REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of this 25th day of November, 1997, by and among Future Petroleum
Corporation, a Utah corporation (the "Company"), Energy Capital Investment
Company PLC, an English investment company ("Energy PLC"), and EnCap Equity
1994 Limited Partnership, a Texas limited partnership ("EnCap LP").
RECITALS:
A. Reference is herein made to that certain Purchase and Sale Agreement dated
as of even date herewith (the "Purchase Agreement") by and among the parties
hereto and Gecko Booty 1994 I Limited Partnership, a Texas limited partnership.
B. In order to induce Energy PLC and EnCap LP to enter into the Purchase
Agreement (and recognizing that Energy PLC and EnCap LP would not be willing
to enter into the Purchase Agreement in the absence of this Agreement), the
Company has agreed to provide Energy PLC and EnCap LP with the registration
rights set forth herein.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the foregoing Recitals and the
mutual covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby
agree as follows:
Section 1. Definitions and References.
(a) When used in this Agreement, the following terms shall have the respective
meanings assigned to them in this Section 1 or in the sections, subsections or
other subdivisions referred to below:
"Agreement" shall mean this Agreement, as hereafter changed, modified or
amended in accordance with the terms hereof.
"Commission" shall mean the Securities and Exchange Commission (or any
successor body thereto).
"Company" shall have the meaning assigned to it in the introductory paragraph
hereof.
"Common Stock" shall mean the common stock of the Company, $0.01 par
value per share.
"Demand Registration" shall have the meaning assigned to it in Section 2(a).
"EnCap LP" shall have the meaning assigned to it in the introductory paragraph
hereof.
"Energy PLC" shall have the meaning assigned to it in the introductory
paragraph hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and all rules and regulations promulgated under such Act.
"Holder" shall mean any Person that holds Registrable Securities.
"Holder Indemnified Parties" shall have the meaning assigned to it in Section
9(a).
"Person" shall mean any individual, corporation, partnership, joint venture,
limited partnership, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Piggyback Registration" shall have the meaning assigned to it in Section 3.
"Purchase Agreement" shall have the meaning assigned to it in Paragraph A
of the Recitals hereto.
"Registrable Securities" shall mean (i) the shares of Common Stock and/or
other securities issued pursuant to this Agreement and (ii) any securities
issued or issuable with respect to the shares described in clause (i) above
by way of a stock dividend or stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or other reorganization;
provided, that a share of Common Stock or security described in clauses (i)
and (ii) shall cease to be a Registrable Security for purposes of this
Agreement at such time as either (A) counsel to the Company renders an
opinion to the Holder of such share or security to the effect that such share
or security can be freely transferred without registration under the
Securities Act (which counsel and opinion shall be reasonably acceptable to
such Holder) or (B) counsel to a Holder of such share or security renders an
opinion to the Company to the effect that such share or security can be
freely transferred without registration under the Securities Act (which
counsel and opinion shall be reasonably acceptable to the Company).
"Registration Expenses" shall mean all expenses incident to the Company's
performance of or compliance with the registration rights granted hereunder,
including (without limitation) all registration and filing fees, fees and
expenses of compliance with securities and blue sky laws, printing and
engraving expenses, messenger, telephone and delivery expenses, and fees and
disbursements of counsel for the Company, all independent certified public
accountants and underwriters (excluding discounts and commissions);
provided, that Registration Expenses shall not include any Selling Expenses.
"Securities Act" shall mean the Securities Act of 1933, as amended, and all
rules and regulations under such Act.
"Selling Expenses" shall mean underwriting discounts or commissions, any
selling commissions and stock transfer taxes attributable to sales of
Registrable Securities and the fees and expenses of counsel for any Holder.
(b) All references in this Agreement to sections, subsections and other
subdivisions refer to corresponding sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any of such subdivisions are for convenience
only and shall not constitute part of such subdivisions and shall be
disregarded in construing the language contained herein. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. Words in the singular
form shall be construed to include the plural and vice versa, unless the
context otherwise requires. Pronouns in masculine, feminine and neuter
genders shall be construed to include any other gender.
Section 2. Demand Registration Rights.
(a) A Holder may request at any time after the expiration of the one-year
period commencing as of the date hereof a registration by the Company under
the Securities Act of all or a part its Registrable Securities (a "Demand
Registration").
