REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of this 4th day of May, 1998, by and among Texoil, Inc., a
Nevada corporation (the "COMPANY"), Energy Capital Investment Company PLC, an
English investment company ("ENERGY PLC"), and EnCap Equity 1996 Limited
Partnership, a Texas limited partnership ("ENCAP LP").
RECITALS:
A. Reference is herein made to that certain Acquisition and Distribution
Agreement dated as of even date herewith (the "A&D AGREEMENT") by and among the
Company, Cliffwood Oil & Gas Corp., a Texas corporation ("COGC"), and Cliffwood
Acquisition - 1996 Limited Partnership, a Texas limited partnership (the
"PARTNERSHIP").
B. Energy PLC and EnCap LP are limited partners in the Partnership.
Under the terms of the documents governing the Partnership, the Limited Partners
are required to consent to the execution, delivery and performance by the
Partnership of the A&D Agreement. The Company acknowledges and agrees that the
shares of Common Stock (as defined herein) to be issued by the Company to the
Partnership under the A&D Agreement will be immediately distributed to the
Limited Partners by the Partnership. Under the A&D Agreement, the Company has
also agreed to issue shares of Common Stock to Energy PLC and EnCap LP in
exchange for certain stock purchase warrants held by Energy PLC and EnCap LP
entitling them to purchase shares of common stock in COGC, a wholly-owned
subsidiary of the Company. In order to induce Energy PLC and EnCap LP to consent
to the execution, delivery and performance by the Partnership of the A&D
Agreement and to exchange the abovementioned stock purchase warrants (and
recognizing that Energy PLC and EnCap LP would not be willing to grant such
consent and exchange such stock purchase warrants in the absence of this
Agreement), the Company has agreed to provide Energy PLC and EnCap LP with the
registration rights set forth herein.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the foregoing Recitals and
the mutual covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby agree
as follows:
SECTION 1. DEFINITIONS AND REFERENCES.
(a) When used in this Agreement, the following terms shall have the
respective meanings assigned to them in this SECTION 1 or in the sections,
subsections or other subdivisions referred to below:
"A&D AGREEMENT" shall have the meaning assigned to such term in
PARAGRAPH A of the Recitals hereto.
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"AGREEMENT" shall mean this Agreement, as hereafter changed, modified or
amended in accordance with the terms hereof.
"COMMISSION" shall mean the Securities and Exchange Commission (or any
successor body thereto).
"COMMON STOCK" shall mean the common stock of the Company, $.01 par
value per share.
"COMPANY" shall have the meaning assigned to it in the introductory
paragraph hereof.
"ENCAP LP" shall have the meaning assigned to it in the introductory
paragraph hereof.
"ENERGY PLC" shall have the meaning assigned to it in the introductory
paragraph hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and all rules and regulations promulgated under such Act.
"HOLDER" shall mean any Person that holds Registrable Securities.
"HOLDER INDEMNIFIED PARTIES" shall have the meaning assigned to it in
SECTION 9(A).
"ISSUANCE DATE" shall mean the date upon which the Company has issued to
EnCap LP and Energy PLC the shares of Common Stock to be acquired or received by
them under the A&D Agreement.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, limited partnership, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"REGISTRABLE SECURITIES" shall mean (i) the shares of Common Stock
issued pursuant to the A&D Agreement (which, for purposes hereof, shall mean the
Purchase Shares, as defined in the A&D Agreement, and the Exchange Shares, as
defined in the A&D Agreement) and (ii) any securities issued or issuable with
respect to the shares described in CLAUSE (I) above by way of a stock dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization.
"REGISTRATION EXPENSES" shall mean all expenses incident to the
Company's performance of or compliance with the registration rights granted
hereunder, including (without limitation) all registration and filing fees, fees
and expenses of compliance with securities and blue sky laws, printing and
engraving expenses, messenger, telephone and delivery expenses, and fees and
disbursements of counsel for the Company, fees and expenses of the Company's
independent certified public accountants, fees and expenses of underwriters
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(excluding discounts and commissions), and the fees and disbursements of one
counsel to the selling Holders; provided, that Registration Expenses shall not
include any Selling Expenses.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
all rules and regulations under such Act.
