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EXHIBIT 7
REGISTRATION RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 21, 1999
BY AND AMONG
INLAND HOLDINGS LLC,
TCW PORTFOLIO NO. 1555 DR V SUB-CUSTODY PARTNERSHIP, L.P.
AND
INLAND RESOURCES INC.,
JOINT ENERGY DEVELOPMENT INVESTMENTS II
LIMITED PARTNERSHIP,
AND
XXXXX MANAGEMENT LLC
PENGO SECURITIES CORPORATION
XXXXX ENERGY PARTNERSHIP
and their affiliates
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TABLE OF CONTENTS
Page
Section 1. Definitions....................................................................................1
Section 2. Demand Registration Rights.....................................................................2
Section 3. Shelf Registration.............................................................................3
Section 4. Piggy-back Registration........................................................................3
Section 5. Restrictions on Dispositions and Demand Registrations..........................................5
Section 6. Registration Procedures........................................................................5
Section 7. Registration Expenses..........................................................................9
Section 8. Indemnification; Contribution..................................................................9
Section 9. Rule 144......................................................................................11
Section 10. Remedies......................................................................................11
Section 11. Binding Effect; Transferees; Termination......................................................11
Section 12. Amendments and Waivers........................................................................12
Section 13. Notices.......................................................................................12
Section 14. Counterparts..................................................................................12
Section 15. Headings......................................................................................12
Section 16. Governing Law.................................................................................12
Section 17. Severability..................................................................................12
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made
and entered into as of the 21st day of September, 1999, by and between Inland
Resources Inc., a Washington corporation (the "Company"), Inland Holdings LLC, a
California limited liability company ("Holdings"), TCW Portfolio No. 1555 DR V
Sub-Custody Partnership, L.P., a California limited partnership ("Portfolio"),
Joint Energy Development Investments II Limited Partnership, a Delaware limited
partnership ("JEDI" together with Holdings, the "Purchasers") and Pengo
Securities Corporation ("Pengo"), Xxxxx Energy Partnership ("SEP"), Xxxxxxx X.
Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx Xxxxxxx Xxxxx, Xxxx X. Xxxxx and Xxxxxx X.
Xxxxxx (collectively, the "Xxxxx Individuals") (Pengo, SEP, and the Xxxxx
Individuals, together with any of their respective affiliates, the "Xxxxx
Group").
This Agreement is being entered into in connection with the
Exchange Agreement dated as of September ___, 1999 (the "Exchange Agreement"),
between the Company, the Purchasers and certain other parties (such transaction
being the "Exchange Transaction"). To induce either of the Purchasers to enter
into the Exchange Agreement and the Xxxxx Group to participate in the Exchange
Transaction, the Company has agreed to provide the registration and other rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the closing under the Exchange Agreement.
The parties hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the
following terms have the meanings indicated:
"Commission" means the Securities and Exchange Commission or
any similar agency having jurisdiction to enforce the Securities Act.
"Common Stock" means the common stock, par value $.001 per
share, of the Company.
"Demand Registration" has the meaning ascribed to such term in
Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
governmental or political subdivision, agency or instrumentality thereof or
other entity or organization of any kind.
"Piggy-back Registration" has the meaning ascribed to such
term in Section 4.
"Purchaser Adjustment Options" has the meaning ascribed to
such term in the Exchange Agreement.
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"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.
