EXHIBIT 3
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REGISTRATION RIGHTS AGREEMENT
DATED AS OF MAY 6, 1997
BY AND BETWEEN
QUEEN SAND RESOURCES, INC.
AND
JOINT ENERGY DEVELOPMENT
INVESTMENTS LIMITED
PARTNERSHIP
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TABLE OF CONTENTS
ARTICLE I..................................................................... 1
Section 1.01. Definitions.................................................. 1
ARTICLE II.................................................................... 2
Section 2.01. Demand Registration.......................................... 2
Section 2.02. Piggy-Back Registration...................................... 3
Section 2.03. Registration Procedures...................................... 5
Section 2.04. Expenses..................................................... 8
Section 2.05. Indemnification.............................................. 8
ARTICLE III................................................................... 10
Section 3.01. Communications............................................... 10
Section 3.02. Successor and Assigns........................................ 11
Section 3.03. Counterparts................................................. 11
Section 3.04. Headings..................................................... 11
Section 3.05. Governing Law................................................ 11
Section 3.06. Severability of Provisions................................... 11
Section 3.07. Entire Agreement............................................. 11
Section 3.08. Attorneys' Fees.............................................. 12
Section 3.09. Amendment.................................................... 12
Section 3.10. Registrable Securities Held by the Company or Its Affiliates. 12
Section 3.11. Assignment of Rights......................................... 12
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is made and entered
into as of May 6, 1997, by and between Queen Sand Resources, Inc., a Delaware
corporation (the "Company"), and Joint Energy Development Investments Limited
Partnership, a Delaware limited partnership (the "Purchaser").
This Agreement is made pursuant to the Securities Purchase Agreement
(the "Purchase Agreement") dated as of March 27, 1997 between the Company and
the Purchaser. In order to induce the Purchaser to enter into the Purchase
Agreement, the Company has agreed to provide the registration and other rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the Closing (as defined in the Purchase Agreement) under the
Purchase Agreement.
The parties agree as follows:
ARTICLE I
Section 1.01. Definitions. Capitalized terms used and not otherwise
defined herein which are defined in the Purchase Agreement are used herein as so
defined. The terms set forth below are used herein as so defined:
"Holder" means the record holder of any shares of Convertible
Preferred Stock, Xxxxxxxxx Warrants, Purchaser Warrants, Maintenance Warrants or
Registrable Securities.
"Registrable Securities" means the Conversion Shares, the Xxxxxxxxx
Warrant Shares, the Purchaser Warrant Shares and the Maintenance Warrant Shares
and all other securities receivable upon the conversion of Convertible Preferred
Stock or the exercise of Xxxxxxxxx Warrants, the Purchaser Warrants or the
Maintenance Warrants and, if held by a Person who is the record holder of shares
of Convertible Preferred Stock or other Registrable Securities, any other shares
of Common Stock or other securities of the same class as those receivable upon
conversion of Convertible Preferred Stock or exercise of Xxxxxxxxx Warrants, the
Purchaser Warrants or the Maintenance Warrants, until such time as such
securities cease to be Registrable Securities pursuant to Section 1.02 hereof.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a Registration Statement (as defined herein).
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Section 1.02. Registrable Securities. Any Registrable Security will
cease to be a Registrable Security when (i) a Registration Statement covering
such Registrable Security has been declared effective by the Commission and such
Registrable Security has been issued, sold or disposed of pursuant to such
effective Registration Statement or (ii) such Registrable Security is disposed
of pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, (iii) such Registrable Security is eligible to be disposed of
pursuant to paragraph (k) of Rule 144 (or any similar provision then in force)
under the Securities Act or (iv) such Registrable Security is held by the
Company or one of its Subsidiaries.
ARTICLE II
Section 2.01. Demand Registration. (a) Any time after the date of
this Agreement, any Holder or Holders who collectively beneficially own at least
a majority of the Registrable Securities outstanding at such time may request (a
"Request Notice") the Company to register under the Securities Act all or any
portion (provided that such portion will have an aggregate offering price of at
least $1,000,000) of the Registrable Securities that are held or will be held
upon the conversion of shares of Convertible Preferred Stock or the exercise of
Warrants by such Holder or Holders (collectively, the "Requesting Holder") for
sale in the manner specified in the Request Notice.
