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EXHIBIT 3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is entered into by
and between Xxx Xxxxx, Inc., a Delaware corporation (the "Company"), and K N
Energy, Inc., a Kansas corporation ("Stockholder"), pursuant to Sections 7.9
and 8.9 of that certain Agreement and Plan of Reorganization dated as of
January 31, 1996 (the "Merger Agreement") by and among the Company, TBI
Acquisition, Inc., a Delaware corporation, K N Production Company, a Delaware
corporation and Stockholder. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Merger Agreement.
WITNESSETH:
WHEREAS, pursuant to the Merger Agreement Stockholder is acquiring
beneficial ownership of 1,000,000 shares of the $1.75 Convertible Preferred
Stock, Series A, par value $.10 ("Convertible Preferred Stock"), of the Company
and 918,367 shares of Common Stock, par value $.10 ("Common Stock"), of the
Company;
WHEREAS, the Company has been advised that Stockholder, after
acquiring such Convertible Preferred Stock and Common Stock of the Company, is
an "affiliate" of the Company, as that term is defined for purposes of
paragraphs (c) and (d) of Rule 145 promulgated by the Commission (hereinafter
defined);
WHEREAS, upon consummation of the Merger, due to Stockholder's status
as an affiliate, Stockholder will be restricted under Rule 145 promulgated by
the Commission from effecting public sales and transfers of shares of
Convertible Preferred Stock (and the Common Stock underlying the same) and
Common Stock of the Company received by Stockholder as a result of the Merger;
and
WHEREAS, the Company desires to grant Stockholder certain rights to
registration under the Act (hereinafter defined) so as to permit Stockholder
the opportunity to dispose of shares of Common Stock underlying the shares of
Convertible Preferred Stock and Common Stock of the Company received by
Stockholder as a result of the Merger without constraint by the restrictions
imposed by Rule 145 promulgated by the Commission;
NOW, THEREFORE, for and in consideration of the premises and the
mutual agreements contained herein, the parties hereto agree as follows:
1.01 Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
(a) "Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute enacted hereafter, and the
rules and regulations of the Commission thereunder all as the same
shall be in effect from time to time.
(b) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the
Act.
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(c) The terms "register", "registered" and "registration"
refer to a registration effected by preparing and filing a
registration statement in compliance with the Act, and the declaration
or ordering of the effectiveness of such registration statement.
(d) "Registrable Common Stock" shall mean (i) the shares
of Common Stock of the Company issued to Stockholder as a result of
the Merger and (ii) the shares of Common Stock of the Company
underlying the shares of Convertible Preferred Stock of the Company
issued to Stockholder pursuant to the Merger.
1.02 Required Registration. At any time during a period of ten
years following the date of consummation of the Merger, Stockholder may request
that the Company effect a registration with respect to the Registrable Common
Stock, as follows:
(a) Request for Registration of Common Stock. If the
Company shall receive from Stockholder a written request that the
Company effect any registration with respect to 1,000,000 or more
shares of the Registrable Common Stock, the Company will, as soon as
practicable, use its diligent best efforts to effect all such
registration, qualification and compliance (including, without
limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or
other state securities laws and appropriate compliance with applicable
regulations issued under the Act) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion
of such Registrable Common Stock as is specified in such request.
(b) Underwriting. If the Stockholder intends to
distribute the Registrable Common Stock covered by its request by
means of an underwriting, the Stockholder shall so advise the Company
as a part of its request made pursuant to this Section 1.02.