(b) Notwithstanding subsection (a) above or anything else herein to the
contrary, the Company shall not be obligated to effect more than two
registrations pursuant to this Section 2; provided, however, that any
registration requested pursuant to this Section 2 will not be deemed to have
been effected unless it has become effective and remained effective for the
lesser of either the period necessary to complete the sale or disposition of
the Registrable Securities covered by such registration statement;
provided, further, that any such registration which does not become
effective after the Company has filed a registration statement in
accordance with the provisions of this Section 2 solely by reason of
the refusal to proceed of the Holder or Holders that have requested
the Demand Registration pursuant to subsection (a) above, including
failure to comply with the provisions of this Agreement (other than
any refusal to proceed based upon the advice of counsel to such Holder
or Holders that the registration statement, or the prospectus contained
therein, contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing, or that such registration statement or
such prospectus, or the distribution contemplated thereby, otherwise
violates or would, if such distribution using such prospectus took
place, violate any applicable state or federal securities law) shall
be deemed to have been effected by the Company at the request of
such Holder or Holders.
(c) Notwithstanding subsection (a) above or anything else herein to the
contrary, it is hereby agreed that a Demand Registration must cover no less
than 50% of the Registrable Shares then outstanding. In the event a Demand
Registration is made pursuant to this Section 2, The Company will (i)
promptly give notice of the proposed registration to any other Holder, if
any, of Registrable Securities and (ii) use its reasonable best efforts to
effect the registration of the Registrable Securities specified in the
request, together with the Registrable Securities of any other Holder joining
in such request as are specified in a written request received by the Company
within 20 days after receipt of the notice referred to in clause (i) above.
Section 3. Piggyback Registration Rights. If the Company proposes to
register any of its securities under the Securities Act other than (a)
under employee compensation or benefit programs, (b) an exchange
offer or an offering of securities solely to the existing stockholders or
employees of the Company, or (c) securities to be issued in a
transaction described in Rule 145(a) promulgated under the Securities
Act, and the registration form to be used may be used for the
registration of Registrable Securities, the Company will give prompt
written notice to Holders of Registrable Securities of its intention to
effect such a registration and will include in such registration all
Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 15 days after the receipt
of the Company's notice (a "Piggyback Registration"). The Company
shall use its reasonable best efforts to cause the managing underwriters
of a proposed underwritten offering to permit the Registrable
Securities requested to be included in the registration statement (or
registration statements) for such offering to be included therein on the
same terms and conditions as any similar securities of the Company
included therein. Notwithstanding the foregoing, if the Company
gives notice of such a proposed registration, the total number of
Registrable Securities which shall be included in such registration
shall be reduced pro rata to such number, if any, as in the reasonable
opinion of the managing underwriters of such offering would not
adversely affect the marketability or offering price of all of the
securities proposed to be offered by the Company in such offering;
provided however, that (i) if such Piggyback Registration is incident to
a primary registration on behalf of the Company, and to the extent not
prohibited by any written registration rights agreements existing on
the date hereof, the securities to be included in the registration
statement (or registration statements) for any person other than the
Holders and the Company shall be first reduced prior to any such pro
rata reduction, and (i) if such Piggyback Registration is incident to a
secondary registration on behalf of holders of securities of the
Company and to the extent not prohibited by any written registration
rights agreements existing on the date hereof, the securities to be
included in the registration statement (or registration statements) for
any person not exercising "demand" registration rights other than the
Holders shall be first reduced prior to any such pro rata reduction.
Section 4. Registration Procedures.
