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EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT (this "Registration Rights Agreement") is entered into as
of the 3rd day of June, 1998 between Xxxxxxxx Energy, Inc., a Delaware
corporation (the "Company"), Enron Capital & Trade Resources Corp., a Delaware
corporation and Joint Energy Development Investments II Limited Partnership
(collectively, the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company and Purchasers have entered into that certain
Securities Purchase Agreement (the "Agreement") dated as of June 3, 1998,
whereby Purchasers have agreed, for the consideration set forth therein, to
purchase an aggregate of 50,000 shares (the "Shares") of Series A Preferred
Stock, $0.10 par value per share (the "Preferred Stock"), of the Company; and
WHEREAS, in order to induce Purchasers to enter into the Agreement, the
Company has agreed to enter into this Registration Rights Agreement and to
grant the Rights (as hereinafter defined) to Purchasers contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
SECTION 1.
CERTAIN DEFINITIONS AND TERMS.
The following terms have the meanings indicated:
"Affiliate" shall have the meaning given to such term in Rule 405 under the
Securities Act.
"Commission" means the Securities and Exchange Commission or any successor
thereof.
"Common Stock" means the common stock, $0.10 par value per share, of the
Company.
"Controlling Person" has the meaning ascribed thereto in Section 4(a) of
this Registration Rights Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Existing Registration Rights Agreement" means article IV of that certain
Consolidation Agreement dated as of September 13, 1996, as amended October 8,
1996, by and among the Company, Xxxxxxxx Energy, L.L.C., CSL Management
Corporation, Valley Gathering Company, Cadell X. Xxxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxx X. Xxxxxxxxx and NationsBanc Capital Corporation.
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"Existing Rights Holder" shall have the meaning ascribed thereto in
Section 2(a)(vii) of this Registration Rights Agreement.
"Form S-3" means Form S-3 as promulgated by the Commission on the date
hereof or any successor form or method of registration that provides for the
incorporation by reference of historical information regarding the Company's
business and financial affairs and permits registration of resales of
Registrable Securities for a continuous and indefinite period of time of no
less than two years pursuant to such form or method of registration.
"Holder" means Purchasers and any other Person holding Registrable
Securities; provided, that such Person acquired such Registrable Securities in
accordance with Section 7 of this Registration Rights Agreement.
"Indemnitee" has the meaning ascribed thereto in Section 4(d) of this
Registration Rights Agreement.
"Indemnitor" has the meaning ascribed thereto in Section 4(d) of this
Registration Rights Agreement.
"Initiating Seller" has the meaning ascribed thereto in Section 2(b)(iii)
of this Registration Rights Agreement.
"Majority" shall mean more than 50.00%.
"NBCC" shall mean NationsBanc Capital Corporation.
"Person" means any individual, firm, corporation, trust, association,
partnership, limited partnership, limited liability company, joint venture or
other entity.
"Registrable Securities" means all shares of Common Stock of the Company
issued or issuable to a Holder upon conversion of the Shares or any Common
Stock or other securities issued or issuable as a dividend or other
distribution upon or with respect to such Shares or such Common Stock.
"Register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act and the declaration or ordering of effectiveness of such
registration statement.
"Rights" means all rights, remedies, powers, benefits, and privileges
granted to the Holders pursuant to this Registration Rights Agreement.
"Rule 415" means Rule 415 under the Securities Act as promulgated by the
Commission on the date hereof or any successor rule or method of registration
that permits the registration of resales of
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Registrable Securities for a continuous and indefinite period of time of no
less than two years pursuant to such rule or method of registration.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
SECTION 2.
REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION RIGHTS. (i) On any date after the date
of the earlier of (A) the mailing by any Holder of a notice of conversion of
Shares for Registrable Securities or (B) the issuance of Registrable
Securities, any Holder or Holders possessing in the aggregate a Majority of the
Registrable Securities shall have the right to request, in writing specifying
that such request is made pursuant to this Section 2(a), that the Company file
a registration statement under the Securities Act covering not less than
250,000 Registrable Securities (unless fewer Registrable Securities are held by
the Holders, in which case, covering all such Registrable Securities). Such
request shall set forth the proposed plan of distribution for the Registrable
Securities to be registered. Within five days of such request, the Company
shall give written notice of such request to all other Holders of Registrable
Securities and shall include in the registration in respect of which notice has
been given all Registrable Securities with respect to which the Company has
received written requests from Holders for inclusion therein within ten days
after the Company's notice regarding such registration has been given as
provided in Section 11(a) of this Registration Rights Agreement. Within 45
days of such request, or, in the event that Form S-3 under the Securities Act
is available to the Company to effect such registration, within 30 days of such
request, the Company shall file a registration statement to register under the
Securities Act all Registrable Securities subject to such request; provided,
however, that the Company may defer its obligations under this Section 2(a) for
a period of no more than 30 days (which 30 days shall be in addition to the
45-day or 30-day period, as applicable, permitted above) if the Company obtains
written advice from the Company's outside securities counsel (which counsel
shall be a nationally recognized securities law firm or a law firm acceptable
to the Holders) that filing such a registration statement would require public
disclosure by the Company of any material non-public development; provided,
further, that if such written advice is received by the Company, the request
for registration may be withdrawn by the Holder who requested such registration
(and shall not be treated as a registration hereunder for any purpose); and
provided further, that if such request for registration has not been withdrawn,
once such information has been publicly disclosed by the Company, the Company
shall promptly proceed to fulfill its obligations under this Section 2(a).
