SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT
by and among
Xxxxxxx Exploration Company
and
GAP Coinvestment Partners II, L.P.,
Special Situations Private Equity Fund, L.P. and
Aspect Resources, L.L.C.
February 22, 2000
SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT
Recitals:
(a) This SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is dated as of February 22, 2000, by and among GAP Coinvestment
Partners II, L.P., Special Situations Private Equity Fund, L.P., and Aspect
Resources, L.L.C. (each individually, a "Buyer," and collectively, the "Buyers")
and Xxxxxxx Exploration Company, a Delaware corporation (the "Company"); and
(b) The Company desires to issue to Buyers, and Buyers desire to
purchase, shares of the Company's common stock, par value $.01 per share and
warrants affording the right to purchase shares of the Company's common stock.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, the Company and
Buyers hereby agree as follows:
ARTICLE I.
TERMS OF THE TRANSACTION
1.1 Agreement to Issue Shares. Within five (5) business days of
Closing, and on the terms and subject to the conditions set forth in this
Agreement, the Company shall have issued to each Buyer, and each Buyer
(severally) shall purchase and accept from the Company, the number of shares of
common stock of the Company (the "Common Stock") as set forth beside its name on
Schedule I (as issued to all Buyers, collectively, the "Shares"); provided,
however, that in the case of Aspect and Special Situations, the Company shall
issue each such Buyer's shares concurrent with its delivery of such Buyer's
share of the Purchase Price to the Company, which shall occur within thirty (30)
days after Closing.
1.2 Agreement to Issue Warrants . Within five (5) business days of
Closing, and on the terms and subject to the conditions set forth in this
Agreement, the Company shall issue and deliver to each Buyer the number of
warrants to purchase common stock of the Company as set forth beside its name on
Schedule I hereto (as issued to all Buyers, collectively, the "Warrants");
provided, however, that in the case of Aspect and Special Situations, the
Company shall issue such Buyer's warrants concurrent with such Buyer's delivery
of its share of the Purchase Price to the Company, which shall occur within
thirty (30) days after Closing.
1.3 Purchase Price and Payment. In consideration of the sale of the
Shares and the Warrants, contemporaneously with its receipt of its portion of
the Shares and Warrants, each Buyer shall pay to the Company, the purchase price
set forth beside its name on Schedule I, the aggregate of which shall be the
"Purchase Price", the Purchase Price per Share (the "Issuance Price") was
determined by reference to the greater of (a) $2.05, and (b) the minimum Average
Price per Share necessary to prevent triggering antidilution provisions in any
agreement in existence as of the date hereof. Each Buyer shall pay its portion
of the Purchase Price to the Company in immediately available funds by confirmed
wire transfer to a bank account to be designated by the Company. Special
Situations and Aspect shall have a period of thirty (30) days after the Closing
Date to fund their respective allocable
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shares of the Purchase Price; if Aspect fails to so timely fund its share of the
Purchase Price, Special Situations shall have no obligation to do so and this
Agreement shall automatically, unless Special Situations nonetheless voluntarily
funds its share of the Purchase Price within such 30-day period, have no further
force and effect relative to Special Situations. Nothing in this Section 1.3 or
elsewhere in this Agreement shall be construed to change or diminish Aspect's
absolute obligation to fund its share of the Purchase Price within 30 days after
the Closing Date.
1.4 Limitations. The rights and interests afforded Buyers hereunder
and/or under the Warrant Certificate are subject to any pre-existing rights of
the Company's common stock, option and warrant holders.
ARTICLE II.
CLOSING
The closing of the transactions contemplated hereby (the "Closing")
shall take place (i) at the offices of Xxxxxxx Exploration Company, 0000 Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxx 0, Xxxxx 000, Xxxxxx, Xxxxx, 00000, at 10:00 a.m., local
time, on February 22, 2000, or (ii) at such other time or place or on such other
date as the parties hereto shall agree. The date on which the Closing is
required to take place is herein referred to as the "Closing Date." All Closing
transactions shall, except as provided otherwise herein, be deemed to have
occurred simultaneously.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyers that:
3.1 Corporate Organization. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of Delaware and
has all requisite corporate power and corporate authority to own, lease, and
operate its properties and to carry on its business as now being conducted. No
actions or proceedings to dissolve the Company are pending or, to the best
knowledge of the Company, threatened.
3.2 Qualification. The Company is duly qualified or licensed to do
business as a foreign corporation and is in good standing in each of the
jurisdictions in which such qualification or licensing is required for the
conduct of its business.
