EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 21, 1999
BY AND AMONG
INLAND HOLDINGS LLC,
TCW PORTFOLIO NO. 1555 DR V SUB-CUSTODY PARTNERSHIP, L.P.
AND
INLAND RESOURCES INC.,
JOINT ENERGY DEVELOPMENT INVESTMENTS II
LIMITED PARTNERSHIP,
AND
XXXXX MANAGEMENT LLC
PENGO SECURITIES CORPORATION
XXXXX ENERGY PARTNERSHIP
and their affiliates
TABLE OF CONTENTS
Page
Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 2. Demand Registration Rights. . . . . . . . . . . . . . . . . . .2
Section 3. Shelf Registration. . . . . . . . . . . . . . . . . . . . . . .3
Section 4. Piggy-back Registration . . . . . . . . . . . . . . . . . . . .3
Section 5. Restrictions on Dispositions and Demand Registrations . . . . .5
Section 6. Registration Procedures.. . . . . . . . . . . . . . . . . . . .5
Section 7. Registration Expenses . . . . . . . . . . . . . . . . . . . . .9
Section 8. Indemnification; Contribution . . . . . . . . . . . . . . . . .9
Section 9. Rule 144. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 10. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 11. Binding Effect; Transferees; Termination. . . . . . . . . . . 11
Section 12. Amendments and Waivers. . . . . . . . . . . . . . . . . . . . 12
Section 13. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 14. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 15. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 16. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 17. Severability. . . . . . . . . . . . . . . . . . . . . . . . . 12
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and
entered into as of the 21st day of September, 1999, by and between Inland
Resources Inc., a Washington corporation (the "Company"), Inland Holdings
LLC, a California limited liability company ("HOLDINGS"), TCW Portfolio No.
1555 DR V Sub-Custody Partnership, L.P., a California limited partnership
("Portfolio"), Joint Energy Development Investments II Limited Partnership, a
Delaware limited partnership ("JEDI" together with HOLDINGS, the
"PURCHASERS") and Pengo Securities Corporation ("PENGO"), Xxxxx Energy
Partnership ("SEP"), Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx Xxxxxxx
Xxxxx, Xxxx X. Xxxxx and Xxxxxx X. Xxxxxx (collectively, the "XXXXX
INDIVIDUALS") (Pengo, SEP, and the Xxxxx Individuals, together with any of
their respective affiliates, the "XXXXX GROUP").
This Agreement is being entered into in connection with the
Exchange Agreement dated as of September 21, 1999 (the "EXCHANGE AGREEMENT"),
between the Company, the Purchasers and certain other parties (such
transaction being the "EXCHANGE TRANSACTION"). To induce either of the
Purchasers to enter into the Exchange Agreement and the Xxxxx Group to
participate in the Exchange Transaction, the Company has agreed to provide
the registration and other rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the closing under the
Exchange Agreement.
The parties hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the
following terms have the meanings indicated:
"COMMISSION" means the Securities and Exchange Commission or any
similar agency having jurisdiction to enforce the Securities Act.
"COMMON STOCK" means the common stock, par value $.001 per share,
of the Company.
"DEMAND REGISTRATION" has the meaning ascribed to such term in
Section 2(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or governmental or political subdivision, agency or instrumentality thereof
or other entity or organization of any kind.
"PIGGY-BACK REGISTRATION" has the meaning ascribed to such term in
Section 4.
"PURCHASER ADJUSTMENT OPTIONS" has the meaning ascribed to such
term in the Exchange Agreement.
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"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.