(ii) Notwithstanding the foregoing, in the event the
Company reasonably expects to file, within 60 days of a request made pursuant
to this Section 2(a), a registration statement pertaining to securities for the
account of the Company (except a registration statement on Form S-4 or Form S-8
or with respect to a transaction subject to Rule 145 under the Securities Act)
then such request shall constitute a request made pursuant to Section 2(b)
hereof to include in such registration
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statement all Registrable Securities subject to such request and the Company
shall not be obligated to file a separate registration statement for the
Registrable Securities subject to such request; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective and that the Company's estimate of
the date of filing of such registration statement is made in good faith.
(iii) Except as provided in Section 2(a)(iv), the Company
shall be obligated to effect only three registrations in the aggregate pursuant
to this Section 2(a) with respect to all Holders (including Purchasers and all
of their direct and indirect transferees pursuant to Section 7 hereof);
provided, however, that a registration requested pursuant to this Section 2(a)
shall not be deemed to be a "registration" for purposes of any provision of
this Section 2(a), (A) if a registration statement with respect thereto has not
been declared effective by the Commission, (B) if after such registration
statement has become effective, such registration is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not the fault of a holder of
Registrable Securities and all of the Registrable Securities covered thereby
have not been sold, (C) if the conditions to closing specified in the selling
agreement or underwriting agreement entered into in connection with such
registration are not satisfied or waived by the parties thereto other than a
holder of Registrable Securities, or (D) if the Holders of Registrable
Securities are not able to register and sell all of the Registrable Securities
requested to be included in such registration by Holders entitled to
registration rights pursuant to this Registration Rights Agreement.
(iv) At any time the Company is eligible to register
Registrable Securities for resale for a continuous and indefinite period of
time of not less than two years on Form S-3 pursuant to Rule 415 or otherwise,
at the election of Holders holding a Majority of the Registrable Securities,
the number of registrations the Company shall be obligated to effect pursuant
to this Section 2(a) shall be reduced to one, if within 30 days of receipt by
the Company of notice from such Holders of such election, the Company files a
registration statement to register under the Securities Act all Registrable
Securities for continuous and indefinite resale for a period of not less than
two years, and such registration is declared effective by the Commission and
remains continuously effective for the lesser of (A) two years from the
effective date of such registration, or (B) the date after which all
Registrable Securities have been sold by the Holders thereof.
(v) Distribution by the Holder or Holders of the
Registrable Securities registered pursuant to this Section 2(a) may be made in
any lawful manner, including underwritten public offerings and non-underwritten
"at the market" distributions. If any such offering is to be an underwritten
public offering, the Holder or Holders of a Majority of such Registrable
Securities shall have the right to select the managing underwriter or
underwriters, subject to the approval of the Company, which approval shall not
be unreasonably withheld.
(vi) The Holders shall not make a request to the Company
to effect any registration pursuant to this Section 2(a) during the 180-day
period beginning on the effective date of the first registration of Registrable
Securities made pursuant to this Section 2(a) or during the 90-day period
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beginning on the effective date of any registration statement relating to any
registration of Registrable Securities made pursuant to Section 2(b) of this
Registration Rights Agreement.
(vii) (A) Whenever the Company shall effect a registration
pursuant to this Section 2(a), (1) the Company may include securities of the
Company in such registration for sale for its own account, and (2) any Person
other than a Holder who is entitled to a piggy-back registration rights under
the Existing Registration Rights Agreement with respect to a registration
statement filed to effect a registration under this Section 2(a) ("Existing
Rights Holders") may include securities of the Company with respect to which
such rights apply in such registration for sale, in each case in accordance
with the method of disposition specified by the Holders requesting registration
of Registrable Securities unless (if the method of disposition shall be an
underwritten public offering) the lead managing underwriter advises the Holders
that market factors would materially reduce the price received by the Holders
if the securities held by such Existing Rights Holders and the Company are
included therein or would reduce the number of Registrable Securities that
could be sold by Holders participating in such registration if the securities
of such Existing Rights Holders and the Company are included therein.
