Registration Rights Agreement
This Registration Rights Agreement (the
"Agreement")
is made and entered into as of September 2, 2008 (the "Closing
Date") by and among ABC Funding, Inc., a Nevada corporation (the "Company")
and Voyager Gas Holdings, L.P., a Texas limited partnership (the “Shareholder”)
and CIT
Capital USA Inc., a Delaware corporation (“CIT”).
R e c i t a l s:
A. Pursuant
to the Stock Purchase and Sale Agreement, dated as of May 22, 2008, by and among
the Company, the Shareholder and Voyager Gas Corporation, as amended (the "Stock Purchase
Agreement"), the Shareholder has acquired from the Company 10,000 shares
of Series D preferred stock, par value $0.001, per share (as defined below),
convertible into 17,500,000 shares of common stock, par value $0.001 per
share.
B. Pursuant
to the Warrant dated as of September 2, 2008, CIT acquired a warrant exercisable
for 24,199,996 shares of Common
Stock.
C. The
Company and the Holders desire to set forth the registration rights to be
granted by the Company to the Holders.
Now, Therefore, in consideration of the
mutual promises, representations, warranties, covenants, and conditions set
forth herein, the parties mutually agree as follows:
A g r e e m
e n t:
1. Certain
Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Blackout Period"
means, with respect to a registration, a period in each case commencing on the
day immediately after the Company notifies the Holders that the Holders are
required, pursuant to Section 4(f), to suspend offers and sales of Registrable
Securities during which the Company, in the good faith judgment of its Board of
Directors, determines (because of the existence of, or in anticipation of, any
acquisition, financing activity, or other transaction involving the Company, or
the unavailability for reasons beyond the Company's control of any required
financial statements, disclosure of information which is in its best interest
not to publicly disclose, or any other event or condition of similar
significance to the Company) that the registration and distribution of the
Registrable Securities to be covered by such registration statement, if any,
would be seriously detrimental to the Company and its shareholders and ending on
the earlier of (1) the date upon which the material non-public information
commencing the Blackout Period is disclosed to the public or ceases to be
material and (2) such time as the Company notifies the selling Holders that the
Company will no longer delay such filing of the Registration Statement,
recommence taking steps to make such Registration Statement effective, or allow
sales pursuant to such Registration Statement to resume; provided, however, that (a)
the Company shall limit its use of Blackout Periods, in the aggregate, to 60
Trading Days in any 12-month period, (b) no Blackout Period may commence sooner
than 60 days after the end of a prior Blackout Period; (c) there may be no more
than three Blackout Periods in a year and (d) a Blackout Period shall not apply
to the Holders unless it also applies to the Company, its officers and directors
and all other shareholders of the Company and all other holders of registration
rights with respect to any securities of the Company.
"Business Day" means
any day of the year, other than a Saturday, Sunday, or other day on which the
Commission is required or authorized to close.
“CIT Holders” means
CIT
Capital USA, Inc. and any and all successors and Permitted Assignees of
the CIT Holders, who acquire rights in accordance with this Agreement with
respect to the Registrable Securities directly or indirectly from VGH Holders,
including from any Permitted Assignee.
"Closing Date" shall
have the same meaning as under the Stock Purchase Agreement.
"Commission" means the
Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.
"Common Stock" means
the common stock, $.001 par value per share, of the Company and any and all
shares of capital stock or other Equity Securities of: (i) the Company which are
added to or exchanged or substituted for the Common Stock by reason of the
declaration of any stock dividend or stock split, the issuance of any
distribution or the reclassification, readjustment, recapitalization, or other
such modification of the capital structure of the Company; and (ii) any other
corporation, now or hereafter organized under the laws of any state or other
governmental authority, with which the Company is merged, which results from any
consolidation or reorganization to which the Company is a party, or to which is
sold all or substantially all of the shares or assets of the Company, if
immediately after such merger, consolidation, reorganization, or sale, the
Company or the stockholders of the Company own Equity Securities having in the
aggregate more than 50% of the total voting power of such other
corporation.
"Equity Securities"
means (i) any Common Stock, (ii) any security convertible, with or
without consideration, into any Common Stock (including the Preferred Stock or
any option to purchase any convertible security), (iii) any security
carrying any warrant or right to subscribe to or purchase any Common Stock
including the Warrant, or (iv) any such warrant or right.
"Exchange Act" means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder.
"Family Member" means
(a) with respect to any individual, such individual's spouse, any descendants
(whether natural or adopted), any trust all of the beneficial interests of which
are owned by any of such individuals or by any of such individuals together with
any organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, the estate of any such individual, and any corporation,
association, partnership, or limited liability company all of the equity
interests of which are owned by those above described individuals, trusts, or
organizations and (b) with respect to any trust, the owners of the beneficial
interests of such trust.
"Form S-1" means a
registration statement on Form S-1 or such other forms of registration statement
under the Securities Act as in effect on the date of the filing of a
registration statement hereunder.
“Holders” means,
collectively, the VGH Holders and the CIT Holders.”
