REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
REGISTRATION
RIGHTS AGREEMENT (this
"Agreement"),
dated
as
of May 9, 2007, by and between Gastar Exploration Ltd., an Alberta, Canada
corporation (the "Company"),
and
Navasota Resources, L.P., a [Texas] limited partnership (the "Purchaser").
WHEREAS:
In
connection with the Common Share Purchase Agreement dated May 9, 2007 by and
between the parties hereto (the "Purchase
Agreement"),
the
Company has agreed, upon the terms and subject to the conditions of the Purchase
Agreement, to issue and sell the Shares (as such term is defined in the Purchase
Agreement) to the Purchaser concurrently with the execution and delivery of
this
Agreement.
To
induce
the Purchaser to execute and deliver the Purchase Agreement, the Company has
agreed to provide certain registration rights under the Securities Act of 1933,
as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the "1933
Act"),
and
applicable state securities laws.
NOW,
THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Purchaser hereby agree as
follows:
1.
DEFINITIONS.
As
used
in this Agreement, the following terms shall have the following
meanings:
a.
"Business
Day"
means a
day, other than Saturday, Sunday or other day on which commercial banks in
Houston, Texas are authorized or required by law to close.
b. "Canadian
Securities Laws"
means
the securities legislation and regulations of, and the instruments, policies,
rules, orders, codes, notices and interpretation notes, of the securities
regulation authorities (including the Toronto Stock Exchange) of any applicable
jurisdiction, or jurisdictions collectively, in Canada.
c. "Common
Shares"
means
the common shares of the Company.
d. "Governmental
Authority"
means
the government of the United States of America, the government of Canada or
the
government of any other nation, or any political subdivision thereof, whether
state, provincial or local, or any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administration powers or functions
of or pertaining to government over the Company or any of its subsidiaries,
or
any of their respective properties, assets or undertakings.
e. "Investor"
means
the Purchaser, any transferee or assignee thereof to whom the Purchaser assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 10 and any transferee or assignee
thereof to whom a transferee or assignee assigns its rights under this Agreement
and who agrees to become bound by the provisions of this Agreement in accordance
with Section 10.
f.
"Person"
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization and a governmental or
any
department or agency thereof.
g. "Register,"
"registered,"
and
"registration"
refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act, and the
declaration or ordering of effectiveness of such Registration Statement(s)
by
the United States Securities and Exchange Commission (the "SEC").
h. "Registrable
Securities"
means
(i) the Shares required to be issued on the Closing Date and (ii), any common
shares issued or issuable with respect to such Shares as a result of any
share
split, share dividend, recapitalization, exchange or similar event or otherwise;
provided, however, that any such Registrable Securities shall cease to be
Registrable Securities when (a) a Registration Statement with respect to
the
sale of such securities becomes effective under the 1933 Act and such securities
are disposed of in accordance with such Registration Statement, (b) such
securities are sold in accordance with Rule 144 (as defined in Section 9),
or
(c) such securities become transferable without any restrictions in accordance
with Rule 144(k) (or any similar rule then in effect under the 1933
Act).
i.
"Registration
Statement"
means a
registration statement or registration statements of the Company filed under
the
1933 Act covering the Registrable Securities.
j.
"Trading
Day"
means
any day on which the Common Shares are traded on the principal securities
exchange or securities market in the United States or Canada on which the
Common
Shares are then traded; provided that "Trading Day" shall not include any
day on
which the Common Shares are scheduled to trade, or actually trade on such
exchange or market, for less than 4.5 hours.
Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Purchase Agreement.
2. DEMAND
REGISTRATION.
a. Request
for Registration.
At any
time after the earlier of December 31, 2007 or if the Company shall receive
a
written request ("Demand
Notice")
from
an Investor holding at least 30% of the Registrable Securities then outstanding
(the "Initiating
Investor")
for
registration under the 1933 Act (a "Demand
Registration")
of all
or part of its Registrable Securities but not less than 30% of the Registrable
Securities then outstanding, then the Company shall, within 15 days of the
receipt thereof, give written notice of such Demand Notice to each Investor.
Within
15
days after receiving such notice, each Investor may make a written request
to
the Company that any or all of the Investor's Registrable Securities be included
in the Demand Registration, which notice shall specify the number of shares
to
be so included. Subject to Section 2(e) hereof, the Company shall include
in the
Demand Registration (or in a separate Registration Statement filed concurrently
therewith)
all Registrable Securities with respect to which the Company has received
a
written request for inclusion therein within 15 days after the receipt by
such
Investor of
the
Company's notice. Each Investor
shall
be
permitted to withdraw all or part of the
Investor's Registrable
Securities requested to be included in the Demand Registration at any time
prior
to the effective date of such Demand Registration without any liability for
any
registration expenses. The
Demand Notice will specify the number of shares of Registrable Securities
proposed to be sold and will also specify the intended method of disposition
thereof
and the jurisdictions in which registration is reasonably desired.
b. Limitation
on Demand Registration.
