1
EXHIBIT 7.1
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of the 30th day of
June, 1994 among HarCor Energy, Inc., a Delaware corporation ("HarCor"), and
Bakersfield Energy Partners, L.P. or a nominee affiliate thereof
("Bakersfield").
W I T N E S S E T H:
WHEREAS, HarCor has offered to sell, and Bakersfield has offered to
purchase, all of the shares of the Series E Preferred Stock of HarCor, which
shares of preferred stock are convertible into shares of the Common Stock of
HarCor;
WHEREAS, in connection with the purchase of the Series E Preferred Stock of
HarCor, Bakersfield is to receive from HarCor 25,000 shares of the Common Stock
of HarCor;
WHEREAS in connection with the acquisition by HarCor of the assets of
Bakersfield, Bakersfield is to receive, as partial consideration for such
assets, a warrant entitling Bakersfield to acquire up to 1,000,000 shares of the
Common Stock of HarCor;
WHEREAS, in order to induce Bakersfield to proceed with the foregoing
transactions, HarCor has agreed to grant to Bakersfield certain registration
rights with respect to the shares of Common Stock which Bakersfield will or may
receive as set forth above, as such registration rights are more particularly
set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
SECTION 1. CERTAIN DEFINITIONS AND TERMS.
The following terms have the meanings indicated:
"Commission" shall mean the Securities and Exchange Commission or any
successor thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Holder" means Bakersfield and any other Person holding Registrable Shares.
"Person" means any individual, firm, corporation, trust, association,
partnership, joint venture or other entity.
2
"Registrable Shares" means 25,000 shares of Common Stock of HarCor
issued on June , 1994, all shares of Common Stock of HarCor issued pursuant
to the Warrant (the "Warrant Shares") between Bakersfield and HarCor (the
"Warrant") dated June 30, 1994 and all shares of Common Stock of HarCor issued
pursuant to the exercise of Bakersfield's option to convert shares of the
Series E Preferred Stock into Common Stock, and all shares of the Common Stock
of HarCor which may be delivered to the Holder by HarCor in lieu of cash
payment of dividends on the Series E Preferred Stock. In the event that HarCor
shall call the Warrants for redemption and the Holder shall give HarCor notice
that it will exercise the Warrant upon the effectiveness of a Registration
Statement filed pursuant to this Agreement, "Registrable Shares" shall include
the Warrant Shares issuable upon exercise of the Warrant, even if such Warrant
has not yet been exercised.
"Register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act and the declaration or ordering of effectiveness of such
registration statement.
"Rights" means rights, remedies, powers, benefits, and privileges.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
SECTION 2. REGISTRATION RIGHTS.
(a) On and after the date of this Agreement, Holders of at least
thirty percent (30%) of Registrable Shares then outstanding shall have the
right to request, in writing specifying that such request is made pursuant to
this Section 2(a), that HarCor file a registration statement under the
Securities Act. Upon receipt of such request, HarCor shall use its best efforts
to cause all Registrable Shares subject to such request to be registered under
the Securities Act; provided, however, that HarCor may defer its obligations
under this Section 2(a) for a period of no more than ninety days if HarCor's
Board of Directors adopts a resolution that filing such a registration
statement would require a public disclosure by HarCor which disclosure would
have material adverse consequences for HarCor, such as a disclosure regarding a
pending material acquisition by HarCor or a material discovery of oil and gas
reserves; provided, further, that once such information has been publicly
disclosed, then HarCor shall promptly proceed to fulfill its obligations under
this Section 2(a).
Notwithstanding the foregoing, HarCor shall not be obligated to effect
a registration pursuant to this Section 2(a) during any period starting with a
date sixty (60) days prior to HarCor's estimated date of filing of, and ending
on a date four (4) months following the effective date of, a registration
statement pertaining to an underwritten public offering of securities for the
account of HarCor, provided that HarCor is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective and
that HarCor's estimate of the date of filing of such registration statement is
made in good faith.
-2-
3
HarCor shall be obligated to effect only two (2) registrations pursuant
to this Section 2(a) with respect to all Holders.