"Inspector" means any
attorney, accountant, or other agent retained by a Holder for the purposes
provided in Section 4(j).
“Liquidated Damages”
means monetary damages as calculated in accordance with Section 3(c)(2)
hereof.
"Permitted Assignee"
means (a) with respect to a partnership, its partners or former partners,
(b) with respect to a corporation, its shareholders in accordance with
their interest in the corporation, (c) with respect to a limited liability
company, its members or former members, (d) with respect to an individual
party, any Family Member of such party, (e) an entity that is controlled by,
controls, or is under common control with a transferor, or (f) a party to this
Agreement.
"Preferred Stock"
means the Series D Preferred Stock, $.001 par value per share, of the Company,
and any and all shares of capital stock or other Equity Securities of: (i) the
Company which are added to or exchanged or substituted for the Preferred Stock
by reason of the declaration of any stock dividend or stock split, the issuance
of any distribution or the reclassification, readjustment, recapitalization, or
other such modification of the capital structure of the Company; and (ii) any
other corporation, now or hereafter organized under the laws of any state or
other governmental authority, with which the Company is merged, which results
from any consolidation or reorganization to which the Company is a party, or to
which is sold all or substantially all of the shares or assets of the Company,
if immediately after such merger, consolidation, reorganization, or sale, the
Company or the stockholders of the Company own Equity Securities having in the
aggregate more than 50% of the total voting power of such other
corporation.
“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 the effectiveness of such registration statement.
"Registrable
Securities" means (i) the Common Stock or the Preferred Stock, whichever
has been issued to the VGH Holders pursuant to the Stock Purchase Agreement and
which the VGH Holders hold at the time of the filing of the Registration
Statement, and if shares of Preferred Stock have been issued to the VGH Holders
pursuant to the Stock Purchase Agreement, the term “Registrable Securities”
shall also include all shares issued on account of the Preferred Stock,
including without limitation, by virtue of conversion, exchange, or
distribution, and (ii) all Warrant Shares (assuming on the date of determination
the Warrants are exercised in full without regard to any exercise limitations
therein), (iii) any additional shares of Common Stock issuable in connection
with any anti-dilution provisions in the Warrant (in each case, without giving
effect to any limitations on conversion set forth in the Warrant) and (iv) any
securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing;
excluding,
however (A) any Registrable Securities that have been publicly sold
pursuant to Rule 144 under the Securities Act or otherwise; (B) any Registrable
Securities sold by a person in a transaction pursuant to a registration
statement filed under the Securities Act; or (C) any Registrable Securities that
are at the time subject to an effective registration statement under the
Securities Act.
"Registration Default
Date" means the date that is 180 days after the Closing
Date.
"Registration Default
Period" means the period following the Registration Default Date during
which any Registration Event occurs and is continuing.
"Registration
Statement" means the registration statement required to be filed by the
Company pursuant to Section 3(a).
“Rule 144 Date” means,
with respect to a particular Holder, the date on which such Holder becomes
eligible to sell any Registrable Securities pursuant to Rule 144.
"SEC Effective Date"
means the date the Registration Statement is declared effective by the
Commission.
"SEC Guidance" means
(i) any publicly-available written or oral requirements of the Commission staff,
(ii) any specific requirements of the Commission with respect to the
registration of the sale of the Registrable Securities (subject to the proviso
set forth in section 3(b), and (iii) the Securities Act.
"Securities Act" means
the Securities Act of 1933, as amended, or any similar federal statute
promulgated in replacement thereof, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.
"Trading Day" means a
day on whichever (a) the national securities exchange, (b) the Nasdaq Stock
Market, or (c) such other securities market, in any such case which at the time
constitutes the principal securities market for the Common Stock, is open for
general trading of securities.
"VGH Holders" means
the Shareholder, Voyager Gas Holdings, L.P., and any and all successors and
Permitted Assignees of the VGH Holders, who acquire rights in accordance with
this Agreement with respect to the Registrable Securities directly or indirectly
from VGH Holders, including from any Permitted Assignee.
“Warrant” means that
certain warrant granted to CIT on the Closing Date.
“Warrant Shares” means
shares of Common Stock issuable to CIT upon the exercise of the
Warrant.
2. Term. This
Agreement shall continue in full force and effect until there are no Registrable
Securities, unless terminated sooner hereunder.
3. Registration.
(a) Registration on Form
S-1. Within 90 days following the Closing Date, the Company
shall file with the Commission a registration statement on Form S-1 relating to
the resale by the Holders of all of the Registrable Securities and the Company
shall be obligated, upon the request of the Holders to effect an underwritten
offering of the Registrable Securities; provided, however, that the
Company shall not be obligated to effect any such registration prior to the end
of the Lock-Up Period as set forth in Section 11 hereof; provided, further, that the
Company shall not be obligated to effect any such registration or qualification
pursuant to this Section 3(a), or, in the case of subpart (i) immediately
following, keep such registration effective pursuant to Section
4: (i) in any particular jurisdiction in which the Company would be
required to qualify to do business as a foreign corporation or as a dealer in
securities under the securities or blue sky laws of such jurisdiction or to
execute a general consent to service of process in effecting such registration,
qualification, or compliance, in each case where it has not already done so; or
(ii) during any Blackout Period.