(b) Promptly following receipt of a Request Notice, the Company shall
immediately notify any Person who is a Holder of Registrable Securities (except
the Requesting Holder) of the receipt of a Request Notice and shall use its best
efforts to file a registration statement under the Securities Act (each such
registration statement is hereinafter referred to as a "Registration Statement")
effecting the registration under the Securities Act, for public sale in
accordance with the method of disposition specified in such Request Notice, the
Registrable Securities specified in the Request Notice (and in any notices
received from other Holders no later than the 10th Business Day after receipt of
the notice sent by the Company) (such other Holders and the Requesting Holder
are hereinafter referred to as the "Requesting Holders"). If such method of
disposition shall be an underwritten public offering, the Company may designate
the managing underwriter of such offering, subject to the approval of the
Requesting Holders holding a majority of the Registrable Securities to be
registered, which approval shall not be withheld unreasonably. The Company
shall be obligated to register Registrable Securities pursuant to this Section
2.01 on three occasions only. A request pursuant to this Section 2.01 shall be
counted only when (i) all the Registrable Securities requested to be included in
any such registration have been so included, (ii) the corresponding Registration
Statement has become effective under the Securities Act, and (iii) the public
offering has been consummated and the Registrable Securities have been sold on
the terms and conditions specified therein. Notwithstanding anything to the
contrary contained herein, the Company may delay the filing or effectiveness of
a Registration Statement after receipt of a Request Notice (i) for up to 90 days
if at the time of such request, the Company is engaged in a firm commitment
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underwritten public offering of its securities in which Holders may include
Registrable Securities and for which the Company has delivered the notice to
Holders required by the first sentence of Section 2.02 or (ii) for up to 60 days
if at the time of such request, the Board of Directors of the Company determines
in its reasonable judgment and in good faith that the filing of such a
Registration Statement or the making of any required disclosure in connection
therewith would have a material adverse effect on the Company or substantially
interfere with a significant transaction in which the Company is then engaged;
provided that the Company may not delay the filing of a Registration Statement
in reliance on this clause (ii) more than once during any period of twelve
consecutive calendar months.
(c) The Company shall be entitled to include in any Registration
Statement filed pursuant to this Section 2.01, for sale in accordance with the
method of disposition specified by the Requesting Holders, Voting Securities to
be sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would materially jeopardize the
successful marketing of the Registrable Securities to be sold. Any Person other
than a Holder entitled to piggy-back registration rights with respect to a
Registration Statement filed pursuant to this Section 2.01 may include Voting
Securities of the Company with respect to which such rights apply in such
Registration Statement for sale in accordance with the method of disposition
specified by the Requesting Holder, except and to the extent that, in the
opinion of the managing underwriter (if such method of disposition shall be an
underwritten public offering) such inclusion would materially jeopardize the
successful marketing of the Registrable Securities to be sold. Except as
provided in this subsection (c), the Company will not effect any other
registration of its Voting Securities (except with respect to Registration
Statements on Form S-4 or S-8 for purposes permissible under such forms as of
the date hereof, or any successor forms for comparable purposes that may be
adopted by the Commission), whether for its own account or that of any other
security holder, from the date of receipt of a Request Notice requesting the
registration of an underwritten public offering until the completion of the
distribution by the underwriters of all securities thereunder.
(d) From and after the date of this Agreement and until no Registrable
Securities remain outstanding, the Company shall not issue any demand
registration rights to any Person without the prior written consent of the
Purchaser.