"Registrable Common Stock" means, collectively, (a) the shares
of Common Stock issued to JEDI and Holdings pursuant to the Exchange Agreement,
(b) the shares of Common Stock acquirable upon the conversion of the Series Z
Preferred Stock issued to Holdings pursuant to the Exchange Agreement, (c) the
shares of Common Stock issuable upon exercise of any of the Purchaser Adjustment
Options, (d) the shares of Common Stock held by the Xxxxx Group as of the date
hereof and (e) any shares of Common Stock or other securities issued with
respect to the Common Stock described in clauses (a), (b), (c) and (d) of this
definition whether by way of stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation, share
exchange, reorganization or otherwise held by Holdings, JEDI or the Xxxxx Group;
provided, however, such Common Stock or other securities shall cease to be
Registrable Common Stock when (i) a registration statement with respect to the
disposition of such Common Stock or other securities shall have become effective
under the Securities Act and such securities shall have been disposed of in
accordance with the plan of distribution set forth in such registration
statement, (ii) such Common Stock or other securities shall have been sold
pursuant to Rule 144 (or any successor provision) under the Securities Act,
(iii) such Common Stock or other securities shall have ceased to be outstanding
or (vi) such Common Stock or other securities may be sold pursuant to Rule 144
(or a successor provision) under the Securities Act without being restricted by
the volume limitations or method of sale restrictions thereof.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Series Z Preferred Stock" means the Series Z Convertible
Preferred Stock of the Company, par value $.001 per share.
"Shelf Registration Statement" has the meaning ascribed to
such term in Section 2(a).
Section 2. Demand Registration Rights.
(a) Right to Demand Registration. Subject to Section 2(b) and
Section 5 hereof, any holder of Registrable Common Stock may make a written
request to the Company for registration with the Commission under and in
accordance with the provisions of the Securities Act of the disposition of all
or part of the Registrable Common Stock (a "Demand Registration"). All requests
made pursuant to this Section 2(a) will specify the aggregate amount of
Registrable Common Stock to be registered, will specify the intended methods of
disposition thereof and will specify whether the registration statement to be
filed is a "shelf" registration statement ("Shelf Registration Statement")
pursuant to Rule 415 under the Securities Act (or any similar rule that may be
adopted by the Commission). If any holder intends to dispose of any of the
Registrable Common Stock pursuant to an underwritten offering, the holder will
have the right to select the underwriter. No securities other than Registrable
Common Stock may be registered in connection with a Demand Registration without
the consent of the holders of a majority of the outstanding Registrable Common
Stock whose shares are subject to such Demand Registration.
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(b) Number of Demand Registrations; Effective Registration;
Expenses. So long as (i) Holdings holds Registrable Common Stock, it (and its
transferees), shall be entitled to initiate and have effected an aggregate of
three (3) Demand Registrations; (ii) JEDI holds Registrable Common Stock, it
(and its transferees) shall be entitled to initiate and have effected two (2)
Demand Registrations; and (iii) the Xxxxx Group holds Registrable Common Stock,
it (and its transferees) shall be entitled to initiate and have effected one (1)
Demand Registration. The Company shall pay all Registration Expenses of all such
Demand Registrations in accordance with Section 7 hereof. The Company shall not
be deemed to have effected a Demand Registration unless and until (i) the
Company has filed a registration statement with the Commission and (ii) the
registration statement has been declared effective by the Commission.
(c) Grant of New Registration Rights. From and after the date
of this Agreement and until this Agreement is terminated, the Company shall not
grant any registration rights to any person that could adversely affect the
rights of either of the Purchasers hereunder or are inconsistent with the rights
of either of the Purchasers hereunder without the prior written consent of such
Purchasers; provided, however, that the granting of piggy-back registration
rights that are not superior to the registration rights granted under Section 4
hereof with respect to cut-backs or reductions required by underwriters shall
not, in and of itself, be deemed to adversely affect the rights of either of the
Purchasers or be inconsistent with such rights.
(d) Termination of Prior Registration Rights. By entering into
this Agreement JEDI, Portfolio and each of the members of the Xxxxx Group, on
behalf of themselves and their affiliates, expressly consents to and
acknowledges that any registration right(s) related to any securities of the
Company held prior to the date hereof by it is/are terminated as of the date
hereof.
