EXHIBIT 10.6
STOCK OWNERSHIP AND
REGISTRATION RIGHTS AGREEMENT
AMONG
TEXOIL, INC.,
TEXOIL COMPANY
AND
RIMCO PARTNERS, L.P.,
RIMCO PARTNERS, L.P. II,
RIMCO PARTNERS, L.P. III
AND
RIMCO PARTNERS, L.P. IV
SEPTEMBER 6, 1996
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Exhibit 10.6 - Page 1
STOCK OWNERSHIP AND REGISTRATION RIGHTS AGREEMENT
AMONG
TEXOIL, INC., TEXOIL COMPANY AND
RIMCO PARTNERS, L.P., RIMCO PARTNERS, L.P. II,
RIMCO PARTNERS, L.P. III AND RIMCO PARTNERS, L.P. IV
THIS STOCK OWNERSHIP AND REGISTRATION RIGHTS AGREEMENT
dated as of September 6, 1996, (this "Agreement") among TEXOIL, INC., a Nevada
corporation ("Parent"), TEXOIL Company, a Tennessee corporation and wholly owned
subsidiary of Parent (the "Company"), and RIMCO Partners, L.P., RIMCO Partners,
L.P. II, RIMCO Partners, L.P. III and RIMCO Partners, L.P. IV (collectively, the
"RIMCO Holders," and together with their distributees, successors and assigns,
the "Holders"), is effective for all purposes as of the date specified in
Article III hereof.
W I T N E S S E T H:
WHEREAS, pursuant to the terms and subject to the conditions of that
certain Note Purchase Agreement (the "Note Purchase Agreement") dated as of even
date herewith among Parent, the Company and the RIMCO Holders, the Company will
issue and sell to the RIMCO Holders the Notes (the Tranche A Notes and Tranche B
Notes); and
WHEREAS, the Tranche A Notes are exchangeable according to their
terms and the terms of that certain Guaranty and Exchange Agreement dated as of
even date herewith among Parent, the Company and the RIMCO Holders (the
"Guaranty and Exchange Agreement") for shares of common stock of Parent, par
value $.01 per share (the "Parent Common Stock"); and
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the closing of the transactions contemplated by the Note Purchase
Agreement;
NOW, THEREFORE, to induce the parties hereto to close the
transactions contemplated by the Note Purchase Agreement (such closing referred
to herein as the "Closing") and in consideration of the aforesaid and of the
mutual representations, warranties and covenants contained herein and in the
Note Purchase Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS; PARENT AND COMPANY REPRESENTATIONS,
WARRANTIES AND COVENANTS
SECTION 1.01. CERTAIN DEFINED TERMS. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Note Purchase Agreement and Annex A attached thereto. For purposes of this
Agreement,
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Exhibit 10.6 - Page 2
"1933 ACT" means the Securities Act of 1933, as amended.
"1934 ACT" means the Securities and Exchange Act of 1934, as amended.
"AGREEMENT" has the meaning specified in the preamble.
"BLUE SKY FILING" has the meaning specified in SECTION 2.09(A).
"CLOSING" has the meaning specified in the recitals.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" has the meaning specified in the preamble.
"DEMAND REGISTRATIONS" has the meaning specified in SECTION 2.01(A).
"GUARANTY AND EXCHANGE AGREEMENT" has the meaning specified in the
recitals.
"HOLDERS" has the meaning specified in the preamble.
"NOTE PURCHASE AGREEMENT" has the meaning specified in the recitals.
"NOTES" means the Tranche A Notes and the Tranche B Notes.
"PARENT" has the meaning specified in the preamble.
"PARENT COMMON STOCK" has the meaning specified in the recitals.
"PERMITTED INTERRUPTION" has the meaning specified in SECTION 2.01(G).
"PIGGYBACK REGISTRATION" has the meaning specified in SECTION 2.02(A).
"REGISTRABLE SECURITIES" means the Shares and the Related Securities. As
to any particular Registrable Securities, once issued such securities shall
cease to be Registrable Securities when (a) a registration statement with
respect to the sale of such securities shall have become effective under the
1933 Act and such securities shall have been disposed of in accordance with the
plan of distribution set forth in such registration statement, (b) such
securities shall have been distributed in accordance with Rule 144 under the
1933 Act or (c) such securities shall have been otherwise transferred, new
certificates therefor not bearing a legend restricting further transfer shall
have been delivered in exchange therefor by Parent and subsequent disposition of
such securities shall not require registration or qualification under the 1933
Act or any similar state law then in force.
"REGISTRATION EXPENSES" has the meaning specified in SECTION 2.07.
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Exhibit 10.6 - Page 3
"RELATED SECURITIES" means, collectively, other than the Shares, (i) any
and all securities issued or issuable as a result of adjustments made under the
Note Purchase Agreement, and in each case any and all securities otherwise
exchanged therefor or distributed, issued or issuable with respect thereto and
(ii) any and all securities of Parent or any successor thereto or assignee
thereof that are hereafter transferred, distributed, issued or issuable to the
Holders.
"RIMCO HOLDERS" has the meaning specified in the preamble.
"SHAREHOLDER NOTEHOLDERS" means the holders of New Shareholder Debt, as
defined in the Note Purchase Agreement.
"SHARES" means, collectively, shares of Parent Common Stock issued or
issuable upon exchange of the Tranche A Notes and all shares of Parent Common
Stock exchanged therefor or distributed, issued or issuable with respect
thereto.
SECTION 1.02. UNDERTAKING TO FILE REPORTS AND COOPERATE IN RULE 144
TRANSACTIONS. For as long as any Holder shall continue to hold any Registrable
Securities, Parent shall file, on a timely basis, all annual, quarterly and
other reports required to be filed by it under Sections 13 and 15(d) of the 1934
Act and the rules and regulations promulgated by the Commission thereunder, as
amended from time to time during the term of this Agreement. In the event of any
proposed transfer of Registrable Securities other than pursuant to a sale or
transfer registered under the 1933 Act, Parent shall cooperate with each Holder
so as to enable such sales to be made in accordance with applicable laws, rules
and regulations, the requirements of Parent's transfer agents, and the
reasonable requirements of the broker through which the sales are proposed to be
executed, and shall, upon request and subject to applicable law, furnish
unlegended certificates representing Shares and Related Securities in such
numbers and denominations as any Holder shall reasonably require for delivery
pursuant to such sales. The Holders will have all of the rights set forth in
this Agreement to register the offering of the Registrable Securities
notwithstanding any availability of Rule 144 under the 1933 Act with respect to
the sale of all or part of the Registrable Securities.
