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$100,000,000
National Energy Group, Inc.
10 3/4% Senior Notes due 2006
REGISTRATION RIGHTS AGREEMENT
October 29, 1996
BEAR, XXXXXXX & CO. INC.
XXXXX XXXXXX INC.
XXXXXXXXX & COMPANY, INC.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
National Energy Group, Inc., a Delaware corporation (the
"Company") proposes to issue and sell to you (the "Initial Purchasers"), upon
the terms set forth in a purchase agreement of even date herewith (the
"Purchase Agreement"), $100,000,000 principal amount of the Company's 10 3/4%
Senior Notes due 2006 (the "Notes"). The Notes will be issued pursuant to an
indenture, to be dated as of November 1, 1996 (the "Indenture") by and among
the Company, National Energy Group of Oklahoma, Inc., a Delaware corporation
(the "Guarantor") and Bank One, Columbus, N.A., as trustee (the "Trustee"),
substantially in the form previously furnished to you.
Capitalized terms used but not specifically defined herein are
defined in the Purchase Agreement and used herein as so defined. References to
Notes shall include the Guarantee (as defined in the Indenture) of the
Guarantor. As used herein, "Registrable Notes" shall mean each Note, until the
earliest to occur of (a) the date on which a Registered Exchange Offer is
completed for the Notes pursuant to which such Note may be exchanged in the
Registered Exchange Offer for an Exchange Note (each as defined below) and
entitled to be resold to the public by the holder thereof without complying
with the prospectus delivery requirements of the Securities Act of 1933, as
amended (the "Securities Act"), (b) the date on which such Note has been
effectively registered under the Securities Act and disposed of pursuant to a
Notes Shelf Registration (as defined below), (c) the date on which such Note is
distributed to the public pursuant to Rule 144 under the Securities Act or by a
Broker-Dealer (as defined below) pursuant to the "Plan of Distribution"
contemplated by the registration statement relating to the Registered Exchange
Offer (including delivery of the prospectus contained therein) or (d) the date
such Note ceases to be outstanding.
In consideration of the premises, and the mutual covenants,
representations, warranties and agreements herein contained, the parties hereby
agree as follows:
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1. Registered Exchange Offer.
(a) Promptly (and in any event not more than 45 days)
following the closing date of the sale of the Notes (the "Closing Date"), the
Company and the Guarantor shall file with the Commission a registration
statement on an appropriate form under the Securities Act with respect to a
proposed offer (the "Registered Exchange Offer") to the holders of the
Registrable Notes to issue and deliver to such holders, in exchange for the
Registrable Notes, a like principal amount of debt securities of the Company
identical in all material respects to the Registrable Notes (the "Exchange
Notes"), shall use their best efforts to cause such registration statement to
become effective under the Securities Act no later than 120 days after the
Closing Date and, upon the effectiveness of that registration statement, shall
commence the Registered Exchange Offer and shall cause the same to remain open
for such period of time to be determined by the Company (but not less than 30
nor more than 60 days after the commencement of the Registered Exchange Offer),
and to be conducted in accordance with such procedures, as may be required by
the applicable provisions of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), it being the objective of such Registered Exchange Offer
to enable each holder of Registrable Notes electing to exchange Registrable
Notes for Exchange Notes (assuming that such holder is not an affiliate of the
Company within the meaning of the Securities Act, acquires the Exchange Notes
in the ordinary course of such holder's business and has no arrangements with
any person to participate in the distribution of the Exchange Notes) to trade
such Registrable Notes for Exchange Notes from and after their receipt without
any limitations or restrictions under the Securities Act, subject as to a
Broker-Dealer to the provisions of Section 1(b) hereof, or the Exchange Act and
without material restrictions under the securities laws of a substantial
proportion of the several states of the United States. Each holder of
Registrable Notes who participates in the Exchange Offer and who desires to
receive Exchange Notes that will not be subject to any limitations or
restrictions on resale under the Securities Act will be required to represent
in writing to the Company that any Exchange Notes received by it will be
acquired in the ordinary course of its business, that at the time of
consummation of the Exchange Offer such holder of Registrable Notes will have
no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes, and that such holder of the Registrable
Notes is not an affiliate of the Company within the meaning of the Securities
Act. Upon consummation of the Exchange Offer in accordance with this Section
1, the Company shall have no further obligation to register Registrable Notes
pursuant to Section 2 of this Agreement.
