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EXHIBIT 4.2
FORM OF
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT")
is made and entered into as of the ____ day of_________, __________, by and
among Vista Energy Resources, Inc., a Delaware corporation (the "COMPANY"),
Prize Energy Corp., a Delaware corporation ("PRIZE"), and each of the parties
listed as Owners on Exhibit A hereto (collectively, the "OWNERS" and,
individually, an "OWNER"). Certain terms used herein are defined in Section 3 of
this Agreement.
1. Background. The Company, Prize and PEC Acquisition Corp., a Delaware
corporation ("MERGER SUB"), have entered into a transaction, which was
consummated on the date hereof, in which Merger Sub was merged with and into
Prize, Prize became a wholly-owned subsidiary of the Company and the
stockholders of Prize received shares of capital stock in the Company in
exchange for their shares of capital stock in Prize (the "MERGER"). The Company
and the Vista Holders are parties to a Registration Rights Agreement dated
October 28, 1998 (the "PRIOR VISTA AGREEMENT"). Prize and the Prize Holders are
parties to an Amended and Restated Registration Rights Agreement dated June 29,
1999 (the "PRIOR PRIZE AGREEMENT"). The parties hereto desire to enter into this
Agreement in order to terminate and replace the Prior Vista Agreement and the
Prior Prize Agreement and to set forth the rights of the parties hereto with
respect to the registration of the shares of capital stock of the Company. The
Prior Vista Agreement and the Prior Prize Agreement are hereby terminated and
canceled, effective on the date hereof, and shall have no further force or
effect.
2. Registration under Securities Act, etc.
2.1. Registration on Request.
(a) Registration of Immediate Offering. Concurrently with or from time to
time after the Secondary Offering Date, subject to the limitations of Section
2.1(g) hereof, upon the written request (a "DEMAND REQUEST") of one or more
Owners, requesting that the Company effect the registration under the Securities
Act of all or a portion of such Owners' Registrable Securities (an "IMMEDIATE
OFFERING REGISTRATION") and specifying the number of Registrable Securities
requested to be registered and the intended method of disposition thereof
(including whether or not such requested disposition is to be in an underwritten
offering):
(i) Within five business days after the receipt of such request, the
Company shall give written notice of the Demand Request (together with a
copy of the Demand Request) to all other Owners of Registrable Securities,
if any; and
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(ii) After giving such notice and subject to the limitations set forth
in Section 2.1(g) below, the Company shall use reasonable efforts to file a
registration statement with the Commission with respect to the Immediate
Offering Registration as soon as is practicable but in any event no later
than 60 days after the Company's receipt of the Demand Request in order to
effect the registration under the Securities Act of:
(A) the Registrable Securities which the Company is requested to
register in the Demand Request, and
(B) all other Registrable Securities which the Company is
requested to register by the Owners who give written notice to the
Company within 15 business days after written notice of the Demand
Request from the Company.
The Owner's notice shall state the number of Registrable Securities
requested to be registered and whether the request to register such
securities constitutes a Demand Request pursuant to Section 2.1 of this
Agreement or a request for Piggyback Registration (as defined in Section
2.2(a) hereof) pursuant to Section 2.2 of this Agreement. If such request
constitutes a Demand Request, such written notice to the Company shall
specify the intended method of disposition of the Owner's Registrable
Securities (including whether or not such requested disposition is to be in
an underwritten offering).
(b) Registration of Delayed or Continuous Offering. Concurrently with or
from time to time after the Secondary Offering Date (or at any time, in the case
of a Shelf Registration, as defined below, which does not provide for
underwritten take-downs), subject to the limitations of Section 2.1(g) hereof,
upon the written request (the "SHELF REQUEST") of Pioneer, the Individual Vista
Holders or the Owners of more than 50% of the Registrable Securities held by
Owners other than Pioneer and the Individual Vista Holders, requesting that the
Company effect the registration under the Securities Act of all or a portion of
such Owners' Registrable Securities for resale in a delayed or continuous
offering to the extent permitted by Rule 415 (or any successor rule thereto)
under the Securities Act (a "SHELF REGISTRATION" and, together with an Immediate
Offering Registration, a "DEMAND OFFERING") and specifying the number of
Registrable Securities requested to be registered and the intended methods of
disposition thereof (including whether or not such requested registration is to
include underwritten offerings):
(i) Within five business days after the receipt of the Shelf Request,
the Company shall give written notice of the Shelf Request (together with a
copy of the Shelf Request) to all other Owners of Registrable Securities,
if any; and
(ii) After giving such notice and subject to the limitations set forth
in Section 2.1(g) below, the Company shall use reasonable efforts to file a
registration statement with the Commission with respect to the Shelf
Registration as soon as is reasonable but in any event no later than 60
days after the Company's receipt of the Shelf Request in order to effect
the registration under the Securities Act of:
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(A) the Registrable Securities which the Company is requested to
register in the Shelf Request, and
(B) all other Registrable Securities which the Company is
requested to register by Owners who give written notice to the Company
within 15 business days after written notice of the Shelf Request from
the Company.
The Owner's notice shall state the number of Registrable Securities
requested to be registered, will constitute a Shelf Request hereunder, and
shall specify the intended methods of disposition of the Owner's
Registrable Securities (including whether or not such requested
registration should include underwritten offerings).
(c) Right to Defer Registration. Notwithstanding anything to the contrary
set forth in Sections 2.1(a) and 2.1(b) above, the Company shall not be
obligated to take any action to notify holders or to effect any Immediate
Offering Registration or Shelf Registration pursuant to Section 2.1(a) or 2.1(b)
above if the Company shall have furnished to the Owners requesting registration
a certificate signed by the Chairman or President and the Chief Financial
Officer of the Company stating that, in the good faith judgment of the Board of
Directors (excluding Board members designated by the holders requesting such
registration) of the Company, such request could materially interfere with bona
fide financing, acquisition, or other material business plans of the Company or
would require disclosure of non-public information, the premature disclosure of
which could materially adversely affect the Company. Such certificate shall
contain a general statement of the reasons for such deferral and an estimate of
the anticipated period of deferral, and the Company shall promptly notify the
holders requesting such registration of the expiration or earlier termination of
such deferral. If the Company defers the registration requested under this
Section 2.1, the Company shall promptly (but not later than 90 days following
the occurrence of the event or circumstances permitting the deferral) notify the
holders of Registrable Securities requesting such registration when the events
or circumstances permitting such deferral have ended and at that time shall
proceed with the requested registration and in accordance with this Agreement.
If the Company shall defer the requested registration pursuant to this Section
2.1(c), then any related requested registration may be withdrawn by the holder
of Registrable Securities requesting such registration by giving notice to the
Company at any time within 10 business days after the date the Company notifies
such holder of its willingness to proceed with the requested registration. Upon
such withdrawal, the withdrawn requested registration shall not count as an
exercise of the demand registration rights granted herein. Holders of
Registrable Securities shall not be liable to the Company for any filing or
other expenses incurred as a result of a withdrawal of a requested registration
made pursuant to this Section 2.1(c). The Company shall not defer a requested
registration more than one time in any continuous 12-month period.
(d) Registration of Other Securities. Whenever the Company shall effect a
registration pursuant to this Section 2.1 in connection with an underwritten
offering by one or more holders of Registrable Securities, no securities other
than Registrable Securities shall be included among the securities covered by
such registration unless (i) the managing underwriter of such offering shall
have advised each holder of Registrable Securities to be covered by such
registration in writing that
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the inclusion of such other securities would not adversely affect such offering,
or (ii) the Requisite Holders of Registrable Securities to be covered by such
registration shall have consented in writing to the inclusion of such other
securities, or (iii) the offering is the Initial Secondary Offering (in which
case the only securities included shall be securities to be sold by the Company
and Registrable Securities in accordance with the applicable priority provisions
set forth in this Agreement).