The
Company shall not be obligated to effect more than one Demand Registration
under
this Section 2. Notwithstanding any provision of this Agreement to the contrary,
the Company shall be entitled to postpone (but not more than once in any
twelve
month period), for a reasonable period of time not in excess of 90 days,
the
filing of a Registration Statement if the Company delivers to the Investors
a
certificate signed by the Chief Executive Officer or Chief Financial Officer
of
the Company certifying that, in the good faith judgment of the Board of
Directors of the Company, such registration and offering would reasonably
be
expected to materially adversely affect or materially interfere with any
bona
fide material financing of the Company or any material transaction under
consideration by the Company or would require disclosure of information that
has
not been disclosed to the public, the premature disclosure of which would
materially adversely affect the Company. Such certificate shall contain a
statement of the reasons for such postponement and an approximation of the
anticipated delay. The Persons receiving such certificate shall keep the
information contained in such certificate confidential subject to the same
terms
set forth in Section 4(i). If the Company shall so postpone the filing of
a
Registration Statement, the Initiating Investor shall have the right to withdraw
the request for registration by giving written notice to the Company within
10
days of the anticipated termination date of the postponement period, as provided
in the certificate delivered by the Company pursuant hereto, and in the event
of
such withdrawal, such request shall not be counted for purposes of the number
of
Demand Registrations to which the Investors are entitled pursuant to the
terms
of this Agreement.
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c. Effective
Registration.
A
registration will not count as a Demand Registration (i) unless a
Registration Statement with respect thereto has become effective (unless
the
Initiating Investor withdraws its shares of Registrable Securities requested
to
be included in the Demand Registration), (ii) if after it has become effective,
such registration is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court for
any
reason not attributable to an Investor and has not thereafter become effective,
or (iii) if the conditions to closing specified in the underwriting agreement,
if any, entered into in connection with such registration are not satisfied or
waived, other than by reason of a failure on the part of an
Investor.
d. No
Third-Party Piggy-Back on Demand Registrations without Consent.
Neither
the Company nor any of its security holders who are not Investors may include
securities of the Company in any Demand Registration without the prior written
consent of the Initiating Investor.
e. Priority
on Demand Registrations.
In the
event an offering pursuant to a Demand Registration shall be in the form
of an
underwritten offering pursuant to subsection (f) below, if the managing
underwriter or underwriters of such offering advise the Company and the
Investors in writing that, in their good faith judgment, the number of
Registrable Securities and any other securities requested to be included
in such
offering is sufficiently large to adversely affect the success of such offering
(a "Material
Adverse Effect"),
then
(i)
the amount of securities to be included in the Demand
Registration for
any
Persons (other than the Company and the Investors) shall first be reduced,
thereafter the securities to be offered for the account of the Company shall
be
reduced, and thereafter the Registrable Securities to be offered for the
account
of the Investors shall be reduced so that the total number of securities
to be
included in the
offering
shall be the recommended
number by such managing underwriter or underwriters, unless the Investors
desire to sell a number of Registrable Securities that is less than the total
amount that they are entitled to sell, in which event
the
number of Registrable Securities not so elected to be sold shall be allocated
first to the Company and then to any other holders of securities of the Company
permitted
to include their securities in such Demand Registration pursuant
to Section 2(d).
f.
Manner
of Offering; Selection of Underwriters.
If the
Initiating Investor so requests, the offering of Registrable Securities pursuant
to a Demand Registration shall be in the form of an underwritten offering
and
all Persons electing to participate in such Demand Registration
shall
be
bound by such
determination. If a Demand Registration is in the form of an underwritten
offering, the Initiating
Investor
shall select the managing underwriter or underwriters to be used in connection
with the offering; provided,
however,
that
such underwriter or underwriters must be reasonably satisfactory to the
Company.
3. PIGGY-BACK
REGISTRATION.
a. Request
for Registration.
At any
time after the date hereof, if the Company proposes to file a registration
statement under the 1933 Act (other than (i) a registration statement on
Form
S-4 or S-8 or any
successor form that may be adopted by the SEC, (ii) a registration statement
filed in connection with an exchange offer or offering of securities or debt
solely to the Company's existing security or debt holders, (iii) a registration
statement filed as a "shelf" registration pursuant to Rule 415 under the
1933
Act or (iv) the Existing Registration Statement (an "Exempt
Offering"))
with
respect to an offering of securities of the same class as the Registrable
Securities for
the
Company's own account
or
for
the
account
of
any
of
its
security holders, then the Company shall give written notice of such proposed
filing to each Investor as soon as practicable (but in no event less than
20 nor
more than 60 days before the anticipated filing date). Such notice shall
offer
each Investor the opportunity to have all or any of the Registrable Securities
held by such Investor included in the Registration Statement proposed to
be
filed or, at the Company's option, in a separate Registration Statement to
be
filed concurrently with such Registration Statement (the "Piggy-Back
Registration").
Within 15 days after receiving such notice, each Investor may make a written
request to the Company that any or all of the Investor's Registrable Securities
be included in the Piggy-Back Registration, which notice shall specify the
number of shares to be so included. Subject to Section 3(b) hereof, the Company
shall include in the Piggy-Back Registration (or in a separate Registration
Statement filed concurrently therewith)
all Registrable Securities with respect to which the Company has received
a
written request for inclusion therein within 15 days after the receipt by
such
Investor of
the
Company's notice. The Company may in its discretion withdraw any Registration
Statement filed pursuant to this Section 3(a) subsequent to its filing without
liability to any
Investor
except
with respect to expenses. Each Investor
shall
be
permitted to withdraw all or part of the
Investor's Registrable
Securities requested to be included in a Piggy-Back Registration at any time
prior to the effective date of such Piggy-Back Registration without any
liability for any registration expenses.