(b) The Company shall indicate in a "Plan of
Distribution" section contained in the final prospectus constituting a part of
the registration statement relating to the Registered Exchange Offer that any
broker or dealer registered under the Exchange Act (each a "Broker-Dealer") who
holds Registrable Notes that were acquired for its own account as a result of
market-making activities or other trading activities (other than Registrable
Notes acquired directly from the Company), may exchange such Registrable Notes
for Exchange Notes pursuant to the Registered Exchange Offer; however, such
Broker-Dealer may be deemed an "underwriter" within the meaning of the
Securities Act and, therefore, must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of the
Exchange Notes received by it in the Registered Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such
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Broker-Dealer of the final prospectus contained in the registration statement
relating to the Registered Exchange Offer. Such "Plan of Distribution" section
also shall state that the delivery by a Broker-Dealer of the final prospectus
relating to the Registered Exchange Offer in connection with resales of
Exchange Notes shall not be deemed to be an admission by such Broker-Dealer
that it is an "underwriter" within the meaning of the Securities Act, and shall
contain all other information with respect to resales of the Exchange Notes by
Broker-Dealers that the Commission may require in connection therewith, but
such "Plan of Distribution" shall not name any such Broker-Dealer or disclose
the amount of Exchange Notes held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the
date of this Agreement.
(c) In connection with such Registered Exchange Offer and
the offer and sale of Exchange Notes by Broker-Dealers as contemplated above,
the Company and the Guarantor shall take such other and further action,
including making appropriate filings under state securities laws and delivering
such number of final prospectuses relating to the Registered Exchange Offer as
any Broker-Dealer proposing to deliver the same in connection with its resales
of Exchange Notes may reasonably request, as may be necessary to realize the
foregoing objectives. The Company and the Guarantor shall cause the
registration statement relating to the Registered Exchange Offer to remain
continuously effective for a period of one year from the date on which such
registration statement is first declared effective, and shall supplement or
amend the prospectus contained therein, in each case, to the extent necessary
to permit such prospectus (as supplemented or amended) to be delivered by
Broker-Dealers in connection with their resales of Exchange Notes as aforesaid.
2. Notes Shelf Registration. The following provisions
shall apply, only if, because of any change in currently prevailing
interpretations of the Commission's staff, the Company is not permitted to
effect a Registered Exchange Offer, as contemplated by Section 1 hereof:
(a) Promptly (and in any event not more than 45 days)
following the date of closing (the "Closing Date") of the sale of the Notes,
the Company and the Guarantor shall file with the Commission, and thereafter
use their best efforts to have declared effective not later than 120 days after
the Closing Date, a registration statement on an appropriate form under the
Securities Act relating to the offer and sale of the Registrable Notes by the
holders thereof, from time to time in accordance with the methods of
distribution set forth in such registration statement and Rule 415 under the
Securities Act (the "Notes Shelf Registration").