(e) Registration Statement Form. Registrations under this Section 2.1 shall
be on such appropriate registration form of the Commission (i) as shall be
selected by the Company and as shall be reasonably acceptable to the Requisite
Holders, and (ii) as shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods of disposition specified in
the request for such registration. The Company agrees to include in any such
registration statement all information which holders of Registrable Securities
being registered shall reasonably request.
(f) Expenses. The Company shall pay all Registration Expenses in connection
with any registration of Registrable Securities requested pursuant to this
Section 2.1 and all Persons on whose behalf securities of the Company are
included in such registration shall pay their own Selling Expenses, with joint
costs allocated on the basis of the respective amounts of the securities then
being registered on their behalf.
(g) Limitations on Requested Registrations. The Company's obligation to
take or continue any action to effect a requested registration under this
Section 2.1 shall be subject to the following limitations:
(i) The number of registrations that the Company is required to
effect:
(A) at the request of Pioneer, shall not exceed one registration
under Section 2.1(k) below and two Demand Registrations, one of
which may be a Shelf Registration,
(B) at the request of the Individual Vista Holders, shall not
exceed one Demand Registration, which may be a Shelf Registration, but
the Company shall not be required to effect any Shelf Registration
which provides for underwritten take-downs until Pioneer shall no
longer own any Registrable Securities, and
(C) at the request of the holders of Registrable Securities other
than Pioneer, shall not exceed two Immediate Offering Registrations
and one Shelf Registration; provided, however, that no more than one
such registration request shall be effected on Form S-1 and the
remainder shall be effected on Form S-3 (such references herein to
Securities Act registration forms shall be deemed to also refer to any
successor forms thereto);
provided, that a registration requested pursuant to this Section 2.1 shall
not be deemed to have been effected (x) unless a registration statement
with respect thereto has been declared
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effective and remained effective for a period of at least 90 days (or, with
respect to a Shelf Registration, until the earlier of the date on which all
securities covered thereby have ceased to be Registrable Securities or the
date on which all of such securities have been disposed of in accordance
with the intended methods of disposition by the seller or sellers thereof,
subject to the provisions of Section 2.1(1) below), (y) if, after a
registration statement has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement
of the Commission or other governmental agency or court for any reason, or
(z) if the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such registration
are not satisfied, other than as a result of the voluntary termination of
such offering by the Requisite Holders;
(ii) Except for the rights of Pioneer to initiate registration under
this Section 2.1 and the rights of the Individual Vista Holders to initiate
registration under the circumstances set forth in Section 2.1(g)(i)(B)
above, the Company shall not be required to effect a Registration or an
underwritten takedown off of a Shelf Registration pursuant to this Section
2.1 unless such registration has been initiated by the holders of
Registrable Securities other than Pioneer which represent at least 30% of
the Registrable Securities then outstanding, and have an estimated
aggregate offering price to the public of at least $3,000,000;
(iii) The Company shall not be required to effect any registration
pursuant to this Section 2.1 during the applicable waiting period (defined
below) following the filing of a registration statement under the
Securities Act with respect to the public offering of any class of the
Company's equity securities in an Immediate Offering Registration or an
underwritten take-down off a Shelf Registration, whether such offering is
for the account of the Company or the account of the owners of its equity
securities (other than a registration of securities with respect to an
employee benefit, retirement or similar plan or pursuant to the Midland
Agreement); for purposes of this clause (iii), the "APPLICABLE WAITING
PERIOD" shall be a period commencing upon the filing of the registration
statement for such Immediate Offering Registration or underwritten
take-down and extending for a period of 90 days following the earlier of
(A) the date of final disposition of all securities offered for sale
pursuant to such registration statement in accordance with the intended
methods of disposition by the seller or sellers thereof, or (B) the date of
the termination or withdrawal of such registration statement; provided,
that, if the Company shall have entered into an agreement in connection
with any underwritten public offering of securities that restricts the
registration or sale of the Company's equity securities (a "LOCK-UP
AGREEMENT") for a period longer than 90 days, the applicable waiting period
shall be the lesser of (x) the period specified in the Lock-Up Agreement,
or (y) 180 days; and
(iv) The Company shall not be required to effect any registration
pursuant to this Section 2.1 during the applicable waiting period (defined
below) following the filing of a registration statement under the
Securities Act with respect to the public offering of any class of the
Company's equity securities in a Shelf Registration; for purposes of this
clause (iv), the "APPLICABLE WAITING PERIOD" shall be a period (A)
commencing upon the filing of the registration statement for such Shelf
Registration and extending for a period of 90 days
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following the date on which such registration statement becomes effective,
and (B) commencing upon an underwritten take-down from such Shelf
Registration and extending for a period of 90 days thereafter.
(h) Selection of Underwriters. If a Demand Offering pursuant to this
Section 2.1 involves an underwritten offering, the underwriter or underwriters
thereof shall be selected by the Requisite Holders with the approval of the
Company.
(i) Priority in Requested Registrations.
(i) In the Initial Secondary Offering, including such an offering
pursuant to Section 2.1(k) hereof, Pioneer shall have the right to include
Registrable Securities in such offering without being subject to any
cutback, without Pioneer's written consent, to the extent of the lesser of
(A) shares with a value (based on the final offering price to the public)
of $50,000,000, or (B) 50 percent of the total number of shares to be sold
in offering, plus 50 percent of any over-allotment for such offering (the
"PIONEER PRIORITY AMOUNT") and no Prize Holder or Vista Holder (other than
an Individual Vista Holder) shall have any right to include shares in the
Initial Secondary Offering, without Pioneer's written consent; provided
that, if the Initial Secondary Offering does not include any shares to be
sold by the Company, the limitation in clause (B) above shall not be
applicable and the Pioneer Priority Amount will only be limited to an
amount less than $50,000,000 if the managing underwriter of such Demand
Offering shall advise the Company and Pioneer in writing that the amount of
Registrable Securities included in the Initial Secondary Offering must be
limited to a lesser amount (which shall be specified in the notice) in
order to prevent the Initial Secondary Offering from materially and
adversely affecting the price or success of any subsequent offerings to be
initiated by the Company within the period of 180 days to 360 days
following the Initial Secondary Offering, in which case the Pioneer
Priority Amount shall be such lesser amount specified by such managing
underwriter.
(ii) In the first underwritten Demand Offering following the Initial
Secondary Offering (including, without limitation, a take-down under a
Shelf Registration), if the managing underwriter of such Demand Offering
shall advise the Company in writing (with a copy to the Owners of
Registrable Securities that made the Demand Request with respect to such
Demand Offering) that the inclusion of the number of securities requested
to be included in such Demand Offering will materially and adversely affect
the price or success of such Demand Offering, the Company will include in
such registration, to the extent of the number of securities which the
Company is so advised can be sold in such Demand Offering, Registrable
Securities requested to be included in such registration allocated as
follows (and any amounts above the amounts so allocated shall not be
included): Pioneer shall have the right to sell 50 percent of the
Registrable Securities to be sold in such Demand Offering and the remaining
50 percent of the Registrable Securities to be sold in such Demand Offering
shall be allocated pro rata among the other Owners of Registrable
Securities who elected to participate in such Demand Offering pursuant to a
Demand Request given in accordance with Section 2.1(a)(ii)(B) hereof
("OTHER DEMAND OWNERS") on the basis of the percentage of
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the Registrable Securities of the Company held by each such Other Demand
Owner to the total Registrable Securities of all such Other Demand Owners);
provided, that, if there is any over-allotment for such Demand Offering,
the allocation of Registrable Securities among Pioneer and each of the
Other Demand Owners that will satisfy such over-allotment shall be based on
each selling Owner's percentage ownership of all of the Registrable
Securities then owned by all such selling Owners.
