REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
November 9, 1993 but effective as set forth in Section 1 below, is entered into
by and between XXXXX XXXXXXX NATURAL GAS CORP., an Oklahoma corporation (the
"Company"), and the undersigned stockholder (the "Holder").
W I T N E S S E T H:
WHEREAS, the Holder owns a substantial number of shares of Common
Stock, par value $.01 per share, of the Company; and
WHEREAS, following the initial public offering referred to below, the
Company Stock will be registered under Section 12 of the Securities and Exchange
Act of 0000 (xxx "Xxxxxxxx Xxx"); and
WHEREAS, under the provisions of the Securities Act of 1933 (the
"Securities Act") and the General Rules and Regulations promulgated by the
Securities and Exchange Commission (the "SEC") thereunder, the Holder is or may
be limited in the manner of selling the shares of Common Stock owned by the
Holder, absent registration under the Securities Act of the sale of such Common
Stock or the availability of another exemption from the registration
requirements of the Securities Act; and
WHEREAS, the Company and the Holder desire to establish certain
registration rights with respect to shares of Common Stock owned by the Holder;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereby agree as follows:
1. EFFECTIVENESS OF AGREEMENT. This Agreement shall become
effective commencing on the effective date of the registration statement
relating to the initial public offering of Common Stock by the Company ("IPO").
2. DEMAND REGISTRATION.
(A) REQUEST FOR REGISTRATION. As used in this Agreement,
"Restricted Stock" shall mean all shares of Common Stock owned by the Holder on
the effective date of this Agreement (excluding any shares which are sold by the
Holder in the IPO), together with any securities issued or issuable with respect
to any such Common Stock by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Restricted
Stock, once issued such securities shall ceased to be Restricted Stock
when (a) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement,
(b) such securities shall have been distributed to the public pursuant to
Rule 144 (or any successor provision) under the Securities Act, (c) such
securities shall have been otherwise transferred, new certificates
representing such securities not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition
of such securities shall not require registration or qualification of such
securities under the Securities Act or any similar state law then in force,
(d) such securities shall have ceased to be outstanding or (e) the Holder or
Holders thereof shall agree in writing that such Restricted Stock shall no
longer be subject to this agreement. The Holder and any permitted assignee
of the Holder's rights and duties hereunder as provided in Section 10 are
referred to herein as the "Holders." Subject to the conditions and
limitations set forth in Section 5 of this Agreement, at any time following
the date one year after the effective date of this Agreement set forth in
Section 1, the Holder or Holders of Restricted Stock holding in the aggregate
5% in Restricted Stock then outstanding may make a written request for
registration under the Securities Act of all or part of its or their
Restricted Stock pursuant to this Section 2 ("Demand Registration"), provided
that the Restricted Stock proposed to be sold (a) shall be at least 5% of the
aggregate number of shares of Restricted Stock then outstanding, but in no
event less than 500,000 shares of Restricted Stock (subject to appropriate
adjustment for any stock dividend, stock split, combination,
recapitalization, merger, consolidation, reorganization or other occurrence
affecting the number of shares of Restricted Stock then outstanding) and
(b) shall have an aggregate Market Value of at least $5,000,000 on the date
immediately preceding the date of the Holder's written request for
registration under this Section 2. For purposes of this Section 2, "Market
Value" shall be determined by using the last reported sales price on the New
York Stock Exchange, or such other national securities exchange on which the
Common Stock is listed. On the day on which such value is to be determined,
or if the Common Stock is not then listed on a national securities exchange,
the last sales prices reported in the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), or if the Common Stock is not included in the National Market
System, then the average of the closing bid and asked prices in the
over-the-counter market as reported by the NASDAQ or other national quotation
service. If at any time the Common Stock is not listed on a national
exchange or traded in the over-the-counter market, the Market Value shall be
the value determined by the Board of Directors of the
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Company, taking into consideration those factors affecting value which they
deem appropriate. The Holder's written request will specify the aggregate
number of shares of Restricted Stock proposed to be sold and will also
specify the intended method of disposition thereof. Within ten days after
receipt of such request, the Company will give written notice of such
registration request to all other Holders of Restricted Stock and include in
such registration all Restricted Stock with respect to which the Company has
received written requests for inclusion therein within fifteen business days
after the receipt by the applicable Holder of the Company's notice. Each
such request will also specify the aggregate number of shares of Restricted
Stock to be registered and the intended method of disposition thereof. No
other party, including the Company (but excluding another Holder of
Restricted Stock), shall be permitted to offer securities under any such
Demand registration unless the Holder or Holders requesting the Demand
Registration shall consent in writing.