(a) Whenever the holders of Registrable Securities have requested that
any Registrable Securities be registered pursuant to Section 2 or
Section 3, the Company will as expeditiously as possible:
(i) prepare and file with the Commission a registration statement on
the appropriate form with respect to such Registrable Securities, and
use its reasonable best efforts to cause such registration statement to
become effective as soon as reasonably practicable after the filing
thereof (provided, that before filing a registration statement or
prospectus or any amendments or supplements thereto, The Company
will furnish copies of all such documents proposed to be filed to any
holder of Registrable Securities covered by such registration
statement);
(ii) prepare and file with the Commission 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 for a period of not less than the period set forth in
such section or such shorter period which will terminate when
Registrable Securities covered by such registration statement have
been sold (but not before the expiration of the applicable prospectus
delivery period) and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement;
(iii) notify each seller of Registrable Securities requesting registration
promptly after the Company shall receive notice thereof of the time
when such registration statement has been filed;
(iv) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including, without limitation, each preliminary prospectus)
and such other documents as such seller may reasonably request in
order to facilitate the disposition of the Registrable Securities owned
by such seller;
(v) use its reasonable best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions within the United States as any seller reasonably requests
and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by
such seller (provided that the Company will not be required to qualify
generally to do business or subject itself to any general service of
process in any jurisdiction where it is otherwise not then so subject);
(vi) notify each seller of such Registrable Securities, at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event which requires the
making of any change in the prospectus included in such registration
statement so that such document will not contain an 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 not misleading,
and, at the request of any such seller, the Company will prepare a
supplement or amendment to such prospectus so that such prospectus
will not contain an 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 not misleading;
(vii) use its reasonable best efforts to cause all such Registrable
Securities to be listed on each securities exchange or exchanges,
automated quotation system or over-the-counter market upon which
securities of the Company of the same class are then listed;
(viii) enter into such customary agreements (including, without
limitation, underwriting agreements in customary form, substance and
scope) and take all such other action as the Holders of a majority of the
Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities;
(ix) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission;
(x) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
disqualification of any common stock included in such registration
statement for sale in any jurisdiction, the Company will use its
reasonable best efforts promptly to obtain the withdrawal of such
order;
(x) use its reasonable best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may
be necessary to enable the sellers thereof to consummate the
disposition of such Registrable Securities; and
(xi) use its reasonable best efforts to obtain a comfort letter from the
Company's public accountants in customary form and covering such
matters of the type customarily covered by comfort letters with respect
to offerings of the type being made pursuant to the registration
statement as the Holders of the Registrable Securities reasonably
request.
(b) Whenever the Holders of Registrable Securities have requested that
any Registrable Securities be registered pursuant to Section 2 or
Section 3, each Holder of Registrable Securities (including Registrable
Securities in any registration statement filed pursuant to this
Agreement) will be deemed to have agreed as follows:
(i) upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 4(a)(vi), the Holders of
Registrable Securities covered by such registration statement will
forthwith discontinue disposition of any such Registrable Securities
until the Holders of Registrable Securities receive copies of the
supplemented or amended prospectus contemplated by Section
4(a)(vi), or until they are advised in writing by the Company that the
use of the applicable prospectus may be resumed, and they have
received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such
prospectus (it being the agreement of the parties hereto, however, that
the obligation of the Company with respect to maintaining the subject
registration statement current and effective shall be extended by a
period of days equal to the period the Holders of Registrable Securities
are required by this Section 4(b)(i) to discontinue disposition of such
Registrable Securities); and
(ii) furnish to the Company such information regarding each Holder,
the Registrable Securities held by such Holder and the intended
method of disposition thereof as the Company shall reasonably request
and as shall be reasonably required in connection with the preparation
of the applicable registration statement and other actions taken by the
Company under this Agreement, and it shall be a condition precedent
to the obligation of the Company to take any action pursuant to this
Agreement in respect of the Registrable Securities that such
information has been furnished to the Company by the Holders of
Registrable Securities.
Section 5. Expenses of Registration. The Company shall pay all
Registration Expenses in connection with each registration effected
pursuant to Sections 2 and 3 and, in any event, shall pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal and accounting duties), the
expense of any annual audit and the fees and expenses incurred in
connection with the listing of the securities to be registered on each
securities exchange on which securities pro rata based upon the
number of Registrable Securities included in such registration.
Section 6. Indemnification.