(iii) In the second underwritten Demand Offering following the Initial
Secondary Offering and each underwritten Demand Offering thereafter
(including, without limitation, take-downs under a Shelf Registration), if
the managing underwriter of such Demand Offering shall advise the Company
in writing (with a copy to the Owners of Registrable Securities that made
the Demand Request with respect to such Demand Offering) that the inclusion
of the number of securities requested to be included in such Demand
Offering will materially and adversely affect the price or success of such
Demand Offering, the Company will include in such registration, to the
extent of the number of securities which the Company is so advised can be
sold in such Demand Offering, Registrable Securities requested to be
included in such registration pro rata among the Owners thereof who
submitted such Demand Request (including, without limitation, all such
Owners who elect to participate in such Demand Offering pursuant to a
Demand Request given in accordance with Section 2.1(a)(ii)(B) hereof) on
the basis of the percentage of the Registrable Securities of the Company
held by the Owners of such Registrable Securities (and amounts above the
amounts so allocated shall not be included); provided, however, in the
event the number of Registrable Securities which the Owners of Registrable
Securities requested to be included in a Demand Offering is reduced by more
than 2%, those Owners of Registrable Securities shall have the right to one
additional demand registration under Section 2.1(g) above.
(j) Holdback Period. If required by the underwriter or underwriters
selected by the Company for an underwritten offering pursuant to this Section
2.1 (collectively, the "UNDERWRITER"), all Owners (whether or not they propose
to distribute their Registrable Securities through such underwriting) shall
agree not to sell publicly any of their Registrable Securities for such period
as the Underwriter may reasonably request; provided, that such period shall not
exceed 90 continuous days.
(k) Initial Secondary Offering. Notwithstanding the other provisions of
this Agreement, except as set forth in this Section 2.1(k), the Company shall
not effect a registration, other than a Shelf Registration which does not
provide for underwritten take-downs, under this Section 2.1 if an Initial
Secondary Offering has not occurred. After the date of this Agreement, Pioneer
shall have the right to require the Company to effect an Initial Secondary
Offering or to include Pioneer's Registrable Securities in an Initial Secondary
Offering that the Company initiates, whereupon the Company shall be required to
use reasonable efforts to effect such registration in accordance with this
Section 2.1. Any shares included by any Owner (other than Pioneer) in an
offering initiated by the Company or the offering initiated pursuant to this
Section 2.1(k) will be deemed included pursuant to that Owner's rights under
Section 2.2 hereof.
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(1) Suspension of the Distribution of the Shares.
(i) In connection with any Shelf Registration, if the Company
determines in good faith that the distribution of any of the Registrable
Securities would materially interfere with bona fide financing,
acquisition, or other material business plans of the Company or any of its
subsidiaries or would require disclosure of non-public information, the
premature disclosure of which could materially adversely affect the
Company, and promptly gives the holders of Registrable Securities included
in such registration written notice of such determination, the Company
shall be entitled to require said holders to suspend their distribution of
the Registrable Securities for a reasonable period of time which, for
purposes of this Section 2.1(l)(i), shall not exceed 90 days. Such
written notice shall contain a general statement of the reasons for such
suspension and an estimate of the anticipated period of suspension, and the
Company shall promptly notify said holders of the expiration or earlier
termination of such suspension. If the Company shall suspend a Shelf
Registration pursuant to this Section 2.1(l)(i), then the Company shall
extend the effectiveness of the applicable registration statement by the
same number of days comprising the suspension period. Alternatively, if the
Company shall suspend a Shelf Registration pursuant to this Section 2.1
(l)(i) for more than 10 business days, then any related requested
registration may be withdrawn by the holder of Registrable Securities
requesting such registration by giving notice to the Company at any time
within 10 business days after the date the Company notifies such holder of
its willingness to proceed with the requested registration.
(ii) Also in connection with any Shelf Registration, if the Company
shall file a registration statement (other than in connection with the
registration of securities issuable pursuant to an employee stock option,
stock purchase, dividend reinvestment or similar plan or pursuant to a
merger, exchange offer or transaction of the type specified in Rule 145(a)
under the Securities Act) with respect to the Company's securities, and the
Company reasonably determines (in the case of a non-underwritten offering)
or the managing underwriter or underwriters advise the Company (in the case
of an underwritten offering) that a sale or distribution of the Registrable
Securities would adversely affect such offering, then, upon written notice
by the Company, the holders of Registrable Securities included in such
registration shall, to the extent not inconsistent with applicable law,
suspend the distribution of any of the Registrable Securities or any sale
of the Registrable Securities pursuant to Rule 144 under the Securities Act
during the 10-day period prior to and the 90-day period following the
effective date of such registration statement, with such 90-day period
being subject to early termination by the Company with the approval of the
managing underwriter or underwriters. The Company shall not effect a
suspension pursuant to this Section 2.1(l)(ii) more than one time in any
12-month period.
(m) Shelf Take-Down Procedures. The Owners' rights to require a Shelf
Registration shall include the right, on or after the Secondary Offering Date,
to require one underwritten offering off that Shelf Registration (a "TAKE-DOWN")
plus an additional number of take-downs equal to the number of unused Demand
Offerings remaining for the Owners (as set forth in Section 2.1(g) hereof). One
or more Owners having Registrable Securities included in an effective Shelf
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Registration may request an underwritten take-down, and the Company shall be
obligated to give notice and opportunity to participate in the take-down to the
other Owners having Registrable Securities included in that Shelf Registration,
in accordance with the same procedures, limitations and allocations applicable
to a Demand Request for an Immediate Offering Registration (with such changes in
those procedures, limitations and allocations as are necessary to reflect that
it is a take-down from a Shelf Registration). No Owner may request a take-down
for a number of that Owner's Registrable Securities that exceeds the number of
that Owner's Registrable Securities already included in the effective Shelf
Registration.
(n) Registration of Warrants. A registration statement filed pursuant to a
Demand Registration or a Shelf Registration and which registers the resale of
any Warrants shall also include the registration of the issuance of all shares
of common stock of the Company issuable upon the exercise of such Warrants by
any holder thereof who either (i) purchases such Warrants pursuant to such
registration statement or (ii) purchases such Warrants after such Warrants have
been previously purchased by another person pursuant to such registration
statement.
