Exhibit 3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT dated as of the 16th day of
January, 1997, is entered into by and between RIO GRANDE, INC., a Delaware
corporation ("Rio Grande"), and XXXX EXPLORATION COMPANY, a Kansas
corporation ("Purchaser").
RECITALS
WHEREAS, Rio Grande and Purchaser have entered into a Preferred Stock
Purchase Agreement dated as of January 16, 1997, concerning, among other
things, the issuance and sale of shares of Rio Grande's preferred stock
(the "Stock Purchase Agreement"); and
WHEREAS, Rio Grande and the Purchaser desire to enter into this
Agreement in connection with, and as an integral part of, their execution
of the Stock Purchase Agreement;
NOW, THEREFORE, for and in consideration of the mutual promises of
the parties hereto, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS
1.1 "Agreement" shall mean, and the words "herein," "hereof,"
"hereunder" and words of similar import shall refer to, this instrument and
any amendment hereto.
1.2 "Commission" shall refer to the Securities and Exchange
Commission.
1.3 "Common Stock" shall refer to any and all of Rio Grande's common
stock, $.01 par value, including, but not limited to, the Conversion Stock.
1.4 "Conversion Stock" shall refer to any and all (i) Common Stock
issued and issuable upon conversion of the Series B Preferred Stock, and
(ii) Common Stock issued as dividends on or in any combination or
subdivision of the foregoing. When the phrase "Conversion Stock" is used
herein, it shall refer to the sum of shares of Common Stock issued as a
result of the conversion of, plus shares of Common Stock issuable on
conversion of, the Series B Preferred Stock, unless otherwise specified.
Conversion Stock shall exclude any shares otherwise included in the
foregoing from and after the date that such shares are sold pursuant to a
Registered Public Offering.
1.5 "Demand Stock" is defined in Section 2.1A.
1.6 "Exchange Act" shall refer to the Securities Exchange Act of
1934, as amended.
1.7 "Holders of Registrable Securities" (including references to
holders of certain percentages of Registrable Securities) collectively
refers to the holders of Series B Preferred Stock (to the extent that such
shares of stock have not then been converted into Common Stock) and the
holders of shares of Common Stock that theretofore have been issued upon
the conversion of Series B Preferred Stock (based upon conversion of the
Series B Preferred Stock).
1.8 "Initiating Holders" means holder(s) of Registrable Securities
who in the aggregate hold not less than forty percent (40%) of the
Registrable Securities (assuming for this purpose that all issued and
outstanding Series B Preferred Stock is converted into Conversion Stock).
1.9 "Person" shall refer to any natural person, partnership,
corporation, association, joint stock company, trust, joint venture,
unincorporated organization or other entity, or a governmental entity or
any department, agency or political subdivision thereof.
1.10 "Preferred Stock" shall refer to the Series B Preferred Stock.
1.11 "Registered Public Offering" shall refer to a public sale of Rio
Grande's Common Stock pursuant to an effective registration statement,
other than a registration effected solely to implement an employee benefit
plan, a transaction in which Rule 145 of the Commission is applicable or
any other form or type of registration in which Registrable Securities
cannot be included pursuant to Commission rule or practice.
1.12 "Registrable Securities" shall refer to the Conversion Stock.
1.13 "Reporting Company" shall mean a Person subject to the filing
requirements of Section 13 or 15 of the Exchange Act or a Person who has
completed a Registered Public Offering.
1.14 "Securities Act" shall refer to the Securities Act of 1933, as
amended.
1.15 "Series B Preferred Stock" shall refer to any and all of Rio
Grande's Series B Preferred Stock, par value $.01 per share.
2. REGISTRATION RIGHTS.
2.1 Demand Registration Rights.
A. Upon the written request by the Initiating Holders to
register Registrable Securities, Rio Grande shall promptly deliver notice
of such request to all holders of Registrable Securities (such holders of
Registrable Securities being referred to as the "Notified Persons"), who
then shall have 30 days to indicate in writing if they desire to be
included in such registration. If the Initiating Holders intend to
distribute the Demand Stock by means of an underwriting, they shall so
advise Rio Grande as part of their written request. "Demand Stock" shall
mean all of the shares of Registrable Securities being requested to be
registered by the Initiating Holders and the Notified Persons. Rio Grande
will use its best efforts to expeditiously (but in any event within 90 days
of the written request described in the first sentence of this section)
effect the registration of the Demand Stock under the Securities Act and
qualify the Demand Stock for sale under any state blue sky law, but only to
the extent provided for in the following provisions of this Article II;
provided, however, that the shares of Demand Stock for which registration
has been requested shall constitute at least 40% of the total shares of
Registrable Securities then outstanding (assuming for this purpose that all
issued and outstanding Series B Preferred Stock is converted into
Conversion Stock).