(b) Allocation of Registrable
Securities. If the Company must reduce the number of
Registrable Securities that can be included in a particular registration
statement to comply with SEC Guidance (provided that, the Company
shall in good faith use its reasonable best efforts to advocate with the
Commission for the registration of all of the Registrable Securities in
accordance with the SEC Guidance, including without limitation effectively
registering Registrable Securities from time to time as occurs the elimination
of the SEC’s reasons and concerns for such reduction(s)) then the number of
Registrable Securities included in such registration statement at such time
shall be reduced pro rata based on the total number of unregistered Registrable
Securities held by the VGH Holders and the CIT Holders.
(c) Damages Upon Registration
Event. This Section 3(c) only applies as set forth below provided, however, that
nothing in this Section 3(c) shall take away, or impair in any way the
availability to the Holders of any other legal or equitable remedies for the
occurrence of a Registration Event (as defined below):
(1) During
the period before a Holder is eligible to sell its Registrable Securities
pursuant to Rule 144 under the Securities Act if (i) the Registration Statement
required to be filed pursuant to Section 3(a) above is not declared effective by
the Commission by the Registration Default Date as to all Registrable Securities
of such Holder, or (ii) after the SEC Effective Date, the Registration Statement
ceases for any reason to remain continuously effective as to all Registrable
Securities for which it is required to be effective, or, (iii) if such Holder,
unless it expressly approves in writing, is not permitted to utilize the
prospectus therein to resell its Registrable Securities for more than 15
consecutive calendar days or more than an aggregate of 25 calendar days during
any 12-month period (which need not be consecutive calendar days; provided that such number of
days shall not include Blackout Periods or the 5 calendar days following the
filing of any Form 8-K, Form 10-Q or Form 10-K, or other comparable form, for
purposes of filing a post-effective amendment to any registration statement that
is not on Form S-1) (any such failure or breach being referred to as a
“Registration Event”, and for purposes of clause (i) the date on which such
Registration Event occurs, or for purposes of clause (iii) the date on which
such Blackout
Period or 15 or 25 calendar day period, as applicable, is exceeded being
referred to as “Registration Event Date”), then in addition to any other rights
such Holder may have hereunder or under applicable law, on either such
Registration Event Date, the Company shall deliver to (X) the VGH Holders on a
pro rata basis, as
partial liquidated damages and not as a penalty, cash, in the aggregate
equal to two percent (2%) of the product of (A) $.40 and (B) the number of
Registrable Securities held by all the VGH Holders on such date (Y) the CIT
Holders on a pro rata basis, as partial liquidated damages and not as a penalty,
cash, in the aggregate equal to 0.8855% of the product of (A) $.35 and (B) the number of
Registrable Securities held by all the CIT Holders on such date.
(2) If,
on the first ninety (90) day anniversary of the first Registration Event Date,
the applicable Registration Event shall not have been cured, the Company shall
deliver to (i) the VGH Holders on a pro rata basis, as
partial liquidated damages, and not as a penalty, cash, in the aggregate
amount equal to three percent (3%) of the product of (A) $.40 and (B) the number of
Registrable Securities held by all the VGH Holders on such ninety (90) day
anniversary date and (ii) the CIT Holders on a pro rata basis, as partial
liquidated damages and not as a penalty, cash, in the aggregate equal to 2.48%
of the product of (A) $.35 and (B) the number of
Registrable Securities held by all the CIT Holders on such date (“Liquidated
Damages”).
(3) After
the Rule 144 Date of a Holder, the Company shall not be obligated to pay
Liquidated Damages to such Holder upon the occurrence of subsequent Registration
Events, with the following exceptions:
(A) if
the Company becomes eligible to use Form S-3, then within ninety (90) days
following the date of such eligibility, the Company shall, upon the written
request of either (i) VGH Holders holding a majority of the Registrable
Securities held by all VGH Holders or (ii) CIT Holders holding a majority of the
Registrable Securities held by all CIT Holders (each a “Shelf Demand”), file
with the Commission a registration statement on Form S-3 relating to the resale
by all Holders of all of the Registrable Securities and if such registration
statement on Form S-3 does not become effective within 180 days after receipt by
the Company of such Shelf Demand, then the Company shall pay the holders
Liquidated Damages and shall pay additional Liquidated Damages on each ninety
(90) day anniversary thereof; and
(B) if
the percentage of outstanding shares of Common Stock held by the VGH Holders
falls below 20%, and a Registration Event is continuing, Company shall deliver
to the VGH Holders as
partial liquidated damages, and not as a penalty, cash, in the aggregate
amount equal to three percent (3%) of the product of (A) $.40 and (B) the number
of Registrable Securities held by the VGH Holders on such ninety (90) day
anniversary date; and
(C) if
the percentage of outstanding shares of Common Stock held by the CIT Holders
falls below 20%, and a Registration Event is continuing, the Company shall
deliver to the CIT Holders as
partial liquidated damages, and not as a penalty, cash, in the aggregate
amount equal 2.48% of the product of (A) $.35 and (B) the number of
Registrable Securities held by all the CIT Holders on such ninety (90) day
anniversary date.