In the case of such a registration, if the managing underwriter advises
that the number of securities to be so registered is too large a number to be
reasonably sold, then the number of such securities sought to be registered by
any Person other than the Holders shall be reduced to the extent necessary to
reduce the number of securities to be registered to the number recommended by
the managing underwriter. If further reductions are necessary, then the number
of Registrable Shares sought to be registered by each Holder shall be reduced
pro rata in proportion to the number of Registrable Shares sought to be
registered by all Holders, to the extent necessary to reduce the number of
Registrable Shares to the number recommended by the managing underwriter.
Holders acknowledge and agree that the Piggyback Rights granted
pursuant to this Section 2(a) shall not entitle Holders to "piggyback" on any
registration effected pursuant to that certain Registration Rights Agreement
dated as of November 23, 1992 among HarCor and Trust Company of the West (a
"TCW Registration"), if the managing underwriter of the TCW Registration
believes that the sale of Holders securities as part of the TCW Registration
would adversely affect the amount of, or price at which, the shares to be
registered under the TCW Registration shall be sold. Holders agree (i) not to
effect any public or private sale or distribution of its equity securities,
including a sale pursuant to Regulation D under the Securities Act, during the
10-day period prior to, and during the 120-day period beginning on, the closing
date of an underwritten offering made pursuant to a registration statement
filed pursuant to a TCW Registration (other than the Registrable Shares so
registered, and other than in connection with the exercise of options, rights
or warrants or the conversion of convertible securities).
HarCor will not grant to any Person at any time on or after the date
hereof the right (a "Piggyback Right") to request HarCor to register any
securities of HarCor under the Securities Act by reason of the exercise by any
Holder of its rights under this Section 2(a) unless such Piggyback Right
provides that such securities shall not be registered and sold at the same time
if the managing underwriter for the respective Holders believes that sale of
such securities would adversely affect the amount of, or price at which, the
respective Registrable Shares being registered under this Section 2(a) can be
sold.
Unless consented to in writing by the Holder or Holders who hold a
majority of the Registrable Shares which are covered by a registration
statement filed under this Section 2(a), HarCor agrees not to effect any public
or private sale or distribution of its equity securities, including a sale
pursuant to Regulation D under the Securities Act, during the 10-day period
prior to, and during the 120-day period beginning on, the closing date of an
underwritten offering made pursuant to a registration statement filed pursuant
to this Section 2(a) (except in connection with the exercise of options,
rights or warrants, or the conversion of convertible securities); provided,
however, that HarCor may effect private sales or distributions of equity
securities including a sale pursuant to Regulation D under the Securities Act,
if the managing underwriter selected by the Holders determines that such sale
or distribution will not have a material adverse effect on the offering of
Registrable
-3-
4
Shares by the Holders under this Section 2(a), which determination may not be
unreasonably withheld.
(b) If HarCor at any time proposes to register any of its Common Stock
under the Securities Act (other than registrations on Forms S-4 or S-8 or any
successor forms thereto or registrations in connection with registration rights
granted by HarCor to purchasers in the private placement of Investment Units
consummated on August 6, 1992 or the first registration of Common Stock by
HarCor after the date hereof if filed by HarCor with the Commission), whether
of its own accord or at the request of any holder or holders of such
securities, it will each such time promptly give written notice to all Holders
of its intention to do so.
Upon the written request of a Holder or Holders delivered to HarCor
within 10 days after receipt of any such notice, HarCor will use its best
efforts to cause all Registrable Shares, the Holders of which shall have so
requested registration thereof, to be registered under the Securities Act, all
to the extent requisite to permit the sale or other disposition by the
prospective Holder or Holders of such Registrable Shares; provided, however,
HarCor may elect not to file a registration statement pursuant to this Section
2(b) or may withdraw any registration statement filed pursuant to this Section
2(b) at any time prior to the effective date thereof. In the case of an
underwritten public equity offering by HarCor, each Holder shall, if requested
by the managing underwriter, agree not to sell publicly any equity securities
of HarCor held by such Holder (other than the Registrable Shares so registered)
for a period of up to 120 days following the effective date of the registration
statement relating to such offering.
If the managing underwriter for the respective offering advises that
the inclusion in such registration of some or all of the Registrable Shares
sought to be registered by the Holders in its opinion will cause the proceeds
or price per unit from such registration to be reduced or that the number of
securities to be registered at the insistence of HarCor and any other selling
shareholders plus the number of Registrable Shares sought to be registered by
the Holders is too large a number to be reasonably sold, the number of
Registrable Shares sought to be registered by each Holder and the number of
securities sought to be sold by any other selling shareholders (other than
shareholders exercising demand registration rights) shall be reduced pro rata,
based on the number of securities sought to be registered by each such Holder
or such other selling shareholder, to the number recommended by the managing
underwriter.