Section 3. Shelf Registration. The Company will, as soon as
possible following a written request pursuant to Section 2(a) for the
registration of Registrable Common Stock by means of a Shelf Registration
Statement, file a shelf registration statement on Form S-3 covering the
Registrable Common Stock and thereafter shall use its best efforts to cause the
Shelf Registration Statement to be declared effective as soon as practicable
following such filing and to take any and all reasonable action within the
Company's control, subject to and in accordance with Section 5, as may be
necessary or appropriate to maintain such effectiveness until such time as
neither any holder nor any of their assignees own any Registrable Common Stock;
provided however that the Company shall not be required to maintain the
effectiveness of any such Shelf Registration Statement for longer than (a) one
hundred and twenty days (120) from the effective date of such registration
statement for a Demand Registration initiated by the Xxxxx Group; and (b) two
years from the effective date of such registration statement for a Demand
Registration initiated by either of the Purchasers.
Section 4. Piggy-back Registration. (a) If the Company
proposes to file a registration statement under the Securities Act with respect
to an offering by the Company for its own account or for the account of others
(the "Initiating Shareholders") of any class of security (other than pursuant to
a registration statement on Forms S-4 or S-8 (or successor forms) or in
connection with an exchange offer or an offering of securities solely to the
Company's existing stockholders), including a Demand Registration Statement or a
Shelf Registration Statement, then the Company shall in each case give written
notice of such proposed filing to the holders of Registrable Common Stock (which
notice shall indicate, to the extent then known, the proposed
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managing underwriter or underwriters, if such offering is to be underwritten,
and such other terms of the proposed offering that the Company reasonably
believes to be material to the holders of Registrable Common Stock) and shall
include in such registration statement all or a portion of the Registrable
Common Stock owned by such holders which such holders shall request to be so
included by written notice given by such holders to the Company within 10
business days after such holder's receipt of such notice from the Company (a
"Piggy-back Registration"). The Company shall use its best efforts to effect the
registration of all Registrable Common Stock requested to be so registered in
such offering on the same terms and conditions as any similar securities of the
Company included therein. If the managing underwriter or underwriters of an
underwritten offering, if any, advise the holders of Registrable Common Stock in
writing that in its or their reasonable opinion or, in the case of a Piggyback
Registration not being underwritten, the Company shall reasonably determine (and
notify the holders of Registrable Common Stock of such determination), after
consultation with an investment banker of nationally recognized standing, that
the number of shares of Common Stock or other securities proposed to be sold in
such registration will adversely affect the success of such offering, the
Company will include in such registration the number of securities, if any,
which, in the opinion of such underwriter or underwriters, or the Company, as
the case may be, can be sold as follows: (A) if such registration was initiated
by the Company, (i) first, the shares the Company proposed to sell, (ii) second,
the Registrable Common Stock and other shares of Common Stock requested to be
included in such registration by the holders thereof entitled to participate in
such registration under this Agreement or under any registration rights
agreement in effect on the date hereof and (iii) third, the Common Stock
requested to be included in such registration by the holders thereof entitled to
participate in such registration under a registration rights agreement effective
after the date hereof and (B) if such registration was initiated as the result
of the exercise of a demand registration right of holders of Common Stock (i)
first, the shares of Common Stock requested to be included in such registration
by the demanding holders pro rata among those requesting such registration on
the basis of the number of shares of Common Stock requested to be included),
(ii) second, shares to be issued and sold by the Company and shares held by
Persons other than the demanding holders and requested to be included in such
registration either pursuant to this Agreement or pursuant to any registration
rights agreement in effect on the date hereof and (iii) third, the Common Stock
requested to be included in such registration by the holders thereof entitled to
participate in such registration under registration rights agreements effective
after the date hereof. To the extent that the privilege of including Registrable
Common Stock or other shares of Common Stock in any Piggyback Registration must
be allocated among the holders thereof pursuant to clause (A)(ii) or (B)(ii)
above, the allocation shall be made pro rata based on the number of shares of
Common Stock that each such participant shall have requested to include therein
and to the extent that the privilege of including Common Stock in any Piggyback
Registration must be allocated among the holders thereof pursuant to clause
(A)(iii) or (B)(iii) above, the allocation shall be made pro rata based on the
number of shares of Common Stock that each shall such participant shall have
requested to include therein.
