Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of ________,
1996, by and among Key Energy Group, Inc., a Maryland corporation (the
"Company"), and each of the several Holders (as hereinafter defined) executing a
signature page hereto.
This Agreement is contemplated by a certain Agreement and Plan of
Merger dated as of November 18, 1995 (the "Merger Agreement") by and between the
Company and WellTech, Inc., a Delaware corporation ("WellTech").
The parties hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"Advice" has the meaning set forth in Section 5.
"Affiliate" means, with respect to any specified Person, any other
Person who, directly or indirectly, controls, is controlled by, or is under
common control with such specified Person.
"Business Day" means any day other than a day on which banks are
authorized or required to be closed in the State of New York.
"Closing Date" has the meaning ascribed thereto in the Merger
Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Shares" means the _______ shares of Common Stock of the Company
held by the Holders.
"Common Stock" means the common stock, par value $.10 per share, of the
Company.
"Company" has the meaning set forth in the preamble and shall include
the Company's successors by merger, acquisition, reorganization or otherwise.
"Controlling Persons" has the meaning set forth in Section 8(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations of
the Commission promulgated thereunder.
"Holder" means each holder of record of Registrable Securities.
"Holders' Counsel" means Xxxxxxx, Procter & Xxxx or any successor
counsel selected by Holders of a majority in interest of the Registrable
Securities.
"Inspectors" has the meaning set forth in Section 4(m).
"Lock-up Request" has the meaning set forth in Section 10.
"NASD" has the meaning set forth in Section 4(q).
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Piggy-Back Registration" has the meaning set forth in Section 3(a).
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), 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 Shelf Registration
Statement, and by all other amendments and supplements to the prospectus,
including post-effective amendments, and in each case including all material
incorporated by reference or deemed to be incorporated by reference in such
prospectus.
"Records" has the meaning set forth in Section 4(m).
"Registrable Securities" means, collectively, the Common Shares, the
Warrants and the Warrant Shares until such time as (i) a Registration Statement
covering such Registrable Securities has been declared effective and such
Registrable Securities have been disposed of pursuant to such effective
Registration Statement, (ii) such Registrable Securities are transferred to any
Person other than a Holder pursuant to Rule 144 (or any similar provision then
in force, but not Rule 144A) under the Securities Act, including a sale pursuant
to the provisions of Rule 144(k), or (iii) such Registrable Securities shall
cease to be outstanding.
"Registration Expenses" has the meaning set forth in Section 7.
"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement (including any Shelf Registration Statement), and all
amendments and supplements to any such registration statement, including
post-effective amendments, in each case including the Prospectus, all exhibits,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
"Rule 144A" has the meaning set forth in Section 9(b).
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"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Shelf Registration" has the meaning set forth in Section 2(a).
"Shelf Registration Statement" has the meaning set forth in Section
2(a).
"Suspension Notice" has the meaning set forth in Section 5.
"Suspension Period" has the meaning set forth in Section 5.
"Target Effective Period" has the meaning set forth in Section 2(a).
"Warrants" mean the warrants to purchase up to _______ shares of Common
Stock held by the Holders.
"Warrant Shares" means the shares of Common Stock issuable upon the
exercise of the Warrants.
Section 2. Shelf Registration.
(a) Filing; Effectiveness. If, as of the Closing Date, a shelf
registration statement (the "Shelf Registration Statement") on the appropriate
form for an offering to be made on a continuous basis pursuant to Rule 415 under
the Securities Act (or such successor rule or similar provision then in effect)
covering all of the Registrable Securities (a "Shelf Registration") is not
effective or the effectiveness thereof has been suspended, then the Company
shall use its reasonable business efforts to cause such Shelf Registration
Statement to be effective as soon as practicable. Once the Shelf Registration
Statement is effective, the Company shall use its reasonable business efforts to
keep such Shelf Registration Statement continuously effective for a period (the
"Target Effective Period") ending with the earlier of (x) the sale of all
Registrable Securities and (y) 36 months following the Closing Date or, if
later, the date on which such Shelf Registration Statement is declared
effective. The Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement, as required by the registration form used by the
Company for such Shelf Registration Statement or by the instructions applicable
to such registration form or by the Securities Act or as reasonably requested
(which request shall result in the filing of a supplement or amendment) by any
Holder of Registrable Securities to which such Shelf Registration Statement
relates (but only to the extent that such request by such Holder relates to
information with respect to such Holder), and the Company agrees to furnish to
each Holder, Holders' Counsel and any managing underwriter copies of any such
supplement or amendment prior to its being used and/or filed with the
Commission. The Holders shall be permitted to withdraw all or any part of the
Registrable Securities from a Shelf Registration Statement (i) at any time prior
to the effective date of such Shelf Registration Statement and (ii) in the event
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that on or after the effective date of such Shelf Registration Statement the
Holders receive a Lock-up Request and such one or more withdrawing Holders elect
to exercise their rights to a Piggy-Back Registration pursuant to Section 3
hereof.
