Selling Holders or any underwriter of such
Registrable Securities shall request, and use its best efforts to obtain all
appropriate registrations, permits and consents required in connection
therewith, and to do any and all other acts and things which may be necessary or
advisable to effect such listing;
(i) to the extent reasonably requested by the lead or managing
underwriters in connection with any underwritten offering, send appropriate
officers of the Company to attend any "road shows" scheduled in connection with
any such registration;
(j) furnish for delivery in connection with the closing of any
offering of Registrable Securities unlegended certificates representing
ownership of the Registrable Securities being sold in such denominations as
shall be requested by the Selling Holders or the underwriters; and
(k) use its best efforts to make available to its security
holders, as soon as reasonably practicable (but not more than eighteen months)
after the effective date of the registration statement, an earnings statement
which shall satisfy the provisions of Section 10(a) of the Securities Act and
the rules and regulations promulgated thereunder.
The Company may require each Selling Holder to furnish the Company
with such information regarding such Selling Holder and pertinent to the
disclosure requirements relating to the registration and the distribution of
such securities as the Company may from time to time reasonably request.
6. Underwriting; Due Diligence.
(a) If requested by the underwriters for any underwritten offering
of Registrable Securities pursuant to a registration requested under this
Agreement, the Company shall enter into an underwriting agreement, with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution
substantially to the effect and to the extent provided in Section 7 hereof and
the provision of opinions of counsel and accountants' letters to the effect and
to the extent provided in Section 5(e) hereof. The Selling Holders on whose
behalf the Registrable Securities are to be distributed by such underwriters
shall be parties to any such underwriting agreement and the representations and
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warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters, shall also be made to and for the benefit of
such Selling Holders. Such underwriting agreement shall also contain such
representations and warranties by the Selling Holders on whose behalf the
Registrable Securities are to be distributed as are customarily contained in
underwriting agreements with respect to secondary distributions. The Selling
Holders may require that any additional securities included in an offering
proposed by a Holder be included on the same terms and conditions as the
Registrable Securities that are included therein.
(b) In the event that any registration pursuant to Section 3 shall
involve, in whole or in part, an underwritten offering, the Company may require
the Registrable Securities requested to be registered pursuant to Section 3 to
be included in such underwritten offering on the same terms and conditions as
shall be applicable to the other securities being sold through underwriters
under such registration. If requested by the underwriters for such underwritten
offering, the Selling Holders on whose behalf the Registrable Securities are to
be distributed shall enter into an underwriting agreement with such
underwriters, such agreement to contain such representations and warranties by
the Selling Holders and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, indemnities and contribution substantially to the
effect and to the extent provided in Section 7 hereof. Such underwriting
agreement shall also contain such representations and warranties by the Company
and such other person or entity for whose account securities are being sold in
such offering as are customarily contained in underwriting agreements with
respect to secondary distributions.
(c) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act, the Company shall give the Holders of such Registrable Securities and the
Underwriters, if any, and their respective counsel and accountants, such
reasonable and customary access to its banks and records and such opportunities
to discuss the business of the Company with its officers and the independent
public accountants who have certified the Company's financial statements as
shall be necessary, in the opinion of such Holders and such underwriters or
their respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
7. Indemnification and Contribution.
(a) In the case of each offering of Registrable Securities made
pursuant to this Agreement, the Company agrees to indemnify and hold harmless
each Holder, its officers and directors, each underwriter of Registrable
Securities so offered and each person, if any, who controls any of the foregoing
persons within the meaning of the Securities Act, from and against any and all
claims, liabilities, losses, damages, expenses and judgments, joint or several,
to which they or any of them may become subject, under the Securities Act or
otherwise, including any amount paid in settlement of any litigation commenced
or threatened, and shall promptly reimburse them, as and when incurred, for any
reasonable legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as such losses,
claims, damages, liabilities or actions shall arise out of, or shall be based
upon, any untrue statement or alleged untrue statement of a material fact
contained in the registration statement (or in any preliminary or final
prospectus included therein) or any amendment or supplement
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thereto, or in any document incorporated by reference therein, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Company shall not be liable to a particular Holder in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement, or
any omission, if such statement or omission shall have been made in reliance
upon and in conformity with information relating to such Holder furnished to the
Company in writing by or on behalf of such Holder and identified in such writing
as being specifically for use in the preparation of the registration statement
(or in any preliminary or final prospectus included therein) or any amendment or
supplement thereto. Such indemnity shall remain in full force and affect
regardless of any investigation made by or on behalf of a Holder and shall
survive the transfer of such securities. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to each Holder,
any of such Holder's directors or officers, underwriters of the Registrable
Securities or any controlling person of the foregoing; provided, further, that
this indemnity does not apply in favor of any underwriter or person controlling
an underwriter (or if a Selling Holder offers Registrable Securities directly
without an underwriter, the Selling Holder) with respect to any loss, liability,
claim, damage or expense arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission in any preliminary
prospectus if a copy of a final prospectus was not sent or given by or on behalf
of an underwriter (or the Selling Holder, if the Selling Holder offered the
Registrable Securities directly without an underwriter) to the person asserting
such loss, claim, damage, liability or action at or prior to the written
confirmation of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been corrected in such
final prospectus.