3.3 Charter and Bylaws. Neither the Company nor any Subsidiary is in
violation of any provision of its charter or bylaws, other than violations
which, individually or in the aggregate, do not and will not have a Material
Adverse Effect on the Company.
3.4 Capitalization of the Company. The authorized capital stock of the
Company consists of (a) 30,000,000 shares of common stock and, after giving
effect to the transactions contemplated herein and all other issuances of
capital stock of the Company on or prior to the date hereof,
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16,712,908 shares of common stock will be issued and outstanding and 731,707
shares will be reserved for future issuance pursuant hereto, and (b) 10,000,000
shares of preferred stock, none of which are presently outstanding. Schedule III
sets forth a description of the outstanding capital stock of the Company,
including options and warrants.
3.5 Authority Relative to This Agreement. The Company has full
corporate power and corporate authority to execute, deliver, and perform this
Agreement and the Ancillary Documents (as hereinafter defined) to which it is a
party and to consummate the transactions contemplated hereby and thereby. The
execution, delivery, and performance by the Company of this Agreement and the
Ancillary Documents to which it is a party, and the consummation by it of the
transactions contemplated hereby and thereby, have been duly authorized by all
necessary corporate action of the Company. This Agreement has been duly executed
and delivered by the Company and constitutes, and each Ancillary Document
executed or to be executed by the Company has been, or when executed will be,
duly executed and delivered by the Company and constitute, or when executed and
delivered will constitute, valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except that such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (ii) equitable principles which may limit the availability
of certain equitable remedies (such as specific performance) in certain
instances.
3.6 Shares and Warrants. The Shares to be issued by the Company within
five (5) business days of Closing or, in the case of Special Situations and
Aspect, within thirty (30) days after Closing, and the Shares issuable upon
exercise of the Warrants (the "Warrant Shares") have been duly authorized for
such issuance. When issued and delivered by the Company in accordance with the
provisions of this Agreement, the Shares, the Warrants and the Warrant Shares
will be validly issued, fully paid, and nonassessable. The issuance of the
Shares, the Warrants and the Warrant Shares pursuant to this Agreement is not
subject to any preemptive or similar rights.
3.7 Approvals. Except for registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and/or the rules and
regulations of the Securities and Exchange Commission (the "Commission")
promulgated thereunder, there, no authorizations, approvals or consents of, and
no filings or registrations with, any governmental authority are necessary for
the execution, delivery or performance by the Company of this Agreement or for
the validity or enforceability thereof.
3.8 Disclosure. No representation or warranty made by the Company in
this Agreement, and no statement of the Company contained in (a) any document
filed by the Company with the Commission pursuant to the Company's reporting
obligations under the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or (b) any document, certificate, or other writing
furnished or to be furnished by the Company pursuant hereto or in connection
herewith, contains or will contain, at the time of delivery, any untrue
statement of a material fact or omits or will omit to state any material fact
necessary in order to make the statements contained therein, in light of the
circumstances under which they are made, not misleading. The Company knows of no
matter (other than matters of a general character not relating solely to the
Company or any subsidiary in any specific manner) which has not been disclosed
to Buyer pursuant
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to this Agreement which has or, so far as the Company can now reasonably
foresee, will have a Material Adverse Effect. The Company has complied in all
material respects with its obligations under the Securities Act and the Exchange
Act.
3.9 Representations and Warranties on Closing Date. The representations
and warranties made in this Article III will be true and correct in all material
respects on and as of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the Closing Date,
except that any such representations and warranties which expressly relate only
to an earlier date shall be true and correct on the Closing Date as of such
earlier date.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each Buyer, only with respect to itself, represents and warrants to the
Company that:
4.1 Organization and Formation. Each corporate Buyer is duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and corporate authority to
own, lease, and operate its properties and to carry on its business as now being
conducted. Each partnership Buyer is duly formed and is in good standing (as
applicable) under the laws of the jurisdiction of its formation. No actions or
proceedings to dissolve any Buyer are pending or, to the best knowledge of
Buyers, threatened.
4.2 Authority Relative to This Agreement. Each Buyer has full power and
authority to execute, deliver, and perform this Agreement and the Ancillary
Documents to which it is a party and to consummate the transactions contemplated
hereby and thereby. The execution, delivery, and performance by Buyers of this
Agreement and the Ancillary Documents to which they are parties, and the
consummation by them of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate or partnership action, as
applicable, of Buyers. This Agreement has been duly executed and delivered by
Buyers and constitutes, and each Ancillary Document executed or to be executed
by Buyers has been, or when executed will be, duly executed and delivered by
each Buyer and constitute, or when executed and delivered will constitute, valid
and legally binding obligations of each Buyer, enforceable against each Buyer in
accordance with their respective terms, except that such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium,
and similar laws affecting creditors' rights generally and (ii) equitable
principles which may limit the availability of certain equitable remedies (such
as specific performance) in certain instances.