Rio Grande shall not be required to effect registration pursuant to
requests under this Section 2.1 more than three (3) times for the holders
of the Registrable Securities as a group. A demand registration instituted
pursuant to this Section 2.1 shall not be counted as such unless and until
(1) Rio Grande shall have in good faith filed a registration statement with
the Commission pursuant to this Section 2.1 and (2) the holders holding at
least a majority of the Registrable Securities included in such offering
elect to proceed with the registration process after receiving the
Commission's complete initial comments, if any, to the first filing of such
registration statement. Rio Grande shall not be required to include in
such registration any shares of Common Stock that are issuable upon the
conversion of Preferred Stock unless the holder commits in writing to Rio
Grande that such holder will convert the Preferred Stock into shares of
Common Stock before or not later than simultaneously with the effectiveness
of the registration statement registering those shares of Common Stock.
B. Whenever a demand registration pursuant to Section 2.1A is
made, Rio Grande shall be entitled to include in any registration statement
(i) shares of Common Stock to be sold by other holders of Common Stock with
registration rights that allow such holders to participate in the
registration (the "Other Registration Rights Holders"), and (ii) shares of
Common Stock to be sold by Rio Grande for its own account; provided,
however that if the managing underwriter determines in good faith that the
number of shares of Common Stock to be sold in such registration should be
limited due to market conditions, then the number of shares of Common Stock
included by Rio Grande in such registration shall be reduced to the extent
necessary to cause the total number of shares of Common Stock being so
registered to be reduced to the number determined by the underwriter, and
if such reduction is not sufficient, then after the number of shares of
Common Stock included by Rio Grande has been decreased to zero, then the
number of shares of Common Stock included by the Other Registration Rights
Holders shall be reduced pro rata among the Other Registration Rights
Holders to the extent necessary to cause the total number of shares of
Common Stock being so registered to be further reduced to the number
determined by the underwriter, and if such further reduction is not
sufficient, then after the number of shares of Common Stock included by the
Other Registration Rights Holders is reduced to zero, then the Demand Stock
shall be reduced pro_rata to the extent necessary to cause the number of
shares of Demand Stock so registered to equal the number determined by the
underwriter.
Except as permitted herein, Rio Grande may not cause any other
registration of securities for sale for its own account or for Persons
other than a holder of Registrable Securities (other than a registration
effected solely to implement an employee benefit plan or a transaction to
which Rule 145 of the Commission is applicable, or as may be required
pursuant to the terms of those certain Warrant Agreements, as amended
through the date hereof, issued by the Company in connection with the
Company's 1995 11.50% Subordinated Notes) to become effective less than 180
days after the effective date of any registration required pursuant to this
Section 2.1.
C. If at the time of any request to register Demand Stock
pursuant to this Section 2.1, Rio Grande is preparing a registration
statement for a Registered Public Offering which in fact is filed and
becomes effective within 90 days after the request, then Rio Grande may at
its option direct that such request to register Demand Stock be delayed for
a period not in excess of six months from the effective date of such
offering. Such right to delay a request shall be exercised by Rio Grande
not more than once in any two year period. Nothing in this Section 2.1C
shall preclude a holder of Registrable Securities from enjoying
registration rights pursuant to the terms of Section 2.2 hereof. No demand
shall be made by holders of Registrable Securities at any time, within six
(6) months of the effective date of any other registration of Common Stock
in which holders of Registrable Securities were entitled to participate
pursuant to the terms of this Agreement.
Rio Grande may postpone for a reasonable period of time (not to
exceed 90 days) the filing of any registration statement otherwise required
to be prepared and filed by it pursuant to this Section 2.1 if, at the time
it receives a request for registration:
(x) the Board of Directors of Rio Grande shall determine in good
faith that such offering will interfere materially with a pending or
contemplated financing, merger, sale of assets, recapitalization or other
similar corporate action of Rio Grande and Rio Grande shall have furnished
to the persons seeking such registration a certificate signed by the
President of Rio Grande to that effect, accompanied by a certified copy of
the relevant board resolutions; or
(y) the Board of Directors of Rio Grande shall determine in good
faith that the disclosures required in connection with such registration
could reasonably be expected to materially adversely affect the business or
prospects of Rio Grande and Rio Grande shall have furnished to the persons
seeking such registration a certificate signed by the President of Rio
Grande to that effect, accompanied by a certified copy of the relevant
board resolutions.