The Company shall (together with the Stockholder proposing to
distribute its Registrable Common Stock through such underwriting)
enter into an underwriting agreement in customary form and containing
representations, warranties and agreements not substantially different
from those customarily included by an issuer in underwriting
agreements with respect to secondary distributions with the
representative of the lead managing underwriter selected for such
underwriting by the Stockholder and approved by the Company, which
approval shall not be unreasonably withheld, and any co-managing
underwriters mutually selected for such underwriting by the
Stockholder and the Company, the approval of which selection shall not
be unreasonably withheld by either party. Notwithstanding any other
provision of this Section 1.02, if the lead managing underwriter
determines, in good faith that marketing factors require a limitation
of the number of shares to be underwritten, the underwriter may limit
the number of shares of Registrable Common Stock to be included in the
registration and underwriting to the extent such underwriter deems
necessary. The Company shall so advise the Stockholder, and the
number of shares of Registrable Common Stock that may be included in
the registration and underwriting shall
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be reduced to the number which the underwriter is willing to include
in the registration. If the Stockholder disapproves of the terms of
the underwriting, the Stockholder may elect to withdraw therefrom by
written notice to the Company and the underwriter and the Registrable
Common Stock so withdrawn shall also be withdrawn from registration
but shall be entitled to such registration rights granted to such
Registrable Common Stock pursuant to this Section 1.02 as may
thereafter remain in effect.
The Company and the holders of the Common Stock and of any
other security of the Company to whom the Company has granted
registration rights substantially identical to those granted to the
Stockholder may include their respective securities for their own
accounts in such requested registration if the underwriter so agrees
and if the number of shares of Registrable Common Stock and other
securities which would otherwise have been included in such
registration and underwriting will not thereby be limited and if such
inclusion will not otherwise adversely impact the offering.
(c) Expenses of Requested Registration. The Company
shall bear all expenses incurred in connection with each registration,
qualification or compliance pursuant to Section 1.02(a), including,
without limitation, all registration, filing and qualification fees,
printing expenses, audit fees and fees and disbursements of counsel
for the Company and counsel for the underwriters, if any (unless any
such underwriter pays such counsel fees) (but excluding underwriter's
commissions, fees and expenses allocable to the Registrable Common
Stock of the Stockholder and fees of independent counsel and
accountants, if any, for the Stockholder, which commissions, fees and
expenses and fees of counsel and accountants shall be borne pro rata
(by share) by the Stockholder and any other offeror employing such
counsel and accountants in such registration).
(d) Limitations on Registration. Notwithstanding any
provision to the contrary in this Section 1.02, the Company shall not
be obligated to take any action to effect any such registration,
qualification or compliance pursuant to Section 1.02(a) if (i)
reputable counsel designated by the Company delivers an opinion to the
Stockholder, in form and substance satisfactory to the Stockholder, to
the effect that the Registrable Common Stock specified in the request
for registration may be sold or distributed as planned by the
Stockholder without registration or (ii) the Company has effected an
aggregate of two previous registrations pursuant to this Section
1.02(a).
(e) Assignability and Assumption. The registration
rights granted to Stockholder in this Section 1.02 may be assigned in
whole or in part by Stockholder to any affiliate of the Stockholder in
connection with a transfer of Registrable Common Stock to such
affiliate provided that (i) Stockholder shall remain liable for its
obligations hereunder, (ii) Stockholder provides the Company with
written notice of such assignment, (iii) the assignee of such rights
agrees in writing to be bound by the terms and conditions of this
Agreement, and (iv) if such assignment is in part, Stockholder shall
be agent for assignee for the purpose of exercising assignee's rights
hereunder. Except as provided in the preceding
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sentence the registration rights granted to Stockholder in this
Section 1.02 shall not be assignable
1.03 Registration Rights; Company Registration.
(a) Registration Initiated by the Company. If the
Company shall determine to register any shares of Common Stock of the
Company, either for its own account or for the account of a security
holder or holders exercising their respective demand registration
rights (other than a registration relating to stock options or
employee benefit plans, any dividend reinvestment plan of the Company,
or the acquisition or purchase by or combination by merger or
otherwise of the Company of or with another company or business entity
or partnership or a registration pursuant to Section 1.02) the Company
will:
(i) promptly give to the Stockholder written
notice thereof (which shall include (to the extent known) a
list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue
sky or other state securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Registrable Common
Stock specified in a written request or requests, made within
20 days after receipt of such written notice from the Company,
by the Stockholder, except as set forth in Section 1.03(b)
below.
(b) Underwriting. If the registration of which the
Company gives notice to the Stockholder is for a registered public
offering involving an underwriting, the Company shall so advise the
Stockholder as a part of the written notice given pursuant to Section
1.03(a)(i). In such event, the right of the Stockholder to
registration pursuant to this Section 1.03 shall be conditioned upon
the Stockholder's participation in such underwriting and the inclusion
of the Stockholder's Registrable Common Stock in the underwriting to
the extent provided herein. The Stockholder proposing to distribute
shares of its Registrable Common Stock through such underwriting
(together with the Company and the other holders (if any) distributing
their securities through such underwriting) shall enter into an
underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 1.03, if the lead
managing underwriter determines, in good faith, that marketing factors
require a limitation of the number of shares to be underwritten, the
underwriter may limit the number of shares of Registrable Common Stock
to be included in the registration and underwriting to the extent such
underwriter deems necessary. The Company shall so advise the
Stockholder, and the number of shares of Registrable Common Stock that
may be included in the registration and underwriting shall be reduced
to the number which the underwriter is willing to include in the
registration. If the Stockholder disapproves of the terms of any
such underwriting, the Stockholder may elect to withdraw therefrom by
written notice to the
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Company and the underwriter. Any Registrable Common Stock excluded or
withdrawn from such underwriting shall be withdrawn from such
registration but shall be entitled to such registration rights granted
to such Registrable Common Stock pursuant to this Section 1.03 as may
thereafter remain in effect.
(c) Expenses of Registration by the Company. The Company
shall bear all expenses incurred in connection with each registration,
qualification or compliance pursuant to this Section 1.03, including,
without limitation, all registration, filing and qualification fees,
printing expenses, audit fees and fees and disbursements of counsel
for the Company and counsel for the underwriters, if any (unless any
such underwriter pays such counsel fees) (but excluding underwriter's
commissions, fees and expenses allocable to the Registrable Common
Stock of the Stockholder and fees of independent counsel and
accountants, if any, for the Stockholder, which commissions, fees and
expenses and fees of counsel and accountants shall be borne pro rata
(by share) by the Stockholder and any other offeror employing such
counsel and accountants in such requested registration).
(d) Limitations on Registration. The Company's
obligation to effect a registration under Section 1.03(a) shall expire
ten years from the date of consummation of the Merger.
Notwithstanding any provision to the contrary in this Section 1.03,
the Company shall not be obligated to take any action to effect any
such registration, qualification or compliance pursuant to Section
1.03 if the Company has effected an aggregate of two previous
registrations in which shares of Registrable Common Stock of the
Stockholder were included pursuant to this Section 1.03.
(e) Assignability and Assumption. The registration
rights granted to Stockholder in this Section 1.03 may be assigned in
whole or in part by the holder thereof in connection with any transfer
of Convertible Preferred Stock or Common Stock of the Company provided
that (i) the assignor provides the Company with written notice of such
assignment, and (ii) the assignee of such rights agrees in writing to
be bound by the terms and conditions of this Agreement. In the event
of a partial assignment, the holders of Registrable Common Stock shall
possess the rights granted in this Section 1.03 pro rata in accordance
with the number of shares of Registrable Common Stock beneficially
owned by each of them and each such holder shall be entitled to
receive a copy of all notices provided for in this Agreement and to
exercise such part of the rights so granted.
1.04 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement
pursuant to which Registrable Common Stock of the Stockholder is included
therein, the Company will keep the Stockholder advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense, the Company will:
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(a) keep such registration, qualification or compliance
effective for a period of at least 120 days or until the Stockholder
has completed the distribution described in the registration statement
relating thereto, whichever first occurs;
(b) furnish such number of prospectuses and other
documents incident thereto as the Stockholder from time to time may
reasonably request; and
(c) list such Registrable Common Stock on each securities
exchange (if any) on which the Common Stock of the Company is listed.
1.05 Indemnification.
(a) The Company shall, if Registrable Common Stock held
by the Stockholder is included in the securities as to which such
registration, qualification or compliance is being effected, indemnify
the Stockholder, each of its officers and directors, and each person
controlling the Stockholder, with respect to each registration,
qualification or compliance which has been effected pursuant to
Section 1.02 or 1.03, and each underwriter, if any, and each person
who controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the
like) incident to any such registration, qualification or compliance,
or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements not misleading, and will reimburse the Stockholder, each of
its officers and directors, and each person controlling the
Stockholder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim,
loss, damage, liability or action, provided that the Company will not
be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the
Company by the Stockholder or underwriter specifically for use
therein. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such party and
shall survive the subsequent transfer of shares of Common Stock of the
Company by the seller thereof and the transfer of any shares of Common
Stock of the Company which were the subject of such registration,
qualification or listing.
(b) The Stockholder will, if Registrable Common Stock
held by the Stockholder is included in the securities as to which
such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors and officers, each legal
counsel and independent accountant of the Company, each underwriter,
if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter
within the meaning of the Act, and each other holder of Common Stock
of the Company registering securities of the Company in such
registration, each of its officers
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and directors and each person controlling such holder, against all
claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company,
such holders, such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim,
loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information
furnished to the Company by the Stockholder specifically for use
therein; provided; however, that (i) the obligations of the
Stockholder hereunder shall be limited to an amount equal to the
proceeds to the Stockholder of Registrable Common Stock sold as
contemplated herein and (ii) the indemnity for untrue statements or
omissions described above shall not apply if the Stockholder providing
such written information provides the Company with such additional
written information prior to the effectiveness of the registration as
is required to make the previously supplied written information true
and complete, together with a description in reasonable detail of the
information previously supplied which was untrue or incomplete.
(c) Each party entitled to indemnification under this
Section 1.05 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of any
obligations it may have otherwise than on account of this Section
1.05. After notice from the Indemnifying Party to the Indemnified
Party of its election to assume the defense of such claim or
litigation, the Indemnifying Party will not be liable to such
Indemnified Party for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation, unless the
Indemnifying Party abandons the defense of such claim or litigation.
No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation.
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1.06 Information by Stockholder. The Stockholder of Registrable
Common Stock included in any registration shall furnish to the Company such
information regarding the Stockholder and the distribution proposed by the
Stockholder as the Company may reasonably request in writing, and as shall be
required in connection with any registration, qualification or compliance
referred to in this Agreement.
1.07 Postponement of Requested Registration. If, within five days
of the Company's receipt of a registration request from the Stockholder, the
Company notifies the Stockholder in writing that (a) effecting the requested
registration would materially and adversely affect a material transaction then
under current consideration by the Company, as determined by the Board of
Directors, and such determination is confirmed by an independent investment
banker satisfactory to the Stockholder, or (b) such registration will require
preparation of audited financial information for the Company as of a date or
for a period for which preparation will not otherwise be required, then the
Company may postpone its performance of its obligations hereunder for a period
not to exceed 90 days.
1.08 Amendments. This Agreement may not be modified, amended,
altered or supplemented except by way of a written agreement executed by each
of the parties hereto. However, either party may waive any condition to the
obligations of the other party hereunder.
1.09 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly give if delivered by hand or facsimile transmission:
(a) If to the Company, to:
Xxx Xxxxx, Inc.
000 Xxxxxx Xxxxx Xxxxxxxx
X. X. Xxx 0000
Xxxxxxx, XX 00000
Attention: Controller
(b) If to Stockholder, to:
K N Energy, Inc.
000 Xxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
1.10 Recapitalization and Successors. In the event of any stock
split, stock dividend, stock combination or other recapitalization or
reclassification of the Convertible Preferred Stock or the Common Stock of the
Company, the terms and provisions of this Agreement shall be appropriately
adjusted so that the terms and provisions of this Agreement shall apply
thereafter in the same manner
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to the capital stock of the Company created as a result of such stock split,
stock dividend, stock combination or other recapitalization or reclassification
as they originally applied to the Convertible Preferred Stock and Common Stock
of the Company. The Company agrees that any successor to the Company by merger
or operation of law shall be bound by the terms of this Agreement and the terms
of this Agreement shall apply to any securities of the Company or such
successor received in exchange for Registrable Common Stock.
IN WITNESS WHEREOF, the parties have executed this Agreement
this 31st day of January, 1996.
STOCKHOLDER: K N ENERGY, INC.
By:
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Name:
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Title:
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COMPANY: XXX XXXXX, INC.
By:
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Name:
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Title:
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