"SELLING EXPENSES" shall mean underwriting discounts or commissions, any
selling commissions and stock transfer taxes attributable to sales of
Registrable Securities.
(b) All references in this Agreement to sections, subsections and other
subdivisions refer to corresponding sections, subsections and other subdivisions
of this Agreement unless expressly provided otherwise. Titles appearing at the
beginning of any of such subdivisions are for convenience only and shall not
constitute part of such subdivisions and shall be disregarded in construing the
language contained herein. The words "this Agreement", "this instrument",
"herein", "hereof", "hereby", "hereunder" and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited. Words in the singular form shall be construed to include the plural
and VICE VERSA, unless the context otherwise requires. Pronouns in masculine,
feminine and neuter genders shall be construed to include any other gender.
SECTION 2. SHELF REGISTRATION. The Company will use its best efforts to
prepare and file with the Commission, no later than 30 days after the Issuance
Date, a shelf registration statement on Form S-3 or other appropriate form
pursuant to Rule 415 of the Securities Act covering the sale by the Holders of
all of the Registrable Securities. The Company shall use its best efforts to
cause the registration statement to be declared effective as promptly as
possible after the Issuance Date and to keep such registration statement
effective until the Holders have disposed of all of the Registrable Securities.
The Holders agree to furnish to the Company such information regarding the
distribution of the Registrable Securities covered by the registration statement
filed under this Section as the Company may from time to time reasonably request
in writing and such other information as may be legally required in connection
with such registration statement.
SECTION 3. AGREEMENT OF HOLDERS REGARDING THE DISPOSITION OF THE
REGISTRABLE SECURITIES. In connection with the disposition of the Registrable
Securities by the Holders, the Holders hereby agree with the Company that, as of
each date specified below, the percentage amount of the Registrable Securities
disposed of by them pursuant to the registration statement filed under SECTION 2
will not exceed the percentage amount set forth opposite such date:
DATE CUMULATIVE PERCENTAGE AMOUNT
---- ----------------------------
June 30, 1998 20%
September 30, 1998 40%
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December 31, 1998 60%
March 31, 1999 80%
June 30, 1999 100%
SECTION 4. REGISTRATION PROCEDURES.
(a) In connection with a registration statement filed pursuant to
SECTION 2, the Company will:
(i) at least seven days prior to filing the registration
statement or prospectus or any amendments or supplements thereto,
furnish copies of all such documents proposed to be filed to any holder
of Registrable Securities covered by such registration statement;
(ii) prepare and file with the Commission 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 as provided in Rule 415 of the Securities Act and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement;
(iii) notify the Holders promptly after the Company shall receive
notice thereof of the time when such registration statement has been
filed and becomes effective;
(iv) furnish to each Holder such number of copies of such
registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including, without
limitation, each preliminary prospectus) and such other documents as
such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder;
(v) use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of
such jurisdictions within the United States as any seller of Registrable
Securities reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company will not be
required to qualify generally to do business or subject itself to any
general service of process in any jurisdiction where it is otherwise not
then so subject);
(vi) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the
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happening of any event which requires the making of any change in the
prospectus included in such registration statement so that such document
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, at the request of any such
seller, the Company will prepare a supplement or amendment to such
prospectus so that 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;
(vii) use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange or
exchanges, automated quotation system or over-the-counter market upon
which securities of the Company of the same class are then listed;
(viii) enter into such customary agreements (including, without
limitation, underwriting agreements in customary form, substance and
scope) and take all such other action as the Holders of a majority of
the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities;
(ix) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission;
(x) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration
statement for sale in any jurisdiction, the Company will use its
reasonable best efforts promptly to obtain the withdrawal of such order;
(xi) use its reasonable best efforts to cause such Registrable
Securities covered by such registration statement to be registered with
or approved by such other governmental agencies or authorities as may be
necessary to enable the sellers thereof to consummate the disposition of
such Registrable Securities; and
(xii) use its reasonable best efforts to obtain a comfort letter
from the Company's public accountants in customary form and covering
such matters of the type customarily covered by comfort letters with
respect to offerings of the type being made pursuant to the registration
statement as the Holders of the Registrable Securities reasonably
request.