(b) In the case of each offering made pursuant to this Agreement,
each Holder of Registrable Securities included in such offering, by exercising
its registration rights hereunder, agrees to indemnify and hold harmless the
Company, its officers and directors and each person, if any, who controls any of
the foregoing within the meaning of the Securities Act (and if requested by the
underwriters, each underwriter who participates in the offering and each person,
if any, who controls any such underwriter within the meaning of the Securities
Act), from and against any and all claims, liabilities, losses, damages,
expenses and judgments, joint or several, to which they or any of them may
become subject, under the Securities Act or otherwise, including any amount paid
in settlement of any litigation commenced or threatened, and shall promptly
reimburse them, as and when incurred, for any legal or other expenses incurred
by them in connection with investigating any claim and defending any actions,
insofar as any such losses, claims, damages, liabilities or actions shall arise
out of, or shall be based upon, any untrue statement or alleged untrue statement
of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or any amendment or supplement
thereto, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue statement of a
material fact is contained in, or such material fact is omitted from,
information relating to such Holder furnished in writing to the Company by or on
behalf of such Holder and identified in such writing as being specifically for
use in the preparation of such registration statement (or in any preliminary or
final prospectus included therein). The foregoing indemnity is in addition to
any liability which such Holder may otherwise have to the Company, any of its
directors or officers, underwriters who participates in
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the offering or any controlling person of the foregoing; provided, however, that
this indemnity does not apply in favor of any underwriter or person controlling
an underwriter (or if the Company offers securities directly without an
underwriter, the Company) with respect to any loss, liability, claim, damage or
expense arising out of or based upon any untrue statement or alleged untrue
statement or omission or alleged omission in any preliminary prospectus if a
copy of a final prospectus was not sent or given by or on behalf of an
underwriter (or the Company, if the Company offered the securities directly
without an underwriter) to the person asserting such loss, claim, damage,
liability or action at or prior to the written confirmation of the sale of the
securities as required by the Securities Act and such untrue statement or
omission had been corrected in such final prospectus.
(c) Each party indemnified under Paragraph (a) or (b) of this
Section 7 shall, promptly after receipt of notice of any claim or the
commencement of any action against such indemnified party in respect of which
indemnity may be sought, notify the indemnifying party in writing of the claim
or the commencement thereof; provided that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party on account of the indemnity agreement contained in
paragraph (a) or (b) of this Section 7, except to the extent the indemnifying
party was materially prejudiced by such failure, and in no event shall relieve
the indemnifying party from any other liability which it may have to such
indemnified party. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein, and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided that each indemnified party, its officers and
directors, if any, and each person, if any, who controls such indemnified party
within the meaning of the Securities Act, shall have the right to employ
separate counsel reasonably approved by the indemnifying party to represent them
if the named parties to any action (including any impleaded parties) include
both such indemnified party and an indemnifying party or an Affiliate of an
indemnifying party, and such indemnified party shall have been advised by
counsel a conflict may exist between such indemnified party and such
indemnifying party or such Affiliate that makes representation by the same
counsel inadvisable, and in that event the fees and expenses of one such
separate counsel for all such indemnified parties shall be paid by the
indemnifying party. An indemnified party will not enter into any settlement
agreement which is not approved by the indemnifying party, such approval not to
be unreasonably withheld. The indemnifying party may not agree to any settlement
of any such claim or action which provides for any remedy or relief other than
monetary damages for which the indemnifying party shall be responsible
hereunder, without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld. In any action hereunder as to which
the indemnifying party has assumed the defense thereof with counsel reasonably
satisfactory to the indemnified party, the indemnified party shall continue to
be entitled to participate in the defense thereof, with counsel of its own
choice, but, except as set forth above, the indemnifying party shall not be
obligated hereunder to reimburse the indemnified party for the costs thereof. In
all instances, the
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indemnified party shall cooperate fully with the indemnifying party or its
counsel in the defense of such claim or action.