2.2. Incidental Registration.
(a) Right to Include Registrable Securities. If the Company, at any time
after the date of this Agreement, proposes to register any of its securities
under the Securities Act (other than (i) in connection with a registration of
securities issuable under any employee benefit, retirement or similar plan, or
(ii) with respect to a Rule 145 transaction), whether or not for sale for its
own account, and if notice of such transaction is not already given pursuant to
Section 2.1 above, it shall each such time give written notice to all holders of
Registrable Securities, at least 30 days before the filing date of the
registration statement with the Commission, of its intention to register such
shares and of the Owners' rights under this Section 2.2. Upon the written
request of any Owner made within 15 business days after the receipt of the
Company's notice (which request shall specify that the Owner of Registrable
Securities desires to include such Registrable Securities in an offering
pursuant to this Section 2.2 and shall specify the number of Registrable
Securities requested to be included in such offering), the Company shall use
reasonable efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the holders thereof ("PIGGYBACK REGISTRATION"), to the extent requisite to
permit the disposition of the Registrable Securities so to be registered;
provided, that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, (i) in
the case of a determination not to register, shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any holder or holders
of Registrable Securities entitled to do so to request that such registration be
effected as a registration under Section 2.1.(a) above, and (ii) in the case of
a determination to delay registering, shall be permitted to delay registering
any Registrable Securities, for the same period as the delay in registering such
other securities; and provided further, that no Registrable Securities shall be
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included in an underwritten registration except Registrable Securities of the
same class as those being registered therein. Each holder of Registrable
Securities shall be permitted to withdraw all or part of such holder's
Registrable Securities from a Piggyback Registration at any time before the
earlier of the effective date of the related registration statement and the
signing of a definitive underwriting, purchase or agency agreement with the
underwriters. Subject to Section 2.2(c) below, the Company shall use all
commercially reasonable efforts to cause the managing underwriters of a proposed
offering to permit the Registrable Securities requested to be included in the
offering to be included at the same price and on no less favorable terms and
conditions as any similar securities included therein. No registration effected
under this Section 2.2 shall be deemed to have been effected pursuant to Section
2.1 above or shall relieve the Company of its obligation to effect any
registration upon request under Section 2.1 above.
(b) Expenses. The Company shall pay all Registration Expenses in connection
with any registration of Registrable Securities requested pursuant to this
Section 2.2, and all Persons on whose behalf securities of the Company are
included in such registration shall pay their own Selling Expenses, with joint
costs allocated on the basis of the respective amounts of the securities then
being registered on their behalf.
(c) Priority in Incidental Registrations.
(i) If a registration pursuant to this Section 2.2 was initiated as an
offering of securities for sale for the account of the Company (other than
the Initial Secondary Offering, which shall be governed by the priority
provisions set forth in Section 2.1(i)(i) hereof), to be distributed (on
a firm commitment basis) by or through one or more underwriters, and if the
managing underwriter of such underwritten offering shall inform the Company
and the Owners of Registrable Securities requesting such registration by
letter of its belief that the number of securities requested to be included
in such registration will materially and adversely affect the price or
success of the offering, then the Company shall include in such
registration, to the extent of the number of securities which the Company
is so advised can be sold in (or during the time of) such offering, first,
all securities proposed by the Company to be sold for its own account,
second, such Registrable Securities requested to be included in such
registration, pro rata on the basis of the number of such securities so
proposed to be sold and so requested to be included, and third, all other
securities of the Company requested to be included in such registration,
pro rata on the basis of the number of such securities so proposed to be
sold and so requested to be included (and any amounts above the amounts so
allocated shall not be included).
(ii) If a registration pursuant to this Section 2.2 was initiated as
an offering of Registrable Securities for sale for the account of Owners
that made a Demand Request (other than the Initial Secondary Offering and
the first underwritten Demand Offering following the Initial Secondary
Offering, which shall be governed by the priority provisions set forth in
Sections 2.1(i)(i) and 2.1(i)(ii) hereof, respectively), to be distributed
(on a firm commitment basis) by or through one or more underwriters, and if
the managing underwriter of such underwritten offering shall inform the
Owners of Registrable Securities that made
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the Demand Request and the Company by letter of its belief that the number
of securities requested to be included in such registration will materially
and adversely affect the price or success of the Demand Offering, then the
Company shall include in such registration, to the extent of the number of
securities which the Company is so advised can be sold in (or during the
time of) such offering, first, all securities proposed by the Owner of
Registrable Securities that made the Demand Request to be sold for its own
account, in accordance with the provisions of Section 2.1 above (including,
without limitation, all such Owners who elect to participate pursuant to a
Demand Request given in accordance with Section 2.1(a)(ii)(B) hereof),
second, all securities proposed by the Company to be sold for its own
account, third, such Registrable Securities requested to be included in
such registration, pro rata on the basis of the number of such securities
so proposed to be sold and so requested to be included, and fourth, all
other securities of the Company requested to be included in such
registration, pro rata on the basis of the number of such securities so
proposed to be solo and so requested to be included (and any amounts above
the amounts so allocated shall not be included).
2.3. Demand Registration Procedures. If and whenever the Company is
required to use reasonable efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Section 2.1 above, the
Company shall as expeditiously as possible:
(i) prepare and (as soon thereafter as possible or in any event no
later than 60 days after the first Demand Request) file with the Commission
the requisite registration statement to effect such registration and
thereafter use reasonable efforts to cause such registration statement to
become effective; provided, that (A) a reasonable time before filing a
registration statement or prospectus or other offering materials, or any
amendments or supplements thereto, the Company will furnish to the Owners
of Registrable Securities to be registered and to one counsel selected by
the holders of a majority of the Registrable Securities included in such
registration (and one separate counsel for each such Owner if paid for by
such Owner), copies of all such documents proposed to be filed, which
documents will be subject to the review of such counsel, and shall
thereafter furnish revised drafts and definitive versions of all such
documents when they are circulated to the working group for the Demand
Offering, and (B) after the filing of the registration statement, the
Company will promptly notify the counsel to the Owners of Registrable
Securities of comments received from the Commission or the securities
exchange or market or inter-dealer quotation system, and other governmental
authorities as may be applicable; provided, that, in connection with a
Demand Offering, the Company shall not file or circulate to potential
investors any registration statement or prospectus, or other offering
materials, or any amendments or supplements thereto, if the Owners of
Registrable Securities who hold a majority of the Registrable Securities
covered by such registration statement, prospectus, or other offering
materials (acting through their counsel), the managing underwriter, or its
counsel shall reasonably object, in writing, on a timely basis;
(ii) prepare and file with the Commission, any applicable securities
exchange or market or inter-dealer quotations system such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary
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to keep such registration statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as all of
such securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement; provided, however, that the Company shall not be
required to maintain the effectiveness of any registration statement for
more than 90 days or such longer period as required by Section 2.1(l)
hereof in the event of a suspension of a registration statement (or, with
respect to a Shelf Registration, until the earlier of the date on which all
securities covered thereby have ceased to be Registrable Securities or the
date on which all of such securities have been disposed of in accordance
with the intended methods of disposition by the seller or sellers thereof,
subject to the provisions of Section 2.1(l) above) and comply with the
provisions of the Securities Act, the Exchange Act, and all other
applicable laws with respect to the disposition of all securities covered
by such registration statement or other offering materials during such
period in accordance with the intended methods of disposition by the Owners
of Registrable Securities set forth in such registration statement or other
offering materials;
(iii) furnish, without charge to each seller of Registrable Securities
covered by such registration statement, such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including, without limitation, all exhibits), such
number of copies of the prospectus contained in such registration statement
(including, without limitation, each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller may reasonably request;
(iv) use reasonable efforts to obtain the withdrawal of any order
suspending or withdrawing the authorization for an offering, the
effectiveness of a registration statement, or the lifting of any suspension
of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment;
(v) cooperate with the Owners of Registrable Securities and the
managing underwriter to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Corporation or other
appropriate book-entry depositary; and enable such Registrable Securities
to be registered in such names as the managing underwriter may request at
least one business day prior to any sale of Registrable Securities;
(vi) make available for inspection by the Owners of Registrable
Securities, any underwriter participating in any disposition pursuant to
such registration statement or other offering materials and any attorney,
accountant or other professional retained by any of the Owners of
Registrable Securities or underwriter (collectively, the "INSPECTORS"), all
financial and other records, pertinent corporate documents and properties
of the Company and its
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subsidiaries as shall be reasonably necessary to enable them to exercise
their due diligence responsibility; cause the Company's officers,
directors, examiners, accountants, attorneys, employees and subsidiaries
to supply all information reasonably requested by any such Inspectors in
connection with such registration statement or other offering materials;
and cooperate and assist in the performance of any due diligence
investigation by any underwriter (including, without limitation, any
qualified independent underwriter) or any of the Owners of Registrable
Securities;
(vii) use reasonable efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions as each
seller thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement remains
in effect, and to take any other action which may be reasonably necessary