(b) The holders of Registrable Common Stock to be distributed
by such underwriters shall be parties to the underwriting agreement between the
Company and such underwriters. The representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the holders of
Registrable Common Stock to be distributed by such underwriters, and the
conditions precedent to the obligations of such holders of Registrable Common
Stock under such underwriting
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agreement shall be reasonably satisfactory to such holders. Such holders shall
not be required to make any representations or warranties to the Company or its
underwriters other than representations or warranties regarding such holder,
such holder's interest in the shares to be distributed and such holder's
intended method of distribution. The Company shall have the right to discontinue
any piggy-back registration under this Section 4 at any time prior to the
effective date of such registration if the registration of the securities giving
rise to such registration under this Section 4 is discontinued by the Company,
but no such discontinuation shall preclude an immediate or subsequent request by
the holders of Registrable Common Stock for registration pursuant to Section 2
hereof if otherwise permitted.
Section 5. Restrictions on Dispositions and Demand
Registrations. Notwithstanding anything to the contrary contained herein, the
Company shall not be obligated to prepare and file any registration statement
pursuant to a Demand Registration or prepare or file any amendment or supplement
thereto and may suspend, by giving written notice to the holders of Registrable
Common Stock, such holders' rights to make dispositions of Registrable Common
Stock pursuant to a Shelf Registration Statement, at any time when the Company
reasonably believes that the filing thereof at the time requested, or the
offering or sale of securities pursuant thereto, would materially adversely
affect a pending or proposed public offering of the Company's securities, or an
acquisition, merger, recapitalization, consolidation, reorganization or similar
transaction or negotiations, discussions or pending proposals with respect
thereto. The rights of holders of Registrable Common Stock to make dispositions
thereof pursuant to a Shelf Registration Statement may similarly be suspended by
the Company upon written notice to the holders of Registrable Common Stock that
the Shelf Registration Statement is unusable as a result of an event requiring a
post-effective amendment or supplement, which has not yet been filed, and will
remain unusable until the supplement is filed or post-effective amendment is
filed and declared effective. The filing of a registration statement, or any
amendment or supplement thereto, by the Company cannot be deferred, and the
holders' rights to dispose of Registrable Common Stock pursuant to a Shelf
Registration Statement cannot be suspended for more than 90 days, may not be so
deferred or suspended more than 180 days during any twelve month period unless
such deferral or suspension is agreed to in writing by the holders of
Registrable Common Stock subject to such suspension or deferral and, with
respect to suspended dispositions, the Company shall be obligated to maintain
the effectiveness of the applicable registration statement for an additional
period of time equal to the period of suspension(s).
Section 6. Registration Procedures.
(a) Certain Company Obligations. Whenever Registrable Common
Stock is to be registered pursuant to Sections 2 or 3 of this Agreement, the
Company will use reasonable diligence to effect the registration of such
Registrable Common Stock in accordance with the intended method of disposition
thereof as quickly as practicable, and in connection with any such request and
with the Piggy-back Registration or Demand Registration, the Company will as
expeditiously as possible:
(i) prepare and file with the Commission a registration
statement which includes the Registrable Common Stock and use
its best efforts to cause such registration statement to
become effective (which registration statement, in the case of
a Demand Registration, shall in all events be filed with the
Commission within 60
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days after the Company's receipt of the Demand Registration,
subject to the limitations set forth in Section 5); provided
that before filing a registration statement or prospectus or
any amendments or supplements thereto, the Company will
furnish to the holders of the Registrable Common Stock covered
by such registration statement and the underwriters, if any,
draft copies of all such documents proposed to be filed at
least five (5) business days prior thereto, which documents
will be subject to the reasonable review of such holders and
underwriters, and provided further that if such registration
statement refers to any holder of Registrable Common Stock by
name or otherwise as the holder of any securities of the
Company, then such holder shall have the right to require (i)
the insertion therein of language, in form and substance
satisfactory to such holder, to the effect that the holding by
such holder of such securities does not necessarily make such
holder a "controlling person" of the Company within the