SECTION 1.03. ELECTION OF DIRECTOR TO BOARD OF DIRECTORS OF PARENT. (a)
Subject to compliance with applicable law, immediately following the issuance of
any of the Notes by the Company, the RIMCO Holders holding not less than a
majority (in then market value) of the then outstanding Notes held by the RIMCO
Holders, or any designee thereof, shall be entitled to designate one person to
be a member of Parent's Board of Directors. Immediately following the issuance
of any of the Notes, Parent shall commence and diligently pursue such action as
is required under its charter and bylaws to increase the size of Parent's Board
of Directors by one and will use its reasonable best efforts, subject to
compliance with applicable law, to elect or cause to be elected to fill the
vacancy so created the person designated by the RIMCO Holders or their designee,
so long as (i) any of the Notes (or any securities exchanged therefor) are
outstanding or (ii) the RIMCO Holders, together with their Affiliates, own an
aggregate of 5% or more of the Parent Common Stock, however acquired (or a then
comparable proportion of the equity securities of Parent entitled to vote for
the election of directors). In the event of any resignation, removal, death or
other termination of the director so designated by the RIMCO Holders or their
designee, or the failure of
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Exhibit 10.6 - Page 4
the stockholders of Parent for any reason to elect such designee or to reelect
such director, the RIMCO Holders holding not less than a majority (in then
market value) of the then outstanding Notes and Registrable Securities held by
the RIMCO Holders, or any designee thereof, shall be entitled to designate one
person to serve on Parent's Board of Directors in place of such previously
designated person, and Parent will use its reasonable best efforts, subject to
compliance with applicable law, to elect or cause to be elected to the Board of
Directors the person so designated by the RIMCO Holders or their designee. The
RIMCO Holders hereby undertake and agree that, not later than 15 days following
written request from Parent, the RIMCO Holders or their designee shall furnish
to Parent's Board of Directors such information with respect to such director
designee as is required to comply with applicable law, rule or regulation, and
with Items 401 and 404 of Regulation S-K or Regulation S-B or any successor
regulation under the 1933 Act, if then applicable to Parent.
(b) Subject to compliance with applicable law, immediately following any
date on which the aggregate principal of the Notes outstanding shall exceed $5
million, the RIMCO Holders holding not less than a majority (in then market
value) of the then outstanding Notes and Registrable Securities held by the
RIMCO Holders, or any designee thereof, shall be entitled to designate a total
of two persons to be members of Parent's Board of Directors. Immediately
following the date on which the aggregate principal of the Notes outstanding
shall exceed $5 million, Parent shall commence and diligently pursue such action
as is required under its charter and bylaws to increase the size of Parent's
Board of Directors by one and will use its reasonable best efforts, subject to
compliance with applicable law, to elect or cause to be elected to fill the
vacancy so created one additional person designated by the RIMCO Holders or
their designee, which person shall be in addition to the person previously
designated by the RIMCO Holders or their designee. So long as the aggregate
principal amount of the Notes outstanding shall exceed $2.5 million, the RIMCO
Holders or their designee shall be entitled to the benefits of this Section
1.03(b), which shall be applicable to each of the two directors provided for
herein (a total of two directors). In the event of any resignation, removal,
death or other termination of any director so designated by the RIMCO Holders or
their designee, or the failure of the stockholders of Parent for any reason to
elect such designee or to reelect such director, the RIMCO Holders holding not
less than a majority (in then market value) of the then outstanding Notes and
Registrable Securities held by the RIMCO Holders, or any designee thereof, shall
be entitled to designate one person to serve on Parent's Board of Directors in
place of each such previously designated person, and Parent will use its
reasonable best efforts, subject to compliance with applicable law, to elect or
cause to be elected to the Board of Directors each such person so designated by
the RIMCO Holders or their designee (a total of two directors). The RIMCO
Holders hereby undertake and agree that, not later than 15 days following
written request from Parent, the RIMCO Holders or their designee shall furnish
to Parent's Board of Directors such information with respect to each such
director designee as is required to comply with applicable law, rule or
regulation, and with Items 401 and 404 of Regulation S-K or Regulation S-B or
any successor regulation under the 1933 Act, if then applicable to Parent.
SECTION 1.04. SECTIONS 411 THROUGH 444 OF THE NEVADA GENERAL CORPORATION
LAW. If at any time Parent shall be governed by Sections 411 through 444 of the
Nevada General Corporation Law, Parent hereby covenants that it will use its
reasonable best efforts, subject to compliance with applicable law, to take all
actions necessary under Nevada law, including, without limitation, the
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Exhibit 10.6 - Page 5
approval by the Board of Directors of Parent of the Transaction Documents and
the consummation of the transactions contemplated thereby, to render the
provisions of Sections 411 through 444 of the Nevada General Corporation Law
inapplicable to the RIMCO Holders and their affiliates and to the transactions
contemplated in the Transaction Documents, including, without limitation, the
acquisition of shares of Parent Common Stock by the RIMCO Holders pursuant to
the transactions contemplated by the Transaction Documents, as may be amended
from time to time.
SECTION 1.05. EXCHANGE LISTING. Parent shall as promptly as practicable
prepare and file an application to list the Registrable Securities on each
exchange or automated market on which comparable securities of Parent are then
traded, including, without limitation, the Boston Stock Exchange (if
applicable), effective as soon as practicable after the issuance of such
Registrable Securities and shall use its reasonable best efforts to cause such
application to be approved as promptly as practicable.