or advisable to enable such seller to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would
not but for the requirements of this Section 2.3(vii) be obligated to be so
qualified or to consent to general service of process in any such
jurisdiction;
(viii) use reasonable efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental agencies, authorities and the board of directors
and stockholders of the Company as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Registrable
Securities;
(ix) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller (and underwriters, if any), of:
(A) an opinion of counsel for the Company, dated the effective
date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), reasonably satisfactory in
form and substance to such seller (which shall be deemed to be
acceptable if it is accepted by the underwriters), and
(B) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants
who have certified the Company's financial statements included in such
registration statement,
in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the
case of the accountants' letter, with respect to events subsequent to the
date of such financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' letters delivered to the
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underwriters in underwritten public offerings of securities and, in the
case of the accountants' letter, such other financial matters, and, in the
case of the legal opinion, such other legal matters, as such seller may
reasonably request;
(x) notify each seller of Registrable Securities promptly: (A) when a
registration statement, prospectus, or other offering material or any
supplement or amendment thereto has been filed, and, with respect to a
registration statement or any post-effective amendment, when the same has
become effective under the Securities Act and each applicable state law,
(B) of any request by the Commission or any other federal or state
governmental authority for amendments or supplements to a registration
statement, or related prospectus (or other legally required offering
material) or for additional information, (C) of the issuance by the
Commission or any other federal or state governmental body or agency of any
action, including, without limitation, a stop order, suspending or
withdrawing the authorization for the offering or the effectiveness of a
registration statement, or the initiation of any proceedings for that
purpose, (D) if at any time the representations or warranties of the
Company contained in any agreement relating to an offering of Registrable
Securities cease to be true and correct, (E) of the receipt by the Company
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose, (F) of the discovery that, or of the happening of any event
as a result of which, the registration statement, related prospectus, other
offering materials or any document incorporated or deemed to be
incorporated therein by reference 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, or that
requires the making of any changes in such registration statement,
prospectus, or other offering materials so that, in the case of the
registration statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that in the case of the prospectus, or other offering materials, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading or that such document otherwise fails to comply with
applicable laws, and (G) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate;
(xi) at the request of the Requisite Holders, promptly: (A) prepare
and furnish to each seller a reasonable number of copies of a supplement to
or an amendment of the prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus
shall not include 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 (B) prepare, file with the
Commission, and furnish to each seller the appropriate post-effective
amendment;
(xii) otherwise use reasonable efforts to comply with all applicable
rules and regulations of the Commission, including, without limitation,
compliance with any required
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registrations under the Exchange Act, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least 12 months, but not more than 18 months, beginning
with the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act, and shall furnish to
each such seller at least five business days prior to the filing thereof a
copy of any amendment or supplement to such registration statement or
prospectus and shall not file any thereof to which any such seller shall
have reasonably objected on the grounds that such amendment or supplement
does not comply in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder;
(xiii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement;
(xiv) use reasonable efforts to list all Registrable Securities
covered by such registration statement on any national securities exchange
or inter-dealer quotation system on which any shares of the capital stock
of the Company of the same class as the Registrable Securities are then
listed;
(xv) cooperate with the underwriters with respect to all roadshows and
other marketing activities as may be reasonably requested by the
underwriters; and
(xvi) enter into such agreements and take such other actions as the
Requisite Holders shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Each holder of Registrable Securities agrees, by acquisition of such
Registrable Securities, that upon receipt of any notice from the Company of the
happening of any event of the kind described in clause (B) or (F) of
Section 2.3(x) above, such holder will forthwith discontinue such holder's
disposition of Registrable Securities pursuant to the registration statement
relating to such Registrable Securities until such holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 2.3(xi)
above and, if so directed by the Company, will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
holder's possession of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
2.4. Incidental Offering Procedures. If and whenever the Company is
required to use reasonable efforts to effect the registration of any Registrable
Securities under the Securities Act, as provided in Section 2.2 above, the
Company shall as expeditiously as possible:
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(i) a reasonable time before filing a registration statement or
prospectus or any amendments or supplements thereto, furnish to the Owners
of Registrable Securities and to one counsel selected by the holders of a
majority of the Registrable Securities included pursuant to Section 2.2
above (and one separate counsel for each such Owner if paid for by such
Owner), copies of all such documents proposed to be filed, which documents
will be subject to the review of the Owners of such Registrable Securities
and to such counsel solely for the purposes of reviewing such material in
connection with the Owner's decision of whether to continue to participate
in the offering in accordance with the terms of this Agreement and
reporting to the Company on a timely basis any inaccuracies with respect to
information regarding the Owners of such Registrable Securities contained
in such material, and the Company shall thereafter furnish revised drafts
and definitive versions of all such documents to the Owners of such
Registrable Securities and to such counsel when they are circulated to the
working group for the registration, and after the filing of the
registration statement, the Company shall promptly notify the counsel to
the Owners of Registrable Securities of comments received from the
Commission, or the securities exchange or market or inter-dealer quotation
system, and other governmental authorities as may be applicable;
(ii) use all commercially reasonable efforts (A) to include the
Registrable Securities to be included in the offering in the registration
statement, or other appropriate offering materials for the type of
Piggyback Registration, (B) to include the Registrable Securities to be
included in the Piggyback Registration in any registration of securities to
be sold in the offering otherwise being made with any governmental
authority under state securities or blue sky laws or other applicable
securities laws, and (C) to maintain such inclusion for such period as such
registration statement, or other appropriate materials for the type of
Piggyback Registration and such registration or qualification are otherwise
maintained by the Company for the Person initiating the Piggyback
Registration;
(iii) furnish without charge to the Owners of such Registrable
Securities the number of copies of the registration statement, each
amendment and supplement thereto (in each case including all exhibits
thereto), the prospectus included in the registration statement (including,
without limitation, each summary or preliminary prospectus or other legally
required offering materials), in conformity with the requirements of the
Securities Act and other applicable laws, all documents incorporated by
reference into such prospectus or registration statement, and such other
documents as the Owner of such Registrable Securities may reasonably
request in order to facilitate the disposition of the Registrable
Securities included in the offering;
(iv) notify the Owners of such Registrable Securities (A) of the
issuance by the Commission or any other federal or state governmental body
or agency of any action, including, without limitation, a stop order,
suspending or withdrawing the authorization for the offering or the
effectiveness of a registration statement, or the initiation of any
proceedings for that purpose, and (B) if the Person initiating the
Piggyback Registration determines to cease using a registration statement,
prospectus or other offering document because of either the issuance by the
Commission or any other federal or state governmental
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body or agency of a stop order or the discovery of a material misstatement
or omission, to suspend the use of a registration statement, prospectus or
other offering document upon receipt of such notification;
(v) notify the counsel to the Owners of such Registrable Securities
promptly (A) when a registration statement, prospectus, or other offering
material for the Piggyback Registration or any supplement or amendment
thereto has been filed, and with respect to a registration statement or any
post-effective amendment, when the same has become effective under the
Securities Act and each applicable state or foreign law, (B) of any request
by the Commission or any other federal or state governmental authority for
amendments or supplements to such registration statement, or related
prospectus (or other legally required offering material) or for additional
information, (C) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, and (D) of the Company's determination that a post-effective
amendment to a registration statement would be appropriate;
(vi) cooperate in good faith to facilitate the timely delivery of
certificates representing the Registrable Securities to be sold;
(vii) use all commercially reasonable efforts to include the
Registrable Securities to be included in the offering in any underwriting
agreement and listing applications as otherwise are entered into for the
securities of the Person initiating the Piggyback Registration;
(viii) make available for inspection by the Owners of Registrable
Securities all financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries as shall be reasonably
necessary to enable them to exercise their due diligence investigation
responsibility, if any; cause the Company's officers, directors, examiners,
accountants, attorneys, employees and subsidiaries to supply all
information reasonably requested by any such Owners of Registrable
Securities in connection with such registration statement; and cooperate
and assist in the performance of any due diligence investigation by such
Owners;
(ix) use best efforts to obtain a comfort letter or comfort letters
from the Company's independent public accountants in customary form and
covering such matters covered by comfort letter or comfort letters, if any,
delivered to the managing underwriter, addressed to each of the Owners of
Registrable Securities; and
(x) furnish to each of the Owners of Registrable Securities a signed
legal opinion, addressed to each of the Owners of Registrable Securities,
of counsel for the Company, dated the date of the closing of the
underwriting or purchase agreement for the Piggyback Registration, in form
and substance equivalent to that counsel's opinion, if any, to the
underwriters in the offering.