(b) Liquidated Damages.
(i) If during the Target Effective Period a stop order is
imposed, for any other reason the effectiveness of the Shelf Registration
Statement is suspended or there is a Suspension Period exceeding the length of
time permitted by Section 5 hereof or not otherwise permitted by Section 5
hereof, then the Company shall pay liquidated damages to each Holder in an
amount equal to $0.50 per 1,000 Common Shares (or in the case of any Warrant,
$.50 per 1,000 Warrant Shares based on the number of Warrant Shares issuable
upon exercise of such Warrant) per week beginning on the date of such stop
order, the date of such other suspension of effectiveness or the date on which
such Suspension Period Failed to comply with Section 5 hereof, as the case may
be. If the stop order, other suspension of effectiveness of the Shelf
Registration Statement or excessive or impermissible Suspension Period shall not
have been cured within1 90 days after such stop order was imposed, the
effectiveness of such Shelf Registration Statement was otherwise suspended or
the Suspension Period failed to comply with Section 5 hereof, as the case may
be, the weekly liquidated damages shall increase to $1.00 per 1,000 Common
Shares (or in the case of any Warrant, $1.00 per 1,000 Warrant Shares based on
the number of Warrant Shares issuable upon exercise of such Warrant). It the
stop order, other suspension of effectiveness of the Shelf Registration
Statement or excessive or impermissible Suspension Period shall not have been
cured within 180 days after such stop order was imposed, the effectiveness of
such Shelf Registration Statement was otherwise suspended or the Suspension
Period failed to comply with Section 5 hereof, as the case may be, the weekly
liquidated damages shall increase to $1.50 per 1,000 Common Shares (or in the
case of any Warrant, $1.50 per 1,000 Warrant Shares based on the number of
Warrant Shares issuable upon exercise of such Warrant).
(ii) The liquidated damages to be paid to Holders pursuant to this
Section 2(b) shall begin to accrue on the date on which the event triggering
such liquidated damages occurs and shall cease to accrue on the day after the
reinstatement of effectiveness of the Shelf Registration Statement or the day
after any excessive or impermissible Suspension Period ends, as the case may be.
(iii) The Registrable Securities with respect to which liquidated
damages shall accrue and be payable in accordance with this Section 2(b) shall
be those Registrable Securities held by the Holders which are included or
proposed to be included in the Shelf Registration Statement and which have not
been sold pursuant to the Shelf Registration Statement or other public sale
prior to the occurrence of the event triggering such liquidated damages. The
Company shall pay the liquidated damages due with respect to any Registrable
Securities at the end of each week during which such damages accrue. Liquidated
damages shall be paid to the Holders of Registrable Securities entitled to
receive such liquidated damages by wire transfer in immediately available funds
to the accounts designated by such Holders.
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(iv) The parties hereto agree that the liquidated damages provided for
in this Section 2(b) constitute a reasonable estimate of the damages that will
be suffered by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to remain effective, in accordance with this
Agreement.
(c) Effective Registration. A registration will not be deemed to have
been effected as a Shelf Registration unless the Shelf Registration Statement
with respect thereto has been declared effective by the Commission and the
Company has complied in all material respects with its obligations under this
Agreement with respect thereto. If a Shelf Registration is deemed not to have
been effected, then the Company shall continue to be obligated to effect a Shelf
Registration pursuant to this Section 2.
(d) Selection of Underwriter. If the Holders so elect, the offering of
Registrable Securities pursuant to a Shelf Registration Statement shall be in
the form of an underwritten offering. If they so elect, the Holders
participating in such Shelf Registration Statement shall select one or more
nationally recognized firms of investment bankers to act as the book-running
managing underwriter or underwriters in connection with such offering; provided
that such selection shall be subject to the consent of the Company, which
consent shall not be unreasonably withheld.
Section 3. Piggy-Back Registration.