(c) HarCor recognizes that money damages may be inadequate to
compensate the Holders for a breach by HarCor of its obligations under this
Agreement, and HarCor agrees that in the event of such a breach any of the
Holders may apply for an injunction of specific performance or the granting of
such other equitable remedies as may be awarded by a court of competent
jurisdiction in order to afford the Holders the benefits of this Agreement and
that HarCor shall not object to such application, entry of such injunction or
granting of such other equitable remedies on the grounds that money damages
will be sufficient to compensate the Holders.
-4-
5
(d) If and whenever HarCor is required by the provisions of this
Section 2 to use its best efforts to effect the registration of any Registrable
Shares under the Securities Act, HarCor will, as expeditiously as possible,
(1) cooperate with any underwriters for, and the Holders
of, such Registrable Shares, and will enter into a usual and customary
underwriting agreement with respect thereto and take all such other
reasonable actions as are necessary or advisable to permit, expedite
and facilitate the disposition of such Registrable Shares in the manner
contemplated by the related registration statement in each case to the
same extent as if all the securities then being offered were for the
account of HarCor and HarCor will provide to any selling Holder, any
underwriter participating in any distribution thereof pursuant to a
registration statement, and any attorney, accountant or other agent
retained by any selling Holder or underwriter, reasonable access to
appropriate HarCor officers and employees to answer questions and to
supply information reasonably requested by any such selling Holder,
underwriter, attorney, accountant or agent in connection with such
registration statement;
(2) furnish or cause to be furnished to each Holder covered
by such registration statement, addressed to such Holders, a copy of
the opinion of counsel for HarCor, and a copy of the "comfort" letter
signed by the independent public accountants who have certified
HarCor's financial statements included in the registration statement
which is delivered to the underwriters of such Registrable Shares;
(3) 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; and
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 Holder or Holders of such
securities shall desire to sell or otherwise dispose of the same;
provided, that no such registration statement will be filed by HarCor
until counsel for the Holders of Registrable Shares included therein
shall have had a reasonable opportunity to review the same and to
exercise their rights under clause (1) above with respect thereto and
no amendment to any such registration statement naming such Holders as
selling shareholders shall be filed with the Commission until such
Holders shall have had a reasonable opportunity to review such
registration statement as originally filed and theretofore amended and
to exercise their rights under clause (1) above;
(4) furnish to each selling Holder such numbers of copies
of a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act,
and such other
-5-
6
documents, as such Holder may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Shares owned by such
Holder;
(5) use its best efforts to register or qualify the Registrable Shares
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as each selling Holder shall request, and do any and
all other acts and things which may be necessary or advisable to enable such
Holder to consummate the public sale or other disposition in such jurisdictions
of the Registrable Shares owned by such Holder; provided, however, that HarCor
shall not be required to make any such registration or qualification in a
jurisdiction if HarCor would be required to qualify to do business as a foreign
corporation in such jurisdiction or file a consent to service of process in
such jurisdiction as a condition to the effectiveness of such registration or
qualification;
(6) in the event of the issuance of any stop order suspending the
effectiveness of any registration statement or of any order suspending or
preventing the use of any prospectus or suspending the qualification of any
Registrable Shares for sale in any jurisdiction, use its best efforts promptly
to obtain its withdrawal;
(7) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months, beginning with the first fiscal quarter
beginning after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act; and
(8) list such securities on any securities exchange on which any stock
of HarCor is then listed, if the listing of such securities is then permitted
under the rules of such exchange;
provided, however, that notwithstanding any other provision of this Section 2,
HarCor shall not be required to maintain the effectiveness of any registration
statement for a period in excess of one hundred twenty (120) days (plus any
period during which the effectiveness of such registration has been suspended)
except that from time to time after a transfer of Registrable Shares pursuant
to a registration statement HarCor will file all reports required to be filed by
it under the Securities Act and the Exchange Act, and will take such further
action as any Holder of Registrable Shares may reasonably request, all to the
extent required to enable such Holder to sell Registrable Shares pursuant to
Rule 144 promulgated under the Securities Act (or any successor thereto). Upon
written request, HarCor will deliver to any Holder a written statement as to
whether it has complied with such requirements.