Amounts
payable as Liquidated Damages to each Holder hereunder with respect to each
share of Registrable Securities shall cease when such Holder no longer holds
such share of Registrable Securities or when such Holder is eligible to sell
Holder’s Registrable Securities without volume or manner of sale restrictions
pursuant to Rule 144 under the Securities Act, as determined by counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company’s transfer agent and the affected
Holders.
The
foregoing provisions of this Section 3(c) notwithstanding, the Company and the
CIT Holders agree that the Company shall not be liable for liquidated damages
under this Agreement with respect to any unexercised Warrants or Warrant
Shares.
(c) Piggy-back Registration
Rights. The Company covenants and agrees that in the
event that prior to the filing of any registration statement required to be
filed pursuant to Section 3(a) above, the Company proposes to file a
registration statement under the Securities Act with respect to shares of Common
Stock (other than pursuant to registration statements on Form S-4 or Form S-8 or
any successor or similar forms), whether or not for its own account, then the
Company shall give written notice of such proposed filing to the Holders
promptly (and in any event at least twenty (20) days before the anticipated
filing date). Such notice shall offer to the Holders the opportunity
to include in such registration statement such number of Registrable Securities
as the Holders may request. The Company shall direct and use its
reasonable best efforts to cause the managing underwriter of a proposed
underwritten offering to permit the Holders to include such Registrable
Securities in the proposed offering and the Company shall use its reasonable
best efforts to include such Registrable Securities in such proposed offering on
the same terms and conditions as any similar securities of the Company included
therein. If the offering of which the Company gives notice is a
public offering involving an underwriter, the right of the Holders to
registration pursuant to this Section 3(c) shall be conditioned upon (i) such
Holder’s participation in such underwriting and the inclusion of the Registrable
Securities to be sold by such Holder in the underwriting and (ii) such Holder
executing an underwriting agreement entered into by the Company which includes
customary terms and conditions relating to sales by shareholders. The
Holders of Registrable Securities to be distributed by such underwriters shall
be parties to the underwriting agreement between the Company and such
underwriters and may, at their option, require that any or all of the
representations and warranties by, and any other agreement on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Holders of Registrable Securities. Any such Holder of Registrable
Securities shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Holder, such Holder’s Registrable
Securities and such Holder’s intended method of distribution and any other
representation required by law. The foregoing notwithstanding, in the
case of a firm commitment offering on underwriting terms appropriate for such a
transaction, if any such managing underwriter of nationally recognized standing
shall advise the Company and the Holders in writing that, in its opinion, the
distribution of all or a specified portion of the Registrable Securities
requested to be included in the registration concurrently with the securities
being registered by the Company would materially adversely affect the price of
such securities by increasing the aggregate amount of the offering in excess of
the maximum amount of securities which such managing underwriter believes can
reasonably be sold in the contemplated distribution, then the securities to be
included in a registration which is a primary underwritten offering on behalf of
the Company then the following shall be the priority of inclusion of shares in
such offering:
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i.
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First:
the Company shall be permitted to include all shares that it intended to
offer, subject to reduction by the
underwriter;
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ii.
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Second:
if the Company is able to include all of the shares that it intends to
offer, then the VGH Holders and the CIT Holders shall be permitted to
include the number of their shares that they request to be included,
subject to reduction by the underwriter pro rata based on the total number
of Registrable Securities that they request to be
included;
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iii.
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Third:
if the Holders are permitted to include all of the shares that they
request to be included, then other holders of registration rights, if any,
may include their shares to the extent determined by the
underwriter.
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(d) Requested Underwritten
Offerings. If requested by the underwriters for any
underwritten offering by Holders of Registrable Securities pursuant to a
registration requested under Section 3(a), the Company will enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be satisfactory in substance and form to each such Holder and the
underwriters and to contain such representations and warranties by the Company
and such other terms as are generally prevailing in agreements of this type,
including without limitation, indemnities to the effect and to the extent
provided in Section 10 below. The Holders of Registrable Securities
to be distributed by such underwriters shall be parties to such underwriting
agreement and may, at their option, require that any or all of 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 such Holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Holders of Registrable Securities. Any such Holder of Registrable
Securities shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Holder, such Holder’s Registrable
Securities and such Holder’s intended method of distribution and any other
representation required by law. In any underwritten offering
requested by the Holders under Section 3(a), the Company shall permit
the Holders of Registrable Securities being included in the Registration
Statement to select an underwriter or underwriters subject to the Company’s
reasonable consent.