4.3 Financing. Each Buyer has, and at the Closing will have, such funds
as are necessary for the consummation by it of the transactions contemplated
hereby.
4.4 Disclosure of Information. Buyers represent that they have had an
opportunity to ask questions of and receive answers from the Company regarding
the Company and its business, assets, results of operation, and financial
condition and the terms and conditions of the issuance of the Shares. Each Buyer
further represents that it has access to all filings duly made by the Company
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with the Securities and Exchange Commission.
4.5 Investment Experience. Each Buyer acknowledges that it can bear the
economic risk of its investment in the Shares, and has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in the Shares.
4.6 Restricted Securities. Each Buyer understands that the Shares will
not have been registered pursuant to the Securities Act or any applicable state
securities laws, that the Shares will be characterized as "restricted
securities" under federal securities laws, and that under such laws and
applicable regulations the Shares cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption therefrom. In this
connection, each Buyer represents that it is familiar with Rule 144 promulgated
under the Securities Act, as currently in effect, and understands the resale
limitations imposed thereby and by the Securities Act. Appropriate stop transfer
instructions may be issued to the transfer agent for securities of the Company
(or a notation may be made in the appropriate records of the Company) in
connection with the Shares.
4.7 Accredited Investor; Investment Intent. Each Buyer is an accredited
investor as defined in Regulation D under the Securities Act. Each Buyer is
acquiring its portion of the Shares for its own account for investment and not
with a view to, or for sale or other disposition in connection with, any
distribution of all or any part thereof, except in compliance with applicable
federal and state securities laws.
4.8 Representations and Warranties on Closing Date. The representations
and warranties made in this Article IV will be true and correct in all material
respects on and as of the Closing Date with the same force and effect as if such
representations and warranties had been made on and as of the Closing Date,
except that any such representations and warranties which expressly relate only
to an earlier date shall be true and correct on the Closing Date as of such
earlier date.
ARTICLE V.
ADDITIONAL AGREEMENTS
5.1 Reasonable Best Efforts. Each party hereto agrees that it will not
voluntarily undertake any course of action inconsistent with the provisions or
intent of this Agreement and will use its reasonable best efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
reasonably necessary, proper, or advisable under Applicable Laws to consummate
the transactions contemplated by this Agreement, including, without limitation,
(i) cooperation in determining whether any consents, approvals, orders,
authorizations, waivers, declarations, filings, or registrations of or with any
Governmental Entity or third party are required in connection with the
consummation of the transactions contemplated hereby; (ii) reasonable best
efforts to obtain any such consents, approvals, orders, authorizations, and
waivers and to effect any such declarations, filings, and registrations; (iii)
reasonable best efforts to cause to be lifted or rescinded any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby; (iv) reasonable best efforts
to defend, and cooperation in defending, all lawsuits or other legal proceedings
challenging this Agreement or the consummation
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of the transactions contemplated hereby; and (v) the execution of any additional
instruments necessary to consummate the transactions contemplated hereby.
5.2 Public Announcements. Except as may be required by Applicable Law
or this Section 5.2, no Buyer shall issue any press release or otherwise make
any public statement with respect to this Agreement or the transactions
contemplated hereby without the prior written consent of the other parties
(which consent shall not be unreasonably withheld). The Company shall prepare
and issue any press release or public statement required by Applicable Law.
5.3 Notice of Litigation. Until the Closing, (i) Buyers, upon learning
of the same, shall promptly notify the Company of any Proceeding which is
commenced or threatened against a Buyer and which affects this Agreement or the
transactions contemplated hereby and (ii) the Company, upon learning of the
same, shall promptly notify Buyers of any Proceeding which is commenced or
threatened against the Company and which affects this Agreement or the
transactions contemplated hereby and any Proceeding which is commenced or
threatened against the Company or any Subsidiary.
5.4 Fees and Expenses. The Company shall be responsible for the payment
of all of the Company's fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby and, except as expressly
provided otherwise in Section 9.7 hereof, the Buyers shall be responsible for
the payment of all the Buyers' fees and expenses incurred in connection with
this Agreement and the transactions contemplated hereby.