(d) If the indemnification provided for in this Section 7 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party in respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to herein, then each indemnifying party shall, in lieu
of indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, in such proportion as shall be appropriate to
reflect the relative fault of the indemnifying party on the one hand and the
indemnified party on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative fault shall
be determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact relates
to information related to and supplied by the indemnifying party on the one hand
or the indemnified party on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission, but not by reference to any indemnified party's
stock ownership in the Company. In no event, however, shall a Holder be required
to contribute in excess of the amount of the net proceeds received by such
Holder in connection with the sale of Registrable Securities in the offering
which is the subject of such loss, claim, damage or liability. The amount paid
or payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this paragraph
shall be deemed to include, for purposes of this paragraph, any legal or other
expenses reasonably incurred by such indemnifying party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Rule 144. The Company shall take such measures and file such
information, documents and reports as shall be required by the SEC as a
condition to the availability of Rule 144 (or any successor provision). The
Company shall use its best efforts to cause all conditions to the availability
of Form S-3 (or any successor form thereto) under the Securities Act for the
filing of registration statements under this Agreement to be met as soon as
possible after the completion of the Public Offering.
9. Holdback.
(a) Each Holder agrees by the acquisition of Registrable
Securities, if so required by the managing underwriter of any offering of equity
securities by the Company and provided that the Company and each of its
executive officers and directors enter into similar agreements, not to sell,
make any short sale of, loan, grant any option for the purchase of, effect any
public sale or distribution of or otherwise dispose of any Registrable
Securities owned by such Holder, during the 7 days prior to and the 90 days
after the registration statement relating to such offering has become effective
(or such shorter period as may be required by the underwriter), except as part
of such underwritten offering. Notwithstanding the foregoing sentence, each
Holder subject to the foregoing sentence shall be entitled to (i) sell any
Registrable Securities acquired in open market transactions after the completion
of such
-14-
underwritten offering and (ii) sell any Registrable Securities in a transaction
in which the purchaser agrees to be bound by the restrictions contained in the
foregoing sentence. The Company may legend and may impose stop transfer
instructions on any certificate evidencing Registrable Securities relating to
the restrictions provided for in this Section 9. The Holders shall not be
subject to the restrictions set forth in this Section 9(a) for longer than 97
days during any 12-month period and a Holder shall no longer be subject to such
restrictions at such time as such Holder together with its Affiliates shall own
less than 5% of the then outstanding shares of Common Stock on a fully-diluted
basis.
(b) The Company agrees, if so required by the managing underwriter
of any offering of Registrable Securities, not to sell, make any short sale of,
loan, grant any option for the purchase of, effect any public sale or
distribution of or otherwise dispose of any of its equity securities during the
30 days prior to and the 90 days after any underwritten registration pursuant to
Section 2 or 3 hereof has become effective, except as part of such underwritten
registration. Notwithstanding the foregoing sentence, the Company shall be
entitled to (i) issue shares of Common Stock or other securities upon the
exercise of an option or warrant or the conversion or exchange of a security
outstanding on such date, (ii) grant shares of Common Stock or other securities
pursuant to employee benefit plans in effect on such date and (iii) sell shares
of Common Stock or other securities in a transaction in which the purchaser
agrees to be bound by the restrictions contained in the preceding paragraph. The
Company shall use its best efforts to obtain and enforce similar agreements from
any other Persons if requested by the managing underwriter of such offering.
Neither the Company nor such Persons shall be subject to the restrictions set
forth in this Section 9(b) for longer than 120 days during any 12-month period.
10. Transfer of Registration Rights.
(a) A Holder may transfer all or any portion of its rights under
this Agreement to any transferee of Registrable Securities that represent
(assuming the conversion, exchange or exercise of all Registrable Securities so
transferred that are convertible into or exercisable or exchangeable for the
Company's Common Stock) at least 10% of the then issued and outstanding Common
Stock of the Company (each, a "Permitted Transferee"); provided, however, that
(i) with respect to any transferee of a majority of the then outstanding shares
of Common Stock, the Company shall not be obligated to file a registration
statement pursuant to a registration request made by such transferee pursuant to
Section 2 hereof on more than three occasions after such time as such transferee
owns less than a majority of the then outstanding shares of Common Stock, (ii)
with respect to any transferee of less than a majority but more than 25% of the
then outstanding shares of Common Stock, the Company shall not be obligated to
file a registration statement pursuant to a registration request made by such
transferee pursuant to Section 2 hereof on more than two occasions, and (iii)
with respect to any transferee of 25% or less of the then issued and outstanding
Common Stock, the Company shall not be obligated to file a registration
statement pursuant to a registration request made by such transferee pursuant to
Section 2 hereof on more than one occasion. No transfer of registration rights
pursuant to this Section 10 shall be effective unless the Company has received
written notice from the Holder of a transfer no later than 10 business days
after the Holder enters into a binding agreement to transfer Registrable
Securities. Such notice shall state the name and address of any Permitted
Transferee and identify the number and/or aggregate principal amount of
Registrable Securities with respect to which the rights under this Agreement are
being transferred and the scope of the
-15-
rights so transferred. In connection with any such transfer, the term TTWF as
used in this Agreement (other than in Sections 2(a)(iii) and 5(a)) shall, where
appropriate to assign the rights and obligations hereunder to such Permitted
Transferee, be deemed to refer to the Permitted Transferee of such Registrable
Securities. TTWF and any Permitted Transferees may exercise the registration
rights hereunder in such priority, as among themselves, as they shall agree
among themselves, and the Company shall observe any such agreements of which it
shall have notice as provided above.
