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EXHIBIT 4.8
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made
and entered into as of this 4th day of May, 1998, by and among Texoil, Inc., a
Nevada corporation (the "COMPANY"), Energy Capital Investment Company PLC, an
English investment company ("ENERGY PLC"), and EnCap Equity 1996 Limited
Partnership, a Texas limited partnership ("ENCAP LP").
RECITALS:
A. Reference is herein made to that certain Acquisition and
Distribution Agreement dated as of even date herewith (the "A&D AGREEMENT") by
and among the Company, Cliffwood Oil & Gas Corp., a Texas corporation ("COGC"),
and Cliffwood Acquisition - 1996 Limited Partnership, a Texas limited
partnership (the "PARTNERSHIP").
B. Energy PLC and EnCap LP are limited partners in the
Partnership. Under the terms of the documents governing the Partnership, the
Limited Partners are required to consent to the execution, delivery and
performance by the Partnership of the A&D Agreement. The Company acknowledges
and agrees that the shares of Common Stock (as defined herein) to be issued by
the Company to the Partnership under the A&D Agreement will be immediately
distributed to the Limited Partners by the Partnership. Under the A&D
Agreement, the Company has also agreed to issue shares of Common Stock to
Energy PLC and EnCap LP in exchange for certain stock purchase warrants held by
Energy PLC and EnCap LP entitling them to purchase shares of common stock in
COGC, a wholly-owned subsidiary of the Company. In order to induce Energy PLC
and EnCap LP to consent to the execution, delivery and performance by the
Partnership of the A&D Agreement and to exchange the abovementioned stock
purchase warrants (and recognizing that Energy PLC and EnCap LP would not be
willing to grant such consent and exchange such stock purchase warrants in the
absence of this Agreement), the Company has agreed to provide Energy PLC and
EnCap LP with the registration rights set forth herein.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the foregoing Recitals and
the mutual covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby
agree as follows:
SECTION 1. DEFINITIONS AND REFERENCES.
(a) When used in this Agreement, the following terms shall have
the respective meanings assigned to them in this Section 1 or in the sections,
subsections or other subdivisions referred to below:
"A&D AGREEMENT" shall have the meaning assigned to such term in
Paragraph A of the Recitals hereto.
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"AGREEMENT" shall mean this Agreement, as hereafter changed, modified
or amended in accordance with the terms hereof.
"CLOSING DATE" shall have the meaning assigned to it in the A&D
Agreement.
"COMMISSION" shall mean the Securities and Exchange Commission (or any
successor body thereto).
"COMMON STOCK" shall mean the common stock of the Company, $.01 par
value per share.
"COMPANY" shall have the meaning assigned to it in the introductory
paragraph hereof.
"ENCAP LP" shall have the meaning assigned to it in the introductory
paragraph hereof.
"ENERGY PLC" shall have the meaning assigned to it in the introductory
paragraph hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and all rules and regulations promulgated under such Act.
"HOLDER" shall mean any Person that holds Registrable Securities.
"HOLDER INDEMNIFIED PARTIES" shall have the meaning assigned to it in
Section 9(a).
"PERSON" shall mean any individual, corporation, partnership, joint
venture, limited partnership, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"REGISTRABLE SECURITIES" shall mean (i) the shares of Common Stock
issued pursuant to the A&D Agreement (which, for purposes hereof, shall mean
the Closing Shares, as defined in the A&D Agreement, and the shares of Common
Stock issued and delivered by the Company pursuant to Section 6.3(f) of the A&D
Agreement) and (ii) any securities issued or issuable with respect to the
shares described in clause (i) above by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.
"REGISTRATION EXPENSES" shall mean all expenses incident to the
Company's performance of or compliance with the registration rights granted
hereunder, including (without limitation) all registration and filing fees,
fees and expenses of compliance with securities and blue sky laws, printing and
engraving expenses, messenger, telephone and delivery expenses, and fees and
disbursements of counsel for the Company, fees and expenses
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of the Company's independent certified public accountants, fees and expenses of
underwriters (excluding discounts and commissions), and the fees and
disbursements of one counsel to the selling Holders; provided, that
Registration Expenses shall not include any Selling Expenses.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and all rules and regulations under such Act.
"SELLING EXPENSES" shall mean underwriting discounts or commissions,
any selling commissions and stock transfer taxes attributable to sales of
Registrable Securities.