4. Registration
Procedures. In the case of each registration, qualification,
or compliance effected by the Company pursuant to Section 3 hereof, the Company
will keep each Holder including securities therein reasonably advised in writing
(which may include e-mail) as to the initiation of each registration,
qualification, and compliance and as to the completion thereof. With
respect to any registration statement filed pursuant to Section 3, the Company
will use its commercially reasonable best efforts to:
(a) prepare
and file with the Commission with respect to such Registrable Securities, a
registration statement on Form S-1 or, if the Company is not eligible to file a
registration statement on Form S-1, on any other form for which the Company then
qualifies and which counsel for the Company shall deem appropriate, and which
form shall be available for the sale of the Registrable Securities in accordance
with the intended method(s) of distribution thereof, and use its best efforts to
cause such registration statement to become effective as soon as possible and
remain effective at least for the period ending with the sale of all Registrable
Securities pursuant to the Registration Statement (the “Effectiveness
Period”); provided,
however, that if the Company files the registration statement on any form
other than Form S-3, the Company shall promptly convert such registration
statement to Form S-3 or file a replacement registration statement on Form S-3
as soon as the Company becomes eligible to file on Form S-3;
(b) if
a registration statement is subject to review by the Commission, promptly
respond to all comments and diligently pursue resolution of any comments to the
satisfaction of the Commission;
(c) 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 during the Effectiveness
Period (but in any event at least until expiration of the 90-day
period referred to in Section 4(3) of the Securities Act and Rule 174
thereunder, or any successor thereto, if applicable), 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 method(s) of disposition by the sellers thereof set
forth in such registration statement;
(d) furnish,
without charge, to each Holder of Registrable Securities covered by such
registration statement (i) a reasonable number of copies of such registration
statement (including any exhibits thereto other than exhibits incorporated by
reference), each amendment and supplement thereto as such Holder may request,
(ii) such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any other prospectus filed
under Rule 424 under the Securities Act) as such Holders may request, in
conformity with the requirements of the Securities Act, and (iii) such other
documents as such Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder, but only during
the Effectiveness Period;
(e) use
its commercially reasonable best efforts to register or qualify such Registrable
Securities under such other applicable securities or blue sky laws of such
jurisdictions as any Holder of Registrable Securities covered by such
registration statement reasonably requests as may be necessary for the
marketability of the Registrable Securities (such request to be made by the time
the applicable registration statement is deemed effective by the Commission) and
do any and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder; provided that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (e), (ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such
jurisdiction;
(f) as
promptly as practicable after becoming aware of such event, notify each Holder
of such Registrable Securities at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
which comes to the Company's attention if as a result of such event the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and the
Company shall promptly prepare and furnish to such Holder a supplement or
amendment to such prospectus (or prepare and file appropriate reports under the
Exchange Act) so that, as thereafter delivered to the Holders of such
Registrable Securities, such prospectus shall 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, unless suspension of
the use of such prospectus otherwise is authorized herein or in the event of a
Blackout Period, in which case no supplement or amendment need be furnished (or
Exchange Act filing made) until the termination of such suspension or Blackout
Period;
(g) comply,
and continue to comply during the Effectiveness Period, in all material respects
with the Securities Act and the Exchange Act and with all applicable rules and
regulations of the Commission with respect to the disposition of all securities
covered by such registration statement, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least 12 months, but not more than 18 months, beginning with the
first full calendar month after the SEC Effective Date, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities
Act.
(h) as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Securities being offered or sold pursuant to the Registration
Statement of the issuance by the Commission of any stop order or other
suspension of effectiveness of the Registration Statement at the earliest
possible time;
(i) permit
the Holders of Registrable Securities being included in the Registration
Statement and their legal counsel to review and have a reasonable opportunity to
comment on the Registration Statement and all amendments and supplements thereto
at least two Business Days prior to their filing with the
Commission;
(j) make
available for inspection by any Holder and any Inspector retained by such
Holder, at such Holder's sole expense, all records as shall be reasonably
necessary to enable such Holder to exercise its due diligence responsibility,
and cause the Company's officers, directors, and employees to supply all
information which such Holder or any Inspector may reasonably request for
purposes of such due diligence; provided, however, that such
Holder shall hold in confidence and shall not make any disclosure of any record
or other information which the Company determines in good faith to be
confidential, and of which determination such Holder is so notified at the time
such Holder receives such information, unless (i) the disclosure of such record
is necessary to avoid or correct a misstatement or omission in the Registration
Statement and a reasonable time prior to such disclosure the Holder shall have
informed the Company of the need to so correct such misstatement or omission and
the Company shall have failed to correct such misstatement of omission, (ii) the
release of such record is ordered pursuant to a subpoena or other order from a
court or governmental body of competent jurisdiction, or (iii) the information
in such record has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company
shall not be required to disclose any confidential information in such records
to any Inspector until and unless such Inspector shall have entered into a
confidentiality agreement with the Company with respect thereto, substantially
in the form of this Section 4(j), which agreement shall permit such Inspector to
disclose records to the Holder who has retained such Inspector. Each
Holder agrees that it shall, upon learning that disclosure of such records is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company, at