(b) The Company and the Guarantor agree to use their best
efforts to keep the registration statement relating to the Notes Shelf
Registration continuously effective in order to permit the prospectus included
therein to be usable by the holders of the Registrable Notes for a period of
three years from the Closing Date or such shorter period that will terminate
when all the Registrable Notes covered by the registration statement have been
sold pursuant to such registration statement; provided, that the Company and
the Guarantor shall be deemed not to have used their best efforts to keep the
registration statement effective during the requisite period if they
voluntarily take any action that would result in holders of the Registrable
Notes covered thereby not being able to
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offer and sell such Registrable Notes during that period, unless such action is
required by applicable law, and provided, further, that the foregoing shall not
apply if the Company determines, in its reasonable judgment, upon advice of
counsel, as authorized by a resolution of its Board of Directors, that the
continued effectiveness and usability of such registration statement would (i)
require the disclosure of material information, which the Company has a bona
fide business reason for preserving as confidential, or (ii) interfere with any
financing, acquisition, corporate reorganization or other material transaction
involving the Company or any of its Affiliates (as defined in the rules and
regulations adopted under the Exchange Act); provided, however, that the
failure to keep the registration statement effective and usable for offers and
sales of Registrable Notes for such reasons shall last no longer than 60 days
in any 12-month period (whereafter Notes Liquidated Damages (as defined in
Section 6) shall accrue and be payable), so long as the Company promptly
thereafter complies with the requirements of Section 3(h) hereof, if
applicable. Any such period during which the Company and the Guarantor fail to
keep the registration statement effective and usable for offers and sales of
Registrable Notes is referred to as a "Suspension Period." A Suspension Period
shall commence on and include the date that the Company gives notice that the
registration statement is no longer effective or the prospectus included
therein is no longer usable for offers and sales of Registrable Notes and shall
end on the date when each seller of Registrable Notes covered by such
registration statement either receives the copies of the supplemented or
amended prospectus contemplated by Section 3(h) hereof or is advised in writing
by the Company that use of the prospectus may be resumed.
(c) Notwithstanding any other provisions of this
Agreement to the contrary, the Company and the Guarantor will cause the Notes
Shelf Registration and the related prospectus and any amendment or supplement
thereto, as of the effective date of such registration statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any 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.
3. Registration Procedures. In connection with, to the
extent applicable, any Registered Exchange Offer pursuant to Section 1 hereof,
or any Notes Shelf Registration pursuant to Section 2 hereof, the following
provisions shall apply:
(a) If requested by any holder of Registrable Notes or
the managing underwriter, if any, with respect to the Notes Shelf Registration,
the Company shall furnish to each such holder of Registrable Notes or such
managing underwriter, prior to the filing thereof with the Commission, a copy
of the applicable registration statement and each amendment thereof and each
supplement, if any, to the prospectus included therein. The Company shall use
its best efforts to reflect in each such document, when so filed with the
Commission, such comments as such holder or managing underwriter reasonably may
propose.
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(b) The Company shall advise the holders of Registrable
Notes or the Exchange Notes, and the managing underwriter, if any, and, if
requested by any such person, confirm such advice in writing:
(i) when the applicable registration statement and any
amendment thereto has been filed with the Commission and when the
registration statement or any post-effective amendment thereto has
become effective;
(ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the applicable registration statement
or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable
Notes or the Exchange Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and
(iv) of the happening of any event that requires the
making of any changes in the registration statement or the prospectus
in order to make the statements therein not misleading (which advice
shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made).
(c) The Company will make every reasonable effort to
obtain the withdrawal of any order suspending the effectiveness of the
registration statement at the earliest possible time.
(d) The Company will furnish to each holder of the
Registrable Notes or the Exchange Notes included within the coverage of the
Registered Exchange Offer or the Notes Shelf Registration, as appropriate,
without charge, at least one copy of the registration statement in the form in
which it was declared effective by the Commission and any post-effective
amendment thereto, including financial statements and schedules, and, if the
holder so requests in writing, all exhibits (including those incorporated by
reference).
(e) The Company will deliver to each holder of the
Registrable Notes or the Exchange Notes included within the coverage of the
Registered Exchange Offer or the Notes Shelf Registration, as appropriate,
without charge, as many copies of the prospectus (including each preliminary
prospectus) included in the registration statement and any amendment or
supplement thereto as such persons may reasonably request; the Company consents
to the use of the prospectus or any amendment or supplement thereto by each of
the selling holders of the Registrable Notes or the Exchange Notes in
connection with the offering and sale of the Registrable Notes or the Exchange
Notes covered by the prospectus or any amendment or supplement thereto.