SECTION 1.06. OTHER REGISTRATION RIGHTS. Parent hereby represents and
warrants that there are no existing rights held by any Person to register the
offering of any securities of Parent under the 1933 Act or any successor statute
("registration rights") other than (a) the rights granted in this Agreement, (b)
the registration rights granted to the Shareholder Noteholders under that
certain Stock Ownership and Registration Rights Agreement dated of even date
herewith among Parent and the Shareholder Noteholders and (c) the registration
rights granted under that certain Underwriters' Warrant Agreement dated June 8,
1994 among Parent and Toluca Pacific Securities Corporation, Tamaron
Investments, Inc. and Grant Bettingen, Inc. Other than the existing registration
rights described in the immediately preceding sentence, Parent will not grant
any registration rights in favor of any Person with respect to any of Parent's
securities without the prior written consent of the Holders.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.01. DEMAND REGISTRATIONS. (a) GENERAL. Upon the written request
to Parent of Holders of not less than a majority (in then market value) of the
then outstanding Registrable Securities, including not less than a majority (in
then market value) of the then outstanding Registrable Securities held by the
RIMCO Holders, to Parent that Parent effect the registration under the 1933 Act,
such registration to occur at any time, of all or part of the Registrable
Securities and specifying the intended method of disposition thereof, Parent
will give prompt written notice of such request to all other Persons, if any,
who have contractual rights to request that any of their shares be piggybacked
onto any registration form proposed to be used to register the Registrable
Securities requested by such Holders, and thereupon Parent will, subject to the
provisions of this Agreement, use its reasonable best efforts to include in the
registration under the 1933 Act all shares of Parent Common Stock that persons
having contractual registration rights with respect to such shares have
requested in writing that Parent register, PROVIDED such request is given to
Parent within 20 days after the receipt of the aforesaid written notice by
Parent (specifying the intended method of disposition of such Parent Common
Stock), all to the extent requisite to permit the intended disposition of the
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Exhibit 10.6 - Page 6
Registrable Securities and shares of Parent Common Stock to be so registered.
All registrations requested pursuant to this SECTION 2.01(A) are referred to
herein as "Demand Registrations."
(b) NUMBER OF DEMAND REGISTRATIONS. Subject to the provisions of SECTION
2.01(A), the Holders shall be entitled to request one Demand Registration;
provided, however, that in the event any Tranche A Notes are exchanged for
Parent Common Stock pursuant to the provisions of Section 3.01(b) of the
Guaranty and Exchange Agreement, the Holders shall be entitled to one additional
Demand Registration with respect to any Tranche A Notes that are still
outstanding following such exchange.
(c) REGISTRATION OF OTHER SECURITIES. Whenever Parent shall effect a
Demand Registration of Parent Common Stock pursuant to SECTION 2.01(A) in
connection with an underwritten offering by the Holders, no securities other
than shares of Parent Common Stock shall be included among the securities
covered by such registration unless (i) the managing underwriter of such
offering shall have advised Parent in writing that the inclusion of such other
securities would not adversely affect such offering or (ii) the Holders of
Registrable Securities participating in such Demand Registration shall have
consented in writing to the inclusion of such other securities.
(d) REGISTRATION STATEMENT FORM. Demand Registrations shall be on such
appropriate registration form of the Commission (excluding Form S-8 or Form S-4
(or any successor form)) (i) as shall be selected by Parent and shall be
reasonably acceptable to the Holders and (ii) as shall permit the disposition of
such Registrable Securities in accordance with the intended method or methods of
disposition specified in the Holders' request for such registration, including,
without limitation, a "shelf offering" or disposition pursuant to Rule 415 under
the 1933 Act. Parent and the Holders agree to include in any such registration
statement all information and exhibits that, in the opinion of counsel to the
Holders or counsel to Parent, is required to be included therein.
(e) EFFECTIVE REGISTRATION STATEMENT. A registration requested pursuant to
SECTION 2.01(A) shall not be deemed to have been effected and will NOT be
considered one of the Demand Registrations which may be requested pursuant to
this Agreement if (i) a registration statement with respect thereto has not
become effective or if the request for the Demand Registration is withdrawn
prior to effectiveness or such registration is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason and has not thereafter become
effective, (ii) after it has become effective, it does not remain effective for
a period of at least 120 days or, in the case of a "shelf" registration or
registration pursuant to Rule 415 under the 1933 Act, for a period of at least
two years (unless the Registrable Securities registered thereunder have been
sold or disposed of prior to the expiration of such 120-day period or such
two-year period, as the case may be), (iii) the conditions to closing specified
in any underwriting agreement entered into in connection with such registration
are not satisfied or waived other than by reason of the failure or refusal of
the Holders to satisfy or perform a condition to such closing or (iv) the
Holders are not able to register and sell all of the Registrable Securities
requested to be included in such Demand Registration, but only if such
registration statement is for a "firm commitment underwriting" rather than for
an "at the market sale" by the Holders. In any event,
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Exhibit 10.6 - Page 7
Parent shall pay all Registration Expenses in connection with any such
registration initiated but not so effected.
(f) PRIORITY ON DEMAND REGISTRATIONS. In the event that the managing
underwriters of a requested Demand Registration advise Parent in writing that in
their opinion the number of shares of Registrable Securities proposed to be
included in any such registration exceeds the number of securities that can be
sold in such offering, Parent shall include in such registration only the number
of shares of Registrable Securities that in the opinion of such underwriters can
be sold. If the number of Registrable Securities requested to be sold in a
Demand Registration exceeds the number of shares of Registrable Securities that
can be sold, Parent shall include in such Demand Registration (i) FIRST, the
Registrable Securities requested to be included therein by the Holders, and (ii)
SECOND, other securities requested to be included in such registration.