(a) Request for Registration. Each time the Company proposes to file a
registration statement under the Securities Act with respect to an offering by
the Company for its own account or for the account of any of its securityholders
of any class of equity security (other than (i) a registration statement on Form
S-4 or S-8 (or any substitute form that is adopted by the Commission) or (ii) a
registration statement filed in connection with an exchange offer or offering of
securities solely to the Company's existing securityholders), and the form of
registration statement to be used permits the registration of Registrable
Securities, then the Company shall give written notice of such proposed filing
to the Holders of Registrable Securities as soon as practicable (but in no event
less than 20 days before the anticipated effective date), and such notice shall
offer such Holders the opportunity to register such Registrable Securities as
each such Holder may request (which request shall specify the Registrable
Securities intended to be disposed of by such Holder and the intended method of
distribution thereof) within 10 days after the date such notice is received by
such Holder from the Company (a "Piggy-Back Registration"). The Company shall
cause the managing underwriter or underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of the Company or any other securityholder included therein
and to permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof. Any Holder shall
have the right to withdraw its request for inclusion of its Registrable
Securities in any registration statement pursuant to this Section 3 by giving
written notice to the Company of such withdrawal no later than five days prior
to the anticipated effective date. The Company may withdraw a Piggy-Back
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Registration at any time prior to the time it becomes effective, provided that
the Company shall give prompt notice of such withdrawal to the Holders of
Registrable Securities requested to be included in such Piggy-Back Registration.
(b) Reduction of Offering. If the managing underwriter or underwriters
of an underwritten offering with respect to which Piggy-Back Registration has
been requested as provided in Section 3(a) shall have informed the Company, in
writing, that in the opinion of such underwriter or underwriters the total
number of shares which the Company, Holders of Registrable Securities and any
other Persons participating in such registration intend to include in such
offering is such as to materially and adversely affect the success of such
offering (including without limitation any material decrease in the proposed
public offering price), then the number of shares to be offered for the account
of all Persons (other than the Company) participating in such registration shall
be reduced or limited (to zero if necessary) pro rata in proportion to the
respective number of shares requested to be registered by such Persons to the
extent necessary to reduce the total number of shares requested to be included
in such offering to the number of shares, if any, recommended by such managing
underwriter or underwriters.
No registration effected under this Section 3, and no failure to effect
a registration under this Section 3 shall relieve the Company of its obligation
to effect a Shelf Registration pursuant to Section 2. No failure to effect a
registration under this Section 3 and to complete the sale of Registrable
Securities in connection therewith shall relieve the Company of any other
obligation under this Agreement, including without limitation, the Company's
obligations under Sections 7 and 8.
Section 4. Registration Procedures.
In connection with the obligations of the Company to effect or cause
the registration of any Registrable Securities pursuant to the terms and
conditions of this Agreement, the Company shall use its reasonable business
efforts to effect the registration and sale of such Registrable Securities in
accordance with the intended method of distribution thereof as quickly as
practicable, and in connection therewith:
(a) The Company shall prepare and file with the Commission a
Registration Statement on the appropriate form under the Securities
Act, which form shall comply as to form in all materials respects with
the requirements of the applicable form and include all financial
statements required by the Commission to be filed therewith, and use
its reasonable business efforts to cause such Registration Statement to
become effective and remain effective in accordance with the provisions
of this Agreement.
(b) The Company shall promptly prepare and file with the
Commission such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration
Statement effective for as long as such registration is required to
remain effective pursuant to the terms hereof; shall cause the
Prospectus to be supplemented by any required Prospectus supplement,
and, as so supplemented, to be filed pursuant to Rule 424 under the
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Securities Act; and shall comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all Registrable
Securities covered by such Registration Statement during the applicable
period in accordance with the intended methods of disposition by the
Holders set forth in such Registration Statement or supplement to the
Prospectus;
(c) The Company shall promptly furnish to any Holder and the
underwriters, if any, without charge, such number of conformed copies
of each Registration Statement and any post-effective amendment thereto
and such number of copies of the Prospectus (including each preliminary
Prospectus) and any amendments or supplements thereto, any documents
incorporated by reference therein and such other documents as such
Holder or underwriter may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities being
sold by such Holder.