meaning of the Securities Act and is not to be construed as a
recommendation by such holder of the investment quality of the
Company's securities covered thereby and that such holding
does not imply that such holder will assist in meeting any
future financial requirements of the Company, or (ii) in the
event that such reference to such holder by name or otherwise
is not required by the Securities Act or any rules and
regulations promulgated thereunder, the deletion of the
reference to such holder;
(ii) prepare and file as soon as reasonably practicable
with the Commission such amendments and post-effective
amendments to the registration statement as may be necessary
to keep the registration statement effective for the period of
time specified in Section 3 with respect to the Shelf
Registration Statement and otherwise for 90 days (or such
shorter period which will terminate when all Registrable
Common Stock covered by such registration statement has been
sold or withdrawn); cause the prospectus to be supplemented by
any required prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 under the Securities Act; and
comply with the provisions of the Securities Act applicable to
it 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 by the
holders thereof set forth in such registration statement or
supplement to the prospectus;
(iii) furnish to any holder of Registrable Common Stock
included in such registration statement and to the managing
underwriter or underwriters, if any, without charge, at least
one signed copy of the registration statement and any
post-effective amendment thereto, upon request, and such
number of conformed copies thereof and such number of copies
of the prospectus (including each preliminary prospectus) and
any amendments or supplements thereto, and any documents
incorporated by reference therein, as such holder or
underwriter may reasonably request in order to facilitate the
disposition of the Registrable Common Stock being sold by such
holder;
(iv) notify in writing each holder of Registrable Common
Stock included in such registration statement, at any time
when a prospectus relating-thereto is required to be delivered
under the Securities Act, when the Company
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becomes aware of the happening of any event as a result of
which the prospectus included in such registration statement
(as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to
make the statements therein (in the case of the prospectus or
any preliminary prospectus, in light of the circumstances
under which they were made) not misleading and, as promptly as
practicable thereafter, prepare and file with the Commission
and furnish a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such
Registrable Common Stock, such prospectus will not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading;
(v) use reasonable diligence to cause all Registrable
Common Stock included in such registration statement to be
listed, by the date of the first sale of Registrable Common
Stock pursuant to such registration statement, on each
securities exchange on which the Common Stock of the Company
is then listed or proposed to be listed, if any, and use
reasonable diligence to cause all Registrable Common Stock
included in such Registration Statement to be quoted on The
Nasdaq Stock Market (or other national or small-cap market),
if the Common Stock of the Company is then quoted thereon;
(vi) make generally available to its security holders an
earnings statement satisfying the provisions of Section 11(a)
of the Securities Act as soon as practicable, which earnings
statement shall cover the requisite 12-month period, which
requirements will be deemed to be satisfied if the Company
timely files complete and accurate information on Forms 10-Q,
10-K and 8-K under the Exchange Act and otherwise complies
with Rule 158 under the Act as soon as feasible;
(vii) if requested by the managing underwriter or
underwriters or any holder of Registrable Common Stock covered
by the registration statement, promptly incorporate in a
prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters or
such holder reasonably requests to be included therein,
including, without limitation, with respect to the Registrable
Common Stock being sold by such holder to such underwriter or
underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other
terms of the underwritten offering of the Registrable Common
Stock to be sold in such offering, and promptly make all
required filings of such prospectus supplement or
post-effective amendment;
(viii) on or prior to the date on which the registration
statement is declared effective, use reasonable diligence to
register or qualify, and cooperate with the holders of
Registrable Common Stock included in such registration
statement, the underwriter or underwriters, if any, and their
counsel, in connection with the registration or qualification
of the Registrable Common Stock covered by the registration
statement for offer and sale under the securities or blue sky
laws of each state and other jurisdiction of the United States
as any such holder or underwriter
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reasonably requests in writing, to use reasonable diligence to
keep each such registration or qualification effective,