-6-
7
(e) Any registration under Section 2(a) shall be for a firmly or best
efforts underwritten public offering to be managed by an underwriter or
underwriters of recognized standing selected by the Holders participating in
such registration and reasonably acceptable to HarCor. If HarCor objects to any
such underwriter, HarCor shall promptly given written notice of its objection to
the Holders specifying in reasonable detail therein the reasons for its
objection. In connection with any offering involving an underwriting of shares
being issued by HarCor, HarCor shall not be required to include any of the
Holders' Registrable Shares in such underwriting unless the Holders accept the
terms of the underwriting as agreed upon between HarCor and the underwriters;
provided, however, that the only representations and warranties any Holder shall
be required to make in connection therewith shall be in with respect to such
Holder's ownership of the Registrable Shares to be sold by it and its ability to
convey title thereto free and clear of all liens, encumbrances or adverse
claims; provided, further, that the only indemnity any Holder shall be required
to make in connection therewith shall be to the effect of Section 4(b) hereof.
(f) The Registrable Shares proposed to be registered under any
registration statement under Section 2(b) hereof will be offered for sale at
the same public offering price as the shares of Common Stock offered for sale
by HarCor or any other selling shareholder covered thereby.
SECTION 3. EXPENSES OF REGISTRATION.
All expenses incurred in connection with a registration pursuant to
Section 2 or otherwise in which HarCor permits a Holder to participate
(excluding underwriters' discounts and commissions applicable to Registrable
Shares), including without limitation all registration and qualification fees,
printing, engineering and accounting fees, and fees and disbursements of counsel
for HarCor and fees and disbursements of one law firm selected by the Holders to
represent all the Holders, shall be borne by HarCor; provided, however, that
HarCor shall not be required to pay expenses of any registration proceeding
begun pursuant to Section 2(a) if the registration is subsequently withdrawn
(other than by reason of HarCor's failure to perform its obligations hereunder
or a material adverse change in HarCor's financial position or business), unless
the Holder agrees to forfeit his right to a demand registration under Section
2(a). If such registration is withdrawn (other than by reason of HarCor's
failure to perform its obligations hereunder of a material adverse change in
HarCor's financial position or business), the Holder shall have the option to
pay the expenses of such registration and preserve all of his rights to demand
registrations under Section 2(a).
Each Holder shall pay the underwriters' discounts and commissions
applicable to the Registrable Shares sold by such Holder. In addition, each
Holder shall pay its own costs for experts or professionals and counsel (other
than the counsel selected by the Holders to represent all the Holders) employed
by it or on its behalf in connection with the registration of Registrable
Shares. No Holder shall have the right to cause HarCor to employ any expert
or professional to act on behalf of HarCor other than any expert or
professional, such as an independent engineer or accountant, whose report or
consent is required to be included in a registration statement for the
Registrable Shares.
-7-
8
SECTION 4. INDEMNIFICATION.
(a) In the event of any registration of any Registrable Shares under
the Securities Act pursuant to this Agreement, HarCor shall indemnify and hold
harmless each Holder of such Registrable Shares, its directors and officers,
and each other person, if any, who controls such Holder within the meaning of
the Securities Act (a "Controlling Person"), against any losses, claims,
damages or liabilities, joint or several, to which such Holder or any such
director or officer or Controlling Person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any alleged untrue statement of any material fact contained,
on the effective date thereof, in any registration statement under which such
Registrable Shares were registered under the Securities Act, or in any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or (ii) any alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and shall reimburse such Holder or such director, officer or
Controlling Person for any legal or any other expenses reasonably incurred by
such Holder or such director, officer or Controlling Person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that HarCor shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any alleged untrue statement or alleged omission made in such registration
statement, preliminary prospectus, prospectus, or amendment or supplement in
reliance upon and in conformity with written information furnished to HarCor
through an instrument duly executed by such Holder specifically for use
therein. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Holder or such director, officer or
Controlling Person, and shall survive the transfer of such Registrable Shares
by such Holder.
