REGISTRATION RIGHTS AGREEMENT
This
Registration
Rights
Agreement (this “Agreement”)
is
dated as of June ___, 2006 (the “Effective
Date”),
by
and among United Fuel & Energy Corporation, a Nevada corporation (the
“Company”),
on
the one hand, and the holders of the Company’s Common Stock executing the
signature page to this Agreement (each a “Stockholder”
and
collectively, the “Stockholders”).
WITNESSETH:
WHEREAS,
the
Stockholders have recently acquired shares of the Company’s Common Stock and
Company is desirous of granting registration and certain other rights to the
Stockholders and the Stockholders are desirous of receiving such registration
rights, subject to the terms and conditions contained herein.
NOW, THEREFORE,
in
consideration of the foregoing premises and the mutual covenants and agreements
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, intending to be
legally bound, the parties hereto hereby agree as follows:
1. Registration
Rights.
1.1 Required
Registration.
The
Company shall use its reasonable best efforts to prepare and file with the
SEC
within one hundred twenty (120) days after the Effective Date a registration
statement on Form X-0, X-0 or S-3 (subject to the Company’s eligibility to use
Form S-2 or S-3) or successor form or another form selected by the Company
that
is available to it under the Securities Act which conforms with all applicable
rules and regulations (the “Required
Registration Statement”)
with
respect to all the Registrable Securities beneficially owned by the Stockholders
to permit the offer and re-sale from time to time of such Registrable Securities
in accordance with the methods of distribution provided by the Stockholders.
The
Company shall use its reasonable best efforts to cause the Required Registration
Statement to become effective as promptly as reasonably practicable thereafter.
The Company shall use its reasonable best efforts to keep such Required
Registration Statement continuously effective (the “Effective
Period”)
until
the first anniversary of the Effective Date plus
whatever
period of time as shall equal any period prior to such first anniversary in
which the Company was not current with its reporting requirements under the
Exchange Act. To the extent that the Registrable Securities are not sold under
the Required Registration Statement, the Stockholders shall have the
registration rights as enumerated in Section 1.2.
1.2 Piggyback
Registrations.
(a) Right
to Piggyback.
Whenever the Company proposes to register any of its securities under the
Securities Act and the registration form to be used may be used for the
registration of Registrable Securities, whether or not for sale for its own
account, the Company will give prompt written notice (but in no event less
than
fifteen (15) days before the anticipated filing date) to all holders of
Registrable Securities, and such notice shall describe the proposed registration
and distribution and offer to all holders of Registrable Securities the
opportunity to register the number of Registrable Securities as each such holder
may request; provided, however, this right shall not apply to any registration
of securities on a registration statement filed prior to the date on which
the
Required Registration Statement is required to be filed (a “Piggyback
Registration”).
Subject to paragraph (d) of this Section 1.2, the Company will include in each
Piggyback Registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within five (5)
days
after the holders’ receipt of the Company’s notice.
(b) Reasonable
Efforts.
The
Company shall use all reasonable efforts to cause the managing underwriter
or
underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggyback Registration to be included
on the same terms and conditions as any similar securities of the Company or
any
other security holder included therein and to permit the sale or other
disposition of such Registrable Securities in accordance with the intended
method of distribution thereof.
(c) Withdrawal.
Any
holder of Registrable Securities electing to participate in a Piggyback
Registration (a “Designated
Holder”)
shall
have the right to withdraw its request for inclusion of its Registrable
Securities in any Registration Statement pursuant to this Section 1.2 by giving
written notice to the Company of its request to withdraw. The Company may
withdraw a Piggyback Registration at any time.
(d) Priority
in Registrations.