the Company's expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, the records deemed
confidential. The Company shall hold in confidence and shall not make
any disclosure of information concerning a Holder provided to the Company
pursuant to this Agreement unless (i) disclosure of such information is
necessary to comply with federal or state securities laws, (ii) disclosure of
such information to the Staff of the Division of Corporation Finance is
necessary to respond to comments raised by the Staff in its review of the
Registration Statement, (iii) disclosure of such information is necessary to
avoid or correct a misstatement or omission in the Registration Statement, (iv)
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, or (v) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning a Holder is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Holder and allow
such Holder, at such Holder's expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, such
information;
(k) cause
all the Registrable Securities covered by the Registration Statement to be
listed or quoted on the principal securities market on which securities of the
same class or series issued by the Company are then listed or
traded;
(l) provide
a transfer agent and registrar, which may be a single entity, for the
Registrable Securities at all times;
(m) cooperate
with the Holders of Registrable Securities being offered pursuant to the
Registration Statement to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable such
certificates to be in such denominations or amounts as the Holders may
reasonably request and registered in such names as the Holders may
request;
(n) file
with the Commission an acceleration request with respect to the Registration
Statement no later than two Trading Days after receiving oral or written notice
from the Commission that it has no comments on the Registration Statement or no
additional comments on the Registration Statement;
(o) take
all other reasonable actions necessary to expedite and facilitate disposition by
the Holders of the Registrable Securities pursuant to the Registration
Statement.
5. Suspension
of Offers and Sales. Each Holder of Registrable Securities
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 4(f) hereof or of the commencement of a
Blackout Period, such Holder shall discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4(f) hereof or notice of the end of
the Blackout Period, and, if so directed by the Company, such Holder shall
deliver to the Company (at the Company's expense) all copies (including, without
limitation, any and all drafts), other than permanent file copies, then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
6. Registration
Expenses. The Company shall pay all expenses in connection
with any registration, including, without limitation, all registration, filing,
stock exchange and NASD fees, printing expenses, all fees and expenses of
complying with securities and blue sky laws, the fees and disbursements of
counsel for the Company and of its independent accountants, and the reasonable
fees and disbursements of a Holder’s attorney in connection with this Agreement;
provided that, in any
underwritten registration, each party shall pay for its own underwriting
discounts and commissions and transfer taxes. Except as provided above in this
Section 6 and in Section 10, the Company shall not be responsible for the
expenses of any attorney or other advisor employed by a Holder of Registrable
Securities.
7. Assignment
of Rights. No Holder may assign its rights under this Agreement to any
party without the prior written consent of the Company; provided, however, that a
Holder may assign its rights under this Agreement without such restrictions to a
Permitted Assignee as long as (a) such transfer or assignment is effected in
accordance with applicable securities laws; (b) such transferee or assignee
agrees in writing to become subject to the terms of this Agreement; and (c) the
Company is given written notice by such Holder of such transfer or assignment,
stating the name and address of the transferee or assignee and identifying the
Registrable Securities with respect to which such rights are being transferred
or assigned.
8. Information
by Holder. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder or Holders and the distribution proposed by such Holder or
Holders as the Company may reasonably request in writing in connection with such
registration.
9. Delay of
Registration. No Holder shall have any right to obtain or seek
an injunction restraining or otherwise delaying any registration pursuant to
this Agreement as the result of any controversy that might arise with respect to
the interpretation or implementation of this Agreement.
10. Indemnification.
(a) In
the event of the offer and sale of Registrable Securities held by Holders under
the Securities Act, the Company shall, and hereby does, indemnify and hold
harmless, to the fullest extent permitted by law, each Holder, its directors,
officers, partners, each other person who participates as an underwriter in the
offering or sale of such securities, and each other person, if any, who controls
or is under common control with such Holder or any such underwriter within the
meaning of Section 15 of the Securities Act, against any losses, claims,
damages, or liabilities, joint or several, and expenses to which the Holder or
any such director, officer, partner, or underwriter or controlling person may
become subject under the Securities Act 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 any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such shares were registered under the
Securities Act, any preliminary prospectus, final prospectus, or summary
prospectus contained therein, or any amendment or supplement thereto, or any
free writing prospectus or other disclosure or offering material, including
documents incorporated by reference, 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
or, with respect to any prospectus, necessary to make the statements
therein in light of the circumstances in which they were made, not misleading,
and the Company shall reimburse each Holder, and each such director, officer,
partner, underwriter, and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating, defending, or
settling any such loss, claim, damage, liability, action, or proceeding; provided that the foregoing
shall not apply to, and the Company shall not be liable, in any such case (i) to
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof), or expense arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment, or supplement in reliance upon and in conformity
with written information regarding such Holder furnished to the Company through
an instrument duly executed by or on behalf of such Holder specifically stating
that it is for use in the preparation thereof, or (ii) provided that the plan of
distribution mechanics described in the applicable prospectus are, in form and
substance, reasonable and customary for transactions of this type, to the extent
that the Holders failed to comply with the terms of such plan of distribution
mechanics. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Holders, or any such director,
officer, partner, underwriter, or controlling person and shall survive the
transfer of such shares by the Holder.