(d) The Company shall, on or prior to the date on which a
Registration Statement is declared effective, (i) use its reasonable
business efforts to register or qualify the Registrable Securities
covered by such Registration Statement under such other securities or
"blue sky" laws of such states of the United States as any Holder or
underwriter requests; (ii) do any and all other acts and things which
may be necessary or advisable to enable such Holder to consummate the
disposition of such Registrable Securities owned by such Holder; (iii)
use its reasonable business efforts to keep each such registration or
qualification (or exemption therefrom) effective during the period
which the Registration Statement is required to be kept effective in
accordance with the provisions of this Agreement; and (iv) do any and
all other acts or things reasonably necessary or advisable to enable
the disposition in such jurisdictions of such Registrable Securities;
provided, however, that the Company shall not be required (x) to
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 4(d), (y) to file
any general consent to service of process, or (z) to subject itself to
taxation in any jurisdiction where it would not otherwise be subject to
taxation.
(e) The Company shall cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary by
virtue of the business and operations of the Company to enable the
Holders to consummate the disposition of such Registrable Securities.
(f) The Company shall promptly notify each Holder, Holders'
Counsel and any underwriter in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by
the Commission or any state securities authority for amendments and
supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become
effective, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement or the
initiation or threatening of any proceedings for that purpose, (iv) of
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the issuance by any state securities commission or other regulatory
authority of any order suspending the qualification or exemption from
qualification of any of the Registrable Securities under state
securities or "blue sky" laws or the initiation of any proceedings for
that purpose, (v) if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered
thereby, the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true and
correct in all material respects, and (vi) of the happening of any
event which makes any statement made in a Registration Statement or
related Prospectus untrue or which requires the making of any changes
in such Registration Statement or Prospectus so that they will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. Immediately following expiration of any
Suspension Period, the Company shall prepare and file with the
Commission and furnish a supplement or amendment to such Prospectus so
that, as thereafter deliverable to the purchasers of such Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(g) The Company shall make generally available to the Holders
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 45 days (90 days in the event it relates
to a fiscal year) after the end of the 12-month period beginning with
the first day of the Company's first fiscal quarter commencing after
the effective date of a Registration Statement, which earnings
statement shall cover said 12-month period, and which requirement will
be deemed to be satisfied if the Company timely files complete and
accurate information on forms 10-Q, 10-K and 8-K under the Exchange Act
and otherwise complies with Rule 158 under the Securities Act.
(h) The Company shall promptly use its reasonable business
efforts to prevent the issuance of any order suspending the
effectiveness of a Registration Statement, and if one is issued use its
reasonable business efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the
earliest possible moment.
(i) The Company shall, if requested by the managing
underwriter or underwriters, if any, Holders' Counsel, or any Holder
promptly incorporate in a Prospectus supplement or post-effective
amendment such information as such managing underwriter or underwriters
reasonably requests, or Holders' Counsel reasonably requests, to be
included therein, including, without limitation, with respect to the
Registrable Securities being sold by such Holder to such underwriter or
underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other terms of an
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underwritten offering of the Registrable Securities to be sold in such
offering, and promptly make all required filings of such Prospectus
supplement or post-effective amendment.
(j) The Company shall, as promptly as practicable after filing
with the Commission any document which is incorporated by reference
into a Registration Statement (in the form in which it was
incorporated), deliver a copy of each such document to each of the
Holders and to Holders' Counsel.
(k) The Company shall cooperate with the Holders and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (which shall not bear any
restrictive legends unless required under applicable law) representing
securities sold under a Registration Statement, and enable such
securities to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or such Holders may
reasonably request and keep available and make available to the
Company's transfer agent prior to the effectiveness of such
Registration Statement a supply of such certificates.
(l) The Company shall enter into such customary agreements
(including, if applicable, an underwriting agreement in customary form)
and take such other actions as the Holders or the underwriters retained
by the Holders participating in an underwritten public offering, if
any, may reasonably request in order to expedite or facilitate the
disposition of Registrable Securities.
(m) The Company shall promptly make available to each Holder,
any underwriter participating in any disposition pursuant to a
Registration Statement, and any attorney, accountant or other agent or
representative retained by any such Holder or underwriter
(collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by any such Inspector in connection
with such Registration Statement; provided that, unless the disclosure
of such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement or the release of such Records
is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, the Company shall not be required to provide
any information under this paragraph (1) if the Company believes, after
consultation with counsel for the Company and counsel for the Holders,
that to do so would cause the Company to forfeit an attorney-client
privilege that was applicable to such information or (2) if either (i)
the Company has requested and been granted from the Commission
confidential treatment of such information contained in any filing with
the Commission or documents provided supplementally or otherwise or
(ii) the Company reasonably determines in good faith that such Records
are confidential and so notifies the Inspectors in writing unless prior
to furnishing any such information with respect to (i) or (ii) such
Holder of Registrable Securities requesting such information agrees to
enter into a confidentiality agreement in customary form and subject to
customary exceptions; and provided, further that each Holder of
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Registrable Securities agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company at its
expense, to undertake appropriate action and to prevent disclosure of
the Records deemed confidential.