If a
Piggyback Registration is an underwritten primary registration on behalf of
the
Company or a secondary registration on behalf of a security holder exercising
demand registration rights (the “Initiating
Holder”),
and
the managing underwriters advise the Company in writing (with a copy to each
party hereto requesting registration of Registrable Securities) that in their
opinion the number of Registrable Securities requested to be included in such
registration exceeds the number which can be sold in such offering without
materially and adversely affecting the marketability of such primary or
secondary offering (the “Offering
Quantity”),
then
the Company will include in such registration securities in the following
priority:
(i) First,
the Company will include the securities the Company proposes to sell and, if
applicable, the securities the Initiating Holder proposes to sell.
(ii) Second,
the Company will include all Registrable Securities requested to be included
by
any Designated Holder and other holders entitled to include securities in such
Piggyback Registration (collectively, “Subordinate
Holders”),
and
if the number of such Subordinate Holders’ securities requested to be included
exceeds the Offering Quantity, then the Company shall include only each such
requesting Subordinate Holders’ pro rata share of the shares available for
registration by the Stockholders, based on the amount of securities held by
each
such Subordinate Holder.
1.3 Holdback
Agreements.
(a) To
the
extent not inconsistent with applicable law, upon the request of the Company
or,
in the case of an underwritten public offering, the underwriters managing such
underwritten offering of the Company’s securities, each holder of Registrable
Securities who owns at least 1% of the outstanding capital stock of the Company
on an “as-converted” basis or is an officer or director of the Company will not
effect any public sale or distribution (other than those included in the
registration) of any securities of the Company, or any securities, options
or
rights convertible into or exchangeable or exercisable for such securities
during the seven (7) days prior to and the ninety (90) day period beginning
on
the effective date of the Registration Statement relating to such offering,
unless (in the case of an underwritten public offering) the managing
underwriters otherwise agree to a shorter period of time. Notwithstanding the
foregoing, no Designated Holder shall be required to enter into any such “lock
up” agreement unless and until all of the Company’s executive officers and
directors execute identical “lock up” agreements and the Company uses
commercially reasonable efforts to cause each holder of more than 1% of its
outstanding capital stock to execute identical “lock up” agreements. Neither the
Company nor the underwriter shall amend, terminate or waive a “lock up”
agreement unless each “lock up” agreement with a Designated Holder is also
amended or waived in a similar manner or terminated, as the case may
be.
(b) The
Company shall have the right at any time to require that the Designated Holders
of Registrable Securities suspend further open market offers and sales of
Registrable Securities pursuant to a Registration Statement filed hereunder
whenever in the reasonable judgment of the Company after consultation with
counsel there is or may be in existence a Changing Event (as defined herein).
The Company will give the Designated Holders notice of any such suspension
and
will use all reasonable best efforts to minimize the length of such
suspension.
1.4 Registration
Procedures.
Whenever any Registrable Securities are required to be registered pursuant
to
this Agreement, the Company will use reasonable best efforts to effect the
registration and the sale of such Registrable Securities in accordance with
the
intended methods of disposition thereof, and pursuant thereto the Company will
as expeditiously as possible:
(a) prepare
and file with the SEC on any form, if not so otherwise provided for, for which
the Company qualifies, as soon as practicable after the end of the period within
which requests for registration may be given to the Company, a Registration
Statement with respect to the offer and sale of such Registrable Securities
and
thereafter use reasonable best efforts to cause such Registration Statement
to
become effective and remain effective until the completion of the distribution
contemplated thereby or the required time period under this Agreement, whichever
is shorter (and before filing such Registration Statement, the Company will
furnish to the counsel selected by the holders of a majority of the Registrable
Securities initiating such Registration Statement copies of all such documents
proposed to be filed); provided,
however,
that
the Company may postpone for not more than sixty (60) calendar days the filing
or effectiveness of the Required Registration Statement if the board of
directors of the Company, in its good faith judgment, determines that such
registration could reasonably be expected to have a material adverse effect
on
the Company and its stockholders including, but not limited to, any proposal
or
plan by the Company to engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer, stock
acquisition or similar transaction then under consideration by delivering
written notice to the holders of Registrable Securities of its determination
to
postpone such Registration Statement; provided,
further,
that
(i) the
Company shall not disclose any information that could be deemed material
non-public information to any holder of Registrable Securities included in
a
Registration Statement that is subject to such postponement, (ii) in no event
may the Company postpone a filing requested hereunder more than twice;
provided,
that
such
postponements must be at least three (3) months apart; provided,
further,
that
the
Company may delay the effectiveness of the Required Registration Statement
if
the SEC rules and regulations prohibit the Required Registration Statement
from
being declared effective because its financial statements are stale at a time
when its fiscal year has ended or it has made an acquisition reportable under