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b. Priority
on Piggy-Back Registration.
If any
Piggy-Back Registration is to be an underwritten offering, the Company shall
use
its reasonable efforts to cause the managing underwriter or underwriters
to
permit the shares of Registrable Securities
requested by each
Investor to
be
included in the Piggy-Back Registration (on the same terms and conditions
as
similar securities of the Company included therein to the extent appropriate).
Notwithstanding the foregoing, if the managing underwriter or underwriters
of
such offering advise the Company in writing that, in their good faith judgment,
the number of Registrable Securities and any other securities requested to
be
included in such offering is sufficiently large to have a Material Adverse
Effect, then (i) if such Piggy-Back Registration is incident to a primary
registration on behalf of the Company, the amount of securities to be included
in the Piggy-Back Registration for any Persons (other than the Company) shall
be
reduced pro rata so that the total number of securities to be included in
the
offering
shall be the recommended
number by such managing underwriter or underwriters, unless an Investor desires
to sell a number of Registrable Securities that is less than the total amount
that it is entitled to sell, and (ii) if such Piggy-Back Registration is
incident to a secondary registration on behalf of holders of securities of
the
Company, the Company shall include in such Registration Statement (A) first,
the
number of securities of such Person(s) on whose behalf the registration is
being
made, (B) second, the number of Registrable Securities requested to be
included in such registration pursuant to this Section 3 and for the account
of
all other Persons pursuant to similar piggy-back registration rights in excess
of the securities such Persons on whose behalf the registration is being
made
propose to sell that, in the good faith judgment of such managing underwriters,
can be sold without causing a Material Adverse Effect on such offering, and
(C) third, the number of securities requested to be included in such
registration
by the Company.
c Legal
Counsel.
Subject
to Section 6 hereof,
the Purchaser shall have the right to select one legal counsel to review,
on
behalf of the Purchaser, any registration pursuant to this Agreement
("Legal
Counsel"), which
shall be counsel as thereafter designated in writing to the Company by the
Purchaser or its assignee. The Company shall reasonably cooperate with Legal
Counsel in performing the Company's obligations under this
Agreement.
4. REGISTRATION
PROCEDURES.
At
such
time as the Company is obligated to effect the registration of the Registrable
Securities with the SEC pursuant to Section 2 or 3 hereof, the Company will
use
its reasonable efforts to effect the registration of the Registrable Securities
in accordance with the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following obligations:
a. The
Company shall promptly prepare and file with the SEC a Registration Statement
with respect to the applicable Registrable Securities and use its reasonable
best efforts to cause such Registration Statement to become effective as
soon as
practicable after such filing. The Company shall keep each Registration
Statement effective at all times for a period of at least 120 days after
the
effective date thereof or such shorter period in which all Registrable
Securities included in such Registration Statement have been sold (the
"Registration
Period"). Such
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of
a
material fact or omit to state a material fact required to be stated therein,
or
necessary to make the statements therein, in light of the circumstances in
which
they were made, not misleading. The term "reasonable efforts" shall mean,
among
other things, that the Company shall submit to the SEC, within three (3)
Business Days after the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that the staff
has no further comments on the Registration Statement, as the case may be,
a
request for acceleration of effectiveness of such Registration Statement
to a
time and date not later than 48 hours after the submission of such request;
provided, however, that, subject to Section 4(t), the Company may delay (an
"Effectiveness
Request Grace Period")
such
submission of a request for acceleration of effectiveness of such Registration
Statement if, in the good faith opinion of the Company and its counsel, such
Effectiveness Request Grace Period is necessary to avoid disclosure of material
non-public information concerning the Company the disclosure of which at
the
time is not, in the good faith opinion of the Board of Directors of the Company
and its counsel, in the best interest of the Company and, in the opinion
of
counsel to the Company, otherwise required; provided that the Company shall
(i)
promptly notify the Investor in writing of the existence of material non-public
information giving rise to such an Effectiveness Request Grace Period (provided
that in each notice the Company shall not disclose the content of such material
non-public information to the Investor), (ii) submit such request for
acceleration of effectiveness as soon as, in the good faith opinion of Company
and its counsel, such Effectiveness Request Grace Period is no longer necessary
(subject to Section 4(t)), and (iii) notify the Investor in writing of the
date
on which the Effectiveness Request Grace Period ends.