(g) RESTRICTIONS ON DEMAND REGISTRATIONS. Parent shall not be obligated to
effect any Demand Registration within 180 days after the effective date of a
previous Demand Registration or a previous registration under which any Holder
exercised piggyback rights pursuant to SECTION 2.02 hereof. Parent may postpone
(such postponement referred to herein as a "Permitted Interruption") for a
reasonable period of time (not to exceed 90 days, which may not thereafter be
extended without approval by the Holders participating in such Demand
Registration, which approval will not be unreasonably withheld) the filing or
the effectiveness of a registration statement for a Demand Registration if, at
the time it receives a request for such registration (i) Parent is engaged in
any active program for repurchase of Parent Common Stock and furnishes to the
Holders an Officer's Certificate to that effect, (ii) Parent is conducting or
about to conduct an offering of Parent Common Stock or other securities and
Parent is advised by the investment banker engaged by Parent to conduct the
offering that such offering would be affected adversely by the registration so
demanded and Parent furnishes to the Holders an Officer's Certificate to that
effect, or (iii) the board of directors of Parent shall determine in good faith
that such offering will interfere with a pending or contemplated financing,
merger, acquisition, business combination, sale of assets, recapitalization or
other similar corporate action of Parent and Parent furnishes to the Holders an
Officer's Certificate to that effect. After such Permitted Interruption, Parent
shall effect such registration as promptly as practicable without further
request from the Holders unless such request has been withdrawn.
(h) SELECTION OF UNDERWRITERS. The Holders shall have the right to select
such investment bankers and managers as shall be reasonably acceptable to Parent
to administer the offering of Registrable Securities for which a Demand
Registration is requested. The Holders shall, in their sole discretion,
negotiate the terms of the underwriters' fees and expenses, the underwriting
discount and commission and the transfer taxes.
(i) PREEMPTION OF DEMAND REGISTRATION. Notwithstanding anything to the
contrary contained herein, if at any time a Demand Registration has been
requested pursuant to SECTION 2.01(A), Parent may elect to effect an
underwritten primary registration on behalf of Parent if Parent's board of
directors believes that such primary registration would be in the best interests
of Parent or if the managing underwriter for the requested Demand Registration
advises Parent in writing that in their opinion in order to sell the Registrable
Securities subject to such Demand
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Exhibit 10.6 - Page 8
Registration Parent should include its own securities. Promptly after receiving
a request for a Demand Registration, Parent shall notify the members of its
board of directors (and the board of directors shall consider the issue within
30 days after receiving such request), and Parent shall meet with the managing
underwriter and shall decide whether or not to effect an underwritten primary
registration on behalf of Parent, and failure to convene such a meeting and make
such determination within such 30-day period shall constitute a waiver by Parent
of its right to preempt a Demand Registration under this SECTION 2.01(I). If
Parent elects to effect a primary registration after receiving a request to
effect a Demand Registration, Parent shall give prompt written notice (and in
any event within 60 days after receiving a request for a Demand Registration) to
each Holder requesting such Demand Registration of Parent's intention to effect
such a primary registration and shall afford such Holder or Holders rights to
Piggyback Registrations contained in SECTION 2.02 hereof. If Parent elects to
effect a primary registration after receiving a request to effect a Demand
Registration, such registration shall not count as one of the Demand
Registrations of the Holders permitted under SECTION 2.01(B) hereof, unless all
Registrable Securities requested to be included in the Demand Registration are
included in such primary registration.
SECTION 2.02. PIGGYBACK REGISTRATIONS. (a) GENERAL. Whenever Parent
proposes to register any shares of Parent Common Stock or other equity
securities under the 1933 Act (other than registrations solely for shares to be
issued in connection with any employee benefit plan or a merger, consolidation
or other business combination registered on Form S-4 (or any successor form
thereto)) and the registration form to be used may be used for the registration
of Shares or Related Securities, as the case may be (a "Piggyback
Registration"), Parent shall give prompt written notice (in any event within 10
business days after its receipt of notice of any exercise of other registration
rights) to each Holder of its intention to effect such a registration and shall
use its reasonable best efforts to include in such registration all of the
Registrable Securities with respect to which Parent receives from any Holder a
written request for inclusion therein within 20 days after the receipt by the
Holders of Parent's notice (five business days if Parent gives telephonic notice
to the Holders, with written confirmation to follow immediately thereafter,
stating that (i) such registration will be on Form S-3 (or any comparable or
successor form or comparable form then applicable to small business issuers) and
(ii) such shorter period of time is required because of a planned filing date),
which request shall specify the number of Registrable Securities requested to be
included in such registration by such Holder. If Parent elects, prior to
effectiveness, not to proceed with a primary registration of Parent Common Stock
or other equity securities, it shall not be obligated to register any
Registrable Securities pursuant to such registration unless such primary
registration was initiated as provided in SECTION 2.01(I) after Parent received
a request for Demand Registration.
(b) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration is an
underwritten primary registration on behalf of Parent and the managing
underwriter of such offering advises Parent in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number that can reasonably be sold in such offering, then Parent shall include
in such registration (i) FIRST, the securities that Parent proposes to sell,
(ii) SECOND, the Registrable Securities and other securities requested to be
included therein by one or more Holders or Shareholder Noteholders, on a PRO
RATA basis according to the number of securities originally requested to be
included by each Holder and Shareholder Noteholder and (iii) THIRD, securities
requested to be
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included therein by any other persons having registration rights with respect to
securities of Parent. If the managing underwriter of such offering subsequently
advises Parent in writing that the number of securities that can be sold exceeds
the number of securities included in the offering, Parent shall include in the
registration (i) FIRST, the securities that Parent proposes to sell, (ii)
SECOND, such additional securities that one or more Holders or Shareholder
Noteholders had originally requested be included in the registration, on a PRO
RATA basis according to the number of securities originally requested to be
included by each Holder and Shareholder Noteholder and (iii) THIRD, securities
requested to be included therein by any other persons having registration rights
with respect to securities of Parent.