(B) If the lead managing underwriter for the
offering advises that marketing factors require the inclusion in such
registration of some or all of the Registrable Securities sought to be
registered by the Company or such Existing Rights Holders to be limited or that
the number of securities to be registered at the insistence of the Company and
any Existing Rights Holders plus the number of Registrable Securities sought to
be registered by the Holders should be limited due to marketing factors, the
number of Registrable Securities sought to be registered by the Company and
such Existing Rights Holders shall be reduced as follows: (1) the number of
securities to be registered by the Company shall first be reduced, to the
number recommended by the managing underwriter; (2) if, after all securities
sought to be registered by the Company have been eliminated, the managing
underwriter still recommends a reduction in the number of securities to be
offered, the number of securities sought to be registered by Existing Rights
Holders shall be reduced, pro rata, based on the number of securities sought to
be registered by each such Holder, to the number recommended by the managing
underwriter; and in no event shall the number of securities offered by the
Holders be reduced.
(viii) The Company agrees (A) not to effect any public sale
or distribution of its equity securities (other than pursuant to Form S-4,
Form S-8 or any successor form thereto and, in the case of any registration
under Section 2(b), equity securities being sold for the account of the Company
in any registration which includes Registrable Securities of Holders) during
the 14-day period prior to, and during the 90-day period beginning on, the
effective date of a registration statement filed pursuant to Section 2(a) or
2(b), and (B) to cause each holder of its privately placed equity securities
possessing registration rights purchased from the Company at any time on or
after the date of this Registration Rights Agreement to agree not to effect any
public sale or distribution (including sales pursuant to Rule 144 under the
Securities Act) of any such securities during such period.
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(b) PIGGYBACK REGISTRATION RIGHTS. (i) If the Company at
any time proposes to register any of its Common Stock under the Securities Act
(other than registrations on Forms S-4 or S-8 or any successor forms thereto or
registrations of securities in connection with a Rule 145 transaction), whether
of its own accord or at the request of any holder or holders of its securities,
it shall each such time promptly give written notice to all Holders of its
intention to do so.
(ii) Upon the written request of a Holder or Holders
delivered to the Company within 10 business days after receipt of any such
notice, the Company shall use its best efforts (subject to the provisions of
this Section 2(b)) to cause all Registrable Securities, the Holders of which
shall have so requested registration thereof, to be registered under the
Securities Act, all to the extent requisite to permit the sale or other
disposition by the Holder or Holders of all of such Registrable Securities;
provided, however, the Company may elect not to file a registration statement
pursuant to this Section 2(b) or may withdraw any registration statement filed
pursuant to this Section 2(b) at any time prior to the effective date thereof.
(iii) If the lead managing underwriter for the respective
offering advises that marketing factors require the exclusion from such
registration of some or all of the Registrable Securities sought to be
registered by the Holders or that the total number of securities to be
registered at the insistence of the Company and any other selling shareholders
plus the number of Registrable Securities sought to be registered by the
Holders should be limited due to marketing factors, the number of Registrable
Securities and other securities sought to be registered by each Holder, the
Company and such other selling shareholders shall be reduced as follows:
(A) if the offering is an offering of securities
for the account of the Company, (1) the number of securities to be registered
by selling Persons other than the Company, NBCC, Purchasers and other Holders
shall first be reduced, pro rata, based on the number of securities sought to
be registered by each such other selling Person, to the number recommended by
the lead managing underwriter; (2) if, after all securities sought to be
registered by selling Persons other than the Company, NBCC, Purchasers and
other Holders have been eliminated, the lead managing underwriter still
recommends a reduction in the number of securities to be offered, the number of
Registrable Securities sought to be registered by Holders other than the
Purchasers shall be reduced, pro rata, based on the number of Registrable
Securities sought to be registered by each such Holder, to the number