(b) Each Holder of any Registrable Shares shall, by acceptance thereof,
indemnify and hold harmless HarCor, its directors and officers and each other
person, if any, who controls HarCor against any losses, claims, damages or
liabilities, joint or several, to which HarCor or any such director or officer
or any such person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any alleged untrue statement or omission of any material fact contained, on the
effective date thereof, in any registration statement under which securities
were registered under the Securities Act, or in any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto, or
(ii) any alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent that such alleged untrue
statement or alleged omission was contained in written information furnished to
HarCor through an instrument duly executed by such Holder specifically for use
therein, and shall reimburse HarCor or such director, officer or other person
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such loss, claim, damage, liability or action.
-8-
9
(c) Indemnification similar to that specified in paragraphs (a) and (b)
of this Section 4 shall be given by HarCor and each Holder (with such
modifications as shall be appropriate) to any underwriter with respect to any
registration or other qualification of any Registrable Shares under any Federal
or State law or regulation of governmental authority. The indemnity and expense
reimbursements obligations of HarCor and the Holders under paragraphs (a) and
(b) of this Section 4 shall be in addition to any liability HarCor and such
Holders may otherwise have.
(d) Each party entitled to indemnification under this Section 4 (the
"Indemnitee") shall give notice to the party required to provide
indemnification (the "Indemnitor") promptly after such Indemnitee has actual
knowledge of any claim as to which indemnity may be sought, provided that the
failure of any Indemnitee to give notice as provided herein shall not relieve
the Indemnitor of its obligations hereunder except to the extent that the
Indemnitor's defense of such claim is prejudiced thereby.
(e) Each Indemnitor shall have the right, subject to the provisions
hereto, to assume the defense of and to designate counsel (acceptable to the
Indemnitee) to defend any case or proceeding against the Indemnitee arising in
respect of any claim of liability for which such indemnification may be
claimed, to the end that duplication of legal expense may be minimized. After
written notice from the Indemnitor to the Indemnitee of its election to assume
the defense of such claim and litigation, the Indemnitor will not be liable to
such Indemnitee for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof other than reasonable costs
of investigation, unless the Indemnitor abandons the defense of such claim or
litigation; provided that, if the Indemnitee notifies the Indemnitor that the
former has been advised by its counsel that any single counsel in such case or
proceeding would have a conflict of interest in representing both the
Indemnitor and the Indemnitee, the Indemnitee may designate its own counsel in
such case or proceeding and, to the extent so provided above in this Section 4
shall be entitled to be reimbursed for its legal expenses reasonably incurred
in connection with defending itself in such case or proceeding.
SECTION 5. RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees that he will not sell, dispose of or otherwise
transfer any of the Registrable Shares except (i) upon registration of such
shares under the Securities Act, (ii) pursuant to Rule 144 under the Securities
Act or such comparable rules as shall from time to time be in effect, or (iii)
in a transaction exempt from the registration requirements of the Securities
Act. Each Holder agrees that HarCor may issue stop transfer instructions with
respect to the restrictions contained herein on the Registrable Shares.
(b) Each certificate presenting the Registrable Shares shall bear a
legend substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR
-9-
10
ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER
SUCH ACT, OR SUCH STATE LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO
HARCOR IS OBTAINED AT HARCOR'S EXPENSE TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED."
(c) Notwithstanding anything to the contrary set forth herein, the
restrictions imposed by this Section 5 upon the transferability of the
Registrable Shares shall cease and terminate as to any particular Registrable
Shares when such Registrable Shares shall have been effectively registered
under the Securities Act and sold by the Holder thereof in accordance with such
registration or sold under Rule 144 promulgated by the Commission. Whenever the
restrictions imposed by this Section 5 shall terminate as to any Registrable
Shares, as hereinabove provided, the Holder thereof shall be entitled to
receive from HarCor, without expense, a new certificate not bearing the
restrictive legend otherwise required to be borne thereby.
(d) In order to permit the Holders of Registrable Shares to sell the
same, if they so desire, pursuant to Rule 144 promulgated by the Commission (or
any successor to such rule), HarCor will comply with all rules and regulations
of the Commission applicable in connection with use of Rule 144 (or any
successor thereto), including the timely filing of all reports with the
Commission in order to enable such holders, if they so elect, to utilize Rule
144, and HarCor will cause any restrictive legends to be removed and any
transfer restrictions to be rescinded with respect to any sale of Registrable
Shares which is exempt from registration under the Securities Act pursuant to
Rule 144.