(c) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration is an
underwritten secondary registration on behalf of holders of Parent's securities
other than the Holders and the managing underwriter of such offering advises
Parent in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number that can reasonably be sold in
such offering, then Parent shall include in such registration (i) FIRST, if such
registration is being made on behalf of other stockholders of Parent exercising
demand registration rights, then the securities so requested to be included
therein in accordance with such demand registration rights, (ii) SECOND, the
Registrable Securities and other securities requested to be included in such
registration by one or more Holders or Shareholder Noteholders on a PRO RATA
basis according to the number of securities originally requested to be included
by each Holder and Shareholder Noteholder, and (iii) THIRD, securities requested
to be included therein by any other persons having registration rights with
respect to securities of Parent. If the managing underwriter of such offering
subsequently advises Parent in writing that the number of securities that can be
sold exceeds the number of securities included in the offering, Parent shall
include in the registration (i) FIRST, the securities proposed to be sold on
behalf of the other stockholders of Parent exercising demand registration
rights, (ii) SECOND, such additional securities that one or more Holders or
Shareholder Noteholders had originally requested be included in the
registration, on a PRO RATA basis according to the number of securities
originally requested to be included by each Holder and Shareholder Noteholder
and (iii) THIRD, securities requested to be included therein by any other
persons having registration rights with respect to securities of Parent.
(d) OTHER REGISTRATIONS. If (i) Parent has previously filed a registration
statement with respect to any of the Registrable Securities pursuant to SECTION
2.01(A) OR 2.02(A) and (ii) such previous registration has not been withdrawn or
abandoned, Parent shall not file or cause to be effective any other registration
of any of its equity securities or securities convertible or exchangeable into
or exercisable for its equity securities under the 1933 Act (except on Form S-8
or Form S-4 or any successor form), whether on its own behalf or at the request
of any holder or holders of such securities, until a period of at least 180 days
has elapsed from the effective date of such previous registration (and, during
the period of any "shelf offering" or offering pursuant to Rule 415 under the
1933 Act, during such time as any Holder is engaged in selling efforts pursuant
thereto, except with the prior written consent of the Holders named in the
prospectus for such "shelf offering").
(e) PIGGYBACK NOT A DEMAND REGISTRATION. Should any Holder's participation
in a registration be pursuant to a Piggyback Registration in connection with (i)
an underwritten primary
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registration on behalf of Parent as described in SECTION 2.01(I) OR 2.02(B), or
(ii) an underwritten secondary registration on behalf of holders of Parent's
securities other than the Holders as described in SECTION 2.02(C), then such
participation by any Holder shall not constitute a Demand Registration for
purposes of determining the number of Demand Registrations the Holders are
entitled to pursuant to SECTION 2.01(B).
SECTION 2.03. HOLDBACK AGREEMENTS. (a) GENERAL. Each Holder hereby agrees
not to effect any public sale or distribution of equity securities of Parent, or
any securities convertible into or exchangeable or exercisable for such
securities, including, without limitation, sales pursuant to Rule 144 under the
1933 Act (or any similar rule then in effect), during the 10 days prior to and
the 90 days beginning on the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration in which Registrable
Securities are included (except as part of such underwritten registration)
unless the underwriters managing the registered public offering otherwise agree.
(b) AGREEMENT BY PARENT. Parent agrees not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10 days prior to and
during the 90 days beginning on the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration in which Registrable
Securities are included (except as part of such underwritten registration in
accordance with the provisions of this Agreement) unless the underwriters
managing the registered public offering otherwise agree.
(c) REGISTRATION PROCEDURES. Whenever any Holder requests registration
pursuant to this Agreement, Parent shall use its reasonable best efforts to
effect the registration of Registrable Securities for which registration is
requested in accordance with the intended method of disposition thereof, and
pursuant thereto Parent shall as expeditiously as possible:
(i) prepare and file with the Commission a registration statement with
respect to such securities and use its reasonable 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, Parent will furnish to the counsel selected by the
Holders copies of all documents proposed to be filed, which documents will
be subject to the review of such counsel);
(ii) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection
therewith and prepare and file any related registration statement pursuant
to Rule 462 under the 1933 Act, in each case as necessary to keep such
registration statement or registration statements effective for a period
of not less than 90 days after such registration statement is declared
effective, provided that Parent shall have no obligation pursuant to this
Agreement to maintain the effectiveness of such registration statement
after the sale of the securities registered thereunder, and shall comply
with the provisions of the 1933 Act with respect to the disposition of all
securities
::ODMA\PCDOCS\DOCS\88117\1
Exhibit 10.6 - Page 11
owned by each Holder that are covered by such registration statement
during such period in accordance with the intended methods of disposition
by such Holder;
(iii) furnish to the Holders such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included
in such registration statement (including each preliminary prospectus) and
such other documents as any Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such
Holder;
(iv) use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or Blue Sky Laws of
such jurisdictions as any Holder requests and do any and all other acts
and things that may be necessary or advisable to enable each Holder to
consummate the disposition in such jurisdictions of the Registrable
Securities (provided that Parent will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this sub-clause (iv), (B) subject itself to
taxation in any such jurisdiction or (c) consent to general service of
process in such jurisdiction);
(v) cause all such shares of Registrable Securities to be listed on each
securities exchange or qualified for trading on each market on which
securities issued by Parent that are of the same class as the Registrable
Securities are then listed or traded;
(vi) provide a transfer agent and registrar for all such Registrable
Securities no later than the effective date of such registration
statement;
(vii) obtain a "cold comfort" letter from Parent's independent public
accountants in customary form, covering such matters of the type
customarily covered by "cold comfort" letters delivered to underwriters,
and covering such other matters as any Holder may reasonably request; and
obtain an opinion of counsel for Parent in customary form, covering such
matters of the type customarily covered in opinions of legal counsel
delivered to underwriters, and covering such other matters as any Holder
may reasonably request;
(viii)if underwriters are engaged in connection with any registration
referred to in this Agreement, Parent shall provide customary
indemnification, representations, covenants, opinions, and other
assurances to the underwriters, in each case in form and substance
reasonably satisfactory to such underwriter;
(ix) notify each Holder and the managing underwriters, if any, promptly,
and (if requested by any such Person) confirm such advice in writing, (A)
when a prospectus or any prospectus supplement or post-effective amendment
(or related registration statement filed pursuant to Rule 462 under the