(n) In the case of any underwritten public offering, the
Company shall furnish to each Holder and to each underwriter a signed
counterpart, addressed to such Holder or underwriter, of (i) an opinion
or opinions of counsel to the Company, and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each
in customary form and covering such matters of the type customarily
covered by opinions or comfort letters, as the case may be, as the
managing underwriter therefor reasonably requests.
(o) The Company shall cause the shares of Common Stock
included in a Registration Statement to be listed on the American Stock
Exchange or such other securities exchange on which similar securities
issued by the Company are then listed.
(p) The Company shall provide a CUSIP number for all
Registrable Securities covered by a Registration Statement not later
than the effective date of such Registration Statement.
(q) The Company shall cooperate with each Holder and each
underwriter participating in the disposition of Registrable Securities
and their respective counsel in connection with any filings required to
be made with the National Association of Securities Dealers, Inc.
("NASD").
(r) The Company shall, during the period when the Prospectus
is required to be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act.
(s) The Company shall appoint a transfer agent and registrar
for all the shares of Common Stock covered by a Registration Statement
not later than the effective date of such Registration Statement.
(t) In connection with an underwritten offering, the Company
will participate, to the extent reasonably requested by the managing
underwriter for the offering or the Holders, in customary efforts to
sell the securities under the offering, including without limitation,
participating in "road shows."
Section 5. Suspension Period.
In the case of a Shelf Registration Statement, each Holder, upon
receipt of any notice (a "Suspension Notice") from the Company of the happening
of any event of the kind described in Section 4(f)(vi) or of any event which, in
the Company's reasonable business judgment, could become such an event, shall
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forthwith discontinue disposition of the Registrable Securities pursuant to the
Shelf Registration Statement covering such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(f) or until it is advised in writing (the "Advice") by
the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings which are incorporated by
reference in the Prospectus, and, if so directed by the Company, such Holder
will, or will request the managing underwriter or underwriters, if any, to,
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice; provided, however, that (w) the Company shall not give a Suspension
Notice until after the Shelf Registration Statement has been declared effective,
(x) the Company shall not give more than three Suspension Notices during any
period of twelve consecutive months, (y) in no event shall the period from the
date on which any Holder receives a Suspension Notice to the date on which any
Holder receives either the Advice or copies of the supplemented or amended
Prospectus contemplated by Section 4(f) (the "Suspension Period") exceed 60 days
and (z) in no event shall the aggregate length of all Suspension Periods during
any period of twelve consecutive months exceed 90 days. In the event that the
Company shall give any Suspension Notice, (i) the Company shall use its
reasonable business efforts and take such actions as are reasonably necessary to
render the Advice and end the Suspension Period as promptly as practicable and
(ii) the time periods for which a Shelf Registration Statement is required to be
kept effective pursuant to Section 2 hereof shall be extended by the number of
days during the Suspension Period.
Section 6. Holder Information.
If any Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right, to the extent permitted by law, to require (i) the insertion
therein of language, in form and substance reasonably satisfactory to such
Holder, to the effect that the holding by such Holder of such securities is not
to be construed as a recommendation by such Holder of the investment quality of
the Company's securities covered thereby and that such holding does not imply
that such Holder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such Holder by name or
otherwise is not required by the Securities Act or any similar Federal or state
"blue sky" statute and the rules and regulations thereunder then in force, the
deletion of the reference to such Holder.
Section 7. Registration Expenses.