"REGISTRABLE COMMON STOCK" means, collectively, (a) the shares of
Common Stock issued to JEDI and Holdings pursuant to the Exchange Agreement,
(b) the shares of Common Stock acquirable upon the conversion of the Series Z
Preferred Stock issued to Holdings pursuant to the Exchange Agreement, (c)
the shares of Common Stock issuable upon exercise of any of the Purchaser
Adjustment Options, (d) the shares of Common Stock held by the Xxxxx Group as
of the date hereof and (e) any shares of Common Stock or other securities
issued with respect to the Common Stock described in clauses (a), (b), (c)
and (d) of this definition whether by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation, share exchange, reorganization or otherwise held by Holdings,
JEDI or the Xxxxx Group; provided, however, such Common Stock or other
securities shall cease to be Registrable Common Stock when (i) a registration
statement with respect to the disposition of such Common Stock or other
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with the plan of
distribution set forth in such registration statement, (ii) such Common
Stock or other securities shall have been sold pursuant to Rule 144 (or any
successor provision) under the Securities Act, (iii) such Common Stock or
other securities shall have ceased to be outstanding or (vi) such Common
Stock or other securities may be sold pursuant to Rule 144 (or a successor
provision) under the Securities Act without being restricted by the volume
limitations or method of sale restrictions thereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SERIES Z PREFERRED STOCK" means the Series Z Convertible Preferred
Stock of the Company, par value $.001 per share.
"SHELF REGISTRATION STATEMENT" has the meaning ascribed to such
term in Section 2(a).
Section 2. Demand Registration Rights.
(a) RIGHT TO DEMAND REGISTRATION. Subject to Section 2(b) and
Section 5 hereof, any holder of Registrable Common Stock may make a written
request to the Company for registration with the Commission under and in
accordance with the provisions of the Securities Act of the disposition of
all or part of the Registrable Common Stock (a "DEMAND REGISTRATION"). All
requests made pursuant to this Section 2(a) will specify the aggregate amount
of Registrable Common Stock to be registered, will specify the intended
methods of disposition thereof and will specify whether the registration
statement to be filed is a "shelf" registration statement ("'SHELF
REGISTRATION STATEMENT") pursuant to Rule 415 under the Securities Act (or
any similar rule that may be adopted by the Commission). If any holder
intends to dispose of any of the Registrable Common Stock pursuant to an
underwritten offering, the holder will have the right to select the
underwriter. No securities other than Registrable Common Stock may be
registered in connection with a Demand Registration without the consent of
the holders of a majority of the outstanding Registrable Common Stock whose
shares are subject to such Demand Registration.
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(b) NUMBER OF DEMAND REGISTRATIONS; EFFECTIVE REGISTRATION;
EXPENSES. So long as (i) Holdings holds Registrable Common Stock, it (and its
transferees), shall be entitled to initiate and have effected an aggregate of
three (3) Demand Registrations; (ii) JEDI holds Registrable Common Stock, it
(and its transferees) shall be entitled to initiate and have effected two (2)
Demand Registrations; and (iii) the Xxxxx Group holds Registrable Common
Stock, it (and its transferees) shall be entitled to initiate and have
effected one (1) Demand Registration. The Company shall pay all Registration
Expenses of all such Demand Registrations in accordance with Section 7
hereof. The Company shall not be deemed to have effected a Demand
Registration unless and until (i) the Company has filed a registration
statement with the Commission and (ii) the registration statement has been
declared effective by the Commission.
(c) GRANT OF NEW REGISTRATION RIGHTS. From and after the date of
this Agreement and until this Agreement is terminated, the Company shall not
grant any registration rights to any person that could adversely affect the
rights of either of the Purchasers hereunder or are inconsistent with the
rights of either of the Purchasers hereunder without the prior written
consent of such Purchasers; provided, however, that the granting of
piggy-back registration rights that are not superior to the registration
rights granted under SECTION 4 hereof with respect to cut-backs or reductions
required by underwriters shall not, in and of itself, be deemed to adversely
affect the rights of either of the Purchasers or be inconsistent with such
rights.
(d) TERMINATION OF PRIOR REGISTRATION RIGHTS. By entering into
this Agreement JEDI, Portfolio and each of the members of the Xxxxx Group, on
behalf of themselves and their affiliates, expressly consents to and
acknowledges that any registration right(s) related to any securities of the
Company held prior to the date hereof by it is/are terminated as of the date
hereof.