5.5 Transfer Taxes. All sales, transfer, filing, recordation,
registration, stamp, and similar Taxes and fees arising from or associated with
the sale and transfer of the Shares as contemplated hereunder shall be borne by
the Buyers.
5.6 Survival of Covenants. Except for any covenant or agreement, which
by its terms expressly terminates as of a specific date or event, the covenants
and agreements of the parties hereto contained in this Agreement shall survive
the Closing without contractual limitation.
ARTICLE VI.
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment on or prior
to the Closing Date of each of the following conditions:
6.1 Representations and Warranties True. All the representations and
warranties of Buyers contained in this Agreement, and in any agreement,
instrument, or document delivered pursuant hereto or in connection herewith on
or prior to the Closing Date, shall be true and correct in all material respects
as of the date made and (having been deemed to have been made again on and as of
the Closing Date in the same language) shall be true and correct in all material
respects on and as of the Closing Date, except as affected by transactions
permitted by this Agreement and except to the extent that any such
representation or warranty is made as of a specified date, in which case
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such representation or warranty shall have been true and correct in all material
respects as of such specified date.
6.2 Covenants and Agreements Performed. Buyers shall have performed and
complied with in all material respects all covenants and agreements required by
this Agreement to be performed or complied with by them on or prior to the
Closing Date.
6.3 Legal Proceedings. No Proceeding shall, on the Closing Date, be
pending or threatened seeking to restrain, prohibit, or obtain damages or other
relief in connection with this Agreement or the consummation of the transactions
contemplated hereby.
6.4 Consents.
(a) There shall have been obtained any and all material permits,
consents, and approvals of Governmental Entities that reasonably may be deemed
necessary so that the consummation of the transactions contemplated hereby will
be in compliance with Applicable Law, the failure to comply with which would
have a Material Adverse Effect on the Company.
(b) All consents and approvals of private persons, (i) the granting of
which is necessary for the consummation of the transactions contemplated hereby
and (ii) the non-receipt of which would have a Material Adverse Effect on the
Company, shall have been obtained.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYERS
The obligations of Buyers to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment on or prior to the Closing
Date of each of the following conditions:
7.1 Representations and Warranties True. All the representations and
warranties of the Company contained in this Agreement, and in any agreement,
instrument, or document delivered pursuant hereto or in connection herewith on
or prior to the Closing Date, shall be true and correct in all material respects
(except for such representations and warranties that are limited by materiality,
in which case they shall be true and correct in all respects) as of the date
made and (having been deemed to have been made again on and as of the Closing
Date in the same language) shall be true and correct in all material respects on
and as of the Closing Date, except as affected by transactions permitted by this
Agreement and except to the extent that any such representation or warranty is
made as of a specified date, in which case such representation or warranty shall
have been true and correct in all material respects as of such specified date.
7.2 Covenants and Agreements Performed. The Company shall have
performed and complied with in all material respects all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the Closing Date.
7.3 Legal Proceedings. No Proceeding shall, on the Closing Date, be
pending or threatened
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seeking to restrain, prohibit, or obtain damages or other relief in connection
with this Agreement or the consummation of the transactions contemplated hereby.
7.4 Ancillary Documents. Buyers shall have received the certificates,
instruments, and documents listed below (the "Ancillary Documents"):
(a) In accordance with the denominations designated in Schedule
I, stock certificates in definitive form and duly executed on behalf
of the Company, representing the portion of the Shares registered in
the name of each Buyer.
(b) In accordance with the denominations designed in Schedule I,
Warrant Certificates in substantially the form attached hereto as
Schedule II.
(c) A copy of the resolutions of the Board of Directors of the
Company authorizing the execution, delivery, and performance by the
Company of this Agreement, certified by the secretary or an assistant
secretary of the Company.
(d) Such other certificates, instruments, and documents as may be
reasonably requested by Buyers to carry out the intent and purposes of
this Agreement.
7.5 Special Conditions Precedent. As a precondition to the obligations
of Buyers, (a) the Company shall have entered, or shall have caused Xxxxxxx Oil
& Gas, L.P. ("BOG") to enter, into an Amended and Restated Credit Agreement with
its senior lenders affording the Company and/or BOG additional availability up
to, but not exceeding total availability of $15,000,000, and (b) the total
Purchase Price for all shares issued to the Buyers hereunder equals or exceeds
$4,500,000.
ARTICLE VIII.