Item 2 of Form 8-K or any other similar situation until the earliest time in
which the SEC would allow the Required Registration Statement to be declared
effective (provided that the Company shall use its reasonable best efforts
to
cure any such situation as soon as possible so that the Registration Statement
can be declared effective at the earliest possible time);
(b) prepare
and file with the SEC 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 for a period provided for in the
applicable Section above or, if such Registration Statement relates to an
underwritten offering, such period as in the opinion of counsel for the
underwriters a prospectus is required by law to be delivered in connection
with
sales of Registrable Securities by an underwriter or dealer or (ii) such shorter
period as will terminate when all of the securities covered by such Registration
Statement have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such Registration
Statement (but in any event not before the expiration of any longer period
required under the Securities Act), and to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such
Registration Statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such Registration Statement;
(c) furnish
to each seller of Registrable Securities, prior to filing a Registration
Statement, such number of copies of such Registration Statement, each amendment
and supplement thereto, the prospectus included in such Registration Statement
(including each preliminary prospectus) and such other documents as such seller
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller;
(d) register
or qualify such Registrable Securities under such state securities or blue
sky
laws of such jurisdictions as any seller reasonably requests and do any and
all
other acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller and to keep each such registration
or qualification (or exemption therefrom) effective during the period which
the
Registration Statement is required to be kept effective (provided,
that
the Company will 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
subparagraph, (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such
jurisdiction);
(e) notify
each seller of such Registrable Securities, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event (a “Changing
Event”)
as a
result of which, the prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits any fact necessary to make
the
statements therein not misleading in the light of the circumstances under which
they were made, and, at the request of any such seller, the Company will as
soon
as possible prepare and furnish to such seller (a “Correction
Event”)
a
reasonable number of copies of a supplement or amendment to such prospectus
so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or
omit
to state any fact necessary to make the statements therein not misleading in
the
light of the circumstances under which they were made;
(f) cause
all
such Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed and, if not so listed,
to be listed on The Nasdaq Stock Market or the Nasdaq SmallCap trading system
or
qualified for trading on the Nasdaq OTC Bulletin Board;
(g) provide
a
transfer agent and registrar for all such Registrable Securities not later
than
the effective date of such Registration Statement;
(h) before
filing a Registration Statement or prospectus or any amendments or supplements
thereto, the Company shall provide counsel selected by the Designated Holders
holding a majority of the Registrable Securities being registered in such
registration (“Holders’
Counsel”)
and
any other Inspector (as defined below) with an adequate and appropriate
opportunity to review and comment on such Registration Statement and each
prospectus included therein (and each amendment or supplement thereto) to be
filed with the SEC, subject to such documents being under the Company’s control,
and the Company shall notify the Holders’ Counsel and each seller of Registrable
Securities of any stop order issued or threatened by the SEC;
(i) otherwise
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve (12) months beginning with
the
first day of the Company’s first full calendar quarter after the effective date
of the Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(j) in
the
event of the issuance of any stop order suspending the effectiveness of a
Registration Statement, or of any order suspending or preventing the use of
any
related prospectus or suspending the qualification of any securities included
in
such Registration Statement for sale in any jurisdiction, the Company will
use
its reasonable best efforts promptly to obtain the withdrawal of such
order;
(k) subject
to execution and delivery of mutually satisfactory confidentiality agreements,
make available at reasonable times for inspection by any seller of Registrable
Securities, any managing underwriter participating in any disposition of such
Registrable Securities pursuant to a Registration Statement, Holders’ Counsel
and any attorney, accountant or other agent retained by any managing underwriter
(each, an “Inspector”
and
collectively, the “Inspectors”),
all
financial and other records, pertinent corporate documents and properties of
the
Company and its subsidiaries (collectively, the “Records”)
as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s and its subsidiaries’ officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspector in
connection with such Registration Statement;
(l) subject
to execution and delivery of mutually satisfactory confidentiality agreements,
keep Holders’ Counsel advised as to the initiation and progress of any
registration hereunder including, but not limited to, providing Holders’ Counsel
with all correspondence with the SEC;
(m) cooperate
with each seller of Registrable Securities and each underwriter participating
in
the disposition of such Registrable Securities and their respective counsel
in
connection with any filings required to be made with the National Association
of
Securities Dealers; and
(n) take
all
other steps reasonably necessary to effect the registration of the Registrable
Securities contemplated hereby.