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b. The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) to each Registration Statement as may be necessary
to
keep such Registration Statement effective at all times during the Registration
Period, with respect to the disposition of all securities covered by the
Registration Statement and cause the related Prospectus to be supplemented
by
any Prospectus supplement as may be necessary to comply with the provisions
of
the 1933 Act with respect to the disposition of the securities of the Company
covered by such Registration Statement until such time as all of such securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the 1933 Act. In the case of amendments
and supplements to a Registration Statement that are required to be filed
pursuant to this Agreement (including pursuant to this Section 4(b)) by reason
of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any
analogous report under the Securities Exchange Act of 1934, as amended (the
"1934
Act"),
the
Company shall have incorporated such report by reference into the Registration
Statement, if applicable and permitted by law, or shall file such amendments
or
supplements with the SEC as soon as practicable after such filing of the
report;
provided,
however,
that
the Company may delay the filing of any applicable supplement or amendment
pursuant to Section 4(t) (any such delay, a "Current
Report Update Grace Period").
c. The
Company shall (A) permit Legal Counsel to review and comment upon the
Registration Statement at least five (5) Business Days prior to its filing
with
the SEC, The Company shall not submit a request for acceleration of the
effectiveness of the Registration Statement or any amendment or supplement
thereto without providing prior notice thereof to Legal Counsel and each
Investor. The Company shall furnish to Legal Counsel, without charge, (i)
promptly after the same is prepared and filed with the SEC, one copy of the
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference
that
have not been filed, or are not immediately available electronically, via
XXXXX,
and all exhibits, and (ii) upon the effectiveness of any Registration Statement,
one copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto. The Company shall reasonably cooperate
with
Legal Counsel in performing the Company's obligations pursuant to this Section
4.
d. The
Company shall furnish to each Investor whose Registrable Securities are included
in a Registration Statement, and to any managing underwriter or
underwriters, without charge, at least one conformed copy of the Registration
Statement, the Prospectus and Prospectus supplements, if applicable, and
each
post-effective amendment thereto, including financial statements (but excluding
schedules, all documents incorporated or deemed to be incorporated therein
by
reference, and all exhibits, unless requested in writing by the Investor
or the
managing underwriter or underwriters) and deliver to the Investor, without
charge, as many copies of the Prospectus or Prospectuses (including each
form of
Prospectus) and each amendment or supplement thereto as the Investor may
reasonably request in connection with the distribution of the Registrable
Securities.
e. The
Company shall use its reasonable efforts to (i) register and qualify, unless
an
exemption from registration and qualification applies, the resale by the
Investor of the Registrable Securities covered by a Registration Statement
under
the securities or "blue sky" laws of all the states of the United States,
(ii)
prepare and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary
to
maintain such registrations and qualifications in effect at all times during
the
Registration Period, and (iv) take all other actions reasonably necessary
or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this
Section 4(e) or (y) subject itself to general taxation in any such jurisdiction.
The Company shall promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any notification
with
respect to the suspension of the registration or qualification of any of
the
Registrable Securities for sale under the securities or "blue sky" laws of
any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.
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f.
The
Company shall notify Legal Counsel and each Investor in writing of the happening
of any event, as promptly as practicable after becoming aware of such event,
as
a result of which the prospectus included in a Registration Statement, as
then
in effect, includes an untrue statement of a material fact or omission to
state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission,
and
deliver to each Investor, without charge, as many copies of the Prospectus
included in such Registration Statement and each amendment or supplement
thereto
as such Investor may reasonably request in connection with the distribution
of
the Registrable Securities. The Company shall also promptly notify Legal
Counsel
and each Investor in writing (i) when a prospectus or any prospectus supplement
or post-effective amendment has been filed, and when a Registration Statement
or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered electronically to Legal Counsel and each
Investor on the same day of such effectiveness and by overnight mail), (ii)
of
any request by the SEC for amendments or supplements to a Registration Statement
or related prospectus or related information, and (iii) of the Company's
reasonable determination that a post-effective amendment to a Registration
Statement would be appropriate.
g. The
Company shall use its reasonable efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a Registration Statement, or
the
suspension of the qualification of any of the Registrable Securities for
sale in
any jurisdiction and, if such an order or suspension is issued, to obtain
the
withdrawal of such order or suspension as soon as practicable and to notify
Legal Counsel and each Investor who holds Registrable Securities being sold
of
the issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such
purpose.
h. At
the
reasonable request (in the context of the securities laws) of any Investor,
the
Company shall furnish to such Investor, on the date of the effectiveness
of the
Registration Statement and thereafter from time to time on such dates as
an
Investor may reasonably request (i) a letter, dated such date, from the
Company's independent certified public accountants in form and substance
as is
customarily given by independent certified public accountants to underwriters
in
an underwritten public offering, addressed to the Investor, and (ii) an opinion,
dated as of such date, of counsel representing the Company for purposes of
such
Registration Statement, in form, scope and substance as is customarily given
in
an underwritten public offering, addressed to the Investor, provided that
such
Investor shall reimburse the Company for its out-of-pocket expenses incurred
in
connection with the furnishing of any such letter and opinion.
i.
At
the
reasonable request (in the context of the securities laws) of any Investor,
the
Company shall upon receipt of a waiver of such investor's non-public information
requirements make available for inspection during regular business hours
by (i)
any Investor, (ii) Legal Counsel and (iii) one firm of accountants or other
agents retained by the Investors (collectively, the "Inspectors"),
all
pertinent financial and other records, and pertinent corporate documents
and
properties of the Company (collectively, the "Records"),
as
shall be reasonably deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information that any Inspector
may reasonably request; provided, however, that each Inspector shall agree
to
hold in strict confidence and shall not make any disclosure (except to an
Investor and Legal Counsel) or use of any Record or other information that
the
Company determines in good faith to be confidential, and of which determination
the Inspectors are so notified, unless (a) the disclosure of such Records
is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of
such
Records is ordered pursuant to a final, non-appealable subpoena or order
from a
court or government body of competent jurisdiction, or (c) the information
in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the Inspector
has knowledge. Each Investor 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 its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Each Inspector that exercises its rights under this Section
4(i)
shall be obligated to execute a non-disclosure agreement containing such
reasonable terms as the Company may request. The fees and expenses of the
Inspectors shall be borne by the applicable Investor or
Investors.