(f) Prior to any public offering of the Registrable Notes
or the Exchange Notes pursuant to the Registered Exchange Offer or the Notes
Shelf Registration, as the case may be, the Company will use its best efforts
to register or qualify, or cooperate with the holders of the
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Registrable Notes or the Exchange Notes covered thereby and their respective
counsel in connection with the registration or qualification of, such
Registrable Notes or Exchange Notes for offer and sale under the securities or
blue sky laws of such jurisdictions as any seller reasonably requests in
writing and do any and all other acts or things necessary or advisable to
enable the offer and sale in such jurisdictions, of the Registrable Notes or
the Exchange Notes covered by the Registered Exchange Offer or the Notes Shelf
Registration, as the case may be; provided, that the Company will not be
required to qualify generally to do business in any jurisdiction where it is
not then so qualified or to take any action which would subject it to general
service of process or to taxation in any such jurisdiction where it is not then
so subject.
(g) The Company will cooperate with the holders of the
Registrable Notes and the Exchange Notes to facilitate the timely preparation
and delivery of certificates representing the Registrable Notes and the
Exchange Notes to be sold in the Registered Exchange Offer or the Notes Shelf
Registration, as the case may be, free of any restrictive legends and in such
denominations and registered in such names as the holders may request provided
such request complies with the Indenture, prior to sales of the Registrable
Notes or the Exchange Notes, pursuant to the Registered Exchange Offer or the
Notes Shelf Registration, as the case may be.
(h) Upon the occurrence of any event contemplated by
paragraph (b)(iv) above, the Company will prepare a post-effective amendment to
the registration statement or a supplement to the related prospectus or file
any other required document so that, as thereafter delivered to purchasers of
the Registrable Notes or the Exchange Notes, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading.
(i) Not later than the effective date of the applicable
registration statement, the Company will provide a CUSIP number for the
Registrable Notes or the Exchange Notes, as the case may be, and provide the
Trustee with printed certificates for the Registrable Notes or the Exchange
Notes, as the case may be, in a form eligible for deposit with The Depository
Trust Company.
(j) The Company will use its best efforts to comply with
all applicable rules and regulations of the Commission and will make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act, no later than 45 days after
the end of the 12-month period (or 90 days, if such period is a fiscal year)
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of each of the Registered Exchange Offer and the
Notes Shelf Registration, which statements shall cover such 12-month period.
(k) The Company will cause the Indenture to be qualified
under the Trust Indenture Act of 1939 upon effectiveness of the registration
statement contemplated by Section 1(a) or Section 2(a).
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(l) The Company may require each holder of Registrable Notes to be
sold pursuant to the Notes Shelf Registration, to furnish to the Company such
information regarding the holder and the distribution of such Registrable Notes
as the Company may from time to time reasonably require for inclusion in the
registration statement. The Company may exclude from such registration the
Registrable Notes of any holder who unreasonably fails to furnish such
information in writing to the Company within ten business days (or longer time
period if agreed by the Company in writing) after receiving such request. Each
holder of Registrable Notes included within the coverage of any Registration
Statement shall furnish promptly to the Company all information required by
applicable law to be disclosed by such party in order to make the information
previously furnished to the Company not materially misleading.
(m) Each holder of Registrable Notes agrees by acquisition of
such Registrable Notes or Exchange Notes to be sold that, upon receipt of any
notice from the Company of the happening of any Suspension Period of the kind
described in Section 2(b), such holder will forthwith discontinue disposition of
such Registrable Notes or Exchange Notes covered by such Registration Statement
or Prospectus until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(h) hereof or is advised in writing
by the Company that use of the prospectus may be resumed.
4. Registration Expenses. The Company and the Guarantor will
bear all expenses incurred in connection with the performance of their
obligations under Sections 1 through 3 hereof and will bear or reimburse the
holders of the Registrable Notes for the reasonable fees and disbursements of
one firm of counsel designated by the holders of a majority in principal amount
of the Registrable Notes to act as counsel for the holders of the Registrable
Notes in connection therewith; provided that in any underwritten offering the
Company shall not be obligated to pay any underwriters' discounts and
commissions nor any transfer tax related to such offering.