(b) All references in this Agreement to sections, subsections and
other subdivisions refer to corresponding sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any of such subdivisions are for convenience only
and shall not constitute part of such subdivisions and shall be disregarded in
construing the language contained herein. The words "this Agreement", "this
instrument", "herein", "hereof", "hereby", "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. Words in the singular form shall be construed to
include the plural and vice versa, unless the context otherwise requires.
Pronouns in masculine, feminine and neuter genders shall be construed to
include any other gender.
SECTION 2. SHELF REGISTRATION. The Company will use its best efforts
to prepare and file with the Commission promptly after the Closing Date and in
any event no later than 30 days after the Closing Date a shelf registration
statement on Form S-3 or other appropriate form pursuant to Rule 415 of the
Securities Act covering the sale by the Holders of all of the Registrable
Securities. The Company shall use its best efforts to cause the registration
statement to be declared effective as promptly as possible after the Closing
Date and to keep such registration statement effective until the Holders have
disposed of all of the Registrable Securities. The Holders agree to furnish to
the Company such information regarding the distribution of the Registrable
Securities covered by the registration statement filed under this Section as
the Company may from time to time reasonably request in writing and such other
information as may be legally required in connection with such registration
statement.
SECTION 3. AGREEMENT OF HOLDERS REGARDING THE DISPOSITION OF THE
REGISTRABLE SECURITIES. In connection with the disposition of the
Registrable Securities by the Holders, the Holders hereby agree with the
Company that, as of each date specified below, the percentage amount of the
Registrable Securities disposed of by them pursuant to the registration
statement filed under Section 2 will not exceed the percentage amount set forth
opposite such date:
Date Cumulative Percentage Amount
---- ----------------------------
June 30, 1998 20%
September 30, 1998 40%
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December 31, 1998 60%
March 31, 1999 80%
June 30, 1999 100%
SECTION 4. REGISTRATION PROCEDURES.
(a) In connection with a registration statement filed pursuant to
Section 2, the Company will:
(i) at least seven days prior to filing the registration
statement or prospectus or any amendments or supplements thereto,
furnish copies of all such documents proposed to be filed to any
holder of Registrable Securities covered by such registration
statement;
(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 as provided in Rule 415 of the Securities Act and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement;
(iii) notify the Holders promptly after the Company shall
receive notice thereof of the time when such registration statement
has been filed and becomes effective;
(iv) furnish to each Holder such number of copies of such
registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including, without
limitation, each preliminary prospectus) and such other documents as
such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder;
(v) use its reasonable best efforts to register or
qualify such Registrable Securities under such other securities or
blue sky laws of such jurisdictions within the United States as any
seller of Registrable Securities reasonably requests and do any and
all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller
(provided that the Company will not be required to qualify generally
to do business or subject itself to any general service of process in
any jurisdiction where it is otherwise not then so subject);
(vi) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the
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happening of any event which requires the making of any change in the
prospectus included in such registration statement so that such
document will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and, at the
request of any such seller, the Company will prepare a supplement or
amendment to such prospectus so that such prospectus will not contain
an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading;
(vii) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange or
exchanges, automated quotation system or over-the-counter market upon
which securities of the Company of the same class are then listed;
(viii) enter into such customary agreements (including,
without limitation, underwriting agreements in customary form,
substance and scope) and take all such other action as the Holders of
a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(ix) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission;
(x) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any
order suspending or preventing the use of any related prospectus or
suspending the qualification of any common stock included in such
registration statement for sale in any jurisdiction, the Company will
use its reasonable best efforts promptly to obtain the withdrawal of
such order;
(xi) use its reasonable best efforts to cause such
Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the sellers thereof to
consummate the disposition of such Registrable Securities; and
(xii) use its reasonable best efforts to obtain a comfort
letter from the Company's public accountants in customary form and
covering such matters of the type customarily covered by comfort
letters with respect to offerings of the type being made pursuant to
the registration statement as the Holders of the Registrable
Securities reasonably request.
(b) Each Holder of Registrable Securities will be deemed to have
agreed as follows:
(i) upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(a)(vi), the
Holders of Registrable Securities covered by such registration
statement will forthwith discontinue disposition of any
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such Registrable Securities until the Holders of Registrable
Securities receive copies of the supplemented or amended prospectus
contemplated by Section 4(a)(vi), or until they are advised in writing
by the Company that the use of the applicable prospectus may be
resumed, and they have received copies of any additional or
supplemental filings that are incorporated or deemed to be
incorporated by reference in such prospectus (it being the agreement
of the parties hereto, however, that the obligation of the Company
with respect to maintaining the subject registration statement current
and effective shall be extended by a period of days equal to the
period the Holders of Registrable Securities are required by this
Section 4(b)(i) to discontinue disposition of such Registrable
Securities); and
(ii) furnish to the Company such information regarding
each Holder, the Registrable Securities held by such Holder and the
intended method of disposition thereof as the Company shall reasonably
request and as shall be reasonably required in connection with the
preparation of the applicable registration statement and other actions
taken by the Company under this Agreement, and it shall be a condition
precedent to the obligation of the Company to take any action pursuant
to this Agreement in respect of the Registrable Securities that such
information has been furnished to the Company by the Holders of
Registrable Securities.