including through new filings, or amendments or renewals,
during the period such registration statement is required to
be kept effective and to do any and all other acts or things
necessary or advisable to enable the disposition in all such
jurisdictions of the Registrable Common Stock covered by the
applicable registration statement; provided that the Company
will not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of
process in any such jurisdiction where it is not then so
subject;
(ix) cooperate with the holders of Registrable Common
Stock covered by the registration statement and the managing
underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under
the registration statement, and enable such securities to be
in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or such holders
may request;
(x) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such
other actions as the holders of the Registrable Common Stock
being sold or the underwriters retained by holders
participating in an underwritten public offering, if any,
reasonably request in order to expedite or facilitate the
disposition of such Registrable Common Stock;
(xi) make available for inspection by the holders, by any
underwriter participating in any disposition to be effected
pursuant to such registration statement and by any attorney,
accountant or other agent retained by the holders or any such
underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company,
and cause all of the Company's officers, directors and
employees to supply all information, reasonably requested by
the holders or any such seller, underwriter, attorney,
accountant or agent in connection with such registration
statement. In that connection, the Company may require the
holders, such underwriter and such other persons to conduct
their investigation in a manner which does not disrupt the
operations of the Company and to execute such confidentiality
agreements as the Company may reasonably determine to be
advisable; and
(xii) notify each holder of Registrable Common Stock of
any stop order issued or threatened by the Commission in
connection with any registration statement covering
Registrable Common Stock and take all reasonable actions
required to prevent the entry of such stop order or to remove
it if entered.
(b) Certain Obligations of Holders of Registrable Common
Stock. Each holder of Registrable Common Stock shall provide the Company in
writing such information as the Company reasonably requests in order to
effectuate the registration and disposition of such holder's Registrable Common
Stock pursuant to this Agreement and such holder shall execute all consents,
powers of attorney, registration statements and other documents reasonably
required to be signed
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by such holder in order to effectuate the registration or disposition of
Registrable Common Stock by such holder.
Section 7. Registration Expenses. The Company shall pay all
expenses incident to the Company's performance of or compliance with its
obligations hereunder, including, without limitation, all registration, filing
and National Association of Securities Dealers, Inc. fees, all fees and expenses
of complying with securities or blue sky laws, all word processing, duplicating
and printing expenses, messenger and delivery expenses, and the reasonable fees
and disbursements of the Company's independent public accountants, of the
Company's counsel and of one law firm acting as counsel to the holders
requesting registration of all or a portion of their Registrable Common Stock .
Holders of Registrable Common Stock requesting registration will be responsible
for any other expenses incurred by them, including for their own accountants and
representatives, as well as any underwriting discounts and commissions on the
sale of the Registrable Common Stock.
Section 8. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each holder of Registrable Common Stock, its
officers, directors, partners and members (and officers and directors of such
partners and members) and each person who controls such holder (within the
meaning of the Securities Act) against all losses, claims, damages or
liabilities arising out of or based upon any untrue or alleged untrue statement
of material fact contained in any registration statement registering the
disposition of Registrable Common Stock, any amendment or supplement thereto,
any prospectus or preliminary prospectus 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, except insofar as the same arise out of
or are based upon, any such untrue statement or omission based upon information
furnished in writing to the Company by such indemnified person expressly for use
therein and will reimburse, as incurred, such holder, officer, director, partner
or controlling person for any legal or other expenses incurred by such holder,
officer, director, partner or controlling person in connection with
investigating, defending or appearing as a third party witness in connection
with any such loss, claim, damage, or liability. In connection with an
underwritten offering, the Company will indemnify, and reimburse for expenses,
the underwriters thereof, their officers and directors and each person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to holders of Registrable Common
Stock.