-6-
j.
The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws,
(ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release
of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available
to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure
of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to
obtain
a protective order for, such information.
k. The
Company shall use its reasonable efforts to (i) maintain the listing of the
Common Shares on the Toronto Stock Exchange and/or the American Stock Exchange
(AMEX), (ii) cause all the Registrable Securities covered by a Registration
Statement to be listed (or quoted, as applicable) on each United States or
Canadian securities exchange or trading market on which securities of the
same
class or series issued by the Company are then listed or traded, and (iii)
without limiting the generality of the foregoing, to arrange for at least
three
market makers to register with the National Association of Securities Dealers,
Inc. ("NASD")
as
such with respect to such Registrable Securities. The Company shall pay all
fees
and expenses in connection with satisfying its obligation under this Section
4(k).
l.
The
Company shall cooperate with each Investor who holds Registrable Securities
being offered and, to the extent applicable, facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legend) representing
the Registrable Securities to be offered pursuant to a Registration Statement
and enable such certificates to be in such denominations or amounts, as the
case
may be, as the Investors may reasonably request and registered in such names
as
the Investors may request.
m. The
Company shall provide a transfer agent and registrar of all such Registrable
Securities not later than the effective date of the applicable Registration
Statement.
n. If
requested by an Investor, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as an Investor requests to be included therein relating to the
sale
and distribution of Registrable Securities, including information with respect
to the number of Registrable Securities being offered or sold, the purchase
price being paid therefor and any other terms of the offering of the Registrable
Securities to be sold in such offering; (ii) as soon as practicable make
all
required filings of such prospectus supplement or post-effective amendment
after
being notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment; and (iii) as soon as practicable, supplement
or make amendments to any Registration Statement if reasonably requested
by an
Investor of such Registrable Securities.
o. The
Company shall use its reasonable efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities in the United
States
and Canada as may be necessary to consummate the disposition of such Registrable
Securities.
p. The
Company shall make generally available to its security holders, as soon as
practicable, an earnings statement (in form complying with the provisions
of
Rule 158 under the 0000 Xxx) covering a twelve-month period beginning not
later
than the first day of the Company's fiscal quarter next following the effective
date of a Registration Statement.
-7-
q. The
Company shall otherwise use its reasonable efforts to comply with all applicable
rules and regulations of the SEC in connection with any registration
hereunder.
r. Within
five (5) Business Days after a Registration Statement that covers applicable
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to each Investor
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective
by the
SEC, provided that if the Company changes its transfer agent, it shall
immediately deliver any previously delivered notices under this Section 4(r)
and
any subsequent notices to such new transfer agent.
s. The
Company shall make such filings with the NASD (including providing all required
information and paying required fees related thereto) as and when requested
by
an Investor and make all other filings and take all other actions reasonably
necessary to expedite and facilitate disposition by Investors of Registrable
Securities pursuant to a Registration Statement.
t.
Notwithstanding
anything to the contrary in Section 4(f), at any time after the applicable
Registration Statement has been declared effective by the SEC, the Company
may
delay the disclosure of material non-public information concerning the Company
the disclosure of which at the time is not, in the good faith opinion of
the
Board of Directors of the Company and its counsel, in the best interest of
the
Company and, in the opinion of counsel to the Company, otherwise required
(a
"Post-Effectiveness
Grace Period,"
and
along with each Effectiveness Request Grace Period and Current Report Update
Grace Period, each a "Grace
Period");
provided that the Company shall promptly (i) notify the Investor in writing
of
the existence of material non-public information giving rise to a
Post-Effectiveness Grace Period (provided that in each notice the Company
shall
not disclose the content of such material nonpublic information to the Investor)
and the date on which the Post-Effectiveness Grace Period will begin, and
(ii)
notify the Investor in writing of the date on which the Post-Effectiveness
Grace
Period ends. Notwithstanding anything to the contrary contained herein, no
Grace
Period shall exceed 30 consecutive days, any Grace Periods during any 365-day
period shall not exceed an aggregate of 60 days, and the first day of any
Grace
Period must be at least two (2) Trading Days after the last day of any prior
Grace Period (a Grace Period that satisfies all of the requirements of Sections
4(a) and 4(b) and this Section 4(t), as applicable, being referred to as
an
"Allowable
Grace Period").
For
purposes of determining the length of a Post-Effectiveness Grace Period under
this Section 4(t), the Post-Effectiveness Grace Period shall begin on and
include the date the holders receive the notice referred to in clause (i)
and
shall end on and include the later of the date the holders receive the notice
referred to in clause (ii) and the date referred to in such notice. The
provisions of Section 4(f) hereof shall not be applicable during the period
of
any Allowable Grace Period. Upon expiration of a Post-Effectiveness Grace
Period, the Company shall again be bound by the first sentence of Section
4(f)
with respect to the information giving rise thereto unless such material
non-public information is no longer applicable.
u. After
the
date of this Agreement, the Company shall not, without the prior written
consent
of Investors holding a majority of the Registrable Securities then outstanding,
enter into any agreement with any holder or prospective holder of any securities
of the Company that would grant such holder registration rights senior to
those
granted to the Investor hereunder.