recommended by the managing underwriter; (3) if, after all Registrable
Securities sought to be registered by such other Holders have been eliminated,
the lead managing underwriter still recommends a reduction in the number of
securities to be offered, the number of Registrable Securities sought to be
registered by the Purchasers shall be reduced, pro rata, based on the number of
Registrable Securities sought to be registered by each such Purchaser, to the
number recommended by the lead managing underwriter, and (4) if, after all
Registrable Securities sought to be registered by Purchasers have been
eliminated, the lead managing underwriter still recommends a reduction in the
number of securities to be offered, the number of Registrable Securities sought
to be registered by NBCC shall be reduced, pro rata, based on the number of
Registrable Securities sought to be registered by NBCC, to the number
recommended by the lead managing underwriter; and in no event shall the number
of securities offered by the Company be reduced;
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(B) if the offering is an offering of securities
initiated for the benefit of an Existing Rights Holder other than NBCC, then
(1) up to 50% of the total amount of securities recommended by the lead
managing underwriter to be registered shall be reserved for securities owned,
and requested to be registered, by NBCC and the remainder shall be allocated
among Existing Rights Holders other than NBCC, the Company, Purchasers, Holders
and other selling Persons; (2) the number of securities to be registered by
the Company, Existing Rights Holders other than NBCC, Purchasers, Holders and
such other selling Persons shall first be reduced, pro rata, based on the
number of securities sought to be registered by the Company and each such other
selling Person, to the number recommended by the lead managing underwriter; (3)
if, after all securities sought to be registered by the Company and such other
selling Persons have been eliminated, the lead managing underwriter still
recommends a reduction in the number of securities to be offered, the number of
Registrable Securities sought to be registered by Holders other than the
Purchasers shall be reduced, pro rata, based on the number of Registrable
Securities sought to be registered by each such Holder, to the number
recommended by the lead managing underwriter; (4) if, after all Registrable
Securities sought to be registered by such other Holders have been eliminated,
the lead managing underwriter still recommends a reduction in the number of
securities to be offered, the number of Registrable Securities sought to be
registered by the Purchasers shall be reduced, pro rata, based on the number of
Registrable Securities sought to be registered by each such Purchaser, to the
number recommended by the lead managing underwriter; and (5) if, after all
Registrable Securities sought to be registered by Purchasers have been
eliminated, the lead managing underwriter still recommends a reduction in the
number of securities to be offered, the number of securities sought to be
registered by the Existing Rights Holders other than NBCC shall be reduced, pro
rata, based on the number of securities sought to be registered by each such
Existing Rights Holder other than NBCC, to the number recommended by the lead
managing underwriter; and
(C) if the offering is an offering of securities
initiated for the benefit of selling shareholders other than Holders and other
than as described under (B) above, (1) the number of securities to be
registered by selling Persons (including the Company) other than the selling
shareholder(s) who initiated the registration (the "Initiating Seller") and
Holders shall first be reduced, pro rata, based on the number of securities
sought to be registered by each such other selling Person, to the number
recommended by the lead managing underwriter, (2) if, after all securities
sought to be registered by selling Persons other than the Initiating Seller and
Holders have been eliminated, the lead managing underwriter still recommends a
reduction in the number of securities to be offered, the number of Registrable
Securities sought to be registered by Holders other than the Purchasers shall
be reduced, pro rata, based on the number of Registrable Securities sought to
be registered by each such Holder, to the number recommended by the lead
managing underwriter; and (iii) if, after all securities sought to be
registered by selling Persons other than the Initiating Seller and the
Purchasers have been eliminated, the lead managing underwriter still recommends
a reduction in the number of securities to be offered, the number of
Registrable Securities sought to be registered by the Purchasers shall be
reduced, pro rata, based on the number of Registrable Securities sought to be
registered by each such Purchaser, to the number recommended by the lead
managing underwriter.