(o) Registration
Expenses.
All
expenses incident to the Company’s performance of or compliance with this
Agreement including, without limitation, all registration and filing fees,
fees
and expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, and fees and disbursements of counsel for
the
Company and all independent certified public accountants, underwriters
(excluding discounts and commissions, which will be paid by the sellers of
Registrable Securities) and other Persons retained by the Company will be borne
by the Company, and the Company will pay its internal expenses (including,
without limitation, all salaries and expenses of its Employees performing legal
or accounting duties), the expense of any annual audit or quarterly review,
the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange or trading system on
which similar securities issued by the Company are then listed or qualified
for
trading. The Company shall have no obligation to pay any underwriting discounts
or commissions attributable to the sale of Registrable Securities and any of
the
expenses incurred by the Designated Holders, such costs to be borne by such
Designated Holder or Holders.
1.5 Indemnification.
(a) In
connection with any Registration Statement in which the holders of Registrable
Securities are participating pursuant to this Agreement, the holders of
Registrable Securities will furnish to the Company in writing such information
as the Company reasonably requests for use in connection with any such
Registration Statement or prospectus and, to the fullest extent permitted by
law, each such holder of Registrable Securities will, severally but not jointly,
indemnify and hold harmless the Company and its stockholders, officers,
directors, members, managers, employees, advisors, representatives, agents
and
Affiliates (collectively, the “Representatives”)
from
and against any reasonable loss, claim, damage, liability, a single reasonable
attorney’s fees, cost or expense and costs and expenses of investigating and
defending any such claim (collectively, the “Losses”)
and
any action in respect thereof to which the Company and its Representatives
may
become subject under the Securities Act or otherwise, insofar as such Losses
(or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon (i) the purchase or sale of Registrable
Securities during a suspension as set forth in herein after written receipt
of
notice of such suspension, (ii) by failure of such holder of Registrable
Securities to deliver a copy of the Registration Statement or prospectus or
any
amendments or supplements thereto after the Company has furnished such holder
of
Registrable Securities with a sufficient number of copies of the same, (iii)
any
untrue or alleged untrue statement of a material fact contained in the
Registration Statement, prospectus or preliminary prospectus or any amendment
or
supplement thereto, or (iv) any omission or alleged omission of a material
fact
required to be stated therein or necessary to make the statements therein not
misleading, but, with respect to clauses (iii) and (iv) above, only to the
extent that such untrue statement or omission is made in such Registration
Statement, any such prospectus or preliminary prospectus or any amendment or
supplement thereto, in reliance upon and in conformity with written information
prepared and furnished to the Company by such holder of Registrable Securities
expressly for use therein; provided,
however,
that
such holder of Registrable Securities shall not be liable in any such case
to
the extent that prior to the filing of any such Registration Statement or
prospectus or amendment or supplement thereto, such holder of Registrable
Securities has furnished in writing to the Company information expressly for
use
in such Registration Statement or prospectus or any amendment or supplement
thereto which corrected or made not misleading information previously furnished
to the Company; provided,
further,
however,
that
the obligation to indemnify will be individual to each such holder of
Registrable Securities and will be limited to the net amount of proceeds
received by such holder of Registrable Securities from the sale of Registrable
Securities pursuant to such Registration Statement. In connection with an
underwritten offering, each holder of Registrable Securities participating
in
such offering will indemnify such underwriters, 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 the indemnification
of
the Company.