Section 3. SHELF REGISTRATION. The Company will, as soon as
possible following a written request pursuant to Section 2(a) for the
registration of Registrable Common Stock by means of a Shelf Registration
Statement, file a shelf registration statement on Form S-3 covering the
Registrable Common Stock and thereafter shall use its best efforts to cause
the Shelf Registration Statement to be declared effective as soon as
practicable following such filing and to take any and all reasonable action
within the Company's control, subject to and in accordance with Section 5, as
may be necessary or appropriate to maintain such effectiveness until such
time as neither any holder nor any of their assignees own any Registrable
Common Stock; provided however that the Company shall not be required to
maintain the effectiveness of any such Shelf Registration Statement for
longer than (a) one hundred and twenty days (120) from the effective date of
such registration statement for a Demand Registration initiated by the Xxxxx
Group; and (b) two years from the effective date of such registration
statement for a Demand Registration initiated by either of the Purchasers.
Section 4. PIGGY-BACK REGISTRATION. (a) If the Company
proposes to file a registration statement under the Securities Act with
respect to an offering by the Company for its own account or for the account
of others (the "INITIATING SHAREHOLDERS") of any class of security (other
than pursuant to a registration statement on Forms S-4 or S-8 (or successor
forms) or in connection with an exchange offer or an offering of securities
solely to the Company's existing stockholders), including a Demand
Registration Statement or a Shelf Registration Statement, then the Company
shall in each case give written notice of such proposed filing to the holders
of Registrable Common Stock (which notice shall indicate, to the extent then
known, the proposed
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managing underwriter or underwriters, if such offering is to be underwritten,
and such other terms of the proposed offering that the Company reasonably
believes to be material to the holders of Registrable Common Stock) and shall
include in such registration statement all or a portion of the Registrable
Common Stock owned by such holders which such holders shall request to be so
included by written notice given by such holders to the Company within 10
business days after such holder's receipt of such notice from the Company (a
"PIGGY-BACK REGISTRATION"). The Company shall use its best efforts to effect
the registration of all Registrable Common Stock requested to be so
registered in such offering on the same terms and conditions as any similar
securities of the Company included therein. If the managing underwriter or
underwriters of an underwritten offering, if any, advise the holders of
Registrable Common Stock in writing that in its or their reasonable opinion
or, in the case of a Piggyback Registration not being underwritten, the
Company shall reasonably determine (and notify the holders of Registrable
Common Stock of such determination), after consultation with an investment
banker of nationally recognized standing, that the number of shares of Common
Stock or other securities proposed to be sold in such registration will
adversely affect the success of such offering, the Company will include in
such registration the number of securities, if any, which, in the opinion of
such underwriter or underwriters, or the Company, as the case may be, can be
sold as follows: (A) if such registration was initiated by the Company, (i)
FIRST, the shares the Company proposed to sell, (ii) SECOND, the Registrable
Common Stock and other shares of Common Stock requested to be included in
such registration by the holders thereof entitled to participate in such
registration under this Agreement or under any registration rights agreement
in effect on the date hereof and (iii) THIRD, the Common Stock requested to
be included in such registration by the holders thereof entitled to
participate in such registration under a registration rights agreement
effective after the date hereof and (B) if such registration was initiated as
the result of the exercise of a demand registration right of holders of
Common Stock (i) FIRST, the shares of Common Stock requested to be included
in such registration by the demanding holders pro rata among those requesting
such registration on the basis of the number of shares of Common Stock
requested to be included), (ii) SECOND, shares to be issued and sold by the
Company and shares held by Persons other than the demanding holders and
requested to be included in such registration either pursuant to this
Agreement or pursuant to any registration rights agreement in effect on the
date hereof and (iii) THIRD, the Common Stock requested to be included in
such registration by the holders thereof entitled to participate in such
registration under registration rights agreements effective after the date
hereof. To the extent that the privilege of including Registrable Common
Stock or other shares of Common Stock in any Piggyback Registration must be
allocated among the holders thereof pursuant to clause (A)(ii) or (B)(ii)
above, the allocation shall be made pro rata based on the number of shares of
Common Stock that each such participant shall have requested to include
therein and to the extent that the privilege of including Common Stock in any
Piggyback Registration must be allocated among the holders thereof pursuant
to clause (A)(iii) or (B)(iii) above, the allocation shall be made pro rata
based on the number of shares of Common Stock that each shall such
participant shall have requested to include therein.