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(c) REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of this Section 2 to effect the registration of any
Registrable Securities under the Securities Act, the Company shall, as
expeditiously as possible,
(i) cooperate with any underwriters for, and the Holders
of, such Registrable Securities, and shall enter into a usual and customary
underwriting agreement with respect thereto and take all such other reasonable
actions as are necessary or advisable to permit, expedite and facilitate the
disposition of such Registrable Securities in the manner contemplated by the
related registration statement, including without limitation, the inclusion in
such registration statement of any information relating to the Company or its
subsidiaries which such Holders or underwriters deem reasonably necessary to
facilitate such disposition, in each case to the same extent as if all the
securities then being offered were for the account of the Company, and the
Company shall provide to any Holder of such Registrable Securities, any
underwriter participating in any distribution thereof pursuant to a
registration statement, and any attorney, accountant or other agent retained by
any Holder or underwriter, reasonable access to appropriate Company officers
and employees to answer questions and to supply information reasonably
requested by any such Holder, underwriter, attorney, accountant or agent in
connection with such registration statement; provided, however, that each such
party shall be required to maintain in confidence and not to disclose to any
other person any information or records reasonably designated by the Company in
writing as being confidential, until such time as (A) such information becomes
a matter of public record (whether by virtue of its inclusion in such
registration statement or otherwise), or (B) such person shall be required so
to disclose such information pursuant to the subpoena or order of any court or
other governmental agency or body having jurisdiction over the matter (subject
to the requirements of such order, and only after such person shall have given
the Company prompt prior written notice of such requirement), or (C) such
information is required to be set forth in such registration statement or the
prospectus included therein or in an amendment to such registration statement
or an amendment or supplement to such prospectus in order that such
registration statement, prospectus, amendment or supplement, as the case may
be, does not contain an untrue statement of a material fact or omit to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
(ii) furnish or cause to be furnished to each Holder of
the Registrable Securities covered by such registration statement, on the date
that such Registrable Securities are to be delivered to the underwriters for
sale pursuant to such registration or, if such Registrable Securities are not
being sold through underwriters, on the date the registration statement with
respect to such Registrable Securities becomes effective (A) an opinion, dated
such date, of the outside counsel representing the Company for the purposes of
such registration, addressed to the underwriters, if any, and to the Holders,
stating, among other things, that such registration statement has become
effective under the Securities Act and that (1) to the knowledge of such
counsel, no stop order suspending the effectiveness of such registration
statement has been instituted or is pending or contemplated under the
Securities Act; and (2) the registration statement, the related prospectus, and
each amendment or supplement thereto, including all documents incorporated by
reference therein, comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and
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regulations of the Commission thereunder (except that such counsel need express
no opinion as to financial statements or other financial or statistical or
reserve data contained or incorporated by reference therein); and such counsel
shall state in customary form that no facts have come to the attention of such
counsel that caused such counsel to believe (with customary qualifications)
that either the registration statement or the prospectus, or any amendment or
supplement thereto, including all documents incorporated by reference therein,
in light of the circumstances under which they were made, contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading
(except that such counsel need express no belief as to financial statements or
other financial or statistical or reserve data contained or incorporated by
reference therein or as to any information provided by the Holders or any
underwriter for inclusion therein); and (B) a letter, dated such date, from the
independent certified public accountants of the Company, addressed to the
underwriters, if any, and to the Holders, stating, among other things, that
they are independent certified public accountants within the meaning of the
Securities Act and that in the opinion of such accountants, the financial
statements and other financial data of the Company included in the registration
statement or the prospectus, or any amendment or supplement thereto, including
all documents incorporated by reference therein, comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act. Such letter from the independent certified public accountants shall
additionally cover such other customary financial matters (including
information as to the period ending not more than five business days prior to
the date of such letter) with respect to the registration in respect of which
such letter is being given as such underwriters, if any, or the Holders may
reasonably request;
(iii) prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become and remain effective for a
period of not more than 90 days (or in the event of (A) a firm underwritten
offering such longer period as may be customary, or (B) the registration
described in Section 2(a)(iv), the period of time specified in such Section
2(a)(iv)), and prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective during such period and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all securities
covered by such registration statement; provided that no such registration
statement or amendment thereto shall be filed by the Company until the Holders
of the Registrable Securities included therein and their counsel shall have had
a reasonable opportunity to review the same, to exercise their rights under
Section 2(c)(i) above with respect thereto and to approve or disapprove any
portion of such registration statement describing or referring to such Holders;
(iv) furnish to each Holder and to each underwriter, if
any, such numbers of copies of a summary prospectus or other prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents, as such Holder may reasonably request
in order to facilitate the public sale or other disposition of such Holder's
Registrable Securities;
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(v) notify the selling Holders promptly (A) when a
registration statement, prospectus, offering circular or other offering