2.2 Piggyback Registration. If Rio Grande at any time proposes a
Registered Public Offering, it will, as soon as practicable but no less
than 30 days prior to filing the registration statement, give written
notice to all holders of Registrable Securities of its intention to do so
(stating the intended method of disposition of such securities). Upon the
written request of any holders of Registrable Securities given within 20
days after transmittal by Rio Grande to the holders of such notice, Rio
Grande will, subject to the limits contained in this Section 2.2, use its
best efforts to cause those Registrable Securities of said requesting
holders to be included in such registration statement; provided, however
that if the underwriter managing such registration determines in good faith
that market or economic conditions limit the amount of securities which may
reasonably be expected to be sold, Rio Grande may limit the number of
shares of Common Stock included by persons other than Rio Grande,
including, without limitation, the Registrable Securities (the "Piggyback
Stock") to be included in such registration and the holders of the
Piggyback Stock will be allowed to register their Piggyback Stock pro rata
based on the number of shares of Piggyback Stock held by such holders,
respectively. If any holder of Piggyback Stock disapproves of the terms of
any such underwriting, he may elect to withdraw therefrom by written notice
to Rio Grande and the managing underwriter. If, by the withdrawal of such
Piggyback Stock, a greater number of Piggyback Stock held by other holders
of Piggyback Stock may be included in such registration (up to the limit
imposed by the underwriters), Rio Grande shall offer to all holders of
Piggyback Stock who have included Piggyback Stock in the registration the
right to include additional Piggyback Stock, pro rata. Any Piggyback Stock
excluded or withdrawn from such underwriting shall be withdrawn from such
registration. Rio Grande shall be under no obligation to complete any
offering of its securities it proposes to make and shall incur no liability
to any holder of Registrable Securities for its failure to do so.
2.3 Registration Procedures. If and whenever Rio Grande is required
by the provisions of this Article II to use its best efforts to effect the
registration of Registrable Securities under the Securities Act, Rio Grande
will, as expeditiously as possible:
(i) prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts to cause
such registration statement to become and remain effective for the period
provided in this Article II;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all securities covered by
such registration statement whenever the seller or sellers of such
securities shall desire to sell or otherwise dispose of the same, but only
to the extent provided in this Article II;
(iii) furnish to each seller such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents, as such
seller may reasonably request in order to facilitate the public sale or
other disposition of the securities owned by such seller;
(iv) use its best efforts to register or qualify the securities
covered by such registration statement under such other securities or state
blue sky laws of such jurisdictions as each seller, or in the case of an
underwritten public offering, the managing underwriter shall reasonably
request, and do any and all other acts and things which may be necessary
under such securities or blue sky laws to enable the public sale or other
disposition of the securities in such jurisdictions, except that Rio Grande
shall not for any such purpose be required to qualify to do business as a
foreign corporation in any jurisdiction wherein it is not so qualified;
(v) before filing the registration statement or prospectus or
amendments or supplements thereto, furnish to one special counsel selected
by the holders of a majority of the Registrable Securities included in such
offering copies of such documents proposed to be filed which shall be
subject to the reasonable approval of such special counsel;
(vi) if the offering is underwritten, at the request of any
seller, use its best efforts to furnish on the date securities are
delivered to the underwriter for sale pursuant to such registration (A) an
opinion of counsel for Rio Grande, dated the effective date of the
registration statement, addressed to the seller and to Rio Grande, and (B)
a "comfort" letter signed by the independent public accountants who have
certified Rio Grande's financial statements included in the registration
statement, addressed to the seller and the underwriter, covering
substantially the same matters with respect to the registration statement
(and the prospectus included therein) and (in the case of the accountants'
letter) with respect to events subsequent to the date of the financial
statements, as are customarily covered (at the time of such registration)
in opinions of issuer's counsel and in accountants' letters delivered to
the underwriters in underwritten public offerings of securities;
(vii) cause all Registrable Securities covered by such
registration to be listed on each securities exchange, including the Nasdaq
Stock Market, on which similar securities issued by Rio Grande are then
listed; and
(viii) take such other actions as shall be reasonably
requested by a holder of Registrable Securities included in such
registration.
provided, however, that notwithstanding any other provision of this Article
II, Rio Grande shall not in any event be required to use its best efforts
to maintain the effectiveness of any such registration statement for a
period in excess of 90 days or 120 days in the case of registrations
pursuant to Section 2.1 (or at the request of the selling holders, an
additional 90 days or 120 days as the case may be). The term "seller" as
used in this Article II refers to a holder of the Registrable Securities
selling such shares.