(b) Each Holder of Registrable Securities will be deemed to have agreed
as follows:
(i) upon receipt of any notice from the Company of the happening
of any event of the kind described in SECTION 4(A)(VI), the Holders of
Registrable Securities covered by such registration statement will
forthwith discontinue disposition of any
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such Registrable Securities until the Holders of Registrable Securities
receive copies of the supplemented or amended prospectus contemplated by
SECTION 4(A)(VI), or until they are advised in writing by the Company
that the use of the applicable prospectus may be resumed, and they have
received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such
prospectus (it being the agreement of the parties hereto, however, that
the obligation of the Company with respect to maintaining the subject
registration statement current and effective shall be extended by a
period of days equal to the period the Holders of Registrable Securities
are required by this SECTION 4(B)(I) to discontinue disposition of such
Registrable Securities); and
(ii) furnish to the Company such information regarding each
Holder, the Registrable Securities held by such Holder and the intended
method of disposition thereof as the Company shall reasonably request
and as shall be reasonably required in connection with the preparation
of the applicable registration statement and other actions taken by the
Company under this Agreement, and it shall be a condition precedent to
the obligation of the Company to take any action pursuant to this
Agreement in respect of the Registrable Securities that such information
has been furnished to the Company by the Holders of Registrable
Securities.
SECTION 5. EXPENSES OF REGISTRATION. The Company shall pay all
Registration Expenses in connection with the registration effected pursuant to
SECTION 2 and, in any event, shall pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal and accounting duties), the expense of any annual audit and 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. All Selling Expenses incurred in connection with a
registration effected pursuant to the terms hereof shall be borne by the seller
or sellers of Registrable Securities pro rata based upon the number of
Registrable Securities included in such registration or as otherwise agreed by
such sellers.
SECTION 6. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless, with respect to any
registration statement filed by it, to the full extent permitted by law, each
Holder of Registrable Securities covered by such registration statement, and
each other Person, if any, who controls such Holder within the meaning of
Section 15 of the Securities Act (collectively, "HOLDER INDEMNIFIED PARTIES")
against all losses, claims, damages, liabilities and expenses, joint or several
to which any such Holder Indemnified Party may become subject under the
Securities Act, the Exchange Act, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement in which such Registrable Securities
were included as contemplated hereby or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein
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not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary prospectus,
together with the documents incorporated by reference therein (as amended or
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto), or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or (iii) any violation by the Company of any federal,
state or common law rule or regulation applicable to the Company and relating to
action of or inaction by the Company in connection with any such registration;
and in each such case, the Company shall reimburse each such Holder Indemnified
Party for any reasonable legal or other expenses incurred by any of them in
connection with investigating or defending any such loss, claim, damage,
liability, expense, action or proceeding; provided, however, that the Company
shall not be liable to any such Holder Indemnified Party in any such case to the
extent, that any such loss, claim, damage, liability or expense (or action or
proceeding, whether commenced or threatened, in respect thereof) arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement or amendment thereof or
supplement thereto or in any such preliminary, final or summary prospectus in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any such Holder Indemnified Party for use in the
preparation thereof. Such indemnity and reimbursement of expenses and other
obligations shall remain in full force and effect regardless of any
investigation made by or on behalf of the Holder Indemnified Parties and shall
survive the transfer of such securities by such Holder Indemnified Parties.
(b) Each Holder of Registrable Securities participating in any
registration hereunder shall severally (and not jointly or jointly and
severally) indemnify and hold harmless, to the fullest extent permitted by law,
the Company, its directors, officers, employees and agents, and each Person who
controls the Company (within the meaning of Section 15 of the Securities Act)
(collectively, "COMPANY INDEMNIFIED PARTIES") against all losses, claims,
damages, liabilities and expenses to which any Company Indemnified Party may
become subject under the Securities Act, the Exchange Act, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement in which
such Holder's Registrable Securities were included or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading to the extent in the cases described in CLAUSES (I) and (II), that
such untrue statement or omission was furnished in writing by such Holder for
use in the preparation thereof, or (iii) any violation by such Holder of any
federal, state or common law
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rule or regulation applicable to such Holder and relating to action of or
inaction by such Holder in connection with any such registration; and in each
such case, such Holder shall reimburse each such Company Indemnified Party for
any reasonable legal or other expenses incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability,
expense, action or proceeding. Such indemnity obligation shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Company Indemnified Parties (except as provided above) and shall survive the
transfer of such securities by such Holder.