(B) PRIORITY ON DEMAND REGISTRATIONS. If the Holders of a
majority in number of shares of the Restricted Stock to be registered in a
Demand Registration so elect, the offering of such Restricted Stock pursuant to
such Demand Registration shall be in the form of an underwritten offering. In
such event, if the managing underwriter or underwriters of such offering advise
the Company and the Holders in writing that in their opinion the aggregate
amount of Restricted Stock requested to be included in such offering is so large
that it will materially and adversely affect the success of such offering, the
Company will include in such registration the aggregate number of shares of
Restricted Stock which in the opinion of such managing underwriter or
underwriters can be sold without any such material adverse effect, and such
number of shares shall be allocated pro rata among the Holders of Restricted
Stock on the basis of the number of shares of Restricted Stock requested to be
included in such registration by their Holders. To the extent Restricted Stock
so requested to be registered is excluded from the offering, then the Holders of
such Restricted Stock shall have the right to one additional Demand Registration
under this Section with respect to such Restricted Stock, PROVIDED that the
failure of such Restricted Stock to be registered is through no fault of such
Holder.
(C) SELECTION OF UNDERWRITERS AND COUNSEL. If any Demand
Registration is in the form of an underwritten offering, the Holders of a
majority in number of shares of Restricted Stock to be registered will select
and obtain the services of the investment banker or investment bankers and
manager or managers that will administer the offering and the counsel to such
investment bankers and managers; PROVIDED that such investment bankers, managers
and counsel must be approved
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by the Company, which approval shall not be unreasonably withheld.
3. PIGGYBACK REGISTRATION. If the Company proposes to file a
registration statement under the Securities Act with respect to an offering for
its own account of any class of its equity securities (other than a registration
statement on Form S-8 (or any successor form) or any other registration
statement relating solely to employee benefit plans or filed in connection with
an exchange offer, a transaction to which Rule 145 under the Securities Act
applies or an offering of securities solely to the Company's existing
stockholders), then the Company shall in each case give written notice of such
proposed filing to the Holders of Restricted Stock as soon as practicable (but
no later than five business days) before the anticipated filing date, and such
notice shall offer such Holders the opportunity to register such number of
shares of Restricted Stock as each such Holder may request. Each Holder of
Restricted Stock desiring to have such Holder's Restricted Stock included in
such registration statement shall so advise the Company in writing within five
business days after the date of Company's notice, setting forth the amount of
such Holder's Restricted Stock for which registration is requested. If the
Company's offering is to be an underwritten offering, the Company shall, subject
to the further provisions of this Agreement, use its reasonable efforts to cause
the managing underwriter or underwriters of a proposed underwritten offering to
permit the Holders of the Restricted Stock, requested to be included in the
registration for such offering, to include such securities in such offering on
the same terms and conditions as any similar securities of the Company included
therein. Moreover, if the registration of which the Company gives notice does
involve an underwriting, the right of each Holder to registration pursuant to
this Section 3 shall, unless the Company otherwise assents, be conditioned upon
such Holder's participation as a seller in such underwriting and its execution
of an underwriting agreement with the managing underwriter or underwriters
selected by the Company. Notwithstanding the foregoing, if the managing
underwriter or underwriters of such offering deliver a written opinion to the
Holders of Restricted Stock that either because of (A) the kind of securities
which the Holders, the Company and any other person or entities intend to
include in such offering or (B) the size of the offering which the Holders, the
Company and other persons intend to make, the success of the offering would be
materially and adversely affected by inclusion of the Restricted Stock requested
to be included, then (i) in the event that the size of the offering is the basis
of such managing underwriter's opinion, the number of shares to be offered for
the accounts of Holders of Restricted Stock shall be reduced pro rata to the
extent necessary to reduce the total amount of securities to be included in such
offering to
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the amount recommended by such managing underwriter or underwriters; PROVIDED
that if securities are being offered for the account of other persons or
entities as well as the Company, such reduction shall not represent a greater
fraction of the number or kind of securities intended to be offered by
Holders of Restricted Stock than the fraction of similar reductions imposed
on such other persons or entities over the amount of securities of such kind
they intended to offer; and (ii) in the event that the combination of
securities to be offered is the basis of such managing underwriter's opinion,
(x) the Restricted Stock to be included in such offering shall be reduced as
described in clause (i) above (subject to the proviso in clause (i)) or, (y)
if the actions described in clause (x) would, in the judgment of the managing
underwriter, be insufficient to substantially eliminate the adverse effect
that inclusion of the Restricted Stock requested to be included would have on
such offering, such Restricted Stock will be excluded from such offering.