(b) Indemnification by Holders of Registrable Common Stock. In
connection with any registration statement in which a holder of Registrable
Common Stock is participating, such holder will furnish to the Company in
writing such information with respect to the name and address of such holder and
the amount of Registrable Common Stock held by such holder and such other
information as the Company shall reasonably request, for use in connection with
any such registration statement or prospectus and agrees to indemnify the
Company, its directors and officers, any underwriter (within the meaning of the
Securities Act) for the Company or other persons selling securities pursuant to
such registration statement, and each person who controls the Company, against
any losses, claims, damages, liabilities and expenses resulting from any untrue
statement of a material fact or any omission of a material fact required to be
stated in the registration statement or prospectus or any amendment thereof or
supplement thereto or necessary
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to make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in any information
with respect to such holder so furnished in writing by such holder expressly for
inclusion in any prospectus or registration statement. In no event shall the
liability of any selling holder of Registrable Common Stock hereunder be greater
in amount than the dollar amount of the proceeds received by such holder upon
the sale of the Registrable Common Stock giving rise to such indemnification
obligation.
(c) Conduct of Indemnification Proceedings. Any person
entitled to indemnification hereunder agrees to give prompt written notice to
the indemnifying party after the receipt by such person of any written notice of
the commencement of any action, suit, proceeding or investigation or threat
thereof made in writing as to which such person will claim indemnification or
contribution pursuant to this Agreement and, unless in the reasonable judgment
of such indemnified party a conflict of interest may exist between such
indemnified party and the indemnifying party with respect to such claim, permit
the indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to such indemnified party. The failure to notify the
indemnifying party promptly of such commencement or threat shall not relieve the
indemnifying party of its obligation to indemnify the indemnified party, except
to the extent that the indemnifying party is actually prejudiced by such
failure. Whether or not such defense is assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
indemnifying party will 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 of such claim or litigation. If the indemnifying party is
not entitled to, or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel for the
indemnified party or parties with respect to such claim, unless in the
reasonable judgment of any indemnified party an actual conflict of interest
exists between such indemnified party and any other of such indemnified parties
with respect to such claim, in which event the indemnified party shall be
obligated to pay the fees and expenses of such additional counsel or counsels.
(d) Contribution. If the indemnification provided for in this
Section 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. 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, 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 8(b), any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
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The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 8(d), no underwriter
shall be required to contribute any amount in excess of the amount by which the
underwriting discount applicable to the Registrable Common Stock purchased by it
and distributed to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no selling holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Common Stock of such selling holder was
offered to the public exceeds the amount of any damages which such selling
holder has otherwise been required to pay by reason of such untrue statement or
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The obligations of the Company pursuant to this Section 8
shall be further subject to such additional express agreements of the Company as
may be required to facilitate an underwritten offering, provided that no such
agreement shall in any way limit the rights of the holders of Registrable Common
Stock under this Agreement, or create additional obligations of such holders not
set forth herein, except as otherwise expressly agreed in writing by any such
holders. The obligations of the Company pursuant to this Section 8 shall be in
addition to any liability or obligation the Company may have at common law or
otherwise.
Section 9. Rule 144. The Company covenants that for so long as
any Holder owns any Registrable Common Stock that it will file, in a timely
manner, the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the Commission thereunder,
and it will take such further action as any holder of Registrable Common Stock
may reasonably request, all to the extent required from time to time to enable
such holder to sell Registrable Common Stock without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (b)
any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any holder of Registrable Common Stock, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
Section 10. Remedies. Each holder of Registrable Common Stock
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
Section 11. Binding Effect; Transferees; Termination. Except
to the extent otherwise provided herein, the provisions of this Agreement shall
be binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns. A transferee of
Registrable Common Stock, which acquires such securities from a holder of
Registrable Common Stock in a transfer, whether in a public distribution or
otherwise, which results in such transferred securities not being Registrable
Common Stock in the hands of such
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transferee, shall not be a holder of Registrable Common Stock hereunder and
shall not have any rights or obligations hereunder as a result of such transfer
of Registrable Common Stock. Except as provided in the preceding sentence, a
transferee of a holder of Registrable Common Stock, whether becoming such by
sale, transfer, assignment, operation of law or otherwise, shall be deemed to be
a holder of Registrable Common Stock hereunder and such transferee shall be
entitled to the rights, and subject to the obligations, of such a holder
hereunder. This Agreement shall terminate at such time as there are no
outstanding shares of Registrable Common Stock.