TERMINATION, AMENDMENT, AND WAIVER
8.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing in the following
manner:
(a) by mutual written consent of the Company and Buyers; or
(b) by either the Company or Buyers, if:
(i) the Closing shall not have occurred on or before
February 23, 2000, unless such failure to close shall be due
to a breach of this Agreement by the party seeking to
terminate this Agreement pursuant to this clause (i); or
(ii) there shall be any statute, rule, or regulation that
makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited or a Governmental Entity
shall have issued an order, decree, or ruling or taken any
other action permanently restraining, enjoining, or
otherwise prohibiting
8
the consummation of the transactions contemplated hereby,
and such order, decree, ruling, or other action shall have
become final and nonappealable; or
(c) by the Company, if (i) any of the representations and
warranties of Buyers contained in this Agreement shall not be true and
correct in any respect which is material to Buyers or the ability of
Buyers to consummate the transactions contemplated hereby, or (ii)
Buyers shall have failed to fulfill in any material respect any of
their obligations under this Agreement, and, in the case of each of
clauses (i) and (ii), such misrepresentation, breach of warranty, or
failure (provided it can be cured) has not been cured within ten days
after written notice thereof from the Company to Buyers; or
(d) by Buyers, if (i) any of the representations and warranties
of the Company contained in this Agreement shall not be true and
correct in any respect which is material to the Company and the
Subsidiaries considered as a whole or the ability of the Company to
consummate the transactions contemplated hereby, or (ii) the Company
shall have failed to fulfill in any material respect any of its
obligations under this Agreement, and, in the case of each of clauses
(i) and (ii), such misrepresentation, breach of warranty, or failure
(provided it can be cured) has not been cured within ten days after
written notice thereof from Buyers to the Company.
8.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.1 by the Company, on the one hand, or Buyer, on
the other, written notice thereof shall forthwith be given to the other party
specifying the provision hereof pursuant to which such termination is made, and
this Agreement shall become void and have no effect, except that the agreements
contained in this Section and in Sections 5.2, 5.4, and 11.1 shall survive the
termination hereof. Nothing contained in this Section shall relieve any party
from liability for damages actually incurred as a result of any breach of this
Agreement.
8.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed by or on behalf of all the parties hereto.
8.4 Waiver. The Company, on the one hand, or Buyers, on the other, may:
(i) waive any inaccuracies in the representations and warranties of the other
contained herein or in any document, certificate, or writing delivered pursuant
hereto, or (ii) waive compliance by the other with any of the other's agreements
or fulfillment of any conditions to its own obligations contained herein. Any
agreement on the part of a party hereto to any such waiver shall be valid only
if set forth in an instrument in writing signed by or on behalf of such party.
No failure or delay by a party hereto in exercising any right, power, or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege.
8.5 Remedies Not Exclusive. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
The rights and remedies of any party based upon, arising out of, or otherwise in
respect of any inaccuracy in or breach of any representation, warranty,
covenant, or agreement contained in this Agreement shall in no way be
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limited by the fact that the act, omission, occurrence, or other state of facts
upon which any claim of any such inaccuracy or breach is based may also be the
subject matter of any other representation, warranty, covenant, or agreement
contained in this Agreement (or in any other agreement between the parties) as
to which there is no inaccuracy or breach.
ARTICLE IX
RESTRICTIONS ON TRANSFERABILITY; REGISTRATION RIGHTS
9.1 Transfers.
(a) General. The Shares and the Warrants shall not be transferred
before satisfaction of the conditions specified in this Article IX, which
conditions are intended to reflect the intent of the Company and Buyers and
further to ensure compliance with the provisions of the Securities Act and
applicable state securities laws. Each Buyer, by entering into this Agreement
and accepting the Shares and the Warrants, agrees to be bound by the provisions
of this Article IX.
(b) Restrictive Legend. Except as otherwise provided in this Article
IX, each certificate representing Warrants, Shares or Warrant Shares shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. SUCH
SECURITIES ARE SUBJECT TO THE RESTRICTIONS AND PRIVILEGES SPECIFIED IN
A SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT, DATED AS OF
February 22, 2000, BETWEEN XXXXXXX EXPLORATION COMPANY AND THE INITIAL
HOLDERS OF SECURITIES NAMED THEREIN, A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF XXXXXXX EXPLORATION COMPANY AND WILL BE FURNISHED
WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST, AND THE
HOLDER OF THIS CERTIFICATE AGREES TO BE BOUND THEREBY."