(a) The Company shall indemnify and hold harmless, with respect to
any registration statement filed by it, to the full extent permitted by
law, each Holder of Registrable Securities covered by such registration
statement, and each other Person, if any, who controls such Holder
within the meaning of Section 15 of the Securities Act (collectively,
"Holder Indemnified Parties") against all losses, claims, damages,
liabilities and expenses, joint or several to which any such Holder
Indemnified Party may become subject under the Securities Act, the
Exchange Act, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in any registration statement in which such
Registrable Securities were included as contemplated hereby 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, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary
prospectus, together with the documents incorporated by reference
therein (as amended or supplemented if the Company shall have filed
with the Commission any amendment thereof or supplement thereto),
or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or (iii) any violation by the Company of
any federal, state or common law rule or regulation applicable to the
Company and relating to action of or inaction by the Company in
connection with any such registration; and in each such case, the
Company shall reimburse each such Holder Indemnified Party for any
reasonable legal or other expenses incurred by any of them in
connection with investigating or defending any such loss, claim,
damage, liability, expense, action or proceeding; provided, however,
that the Company shall not be liable to any such Holder Indemnified
Party in any such case to the extent, that any such loss, claim, damage,
liability or expense (or action or proceeding, whether commenced or
threatened, in respect thereof) arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made in such registration statement or amendment thereof or
supplement thereto or in any such preliminary, final or summary
prospectus in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such
Holder Indemnified Party for use in the preparation thereof. Such
indemnity and reimbursement of expenses and other obligations shall
remain in full force and effect regardless of any investigation made by
or on behalf of the Holder Indemnified Parties and shall survive the
transfer of such securities by such Holder Indemnified Parties.
(b) Each Holder of Registrable Securities participating in any
registration hereunder shall severally (and not jointly or jointly and
severally) indemnify and hold harmless, to the fullest extent permitted
by law, the Company, its directors, officers, employees and agents, and
each Person who controls the Company (within the meaning of
Section 15 of the Securities Act) (collectively, "Company Indemnified
Parties") against all losses, claims, damages, liabilities and expenses to
which any Company Indemnified Party may become subject under the
Securities Act, the Exchange Act, at common law or otherwise, insofar
as such losses, claims, damages, liabilities or expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration
statement in which such Holder's Registrable Securities were included
or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary, final or
summary prospectus, together with the documents incorporated by
reference therein (as amended or supplemented if the Company shall
have filed with the Commission any amendment thereof or supplement
thereto), or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading to the extent in the cases described in
clauses (i) and (ii), that such untrue statement or omission was
furnished in writing by such Holder for use in the preparation thereof,
or (iii) any violation by such Holder of any federal, state or common
law rule or regulation applicable to such Holder and relating to action
of or inaction by such Holder in connection with any such registration;
and in each such case, such Holder shall reimburse each such
Company Indemnified Party for any reasonable legal or other expenses
incurred by any of them in connection with investigating or defending
any such loss, claim, damage, liability, expense, action or proceeding.
Such indemnity obligation shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company
Indemnified Parties (except as provided above) and shall survive the
transfer of such securities by such Holder.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) of written notice of the commencement of any action, suit,
proceeding, investigation or threat thereof made in writing with
respect to which a claim for indemnification may be made pursuant to
this Section 6, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written
notice to the indemnifying party of the threat or commencement
thereof; provided, however, that the failure to so notify the
indemnifying party shall not relieve it from any liability which it may
have to any indemnified party except to the extent that the
indemnifying party is actually prejudiced by such failure to give
notice. If any such claim or action referred to under subsection (a) or
(b) is brought against any indemnified party and it then notifies the
indemnifying party of the threat or commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party. After notice from
the indemnifying party to such indemnified party of its election so to
assume the defense of any such claim or action, the indemnifying party
shall not be liable to such indemnified party under this Section 6 for
any legal expenses of counsel or any other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation unless the
indemnifying party has failed to assume the defense of such claim or
action or to employ counsel reasonably satisfactory to such
indemnified party. Under no circumstances will the indemnifying
party be obligated to pay the fees and expenses of more than one law
firm for all indemnified parties. The indemnifying party shall not be
required to indemnify the indemnified party with respect to any
amounts paid in settlement of any action, proceeding or investigation
entered into without the written consent of the indemnifying party,
which consent shall not be unreasonably withheld. No indemnifying
party shall consent to the entry of any judgment or enter into any
settlement without the consent of the indemnified party unless (i) such
judgment or settlement does not impose any obligation or liability
upon the indemnified party other than the execution, delivery or
approval thereof, and (ii) such judgment or settlement includes as an
unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a full release and discharge from all liability
in respect of such claim for all persons that may be entitled to or
obligated to provide indemnification or contribution under this Section
6.
(d) Indemnification similar to that specified in the preceding
subsections of this Section 6 (with appropriate modifications) shall be
given by the Company and each seller of Registrable Securities with
respect to any required registration or qualification of securities under
any state securities or blue sky laws.