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2.5. Underwritten Offerings.
(a) Requested Underwritten Offerings. If requested by the underwriters for
any underwritten offering by holders of Registrable Securities pursuant to a
registration requested under Section 2.1 above, the Company and all sellers of
Registrable Securities to be included in such offering will enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be satisfactory in substance and form to the Company and the Requisite
Holders and the underwriters and to contain such representations and warranties
by the Company and such other terms as are generally prevailing in agreements of
this type, including, without limitation, indemnities to the effect and to the
extent provided in Section 2.8 below. A holder of Registrable Securities to be
distributed by such underwriters shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities and such holder's intended method
of distribution and any other representation required by law and other than
indemnification of the Company and underwriters for liabilities arising from
information furnished in writing by such holder specifically for use in the
registration statement.
(b) Incidental Underwritten Offerings. If requested by the underwriters for
any underwritten offering by the Company or by holders of Registrable Securities
pursuant to a registration pursuant to Section 2.2 above, the Company and all
sellers of Registrable Securities to be included in such offering will enter
into an underwriting agreement with the underwriters for such offering, such
agreement to be satisfactory in substance and form to (i) the Company, and (ii)
the Requisite Holders, if the offering is pursuant to a Demand Request made by
an Owner of Registrable Securities pursuant to Section 2.1 above, and such
underwriters and to contain such representations and warranties by the Company
and such other terms as are generally prevailing in agreements of this type,
including, without limitation, indemnities to the effect and to the extent
provided in Section 2.8 below. A holder of Registrable Securities to be
distributed by such underwriters shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities and such holder's intended method
of distribution and any other representation required by law and other than
indemnification of the Company and underwriters for liabilities arising from
information furnished in writing by such holder specifically for use in the
registration statement.
2.6. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, and their counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion
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of such holders' counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
2.7. Additional Rights of Owners. If any registration statement prepared
under this Agreement refers to any Owner by name or otherwise as the holder of
any securities of the Company, then such Owner shall have the right to require
(a) the insertion therein of language, in form and substance satisfactory to
such Owner, to the effect that the holding by such Owner of such securities does
not necessarily make such Owner a "controlling person" of the Company within the
meaning of the Securities Act and is not to be construed as a recommendation by
such Owner of the investment quality of the Company's debt or equity securities
covered thereby and that such holding does not imply that such Owner will assist
in meeting any future financial requirements of the Company, or (b) in the event
that such reference to such Owner by name or otherwise is not required by the
Securities Act or any rules and regulations promulgated thereunder, the deletion
of the reference to such Owner.
2.8. Indemnification.
(a) Indemnification by the Company. In the event of any registration of any
securities of the Company under the Securities Act, the Company will, and hereby
does, indemnify and hold harmless the seller of any Registrable Securities
covered by such registration statement, and the officers, directors, agents,
attorneys, general and limited partners, affiliates, accountants and employees
of the seller of any such Registrable Securities, each other Person who
participates in the offering or sale of such securities and each other Person,
if any, who controls such seller, within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such seller or any such director or officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, 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 securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse such seller and each such officer, director, agent,
attorney, general and limited partner, affiliate, accountant and employee, and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided, however, that the Company shall not
be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation thereof; and provide further, that the
Company shall not be liable to any Person who participates as an underwriter in
the offering or sale of Registrable Securities or any other Person, if any, who
controls such underwriter within the
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meaning of the Securities Act, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such Person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such seller or any such
director, officer, underwriter or controlling person and shall survive the
transfer of such securities by such seller.
(b) Indemnification by the Sellers. In the event of any registration of any
securities of the Company under the Securities Act, each of the sellers of
Registrable Securities covered by such registration statement will, and hereby
does, indemnify and hold harmless (in the same manner and to the same extent as
set forth in Section 2.8(a) above) the Company, each director of the Company,
each officer of the Company and each other Person, if any, who controls the
Company within the meaning of the Securities Act, to the same extent as the
foregoing indemnity from the Company to the seller of Registrable Securities,
but only with respect to information furnished in writing to the Company by the
seller of Registrable Securities expressly for use in any registration
statement, prospectus or other offering materials relating to the Registrable
Securities. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling Person and shall survive the transfer of such securities
by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in Section 2.8(a) or (b) above, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under
Sections 2.8(a) and (b) above, except to the extent that the indemnifying party
is actually prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, 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 the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.
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(d) Other Indemnification. Indemnification similar to that specified in
this Section 2.8 (with appropriate modifications) shall be given by the Company
and each seller of Registrable Securities with respect to any required
registration or other qualification of securities under any Federal or state law
or regulation of any governmental authority other than the Securities Act.
(e) Indemnification Payments. The indemnification required by this Section
2.8 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred.
2.9. Adjustments Affecting Registrable Securities. The Company will not
effect or permit to occur any combination or subdivision which would adversely
affect the ability of the holders of Registrable Securities to include such
Registrable Securities in any registration of its securities contemplated by
this Agreement or the marketability of such Registrable Securities under any
such registration.
2.10. Holdback Agreement. If the Company, at any time pursuant to Section
2.1 or 2.2 above, shall register under the Securities Act Registrable Securities
held by Owners for sale to the public pursuant to an underwritten offering, the
Company shall not, without the prior written consent of the Majority Holders,
effect any public sale or distribution of securities similar to those being
registered, or any securities convertible into or exercisable or exchangeable
for such securities, for such period as shall be determined by the managing
underwriters, which period shall not begin more than 10 days prior to the
effectiveness of the registration pursuant to which such public offering shall
be made and shall not last more than 90 days after the closing of the sale of
securities pursuant to such registration.
2.11. Lock-Up Period. If the Company at any time shall register any of its
securities under the Securities Act in a primary underwritten offering (a)
pursuant to an Initial Secondary Offering or (b) pursuant to any other
registration, the Owners shall not sell, make any short sale of, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those Registrable Securities included in such registration) without
the prior written consent of the Company for a period as shall be determined by
the managing underwriter of such offering, which period cannot begin more than
10 days prior to the effectiveness of such registration and cannot last more
than 180 days after the effective date of such registration for the Company's
Initial Secondary Offering and 90 days for all other registrations (provided,
however, that the Owners shall not be prevented from selling their respective
Registrable Securities pursuant to this Section 2.11 more than once in any 12
consecutive month period).
2.12. Third Party Registration Rights. The Company has not granted demand
or piggyback registration rights to any party other than the Owners of
Registrable Securities, except pursuant to the Midland Agreement.