9.2 Registration. The Company shall utilize reasonable best efforts to,
within 90 days after the Closing Date, register on a Form S-3 (or Form S-1 or
successor form to either) Registration Statement all of the Registrable
Securities that are held by any Buyer(s) that, on or before the Closing Date,
have elected to have their Registrable Securities so registered. The Company
shall use its reasonable best efforts to keep such Registration Statement
effective until the twenty-four (24) month anniversary of such Effective Date.
9.3 Incidental Registration.
If the Company at any time proposes to file on its behalf and/or on
behalf of any of its
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security holders (the "Demanding Security Holders") a Registration Statement
under the Securities Act on any form (other than a Registration Statement (i)
filed pursuant to demand under the Company's Registration Rights Agreement with
Joint Energy Development Investments II Limited Partnership, a Delaware limited
partnership, and Enron Capital & Trade Resources Corp., a Delaware corporation,
dated August 20, 1998, as amended, or (ii) on Form S-8 or any similar or
successor form or any other registration statement relating to an offering of
securities solely to the Company's existing security holders or employees) to
register the offer and sale of its common stock for cash, it will give written
notice to all Buyers at least five (5) days before the anticipated date of
initial filing with the Commission of such Registration Statement, which notice
shall set forth the Company's intention to effect such a registration, the class
or series and number of equity securities proposed to be registered and the
intended method of disposition of the securities proposed to be registered by
the Issuer. The notice shall offer to include in such filing all of each Buyer's
Registrable Securities.
Each Buyer desiring to have Registrable Securities registered under
this Section 9.3 shall advise the Company in writing within fifteen (15) days
after the date of receipt of such offer from the Company, setting forth the
amount of such Registrable Securities for which registration is requested. The
Company shall thereupon include in such filing the number of Registrable
Securities for which registration is so requested, subject to the next sentence,
and shall use its best efforts to effect registration under the Securities Act
of such securities. If the managing underwriter of a proposed public offering
shall advise the Company in writing that, in its opinion, the distribution of
the Registrable Securities requested to be included in the registration
concurrently with the securities being registered by the Company or the
Demanding Security Holder, as the case may be, would materially and adversely
affect the distribution of such securities by the Company or such Demanding
Security Holders, as the case may be, then all selling security holders (but not
the Company or such Demanding Security Holders, as the case may be) shall reduce
the amount of securities each intended to distribute through such offering on a
pro rata basis to the greatest aggregate amount which, in the opinion of such
managing underwriter, would not materially and adversely affect the distribution
of such securities.
Nothing in this Section 9.3 shall preclude the Company from
discontinuing the registration of its securities being effected on its behalf
under this Section 9.3 at any time prior to the effective date of the
registration relating thereto. Notwithstanding any provision herein, the rights
of the Buyers under this Section 9.3 are subject to the express limitations
contained in registration rights agreements (and registration rights provisions
in agreements) in effect on the date hereof between the Company and other
parties.
9.4 Requests for Registration. Each Buyer agrees that it will not sell,
transfer or otherwise dispose of any Registrable Securities in whole or part,
except pursuant to an effective Registration Statement under the Securities Act
or an exemption from registration thereunder. Each certificate, if any,
evidencing such Registrable Securities issued upon such transfer shall bear the
restrictive legend set forth in Section 9.1, and each Warrant Certificate issued
upon such transfer shall bear the restrictive legend set forth in Section 9.1 of
this Agreement, unless in the opinion of the transferee's or Buyer's reputable
counsel delivered to the Company in connection with such transfer, such legend
is not required in order to ensure compliance with the Securities Act.
11
9.5 Registration Procedures. In its efforts to effect registration of
the Registrable Securities pursuant to Section 9.2 or 9.3, above, the Company
will, as expeditiously as possible:
(a) furnish to the selling security holders such number of copies or a
summary prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as such selling security holders may reasonably request;
(b) use its best efforts to register or qualify the securities covered
by such Registration Statement under such other securities or blue sky laws of
such jurisdictions within the United States as each holder of such securities
shall request (provided, however, the Company shall not be obligated to qualify
as a foreign corporation to do business under the laws of any jurisdiction in
which it is not then qualified or to file any general consent to service or
process), and do such other reasonable acts and things as may be requited of it
to enable such holder to consummate the disposition in such jurisdiction of the
securities covered by such Registration Statement;
(c) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Shares; and
(d) 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, but not later than 18 months after the
effective date of the Registration Statement, an earnings statement covering the
period of at least 12 months beginning with the first full month after the
effective date of such Registration Statement, which earnings statements shall
satisfy the provisions of Section 11(a) of the Securities Act.