(e) If the indemnification provided for in this Section 6 is unavailable
to or insufficient to hold harmless an indemnified party under
subsection (a) or (b), then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the
losses, claims, damages, liabilities or expenses (or actions or
proceedings in respect thereof) referred to in subsection (a) or (b) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the
other in connection with the statements, omissions, actions or
inactions which resulted in such losses, claims, damages, liabilities or
expenses as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and the indemnified party 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 indemnifying party or the indemnified party, any action or
inaction by any such party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement, omission, action or inaction. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof)
pursuant to this subsection (e) shall be deemed to include, without
limitation, any reasonable legal or other expenses incurred by such
indemnified party in connection with investigating or defending any
such action or claim (which shall be limited as provided in subsection
(c) if the indemnifying party has assumed the defense of any such
action in accordance with the provisions thereof) which is the subject
of this subsection (e). 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. Promptly after
receipt by an indemnified party under this subsection (e) of written
notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing with respect to which a
claim for contribution may be made against an indemnifying party
under this subsection (e), such indemnified party shall, if a claim for
contribution in respect thereof is to be made against an indemnifying
party, give written notice to the indemnifying party in writing of the
commencement thereof (if the notice specified in subsection (c) has
not been given with respect to such action); provided, however, that
the failure to so notify the indemnifying party shall not relieve it from
any obligation to provide contribution which it may have to any
indemnified party under this subsection (e) except to the extent that
the indemnifying party is actually prejudiced by the failure to give
notice.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata
allocation or by any other method of allocation which does not take
account the equitable considerations referred to in the immediately
preceding paragraph.
If indemnification is available under this Section 6, the indemnifying
parties shall indemnify each indemnified party to the fullest extent
provided in subsections (a) and (b), without regard to the relative fault
of said indemnifying party or any other equitable consideration
provided for in this subsection. The provisions of this subsection shall
be in addition to any other rights to indemnification or contribution
which any indemnified party may have pursuant to law or contract,
shall remain in full force and effect regardless of any investigation
made by or on behalf of any indemnified party, and shall survive the
transfer of securities by any such party.
(f) In connection with any underwritten offering contemplated by this
Agreement which includes Registrable Securities, the Company and
all sellers of Registrable Securities included in any registration
statement shall agree to customary provisions for indemnification and
contribution (consistent with the other provisions of this Section 6) in
respect of losses, claims, damages, liabilities and expenses of the
underwriters of such offering.
Section 7. Selection of Underwriters. If a registration effected
pursuant to Section 2 is an underwritten offering or a best efforts
underwritten offering, the investment bankers or investment bankers
and manager or managers that will administer the offering shall be
selected by the Holders of a majority of the Registrable Securities to be
registered in such registration; provided, however, that such
investment bankers and managers must be reasonably satisfactory to
the Company.
Section 8. Rule 144. The Company covenants to each Holder that, to
the extent that the Company shall be required to do so under the
Exchange Act, the Company shall (a) timely file the reports required
to be filed by it under the Exchange Act or the Securities Act
(including, but not limited to, the reports under Section 13 and 15(d)
of the Exchange Act referred to in subparagraph (c) (1) of Rule 144
adopted by the Commission under the Securities Act) and the rules
and regulations adopted by the Commission thereunder, and (b) 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 of the exemption provided by Rule 144 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.
Upon the request of any Holder, the Company shall deliver to such
Holder a written statement as to whether it has complied with such
requirements.
Section 9. Market Standoff Agreement. In order to facilitate the
possibility of future public offerings of Common Stock, the Holders
(and any subsequent Holder) agree that the Registrable Securities will
not be resold during a period commencing on the filing by the
Company of a registration statement under the Securities Act for an
underwritten public offering for cash by the Company of its Common
Stock or securities convertible into or exercisable or exchangeable for
its Common Stock and continuing until the earlier of the abandonment
of the proposed public offering or 120 days following the date of the
last closing in the public offering without the consent of the
underwriters of such offering, except to the extent such shares are
included in such registration. Holders of such Registrable Securities
also agree that they will cooperate with the Company in providing
reasonable written assurances respecting the foregoing to the
underwriter of any such public offering. Holders agree that during the
above restricted period they will not directly or indirectly sell, offer to
sell, contract to sell (including without limitation any short sale), grant
an option to purchase or otherwise transfer of dispose of (other than
donees who agree to be similarly bound) shares of Registrable
Securities at any time during such period except securities included in
such registration. In order to enforce the foregoing covenant, the
Company may impose stop-order instructions with respect to such
shares of Registrable Securities held by each Holder, which shall be
binding upon any assignee or successor of such Holder (and the shares
or securities of every other person subject to the foregoing restriction),
until the end of the restricted period.