(c) Promptly after receipt by an indemnified party under SUBSECTION (A)
or (B) of written notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing with respect to which a claim
for indemnification may be made pursuant to this SECTION 6, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the indemnifying party of the threat or
commencement thereof; provided, however, that the failure to so notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. If any such claim or action
referred to under SUBSECTION (A) or (B) is brought against any indemnified party
and it then notifies the indemnifying party of the threat or commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense of any such claim or
action, the indemnifying party shall not be liable to such indemnified party
under this SECTION 6 for any legal expenses of counsel or any other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation unless the indemnifying
party has failed to assume the defense of such claim or action or to employ
counsel reasonably satisfactory to such indemnified party. Under no
circumstances will the indemnifying party be obligated to pay the fees and
expenses of more than one law firm for all indemnified parties. The indemnifying
party shall not be required to indemnify the indemnified party with respect to
any amounts paid in settlement of any action, proceeding or investigation
entered into without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld. No indemnifying party shall consent
to the entry of any judgment or enter into any settlement without the consent of
the indemnified party unless (i) such judgment or settlement does not impose any
obligation or liability upon the indemnified party other than the execution,
delivery or approval thereof, and (ii) such judgment or settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a full release and discharge from all liability in respect
of such claim for all persons that may be entitled to or obligated to provide
indemnification or contribution under this SECTION 6.
(d) Indemnification similar to that specified in the preceding
subsections of this SECTION 6 (with appropriate modifications) shall be given by
the Company and each seller of Registrable Securities with respect to any
required registration or qualification of securities under any state securities
or blue sky laws.
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(e) If the indemnification provided for in this SECTION 6 is unavailable
to or insufficient to hold harmless an indemnified party under SUBSECTION (A) or
(B), then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof) referred
to in SUBSECTION (A) or (B) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other in connection with the statements, omissions, actions or
inactions 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 and the indemnified 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 the indemnifying party or the indemnified
party, any action or inaction by any such party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement, omission, action or inaction. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions or proceedings in respect thereof) pursuant to this
SUBSECTION (E) shall be deemed to include, without limitation, any reasonable
legal or other expenses incurred by such indemnified party in connection with
investigating or defending any such action or claim (which shall be limited as
provided in SUBSECTION (C) if the indemnifying party has assumed the defense of
any such action in accordance with the provisions thereof) which is the subject
of this SUBSECTION (E). 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. Promptly after receipt by an indemnified party under this
SUBSECTION (E) of written notice of the commencement of any action, suit,
proceeding, investigation or threat thereof made in writing with respect to
which a claim for contribution may be made against an indemnifying party under
this SUBSECTION (E), such indemnified party shall, if a claim for contribution
in respect thereof is to be made against an indemnifying party, give written
notice to the indemnifying party in writing of the commencement thereof (if the
notice specified in SUBSECTION (C) has not been given with respect to such
action); provided, however, that the failure to so notify the indemnifying party
shall not relieve it from any obligation to provide contribution which it may
have to any indemnified party under this SUBSECTION (E) except to the extent
that the indemnifying party is actually prejudiced by the failure to give
notice.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or by any other method of allocation which does not take account the equitable
considerations referred to in the immediately preceding paragraph.
If indemnification is available under this SECTION 6, the indemnifying
parties shall indemnify each indemnified party to the fullest extent provided in
SUBSECTIONS (A) and (B), without regard to the relative fault of said
indemnifying party or any other equitable consideration provided for in this
subsection. The provisions of this subsection shall be in addition to any other
rights to indemnification or contribution which any indemnified party may have
pursuant to law or contract, shall remain in full force and effect regardless of
any
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investigation made by or on behalf of any indemnified party, and shall survive
the transfer of securities by any such party.