Any Restricted Stock excluded from an underwriting shall be withdrawn from
registration and shall not, without the consent of the Company and the
manager of the underwriting, be transferred in a public distribution prior to
the earlier of 90 days (or such other shorter period of time as the Company
and the manager of the underwriting may require) after the effective date of
the registration statement or 150 days after the date the Holders of such
Restricted Stock are notified of such exclusion.
4. REGISTRATION PROCEDURES. Whenever, pursuant to Section 2 or 3,
the Holders of Restricted Stock have requested that any Restricted Stock be
registered, the Company will, subject to the provisions of Section 5, use all
reasonable efforts to effect the registration and the sale of such Restricted
Stock in accordance with the intended method of disposition thereof as promptly
as practicable, and in connection with any such request, the Company will:
(A) In connection with a request pursuant to Section 2, prepare
and file with the SEC, not later than 60 days after receipt of such request to
file a registration statement with respect to Restricted Stock, a registration
statement on any form for which the Company then qualifies and which counsel for
the Company shall deem appropriate and which form shall be available for the
sale of such Restricted Stock in accordance with the intended method of
distribution thereof, and use its reasonable efforts to cause such registration
statement to become effective; PROVIDED that if the Company shall furnish to the
Holders making such a request a certificate signed by either the chief financial
officer or the chief accounting officer of the Company stating that in his good
faith judgment it would be significantly disadvantageous to the Company for such
a registration statement to be filed on or before the date filing would be
required, the Company shall have an additional period of not
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more than 90 days within which to file such registration statement; and
provided further (i) that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish
to one counsel selected by the Holders of a majority in number of shares of
the Restricted Stock covered by such registration statement copies of all
such documents proposed to be filed, which documents will be subject to the
review of such counsel, and (ii) that after the filing of the registration
statement, the Company will promptly notify each selling Holder of Restricted
Stock of any stop order issued or, to the knowledge of the Company,
threatened by the SEC and take all reasonable actions to prevent the entry of
such stop order or to remove it if entered;
(B) in connection with a registration pursuant to Section 2,
prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective for a period of
not less than 270 days or such shorter period as shall terminate when all
Restricted Stock covered by such registration statement have been sold (but
not before the expiration of the 90-day period referred to in Section 4(3),
of the Securities Act and Rule 174 thereunder, if applicable), and comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the selling Holders
thereof set forth in such registration statement;
(C) as soon as reasonably practicable, furnish to each
selling Holder, prior to filing a registration statement, copies of such
registration statement as proposed to be filed, and thereafter furnish to
such selling Holder such number of copies of such registration statement,
each amendment and supplement thereto (in each case, if specified by such
Holder, including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus) and such other
documents as such selling Holder may reasonably request in order to
facilitate the disposition of the Restricted Stock owned by such selling
Holder;
(D) with reasonable promptness, use its reasonable efforts to
register or qualify such Restricted Stock under such other securities or blue
sky laws of such jurisdictions within the United States as any selling Holder
reasonably (in light of such selling Holder's intended plan of distribution)
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such selling Holder to consummate the
disposition in such jurisdictions of the Restricted Stock owned by such
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selling Holder; PROVIDED, that the Company will not be required to (i)
qualify generally or do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection (D), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction;
(E) with reasonable promptness, use reasonable efforts to cause
the Restricted Stock covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable the
selling Holder or Holders thereof to consummate the disposition of such
Restricted Stock;
(F) promptly notify each selling Holder of such Restricted
Stock, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, or the occurrence of any event known to the
Company requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such Restricted
Stock, such prospectus will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and promptly make available to each
selling Holder any such supplement or amendment;
(G) in connection with a request pursuant to Section 2, enter
into an underwriting agreement in customary form, the form and substance of such
underwriting agreement being subject to the reasonable satisfaction of the
Company;
(H) with reasonable promptness make available for inspection by
any selling Holder, any underwriter participating in any disposition pursuant to
such registration statement, and any attorney, accountant or other agent
retained by any such selling Holder or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested for such purpose by any such Inspector in
connection with such registration statement; PROVIDED, HOWEVER, that the
selection of any Inspector other than a selling Holder shall be subject to the
consent of the Company, which shall not be unreasonably withheld. Each