Section 2.02. Piggy-Back Registration. If the Company proposes to
register any equity securities under the Securities Act for sale to the public
for cash, whether for its own account or for the account of other security
holders or both (except with respect to Registration Statements on Forms S-4 or
S-8 for purposes permissible under such forms as of the date hereof, or any
successor forms for comparable purposes that may be adopted by the Commission)
each such time it will give written notice to all Holders of its intention to do
so no less than 15 Business Days prior to the anticipated filing date. Upon the
written request of any Holder, received by the Company no
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later than the 10th Business Day after receipt by such Holder of the notice sent
by the Company, to register, on the same terms and conditions as the securities
otherwise being sold pursuant to such registration, any of its Registrable
Securities (which request shall state the intended method of disposition
thereof), the Company will use its best efforts to cause the Registrable
Securities as to which registration shall have been so requested to be included
in the securities to be covered by the Registration Statement proposed to be
filed by the Company, on the same terms and conditions as any similar securities
included therein, all to the extent requisite to permit the sale or other
disposition by each Holder (in accordance with its written request) of such
Registrable Securities so registered; provided, however, that the Company may at
any time prior to the effectiveness of any such Registration Statement, in its
sole discretion and without the consent of any Holder, abandon the proposed
offering in which any Holder had requested to participate. The number of
Registrable Securities to be included in such a registration may be reduced or
eliminated if and to the extent, in the case of an underwritten offering, the
managing underwriter shall render to the Company its opinion that such inclusion
would materially jeopardize the successful marketing of the securities
(including the Registrable Securities) proposed to be sold therein; provided,
however, that such number of shares of Registrable Securities shall not be
reduced (i) if any securities included in such registration are included other
than for the account of (x) the Company or (y) persons exercising registration
rights granted pursuant to the agreements listed on Schedule I hereto (as in
effect as of the date hereof) (the "Schedule I Agreements") and (ii) unless the
shares included in the registration pursuant to piggy-back registration rights
granted pursuant to the Schedule I Agreements are also reduced on a pro rata
basis. From and after the date of this Agreement and until no Registrable
Securities remain outstanding, the Company shall not grant any piggy-back
registration rights to any Person unless such rights are expressly made subject
to the prior right of Holders to include any or all of their Registrable Shares
before such other Person includes any shares in any registration relating to an
underwritten public offering with respect to which, in the opinion of the
managing underwriter, the inclusion in the offering of all shares requested to
be registered by all Persons holding registration rights would materially
jeopardize the successful marketing of the securities (including the Registrable
Securities) to be sold. In the event that the number of Registrable Securities
to be included in a registration is to be reduced as provided above, within 10
Business Days after receipt by each Holder proposing to sell Registrable
Securities pursuant to the registered offering of the opinion of such managing
underwriter, all such Selling Holders may allocate among themselves the number
of shares of such Registrable Securities which such opinion states may be
distributed without adversely affecting the distribution of the securities
covered by the Registration Statement, and if such Holders are unable to agree
among themselves with respect to such allocation, such allocation shall be made
in proportion to the respective numbers of shares specified in their respective
written requests. Notwithstanding anything to the contrary contained in this
Section 2.02, in the event that there is a firm underwriting commitment offer of
securities of the Company pursuant to a Registration Statement covering
Registrable Securities and a Person does not elect to sell its Registrable
Securities to the underwriters of the Company's securities in connection with
such
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offering, such Person shall not offer for sale, sell, grant any option for the
sale of, or otherwise dispose of, directly or indirectly, any shares of Common
Stock, or any securities convertible into or exchangeable into or exercisable
for any shares of Common Stock during the period of distribution of the
Company's securities by such underwriters, which shall be specified in writing
by the underwriters, shall not exceed any period during which management of the
Company and others are similarly prohibited from disposing of shares of Common
Stock and shall not exceed 180 days following the date of effectiveness under
the Securities Act of the Registration Statement relating thereto if the net
proceeds to the Company from such offering will be $25,000,000 or greater and
shall not exceed 60 days following the date of effectiveness under the
Securities Act of the Registration Statement relating thereto if the net
proceeds to the Company from such offering will be less than $25,000,000.