(b) As
a condition to including any Registrable Securities to be offered by a Holder in
any registration statement filed pursuant to this Agreement, each such Holder
agrees to be bound by the terms of this Section 10 and to indemnify and hold
harmless, severally and not jointly with the other Holders, to the fullest
extent permitted by law, the Company, its directors and officers, and each other
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, legal counsel and accountants for the Company, any underwriter,
any other Holder selling securities in such registration statement, and any
controlling person within the meaning of the Securities Act of any such
underwriter or other Holder, against any losses, claims, damages, or
liabilities, joint or several, to which the Company or any such director or
officer or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out
of or are based upon (i) (A) any an untrue statement or alleged untrue statement
of a material fact contained in a registration statement, any preliminary
prospectus, final prospectus, or summary prospectus contained therein, or any
amendment or supplement thereto or (B) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading or, with respect to any prospectus, necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by or on behalf of
such Holder specifically stating that it is for use in the preparation thereof,
or (ii) provided that
the plan of distribution mechanics described in the applicable prospectus are,
in form and substance, reasonable and customary for transactions of this type,
to the extent that the Holders failed to comply with the terms of such plan of
distribution mechanics. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holders, or any such
director, officer, partner, underwriter, or controlling person and shall survive
the transfer of such shares by the Holder, and such Holder shall reimburse the
Company, and each such director, officer, legal counsel and accountants,
underwriter, other Holder, and controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating,
defending, or settling and such loss, claim, damage, liability, action, or
proceeding; provided,
however, that such indemnity agreement found in this Section 10(b) shall
in no event exceed the net proceeds from the offering received by such
Holder. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any such
director, officer, or controlling person and shall survive the transfer by any
Holder of such shares.
(c) Promptly
after receipt by an indemnified party of notice of the commencement of any
action or proceeding involving a claim referred to in Section 10(a) or (b)
hereof (including any governmental action), 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 commencement of such action;
provided that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under Section 10(a) or (b)
hereof, except to the extent that the indemnifying party is actually prejudiced
by such failure to give notice. In case any such action is brought
against an indemnified party, unless in the reasonable judgment of counsel to
such indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist or the indemnified party may have defenses not
available to the indemnifying party in respect of such claim, the indemnifying
party shall be entitled to participate in and to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, other than reasonable costs of
investigation, unless in such indemnified party's reasonable judgment a conflict
of interest between such indemnified and indemnifying parties arises in respect
of such claim after the assumption of the defenses thereof or the indemnifying
party fails to defend such claim in a diligent manner. Neither an
indemnified nor an indemnifying party shall be liable for any settlement of any
action or proceeding effected without its consent. No indemnifying
party shall, without the consent of the indemnified party, 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. Notwithstanding anything to the contrary set forth
herein, and without limiting any of the rights set forth above, in any event any
party shall have the right to retain, at its own expense, counsel with respect
to the defense of a claim.
(d) In the
event that an indemnifying party does not or is not permitted to assume the
defense of an action pursuant to Section 10(c) or, in the case of the expense
reimbursement obligation set forth in Section 10(a) and (b), the indemnification
required by Section 10(a) and (b) hereof shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills received or expenses, losses, damages, or liabilities are
incurred.
(e) If
the indemnification provided for in this Section 10 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage, or expense referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall (i) contribute to the amount paid or payable by such indemnified party as
a result of such loss, liability, claim, damage, or expense as is appropriate to
reflect the proportionate relative fault of the indemnifying party on the one
hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such untrue statement or
omission), or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, not only the proportionate relative
fault of the indemnifying party and the indemnified party, but also the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, as well as any other relevant equitable
considerations. No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any indemnifying party who was not guilty
of such fraudulent misrepresentation.
(f) Other
Indemnification. Indemnification similar to that specified in
the preceding subsections of this Section 10 (with appropriate modifications)
shall be given by the Company and each Holder of Registrable Securities with
respect to any required registration or other qualification of securities under
any federal or state law or regulation or governmental authority other than the
Securities Act.
11. Lock-Up
Agreement. For a period of
one hundred fifty (150) days following the Closing Date, no Holder will (A)
directly or indirectly, sell, offer to sell, contract to sell or otherwise
dispose of or transfer (“offer or
sell”) any Registrable Securities or (B) establish or increase any “put
equivalent position” or liquidate or decrease any “call equivalent position”
with respect to any Registrable Securities (in each case within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder), or otherwise enter into any swap,
derivative or other transaction or arrangement that transfers to another, in
whole or in part, any economic consequence of ownership of a Registrable
Security, whether or not such transaction is to be settled by delivery of
Registrable Securities, other securities, cash or other consideration; provided, however, that the
lock-up agreement set forth in this Section 11 shall not apply if any other
person is permitted to offer or sell, or offers or sells any securities of the
Company during the 150 day lock-up period described in this Section
11.