inspector that actually reviews Records supplied by the Company that include
information that the Company determines, in good faith, to be confidential
("Confidential Information") shall be required, prior to any such review, to
execute an agreement with the Company
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providing that such Inspector shall not disclose any Confidential Information
unless such disclosure is required by applicable law or legal process. Each
selling Holder of Restricted Stock agrees that Confidential Information
obtained by it as a result of such inspections shall not be used by it as the
basis for any transactions in securities of the Company unless and until such
information is made generally available to the public. Each selling Holder
of Restricted Stock further agrees that it will, upon learning that
disclosure of Confidential Information is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of the
Confidential Information. Each selling Holder also agrees that the due
diligence investigation made by the Inspectors shall be conducted in a manner
which shall not unreasonably disrupt the operations of the Company or the
work performed by the Company's officers and employees;
(I) in the event such sale is pursuant to an underwritten
offering, use its reasonable efforts to obtain a comfort letter or letters from
the Company's independent public accountants in customary form and covering such
matters of the type customarily covered by comfort letters as the managing
underwriter reasonably requests;
(J) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the GEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering a
period of twelve months, beginning within three months after the effective date
of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act; and
(K) with reasonable promptness, use its reasonable efforts to
cause all such Restricted Stock to be listed on each securities exchange on
which the Common Stock of the Company is then listed, PROVIDED that the
applicable listing requirements are satisfied.
Each selling Holder of Restricted Stock agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in subsection (F) hereof, such selling Holder will forthwith discontinue
disposition of Restricted Stock pursuant to the registration statement covering
such Restricted Stock until such selling Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subsection (F) hereof, and,
if so directed by the Company, such selling Holder will deliver to the Company
(at the Company's expense) all copies, other than permanent file copies then in
such selling Holder's possession, of the prospectus covering such Restricted
Stock
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current at the time of receipt of such notice. In the event the Company
shall give any such notice, the Company shall extend the period during which
such registration statement shall be maintained effective pursuant to this
Agreement (including the period referred to in subsection (D)) by the number
of days during the period from and including the date of the giving of such
notice pursuant to subsection (F) hereof to and including the date when each
selling Holder of Restricted Stock covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by subsection (F) hereof. Each selling Holder also agrees to
notify the Company if any event relating to such selling Holder occurs which
would require the preparation of a supplement or amendment to the prospectus
so that such prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
5. CONDITIONS AND LIMITATIONS.
(A) The Company's obligations under Section 2 shall be subject
to the following limitations:
(i) the Company need not file a registration statement either
(x) during the period starting with the date 60 days prior to the
Company's estimated date of filing of, and ending 90 days after the
effective date of, any registration statement pertaining to securities
of the Company (other than a registration of securities in a Rule 145
transaction or exchange offer or with respect to an employee benefit
plan or dividend reinvestment plan), provided that if such Company
registration statement is not filed within 90 days after the first
date on which the Company notifies the Holder of Restricted Stock that
it will delay a Demand Registration pursuant to this clause (x), the
Company may not further postpone such Demand Registration pursuant to
this clause; or (y) during the period specified in the first proviso
of subparagraph (A) of Section 4;
(ii) the Company shall not be required to furnish any audited
financial statements other than those audited statements customarily
prepared at the end of its fiscal year, or to furnish any unaudited
financial information with respect to any period other than its
regularly reported interim quarterly periods unless in the absence of
such other unaudited financial information the registration statement
would contain an untrue statement of material fact or omit to state a
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material fact required to be stated therein or necessary to make the
statements therein not misleading;
(iii) except as provided in Section 2(B), the Company shall not
be required to file more than four Demand Registrations. A
registration statement will not count as a Demand Registration until
it has become effective; and
(iv) the Company shall have received the information and
documents specified in Section 6 and each selling Holder shall have
observed or performed its other covenants and conditions contained in
such section and Section 8.
(B) The Company's obligation under Section 3 shall be subject to
the limitations and conditions specified in such section and in clauses (i),
(ii), and (iv) of subsection (A) of this Section 5, and to the condition that
the Company may at any time terminate its proposal to register its shares and
discontinue its efforts to cause a registration statement to become or remain
effective.