It shall be a condition precedent to the obligation of the company to
take any action pursuant to this Article IX in respect of the Registrable
Securities which are to be registered at the request of any Buyer that such
Buyer shall refurnish to the Company such information regarding the Registrable
Securities held by such Buyer and the intended method of disposition thereof as
the Company shall reasonably request and as shall be required in connection with
the action taken by the Company.
9.6 Rights of Others.
(a) The Company and any party to any existing agreements with the
Company who are entitled to piggy-back registration rights ("Other Holders")
with respect to a Registration Statement filed pursuant to Section 9.2 or 9.3
may include securities of the Company in such Registration Statement.
(b) Notwithstanding any provision herein, the rights of the Buyers
under this Article IX are subject to the express limitations contained in
registration rights agreements (and registration rights provisions in
agreements) in effect on the date hereof between the Company and other parties.
9.7 Expenses. All registration and filing fees (including those
incident to filing with the
12
NASD), incurred in complying with this Article IX (all of such fees shall be
collectively referred to herein as "Registration Expenses"), shall be paid by
the Company; provided, however, the Company shall not be responsible for any
attorneys' fees or discount or commission or cost reimbursement to any
underwriter in respect of the securities sold by such Buyer, or any other
expenses incurred by Buyers in relation to this Agreement, except as set forth
in this Section 9.7.
9.8 Liquidated Damages. The parties hereto agree that, without
limitation of any other remedies that may be available to Buyers, upon the
failure of the Company to register the shares of Registrable Securities that are
held by Buyers that have elected on or before the Closing Date to have their
Registrable Securities registered, within 180 days of the Closing Date, the
Buyers that have so elected to have their Registrable Securities registered
shall each be entitled to liquidated damages from the Company in an amount equal
to 1% per month of the Purchase Price paid by such Buyer, with the total
liquidated damages payable by the Company to all Buyers together not to exceed
$100,000. The parties agree that the liquidated damages set forth herein are
reasonable and not a penalty because of the difficulty of ascertaining the
actual damages that would be sustained by the Buyers in the event of such a
material breach of this Agreement by the Company.
ARTICLE X.
MISCELLANEOUS
10.1 Notices. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by any party hereto shall be
in writing and shall be deemed to have been duly given or made if (i) delivered
personally, (ii) transmitted by first class registered or certified mail,
postage prepaid, return receipt requested, (iii) sent by prepaid overnight
courier service, or (iv) sent by telecopy or facsimile transmission, answer back
requested, to the parties at the following addresses (or at such other addresses
as shall be specified by the parties by like notice):
If to: GAP Coinvestment Partners II, L.P.
c/o General Atlantic Service Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Mr. Xxxxx Xxxxxxxx
Telefax: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Telefax: (000) 000-0000
If to: Special Situations Private Equity Fund
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Telefax: (000) 000-0000
13
If to: Aspect Resources, L.L.C.
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxxxxx
Telefax: (000) 000-0000
If to the Company:
Xxxxxxx Exploration Company
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxxx, XX 00000
Attention: Chief Financial Officer
Telefax: (000) 000-0000
Such notices, requests, demands, and other communications shall be effective (i)
if delivered personally or sent by courier service, upon actual receipt by the
intended recipient, (ii) if mailed, upon the earlier of five days after deposit
in the mail or the date of delivery as shown by the return receipt therefor, or
(iii) if sent by telecopy or facsimile transmission, when the answer back is
received.
10.2 Entire Agreement. This Agreement, together with the Schedules,
Exhibits, Annexes, and other writings referred to herein or delivered pursuant
hereto, constitute the entire agreement between the parties hereto with respect
to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
10.3 Binding Effect; Assignment; No Third Party Benefit. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors, and permitted assigns.
Except as otherwise expressly provided in this Agreement, neither this Agreement
nor any of the rights, interests, or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties. Nothing in this Agreement, express or implied, is intended to or shall
confer upon any person other than the parties hereto, and their respective
heirs, legal representatives, successors, and permitted assigns, any rights,
benefits, or remedies of any nature whatsoever under or by reason of this
Agreement.
10.4 Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by Applicable Law.
14
10.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
10.6 Counterparts. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all, the parties hereto.
10.7 Consent to Jurisdiction
(a) The parties hereto hereby irrevocably submit to the jurisdiction of
the courts of the State of Texas and the federal courts of the United States of
America located in Dallas, Texas, and appropriate appellate courts therefrom,
over any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby, and each party hereby irrevocably agrees that
all claims in respect of such dispute or proceeding may be heard and determined
in such courts.