SECTION 5. EXPENSES OF REGISTRATION. The Company shall pay all
Registration Expenses in connection with the registration effected pursuant to
Section 2 and, in any event, shall pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal and accounting duties), the expense of any annual audit and
the fees and expenses incurred in connection with the listing of the securities
to be registered on each securities exchange on which similar securities issued
by the Company are then listed. All Selling Expenses incurred in connection
with a registration effected pursuant to the terms hereof shall be borne by the
seller or sellers of Registrable Securities pro rata based upon the number of
Registrable Securities included in such registration or as otherwise agreed by
such sellers.
SECTION 6. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless, with respect to
any registration statement filed by it, to the full extent permitted by law,
each Holder of Registrable Securities covered by such registration statement,
and each other Person, if any, who controls such Holder within the meaning of
Section 15 of the Securities Act (collectively, "HOLDER INDEMNIFIED PARTIES")
against all losses, claims, damages, liabilities and expenses, joint or several
to which any such Holder Indemnified Party may become subject under the
Securities Act, the Exchange Act, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement in which such Registrable Securities
were included as contemplated hereby or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein
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not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary prospectus,
together with the documents incorporated by reference therein (as amended or
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto), or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or (iii) any violation by the Company of any
federal, state or common law rule or regulation applicable to the Company and
relating to action of or inaction by the Company in connection with any such
registration; and in each such case, the Company shall reimburse each such
Holder Indemnified Party for any reasonable legal or other expenses incurred by
any of them in connection with investigating or defending any such loss, claim,
damage, liability, expense, action or proceeding; provided, however, that the
Company shall not be liable to any such Holder Indemnified Party in any such
case to the extent, that any such loss, claim, damage, liability or expense (or
action or proceeding, whether commenced or threatened, in respect thereof)
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement or
amendment thereof or supplement thereto or in any such preliminary, final or
summary prospectus in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any such Holder Indemnified Party
for use in the preparation thereof. Such indemnity and reimbursement of
expenses and other obligations shall remain in full force and effect regardless
of any investigation made by or on behalf of the Holder Indemnified Parties and
shall survive the transfer of such securities by such Holder Indemnified
Parties.
(b) Each Holder of Registrable Securities participating in any
registration hereunder shall severally (and not jointly or jointly and
severally) indemnify and hold harmless, to the fullest extent permitted by law,
the Company, its directors, officers, employees and agents, and each Person who
controls the Company (within the meaning of Section 15 of the Securities Act)
(collectively, "COMPANY INDEMNIFIED PARTIES") against all losses, claims,
damages, liabilities and expenses to which any Company Indemnified Party may
become subject under the Securities Act, the Exchange Act, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement in which
such Holder's Registrable Securities were included or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading to the extent in the cases described in clauses (i) and (ii), that
such untrue statement or omission was furnished in writing by such Holder for
use in the preparation thereof, or (iii) any violation by such Holder of any
federal, state or common law
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rule or regulation applicable to such Holder and relating to action of or
inaction by such Holder in connection with any such registration; and in each
such case, such Holder shall reimburse each such Company Indemnified Party for
any reasonable legal or other expenses incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability,
expense, action or proceeding. Such indemnity obligation shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Company Indemnified Parties (except as provided above) and shall survive the
transfer of such securities by such Holder.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) of written notice of the commencement of any action,
suit, proceeding, investigation or threat thereof made in writing with respect
to which a claim for indemnification may be made pursuant to this Section 6,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the indemnifying party of
the threat or commencement thereof; provided, however, that the failure to so
notify the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. If any such claim
or action referred to under subsection (a) or (b) is brought against any
indemnified party and it then notifies the indemnifying party of the threat or
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other indemnifying
party similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense of any
such claim or action, the indemnifying party shall not be liable to such
indemnified party under this Section 6 for any legal expenses of counsel or any
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation unless
the indemnifying party has failed to assume the defense of such claim or action
or to employ counsel reasonably satisfactory to such indemnified party. Under
no circumstances will the indemnifying party be obligated to pay the fees and
expenses of more than one law firm for all indemnified parties. The
indemnifying party shall not be required to indemnify the indemnified party
with respect to any amounts paid in settlement of any action, proceeding or
investigation entered into without the written consent of the indemnifying
party, which consent shall not be unreasonably withheld. No indemnifying party
shall consent to the entry of any judgment or enter into any settlement without
the consent of the indemnified party unless (i) such judgment or settlement
does not impose any obligation or liability upon the indemnified party other
than the execution, delivery or approval thereof, and (ii) such judgment or
settlement includes as an unconditional term thereof the giving by the claimant
or plaintiff to such indemnified party of a full release and discharge from all
liability in respect of such claim for all persons that may be entitled to or
obligated to provide indemnification or contribution under this Section 6.