(b) Promptly
after receipt by the Company of notice of any claim or the commencement of
any
action, the Company shall, if a claim in respect thereof is to be made against
a
holder of Registrable Securities, promptly notify the holder of Registrable
Securities in writing of the claim or the commencement of such action;
provided,
that
the failure to notify the holder of Registrable Securities shall not relieve
the
holder of Registrable Securities from any liability which it may have to an
the
Company otherwise than under Section 1.5(a) except to the extent of any actual
prejudice resulting therefrom. If any such claim or action shall be brought
against a holder of Registrable Securities, and it shall notify the Company,
the
holder of Registrable Securities shall be entitled to participate therein,
and,
to the extent that it wishes, jointly with any other similarly notified holders
of Registrable Securities, to assume the defense thereof with counsel reasonably
satisfactory to the Company. After notice from the holder of Registrable
Securities to the Company of its election to assume the defense of such claim
or
action, the holder of Registrable Securities shall not be liable to the Company
for any legal or other expenses subsequently incurred by the Company in
connection with the defense thereof other than reasonable costs of
investigation; provided,
that
the Company shall have the right to employ separate counsel to represent the
Company and its Representatives who may be subject to liability arising out
of
any claim in respect of which indemnity may be sought by the Company against
the
holder of Registrable Securities, but the fees and expenses of such counsel
shall be for the account of such Company unless (i) the holder of Registrable
Securities and the Company shall have mutually agreed to the retention of such
counsel or (ii) in the written opinion of counsel to such Company,
representation of both parties by the same counsel would be inappropriate due
to
actual or potential conflicts of interest between them, it being understood,
however, that the holder of Registrable Securities shall not, in connection
with
any one such claim or action or separate but substantially similar or related
claims or actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at
any
time for all Indemnified Parties. No holder of Registrable Securities shall,
without the prior written consent of the Company, effect any settlement of
any
claim or pending or threatened proceeding in respect of which the Company is
or
could have been a party and indemnity could have been sought hereunder by such
Company, unless such settlement includes an unconditional release of such
Company from all liability arising out of such claim or proceeding other than
the payment of monetary damages by the holder of Registrable Securities on
behalf of the Company. Whether or not the defense of any claim or action is
assumed by the holder of Registrable Securities, such holder of Registrable
Securities will not be subject to any liability for any settlement made without
its consent, which consent will not be unreasonably withheld.
(c) If
the
indemnification provided for in this Section 1.5 is unavailable to the
Indemnified Parties in respect of any Losses referred to herein, then each
holder of Registrable Securities, in lieu of indemnifying such Company, shall
contribute to the amount paid or payable by such Company as a result of such
Losses in such proportion as is appropriate to reflect the relative benefits
received by the holders of the Registrable Securities from the offering of
the
Registrable Securities, or if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect the relative benefits
of
the holders of the Registrable Securities in connection with the statements
or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations.
The
Company and the holders of the Registrable Securities agree that it would not
be
just and equitable if contribution pursuant to this Section 1.5(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. The amount paid or payable by an Company as
a
result of the Losses referred to in the immediately preceding paragraph shall
be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Company in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 1.5, no holder of Registrable Securities shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such holder were offered to the
public exceeds the amount of any Losses which such holder has otherwise paid
by
reason of such untrue or alleged untrue statement or omission or alleged
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. Each
holder’s obligations to contribute pursuant to this Section 1.5 is several in
the proportion that the proceeds of the offering received by such holder of
Registrable Securities bears to the total proceeds of the offering received
by
all the holders of Registrable Securities and not joint.