1933 Act) has been filed, and, with respect to a registration statement or
any post-effective amendment, when the same has become effective, (B) of
any request by the Commission for amendments or supplements to a
registration statement or related prospectus or for additional
information, (C) of the issuance by the Commission of any stop order
::ODMA\PCDOCS\DOCS\88117\1
Exhibit 10.6 - Page 12
suspending the effectiveness of a registration statement or the initiation
of any proceedings for that purpose, (D) of the receipt by Parent of any
notification with respect to the suspension of the qualification of any of
the registrable securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose, (E) of the happening of
any event that 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 fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and (F) of Parent's reasonable determination that a
post-effective amendment to a registration statement would be required;
(x) notify each Holder at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act, of the occurrence of any
event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any
fact necessary to make the statements therein not misleading, and, at the
request of any Holder, Parent shall prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
shares such amended or supplemented prospectus shall not contain an untrue
statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading;
(xi) use its reasonable best efforts to obtain as soon as reasonably
practicable 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;
(xii) if requested by the managing underwriters or any Holder, incorporate
in a prospectus supplement or post-effective amendment such information as
the managing underwriter and the Holders agree should be included therein
relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of
Registrable Securities being sold to such underwriters, 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 any Holder or any
underwriter of such securities;
(xiii)furnish to each Holder and each managing underwriter, without
charge, such signed copies of the registration statement or statements and
any post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all
exhibits (including those incorporated by reference) as any Holder or
managing underwriter may reasonably request;
(xiv) cooperate with reasonable requests of the Holders and the managing
underwriter, if any, to facilitate the timely preparation and delivery of
certificates representing Shares or
::ODMA\PCDOCS\DOCS\88117\1
Exhibit 10.6 - Page 13
Related Securities to be sold and not bearing any restrictive legends
unless required by applicable law; and enable such certificates to be in
such denominations and registered in such names as the managing
underwriter may request at least two business days prior to any sale of
Registrable Securities to the underwriters;
(xv) in the case of an underwritten offering, enter into such customary
agreements (including underwriting agreements in customary form) and take
all such other actions as any Holder or underwriter reasonably requests in
order to expedite or facilitate the disposition of such Registrable
Securities; and
(xvi) make available for inspection by any Holder, any underwriter
participating in any disposition pursuant to such registration statement,
and any attorney, accountant or other agent retained by any such Holder or
underwriter, all financial and other records, pertinent corporate
documents and properties of Parent, and cause Parent's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such Holder, underwriter, attorney, accountant
or agent in connection with such registration statement.
SECTION 2.04. COMPANY REPORTS. Parent shall file all reports required to
be filed by it under the 1933 Act and the 1934 Act and the rules and regulations
promulgated by the Commission thereunder, and take such further reasonable
action as may be necessary or appropriate for Parent to use Form S-2 or S-3 (or
any similar registration form then applicable to small business issuers or
hereafter adopted by the Commission) to register the Registrable Securities for
sale thereon. Upon request, Parent shall deliver to the Holders a written
statement as to whether it has complied with such requirements.
SECTION 2.05. INFORMATION TO BE FURNISHED BY THE HOLDERS. In connection
with any registration of shares of Registrable Securities hereunder, Parent may
require the Holders to furnish Parent with such information regarding the
Holders and the distribution of such shares as Parent may from time to time
reasonably request in writing in order to comply with the 1933 Act. Each Holder
agrees to notify Parent as promptly as practicable of any inaccuracy or change
in information previously furnished to Parent or of the occurrence of any event
in either case as a result of which any prospectus relating to such registration
contains untrue statements of a material fact regarding the Holders or the
distribution of such shares or omits to state any material fact regarding the
Holders or the distribution of such shares required to be stated therein or
necessary to make the statement therein not misleading in light of the
circumstances under which such statements were made, and to promptly furnish to
Parent any additional information required to correct and update any previously
furnished information or required such that such prospectus shall not contain,
with respect to the Holders or the distribution of such shares, 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 in
light of the circumstances under which such statements are made.
SECTION 2.06. SUSPENSION OF OFFERING PENDING PROSPECTUS SUPPLEMENT OR
AMENDMENT. Each Holder agrees that, upon receipt of any notice from Parent of
the occurrence of any event of
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Exhibit 10.6 - Page 14
the kind described in SECTION 2.03(C)(IX)(B), (C), (D), (E) OR (F) hereof, such
Holder will forthwith discontinue disposition of the Registrable Securities
covered by such registration statement or prospectus until such holder's receipt
of the copies of the supplemented or amended prospectus relating to such
registration statement or prospectus, or until it is advised in writing by
Parent 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 Parent, such Holder will
deliver to Parent all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering the Registrable Securities
current at the time of receipt of such notice.
SECTION 2.07. REGISTRATION EXPENSES. (a) GENERAL. All expenses incident to
Parent's performance and execution of Demand Registrations or Piggyback
Registrations, and Parent's performance of or compliance with this Agreement,
including, without limitation, all registration and filing fees, fees and
expenses of compliance with securities or Blue Sky Laws, expenses and fees for
listing the securities on the appropriate securities exchanges or qualifying
such securities for trading in the appropriate securities markets, costs of
liability insurance, all internal expenses, the expense of any annual audit or
quarterly review, printing expenses, messenger and delivery expenses, fees and
disbursements of counsel for Parent and all independent certified public
accountants (including the expenses of any special audit and "cold comfort"
letters required by or incident to such performance), and fees and costs of
underwriters (excluding discounts and commissions and fees of underwriters,
selling brokers, dealer managers or similar securities industry professionals
relating to the distribution of the Registrable Securities) and other Persons
(all such expenses being herein called "Registration Expenses"), shall be borne
by Parent.
(b) REIMBURSEMENT FOR COUNSEL FEES. In connection with each Demand
Registration and Piggyback Registration, Parent shall reimburse the Holders for
the reasonable fees and disbursements of one law firm chosen by Holders of a
majority (in then market value) of the then outstanding Registrable Securities.
(c) PAYMENT OF EXPENSES BY THE HOLDERS. The Holders shall pay the
underwriters' discount and commissions and the commissions and fees, if any,
payable in respect of selling brokers, dealer managers or similar securities
industry professionals, and transfer taxes allocable to the registration of the
Holders' securities so included in any Demand Registration or Piggyback
Registration pursuant to this Agreement.