material or any supplement or amendment thereto has been filed, and, with
respect to a registration statement or any post-effective amendment, when the
same has become effective under the Securities Act and each applicable state or
foreign law, (B) of any request by the Commission or any other United States or
foreign federal or state governmental authority for amendments or supplements
to a registration statement, or related prospectus (or other legally required
offering material) or for additional information, (C) of the issuance by the
Commission or any other United States or foreign federal or state governmental
body or agency of any action, including without limitation a stop order,
suspending or withdrawing the authorization for the offering or the
effectiveness of a registration statement, or the initiation of any proceedings
for that purpose, (D) if at any time the representations or warranties of the
Company contained in any agreement (including any underwriting, purchase or
agency agreement) entered into in connection with the offering or sale of
securities of the Company as contemplated by this Registration Rights Agreement
cease to be true and correct in any material respect, (E) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (F) of the discovery that, or of the happening of any event as a
result of which, the registration statement, related prospectus, offering
circular, other offering materials or any document incorporated or deemed to be
incorporated therein by reference includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or that requires the
making of any changes in such registration statement, prospectus, offering
circular or other offering materials so that, in the case of the registration
statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and that in the case of the prospectus,
offering circular or other offering materials, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that such document
otherwise fails to comply with applicable laws, and (G) of the Company's
reasonable determination that a post-effective amendment to a registration
statement would be appropriate;
(vi) use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under the state
securities or blue sky laws of such United States jurisdictions as each Holder
shall request, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Holder to consummate the public sale or
other disposition in such United States jurisdictions of the Registrable
Securities owned by such Holder, except that the Company shall not for any such
purpose be required (A) to qualify to do business as a foreign corporation in
any jurisdiction wherein it is not so qualified, (B) to file therein any
general consent to service, or (C) to subject itself to taxation in any such
jurisdiction;
(vii) in the event of the issuance of any stop order
suspending the effectiveness of any registration statement or of any order
suspending or preventing the use of any prospectus or
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suspending the qualification of such Registrable Securities for sale in any
jurisdiction, use its reasonable efforts promptly to obtain its withdrawal;
(viii) if any event contemplated by Section 2(c)(v)(F) or
(G) above shall occur, as promptly as practicable prepare a supplement or
amendment or post-effective amendment to such registration statement, related
prospectus, offering circular or other offering materials or any document
incorporated therein by reference or promptly file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities, the prospectus, offering circular and other offering materials will
not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or otherwise will not fail to comply with applicable
law.
(ix) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, beginning with the first fiscal
quarter beginning 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; and
(x) list such securities on any securities exchange or
consolidated reporting system on which the Common Stock of the Company is then
listed, if the listing of such securities is then permitted under the rules of
such exchange or consolidated reporting system.
(d) HOLDERS' OBLIGATIONS IN PIGGYBACK REGISTRATIONS. In
connection with any offering involving an underwriting of shares being issued
by the Company, the Company shall not be required to include any of the
Holders' Registrable Securities in such underwriting pursuant to Section 2(b)
unless the Holders accept the terms of the underwriting as agreed upon between
the Company and the underwriters; provided, however, that the only
representations and warranties any Holder shall be required to make in
connection therewith shall be with respect to such Holder's ownership of the
Registrable Securities to be sold by it and its ability to convey title thereto
free and clear of all liens, encumbrances or adverse claims and such other
customary representations and warranties reasonably requested by the
underwriters; and provided further, that the only indemnity any Holder shall be
required to make in connection therewith shall be to the effect of Sections
4(b) and 4(c) hereof.
(e) PRICING OF PIGGYBACK REGISTRATIONS. The Registrable
Securities proposed to be registered under any registration statement under
Section 2(b) hereof shall be offered for sale at the same public offering price
as the shares of Common Stock offered for sale by the Company or any other
selling shareholder covered thereby.
(f) PRIOR DEMAND RIGHT. Purchasers and each other Holder or
Holders, acknowledge and agree that their rights under Section 2 are subject to
the prior right of NBCC (i) to require demand registrations pursuant to article
IV. B. of the Existing Registration Rights Agreement and (ii) to the extent
mandatorily applicable and not specifically described herein, to certain of the
rights to
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participate in incidental registrations pursuant to article IV. A. of the
Existing Registration Rights Agreement, in each case of NBCC.
SECTION 3.
EXPENSES OF REGISTRATION.
All expenses incurred in connection with each registration of Registrable
Securities pursuant to Section 2(a) and any registration of Registrable
Securities pursuant to Section 2(b), including without limitation (i) all
Commission and state registration and qualification fees, (ii) all printing,
engineering and accounting fees, (iii) all fees and disbursements of counsel
for the Company, (iv) the fee payable to the National Association of Securities
Dealers, Inc., (v) all fees and disbursements of one law firm selected by the
Holders of a Majority of the Registrable Securities to be registered to
represent all the Holders, shall be borne by the Company, and (vi) all fees and
disbursements of any underwriters (including fees and disbursements of
underwriters' counsel, if applicable); provided, however, that the Company
shall not be required to pay, and the Holders shall pay, any underwriter
discounts, commissions and other underwriter compensation, to the extent such
fees, discounts, commissions and compensation relate to the Registrable
Securities.
SECTION 4.
INDEMNIFICATION.