Section 2.03. Registration Procedures. If and whenever the Company is
required pursuant to this Agreement to effect the registration of any of the
Registrable Securities under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare and file as promptly as possible with the Commission a
Registration Statement, on a form available to the Company, with respect to
such securities (which filing shall be made within 45 days after the
receipt by the Company of a Request Notice) and use its best efforts to
cause such Registration Statement to become and remain effective for the
period of the distribution contemplated thereby (determined pursuant to
subparagraph (g) below);
(b) 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 the period specified in subsection (g) below and as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement in accordance with the sellers' intended method of disposition
set forth in such Registration Statement for such period;
(c) furnish to each Selling Holder and to each underwriter such number
of copies of the Registration Statement and the prospectus included therein
(including each preliminary prospectus and each document incorporated by
reference therein to the extent then required by the rules and regulations
of the Commission) as such Persons may reasonably request in order to
facilitate the public sale or other disposition of the Registrable
Securities covered by such Registration Statement;
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(d) use its best efforts to register or qualify the Registrable
Securities covered by such Registration Statement under the securities or
blue sky laws of such jurisdictions as the Selling Holders or, in the case
of an underwritten public offering, the managing underwriter, shall
reasonably request, provided, however, that the Company will not be
required to subject itself to taxation in any such jurisdiction or to
consent to general service of process in any such jurisdiction;
(e) immediately notify each Selling Holder and each underwriter, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus contained in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing and as promptly as practicable amend the Registration Statement or
supplement the prospectus or take other appropriate action so that the
prospectus does not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing; provided, however, that, in the case of a shelf
registration, the Company, on one occasion during each such registration,
may delay taking such action for a period of 45 days, during which time the
Selling Holders shall not sell any Registrable Securities, if the Board of
Directors determines in its reasonable judgment and in good faith that the
making of any required disclosure in connection therewith would have a
material adverse effect on the Company or substantially interfere with a
significant transaction in which the Company is then engaged;
(f) in the case of an underwritten public offering, furnish, (i) on
the date that Registrable Securities are delivered to the underwriters for
sale pursuant to such Registration Statement, an opinion of counsel for the
Company dated as of such date and addressed to the underwriters and to the
Selling Holders, stating that such Registration Statement has become
effective under the Securities Act and that (A) to the best knowledge of
such counsel, no stop order suspending the effectiveness thereof has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act, (B) the Registration
Statement, the related prospectus, and each amendment or supplement
thereof, comply as to form in all material respects with the requirements
of the Securities Act and the applicable rules and regulations thereunder
of the Commission (except that such counsel need express no opinion as to
the financial statements or any engineering report contained or
incorporated therein) and (C) to such other effects as may reasonably be
requested by counsel for the underwriters, and (ii) on the effective date
of the Registration Statement and on the date that Registrable Securities
are delivered to the underwriters for sale pursuant to such Registration
Statement, a letter dated such dates from the independent
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accountants retained by the Company, addressed to the underwriters and to
the Selling Holders, stating that they are independent public accountants
within the meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements of the Company and the schedules
thereto that are included or incorporated by reference in the Registration
Statement or the prospectus, or any amendment or supplement thereof, comply
as to form in all material respects with the applicable requirements of the
Securities Act and the published rules and regulations thereunder, and such
letter shall additionally address such other financial matters (including
information as to the period ending no more than five Business Days prior
to the date of such letter) included in the Registration Statement in
respect of which such letter is being given as the underwriters may
reasonably request;
(g) make available for inspection by one representative of the Selling
Holders designated by a majority thereof, any underwriter participating in
any distribution pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by such representative of the Selling
Holders or underwriter (the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company, 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. For purposes of subsections (a) and (b) above
and of Section 2.01(c) of this Agreement, the period of distribution of
Registrable Securities in a firm commitment underwritten public offering
shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of
distribution of Registrable Securities in any other registration shall be
deemed to extend until the earlier of the sale of all Registrable
Securities covered thereby or one year, excluding any period of time during
which Selling Holders are prohibited from selling Registrable Securities
pursuant to Section 2.02 or Section 2.03(e);
(h) use its best efforts to keep effective and maintain for the period
specified in subparagraph (g) a registration, qualification, approval or
listing obtained to cover the Registrable Securities as may be necessary
for the Selling Holders to dispose thereof and shall from time to time
amend or supplement any prospectus used in connection therewith to the
extent necessary in order to comply with applicable law;
(i) use its best efforts to cause the Registrable Securities 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 Selling Holders to consummate the disposition of
such Registrable Securities; and
(j) enter into customary agreements (including, if requested, an
underwriting agreement in customary form) and take such other actions as
are reasonably requested by the
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Selling Holders or the underwriters, if any, in order to expedite or
facilitate the disposition of such Registrable Securities.