(d) Indemnification similar to that specified in the preceding
subsections of this Section 6 (with appropriate modifications) shall be given
by the Company and each seller of Registrable Securities with respect to any
required registration or qualification of securities under any state securities
or blue sky laws.
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(e) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b), then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions or proceedings in respect
thereof) referred to in subsection (a) or (b) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party on the other in connection with the statements,
omissions, actions or inactions which resulted in such losses, claims, damages,
liabilities or expenses as well as any other relevant equitable considerations.
The relative 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 the indemnified party, any action or inaction by any such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement, omission, action or inaction. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses (or actions or proceedings in respect thereof)
pursuant to this subsection (e) shall be deemed to include, without limitation,
any reasonable legal or other expenses incurred by such indemnified party in
connection with investigating or defending any such action or claim (which
shall be limited as provided in subsection (c) if the indemnifying party has
assumed the defense of any such action in accordance with the provisions
thereof) which is the subject of this subsection (e). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Promptly after receipt by an
indemnified party under this subsection (e) of written notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing with respect to which a claim for contribution may be made
against an indemnifying party under this subsection (e), such indemnified party
shall, if a claim for contribution in respect thereof is to be made against an
indemnifying party, give written notice to the indemnifying party in writing of
the commencement thereof (if the notice specified in subsection (c) has not
been given with respect to such action); provided, however, that the failure to
so notify the indemnifying party shall not relieve it from any obligation to
provide contribution which it may have to any indemnified party under this
subsection (e) except to the extent that the indemnifying party is actually
prejudiced by the failure to give notice.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or by any other method of allocation which does not take account the equitable
considerations referred to in the immediately preceding paragraph.
If indemnification is available under this Section 6, the indemnifying
parties shall indemnify each indemnified party to the fullest extent provided
in subsections (a) and (b), without regard to the relative fault of said
indemnifying party or any other equitable consideration provided for in this
subsection. The provisions of this subsection shall be in addition to any
other rights to indemnification or contribution which any indemnified party may
have pursuant to law or contract, shall remain in full force and effect
regardless of any
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investigation made by or on behalf of any indemnified party, and shall survive
the transfer of securities by any such party.
(f) In connection with any underwritten offering contemplated by
this Agreement which includes Registrable Securities, the Company and all
sellers of Registrable Securities included in any registration statement shall
agree to customary provisions for indemnification and contribution (consistent
with the other provisions of this Section 6) in respect of losses, claims,
damages, liabilities and expenses of the underwriters of such offering.
SECTION 7. SELECTION OF UNDERWRITERS. If a registration
effected pursuant to Section 2 is an underwritten offering or a best efforts
underwritten offering, the investment bankers or investment bankers and manager
or managers that will administer the offering shall be selected by the Holders
of a majority of the Registrable Securities to be registered in such
registration; provided, however, that such investment bankers and managers must
be reasonably satisfactory to the Company.
SECTION 8. RULE 144. The Company covenants to each Holder that,
to the extent that the Company shall be required to do so under the Exchange
Act, the Company shall (a) timely file the reports required to be filed by it
under the Exchange Act or the Securities Act (including, but not limited to,
the reports under Section 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) (1) of Rule 144 adopted by the Commission under the Securities
Act) and the rules and regulations adopted by the Commission thereunder, and
(b) take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitations
of the exemption provided by Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such requirements. Each Holder agrees that if such Holder is able to sell
Registrable Securities without registration pursuant to an exemption under Rule
144, such Holder shall use reasonable efforts to attempt to do so, giving due
consideration to the quantity of Registrable Securities such Holder desires to
sell.
SECTION 9. MISCELLANEOUS.