5. OBLIGATIONS
OF THE INVESTORS.
a. At
least
six (6) Business Days prior to the first anticipated filing date of a
Registration Statement filed pursuant to Sections 2 or 3 hereof and at least
five (5) Business Days prior to the filing of any amendment or supplement
to a
Registration Statement, the Company shall notify each Investor in writing
of the
information, if any, the Company requires from each such Investor if such
Investor elects to have any of such Investor's Registrable Securities included
in such Registration Statement or, with respect to an amendment or a supplement,
if such Investor's Registrable Securities are included in such Registration
Statement (each an "Information
Request").
Provided that the Company shall have complied with its obligations set forth
in
the preceding sentence, it shall be a condition precedent to the obligations
of
the Company to complete the registration pursuant to this Agreement with
respect
to the Registrable Securities of a particular Investor that such Investor
shall
furnish to the Company, in response to an Information Request, such information
regarding itself; the Registrable Securities held by it and the intended
method
of disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company
may
reasonably request.
-8-
b. Each
Investor, by such Investor's acceptance of the Registrable Securities, agrees
to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder,
unless
such Investor has notified the Company in writing of such Investor's election
to
exclude all of such Investor's Registrable Securities from such Registration
Statement.
c. Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(g) or the first
sentence of Section 4(f) or written notice from the Company of a Grace Period,
such Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 4(f) or receipt of notice that no supplement
or amendment is required or that the Grace Period has ended. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver
unlegended Common Shares to a transferee of an Investor in connection with
any
sale of Registrable Securities pursuant to a Registration Statement covering
such Registrable Securities with respect to which an Investor has entered
into a
contract for sale prior to the Investor's receipt of a notice from the Company
of the happening of any event of the kind described in Section 4(g) or the
first
sentence of Section 4(f) and for which the Investor has not yet
settled.
6. EXPENSES
OF REGISTRATION.
All
reasonable expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Sections
2, 3 and 4, including all registration, listing and qualifications fees,
printers and accounting fees, and fees and disbursements of counsel for the
Company shall be paid by the Company, except as provided in Section 4(h).
The
Company shall also reimburse the Investor for the reasonable fees and
disbursements of Legal Counsel in connection with registration, filing or
qualification pursuant to Sections 2, 3 and 4 of this Agreement, up to a
maximum
of $10,000 per Registration Statement.
7. INDEMNIFICATION.
In
the
event any Registrable Securities are included in a Registration Statement
under
this Agreement:
a. To
the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend each Investor, the directors, officers, partners,
employees, agents, representatives of, and each Person, if any, who controls
any
Investor within the meaning of the 1933 Act, the 1934 Act or the Canadian
Securities Laws (each, an "Indemnified
Person"),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys' fees, amounts paid in settlement or
expenses, joint or several (collectively, "Claims")
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by
or
before any court or governmental, administrative or other regulatory agency
or
body (including the SEC or any state or provincial securities commission
authority or self-regulatory organization, in the United States, Canada or
anywhere else in the world), whether pending or threatened, whether or not
an
indemnified party is or may be a party thereto ("Indemnified
Damages"),
to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of
or are based upon: (i) any untrue statement or alleged untrue statement of
a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction
in
which Registrable Securities are offered ("Blue
Sky Filing"),
or
the omission or alleged omission to state a material fact required to be
stated
therein or necessary to make the statements therein not misleading, (ii)
any
untrue statement or alleged untrue statement of a material fact contained
in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented,
if
the Company files any amendment thereof or supplement thereto with the SEC)
or
the omission or alleged omission to state therein any material fact necessary
to
make the statements made therein, in light of the circumstances under which
the
statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any of the Canadian
Securities Laws, any other law, including any state, provincial or foreign
securities law, or any rule or regulation thereunder relating to the offer
or
sale of the Registrable Securities pursuant to a Registration Statement or
(iv)
any material violation of this Agreement by the Company (the matters in the
foregoing clauses (i) through (iv) being, collectively, "Violations").
Subject to Section 7(c), the Company shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable,
for
any
legal fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 7(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation that occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified
Person
for such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company pursuant
to
Section 4(d); (ii) with respect to any preliminary prospectus, shall not
inure
to the benefit of any such person from whom the person asserting any such
Claim
purchased the Registrable Securities that are the subject thereof (or to
the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by the Company pursuant to Section 4(d), and the
Indemnified Person was promptly advised in writing not to use the incorrect
preliminary prospectus prior to the use giving rise to a violation and such
Indemnified Person, notwithstanding such advice, used it; (iii) shall not
be
available to the extent such Claim is based on a failure of the Investor
to
deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant
to
Section 4(d); and (iv) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of
the
Company, which consent shall not be unreasonably withheld. Such indemnity
shall
remain in full force and effect regardless of any investigation made by or
on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investor pursuant to Section 10.