SECTION 6. REPORTING REQUIREMENTS.
HarCor shall:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144, at all times;
(b) File with the Commission in a timely manner all reports and other
documents required of HarCor under the Securities Act and the Exchange Act and
promptly deliver copies of all such reports and other documents to the Holders;
and
(c) Promptly deliver to the Holders copies of all financial statements
and engineering reports which HarCor or any of its subsidiaries delivers to any
bank or other lender.
SECTION 7. COVENANTS IN CONNECTION WITH FUTURE GRANTS OF REGISTRATION RIGHTS.
Except as provided in Section 2(a), from and after the date of this
Agreement, HarCor shall not enter into any agreement with any holder or
prospective holder of any
-10-
11
securities of HarCor which provides for the granting to such holder of
registration rights unless the registration rights granted under such agreement
are on a pari passu basis with, or subordinate to, the rights of Holders
hereunder or unless HarCor first obtains the Holders' of a majority of the
Registrable Shares consent to the terms thereof.
SECTION 8. TRANSFER OF REGISTRATION RIGHTS.
The registration rights of Holders under this Agreement may be assigned
and transferred to any transferee purchasing Registrable Shares, other than in
a public offering pursuant to a registration statement, in an amount equal to
at least 200,000 Registrable Shares; provided, however, that HarCor is given
written notice by the Holder at the time of such transfer stating the name and
address of the transferee and identifying the Registrable Shares with respect
to which the rights under this Agreement are being assigned.
SECTION 9. TERMINATION.
HarCor shall not be obligated to take any action to effect any
registration, qualification or compliance pursuant to this Agreement with
respect to any Holder (and such Holder only) who, at the time of such Holder's
notice pursuant to Section 2(a) or Section 2(b) may sell in an existing market
for HarCor's Common Stock all of such Holder's Registrable Shares requested to
be included in a registration in a three month period in reliance upon Rule 144
promulgated under the Securities Act or any other rule or regulation of the
Commission that may at any time permit a Holder to sell securities of a company
to the public without registration.
SECTION 10. MISCELLANEOUS.
10.1 (a) All communications under this Agreement shall be in writing
and shall be mailed by first class mail, postage prepaid, or sent by telecopy,
(1) if to any party hereto at its address or telecopy
number for notices specified beneath its name on the signature page
hereof, or at such other address or telecopy number as it may have
furnished in writing to each other party hereto or Registrable Shares.
(2) if to any other person or entity who is the registered
holder of any Registrable Shares or Warrants to the address or telecopy
number for the purpose of such holder as it appears in the stock or
warrant ledger of HarCor.
(b) Any notice shall be deemed to have been duly given (i) when
delivered by hand, if personally delivered, (ii) if sent by mail, two business
days after being deposited in the mail, postage prepaid and (iii) when sent by
telecopy so long as a duplicate of such notice is deposited in the mail, first
class postage prepaid, on the date such telecopy is sent.
-11-
12
10.2 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties
whether so expressed or not.
10.3 AMENDMENT AND WAIVER, ETC. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, but only with the
unanimous written consent of HarCor and the Holders. No failure or delay on
the part of the Holders in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to the Holders at law or in equity or otherwise. No waiver of or
consent to any departure by HarCor from any provision of this Agreement shall
be effective unless signed in writing by the Holders.
10.4 DUPLICATE ORIGINALS. Two or more duplicate originals of this
Agreement may be signed by the parties, each of which shall be an original but
all of which together shall constitute one and the same instrument.
10.5 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
10.6 GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the law of the State of Delaware.
10.7 ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement of the parties and supersedes any and all prior negotiations,
correspondence, undertakings and agreements between the parties hereto
respecting the subject matter hereof.
-12-
13
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
HARCOR ENERGY, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Xxxxxxx X. Xxxx
President and Chief Operating Officer
Address for Notices:
0000 Xxxx Xxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Chairman
Telecopy: (000) 000-0000
BAKERSFIELD ENERGY PARTNERS, L.P.
BY: BAKERSFIELD ENERGY RESOURCES,
its general partner
By: /s/ Xxxxxx X. Shore
---------------------------------
Name: Xxxxxx X. Shore
Title: Chief Executive Officer
Address for Notices:
Bakersfield Energy Resources, Inc.
0000 Xxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy: (000) 000-0000
-13-