In connection with each registration hereunder, each seller shall
furnish to Rio Grande in writing such information with respect to such
seller as reasonably shall be necessary in order to assure compliance with
federal and applicable state securities laws.
2.4 Expenses. All expenses incurred in effecting the registration
provided for in Sections 2.1, 2.2 and Section 2.9, including without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for Rio Grande and fees of one special counsel for
all of the selling holders of the Registrable Securities being so
registered selected by the holders of a majority of the Registrable
Securities included in the registration, underwriting expenses (other than
fees, commissions or discounts relating to the sale of shares of Common
Stock, other than for the account of Rio Grande, that are included in the
registration), expenses of any audits incident to or required by any such
registration, expenses of complying with the securities or blue sky laws of
any jurisdictions pursuant to Section 2.3(iv) hereof, and any other
expenses incurred in taking the actions described in Section 2.3 (all of
such expenses referred to as "Registration Expenses"), shall be paid by Rio
Grande; provided, however that in the case of a registration pursuant to
Section 2.1, participating sellers of Registrable Securities shall bear
their respective pro rata portion of expenses incurred by Rio Grande for
its accountants to audit other than year-end financial statements, unless
in the case of a registration pursuant to Section 2.1 in which more than
40% of the Common Stock included in such registration is Common Stock for
the account of Rio Grande, in which case Rio Grande shall pay its
proportionate share of such additional audit expense.
2.5 Indemnification.
A. In the event of any registration of any of its securities
under the Securities Act pursuant to this Article II, Rio Grande shall
indemnify and hold harmless the seller of such securities, each underwriter
(as defined in the Securities Act), and each other Person who participates
in the offering of such securities and each other Person, if any, who
controls (within the meaning of the Securities Act) such seller,
underwriter or participating Person (individually and collectively the
"Indemnified Person") against any and all losses, claims, damages or
liabilities (collectively the "liability"),to which such Indemnified Person
may become subject insofar as such liability (or action in respect thereof)
arises out of or is based upon (i) 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 or final prospectus contained therein, or any
amendment or supplement thereto, (ii) 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 or (iii) any violation by Rio
Grande of any rule or regulation promulgated under the Securities Act or
any state securities law applicable to and relating to action or inaction
required of Rio Grande in connection with any such registration. Rio
Grande shall reimburse each such Indemnified Person for all fees and
expenses (including reasonable legal fees) reasonably incurred by such
Indemnified Person in connection with investigating or, subject to
paragraph D of this Section 2.5, defending or settling any such liability;
provided, however, that Rio Grande shall not be liable to any Indemnified
Person in any such case to the extent that any such liability arises out of
or is based upon any alleged untrue statements or alleged omissions made in
such registration statement, preliminary or final prospectus, or amendment
or supplement thereto, in reliance upon and in conformity with written
information furnished to Rio Grande by such Indemnified Person specifically
for use therein.
B. Each holder of any securities sold pursuant to any
registration under this Article II shall, by acceptance of the proceeds
thereof, indemnify and hold harmless, for the sale of its securities in
such registration, each other holder of any such securities, Rio Grande,
its directors and officers, its legal counsel and independent public
accountants, each underwriter and each other Person, if any, who controls
Rio Grande or such underwriter (individually and collectively the "Rio
Grande Indemnified Person"), against any and all losses, claims, damages or
liabilities, to which any such Rio Grande Indemnified Person may become
subject insofar as such liability (or actions in respect thereof) arises
out of or is based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any registration statement
under which securities were registered under the Securities Act at the
written request of such holder, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or
(ii) 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, in the case of (i) and (ii) to the extent, but only to the
extent, that such alleged untrue statement or alleged omission was made in
such registration statement, preliminary or final prospectus, amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to Rio Grande by such holder specifically for use
therein, and then only to the extent that such untrue statement or alleged
untrue statements or omission or alleged omissions by the holder were not
based on the authority of an expert as to which the holder had no
reasonable ground to believe, and did not believe, that the statements made
on the authority of such expert were untrue or that there was an omission
to state a material fact. Such holder shall reimburse any Rio Grande
Indemnified Person for any reasonable legal fees reasonably incurred in
investigating or, subject to Paragraph D of this Section 2.5, defending any
such liability.