(b) Each of the parties hereto hereby consents to process being served
by any party to this Agreement in any suit, action, or proceeding of the nature
specified in subsection (a) above by the mailing of a copy thereof in the manner
specified by the provisions of Section 10.1.
10.8 Liability of Buyers. The liability of each Buyer with respect to
the agreements, covenants, representations and warranties of Buyers contained in
this Agreement or in any certificate, instrument, or document delivered pursuant
hereto shall be to the extent such agreements, covenants, representations or
warranties applies to himself, herself, or itself and not with respect to any
other Buyer.
10.9 Consent to Certain Stock Issuances. By its execution hereof, each
Buyer hereby consents to the issuance of Common Stock upon exercise of warrants
and options to purchase Common Stock outstanding as of the date hereof.
10.10 Loss or Mutilation. Upon receipt by the Company from any Buyer of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of a certificate representing Shares and indemnity
reasonably satisfactory to it (it being understood that the written agreement of
the Buyer or an Affiliate thereof shall be sufficient indemnity) and in case of
mutilation upon surrender and cancellation hereof or thereof, the Company will
execute and deliver in lieu hereof or thereof a new stock certificate, of like
tenor to such Buyer, provided, in the case of mutilation, no indemnity shall be
required if the certificate representing Shares in identifiable form is
surrendered to the Company for cancellation.
15
ARTICLE XI.
DEFINITIONS
11.1 Certain Defined Terms. As used in this Agreement, each of the
following terms has the meaning given it below:
"Affiliate" means, with respect to any person, any other person
that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
person. For the purposes of this definition, "control" when used with
respect to any person means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting
securities, by contract, or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Applicable Law" means any statute, law, rule, or regulation or
any judgment, order, writ, injunction, or decree of any Governmental
Entity to which a specified person or property is subject.
"Code" means the Internal Revenue Code of 1986, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Entity" means any court or tribunal in any
jurisdiction (domestic or foreign) or any federal, state, municipal,
or other governmental body, agency, authority, department, commission,
board, bureau, or instrumentality (domestic or foreign), as well as
the New York Stock Exchange, The NASDAQ Stock Market, and any exchange
upon which the Common Stock is listed from time to time.
"Material Adverse Effect" means any change, development, or
effect (individually or in the aggregate) which is, or is reasonably
likely to be, materially adverse (i) to the business, assets, results
of operations or condition (financial or otherwise) of a party, or
(ii) to the ability of a party to perform on a timely basis any
material obligation under this Agreement or any agreement, instrument,
or document entered into or delivered in connection herewith.
16
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, enterprise,
unincorporated organization, or Governmental Entity.
"Proceedings" means all proceedings, actions, claims, suits,
investigations, and inquiries by or before any arbitrator or
Governmental Entity.
"Registrable Securities" means the Shares, the Warrant Shares and
any shares issued upon exercise of the Warrants.
"Securities Act" means the Securities Act of 1933, as amended.
"Taxes" means any income taxes or similar assessments or any
sales, excise, occupation, use, ad valorem, property, production,
severance, transportation, employment, payroll, franchise, or other
tax imposed by any United States federal, state, or local (or any
foreign or provincial) taxing authority, including any interest,
penalties, or additions attributable thereto.
IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
THE COMPANY:
XXXXXXX EXPLORATION COMPANY
By: /s/ Xxx X. Xxxxxxx
---------------------------
Name: Xxx X. Xxxxxxx
---------------------------
Title: President and CEO
---------------------------
BUYERS:
GAP COINVESTMENT PARTNERS II, L.P.
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
---------------------------
Title: General Partner
---------------------------
17
SPECIAL SITUATIONS PRIVATE
EQUITY FUND, L.P.
By: /s/ Xxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxx
---------------------------
Title: MD
---------------------------
ASPECT RESOURCES, L.L.C.
By its Manager, Aspect Management
Corporation
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxxx
---------------------------
Title: Vice President
---------------------------
18
Schedule I
Shares of Purchase
Buyers Warrants Common Stock Price
---------------------------------------------------------------------------------------
GAP Coinvestment Partners II, L.P. 325,203 975,610 $2,005,691.56
---------------------------------------------------------------------------------------
Special Situations Private Equity Fund, L.P. 243,902 731,707 $1,504,267.65
---------------------------------------------------------------------------------------
Aspect Resources, L.L.C. 162,602 487,805 $1,002,845.79
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Total 731,707 2,195,122 $4,512,805.00
---------------------------------------------------------------------------------------