(b) The holders of Registrable Common Stock to be distributed by
such underwriters shall be parties to the underwriting agreement between the
Company and such underwriters. The representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of the holders of
Registrable Common Stock to be distributed by such underwriters, and the
conditions precedent to the obligations of such holders of Registrable Common
Stock under such underwriting
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agreement shall be reasonably satisfactory to such holders. Such holders
shall not be required to make any representations or warranties to the
Company or its underwriters other than representations or warranties
regarding such holder, such holder's interest in the shares to be distributed
and such holder's intended method of distribution. The Company shall have
the right to discontinue any piggy-back registration under this Section 4 at
any time prior to the effective date of such registration if the registration
of the securities giving rise to such registration under this Section 4 is
discontinued by the Company, but no such discontinuation shall preclude an
immediate or subsequent request by the holders of Registrable Common Stock
for registration pursuant to Section 2 hereof if otherwise permitted.
Section 5. RESTRICTIONS ON DISPOSITIONS AND DEMAND
REGISTRATIONS. Notwithstanding anything to the contrary contained herein, the
Company shall not be obligated to prepare and file any registration statement
pursuant to a Demand Registration or prepare or file any amendment or
supplement thereto and may suspend, by giving written notice to the holders
of Registrable Common Stock, such holders' rights to make dispositions of
Registrable Common Stock pursuant to a Shelf Registration Statement, at any
time when the Company reasonably believes that the filing thereof at the time
requested, or the offering or sale of securities pursuant thereto, would
materially adversely affect a pending or proposed public offering of the
Company's securities, or an acquisition, merger, recapitalization,
consolidation, reorganization or similar transaction or negotiations,
discussions or pending proposals with respect thereto. The rights of holders
of Registrable Common Stock to make dispositions thereof pursuant to a Shelf
Registration Statement may similarly be suspended by the Company upon written
notice to the holders of Registrable Common Stock that the Shelf Registration
Statement is unusable as a result of an event requiring a post-effective
amendment or supplement, which has not yet been filed, and will remain
unusable until the supplement is filed or post-effective amendment is filed
and declared effective. The filing of a registration statement, or any
amendment or supplement thereto, by the Company cannot be deferred, and the
holders' rights to dispose of Registrable Common Stock pursuant to a Shelf
Registration Statement cannot be suspended for more than 90 days, may not be
so deferred or suspended more than 180 days during any twelve month period
unless such deferral or suspension is agreed to in writing by the holders of
Registrable Common Stock subject to such suspension or deferral and, with
respect to suspended dispositions, the Company shall be obligated to maintain
the effectiveness of the applicable registration statement for an additional
period of time equal to the period of suspension(s).
Section 6. REGISTRATION PROCEDURES.