2.13 Decisions within a Group of Holders. Any time a specified group of
Owners (e.g. the Vista Holders, the Individual Vista Holders or the Prize
Holders) has certain rights under this Section 2, any decision or election to be
made by that group of Owners shall be made by a majority
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in interest of the members of that group, except that, while Hill is a holder of
Registrable Securities, all decisions of the Individual Vista Holders shall be
made by Hill.
3. Definitions. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
COMMISSION: The Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
EXCHANGE ACT: The Securities Exchange Act of 1934, or any similar
Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Exchange Act shall include a reference
to the comparable section, if any, of any such similar Federal
statute.
HILL: C. Xxxxxxx Xxxx, one of the Individual Vista Holders.
INDIVIDUAL VISTA HOLDERS: The Vista Holders other than Natural Gas
Partners II, L.P. and Natural Gas Partners III, L.P.
INITIAL SECONDARY OFFERING: The first offering and sale by the Company
of newly issued shares of the common stock of the Company, by Pioneer
of shares of the common stock of the Company in an underwritten
offering, or both, in the United States following the date of this
Agreement pursuant to a registration statement filed and declared
effective under the Securities Act (other than a registration of
securities with respect to an employee benefit, retirement or similar
plan, a Rule 145 transaction or pursuant to the Midland Agreement).
MAJORITY HOLDERS: At any time, the holder or holders of more than 50%
of all Registrable Securities then outstanding.
MIDLAND AGREEMENT: That certain Registration Rights Agreement for
Midland Holders dated October 28, 1998, between the Company and
certain holders of warrants to purchase shares of common stock of the
Company.
PERSON: A corporation, an association, a partnership, a limited
liability company, a business, an individual, a governmental or
political subdivision thereof or a governmental agency.
PIONEER: Pioneer Natural Resources USA, Inc., a Delaware corporation.
PRIZE HOLDERS: Pioneer and those other Owners who are identified as
such on Exhibit A hereto, all of which were stockholders of Prize
prior to consummation of the Merger.
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REGISTRABLE SECURITIES: Any of the common stock of the Company owned
by an Owner or issuable to an Owner upon conversion of Series A
Preferred Shares or upon exercise of any Warrants, any Warrants owned
by an Owner and any securities issued or issuable with respect to any
such common stock or Warrants by way of distribution or in connection
with any reorganization or other recapitalization, merger,
consolidation or otherwise. As to any particular Registrable
Securities, once issued, such securities shall cease to be Registrable
Securities when (a) a registration statement with respect to the sale
of such securities shall have become effective under the Securities
Act and such securities shall have been disposed of in accordance with
such registration statement, (b) the Owner shall have sold such
securities to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (c) such securities have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company
and subsequent disposition of such securities shall not require
registration or qualification under the Securities Act or any similar
state law then in force, (d) such securities represent less than 5% of
the issued and outstanding common stock of the Company and are able to
be sold under Rule 144(k) (or successor Rule) under the Securities Act
without restriction, or (e) such securities shall have ceased to be
outstanding.
REGISTRATION EXPENSES: All expenses incident to the Company's
performance of or compliance with Section 2.1 and 2.2 above,
including, without limitation, all registration, filing and National
Association of Securities Dealers fees, all fees and expenses of
complying with applicable laws (including, without limitation,
securities or blue sky laws), all word processing, duplicating and
printing expenses, messenger and delivery expenses, the fees and
disbursements of counsel for the Company and of its independent public
accountants, including, without limitation, the expenses of any
special audits or "cold comfort" letters required by or incident to
such performance and compliance, the fees and disbursements of one
special counsel to the holders of Registrable Securities, premiums and
other costs of policies of insurance against liabilities arising out
of the public offering of the Registrable Securities being registered,
the fees and expenses of any special experts, including independent
petroleum engineers, retained by the Company in connection with such
offering, the fees and expenses of any qualified independent
underwriter or other independent appraiser participating in any
offering pursuant to the Conduct Rules of the National Association of
Securities Dealers, Inc., all travel expenses of the Company's
officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective
purchasers of the offered securities, and any fees and disbursements
of underwriters customarily paid by issuers or sellers of securities,
but excluding Selling Expenses, if any; provided, that, in any case
where Registration Expenses are not to be borne by the Company, such
expenses shall not include salaries of Company personnel or general
overhead expenses of the Company, auditing fees, premiums or other
expenses relating to
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liability insurance required by underwriters of the Company or other
expenses for the preparation of financial statements or other data
normally prepared by the Company in the ordinary course of its
business or which the Company would have incurred in any event.
REQUISITE HOLDERS: With respect to any registration of Registrable
Securities, any holder or holders of more than 50% of the Registrable
Securities to be so registered.
SECONDARY OFFERING DATE: The first anniversary date of the Initial
Secondary Offering, or such earlier date on which an investment
banking firm selected by mutual agreement of the Company and Pioneer
determines that market conditions are favorable for another secondary
offering of Registrable Securities.
SECURITIES ACT: The Securities Act of 1933, or any similar Federal
statute, and the rules and regulations of the Commission thereunder,
as the same shall be in effect at the time. References to a particular
section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
SELLING EXPENSES: Underwriting discounts and commissions and stock
transfer taxes relating to Registrable Securities owned by selling
holders being registered by the Company and the fees and disbursements
paid to representatives retained by holders of Registrable Securities
to be registered (including, without limitation, the fees and
disbursements of legal counsel to the holders of such Registrable
Securities, other than the one special counsel referred to in the
definition of Registration Expenses).
SERIES A PREFERRED SHARES: The shares of the Company's Series A 6%
Convertible Preferred Stock issued in the Merger to Pioneer as holder
of shares of Prize's Series A 6% Convertible Preferred Stock.
VISTA HOLDERS: Those Owners who are identified as such on Exhibit A
hereto, all of whom were stockholders of the Company prior to
consummation of the Merger.
WARRANTS: The warrants owned by the Vista Holders as of the date
hereof that are exercisable to purchase shares of common stock of the
Company.
4. Rule 144 and Rule 144A: The Company shall file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder and shall take such further
action as any holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any holder of
Registrable Securities, the Company shall deliver to such holder a written
statement as to whether it has complied with such requirements. After any sale
of Registrable
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Securities pursuant to this Section 4, the Company shall, to the extent allowed
by law, cause any restrictive legends to be removed and any transfer
restrictions to be rescinded with respect to such Registrable Securities. In
order to permit the holders of Registrable Securities to sell the same if they
so desire, and Pioneer to sell Series A Preferred Shares if it so desires,
pursuant to Rule 144A promulgated by the Commission (or any successor to such
rule) ("RULE 114A"), the Company shall comply with all rules and regulations of
the Commission applicable in connection with the use of Rule 144A. Prospective
transferees of Registrable Securities and Series A Preferred Shares that are
Qualified Institutional Buyers (as defined in Rule 144A) which would be
purchasing such Registrable Securities and Series A Preferred Shares in reliance
upon Rule 144A may request from the Company information regarding the business,
operations and assets of the Company. Within five business days after receipt by
the Company of any such request, the Company shall deliver to any such
prospective transferee copies of annual audited and quarterly unaudited
financial statements of the Company and such other information as may be
required to be supplied by the Company for it to comply with Rule 144A.
5. Amendments and Waivers. This Agreement may be amended and the Company
may take any action herein prohibited or omit to perform any act herein required
to be performed by it, only if the Company shall have obtained the written
consent to such amendment, action or omission to act, of the Majority Holders;
provided, however, that any such amendment or consent that would have a material
adverse effect on a particular Owner but would not have a similar material
adverse effect on all Owners generally or would otherwise remove an Owner as a
party to this Agreement shall require the consent of such Owner. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
by any consent authorized by this Section 5, whether or not such Registrable
Securities shall have been marked to indicate such consent.
6. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of Registrable Securities held by any
holder or holders of Registrable Securities contemplated by this Agreement. If
the beneficial owner of any Registrable Securities so elects, the Company may
require assurances reasonably satisfactory to it of such owner's beneficial
ownership of such Registrable Securities.
7. Notices. All communications provided for hereunder shall be sent by
first-class mail, postage prepaid, return receipt requested, and addressed (a)
if to a party other than the Company, to such party at the address furnished to
the Company by such party, or (b) if to the Company, at 00 Xxxx 0xx Xxxxxx,
Xxxxx 0000, Xxxxx, XX 00000, Attention: Chairman, or at such other address, or
to the attention of such other officer, as the Company shall have furnished to
each holder of Registrable Securities at the time outstanding by a nationally
recognized commercial delivery service, charges prepaid, or by facsimile (a) if
to a party other than the Company, to such party at the facsimile number
furnished to the Company by such party, or (b) if to the Company, to (918)
582-1547; provided, however, that any such communication to the Company may
also, at the option of any of
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the parties hereunder, be either delivered to the Company at its address set
forth above or to any officer of the Company.
8. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the parties hereto other than the Company shall also be for the benefit of
and enforceable by any subsequent holder of any Registrable Securities, subject
to the provisions respecting the minimum numbers or percentages of Registrable
Securities required in order to be entitled to certain rights, or take certain
actions, contained herein. Pioneer shall be able to assign its rights in
connection with a transfer of its shares other than a transfer which makes such
shares cease to be Registrable Securities. In the event of an assignment by
Pioneer of its Registrable Securities, the rights of Pioneer hereunder (a) shall
not be expanded as a result, and (b) shall be exercised by the holders of a
majority in interest of the Registrable Securities originally held by Pioneer.
9. Termination. This Agreement shall terminate when no Registrable
Securities remain outstanding.
10. Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof. References herein to Sections are
references to Sections of this Agreement, except as otherwise indicated.
11. Specific Performance. The parties hereto recognize and agree that money
damages may be insufficient to compensate the holders of any Registrable
Securities for breaches by the Company of the terms hereof and, consequently,
that the equitable remedy of specific performance of the terms hereof will be
available in the event of any such breach.
12. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware.
13. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
14. Entire Agreement. This Agreement constitutes the entire agreement among
the parties regarding the subject matter hereof and supersedes all prior
understandings and agreements regarding such matters, including, without
limitation, the Prior Prize Agreement and the Prior Vista Agreement.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement or have caused this Agreement to be executed and delivered by
their respective officers thereunto duly authorized as of the date first
above written.
PRIZE ENERGY CORP. VISTA ENERGY RESOURCES, INC.
By: By:
------------------------------------------- ----------------------------------------------------
Xxxxxx X. Xxxxx C. Xxxxxxx Xxxx
Chairman and Chief Executive Officer Chairman and Chief Executive Officer
NATURAL GAS PARTNERS V, L.P. NATURAL GAS PARTNERS II, L.P.
By: G.F.W. Energy V, L.P., general partner By: G.F.W. Energy II, L.P., general partner
By: GFW V, L.L.C., general partner By: GFW II, L.L.C., general partner
By: By:
------------------------------------------- ----------------------------------------------------
Xxxxxxx X. Xxxxx, Authorized Member Xxxxxxx X. Xxxxx, Authorized Member
---------------------------------------------- NATURAL GAS PARTNERS III, L.P.
Xxxxxx X. Xxxxx, Trustee of the Xxxxxx X. By: Rainwater Energy Investors, L.P., general
Xxxxx Revocable Trust Dated July 25, 1994 partner
By: GFW III, L.L.C., general partner
----------------------------------------------
Xxxxxx X. Xxxxx, Trustee of the Xxxxx X. Xxxxx By:
Irrevocable Trust Dated January 15, 1996 ----------------------------------------------------
Xxxxxxx X. Xxxxx, Authorized Member
---------------------------------------------- -------------------------------------------------------
Xxxxxx X. Xxxxx, Trustee of the Xxxxx X. Xxxxx Xxxxxx X. Xxxxx, Individually
Irrevocable Trust Dated January 15, 1996
---------------------------------------------- -------------------------------------------------------
Xxx X. Xxxx Xxxxxx X. Xxxxx, Trustee of each of the
Xxxxxx X. Xxxxx, Xx. 1984 Trust, the Xxxx X. Xxxxx 1984
Trust, the Xxxx X. Xxxxx 1984 Trust, and the
---------------------------------------------- Xxxxxx X. Xxxxx 1984 Trust
Xxxxxx X. Xxxxxxx
PIONEER NATURAL RESOURCES -------------------------------------------------------
USA, INC. Xxxx X. Xxxx
By:
-------------------------------------------
Xxxx X. Xxxxxxx
Executive Vice President
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------------------------------------------
Xxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxxx, Xx.
------------------------------------------
R. Xxxxx Xxxxx
------------------------------------------
Xxxxxx X. Xxxxxxxxx, Xx.
------------------------------------------
Xxxxx X. Xxxxxx, as Trustee of the Xxxxxxx
Children's Trust
------------------------------------------
Xxxx X. Xxxxx
------------------------------------------
Xxxxxx X. Xxxx
------------------------------------------
R. Xxxx Xxxxxxxx
------------------------------------------
Xxxxxx X. Xxxx
------------------------------------------
C. Xxxxxxx Xxxx
------------------------------------------
Xxx Xxxxxxxx
------------------------------------------
Xxxx Xxxxxxxx
------------------------------------------
D. Xxxxx Xxxxx
------------------------------------------
Xxxxxxx Xxxxxxx
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EXHIBIT A
OWNERS
PRIZE HOLDERS VISTA HOLDERS
Natural Gas Partners V, L.P. Natural Gas Partners II, L.P.
Xxxxxx X. Xxxxx, Trustee of the Xxxxxx X. Natural Gas Partners III, X.X
Xxxxx Revocable Trust Dated July 25, 1994
Xxxxxx X. Xxxxx, Trustee of the Xxxxx X. Xxxxx Xxxxxx X. Xxxxx, Individually
Irrevocable Trust Dated January 15, 1996
Xxxxxx X. Xxxxx, Trustee of the Xxxxx X. Xxxxxx X. Xxxxx, Trustee of each of the
Xxxxx Irrevocable Trust Dated January 15, Xxxxxx X. Xxxxx, Xx. 1984 Trust, the
1996 Xxxx X. Xxxxx 1984 Trust, the Xxxx X.
Xxxxx 1984 Trust, and the Xxxxxx X.
Xxx X. Xxxx Xxxxx 1984 Trust
Xxxxxx X. Xxxxxxx Xxxx X. Xxxx
Pioneer Natural Resources USA, Inc. Xxxx X. Xxxxx
Xxxxxxxx X. Xxxxxx, Xx.
R. Xxxxx Xxxxx
Xxxxxx X. Xxxxxxxxx, Xx.
Xxxxx X. Xxxxxx, as Trustee of the Xxxxxxx
Children's Trust
Xxxx X. Xxxxx
Xxxxxx X. Xxxx
R. Xxxx Xxxxxxxx
Xxxxxx X. Xxxx
C. Xxxxxxx Xxxx
Xxx Xxxxxxxx
Xxxx Xxxxxxxx
D. Xxxxx Xxxxx
Xxxxxxx Xxxxxxx
A-1