In connection with each registration hereunder, each Selling Holder will
furnish promptly to the Company in writing such information with respect to
itself and the proposed distribution by it as shall be reasonably necessary in
order to ensure compliance with federal and applicable state securities laws.
In connection with each registration hereunder with respect to an
underwritten public offering, the Company and each Selling Holder agrees to
enter into a written agreement with the managing underwriter or underwriters
selected in the manner herein provided in such form and containing such
provisions as are customary in the securities business for such an arrangement
between underwriters and companies of the Company's size and investment stature,
provided that such agreement shall not contain any such provision applicable to
the Company or the Selling Holders that is inconsistent with the provisions
hereof; and further provided, that the time and place of the closing under said
agreement shall be as mutually agreed upon among the Company, the Selling
Holders and such managing underwriter.
Section 2.04. Expenses. (a) All expenses incident to the Company's
performance under or compliance with this Agreement, including without
limitation, all registration and filing fees, blue sky fees and expenses,
printing expenses, listing fees, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars and costs of insurance and reasonable out-of-pocket expenses
(including, without limitation, legal fees of one counsel for all Selling
Holders) of the Selling Holders, but excluding any Selling Expenses (as defined
below), are herein called "Registration Expenses." All underwriting fees,
discounts and selling commissions allocable to the sale of the Registrable
Securities are herein called "Selling Expenses."
(b) The Company will pay all Registration Expenses in connection with
each Registration Statement filed pursuant to this Agreement, whether or not the
Registration Statement becomes effective, and the Selling Holders shall pay
Selling Expenses in connection with any Registrable Securities registered
pursuant to this Agreement.
Section 2.05. Indemnification. (a) In the event of a registration
of any Registrable Securities under the Securities Act pursuant to this
Agreement, the Company will indemnify and hold harmless each Selling Holder
thereunder and each underwriter of Registrable Securities thereunder and each
Person, if any, who controls such Selling Holder or underwriter within the
meaning of the Securities Act and the Exchange Act, against any losses, claims,
damages or liabilities (including reasonable attorneys' fees) ("Losses"), joint
or several, to which such Selling
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Holder or underwriter or controlling Person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Losses, (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon 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, and will reimburse each such Selling Holder, each such
underwriter and each such controlling Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Loss or actions; provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by such Selling Holder, such underwriter or such controlling Person in
writing specifically for use in such Registration Statement or prospectus.
(b) Each Selling Holder agrees to indemnify and hold harmless the
Company, its directors, officers, employees and agents and each Person, if any,
who controls the Company within the meaning of the Securities Act or of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Selling Holder, but only with respect to information regarding such Selling
Holder furnished in writing by or on behalf of such Selling Holder expressly for
inclusion in any Registration Statement or prospectus relating to the
Registrable Securities, or any amendment or supplement thereto; provided,
however, that the liability of such Selling Holder shall not be greater in
amount than the dollar amount of the proceeds (net of any Selling Expenses)
received by such Selling Holder from the sale of the Registrable Securities
giving rise to such indemnification.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 2.05. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party and, after notice from the indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under this Section 2.05 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of
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investigation and of liaison with counsel so selected; provided, however, that,
(i) if the indemnifying party has failed to assume the defense and employ
counsel or (ii) if the defendants in any such action include both the
indemnified party and the indemnifying party and counsel to the indemnified
party shall have concluded that there may be reasonable defenses available to
the indemnified party that are different from or additional to those available
to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, then the indemnified party shall have the right to select a separate
counsel and to assume such legal defense and otherwise to participate in the
defense of such action, with the expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the
indemnifying party as incurred, provided that such fees and expenses shall be
reimbursed for only one counsel for all indemnified parties.