5. Indemnification.
(a) Indemnification by Company and the Guarantor. The Company and
the Guarantor, jointly and severally, shall indemnify and hold harmless (i)
each Initial Purchaser, (ii) in the case of the Notes Shelf Registration, each
holder of Registrable Notes, and (iii) in the case of the Registered Exchange
Offer, each Broker-Dealer who holds Exchange Notes acquired for its own account
pursuant to the Registered Exchange Offer, and, in any such case, each Initial
Purchaser's and such holder's officers, directors, employees and agents and
each person who controls each such Initial Purchaser, now or hereafter, and
each such holder within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act (each such person being sometimes hereinafter
referred to as an "Indemnified Person") from and against any and all losses,
claims, damages, liabilities and judgments arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus or in any amendment or supplement
thereto relating to the Notes Shelf Registration or the Registered Exchange
Offer, as the case may be, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of
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the circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or allegation thereof based upon information
relating to such Indemnified Person furnished in writing to the Company by such
Indemnified Person expressly for use therein and used in conformity therewith;
provided, however, that in the event an Initial Purchaser or a Broker- Dealer
is required by law to deliver a final prospectus in connection with a
Registered Exchange Offer or a Note Shelf Registration and the indemnity
obligations arising under this Section 5(a) arise with respect to untrue
statements or omissions or untrue alleged statements or omissions made in a
preliminary prospectus, such indemnity obligations arising under this Section
5(a) shall not inure to the benefit of any Initial Purchaser or Broker-Dealer
and its controlling persons and their respective directors, officers and
employees if the person asserting any such Losses purchased the Notes from such
Initial Purchaser or Broker-Dealer and if a copy of the final prospectus (as
then amended or supplemented if the Company and the Guarantor shall have timely
furnished any amendments thereof or supplements thereto), was not sent or given
by such Initial Purchaser or Broker-Dealer or on its behalf to such person at
or prior to the time such delivery was required by law, and if the final
prospectus (as then amended or supplemented if the Company and the Guarantor
shall have timely furnished any amendments thereof or supplements thereto)
would have cured the defect giving rise to such Losses. The indemnity will be
in addition to any liability which the Company and the Guarantor may otherwise
have.
If any action or proceeding (including any governmental
investigation or inquiry) shall be brought or asserted against an Indemnified
Person, or notice of any such claim is received, in respect of which indemnity
may be sought from the Company or the Guarantor, such Indemnified Person shall
promptly notify the Company and the Guarantor in writing, and the Company and
the Guarantor shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Person and the payment of
all reasonable fees and expenses of such defense; provided that the failure by
any such Indemnified Person to so notify the Company and the Guarantor shall
not relieve the Company and the Guarantor of their indemnification obligations
under Sections 5(a) and (b) hereof, except to the extent that the Company and
the Guarantor are materially prejudiced or forfeit substantive rights and
defenses by reason of such failure. Such Indemnified Person shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be the expense
of such Indemnified Person unless (a) the Company and the Guarantor have agreed
in writing to pay such fees and expenses or (b) the Company and the Guarantor
shall have failed to assume the defense of such action or proceeding and to
employ counsel reasonably satisfactory to such Indemnified Person in any such
action or proceeding within a reasonable time after notice of commencement of
such action or proceeding or (c) the named parties to any such action or
proceeding (including any impleaded parties) include such Indemnified Person
and the Company and/or the Guarantor, and such Indemnified Person shall have
been advised in writing by counsel that there may be one or more legal
defenses available to such Indemnified Person that are different from or
additional to those available to the Company or the Guarantor and in the
reasonable judgment of such counsel it is advisable for such Indemnified Party
to employ separate counsel (in which case, if such Indemnified Person notifies
the Company and the Guarantor in writing that it
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elects to employ separate counsel at the expense of the Company and the