C. Indemnification similar to that specified in Section 2.5A
and Section 2.5B shall be given by Rio Grande and each holder of any
securities sold pursuant to a registration under this Article II (with such
modifications as may be appropriate) with respect to any required
registration or other qualification of such securities under any federal or
state law or regulation of a governmental authority other than the
Securities Act.
D. In the event Rio Grande, any holder of Registrable
Securities or of securities sold pursuant to this Agreement or any other
Person receives a complaint, claim or other notice of any liability or
action, giving rise to a claim for indemnification under paragraphs A, B or
C of this Section 2.5, the Person claiming indemnification under such
paragraphs shall promptly notify the Person against whom indemnification is
sought of such complaint, notice, claim or action, and such indemnifying
Person shall have the right to investigate and defend any such loss, claim,
damage, liability or action; provided however, that failure to so notify
shall not affect the indemnification rights under paragraphs A, B or C of
this Section 2.5 except to the extent (but only to the extent) the
indemnifying person was materially adversely prejudiced by such failure.
The Person claiming indemnification shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall not be at the expense of the
Person against whom indemnification is sought (unless the indemnifying
party fails to defend the Persons rightfully claiming indemnification under
this Section 2.5, in which case the fees and expenses of such separate
counsel shall be borne by the Person against whom indemnification is
sought). In no event shall a Person against whom indemnification is sought
be obligated to indemnify any Person for any settlement of any claim or
action effected without the indemnifying Person's prior written consent.
E. If the indemnification provided for in this Section 2.5 is
held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other hand in connection with the statements
or omissions which resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations. The
relevant fault of the indemnifying party and the indemnified party shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Notwithstanding the foregoing, the
amount any holder of Registrable Securities shall be obligated to
contribute pursuant to this Section 2.5E shall be limited to an amount
equal to the proceeds received by such holder pursuant to the registration
statement which gives rise to such obligation to contribute (less the
aggregate amount of any damages which the holder has otherwise been
required to pay in respect of such loss, claim, damage, liability or action
or any substantially similar loss, claim, damage, liability or action
arising from the sale of such securities).
F. The indemnification provided by this Section 2.5 shall be
a continuing right to indemnification and shall survive the registration
and sale of any securities by any Person entitled to indemnification
hereunder and the expiration or termination of this Agreement.
2.6 Termination of Registration Rights. Notwithstanding the
foregoing provisions of this Article II, the rights to registration and the
designation of Conversion Stock as Registrable Securities shall terminate
as to any particular securities when such securities shall have been
transferred or assigned in any manner except as set forth in Section 2.10
hereto.
2.7 Compliance with Rule 144 and Rule 144A. Rio Grande shall make
available to each holder of Registrable Securities the benefit of certain
rules and regulations of the Commission which may permit such holder to
sell Conversion Stock to the public without registration under the
Securities Act by (a) making and keeping "current public information"
"available" (as both such terms are defined in Rule 144 under the
Securities Act) at all times, (b) use its best efforts to timely file with
the Commission, in accordance with all rules and regulations applicable
thereto, all reports and other documents (i) required of Rio Grande for
Rule 144, as it may be amended from time to time (or any rule, regulation
or statute replacing Rule 144), to be available to stockholders of Rio
Grande and (ii) required to be filed under Section 15(d) of the Exchange
Act, notwithstanding that Rio Grande's duty to file such reports or
documents may be suspended or otherwise terminated under the express terms
of such provision and (c) upon request by such holder, furnishing such
holder a written statement by Rio Grande that it has complied with the
reporting requirements of the Exchange Act and Rule 144, together with a
copy of the most recent annual or quarterly report of Rio Grande and such
reports and documents filed by Rio Grande with the Commission as may
reasonably be requested by such holder in order that such holder may avail
itself of any rule or regulation of the Commission allowing sales of
Conversion Stock without registration under the Securities Act. Rio Grande
shall, upon such holder's request or upon the request of a prospective
buyer (a "Prospective Buyer") of Conversion Stock, deliver to such holder
and such Prospective Buyer, all information described in Section (d)(i) of
Rule 144A under the Securities Act (all of such information being
"reasonably current" as described in such Section (d)4(i) if Rio Grande (x)
is not subject to Section 13 or 15(d) of the Exchange Act, and (y) is not
exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act.