(d) If the indemnification provided for in this Section 2.05 is
available to the Company or the Selling Holders or is insufficient to hold them
harmless in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then each such indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities and
expenses as between the Company on the one hand and each Selling Holder on the
other, in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and of each Selling Holder on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and each Selling Holder on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statements of a material fact or the omission or
alleged omission to state a material fact has been made by, or relates to,
information supplied by such party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
No person of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who is not guilty of such fraudulent misrepresentation.
ARTICLE III
Section 3.0. Communications. All notices and other communications
provided for or permitted hereunder shall be made in writing by telecopy,
courier service or personal delivery:
(i) if to a Holder of Registrable Securities, at the most current
address given by such Holder of the Company in accordance with the
provisions of this
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Section 3.01, which address initially is, with respect to the Purchaser,
the address set forth in the Purchase Agreement, and
(ii) if to the Company, initially at its address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 3.01.
All such notices and communications shall be deemed to have been
received at the time delivered by hand, if personally delivered; when receipt
acknowledged, if telecopied; and on the next Business Day if timely delivered to
an air courier guaranteeing overnight delivery.
Section 3.02. Successor and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent holders of Registrable Securities.
Section 3.03, Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.
Section 3.04. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 3.05. Governing Law. The laws of the State of Texas shall
govern this Agreement without regard to principles of conflict of laws.
Section 3.06. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting or impairing the validity or enforceability of such provision in any
other jurisdiction.
Section 3.07. Entire Agreement. This Agreement, together with the
Purchase Agreement and the other Basic Documents is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. 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 with respect to
the securities sold pursuant to the Purchase Agreement. This Agreement, the
Purchase Agreement and the other Basic
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Documents supersede all prior agreements and understandings between the parties
with respect to such subject matter.
Section 3.08. Attorneys' Fees. In any action or proceeding brought
to enforce any provision of this Agreement, the successful party shall be
entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.
Section 3.09. Amendment. This Agreement may be amended only by means
of a written amendment signed by the Company and by the Holders of a majority of
the Registrable Securities.
Section 3.10. Registrable Securities Held by the Company or Its
Affiliates. In determining whether the Holders of the required amount of
Registrable Securities have concurred in any direction, amendment, supplement,
waiver or consent, Registrable Securities owned by the Company or one of its
Affiliates shall be disregarded.
Section 3.11. Assignment of Rights. (a) The rights of any Holder
under this Agreement may be assigned to any Person who acquires Convertible
Preferred Stock, Warrants or the Registrable Securities issuable on conversion
or exercise thereof. Any assignment of registration rights pursuant to this
Section 3.11(a) shall be effective only upon receipt by the Company of written
notice from such assigning Holder stating the name and address of any assignee.
(b) The rights of an assignee under Section 3.11(a) shall be the same
rights granted to the assigning Holder under this Agreement, except that the
assignee shall be entitled to initiate only one demand registration pursuant to
Section 2.01, unless demands for three registrations have been previously
counted in accordance with Section 2.01(b), in which case such assignee shall
not have any demand registration rights. In the event that an assignee Holder
is not entitled to initiate a demand registration, such Holder's Registrable
Securities shall not be counted as outstanding for purposes of calculating the
majority of Registrable Securities required to initiate a demand registration.
In connection with any such assignment, the term "Holder" as used herein shall,
where appropriate to assign the rights and obligations of the assigning Holder
hereunder to such assignee, be deemed to refer to the assignee.
14
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
QUEEN SAND RESOURCES, INC.
By: /s/ XXXXXX X. XXXXXX
----------------------------------
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
and
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Xxxxxx X. Xxxxxxx
Chief Operating Officer
JOINT ENERGY DEVELOPMENT
INVESTMENTS LIMITED PARTNERSHIP
By: Enron Capital Management Limited
Partnership, its General Partner
By: Enron Capital Corp., its General
Partner
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Xxxxxx X. Xxxxxxx
Agent and Attorney-in-Fact
15