1.6 Participation
in Underwritten Registrations.
(a) No
Person
may participate in any registration hereunder which is underwritten unless
such
Person (i) agrees to sell such Person’s securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements (including, without limitation, pursuant to the
terms of any over-allotment or “green shoe” option requested by the managing
underwriter(s), provided,
that
each holder of Registrable Securities shall not be required to sell more than
the number of Registrable Securities that such holder has requested the Company
to include in any registration) and (ii) completes and executes all
questionnaires, powers of attorney, custody agreements, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and this Agreement.
(b) Each
Person that is participating in any registration hereunder agrees that, upon
receipt of any notice from the Company of the happening of any event of the
kind
described in Section 1.4(e) above, such Person will forthwith discontinue the
disposition of its Registrable Securities pursuant to the Registration Statement
until such Person’s receipt of the copies of a supplemented or amended
prospectus as contemplated by such Section 1.4(e).
1.7 Current
Public Information.
The
Company covenants that it will file all reports required to be filed by it
under
the Securities Act and the Exchange Act and the rules and regulations adopted
by
the SEC thereunder, and will use reasonable best efforts to take such further
action as the Stockholder may reasonably request, all to the extent required
to
enable the holders of Registrable Securities to sell Registrable Securities
pursuant to Rule 144 or Rule 144A adopted by the SEC under the Securities Act
or
any similar rule or regulation hereafter adopted by the SEC. The Company shall,
upon the request of a Designated Holder, deliver to such Designated Holder
a
written statement as to whether it has complied with such
requirements.
2. Transfers
of Certain Rights.
2.1 Transfer.
The
rights granted to the Stockholder under this Agreement may not be assigned
or
transferred without the prior written consent of the Company.
2.2 Transferees.
Any
transferee to whom rights under this Agreement are permitted by the Company
to
be transferred shall, as a condition to such transfer, deliver to the Company
a
written instrument by which such transferee agrees to be bound by the
obligations imposed upon the Stockholder under this Agreement to the same extent
as if such transferee were the Stockholder hereunder.
2.3 Subsequent Transferees.
A
transferee to whom rights are transferred pursuant to this Section 2 may not
again transfer such rights to any other person or entity, other than as provided
in Sections 2.1 and 2.2 above.
3. Certain
Definitions.
The
following capitalized terms shall have the meanings ascribed to them
below:
“Affiliate”
means
any Person that directly or indirectly controls, or is under common control
with, or is controlled by such Person. As used in this definition, “control”
(including with its correlative meanings, “controlled by” and “under common
control with”) shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise).
“Common
Stock”
means
the common stock, par value $.001 per share, of the Company.
“Employees”
means
any current, former, or retired employee, office consultant, advisor,
independent contractor, agent, officer or director of the Company.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the SEC promulgated thereunder.
“Person”
means
any individual, company, partnership, firm, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental body
or
other entity.
“Registrable
Securities”
means,
subject to the immediately following sentence, (i) shares of Common Stock held
by the Stockholder as of the Effective Date of this Agreement and (ii) any
securities issued or issuable directly or indirectly with respect to the
securities referred to in clause (i) by way of stock dividend or stock split
or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular shares of Common
Stock constituting Registrable Securities, such shares of Common Stock will
cease to be Registrable Securities when they (x) have been effectively
registered under the Securities Act and disposed of in accordance with a
Registration Statement covering them, (y) have been sold to the public pursuant
to Rule 144 (or by similar provision under the Securities Act), or (z) are
eligible for resale under Rule 144(k) (or by similar provision under the
Securities Act) without any limitation on the amount of securities that may
be
sold under paragraph (e) thereof.
“Registration
Statement”
means
any registration statement of the Company filed under the Securities Act which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all material incorporated by reference in such registration
statement.
“SEC”
means
the United States Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations of the
SEC
promulgated thereunder.
4. Miscellaneous.
4.1 Recapitalizations,
Exchanges, etc.