2.8 Amendments. The provisions of this Agreement may be amended,
and Rio Grande may take any action herein prohibited or omit to perform any
act herein required to be performed by it, only if Rio Grande has obtained
the written consent of holders of at least 66-2/3% of the Registrable
Securities.
2.9 Short Form Registration. Rio Grande shall use its best efforts
to qualify for registration on Form X-0, Xxxx X-0 or similar short form
registration statement (the "Short Form"). If and when Rio Grande so
qualifies to use a Short Form, the holders of the Registrable Securities
shall have the right to request registration on the Short Form as the
demand registration right created by Section 2.1 hereof. In such case, the
provisions of Section_2.1 shall apply to such demand registration except
that the registration shall be on the Short Form so specified by the
holders of the Registrable Securities.
2.10 Transferability of Registration Rights. The right to cause Rio
Grande to register Registrable Securities of a holder and keep information
available granted to a holder of Registrable Securities by Rio Grande under
this Agreement may be assigned by a holder of Registrable Securities to any
partner, shareholder or affiliate of such holder, to any other holder of
Registrable Securities, or to a transferee or assignee who receives at
least 500,000 shares of Registrable Securities (as adjusted for stock
splits and the like); provided, that Rio Grande is given written notice by
the holder of Registrable Securities at the time of or within a reasonable
time after said transfer, stating the name and address of said transferee
or assignee and identifying the securities with respect to which such
registration rights are being assigned. As used herein, an "affiliate" of
a holder of Registrable Securities shall mean any Person who controls, is
under common control with, or is controlled by such holder.
2.11 Designation of Underwriter. In the case of any registration
effected pursuant to this Article II, Rio Grande shall have the right to
designate the managing underwriter, subject to the approval of the holders
of a majority of the Registrable Securities included in such offering.
With respect to offerings under Section 2.1, the holders of the Demand
Stock shall negotiate with the underwriter selected by Rio Grande with
regard to the underwriting of the Demand Stock; provided, however, that if
the holders of a majority of the Demand Stock have not agreed with such
underwriter as to the terms and conditions of such underwriting within
twenty (20) days following commencement of such negotiations, the holders
of a majority of the Demand Stock may select an underwriter of their
choice, provided such underwriter is reasonably acceptable to Rio Grande.
Rio Grande and each holder of Registrable Securities included in the
registration shall enter into an underwriting agreement in customary form
with the managing underwriter.
3. MISCELLANEOUS.
3.1 Remedies. Any Person having any rights under any provision of
this Agreement will be entitled to enforce such rights specifically, to
recover any damages by reason of any breach of any provision of this
Agreement, and to exercise all other rights granted by law or equity, which
rights may be exercised cumulatively and not alternatively. The prevailing
party in any such dispute shall receive its reasonable attorneys' fees and
costs.
3.2 Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto will bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so
expressed or not.
3.3 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
3.4 Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts when taken together will constitute
one and the same Agreement.
3.5 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
3.6 Notices. Any notices required or permitted to be sent shall be
delivered personally, telecopied or mailed, certified mail, postage
prepaid, return receipt requested, to the following addresses until such
addresses have been changed by written notice delivered pursuant to this
Section 3.6 and shall be deemed to have been delivered and received three
(3) business days after such mailing, when delivered personally or when
receipt is confirmed by an individual if sent by telecopy:
If to Rio Grande: Rio Grande, Inc.
00000 Xxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxx. 000
Xxx Xxxxxxx, Xxxxx 00000
Attn: President
Telecopy No.:(000) 000-0000
If to Purchaser: Xxxx Exploration Company
0000 X. 00xx Xx. Xxxxx
Xxxxxxx, Xxxxxx 00000
Attn: Vice President
Telecopy No.:_(000) 000-0000
3.7 Governing Law. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of Texas
applicable to contracts made and to be performed in that state.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first written above.
Rio Grande:
RIO GRANDE, INC.
By: _________________________
Its:
Purchaser:
XXXX EXPLORATION COMPANY
By: _________________________
Its:
