EXHIBIT 10.12
XPLOR ENERGY, INC.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is executed and delivered on this 24th
day of September, 1997 (this "Agreement"), by and between XPLOR ENERGY, INC., a
Delaware corporation (the "Company"), and ERI INVESTMENTS, INC., a Delaware
corporation ("Equitable"), and 420 ENERGY INVESTMENTS, INC., a Delaware
corporation ("Energy") (each of Equitable and Energy a "Stockholder"), and
collectively the "Stockholders");
W I T N E S S E T H:
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WHEREAS, the Company and the Stockholders are parties to that certain
Acquisition Agreement and Plan of Organization dated as of August 19, 1997 (the
"Acquisition Agreement") pursuant to which the Company will acquire all of the
outstanding South Coast Ownership Interests (as defined in the Acquisition
Agreement) from the Stockholders (the "Acquisition"); and
WHEREAS, pursuant to the Acquisition Agreement, the Stockholders will have
acquired, in exchange for the South Coast Ownership Interests, approximately
________ aggregate shares of common stock, par value $.001 per share, of the
Company ("Common Stock"), and
WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Acquisition Agreement that the Company has agreed to provide
to the Stockholders the limited registration rights set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual terms,
covenants and conditions herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
REGISTRATION RIGHTS
The Company and each of the Stockholders covenant and agree as follows:
1.1 Definitions. For purposes of this Agreement:
(a) The terms "register," "registered" and "registration" refer to a
registration of securities effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act (as defined
below), and the declaration or ordering of effectiveness of such registration
statement or document.
(b) The term "Registrable Securities" means (i) the Common Stock received
by the Stockholders pursuant to the Acquisition Agreement and (ii) a dividend or
other distribution with respect to, or in exchange for or in replacement of,
such Common Stock.
(c) The term "Restricted Securities" means the Registrable Securities upon
original issuance thereof, subject to the provisions of Section 1.2 hereof.
(d) The term "Person" means an individual, partnership, corporation,
limited liability company, trust or unincorporated organization, or government
or agency or political subdivision thereof.
(e) The term "Board" means the Board of Directors of the Company.
(f) The term "Commission" means the Securities and Exchange Commission.
(g) The term "Securities Act" means the Securities Act of 1933, as amended,
and the term "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) The term "Best Efforts" means a Person's good faith best efforts in
accordance with reasonable commercial practice.
1.2 Securities Subject to this Agreement. The securities entitled to the
benefits of this Agreement are the Registrable Securities but with respect to
any particular Registrable Security, only so long as such security continues to
be a Restricted Security. A Registrable Security ceases to be a Restricted
Security when (a) it has been effectively registered under the Securities Act
and disposed of in accordance with the registration statement covering it, (b)
it is sold pursuant to Rule 144 or Rule 145 (or any similar provision them in
force) under the Securities Act or (c) it is eligible for sale pursuant to Rule
144 or Rule 145 (or any similar provision then in force) under the Securities
Act without any volume limitations.
1.3 Registration on Request.
(a) If, at any time after the consummation of an initial public offering
("IPO") of Common Stock (the "IPO Date"), the Company shall receive a written
request from any Stockholder or Stockholders holding an aggregate of a majority
of Registrable Securities that the Company file a registration statement under
the Securities Act covering the registration of Registrable Securities, then the
Company shall (i) if such request is received from less than all of the
Stockholders, give prompt written notice of such requested registration to the
other Stockholders, so that such other Stockholders shall have the opportunity
to join in such request and (ii) subject to the limitations of Sections 1.5 and
1.7 hereof, effect the registration of all Registrable Securities that any such
Stockholder or Stockholders request to be registered as soon as is practicable
with the use of the Company's Best Efforts, but in no event later than 60 days
after the receipt by the Company of such written request, by means of a shelf
registration statement on any appropriate form under the
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Securities Act for an offering to be made on a continuous basis pursuant to Rule
415 under the Securities Act. The Company agrees to use its Best Efforts to
keep such shelf registration statement continuously effective for a period of
time following the date on which such shelf registration statement is declared
effective equal to (i) 120 days in the case of a registration statement on Form
S-3 or (ii) 60 days in the case of a registration statement on any other form,
plus, in either case, the number of days of any discontinuance as described
below.
(b) If the requesting Stockholder or Stockholders intend to distribute the
Registrable Securities covered by the request by means of an underwriting, they
shall so advise the Company as a part of its request made pursuant to this
Section 1.3.
(c) The Company is obligated to effect one registration pursuant to this
Section 1.3, in addition to any registrations in which the Stockholders may
participate pursuant to the other provisions of this Agreement. A registration
shall not be deemed to have been effected (i) unless it has become effective and
remained effective for the period specified in Section 1.3(a) or, if earlier,
until the Registrable Securities registered under such registration statement
have been sold, or (ii) if, after it has become effective, such registration is
terminated by a stop order, injunction or other order of the Commission or other
governmental agency or court.
(d) If none of the Registrable Securities registered pursuant to any shelf
registration pursuant to this Section 1.3 are to be sold in an underwritten
offering, shares of Common Stock other than the Registrable Securities may be
included among the securities covered by the registration statement effected
pursuant to this Section 1.3; provided, that such registration statement
includes a prospectus containing a plan of distribution satisfactory to the
Stockholders including Registrable Securities therein. If any of the
Registrable Securities registered pursuant to this Section 1.3 are to be sold in
an underwritten offering, shares of Common Stock other than the Registrable
Securities may be included among the securities covered by the registration
statement subject to the right to exclude such other securities under Section
1.3(e).
(e) If any of the Registrable Securities registered pursuant to any shelf
registration pursuant to this Section 1.3 are to be sold in an underwritten
offering, and the managing underwriter or underwriters deliver an opinion to the
Company and the requesting Stockholder or Stockholders that the total number of
shares of Common Stock which such Stockholder or Stockholders and any other
Persons intend to include in such offering exceeds the number of shares that can
be sold in such offering, then there shall be included in such underwritten
offering the number of shares of Common Stock which in the opinion of such
underwriters can be sold, and such shares shall be allocated pro rata among the
holders of shares of Common Stock to be sold on the basis of the number of
shares of Common Stock to be registered; provided, that if shares of Common
Stock are being offered for the account of other Persons (including the Company)
as well as such Stockholder or Stockholders, a reduction in number of shares
shall first be made from the shares intended to be offered by such Persons other
than the Stockholder or Stockholders. Anything in this Agreement to the
contrary notwithstanding, in the event that the Stockholder or Stockholders
request registration of their Registrable Securities pursuant to this Section
1.3 and shares representing 50% or more of
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the Registrable Securities requested to be included by such Stockholder or
Stockholders are excluded from the offering by the managing underwriter or
underwriters thereof, then such registration shall not constitute, or be counted
as, the registration requested by the Stockholders pursuant to Section 1.3
hereof.
(f) Notwithstanding the foregoing, the Company shall not be required to
register any Registrable Securities pursuant to this Section 1.3: (i) during a
reasonable period of time, not to exceed six months, following the IPO Date, if
the Company has been advised by the managing underwriters for the IPO that a
registration of Registrable Securities pursuant to this Section 1.3 would
adversely affect the market for the Common Stock, (ii) during a reasonable
period of time (not to exceed 30 days) with respect to which the Board of
Directors of the Company has determined that a registration of Registrable
Securities pursuant to this Section 1.3 would adversely affect the Company
because of a material non-public acquisition or similar material transaction
that is pending or imminent, or (iii) for a period of three months following the
effective date of a Company registration statement as described in Section 1.4
hereof, provided that the Stockholder or Stockholders were offered the
opportunity to have the Registrable Securities included therein and declined to
request that a majority of such shares be so included.
1.4 Company Registration. At any time the Company proposes to register
(including for this purpose a registration effected by the Company for
stockholders other than the Stockholders) any shares of its Common Stock under
the Securities Act for sale (other than registration of the Common Stock for
issuance or sale (a) pursuant to Section 1.3 hereof or (b) in connection with
(i) employee or non-employee director compensation or benefit programs, (ii) an
exchange offer or an offering of securities solely to the existing stockholders
or employees of the Company or (iii) an acquisition, merger or other business
combination using a registration statement on Form S-4 or any successor or other
appropriate form), the Company will give prompt written notice (which, in any
event, shall be given no less than 15 days prior to the filing of a registration
statement with respect to such offering) to the Stockholders of its intention so
to do and, upon the written request of any Stockholder sent within 15 days after
the effective date of any such notice, the Company will, subject to the
provisions of Sections 1.5 and 1.7 hereof, use its Best Efforts to cause all
Registrable Securities as to which any such Stockholder or Stockholders shall
have so requested registration, to be registered under the Securities Act, all
to the extent necessary to permit the sale in such offering of the Registrable
Securities so registered on behalf of such Stockholder or Stockholders in the
same manner as the Company (or stockholder other than one of the Stockholders,
as the case may be) proposes to offer its shares of Common Stock. The Company
shall use its Best Efforts to cause the managing underwriter or underwriters of
a proposed underwritten offering to permit the Registrable Securities requested
by the Stockholder or Stockholders to be included in the registration for such
offering on the same terms and conditions as the shares of Common Stock of the
Company included therein. Notwithstanding the foregoing, if the managing
underwriter or underwriters of such offering deliver an opinion to the Company
and the requesting Stockholder or Stockholders that the total number of shares
of Common Stock which the requesting Stockholder or Stockholders or the Company,
and any other Persons, intend to include in such offering will in the good faith
opinion of such managing underwriter or underwriters materially and adversely
affect the success of such
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offering, then the number of shares of Common Stock to be offered for the
account of the Stockholder(s) shall be reduced pro rata based upon the number of
shares of Common Stock proposed to be sold by the Stockholder or Stockholders
and any other Persons (excluding the Company and the stockholder(s) for whom the
Company filed such Registration Statement) to the extent necessary to reduce the
total number of shares of Common Stock to be included in such offering to the
number of shares recommended by such managing underwriter.
1.5 Obligations of the Company. If and whenever the Company is required
by the provisions of this Agreement to use its Best Efforts to effect the
registration of any Registrable Securities, the Company shall as expeditiously
as reasonably practicable:
(a) Prepare and file with the Commission a registration statement on an
appropriate form under the Securities Act and use its Best Efforts to cause such
registration statement to become effective; provided, that before filing a
registration statement or prospectus or any amendments or supplements thereto,
including documents incorporated by reference after the initial filing of any
registration statement, as soon as practicable, the Company will furnish to the
requesting Stockholder or Stockholders and the underwriters, if any, copies of
all such documents proposed to be filed, which documents will be subject to the
review of the requesting Stockholder or Stockholders and the underwriters, and
the Company will not file any registration statement or amendment thereto, or
any prospectus or any supplement thereto (including such documents incorporated
by reference) to which the requesting Stockholder or Stockholders or the
underwriters, if any, shall reasonably object in the light of the requirements
of the Securities Act and any other applicable laws and regulations.
(b) Prepare and file with the Commission such amendments and post-effective
amendments to a registration statement as may be necessary to keep such
registration statement effective for the applicable period; cause the related
prospectus to be filed pursuant to Rule 424(b) under the Securities Act; cause
such prospectus to be supplemented by any required prospectus supplement and, as
so supplemented, to be filed pursuant to Rule 424(b) under the Securities Act;
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during the
applicable period in accordance with the intended methods of disposition set
forth in such registration statement or supplement to such prospectus.