SECTION 2.08. UNDERWRITTEN OFFERINGS. (a) UNDERWRITING AGREEMENT. In any
underwritten offering by one or more Holders pursuant to a registration
requested under SECTION 2.01(A) OR 2.02(A), Parent shall enter into an
underwriting agreement which shall be reasonably satisfactory in form and
substance to Parent, such Holder or Holders and the underwriters and which shall
contain representations, warranties and agreements (including indemnification
agreements to the effect and consistent with that provided in SECTION 2.09
hereof) as are customarily included by an issuer in underwriting agreements with
respect to primary distributions.
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Exhibit 10.6 - Page 15
(b) CONDITION TO PARTICIPATION AND QUALIFICATIONS TO OBLIGATIONS UNDER
REGISTRATION COVENANTS. The obligations of Parent to use its reasonable best
efforts to cause the Registrable Securities to be registered under the 1933 Act
are subject to each of the conditions that no Holder may participate in any
underwritten offering hereunder unless such Holder (a) agrees to sell such
Registrable Securities on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably and customarily required
under the terms of such underwriting arrangements.
SECTION 2.09. INDEMNIFICATION. (a) BY PARENT AND THE COMPANY. In the event
of any registration of any Registrable Securities under the 1933 Act, Parent and
the Company will, and hereby do, jointly and severally, indemnify and hold
harmless, to the fullest extent permitted by law, each Holder, its directors and
officers, each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who controls such
Holder or any such underwriter within the meaning of the 1933 Act, against any
and all losses, claims, damages, liabilities and expenses, joint or several, (or
actions or proceedings, whether commenced or threatened, in respect thereof) to
which they or any of them may become subject under the 1933 Act or any other
statute or common law, including any amount paid in settlement of any
litigation, commenced or threatened, and to reimburse them for any legal or
other expenses incurred by them in connection with investigating any claims and
defending any actions, insofar as any such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement relating to the sale of such securities or any post-effective
amendment thereto or any related registration statement filed pursuant to Rule
462 or similar rule under the 1933 Act or in any filing made in connection with
the qualification of the offering under Blue Sky or other securities laws or
jurisdictions in which the Registrable Securities are offered ("Blue Sky
Filing"), or the omission or alleged omission to state therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, 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 such registration statement (unless such
statement is corrected in the final prospectus and Parent has previously
furnished copies thereof to each Holder and the underwriters), or contained in
the final prospectus (as amended or supplemented if Parent shall have filed with
the Commission, and furnished to each Holder and the underwriters of such
offering copies thereof, prior to the written confirmation of any sale to the
person asserting liability, any amendment thereof or supplement thereto) if used
within the period during which Parent is required to keep the registration
statement to which such prospectus relates current, or the omission or alleged
omission to state therein (if so used) a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the indemnification agreement
contained herein shall not (i) apply to such losses, claims, damages,
liabilities, expenses or actions arising out of, or based upon, any such untrue
statement or alleged untrue statement, or any such omission or alleged omission,
if such statement or omission was made in reliance upon and in conformity with
written information furnished to Parent by a Holder or such underwriter
expressly for use in connection with preparation of the registration statement,
any preliminary prospectus or final prospectus contained in the registration
statement, any such amendment or supplement thereto or any Blue Sky Filing or
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Exhibit 10.6 - Page 16
(ii) inure to the benefit of any underwriter or any person controlling such
underwriter, to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of such person's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Holder or any such director, officer or controlling person and
shall survive the transfer of such securities by such Holder.
(b) BY THE HOLDERS. Parent may require, as a condition to including any
Registrable Securities in any registration statement filed pursuant to SECTION
2.01 OR 2.02, that Parent shall have received an undertaking satisfactory to it
from the Holders to indemnify and hold harmless (in the same manner and to the
same extent as set forth in SECTION 2.09(A)) Parent, each director of Parent,
each officer of Parent and each other person, if any, who controls Parent within
the meaning of the 1933 Act, with respect to any untrue statement or alleged
untrue statement in, or omission or alleged omission from, such registration
statement, any preliminary prospectus or final prospectus contained therein, or
any amendment or supplement thereto, if such statement or omission was made in
reliance upon and in conformity with written information furnished to Parent by
a Holder expressly for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, amendment or supplement. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on behalf of Parent or any such director, officer or controlling
person and shall survive the transfer of such securities by such Holder. In no
event shall any indemnity paid by any Holder to Parent pursuant to this SECTION
2.09(B), or otherwise, exceed the proceeds received by such Holder in such
offering.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in SECTION 2.09(A) OR 2.09(B), such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action, PROVIDED that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under SECTION 2.09(A) OR
2.09(B), as the case may be. In case any such action is brought against an
indemnified party, the indemnifying party shall be entitled to participate in
and, unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. In the event that the indemnifying party advises an indemnified
party that it will contest a claim for indemnification hereunder, or fails,
within 30 days of receipt of any indemnification notice to notify, in writing,
such person of its election to defend, settle or compromise, at its sole cost
::ODMA\PCDOCS\DOCS\88117\1
Exhibit 10.6 - Page 17
and expense, any action, proceeding or claim (or discontinues its defense at any
time after it commences such defense), then the indemnified party may, at its
option, defend, settle or otherwise compromise or pay such action or claim. In
any event, unless and until the indemnifying party elects in writing to assume
and does so assume the defense of any such claim, proceeding or action, the
indemnified party's costs and expenses arising out of the defense, settlement or
compromise of any such action, claim or proceeding shall be losses subject to
indemnification hereunder. The indemnified party shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the indemnified party which
relates to such action or claim. The indemnifying party shall keep the
indemnified party fully apprised at all times as to the status of the defense or
any settlement negotiations with respect thereto. If the indemnifying party
elects to defend any such action or claim, then the indemnified party shall be
entitled to participate in such defense with counsel of its choice at its sole
cost and expense. If the indemnifying party does not assume such defense, the
indemnified party shall keep the indemnifying party apprised at all times as to
the status of the defense; PROVIDED, HOWEVER, that the failure to keep the
indemnifying party so informed shall not affect the obligations of the
indemnifying party hereunder. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its written
consent; PROVIDED, HOWEVER, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the consent of the indemnified party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation.