Any and all expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all Commission and
securities exchange, NASDAQ or NASD registration and filing fees, all fees and
expenses incurred in connection with compliance with state securities or "blue
sky" laws (including reasonable fees and disbursements of counsel for any
underwriters in connection with "blue sky" qualifications of the Registrable
Securities), printing expenses, messenger and delivery expenses, internal
expenses (including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting duties), all
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expenses for word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, the fees and
expenses incurred in connection with the listing of the Registrable Securities,
the fees and disbursements of counsel for the Company and of the independent
certified public accountants of the Company (including the expenses of any
comfort letters or costs associated with the delivery by independent certified
public accountants of a comfort letter or comfort letter requested pursuant to
Section 4(n)) Securities Act liability insurance (if the Company elects to
obtain such insurance), the reasonable fees and expenses of any special experts
or other Persons retained by the Company in connection with any registration,
the reasonable fees and disbursements of Holders' Counsel and any reasonable
out-of-pocket expenses of the Holders and their agents (other than their
counsel) including any reasonable travel costs (all such expenses being herein
called "Registration Expenses"), will be borne by the Company whether or not the
Registration Statement to which such expenses relate becomes effective provided,
however, that Registration Expenses shall not include (i) underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of Registrable Securities or (ii) any fees or expenses of any counsel,
accountants or other persons retained or employed by the Holders other than as
provided above.
Section 8. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the full extent permitted by law, each Holder, its partners,
officers, directors, trustees, stockholders, employees, agents and investment
advisers, and each Person who controls such Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, or is under
common control with, or is controlled by, such Holder, together with the
partners, officers, directors, trustees, stockholders, employees and agents of
such controlling Person (collectively, the "Controlling Persons"), from and
against all losses, claims, damages, liabilities and expenses (including without
limitation any legal or other fees and expenses reasonably incurred by any
Holder or any such Controlling Person in connection with defending or
investigating any action or claim in respect thereof) (collectively, the
"Damages") to which such Holder, its partners, officers, directors, trustees,
stockholders, employees, agents and investment advisers, and any such
Controlling Person may become subject under the Securities Act or otherwise,
insofar as such Damages (or proceedings in respect thereof) arise out of or are
based upon any untrue or alleged untrue statement of material fact contained in
any Registration Statement (or any amendment thereto) pursuant to which
Registrable Securities were registered under the Securities Act, including all
documents incorporated therein by reference, or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, or caused by any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact necessary
to make the statements therein in light of the circumstances under which they
were made not misleading, except insofar as such Damages arise out of or are
based upon any such untrue statement or omission based upon information relating
12
to such Holder furnished in writing to the Company by such Holder expressly for
use therein. In connection with an underwritten offering, the Company will
indemnify the underwriters thereof, their officers and directors and each Person
who controls such underwriters (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as provided
above with respect to the indemnification of the Holders of Registrable
Securities except with respect to information provided by the underwriter
specifically for inclusion therein.
(b) Indemnification by the Holders. Each Holder agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors, officers
and each Person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to such Holder, but only with
reference to information relating to such Holder furnished to the Company in
writing by such selling Holder expressly for use in any Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto); provided, however, that such selling Holder shall not be obligated to
provide such indemnity to the extent that such Damages result from the failure
of the Company to promptly amend or take action to correct or supplement any
such Registration Statement or Prospectus on the basis of corrected or
supplemental information provided in writing by such selling Holder to the
Company expressly for such purpose. In no event shall the liability of any
Holder of Registrable Securities hereunder be greater in amount than the amount
of the proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Indemnification Procedures. In case any proceeding (including any
governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to either paragraph (a) or (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceedings and shall pay the fees and
disbursements of such counsel relating to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, or (ii) the
indemnifying party fails promptly to assume the defense of such proceeding or
fails to employ counsel reasonably satisfactory to such indemnified party or
parties, or (iii) (A) the named parties to any such proceeding (including any
impleaded parties) include both such indemnified party or parties and any
indemnifying party or an Affiliate of such indemnified party or parties or of
any indemnifying party, (B) there may be one or more defenses available to such
indemnified party or parties or such Affiliate of such indemnified party or
parties that are different from or additional to those available to any
indemnifying party or such Affiliate of any indemnifying party and (C) such
indemnified party or parties shall have been advised by such counsel that there
may exist a conflict of interest between or among such indemnified party or
parties or such Affiliate of such indemnified party or parties and any
indemnifying party or such Affiliate of any indemnifying party, in which
13
case, if such indemnified party or parties notifies the indemnifying party or
parties in writing that it elects to employ separate counsel of its choice at
the expense of the indemnifying parties, the indemnifying parties shall not have
the right to assume the defense thereof and such counsel shall be at the expense
of the indemnifying parties, it being understood, however, that unless there
exists a conflict among indemnified parties, the indemnifying parties shall not,
in connection with any one such proceeding or separate but substantially similar
or related proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such indemnified party or parties. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent
but, if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party or
parties from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which such indemnified party is a party, and indemnity could have
been sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) Contribution. To the extent that the indemnification provided for
in paragraph (a) or (b) of this Section 8 is unavailable to an indemnified party
or insufficient in respect of any Damages, then each indemnifying party under
such paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Damages in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Holders on the other hand in
connection with the statements or omissions that resulted in such Damages, as
well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Holders on the other hand shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Notwithstanding the provisions of this Section 8(d), no Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such Holder were offered to the
public (less any underwriting discounts and commissions) exceeds the amount of
any damages which such Holder has otherwise been required to pay by reason of
such untrue statement or omission. Each Holder's obligation to contribute
pursuant to this Section 8(d) is several in the proportion that the proceeds of
the offering received by such Holder bears to the total proceeds of the offering
received by all the Holders and not joint.