6. INFORMATION FROM AND CERTAIN COVENANTS OF HOLDERS OF RESTRICTED
STOCK. Notices and requests delivered to the Company by Holders for whom
Restricted Stock is to be registered pursuant to this Agreement shall contain
such information regarding the Restricted Stock to be so registered, the Holder
and the intended method of disposition of such Restricted Stock as shall
reasonably be required in connection with the action to be taken. Any Holder
whose Restricted Stock is included in a registration statement pursuant to this
Agreement shall execute all consents, powers of attorney, registration
statements and other documents reasonably required to be signed by it in order
to cause such registration statement to become effective. Each selling Holder
covenants that, in disposing of such Holder's shares , such Holder will comply
with Rules 10b-2, 10b-6 and 10b-7 of the SEC adopted pursuant to the Exchange
Act.
7. REGISTRATION EXPENSES. All Registration Expenses (as defined
herein) will be borne by the Company. Underwriting discounts and commissions
applicable to the sale of Restricted Stock shall be borne by the Holder of the
Restricted Stock to which such discount or commission relates, and each selling
Holder shall be responsible for the fees and expenses of any legal counsel,
accountants or other agents retained by such selling Holder and all other out-
of-pocket expenses incurred by such selling Holder in connection with any
registration under this Agreement.
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As used herein, the term Registration Expenses means all expenses
incident to the Company's performance of or compliance with this Agreement
(whether or not the registration in connection with such expenses are
incurred ultimately becomes effective), including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities
or blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Restricted Stock), rating
agency fees, printing expenses, messenger and delivery expenses incurred by
the Company, internal expenses incurred by the Company (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the fees and expenses incurred in
connection with the listing of the securities to be registered on each
securities exchange on which similar securities issued by the Company are
then listed, and fees and disbursements of counsel for the Company and its
independent certified public accountants (including the expenses of any
special audit or comfort letters required by or incident to such
performance), securities acts liability insurance (if the Company elects to
obtain such insurance), the reasonable fees and expenses of any special
experts retained by the Company in connection with such registration and the
fees and expenses of other persons retained by the Company.
8. INDEMNIFICATION AND CONTRIBUTION.
(A) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each selling Holder of Restricted Stock, its
officers, directors and agents and each person, if any, who controls such
selling Holder within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
or prospectus relating to the Restricted Stock or in any amendment or
supplement thereto or in any preliminary prospectus relating to the
Restricted Stock, or arising out of or based upon 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
such losses, claims, damages, liabilities or expenses arise out of, or are
based upon, any such untrue statement or omission or allegation thereof which
is based upon information furnished in writing to the Company by such selling
Holder or on such selling Holder's behalf expressly for use therein; and
PROVIDED, FURTHER, that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this subsection shall not apply to the
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extent that any such loss, claim, damage, liability or expense results from
the fact that a copy of the final prospectus was not sent or given to the
person asserting any such losses, claims, damages, liabilities or expenses at
or prior to the written confirmation of the sale of the Restricted Stock
concerned to such person. The Company also agrees to include in any
underwriting agreement with any underwriters of the Restricted Stock
provisions indemnifying and providing for contribution to such underwriters,
their officers and directors and each person who controls such underwriters
on substantially the same basis as the provisions of this Section 8
indemnifying and providing for contribution to the selling Holders.
(B) INDEMNIFICATION BY HOLDERS OF RESTRICTED STOCK. Each
selling Holder agrees to indemnify and hold harmless the Company, its
officers, directors and agents and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement or a material fact contained in any registration statement
or prospectus relating to the Restricted Stock or in any amendment or
supplement thereto or in any preliminary prospectus relating to the
Restricted Stock, or arising out of or based upon 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, provided (i) that
such losses, claims, damages, liabilities or expenses arise out of, or are
based upon, any such untrue statement or omission or allegation thereof which
is based upon information furnished in writing to the Company by such selling
Holder or on such selling Holder's behalf expressly for use therein, (ii)
that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus, the indemnity
agreement contained in this subsection shall not apply to the extent that any
such loss, claim, damage, liability or expense results from the fact that a
copy of the final prospectus was not sent or given to the person asserting
any such losses, claims, damages, liabilities or expenses at or prior to the
written confirmation of the sale of the Restricted Stock concerned to such
person, and (iii) that no selling Holder shall be liable for any
indemnification under this Section 8 in an aggregate amount which exceeds the
total net proceeds (before deducting expenses) received by such selling
Holder from the offering. Each selling Holder also agrees to include in any
underwriting agreement with underwriters of the Restricted Stock provisions
indemnifying and providing for contribution to such underwriters, their
officers and directors and each person who controls such underwriters on
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substantially the same basis as the provisions of this Section 8 indemnifying
and providing for contribution to the Company.