(a) In the event of any registration of Registrable Securities
under the Securities Act pursuant to this Registration Rights Agreement, the
Company shall indemnify and hold harmless the Holder of such Registrable
Securities, such Holder's directors and officers, and each other Person, if
any, who controls such Holder within the meaning of the Securities Act (a
"Controlling Person"), against any losses, claims, damages or liabilities,
joint or several, to which such Holder or any such director, officer or
Controlling Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any alleged untrue statement of any material fact contained, on the effective
date thereof, in any registration statement under which such Registrable
Securities were registered under the Securities Act, or in any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, or (ii) any alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and shall reimburse such Holder or such director, officer or
Controlling Person for any legal or any other expenses reasonably incurred by
such Holder, director, officer or Controlling Person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon any alleged untrue statement or alleged omission made in such
registration statement, preliminary prospectus, prospectus, or amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed or provided by
such Holder or an underwriter specifically for use therein. Such indemnity
shall remain in full force and
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effect regardless of any investigation made by or on behalf of such Holder,
director, officer or Controlling Person, and shall survive the transfer of such
Registrable Securities by such Holder.
(b) It shall be a condition to the Company's obligation to
register the Registrable Securities of any Holder that such Holder shall enter
into an agreement to indemnify and hold harmless the Company, its directors and
officers and each other Person, if any, who controls the Company against any
losses, claims, damages or liabilities, joint or several, to which the Company
or any such director or officer or any such Person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any alleged untrue statement or omission of any material
fact contained, on the effective date thereof, in any registration statement
under which such Holder's Registrable Securities were registered under the
Securities Act, or in any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such alleged untrue statement or omission was
contained in written information furnished to the Company through an instrument
duly executed or provided by such Holder specifically for use therein, and to
reimburse the Company or such director, officer or other Person for any legal
or any other expenses reasonably incurred in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Indemnification similar to that specified in Section 4(b)(i)
and (ii) above shall be given by the Company and each Holder (with such
modifications as shall be appropriate) to any underwriter with respect to any
required registration or other qualification of any Registrable Securities
registered under this Registration Rights Agreement under any federal or state
law or regulation of governmental authority. The indemnity and expense
reimbursements obligations of the Company and the Holders under Section 4(b)(i)
and(ii) above shall be in addition to any liability the Company and the Holders
may otherwise have.
(d) Each Person (an "Indemnitor") who under the preceding
provisions of this Section 4 agrees to indemnify another Person (an
"Indemnitee") shall have the right, subject to the provisions hereto, to
designate counsel (which counsel shall be a nationally recognized securities
law firm or a law firm acceptable to the Holders) or to defend any case or
proceeding against the Indemnitee arising in respect of any claim of liability
for which such indemnification may be claimed, to the end that duplication of
legal expense may be minimized; provided that, if the Indemnitee notifies the
Indemnitor that the former has been advised by its counsel that any single
counsel in such case or proceeding would have a conflict of interest in
representing both the Indemnitor and the Indemnitee, the Indemnitee may
designate one counsel of its own in such case or proceeding and, to the extent
so provided above in this Section 4, shall be entitled to be reimbursed for its
legal expenses reasonably incurred in connection with defending itself in such
case or proceeding.
(e) The Indemnitee shall give notice to the Indemnitor promptly
after such Indemnitee has actual knowledge of any claim as to which indemnity
may be sought, provided that the failure
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of any Indemnitee to give notice as provided herein shall not relieve the
Indemnitor of its obligations hereunder except to the extent that the
Indemnitor's defense of such claim is prejudiced thereby.
SECTION 5.
CONTRIBUTION.
(a) In the event the indemnity provisions provided for in Section
4 of this Registration Rights Agreement are for any reason held to be
unenforceable by the indemnified parties, the Company, the Holders and the
underwriters, if any, shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
provisions incurred by the Company, the Holders and the underwriters in
proportion to the relative fault of each such party in connection with the
statements or omissions that resulted in such losses, liabilities, claims,
damages and expenses. Relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by one of the parties and such parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. Notwithstanding the foregoing, no
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the total price at which the Registrable Securities sold
by it exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.
(b) Notwithstanding the foregoing provisions of this Section 5, no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section, each person, if any, who controls an underwriter within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as such
underwriter, and each director of the Company, each officer of the Company who
signed such registration statement and each person, if any, who controls the
Company or any Holder within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company or such Holder, as the case
may be.
SECTION 6.
SALES PURSUANT TO RULE 144.
Upon written request, the Company shall deliver to any Holder a written
statement as to whether it has complied with all rules and regulations of the
Commission applicable in connection with use of Rule 144 (or any successor
thereto), including the timely filing of all reports required to be filed by
the Company with the Commission. The Company shall cause any restrictive
legends to be removed and any transfer restrictions to be rescinded with
respect to any sale of Registrable Securities which is exempt from registration
under the Securities Act pursuant to Rule 144.