If indemnification is available under paragraph (a) or (b) of this
Section 8, the indemnifying parties shall indemnify each indemnified party to
the full extent provided in such paragraphs without regard to the relative fault
of said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 8(d).
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The Company and each Holder agrees that it would not be just or
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the Damages referred to in this Section 8
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred (and not otherwise reimbursed) by
such indemnified 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. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
Section 9.
(a) Rule 144. The Company covenants that it will file any reports
required to be filed by it under the Securities Act and the Exchange Act (or, if
the Company is not required to file such reports, it will, upon the request of
any Holder, make publicly available other information so long as necessary to
permit sales under Rule 144 under the Securities Act), and it will take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rules may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of any Holder, the Company will deliver to such
Holder a written statement as to whether it has complied with such requirements.
(b) Rule 144A. Upon the request of any Holder, the Company shall
deliver to such holder within 10 days following receipt by the Company of such
request, the information required by Section (d)(4) of Rule 144A under the
Securities Act, as such rule may be amended from time to time or any similar
rule or regulation hereafter adopted by the Commission ("Rule 144A"), and will
take such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitations or the
exemptions provided by Rule 144A. All information shall be "reasonably current"
as defined in Rule 144A.
Section 10. Restrictions on Sale by the Company and Others.
In the event of an underwritten public offering for the account of the
Company with respect to which the Holders have the right to exercise their
rights to Piggy-Back Registration pursuant to Section 3 hereof, upon the written
request (the "Lock-up Request") of the managing underwriter (or underwriters) of
such offering, which request shall be made at least 20 days prior to the
anticipated effective date of the Registration Statement for such offering, each
Holder agrees not to effect any public sale or distribution of any securities
similar to those being registered in such offering (other than pursuant to such
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offering), including without limitation, through sales of Registrable Securities
pursuant to the Shelf Registration Statement, during the 10 days prior to, and
during the 90-day period beginning on, the effective date of the Registration
Statement relating to such offering.
Section 11. Miscellaneous.
(a) 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 the Holders of a
majority in interest of the Registrable Securities then outstanding.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by telecopier, registered or certified
mail (return receipt requested), postage prepaid or courier to the parties at
their respective addresses set forth on the signature pages hereof (or at such
other address for any party as shall be specified by like notice, provided that
notices of a change of address shall be effective only upon receipt thereof).
All such notices and communications shall be deemed to have been received: at
the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered to
a courier guaranteeing overnight delivery.
(c) 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. 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 and such person shall be entitled to
receive the benefits hereof.
(d) 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.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of law.
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(g) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(h) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(i) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement or where any provision hereof is validly asserted as
a defense, the successful party shall, to the extent permitted by applicable
law, be entitled to recover reasonable attorneys' fees and expenses in addition
to any other available remedy.
(j) Further Assurances. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
(k) Remedies. Except as provided in Section 2 of this Agreement with
respect to liquidated damages, in the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement and
granted by law. Except as otherwise provided in Section 2 of this Agreement with
respect to liquidated damages, the parties agree that the provisions of this
Agreement shall be specifically enforceable, it being agreed by the parties that
the remedy at law, including monetary damages, is inadequate and that any
objection in any action for specific performance or injunctive relief that a
remedy at law would be adequate is waived.
(l) Limitation of Liability. Each party to this Agreement hereby
acknowledges and agrees to the limitation of liability with respect to certain
of the Holders as set forth on such Holder's signature page.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
KEY ENERGY GROUP, INC.
By:/s/Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Chief Executive Officer
Address: 000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000
Telecopier: (000) 000-0000
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