(a) CERTAIN COMPANY OBLIGATIONS. Whenever Registrable Common Stock
is to be registered pursuant to Sections 2 or 3 of this Agreement, the
Company will use reasonable diligence to effect the registration of such
Registrable Common Stock in accordance with the intended method of
disposition thereof as quickly as practicable, and in connection with any
such request and with the Piggy-back Registration or Demand Registration, the
Company will as expeditiously as possible:
(i) prepare and file with the Commission a registration
statement which includes the Registrable Common Stock and use its best
efforts to cause such registration statement to become effective (which
registration statement, in the case of a Demand Registration, shall in all
events be filed with the Commission within 60
5
days after the Company's receipt of the Demand Registration, subject to
the limitations set forth in Section 5); provided that before filing a
registration statement or prospectus or any amendments or supplements
thereto, the Company will furnish to the holders of the Registrable Common
Stock covered by such registration statement and the underwriters, if any,
draft copies of all such documents proposed to be filed at least five (5)
business days prior thereto, which documents will be subject to the
reasonable review of such holders and underwriters, and provided further
that if such registration statement refers to any holder of Registrable
Common Stock by name or otherwise as the holder of any securities of the
Company, then such holder shall have the right to require (i) the insertion
therein of language, in form and substance satisfactory to such holder, to
the effect that the holding by such holder of such securities does not
necessarily make such holder a "controlling person" of the Company within
the meaning of the Securities Act and is not to be construed as a
recommendation by such holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such
holder will assist in meeting any future financial requirements of the
Company, or (ii) in the event that such reference to such holder by name or
otherwise is not required by the Securities Act or any rules and
regulations promulgated thereunder, the deletion of the reference to such
holder;
(ii) prepare and file as soon as reasonably practicable with the
Commission such amendments and post-effective amendments to the
registration statement as may be necessary to keep the registration
statement effective for the period of time specified in Section 3 with
respect to the Shelf Registration Statement and otherwise for 90 days (or
such shorter period which will terminate when all Registrable Common Stock
covered by such registration statement has been sold or withdrawn); cause
the prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all securities covered
by such registration statement during the applicable period in accordance
with the intended methods of disposition by the holders thereof set forth
in such registration statement or supplement to the prospectus;
(iii) furnish to any holder of Registrable Common Stock included
in such registration statement and to the managing underwriter or
underwriters, if any, without charge, at least one signed copy of the
registration statement and any post-effective amendment thereto, upon
request, and such number of conformed copies thereof and such number of
copies of the prospectus (including each preliminary prospectus) and any
amendments or supplements thereto, and any documents incorporated by
reference therein, as such holder or underwriter may reasonably request in
order to facilitate the disposition of the Registrable Common Stock being
sold by such holder;
(iv) notify in writing each holder of Registrable Common Stock
included in such registration statement, at any time when a prospectus
relating-thereto is required to be delivered under the Securities Act, when
the Company
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becomes aware of the happening of any event as a result of which the
prospectus included in such registration statement (as then in effect)
contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein (in the case of
the prospectus or any preliminary prospectus, in light of the circumstances
under which they were made) not misleading and, as promptly as practicable
thereafter, prepare and file with the Commission and furnish a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Common Stock, such prospectus will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(v) use reasonable diligence to cause all Registrable Common
Stock included in such registration statement to be listed, by the date of
the first sale of Registrable Common Stock pursuant to such registration
statement, on each securities exchange on which the Common Stock of the
Company is then listed or proposed to be listed, if any, and use reasonable
diligence to cause all Registrable Common Stock included in such
Registration Statement to be quoted on The Nasdaq Stock Market (or other
national or small-cap market), if the Common Stock of the Company is then
quoted thereon;
(vi) make generally available to its security holders an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act
as soon as practicable, which earnings statement shall cover the requisite
12-month period, which requirements will be deemed to be satisfied if the
Company timely files complete and accurate information on Forms 10-Q, 10-K
and 8-K under the Exchange Act and otherwise complies with Rule 158 under
the Act as soon as feasible;
(vii) if requested by the managing underwriter or underwriters or
any holder of Registrable Common Stock covered by the registration
statement, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter or
underwriters or such holder reasonably requests to be included therein,
including, without limitation, with respect to the Registrable Common Stock
being sold by such holder to such underwriter or underwriters, the purchase
price being paid therefor by such underwriter or underwriters and with
respect to any other terms of the underwritten offering of the Registrable
Common Stock to be sold in such offering, and promptly make all required