Guarantor, the Company and the Guarantor shall not have the right to assume the
defense of such action or proceeding on behalf of such Indemnified Person, it
being understood, however, that the Company and the Guarantor shall not, in
connection with any one such action or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel) at any time for such Indemnified Person and any other Indemnified
Persons, which firm shall be designated in writing by such Indemnified Persons
(which shall be reasonably satisfactory to the Company and the Guarantor), and
that all such fees and expenses shall be reimbursed as they are billed). The
Company and the Guarantor shall not be liable for any settlement of any such
action or proceeding effected without their written consent (not to be
unreasonably withheld), but if settled with their written consent, or if there
be a final, unappealable judgment for the plaintiff in any such action or
proceeding, the Company and the Guarantor agree to indemnify and hold harmless
such Indemnified Persons from and against any loss or liability by reason of
such settlement or judgment. The Company and the Guarantor shall not, without
the prior written consent of the Indemnified Person (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is a party and indemnity
has been sought hereunder by such Indemnified Person; provided however, that
the Company and the Guarantor may effect such a settlement without the consent
of such Indemnified Person if such settlement includes an unconditional release
of such Indemnified Person from all lability for claims that are the subject
matter of such proceeding or the Company and the Guarantor indemnify such
Indemnified Person in writing and post a bond for an amount equal to the
maximum liability for all such claims as contemplated above or provide other
security for such indemnity as shall be reasonably satisfactory to such
Indemnified Person.
(b) Indemnification by Holders. Each holder of Registrable Notes
agrees to indemnify and hold harmless the Company and the Guarantor, their
directors and officers, employees and agents and each person, if any,
controlling the Company and the Guarantor 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 and the Guarantor to such holder,
but only with respect to information relating to such holder or the
distribution furnished in writing by such holder expressly for use in any
registration statement or prospectus or any amendment or supplement thereto or
any preliminary prospectus relating thereto, provided, however, that no such
holder shall be liable for any indemnity claims hereunder in excess of the
amount of net proceeds received by such holder from the sale of Registrable
Notes pursuant to the Notes Shelf Registration. If any action or proceeding
shall be brought against the Company, the Guarantor or their directors,
officers, employees or agents or any such controlling person, in respect of
which indemnity may be sought against a holder of Registrable Notes, such
holder shall have the rights and duties given the Company and the Guarantor and
the Company and the Guarantor or their directors, officers, employees or agents
or such controlling person shall have the rights and duties given to each
holder by Section 5(a) hereof. The Company and the Guarantor shall be entitled
to receive indemnities from underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution, to
the same extent as provided above with respect to information
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so furnished in writing by such persons specifically for inclusion in any
prospectus or registration statement or any amendment or supplement thereto.
(c) Contribution. If the indemnification provided for in this
Section 5 is unavailable to an indemnified party under Section 5(a) or Section
5(b) hereof (other than by reason of exceptions provided in those Sections) in
respect of any losses, claims, damages, liabilities or judgments referred to
therein, then each applicable 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 or
judgments in such proportion as is appropriate to reflect not only the relative
benefits but also the relative fault of the Company and the Guarantor on the
one hand and of the Indemnified Person on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantor on the one
hand and of the Indemnified Person on the other 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 and the Guarantor
or by the Indemnified Person and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in the second paragraph of
Section 5(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company, the Guarantor and the holders of the Registrable
Notes and Exchange Notes agree that it would not be just and equitable if
contribution pursuant to this Section 5(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. 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.