Section 12. Amendments and Waivers. Except as otherwise
provided herein, the provisions of this Agreement may not be amended, modified
or supplemented without the written agreement of each of the Company, Holdings,
JEDI and the Xxxxx Group; provided, however, at such time as any of Holdings,
JEDI or any member of the Xxxxx Group no longer holds Registrable Common Stock,
this Agreement (other than Section 8) may be amended, modified or supplemented
without consent of the party no longer holding Registrable Common Stock.
Section 13. Notices. All communications under this Agreement
shall be in writing and shall be effective (a) upon hand delivery or delivery by
telecopy or facsimile, if delivered on a business day during normal business
hours where such notice is to be received or the first business day following
such delivery if delivered other than on a business day during normal business
hours where such notice is to be received or (b) on the second business day
following the date of mailing by first class mail, postage prepaid or by express
courier service, fully prepaid, or upon actual receipt of such mailing,
whichever shall first occur:
(i) if to a holder of Registrable Common Stock at the
most current address given by such holder to the Company in
writing;
(ii) if to the Company at its address set forth in the
Exchange Agreement.
Section 14. Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
Section 15. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 16. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
Section 17. Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions contained herein shall not be in
any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.
[REMAINDER OF PAGE LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
INLAND RESOURCES INC.,
a Washington corporation
By: /s/ XXXX X. XXXXXX
-----------------------------------
Xxxx X. Xxxxxx
Co-Chief Executive Officer
INLAND HOLDINGS LLC, a California limited
liability company,
By: TRUST COMPANY OF THE WEST, a
California trust company, as
Sub-Custodian for Mellon Bank for the
benefit of Account No. CPFF 873-3032,
Member
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Xxxxxx X. Xxxxxxxx
Managing Director
By: /s/ XXXX XXXXXXXX
-----------------------------------
Xxxx XxxXxxxx
Senior Vice President
By: TCW PORTFOLIO NO. 1555 DR V
SUB-CUSTODY PARTNERSHIP, L.P., a
California limited partnership, Member
By: TCW ROYALTY COMPANY V, a
California corporation, Managing
General Partner
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Xxxxxx X. Xxxxxxxx
Vice President
16
TCW PORTFOLIO NO. 1555 DR V SUB-CUSTODY
PARTNERSHIP, L.P., a California limited
partnership
By: TCW ROYALTY COMPANY V, a California
corporation, as Managing General
Partner
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Xxxxxx X. Xxxxxxxx
Vice President
JOINT ENERGY DEVELOPMENT INVESTMENTS II
LIMITED PARTNERSHIP, a Delaware limited
partnership
By: Enron Capital Management II Limited
Partnership, its General Partner
By: Enron Capital II Corp., its General
Partner
By: /s/ XXXX XXXXXX
-----------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Vice President
---------------------------------
PENGO SECURITIES CORP., a Delaware
corporation
By: /s/ XXXXX XXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxx
----------------------------------
17
XXXXX ENERGY PARTNERSHIP, a New York
general partnership
By: Xxxxx Management LLC, a New York
limited liability company, its General
Partner
By: /s/ XXXXX XXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxx
----------------------------------
Title:
---------------------------------
/s/ XXXXXXX X. XXXXX
----------------------------------------
XXXXXXX X. XXXXX, an individual
/s/ XXXXXXX X. XXXXX
----------------------------------------
XXXXXXX X. XXXXX, an individual
/s/ XXXXXXX XXXXXXX XXXXX
----------------------------------------
XXXXXXX XXXXXXX XXXXX, an individual
/s/ XXXX X. XXXXX
----------------------------------------
XXXX X. XXXXX, an individual
/s/ XXXXXX X. XXXXXX
----------------------------------------
XXXXXX X. XXXXXX, an individual