The
provisions of this Agreement shall apply to the full extent set forth herein
with respect to (i) the Common Stock, (ii) any and all securities into
which the Registrable Securities are converted, exchanged or substituted in
any
recapitalization
or other capital reorganization by the Company and (iii) any and all equity
securities of the Company or any successor or assign of the Company (whether
by
merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in conversion of, in exchange for or in substitution of, the Common
Stock and shall be appropriately adjusted for any stock dividends, splits,
reverse splits, combinations, recapitalizations and the like occurring after
the
date hereof. The Company shall cause any successor, assign or issuer of
securities that are Registrable Securities (whether by merger, consolidation,
sale of assets or otherwise) to enter into a new registration rights agreement
with the Designated Holders on terms substantially the same as this Agreement
as
a condition of any such transaction.
4.2 No
Inconsistent Agreements.
The
Company has not and shall not enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Stockholders
in
this Agreement or grant any additional registration rights to any Person or
with
respect to any securities which are not Registrable Securities which are prior
in right to or inconsistent with the rights granted in this Agreement. The
granting of demand registration rights or pari passu piggyback registration
rights shall be deemed not to be inconsistent with the rights granted to
Stockholders in this Agreement.
4.3 Amendments and Waivers.
The
provisions of this Agreement may be amended and the Company may take action
herein prohibited, or omit to perform any act herein required to be performed
by
it, if, but only if, the Company has obtained the written consent of holders
of
at least a majority of the Registrable Securities then in existence.
4.4 Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
4.5 Counterparts.
This
Agreement may be executed in one or more counterparts each of which shall be
deemed an original, but all of which together shall constitute one and the
same
instrument.
4.6 Notices.
All
notices, requests and other communications to any party hereunder shall be
in
writing (including telecopy, telex or similar writing) and shall be deemed
given
or made as of the date delivered, if delivered personally or by telecopy
(provided that delivery by telecopy shall be followed by delivery of an
additional copy personally, by mail or overnight courier), one day after being
delivered by overnight courier or three days after being mailed by registered
or
certified mail (postage prepaid, return receipt requested), to the parties
at
the following addresses (or to such other address or telex or telecopy number
as
a party may have specified by notice given to the other party pursuant to this
provision):
If
to the
Company, to:
United
Fuel & Energy Corporation
000
Xxxxx
Xxxxxxxxxx
Xxxxx
000
Xxxxxxx,
Xxxxx 00000
Attention:
President
With
a
copy to:
Akin
Gump
Xxxxxxx Xxxxx & Xxxx, LLP
000
Xxxxxxx Xx., Xxxxx 0000
Xxx
Xxxxxxx, Xxxxx 00000
Attention:
Will Xxxxxxxx
If
to
each Stockholder, to:
The
address or facsimile number of each Stockholder as recorded in the stockholders
records of the Company.
4.7 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Texas, without regard to the conflicts of laws rules or
provisions.
4.8 Forum;
Service of Process.
Any
legal suit, action or proceeding brought by any party or any of its affiliates
arising out of or based upon this Agreement shall be instituted in any federal
or state court in Midland County, Texas, and each party waives any objection
which it may now or hereafter have to the laying of venue or any such
proceeding, and irrevocably submits to the jurisdiction of such courts in any
such suit, action or proceeding.
4.9 Captions.
The
captions, headings and arrangements used in this Agreement are for convenience
only and do not in any way limit or amplify the terms and provisions
hereof.
4.10 No
Prejudice.
The
terms of this Agreement shall not be construed in favor of or against any party
on account of its participation in the preparation hereof.
4.11 Words
in Singular and Plural Form.
Words
used in the singular form in this Agreement shall be deemed to import the
plural, and vice versa, as the sense may require.
4.12 Successors
and Assigns; Third Party Beneficiaries.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the parties hereto and their respective successors, permitted
assigns, executors, administrators and heirs.
4.13 Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding between the parties
as to the subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
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