-9-
b. In
connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is
set
forth in Section 7(a), the Company, each of its directors, each of its officers
who signs the Registration Statement, and each Person, if any, who controls
the
Company within the meaning of the 1933 Act, the 1934 Act or the Canadian
Securities Laws (each an "Indemnified
Party"),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act, the Canadian Securities Laws or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement; and, subject to Section 7(c),
such
Investor will reimburse, promptly as such expenses are incurred and are due
and
payable, any legal or other expenses reasonably incurred by an Indemnified
Party
in connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 7(b) and the agreement
with respect to contribution contained in Section 8 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior
written consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the aggregate liability of the
Investor in connection with any Violation shall not exceed the net proceeds
to
such Investor as a result of the sale of Registrable Securities pursuant
to the
Registration Statement giving rise to such Claim. Such indemnity shall remain
in
full force and effect regardless of any investigation made by or on behalf
of
such Indemnified Party and shall survive the transfer of the Registrable
Securities by the Investor pursuant to Section 10. Notwithstanding anything
to
the contrary contained herein, the indemnification agreement contained in
this
Section 7(b) with respect to any preliminary prospectus shall not inure to
the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected on a timely basis
in
the prospectus, as then amended or supplemented.
-10-
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
7
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or
Indemnified Party shall, if a Claim in respect thereof is to be made against
any
indemnifying party under this Section 7,
deliver
to the indemnifying party a written notice of the commencement thereof, and
the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person
or
the Indemnified Party, as the case may be. In any such proceeding, any
Indemnified Person or Indemnified Party may retain its own counsel, but,
except
as provided in the following sentence, the fees and expenses of that counsel
will be at the expense of that Indemnified Person or Indemnified Party, as
the
case may be, unless (i) the indemnifying party and the Indemnified Person
or
Indemnified Party, as applicable, shall have mutually agreed to the retention
of
that counsel, (ii) the indemnifying party does not assume the defense of
such
proceeding in a timely manner or (iii) in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel for
the
Indemnified Person or Indemnified Party and the indemnifying party would
be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
such
counsel in such proceeding, in which case the Company shall pay reasonable
fees
for up to one separate legal counsel for the Investors, and such legal counsel
shall be selected by the Investor(s) holding at least two-thirds (2/3) in
interest of the Registrable Securities included in the Registration Statement
to
which the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or Claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to
the
Indemnified Party or Indemnified Person which relates to such action or Claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable
for any
settlement of any action, claim or proceeding effected without its prior
written
consent, provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the prior written consent of the Indemnified Party or Indemnified Person,
consent to entry of any judgment or enter into any settlement or other
compromise with respect to any pending or threatened action or claim in respect
of which indemnification or contribution may be or has been sought hereunder
(whether or not the Indemnified Party or Indemnified Person is an actual
or
potential party to such action or claim), which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation. Following indemnification as provided
for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties,
firms
or corporations relating to the matter for which indemnification has been
made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve
such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 7, except to the extent that the indemnifying party
is
prejudiced in its ability to defend such action.
d. The
indemnification required by this Section 7 shall be made by periodic payments
of
the amount thereof during the course of the investigation or defense, as
and
when bills are received or Indemnified Damages are incurred.
e. The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
8. CONTRIBUTION.
To
the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with
respect
to any amounts for which it would otherwise be liable under Section 7 to
the
fullest extent permitted by law; provided, however, that: (i) no Person involved
in the sale of Registrable Securities which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) in
connection with such sale, shall be entitled to contribution from any Person
involved in such sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited to an amount equal to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant
to
the Registration Statement giving rise to such action or claim for
indemnification less the amount of any damages that such seller has otherwise
been required to pay in connection with such sale.
-11-
9. REPORTS
UNDER THE 1934 ACT.
With
a
view to making available to the Investor the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that
may
at any time permit the Investor to sell securities of the Company to the
public
without registration ("Rule
144"),
after
the Company first becomes subject to reporting obligations under the 1934
Act,
the Company agrees to:
a. make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
b. file
with
the SEC all Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on 8-K (other than Current Reports on Form 8-K that are required
solely pursuant to Item 1.01, 1.02, 2.03, 2.04, 2.05, 2.06 or 4.02(a) of
Form
8-K) and any similar or successor reports required of the Company under the
1934
Act so long as the Company remains subject to such requirements and the filing
of such reports and other documents is required for the applicable provisions
of
Rule 144; and
c. furnish
to each Investor so long as such Investor owns Registrable Securities, promptly
upon written request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the 1933 Act and the
1934
Act, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested to permit the Investor to
sell
such securities pursuant to Rule 144 without registration.
10. ASSIGNMENT
OF REGISTRATION RIGHTS.
The
rights under this Agreement shall be automatically assignable by the Purchaser
to any transferee or assignee of all or any portion of Registrable Securities
if: (i) the Purchaser agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the Company
within five (5) Business Days after such transfer or assignment; (ii) the
Company is, within five (5) Business Days after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee
or
assignee, and (b) the securities with respect to which such registration
rights
are being transferred or assigned; (iii) immediately following such
transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the 1933 Act or any applicable
state
securities laws; (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this sentence, the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions
contained herein; and (v) in the case of a transfer or assignment of fewer
than
all of the Registrable Securities then held by the Investor to a Person that
is
not an affiliate of the Investor, at least 9,000,000 Registrable Securities
(subject to adjustment for stock splits, stock dividends, stock combinations
and
similar transactions after the date of this Agreement) are transferred or
assigned to the transferee or assignee.