(c) Notify the requesting Stockholder or Stockholders and the managing
underwriters, if any, promptly, and (if requested by any such Person) confirm
such advice in writing, (i) when a prospectus or any prospectus supplement or
post-effective amendment has ben filed, and, with respect to a registration
statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission for amendments or supplements to a
registration statement or related prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement or the initiation of any proceeding
for that purpose, (iv) if at any time the representations and warranties of the
Company contemplated by Section 1.5(1) cease to be true and correct, (v) of the
receipt by the Company of any notification with respect to the suspension or
qualification of any of the Registrable Securities
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for sale in any jurisdiction or the initiation of any proceeding for such
purpose, (vi) of the happening of any event which requires the making of any
changes in a registration statement or related prospectus so that such documents
will not contain any untrue statement of a material factor or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (vii) of the Company's reasonable determination that
a post-effective amendment to a registration statement would be appropriate or
that there exist circumstances not yet disclosed to the public which make
further sales under such registration statement inadvisable pending such
disclosures and post-effective amendment.
(d) Make reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of any
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction, at the earliest possible moment.
(e) If requested by the managing underwriters or any Stockholder or
Stockholders in connection with an underwritten offering, immediately
incorporate in a prospectus supplement or post effective amendment such
information as the managing underwriters and such Stockholder or Stockholders
agree should be included therein relating to such sale and distribution of
Registrable Securities, including, without limitation, information with respect
to the number of shares of Registrable Securities being sold to such
underwriters and the purchase price being paid therefor by such underwriters and
with respect to any other terms of the underwritten (or best efforts
underwritten) offering of the Registrable Securities to be sold in such
offering; make all required filings of such prospectus supplement or post-
effective amendment as soon as notified of the matters to be incorporated in
such prospectus supplement or post-effective amendment; and supplement or make
amendments to any registration statement if requested by such Stockholder or
Stockholders or any underwriter of such Registrable Securities.
(f) Furnish to each Stockholder requesting registration and each managing
underwriter, if any, without charge, at least one signed copy of the
registration statement, any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference).
(g) Deliver without charge to each Stockholder requesting registration and
the underwriters, if any, as many copies of the prospectus or prospectuses
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request; and the Company consents to the use of
such prospectus or any amendment or supplement thereto by each such Stockholder
and the underwriters, if any, in connection with the offer and sale of the
Registrable Securities covered by such prospectus or any amendment or supplement
thereto.
(h) Prior to any public offering of Registrable Securities, register or
qualify or cooperate with the Stockholder or Stockholders requesting
registration, the underwriters, if any, and respective counsel in connection
with the registration or qualification of such Registrable Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as each
such Stockholder or an underwriter reasonably requests in writing; keep each
such registration or qualification effective
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during the period such registration statement is required to be kept effective
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
applicable registration statement; provided, however, that the Company will not
be required in connection therewith or as a condition thereto to qualify
generally to do business or subject itself to general service of process in any
such jurisdiction where it is not then so subject.
(i) Cooperate with each requesting Stockholder and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of Registrable Securities
to the underwriters.
(j) Use its Best 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 as may be necessary, if any, to
consummate the disposition of such Registrable Securities.
(k) Upon the occurrence of any event contemplated by Section 1.5(c)(ii) -
(vii) above, prepare a supplement or post-effective amendment to the applicable
registration statement or related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchaser of the Registrable Securities being sold thereunder,
such prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading.
(l) Enter into such agreements (including an underwriting agreement) and
take all such other actions in connection therewith in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the Registrable Securities to be covered by such registration are to be
offered in an underwritten offering: (i) make such representations and
warranties to the requesting Stockholder or Stockholders with respect to the
registration statement, prospectus and documents incorporated by reference, if
any, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates thereof
with respect to the registration statement and the prospectus in the form, scope
and substance which are customarily delivered in underwritten offerings; (iii)
in the case of an underwritten offering, enter into an underwriting agreement in
form, scope and substance as is customary in underwritten offerings and obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters and the requesting Stockholder or Stockholders) addressed
to such Stockholder or Stockholders and the underwriters, if any, covering the
matters customarily covered in opinions delivered in underwritten offerings and
such other matters as may be reasonably requested by such Stockholder or
Stockholders and such underwriters; (iv) obtain "cold comfort" letters and
updates thereof from the Company's independent certified public accountants
addressed to such Stockholder or Stockholders and the underwriters, if any, such
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letters to be in customary form and covering maters of the type customarily
covered in "cold comfort" letters by accountants in connection with underwritten
offerings; (v) if any underwriting agreement is entered into, the same shall set
forth in full the indemnification provisions and procedures customarily included
in underwriting agreements in underwritten offerings; and (vi) the Company shall
deliver such documents and certificates as may be requested by such Stockholder
or Stockholders and the managing underwriters, if any, to evidence compliance
with clause (i) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company. The above
shall be done at each closing under such underwriting or similar agreement or as
and to the extent required thereunder.
(m) Make available for inspection by a representative of any Stockholder or
Stockholders requesting registration, any underwriter participating in any
disposition pursuant to such registration, and any attorney or accountant
retained by any such Stockholder or Stockholders or such underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with such registration; provided that any
records, information or documents that are designated by the Company in writing
as confidential shall be kept confidential by such Persons unless disclosure of
such records, information or documents is required by court or administrative
order.
(n) Otherwise use its Best Efforts to comply with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act, no later than 90 days after the end of any 12-month period (i)
commencing at the end of any fiscal quarter in which Registrable Securities are
sold to underwriters in a firm or best efforts underwritten offering and (ii)
beginning with the first day of the Company's first fiscal quarter next
succeeding each sale of Registrable Securities after the effective date of a
registration statement, which statements shall cover said 12-month periods.
In connection with any registration of Registrable Securities, the Company
may require any Stockholder whose Registrable Securities shall have been
registered hereunder to furnish to the Company such information regarding itself
and the distribution of such securities as the Company may from time to time
reasonably request in writing.
Each Stockholder agrees by acquisition of Registrable Securities that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 1.5(c)(ii)-(vii) hereof, such Stockholder will forthwith
discontinue disposition of Registrable Securities covered by such registration
statement or prospectus until such Stockholder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 1.5(c)(i) hereof, or
until it is advised in writing by the Company that the use of the applicable
prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in such prospectus, and
if so directed by the Company, the Stockholder will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies then in the
Stockholder's possession, of the prospectus covering such Registrable Securities
current at the time
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of receipt of such notice. In the event the Company shall give any such notice,
the time period mentioned in Section 1.3(a) shall be extended by the number of
days during the time period from and including the date of the giving of such
notice pursuant to Section 1.5(c) hereof to and including the date when such
Stockholder shall have received the copies of the supplemented or amended
prospectus contemplated by Section 1.5(c) hereof.
1.6 Expenses of Registration. All expenses incurred in connection with a
registration, filing or qualification pursuant to Section 1.3 or 1.4 hereof
(other than fees and expenses of the Company's counsel), including, without
limitation, registration, filing and qualification fees, printers' and
accounting fees (other than the fees and disbursements of counsel for any
Stockholder or Stockholders requesting registration, which shall be paid by such
Stockholder or Stockholders) and any underwriting discounts and commissions,
shall be borne and paid by such Stockholder or Stockholders, pro rata in such
proportion as the number of Registrable Securities registered pursuant to such
registration bears to the total amount of securities registered pursuant
thereto.
1.7 Underwritten Registrations.
(a) If any of the Registrable Securities covered by any registration under
Section 1.3 are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will administer the offering
will be selected by the requesting Stockholder or Stockholders, subject to the
consent of the Company, which consent will not be unreasonably withheld.
(b) The requesting Stockholder or Stockholders may not participate in any
underwritten registration under Section 1.4 hereunder unless it (i) agrees to
sell its securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements. In connection with any underwritten offering
that includes securities being issued or sold by the Company, the Company shall
be the Person entitled to approve the terms of the underwriting arrangements.
1.8 Indemnification. In the event any Registrable Securities are included
in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless the requesting Stockholder or Stockholders, the officers and directors
of each such Stockholder, each underwriter of Registrable Securities and each
other Person, if any, who controls each such Stockholder or such underwriter
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages, liabilities or expenses, joint or several, to which any such
Person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement under
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which such Registrable Securities were registered under the Securities Act
pursuant hereto, or any post-effective amendment thereof, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (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 the registration
statement and not corrected in the final prospectus, or contained in the final
prospectus (as amended or supplemented, if the Company shall have filed with the
Commission any amendment thereof or supplement thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will reimburse any
such Person for any legal or other expenses reasonably incurred by such Person
in connection with investigating or defending any such loss, claim, damage,
liability or expense; provided, however, that the indemnity agreement contained
in this Section 1.8(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or expense if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld);
and provided further that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or expense arises out of
or is based upon any such untrue statement or omission or alleged untrue
statement or omission which has been made in said registration statement,
preliminary prospectus, prospectus or amendment or supplement or omitted
therefrom in reliance upon and in conformity with information furnished in
writing to the Company by any such Stockholder or such underwriter specifically
for use in the preparation thereof.
(b) To the extent permitted by law, each Stockholder whose Registrable
Securities shall have been registered pursuant to this Agreement will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, each underwriter
and each Person who controls any underwriter within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages, liabilities or
expenses, joint or several, to which the Company or any such Person, may become
subject under the Securities Act or otherwise, and will reimburse the Company or
any such Person for any legal or other expenses reasonably incurred by the
Company or such Person in connection with investigating or defending any such
loss, claim, damage, liability or expense, but only insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission of a material fact referred to in clause (i) or (ii) of
Section 1.8(a) hereof, in each case to the extent (and only to the extent) that
such untrue statement or omission or alleged untrue statement or omission was
made in reliance upon and in conformity with information furnished in writing by
or on behalf of such Stockholder specifically for use in connection with such
registration; provided, however, that the indemnity agreement contained in this
Section 1.8(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if such settlement is effected without the
consent of such Stockholder, which consent shall not be unreasonably withheld;
and, provided further, that the obligations a Stockholder under this Section
1.8(b) shall be limited to an amount equal to the amount of proceeds from the
sale by such Stockholder of Registrable Securities included in a registration
statement under this Agreement to which such obligations relate.
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(c) Promptly after receipt by an indemnified party under this Section 1.8
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Section 1.8, notify the indemnifying party in
writing of the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
to assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure so to notify an indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 1.8, but the omission
so to notify the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.8.
(d) If the indemnification provided for in this Section 1.8 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations; provided that the obligations of a Stockholder under
this Section 1.8(d) shall be limited to an amount equal to the amount of
proceeds from the sale by such Stockholder of Registrable Securities included in
a registration statement under this Agreement to which such obligations relate.
The relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or related to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 1.8(c) hereof, any legal or other fees or expenses reasonably incurred
by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 1.8(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
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1.9 Reports Under Exchange Act. With a view to making available to the
Stockholders the benefits of Rule 144 under the Securities Act and any other
rule or regulation of the Commission that may at any time permit the Stockholder
to sell securities of the Company to the public without registration, the
Company agrees to:
(a) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act,
and the rules and regulations adopted by the Commission thereunder; and
(b) furnish to any Stockholder forthwith upon request (i) a written
statement by the Company as to whether it has complied with the reporting
requirements of Rule 144, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents filed by the Company
pursuant to the Exchange Act and (iii) such other information as may be
reasonably requested in availing such Stockholder of any rule or regulation of
the Commission which permits the sale of any securities without registration.
1.10 Assignment of Registration Rights. The right to cause the Company to
register Registrable Securities pursuant to this Agreement may be assigned, in
whole or in part, to an assignee of the Registrable Securities (to the extent
the shares of Common Stock are assigned), by any Stockholder without the prior
written consent of the Company.
1.11 Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of Stockholders holding more than 50% of the Registrable Securities, enter into
any agreement with any holder or prospective holder of any securities of the
Company which would conflict with any term of this Agreement, including (i) the
right to exclude other securities under Section 1.3(e) and (ii) the right of the
Stockholders to register and offer Registrable Securities under Section 1.4 on a
pro-rata basis if a reduction in the amount of Common Stock intended to be
offered is necessary in an underwritten offering with any other Persons
(excluding shares to be offered by the Company and the stockholder(s) for whom
the Company files such Registration Statement) intending to register and offer
their Common Stock. Except as set forth on Schedule A hereto, the Company is
not a party to any currently subsisting agreement with respect to its securities
granting any registration rights to any Person.
1.12 Company's Hold-Back Agreements.
(a) The Company agrees not to effect any public sale or distribution of any
securities similar to those being registered during the 14-day period prior to,
and during the 60-day period beginning on, the date the distribution under a
registration statement filed pursuant to Section 1.3 or 1.4 hereof is completed
(except as part of such registration or in connection with (A) employee or non-
employee director compensation or benefit programs, (B) an exchange offer or an
offering of securities solely to the existing stockholders or employees of the
Company, or (C) an acquisition,
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merger or other business combination using a registration statement on Form S-4
or any successor or other appropriate form).
(b) Each holder of Registrable Securities agrees not to effect any public
sale or distribution of any Registrable Securities which (i) are similar in
nature as the securities of the Company being registered and (ii) the
Stockholder(s) declined to include in such Registration Statement after being
given the opportunity to do so by the Company, during the 14 days prior to and
during the 60-day period beginning on, the effective date of a Registration
Statement filed by the Company, but only if and to the extent requested in
writing (with reasonable prior notice) by the managing underwriting or
underwriters in the case of an underwritten public offering or, if such offering
is not underwritten, by the Company of securities similar to the Registrable
Securities.
ARTICLE II
MISCELLANEOUS
2.1 Successors and Assigns; No Third Party Benefit. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
permitted successors and assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto and their
respective permitted successors and assigns any rights or remedies under or by
reason of this Agreement, except as expressly provided in this Agreement.
2.2 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive laws of the State of Texas, without
giving effect to the principles of conflicts of law thereof.
2.3 Counterparts. This Agreement maybe executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all, the parties hereto.
2.4 Titles and Subtitles. The titles and subtitles used in this Agreement
are inserted for convenience only and are not to be considered in construing or
interpreting this Agreement.
2.5 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing and shall be delivered by (a)
personal delivery, (b) expedited delivery service, (c) telefax with confirmed
delivery or (d) certified or registered mail, postage prepaid. Any such notice
shall be deemed given upon its receipt at the following address or telefax
number, as applicable:
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(i) If to Equitable or Energy:
ERI Investments, Inc.
420 Boulevard of the Allies
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Telefax: (000) 000-0000
Attention: Xxxx Xxxxxxxxx
With a copy to:
Xxxxxxx X. Xxxxxxxx
Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telefax: (000) 000-0000
and thereafter at such other address, notice of which is given to the Company in
accordance with this Section 2.5; and
(ii) If to the Company:
00000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx 00000
Telefax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxx & Xxxxxxx
1800 Mid-America Tower
00 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telefax: (000) 000-0000
and thereafter at such other address, notice of which is given in accordance
with this Section 2.5.
2.6 Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof (which may be
generally or in a particular instance and either retroactively or prospectively)
may not be given, unless the Company has obtained the written consent of
Stockholders holding more than 50% of the Registrable Securities.
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2.7 Severability. If any provision or any portion of any provision of
this Agreement or the application of such provision or any portion thereof to
any Person or circumstance shall be held invalid or unenforceable, the remaining
portion of such provision, as it applies to other Persons or circumstances and
the remaining provisions, shall not be affected or impaired thereby.
2.8 Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter herein contained. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the securities received by the Stockholder pursuant to the Acquisition. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
THE COMPANY:
XPLOR ENERGY, INC.
By: /s/ W. E. Xxxxxx
--------------------------
Name: W. E. Xxxxxx
-------------------------
Title: Chairman
------------------------
EQUITABLE:
ERI INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxx
-------------------------
Title: President
------------------------
ENERGY:
420 ENERGY INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxxx
------------------------
Title: President
-----------------------
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SCHEDULE "A"
Registration Rights Agreement
As of September 24, 1997, XPLOR has registration rights agreements with
Stratum Group L.P. and Credit Lyonnais, New York Branch.
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