filings of such prospectus supplement or post-effective amendment;
(viii) on or prior to the date on which the registration statement
is declared effective, use reasonable diligence to register or qualify, and
cooperate with the holders of Registrable Common Stock included in such
registration statement, the underwriter or underwriters, if any, and their
counsel, in connection with the registration or qualification of the
Registrable Common Stock covered by the registration statement for offer
and sale under the securities or blue sky laws of each state and other
jurisdiction of the United States as any such holder or underwriter
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reasonably requests in writing, to use reasonable diligence to keep each
such registration or qualification effective, including through new
filings, or amendments or renewals, during the period such registration
statement is required to be kept effective and to do any and all other acts
or things necessary or advisable to enable the disposition in all such
jurisdictions of the Registrable Common Stock covered by the applicable
registration statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then
so qualified or to take any action which would subject it to general
service of process in any such jurisdiction where it is not then so
subject;
(ix) cooperate with the holders of Registrable Common Stock
covered by the registration statement and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing securities
to be sold under the registration statement, and enable such securities to
be in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or such holders may request;
(x) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other actions
as the holders of the Registrable Common Stock being sold or the
underwriters retained by holders participating in an underwritten public
offering, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Common Stock;
(xi) make available for inspection by the holders, by any
underwriter participating in any disposition to be effected pursuant to
such registration statement and by any attorney, accountant or other agent
retained by the holders or any such underwriter, all pertinent financial
and other records, pertinent corporate documents and properties of the
Company, and cause all of the Company's officers, directors and employees
to supply all information, reasonably requested by the holders or any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement. In that connection, the Company may require the
holders, such underwriter and such other persons to conduct their
investigation in a manner which does not disrupt the operations of the
Company and to execute such confidentiality agreements as the Company may
reasonably determine to be advisable; and
(xii) notify each holder of Registrable Common Stock of any stop
order issued or threatened by the Commission in connection with any
registration statement covering Registrable Common Stock and take all
reasonable actions required to prevent the entry of such stop order or to
remove it if entered.
(b) CERTAIN OBLIGATIONS OF HOLDERS OF REGISTRABLE COMMON STOCK.
Each holder of Registrable Common Stock shall provide the Company in writing
such information as the Company reasonably requests in order to effectuate the
registration and disposition of such holder's Registrable Common Stock pursuant
to this Agreement and such holder shall execute all consents, powers of
attorney, registration statements and other documents reasonably required to be
signed
8
by such holder in order to effectuate the registration or disposition of
Registrable Common Stock by such holder.
Section 7. REGISTRATION EXPENSES. The Company shall pay all
expenses incident to the Company's performance of or compliance with its
obligations hereunder, including, without limitation, all registration,
filing and National Association of Securities Dealers, Inc. fees, all fees
and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery
expenses, and the reasonable fees and disbursements of the Company's
independent public accountants, of the Company's counsel and of one law firm
acting as counsel to the holders requesting registration of all or a portion
of their Registrable Common Stock . Holders of Registrable Common Stock
requesting registration will be responsible for any other expenses incurred
by them, including for their own accountants and representatives, as well as
any underwriting discounts and commissions on the sale of the Registrable
Common Stock.
Section 8. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each holder of Registrable Common Stock, its
officers, directors, partners and members (and officers and directors of such
partners and members) and each person who controls such holder (within the
meaning of the Securities Act) against all losses, claims, damages or
liabilities arising out of or based upon any untrue or alleged untrue
statement of material fact contained in any registration statement
registering the disposition of Registrable Common Stock, any amendment or
supplement thereto, any prospectus or preliminary prospectus or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same arise out of or are based upon, any such untrue statement
or omission based upon information furnished in writing to the Company by
such indemnified person expressly for use therein and will reimburse, as
incurred, such holder, officer, director, partner or controlling person for
any legal or other expenses incurred by such holder, officer, director,
partner or controlling person in connection with investigating, defending or
appearing as a third party witness in connection with any such loss, claim,
damage, or liability. In connection with an underwritten offering, the
Company will indemnify, and reimburse for expenses, the underwriters thereof,
their officers and directors and each person who controls such underwriters
(within the meaning of the Securities Act) to the same extent as provided
above with respect to holders of Registrable Common Stock.
(b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE COMMON STOCK.