12. Miscellaneous.
(a) Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas and the United States of America, both substantive and remedial.
Any judicial proceeding brought against either of the parties to this agreement
or any dispute arising out of this Agreement or any matter related hereto shall
be brought in the courts of the State of Texas, Xxxxxx County, or in the United
States District Court for the Southern District of Texas and, by its execution
and delivery of this agreement, each party to this Agreement accepts the
jurisdiction of such courts. The foregoing consent to jurisdiction shall not be
deemed to confer rights on any person other than the parties to this
Agreement.
(b) Successors and
Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
Permitted Assigns, executors, and administrators of the parties
hereto. In the event the Company merges with, or is otherwise
acquired by, a direct or indirect subsidiary of a publicly traded company, the
Company shall condition the merger or acquisition on the assumption by such
parent company of the Company's obligations under this Agreement.
(c) Entire
Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
(d) Notices. All notices
or other communications which are required or permitted under this Agreement
shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, by electronic
mail, or by courier or overnight carrier, to the persons at the addresses set
forth below (or at such other address as may be provided hereunder), and shall
be deemed to have been delivered as of the date so delivered:
If to the
Company: ABC
Funding , Inc.
0000 XX 0000 Xxxx
Xxxxx 000
Xxxxxxx,
XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
With a
copy
to: Xx.
Xxxxxxx X. Xxxxx
Xxxxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
00xx
Xxxxx
Xxx Xxxx, Xxx
Xxxx 00000
Telephone
No. 000-000-0000
Fax. 000-000-0000
If to the VGH
Holders: To
each Holder at the address
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set
forth on Exhibit A with a copy to:
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Xx.
Xxxxxxxxxxx Xxx
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|
Natural
Gas Partners
|
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|
000
X. Xxxx Xxxxxxxxx Xxx., Xxx. 000
|
|
|
Xxxxxx,
XX 00000
|
|
|
Telephone:
(000) 000-0000
|
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|
Fax:
(000) 000-0000
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and
Mr. W.
Xxxx Xxxxxxx
Xxxxx
& Xxxxxxxxx LLP
0000
Xxxxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Telephone:
000-000-0000
Fax:
000-000-0000
If to the
CIT
Holders: To
each Holder at the address
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set
forth on Exhibit A with a copy to:
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CIT
Capital USA Inc.
000 Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
XX 00000
Attn:
Xxxxxxxxxx Xxxxxxx
Telecopy
No.: 000 000 0000
And
Xx.
Xxxxxx Xxxxxxxx
Xxxxxx
& Xxxxxx L.L.P.
First
City Tower
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Telephone:
000-000-0000
Fax:
000-000-0000
or at
such other address as any party shall have furnished to the other parties in
writing.
(e) Delays or
Omissions. No delay or omission to exercise any right, power,
or remedy accruing to any Holder of any Registrable Securities, upon any breach
or default of the Company under this Agreement, shall impair any such right,
power, or remedy of such Holder nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereunder occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent, or approval of
any kind or character on the part of any Holder of any breach or default under
this Agreement, or any waiver on the part of any Holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies,
either under this Agreement, or by law or otherwise afforded to any Holder,
shall be cumulative and not alternative or exclusive.
(f) Titles and
Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
(g) Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument.
(h) Severability. In the
case any provision of this Agreement shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
(i) Amendments. The
provisions of this Agreement may be amended at any time and from time to time,
and particular provisions of this Agreement may be waived, with and only with an
agreement or consent in writing signed by the Company and by the holders of a
majority of the number of shares of Registrable Securities outstanding as of the
date of such amendment or waiver. The Holders acknowledge that by the operation
of this Section 12(i), the holders of a majority of the outstanding Registrable
Securities may have the right and power to diminish or eliminate all rights of
the Holders under this Agreement.
This
Registration Rights Agreement is hereby executed as of the date first above
written.
COMPANY:
By: /s/
Xxxxxx X.
Xxxx
Xxxxxx X. Xxxx
Chief Executive Officer
HOLDERS:
VOYAGER
GAS HOLDINGS, L.P.
By: VGH
GP, L.L.C., its General Partner
By:
Name:
Title:
CIT
CAPITAL USA, INC.
By: /s/
Xxxxx
Xxxxxxxx
Xxxxx
Xxxxxxxx
Vice
President
Exhibit
A
Holder
Information
Voyager
Gas Holdings, L.P.
Attention:
Xxxxxxxxxxx Xxx
000 X.
Xxxx Xxxxxxxxx Xxx., Xxx. 000
Xxxxxx,
XX 00000
Telephone:
(000) 000-0000
fax:
(000) 000-0000
CIT
Capital USA Inc.
Attn:
Xxxxx Xxxxxxxx
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Telephone:
000-000-0000
Fax:
000-000-0000