Section 10. Miscellaneous.
(a) From and after the date of this Agreement, the Company will not,
without the prior written consent of the Holders of a majority of the
number of Registrable Securities then outstanding, enter into any
agreement with respect to its securities which is inconsistent with or
violates the rights granted to the Holders of Registrable Securities in
this Agreement.
(b) Energy PLC and EnCap LP agree, and each other Holder of
Registrable Securities (including Registrable Securities in any
registration statement filed pursuant to this Agreement) will be
deemed to have agreed, as follows:
(i) if any Registrable Securities are being registered in any registration
pursuant to this Agreement, the Holder thereof will comply with all
anti-stabilization, manipulation and similar provisions of Section 10 of
the Exchange Act, as amended, and any rules promulgated thereunder
by the Commission and, at the request of the Company, will execute
and deliver to the Company and to any underwriter participating in
such offering, an appropriate agreement to such effect; and
(ii) at the end of any period during which the Company is obligated to
keep a registration statement current and effective as described herein,
the Holders of Registrable Securities included in the registration
statement shall discontinue sales thereof pursuant to such registration
statement.
(c) All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by the internal law,
and not the law of conflicts, of the State of Texas.
(d) All covenants and agreements in this Agreement by or on behalf of
any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto. In addition, the
rights and obligations under this Agreement shall automatically be
transferred to and binding on any transferee or assignee of the
Registrable Securities; provided, that (i) the Company is, within a
reasonable time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the
Registrable Securities with respect to which such registration rights
are being transferred or assigned, (ii) such transferee or assignee
agrees in writing to be bound by and subject to the terms and
conditions of this Agreement, (iii) the transfer and assignment of the
subject Registrable Securities is in compliance with the Securities Act
and applicable state securities laws or an exemption from the
registration requirements of the Securities Act and applicable state
securities laws, and (iv) such assignment of rights and obligations
under this Agreement shall be effective only if immediately following
such transfer the further disposition of such Registrable Securities by
the transferee or assignee is restricted under the Securities Act.
(e) This Agreement is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement
of the agreement and understanding of the parties hereto in respect of
the subject matter herein contained. There are no restrictions,
promises, warranties or undertakings, other than those set forth or
referred to herein, with respect to the registration rights granted by the
Company to the Holders of the Registrable Securities. This
Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(f) All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered
personally or sent by reputable express courier service (charges
prepaid), or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid, or sent by telefax, to the
parties at the following address (or to such other address or to the
attention of such other person as the recipient party has specified by
prior like notice to the sending party):
If to the Company:
Future Petroleum Corporation
0000 Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Telecopier No.: (000)000-0000
Attention: Xxxx Xxxxx
If to Energy PLC or EnCap LP:
c/o EnCap Investments L.C.
0000 Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Managing Director
(g) If any provision of this Agreement is held to be unenforceable, this
Agreement shall be considered divisible and such provision shall be
deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable
by limitation thereof, then such provision shall be deemed to be so
limited and shall be enforceable to the maximum extent permitted by
applicable law.
(h) This Agreement may be executed by the parties hereto in any
number of counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same agreement. Each
counterpart may consist of a number of copies hereof each signed by
less than all, but together signed by all, the parties hereto.
(i) Each Holder of Registrable Securities, in addition to being entitled
to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of breach by
it of the provisions of this Agreement and hereby agrees to waive (to
the extent permitted by law) the defense in any action for specific
performance that a remedy of law would be adequate.
(j) 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 be entitled to recover reasonable
attorneys' fees in addition to any other available remedy.
(k) The Company agrees to remove any legends on certificates
representing Registrable Securities describing transfer restrictions
applicable to such securities upon the sale of such securities (i)
pursuant to an effective Registration Statement under the Securities
Act or (ii) in accordance with the provisions of Rule 144 under the
Securities Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
FUTURE PETROLEUM CORPORATION, a Utah corporation
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: President
ENERGY CAPITAL INVESTMENT COMPANY PLC
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title : Director
ENCAP EQUITY 1994 LIMITED PARTNERSHIP
By: EnCap Investments L.C., General Partner
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