In connection with any registration statement in which a holder of
Registrable Common Stock is participating, such holder will furnish to the
Company in writing such information with respect to the name and address of
such holder and the amount of Registrable Common Stock held by such holder
and such other information as the Company shall reasonably request, for use
in connection with any such registration statement or prospectus and agrees
to indemnify the Company, its directors and officers, any underwriter (within
the meaning of the Securities Act) for the Company or other persons selling
securities pursuant to such registration statement, and each person who
controls the Company, against any losses, claims, damages, liabilities and
expenses resulting from any untrue statement of a material fact or any
omission of a material fact required to be stated in the registration
statement or prospectus or any amendment thereof or supplement thereto or
necessary
9
to make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in any
information with respect to such holder so furnished in writing by such
holder expressly for inclusion in any prospectus or registration statement.
In no event shall the liability of any selling holder of Registrable Common
Stock hereunder be greater in amount than the dollar amount of the proceeds
received by such holder upon the sale of the Registrable Common Stock giving
rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person
entitled to indemnification hereunder agrees to give prompt written notice to
the indemnifying party after the receipt by such person of any written notice
of the commencement of any action, suit, proceeding or investigation or
threat thereof made in writing as to which such person will claim
indemnification or contribution pursuant to this Agreement and, unless in the
reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and the indemnifying party with respect
to such claim, permit the indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to such indemnified party. The
failure to notify the indemnifying party promptly of such commencement or
threat shall not relieve the indemnifying party of its obligation to
indemnify the indemnified party, except to the extent that the indemnifying
party is actually prejudiced by such failure. Whether or not such defense is
assumed by the indemnifying party, the indemnifying party will not be subject
to any liability for any settlement made without its consent (but such
consent will not be unreasonably withheld). No indemnifying party will
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in
respect of such claim or litigation. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel for the
indemnified party or parties with respect to such claim, unless in the
reasonable judgment of any indemnified party an actual conflict of interest
exists between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnified party
shall be obligated to pay the fees and expenses of such additional counsel or
counsels.
(d) CONTRIBUTION. If the indemnification provided for in
this Section 8 from the indemnifying party is unavailable to an indemnified
party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified parties
in connection with the actions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact, has been made by, or related to information
supplied by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such action. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall
be deemed to include, subject to the limitations set forth in Section 8(b),
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
10
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 8(d), no
underwriter shall be required to contribute any amount in excess of the
amount by which the underwriting discount applicable to the Registrable
Common Stock purchased by it and distributed to the public exceeds the amount
of any damages which such underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, and no selling holder shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable Common
Stock of such selling holder was offered to the public exceeds the amount of
any damages which such selling holder has otherwise been required to pay by
reason of such untrue statement or omission. 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.
The obligations of the Company pursuant to this Section 8 shall be
further subject to such additional express agreements of the Company as may
be required to facilitate an underwritten offering, provided that no such
agreement shall in any way limit the rights of the holders of Registrable
Common Stock under this Agreement, or create additional obligations of such
holders not set forth herein, except as otherwise expressly agreed in writing
by any such holders. The obligations of the Company pursuant to this Section
8 shall be in addition to any liability or obligation the Company may have at
common law or otherwise.
Section 9. RULE 144. The Company covenants that for so long as
any Holder owns any Registrable Common Stock that it will file, in a timely
manner, the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the Commission
thereunder, and it will take such further action as any holder of Registrable
Common Stock may reasonably request, all to the extent required from time to
time to enable such holder to sell Registrable Common Stock without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any holder of Registrable
Common Stock, the Company will deliver to such holder a written statement as
to whether it has complied with such requirements.
Section 10. REMEDIES. Each holder of Registrable Common Stock
in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific 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 a
breach by it of the provisions of this Agreement and hereby agrees to waive
the defense in any action for specific performance that a remedy at law would
be adequate.