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SECTION 7.
TRANSFER OF REGISTRATION RIGHTS.
The registration rights of Holders under this Registration Rights
Agreement may be assigned or transferred upon written notice to the Company to
any transferee acquiring Registrable Securities, other than in a public
offering pursuant to a registration statement or in a transaction pursuant to
Rule 144. Any transferee must acknowledge in writing its acceptance of all
terms, conditions and obligations of this Registration Rights Agreement.
SECTION 8.
TERMINATION.
The Company shall not be obligated to take any action to effect any
registration, qualification or compliance pursuant to this Registration Rights
Agreement, and this Registration Rights Agreement shall terminate and be of no
force and effect (except any obligations of the Company under Section 6 of this
Registration Rights Agreement) with respect to any Holder (and such Holder
only) who may sell all of such Holder's Registrable Securities in reliance upon
Rule 144(k) (or any successor rule) promulgated under the Securities Act.
SECTION 9.
REMEDIES.
The Company recognizes that money damages may be inadequate to compensate
the Holders for a breach by the Company of its obligations under this
Registration Rights Agreement, and the Company agrees that in the event of such
a breach any of the Holders may apply for an injunction of specific performance
or the granting of such other equitable remedies as may be awarded by a court
of competent jurisdiction in order to afford the Holders the benefits of this
Registration Rights Agreement and that the Company shall not object to such
application, entry of such injunction or granting of such other equitable
remedies on the grounds that money damages shall be sufficient to compensate
the Holders.
SECTION 10.
PRIORITY OF REGISTRATION RIGHTS.
The Company shall not grant to any Person while this Registration Rights
Agreement remains in effect the right to request the Company to register any
securities of the Company under the Securities Act which right has priority
over or is inconsistent with the rights granted to the Holders hereby.
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SECTION 11.
MISCELLANEOUS.
(a) NOTICES.
(i) All communications under this Registration Rights
Agreement shall be in writing and shall be sent:
(A) if to any party hereto at its address or
facsimile number for notices specified beneath its name on the signature
page hereof, or at such other address or facsimile number as it may have
furnished in writing to each other party hereto;
(B) if to any other person or entity who is the
registered holder of any Registrable Securities to the address or
facsimile number of such holder as it appears in the stock ledger of the
Company.
(ii) Any notice shall be deemed to have been duly given
and received (A) at the time of delivery when delivered by hand, if personally
delivered, (B) if sent by mail, two business days after being deposited in the
mail, postage prepaid, return receipt requested, and (C) when sent by
facsimile, with confirmation of receipt, so long as a duplicate of such notice
is deposited in the mail, first class postage prepaid, on the date such
facsimile is sent.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of each of
the parties whether so expressed or not.
(c) AMENDMENT AND WAIVER. ETC. This Agreement may be amended, and
the observance of any term of this Registration Rights Agreement may be waived,
but only with the written consent of the Company and the Holders of a Majority
of the Registrable Securities. No failure or delay on the part of the Holders
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Holders at
law or in equity or otherwise. No waiver of or consent to any departure by the
Company from any provision of this Registration Rights Agreement shall be
effective unless in writing and signed by the Holders of a Majority of the
Registrable Securities.
(d) DUPLICATE ORIGINALS. Two or more duplicate originals of this
Registration Rights Agreement may be signed in counterpart by the parties, each
of which shall be an original but all of which together shall constitute one
and the same instrument.
(e) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity,
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legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired
thereby.
(f) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the substantive law of Texas without giving effect
to the principles of conflicts of law thereof.
(g) ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement of the parties and supersedes any and all prior negotiations,
correspondence, undertakings and agreements between the parties hereto
respecting the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Registration Rights Agreement as of the date first above written.
XXXXXXXX ENERGY, INC.,
a Delaware corporation
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: President and Chief Executive Officer
By: /s/ XXXXXXX X. XXXXXX
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------------
ENRON CAPITAL & TRADE RESOURCES CORP.,
a Delaware corporation
0000 Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Vice President
With a copy to:
Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
By: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
-------------------------------------------------
Title: Vice President
------------------------------------------------
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JOINT ENERGY DEVELOPMENT INVESTMENTS II
LIMITED PARTNERSHIP
By: Enron Capital Management Limited Partnership,
its General Partner
By: Enron Capital II Corp.,
its General Partner
By: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Title: Agent and Attorney-in-Fact
---------------------------------------
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