11. AMENDMENT
OF REGISTRATION RIGHTS.
Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors
who
then hold at least two-thirds (2/3) of the Registrable Securities. Any amendment
or waiver effected in accordance with this Section 11 shall be binding upon
each
Investor and the Company. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the Registrable Securities.
No consideration shall be offered or paid to any Person to amend or consent
to a
waiver or modification of any provision of any of this Agreement unless the
same
consideration also is offered to all of the parties to this
Agreement.
-12-
12. MISCELLANEOUS.
a. A
Person
is deemed to be a holder of Registrable Securities whenever such Person owns
or
is deemed to own of record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the
basis
of instructions, notice or election received from the registered owner of
such
Registrable Securities.
b. Any
notices, consents, waivers or other communications required or permitted
to be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending
party);
or (iii) one (1) Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party
to
receive the same. The addresses and facsimile numbers for such communications
shall be as set forth below, or such other address and/or facsimile number
and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party at least five
(5) days
prior to the effectiveness of such change:
If
to the
Company:
0000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Chief Executive Officer
With
a
copy to:
Xxxxxx
& Xxxxxx, L.L.P.
First
City Tower
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000-0000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
T. Xxxx Xxxxx, Esq.
If
to the
Purchaser:
Navasota
Resources, L.P.
00000
Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxxxx X. Xxxxxxxxx
Facsimile
(000) 000-0000
With
a
copy to Legal Counsel:
______________________
______________________
______________________
______________________
Attention:
______________
Facsimile:
______________
Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by a
courier or overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or deposit with a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
-13-
c. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate
as a
waiver thereof.
d. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
Texas,
without giving effect to any choice of law or conflict of law provision or
rule
(whether of the State of Texas or any other jurisdictions) that would cause
the
application of the laws of any jurisdictions other than the State of Texas.
Each
party hereby irrevocably submits to the exclusive jurisdiction of the state
and
federal courts sitting in Xxxxxx County for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated
hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert
in
any suit, action or proceeding, any claim that it is not personally subject
to
the jurisdiction of any such court, that such suit, action or proceeding
is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service
of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in
any
manner permitted by law. If any provision of this Agreement shall be invalid
or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
not
affect the validity or enforceability of the remainder of this Agreement
in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. This
Agreement, the Purchase Agreement and the other Transaction Documents constitute
the entire agreement among the parties hereto with respect to the subject
matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
This
Agreement, the Purchase Agreement and the other Transaction Documents supersede
all prior agreements and understandings among the parties hereto with respect
to
the subject matter hereof and thereof.
f.
Subject
to the requirements of Section 10, this Agreement shall inure to the benefit
of
and be binding upon the permitted successors and assigns of each of the parties
hereto.
g. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
h. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective
when
counterparts have been signed by each party and delivered to each other party;
provided that a facsimile signature shall be considered due execution and
shall
be binding upon the signatory thereto with the same force and effect as if
the
signature were an original, not a facsimile signature.
i.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments arid documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
j.
All
consents and other determinations to be made by the Investors pursuant to
this
Agreement shall be made, unless otherwise specified in this Agreement, by
Investors holding at least two-thirds (2/3) of the Registrable Securities,
determined without regard to any limitations on the issuance of the Shares.
Any
consent or other determination approved by Investors as provided in the
immediately preceding sentence shall be binding on all
Investors.
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k. The
language used in this Agreement will be deemed to be the language chosen
by the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
l.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and, to the extent provided in Sections
7(a)
and 7(b) hereof, each Investor, the directors, officers, partners, employees,
agents, representatives of, and each Person, if any, who controls any Investor
within the meaning of the 1933 Act, the 1934 Act or the Canadian Securities
Laws
and each of the Company's directors, each of the Company's officers who signs
the Registration Statement, and each Person, if any, who controls the Company
within the meaning of the 1933 Act, the 1934 Act or the Canadian Securities
Laws, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
m. Unless
the context otherwise requires, (a) all references to Sections are to Sections
contained in or attached to this Agreement, (b) words in the singular or
plural include the singular and plural and pronouns stated in either the
masculine, the feminine or neuter gender shall include the masculine, feminine
and neuter, and (c) the use of the word "including" in this Agreement shall
be
by way of example rather than limitation.
IN
WITNESS WHEREOF,
the
parties have caused this Registration Rights Agreement to be duly executed
as of
day and year first above written.
|
COMPANY:
|
PURCHASER:
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|||
|
|
||||
|
NAVASOTA
RESOURCES, L.P.
|
||||
|
By:
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/s/
J. XXXXXXX XXXXXX
|
By:
|
/s/
XXXXXX X. XXXXXXXXX
|
|
|
J.
Xxxxxxx Xxxxxx, President and
|
Xxxxxx
X. Xxxxxxxxx
|
|||
|
Chief
Executive Officer
|
President
|
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