Section 11. BINDING EFFECT; TRANSFEREES; TERMINATION. Except to
the extent otherwise provided herein, the provisions of this Agreement shall
be binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns. A
transferee of Registrable Common Stock, which acquires such securities from a
holder of Registrable Common Stock in a transfer, whether in a public
distribution or otherwise, which results in such transferred securities not
being Registrable Common Stock in the hands of such
11
transferee, shall not be a holder of Registrable Common Stock hereunder and
shall not have any rights or obligations hereunder as a result of such
transfer of Registrable Common Stock. Except as provided in the preceding
sentence, a transferee of a holder of Registrable Common Stock, whether
becoming such by sale, transfer, assignment, operation of law or otherwise,
shall be deemed to be a holder of Registrable Common Stock hereunder and such
transferee shall be entitled to the rights, and subject to the obligations,
of such a holder hereunder. This Agreement shall terminate at such time as
there are no outstanding shares of Registrable Common Stock.
Section 12. AMENDMENTS AND WAIVERS. Except as otherwise
provided herein, the provisions of this Agreement may not be amended,
modified or supplemented without the written agreement of each of the
Company, Holdings, JEDI and the Xxxxx Group; provided, however, at such time
as any of Holdings, JEDI or any member of the Xxxxx Group no longer holds
Registrable Common Stock, this Agreement (other than Section 8) may be
amended, modified or supplemented without consent of the party no longer
holding Registrable Common Stock.
Section 13. NOTICES. All communications under this Agreement
shall be in writing and shall be effective (a) upon hand delivery or delivery
by telecopy or facsimile, if delivered on a business day during normal
business hours where such notice is to be received or the first business day
following such delivery if delivered other than on a business day during
normal business hours where such notice is to be received or (b) on the
second business day following the date of mailing by first class mail,
postage prepaid or by express courier service, fully prepaid, or upon actual
receipt of such mailing, whichever shall first occur:
(i) if to a holder of Registrable Common Stock at the most
current address given by such holder to the Company in writing;
(ii) if to the Company at its address set forth in the Exchange
Agreement.
Section 14. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
Section 15. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 16. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
Section 17. SEVERABILITY. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be in any way impaired thereby, it being intended that all of the rights
and privileges of the parties hereto shall be enforceable to the fullest
extent permitted by law.
[REMAINDER OF PAGE LEFT BLANK]
12
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
INLAND RESOURCES INC.,
a Washington corporation
By:
--------------------------------------
Xxxx X. Xxxxxx
Co-Chief Executive Officer
INLAND HOLDINGS LLC, a California limited
liability company,
By: TRUST COMPANY OF THE WEST, a California trust
company, as Sub-Custodian for Mellon Bank for
the benefit of Account No. CPFF 873-3032,
Member
By:
----------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
By:
----------------------------------
Xxxx XxxXxxxx
Senior Vice President
By: TCW PORTFOLIO NO. 1555 DR V SUB-CUSTODY
PARTNERSHIP, L.P., a California limited
partnership, Member
By: TCW ROYALTY COMPANY V, a California
corporation, Managing General Partner
By:
--------------------------------------
Xxxxxx X. Xxxxxxxx
Vice President
TCW PORTFOLIO NO. 1555 DR V SUB-CUSTODY
PARTNERSHIP, L.P.,
a California limited partnership
By: TCW ROYALTY COMPANY V,
a California corporation,
as Managing General Partner
By:
----------------------------------
Xxxxxx X. Xxxxxxxx
Vice President
JOINT ENERGY DEVELOPMENT
INVESTMENTS II LIMITED PARTNERSHIP, a Delaware
limited partnership
By: Enron Capital Management II Limited
Partnership, its General Partner
By: Enron Capital II Corp., its General Partner
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
PENGO SECURITIES CORP., a Delaware corporation
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
XXXXX ENERGY PARTNERSHIP, a New York general
partnership
By: Xxxxx Management LLC,
a New York limited liability company,
its General Partner
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
------------------------------------------
XXXXXXX X. XXXXX, an individual
------------------------------------------
XXXXXXX X. XXXXX, an individual
------------------------------------------
XXXXXXX XXXXXXX XXXXX, an individual
------------------------------------------
XXXX X. XXXXX, an individual
------------------------------------------
XXXXXX X. XXXXXX, an individual