(a) From and after the date of this Agreement, the Company will
not, without the prior written consent of the Holders of a majority of the
number of Registrable Securities then outstanding, enter into any agreement
with respect to its securities which is inconsistent with or violates the
rights granted to the Holders of Registrable Securities in this Agreement.
Without limiting the foregoing, the Company also specifically agrees that
during the period commencing on the date hereof and ending when the Holders
have disposed of all of their Registrable Securities, the Company will not
enter into an agreement with a third party pertaining to the registration by
the Company of such third party's Common Stock on terms more favorable to the
third party than those afforded to the Holders hereunder (including, without
limitation, Section 3). The Company represents and warrants to Energy PLC and
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EnCap LP that, as of the date hereof, the Company is not a party to any
agreement with a third party pertaining to the registration by the Company of
such third party's Common Stock other than those listed in Exhibit 9(a)
attached hereto (which Exhibit also sets forth the principal terms of each such
agreement and which agreements are, in this subsection (a), called an "EXISTING
AGREEMENT"). The Company covenants and agrees with the Holders of Registrable
Securities that if a party to an existing agreement is permitted under the
terms thereof to dispose or otherwise transfer all or a portion of its Common
Stock on a basis more favorable than that accorded the Holders under Section 3,
the Company will consent to an amendment to this Agreement reasonably proposed
by the Holders that would permit the Holders to dispose or transfer of their
Registrable Securities on the same basis as such third party and/or shall
otherwise take all reasonable actions as are reasonably requested by the
Holders so as to accord the Holders with the right to dispose or transfer of
their Registrable Securities on the same basis as such third party.
(b) Energy PLC and EnCap LP agree, and each other Holder of
Registrable Securities (including Registrable Securities in any registration
statement filed pursuant to this Agreement) will be deemed to have agreed that
if any Registrable Securities are being registered in any registration pursuant
to this Agreement, the Holder thereof will comply with all anti-stabilization,
manipulation and similar provisions of Section 10 of the Exchange Act, as
amended, and any rules promulgated thereunder by the Commission and, at the
request of the Company, will execute and deliver to the Company and to any
underwriter participating in such offering, an appropriate agreement to such
effect.
(c) All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by the internal law, and not
the law of conflicts, of the State of Texas.
(d) All covenants and agreements 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. In addition, the
rights and obligations under this Agreement shall automatically be transferred
to and binding on any transferee or assignee of the Registrable Securities;
provided, that (i) the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the Registrable Securities with respect to which
such registration rights are being transferred or assigned, (ii) such
transferee or assignee agrees in writing to be bound by and subject to the
terms and conditions of this Agreement, (iii) the transfer and assignment of
the subject Registrable Securities is in compliance with the Securities Act and
applicable state securities laws or an exemption from the registration
requirements of the Securities Act and applicable state securities laws, and
(iv) such assignment of rights and obligations under this Agreement shall be
effective only if immediately following such transfer the further disposition
of such Registrable Securities by the transferee or assignee is restricted
under the Securities Act.
(e) This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter herein contained. There are
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no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein, with respect to the registration rights granted by
the Company to the Holders of the Registrable Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(f) All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or
sent by reputable express courier service (charges prepaid), or mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid, or sent by telefax, to the parties at the following address (or to
such other address or to the attention of such other person as the recipient
party has specified by prior like notice to the sending party):
If to the Company:
Texoil, Inc.
000 Xxxxxxx Xxxxxxx Xx.
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000)000-0000
Attention: Xxxxx X. Xxxxxxxxx
If to Energy PLC or EnCap LP:
c/o EnCap Investments L.C.
0000 Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Managing Director
(g) 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.
(h) 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.
(i) Each Holder of Registrable Securities, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific
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13
performance of its rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of breach by it of the provisions of this Agreement and hereby agrees to
waive (to the extent permitted by law) the defense in any action for specific
performance that a remedy of law would be adequate.
(j) In any action or proceeding brought to enforce any provision
of this Agreement, or where any provision hereof is validly asserted as a
defense, the successful party shall be entitled to recover reasonable
attorneys' fees in addition to any other available remedy.
(k) The Company agrees to remove any legends on certificates
representing Registrable Securities describing transfer restrictions applicable
to such securities upon the sale of such securities (i) pursuant to an
effective Registration Statement under the Securities Act or (ii) in accordance
with the provisions of Rule 144 under the Securities Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TEXOIL, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
ENERGY CAPITAL INVESTMENT
COMPANY PLC
By: /s/ Xxxx X. Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director
ENCAP EQUITY 1996 LIMITED
PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
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