(d) CONTRIBUTION. If the indemnification provided for in or pursuant to
SECTION 2.09(A) OR 2.09(B) is due in accordance with the terms thereof, but is
held by a court to be unavailable or unenforceable in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified person 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 on the one hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses as well as any other relevant equitable considerations.
The relative fault of the indemnifying party on the one hand and of the
indemnified person on the other 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 the indemnifying party or by the indemnified party, by such party's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement, or omission. In no event shall the liability of any
Holder be greater in amount than the amount of proceeds received by such Holder
upon such sale.
::ODMA\PCDOCS\DOCS\88117\1
Exhibit 10.6 - Page 18
ARTICLE III
EFFECTIVE TIME AND TERM OF THIS AGREEMENT
SECTION 3.01. EFFECTIVE TIME AND TERM OF THIS AGREEMENT. This Agreement
will be effective for all purposes as of the Closing and will continue in full
force and effect until the date that no Holder owns any of the Registrable
Securities.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 4.02. AMENDMENTS. This Agreement contains the entire understanding
of the parties with respect to the Registrable Securities, and may be amended
only by an agreement in writing signed by (i) Parent, (ii) the Company and (iii)
the Holders of not less than a majority (in then market value) of the then
outstanding Registrable Securities, including not less than a majority (in then
market value) of the then outstanding Registrable Securities held by the RIMCO
Holders, PROVIDED, HOWEVER, that in no event shall any amendment impose any
additional material obligations on any Holder without such Holder's written
consent.
SECTION 4.03. DESCRIPTIVE HEADINGS. Descriptive headings are for
convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement.
SECTION 4.04. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.
SECTION 4.05. NOTICES. All notices and communications provided for
hereunder shall be in writing and sent (a) by telecopy if the sender on the same
day sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid) or (ii) by registered or certified mail with return
receipt requested (postage prepaid) or (iii) by a recognized overnight delivery
service (with charges prepaid).
(i) if to a RIMCO Holder, at its addresses set forth below, or such other
address as it shall have specified to Parent in writing,
::ODMA\PCDOCS\DOCS\88117\1
Exhibit 10.6 - Page 19
(ii) if to any other Holder, at such address as specified to Parent in
writing in the notice provided in SECTION 4.08(B), or such other address
as such Holder shall have subsequently specified to Parent in writing, and
(iii) if to the Company or Parent, 1600 Smith Street, Suite 4000, Houston,
Texas 77002, Telecopy No.: 713-652-9601, or such other address as it shall
have specified to the Holders in writing.
Notices given under this SECTION 4.05 shall be deemed given only when actually
received.
SECTION 4.06. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of New York, excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
SECTION 4.07. SURVIVAL. The representations and warranties made by the
Company and Parent herein shall survive the execution and delivery of the
Transaction Documents and the purchase and transfer by the Holders of any of the
Registrable Securities, regardless of any investigation made at any time by or
on behalf of the RIMCO Holders or any other Holder. All statements contained in
any certificate or other instrument delivered by or on behalf of the Company or
Parent pursuant to this Agreement shall be deemed to be representations and
warranties of the Company and Parent under this Agreement.
SECTION 4.08. SUCCESSORS AND ASSIGNS. (a) Subject to the provisions of
SECTION 4.08(B), all covenants and other agreements contained in this Agreement
by or on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation, any
subsequent holder of a Note or any Registrable Securities), whether so expressed
or not.
(b) The Registrable Securities and rights of any Holder under this
Agreement with respect to any Registrable Securities may be assigned to any
person who acquires Registrable Securities from a Holder, except that any Person
who acquires such Registrable Securities (x) pursuant to a public offering
registered under the 1933 Act or (y) pursuant to a transfer made in accordance
with Rule 144 under the 1933 Act may not be assigned rights hereunder with
respect to such Registrable Securities. Notwithstanding the foregoing, rights to
cause a Demand Registration under SECTION 2.01(A) may only be assigned if such
rights are expressly assigned in writing from a Holder. Any assignment of
registration rights pursuant to this SECTION 4.08(B) shall be effective upon
receipt by Parent of written notice from such assigning Holder (i) stating the
name and address of any assignee, (ii) describing the manner in which the
assignee acquired the Registrable Securities from such Holder and (iii)
identifying the number of Registrable Securities with respect to which the
rights under this Agreement are being assigned.
::ODMA\PCDOCS\DOCS\88117\1
Exhibit 10.6 - Page 20
SECTION 4.09. ACTIONS BY HOLDERS OF MAJORITY OF REGISTRABLE SECURITIES.
Each of the parties hereto agrees, in connection with the taking of any action
permitted to be taken hereunder by the Holders or RIMCO Holders (as the case may
be), that the Holders or RIMCO Holders (as the case may be) holding a majority
(in then market value) of the then outstanding Registrable Securities are
entitled to take such action.
IN WITNESS WHEREOF, the Company, Parent and the RIMCO Holders have caused
this Agreement to be executed by their respective representatives thereunto duly
authorized, effective as of the date first above written.
TEXOIL, INC.
By: /S/ RUBEN MEDRANO
Name: Ruben Medrano
Title:President
TEXOIL COMPANY
By: /S/ RUBEN MEDRANO
Name: Ruben Medrano
Title:President
RIMCO PARTNERS, L.P.
RIMCO PARTNERS, L.P. II
RIMCO PARTNERS, L.P. III
RIMCO PARTNERS, L.P. III
By: RESOURCES INVESTORS MANAGEMENT
COMPANY LIMITED PARTNERSHIP,
their general partner
By: RIMCO ASSOCIATES, INC.,
its general partner
By: /S/ GARY MILAVEC
Name: Gary Milavec
Title:Vice President
::ODMA\PCDOCS\DOCS\88117\1
Exhibit 10.6 - Page 21
Addresses for Notices:
22 Waterville Road
Avon, Connecticut 06001
Telecopy No.: 860-678-9382
600 Travis Street -Suite 6875
Houston, Texas 77002
Telecopy No.: 713-247-0730
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Exhibit 10.6 - Page 22