(C) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any indemnified party in respect of which indemnity may be
sought from an indemnifying party, the indemnifying party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory
to such indemnified party, and shall assume the payment of all expenses.
Such indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party has agreed to pay such fees and expenses,
or (ii) the indemnifying party shall have failed to assume the defense of
such action or proceeding and employ counsel reasonably satisfactory to such
indemnified party or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such indemnified party and
such indemnifying party, and such indemnified party shall have been advised
by counsel that there may be one or more legal defenses available to such
indemnified party which are different from or additional to those available
to the indemnifying party (in which case, if such indemnified party notifies
the indemnifying party in writing that it elects to employ separate counsel
at the expense of the indemnifying party, the indemnifying party shall not
have the right to assume the defense of such action or proceeding on behalf
of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or
proceeding for separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (together with appropriate local counsel)
at any time for such indemnified party, which firm shall be designated in
writing by such indemnified party). The indemnifying party shall not be
liable for any settlement of any such action or proceeding effected without
its written consent, but if settled with its written consent, or if there is
a final judgment for the plaintiff in any such action or proceeding, the
indemnifying party agrees to indemnify and hold harmless such indemnified
party from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.
(D) CONTRIBUTION. If the indemnification provided for in
this Section 8 is unavailable to the Company or the selling Holders in
respect of any losses, claims, damages, liabilities or judgments referred to
therein, then each such indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or
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payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments, in such proportions as is appropriate to
reflect the relative fault of each such party in connection with such
statements or omissions, as well as any other relevant equitable
considerations. The relative fault of each such party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Company and the selling Holders 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. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigation or
defending any such action or claim. Notwithstanding the provisions of this
Section 8(D), no selling Holder shall be required to contribute any amount in
excess of the amount by which the total price at which the Restricted Stock
of such selling Holder were 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 or alleged untrue statement or omission or alleged
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.
9. AMENDMENTS. This Agreement may be amended or modified upon
the written consent thereto of the Company and the Holders of not less than
66 2/3% of the Restricted Stock.
10. PERMITTED ASSIGNMENTS. In the event any Holder or Holders
transfer or assign Restricted Stock to any corporation or entity that is
directly or indirectly at least 80% owned by S.A. Xxxxx Xxxxxxx et Cie, the
rights and obligations of such Holder or Holders under this Agreement with
respect to such Restricted Stock may be assigned to such transferee or
assignee, without the consent of the Company. Except as provided in the
preceding sentence, this Agreement and the rights and obligations of the
Holder or Holders hereunder shall not be assignable except with the prior
written consent of the Company, and any attempted assignment without such
consent shall be null and void AB INITIO.
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Subject to this limitation, this Agreement shall inure to the benefit of and
be binding upon and enforceable by the respective successors and assigns of
the parties hereto.
11. ENTIRE AGREEMENT; GOVERNING LAW. This Agreement constitutes
the entire agreement of the parties relating to the subject matter hereof:
all prior or contemporaneous written or oral agreements are merged herein;
this agreement shall be governed by the laws of the State of Oklahoma.
12. NOTICES. Any notice, request, instruction, correspondence or
other document to be given hereunder by either party to the other (herein
collectively called "Notice") shall be in writing and delivered personally or
mailed, postage prepaid, or by telegram or telecopier, as follows:
If to Holder:
Xxxxx Xxxxxxx Natural Gas Holdings Corp.
Xxx Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Attention: XXXXXXX X. XXXXXX
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company:
Xxxxx Xxxxxxx Natural Gas Corp.
00000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt of not received
during the recipient's normal business hours. Any party may change any address
to which Notice is to be given to it by giving Notice as provided above of such
change of address.
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IN WITNESS WHEREOF, the Company and the Holder have caused this Agreement
to be signed by their respective officers thereunto duly authorized.
XXXXX XXXXXXX NATURAL GAS CORP.
By: /s/ Xxxxx X. Xxxx, Xx.
--------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: President and CEO
XXXXX XXXXXXX NATURAL GAS HOLDINGS
CORP.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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