6. Additional Interest Under Certain Circumstances; Remedies.
If the Company and the Guarantor fail to file within 45 days,
or cause to become effective within 120 days, the registration statement
relating to the Registered Exchange Offer or the Notes Shelf Registration, as
applicable, or (subject to Section 2(b)) the Notes Shelf Registration is
declared effective but thereafter ceases to be effective in connection with
resales of the Registrable Notes (each such event, a "Registration Default"),
then the Company agrees to pay to each holder of Registrable Notes, accruing
from the date of the first such Registration Default (except in the event of
the commencement of a Suspension Period, in which case occurring from the 60th
day therefrom), liquidated damages in an amount equal to one-half of one
percent (.5%) per annum of the principal amount of Registrable Notes held by
such holder during the first 180-day period immediately following the
occurrence of the first such Registration Default, increasing by an additional
one-half of one percent (0.5%) per annum of the principal amount of such
Registrable
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Notes during each subsequent 180-day period, up to a maximum amount of
liquidated damages equal to two percent (2.0%) per annum of the principal
amount of such Registrable Notes ("Notes Liquidated Damages"), and ceasing to
accrue on the date such Registration Default has been cured by, as applicable,
the filing, declaration of effectiveness or withdrawal of suspension of
effectiveness of the applicable registration statement. The Company shall
notify the Trustee within one business day after (i) each and every
Registration Default and (ii) the date the Registration Default has been so
cured. Until the Trustee and the Paying Agent have received an Officers'
Certificate from the Company to the effect that all Notes Liquidated Damages
then due have been paid in full, the Company (in respect of any payment date)
shall pay Notes Liquidated Damages then due by depositing with the Trustee, in
trust, for the benefit of the affected holders of Registrable Notes, on or
before the applicable semi-annual interest payment date, immediately available
funds in sums sufficient to pay the liquidated damages then due and provide to
the Trustee and the Paying Agent a list of holders entitled to Notes Liquidated
Damages together with the amount of cash such holder is due. The Notes
Liquidated Damages amount due shall be payable as additional interest (from
funds received pursuant to such deposit) on each interest payment date to the
record holder of Registrable Notes entitled to receive the interest payment to
be made on such date as set forth in the Indenture.
7. Miscellaneous.
(a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of holders of a majority in aggregate
principal amount of the Registrable Notes (insofar as such matters relate to
the Registrable Notes) or the Exchange Notes (insofar as such matters relate to
the Exchange Notes).
(b) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(1) if to a holder of Registrable Notes or Exchange
Notes, at the most current address given by such holder to the Company
in accordance with the provisions of this Section 7(b), which address
initially is, with respect to each holder, the address of such holder
to which confirmation of the sale of the Notes was first sent by an
Initial Purchaser, with a copy in like manner to Bear, Xxxxxxx & Co.
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Finance Department, Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Finance Department and Xxxxxxxxx
& Company, Inc., 00000 Xxxxx Xxxxxx Xxxx., 00xx Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Corporate Finance Department;
(2) if to an Initial Purchaser, to the addresses set
forth in clause (b)(1) above; and
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(3) if to the Company or the Guarantor, initially at its
respective address set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged by recipient's
telecopy operator, if telecopied; and on the day delivered, if sent by
overnight air courier guaranteeing next day delivery.
(a) Successors 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 the Registrable Notes.
(b) Counterparts. This Agreement may be executed in any
number of 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.
(c) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(d) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to principles of conflicts of laws to the extent the application
of the law of another jurisdiction would be required thereby.
(e) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
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REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above:
Very truly yours,
NATIONAL ENERGY GROUP, INC.
By: /s/ MILES X. XXXXXX
--------------------------
Name: Miles X. Xxxxxx
-------------------------
Title: President and Chief
Executive Officer
------------------------
GUARANTOR:
NATIONAL ENERGY GROUP OF
OKLAHOMA, INC.
By: /s/ MILES X. XXXXXX
--------------------------
Name: Miles X. Xxxxxx
-------------------------
Title: President and Chief
Executive officer
------------------------
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REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE
Accepted and agreed to as of
the first date written above
BEAR, XXXXXXX & CO. INC.
By: /s/ XXXXXX X. XXXXXX
----------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Senior Managing Director
-------------------------
XXXXX XXXXXX INC.
By: /s/ XXXXXX XXXXXX
----------------------------
Name: Xxxxxx Xxxxxx
--------------------------
Title: Managing Director
-------------------------
XXXXXXXXX & COMPANY, INC.
By: /s/ XXXXXX XXXXXXXXX
----------------------------
Name: Xxxxxx Xxxxxxxxx
--------------------------
Title: Senior Vice President
-------------------------
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