(b) After any such transfer, the transferring Holder shall retain
its rights under this Agreement with respect to all other Registrable Securities
owned by such transferring Holder.
(c) Upon the request of the transferring Holder, the Company shall
execute an agreement with a Permitted Transferee substantially similar to this
Agreement.
11. Miscellaneous.
(a) Injunctions. Each party acknowledges and agrees that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. Therefore, each party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court having
jurisdiction, such remedy being in addition to any other remedy to which such
party may be entitled at law or in equity.
(b) Severability. If any term or provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms and provisions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
each of the parties shall use its best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term or provision.
(c) Further Assurances. Subject to the specific terms of this
Agreement, each of the parties hereto shall make, execute, acknowledge and
deliver such other instruments and documents, and take all such other actions,
as may be reasonably required in order to effectuate the purposes of this
Agreement and to consummate the transactions contemplated hereby.
(d) Waivers, etc. Except as otherwise expressly set forth in this
Agreement, no failure or delay on the part of either party in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. Except as
otherwise expressly set forth in this Agreement, no modification or waiver of
any provision of this Agreement nor consent to any departure therefrom shall in
any event be effective unless the same shall be in writing and signed by an
authorized officer of each of the parties, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
-16-
(e) Entire Agreement. This Agreement contains the final and
complete understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the
parties, whether written or oral, with respect to the subject matter hereof.
(f) Counterparts. For the convenience of the parties, this
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original but all of which together shall be one and the same
instrument.
(g) Termination. The right of any Holder to request registration
or inclusion in any registration pursuant to this Agreement shall terminate on
such date as all Registrable Securities held or entitled to be held upon
conversion by such Holder and its Affiliates may immediately be sold under Rule
144 during any ninety (90) day period.
(h) Amendment. This Agreement may be amended only by a written
instrument duly executed by an authorized officer of each of the parties.
(i) Notices. Unless expressly provided herein, all notices,
claims, certificates, requests, demands and other communications hereunder shall
be in writing and shall be deemed to be duly given (i) when personally delivered
or (ii) if mailed registered or certified mail, postage prepaid, return receipt
requested, on the date the return receipt is executed or the letter refused by
the addressee or its agent or (iii) if sent by overnight courier which delivers
only upon the signed receipt of the addressee, on the date the receipt
acknowledgment is executed or refused by the addressee or its agent or (iv) if
sent by facsimile or other generally accepted means of electronic transmission,
on the date confirmation of transmission is received (provided that a copy of
any notice delivered pursuant to this clause (iv) shall also be sent pursuant to
clause (ii) or (iii)), addressed as follows or sent by facsimile to the
following number (or to such other address or facsimile number for a party as it
shall have specified by like notice):
(i) if to TTWF, to:
TTWF LP
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: TTWFGP LLC, general partner
Facsimile Number: (000) 000-0000
(ii) if to the Company, to:
Westlake Chemical Corporation
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile Number: (000) 000-0000
(iii) if to a Holder of Registrable Securities, to the name
and address as the same appear in the security transfer books of the
Company,
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or to such other address as either party (or other Holders of Registrable
Securities) may, from time to time, designate in a written notice in a like
manner.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
(k) Assignment. Except as specifically provided herein, the
parties may not assign their rights under this Agreement. The Company may not
delegate its obligations under this Agreement.
(l) Conflicting Agreements. The Company shall not hereafter grant
any rights to any person to register securities of the Company, the exercise of
which would conflict with the rights granted to the Holders of the Registrable
Securities under this Agreement. The Company shall not hereafter grant to any
person demand registration rights permitting it to exclude the Holders from
including Registrable Securities in a registration on behalf of such person on a
basis more favorable than that set forth in Section 2(d) hereof with respect to
the Holders.
(m) Construction. This Agreement shall be construed as if jointly
drafted by the Company and TTWF and no rule of construction or strict
interpretation shall be applied against either party. The paragraph headings
contained in this Agreement are for reference purposes only, and shall not
affect in any manner the meaning or interpretation of this Agreement.
-18-