(f) In connection with any underwritten offering contemplated by this
Agreement which includes Registrable Securities, the Company and all sellers of
Registrable Securities included in any registration statement shall agree to
customary provisions for indemnification and contribution (consistent with the
other provisions of this SECTION 6) in respect of losses, claims, damages,
liabilities and expenses of the underwriters of such offering.
SECTION 7. SELECTION OF UNDERWRITERS. If a registration effected
pursuant to SECTION 2 is an underwritten offering or a best efforts underwritten
offering, the investment bankers or investment bankers and manager or managers
that will administer the offering shall be selected by the Holders of a majority
of the Registrable Securities to be registered in such registration; provided,
however, that such investment bankers and managers must be reasonably
satisfactory to the Company.
SECTION 8. RULE 144. The Company covenants to each Holder that, to the
extent that the Company shall be required to do so under the Exchange Act, the
Company shall (a) timely file the reports required to be filed by it under the
Exchange Act or the Securities Act (including, but not limited to, the reports
under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)
(1) of Rule 144 adopted by the Commission under the Securities Act) and the
rules and regulations adopted by the Commission thereunder, and (b) take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Holder, the Company shall deliver to such
Holder a written statement as to whether it has complied with such requirements.
Each Holder agrees that if such Holder is able to sell Registrable Securities
without registration pursuant to an exemption under Rule 144, such Holder shall
use reasonable efforts to attempt to do so, giving due consideration to the
quantity of Registrable Securities such Holder desires to sell.
SECTION 9. MISCELLANEOUS.
(a) From and after the date of this Agreement, the Company will not,
without the prior written consent of the Holders of a majority of the number of
Registrable Securities then outstanding, enter into any agreement with respect
to its securities which is inconsistent with or violates the rights granted to
the Holders of Registrable Securities in this Agreement. Without limiting the
foregoing, the Company also specifically agrees that during the period
commencing on the date hereof and ending when the Holders have disposed of all
of their Registrable Securities, the Company will not enter into an agreement
with a third party pertaining to the registration by the Company of such third
party's Common Stock on terms more favorable to the third party than those
afforded to the Holders hereunder (including, without limitation, SECTION 3).
The Company represents and warrants to Energy PLC and
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EnCap LP that, as of the date hereof, the Company is not a party to any
agreement with a third party pertaining to the registration by the Company of
such third party's Common Stock other than those listed in EXHIBIT 9(A) attached
hereto (which Exhibit also sets forth the principal terms of each such agreement
and which agreements are, in this SUBSECTION (A), called an "EXISTING
AGREEMENT"). The Company covenants and agrees with the Holders of Registrable
Securities that if a party to an existing agreement is permitted under the terms
thereof to dispose or otherwise transfer all or a portion of its Common Stock on
a basis more favorable than that accorded the Holders under SECTION 3, the
Company will consent to an amendment to this Agreement reasonably proposed by
the Holders that would permit the Holders to dispose or transfer of their
Registrable Securities on the same basis as such third party and/or shall
otherwise take all reasonable actions as are reasonably requested by the Holders
so as to accord the Holders with the right to dispose or transfer of their
Registrable Securities on the same basis as such third party.
(b) Energy PLC and EnCap LP agree, and each other Holder of Registrable
Securities (including Registrable Securities in any registration statement filed
pursuant to this Agreement) will be deemed to have agreed that if any
Registrable Securities are being registered in any registration pursuant to this
Agreement, the Holder thereof will comply with all anti-stabilization,
manipulation and similar provisions of Section 10 of the Exchange Act, as
amended, and any rules promulgated thereunder by the Commission and, at the
request of the Company, will execute and deliver to the Company and to any
underwriter participating in such offering, an appropriate agreement to such
effect.
(c) All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by the internal law, and not
the law of conflicts, of the State of Texas.
(d) All covenants and agreements in this Agreement by or on behalf of
any of the parties hereto will bind and inure to the benefit of the respective
successors and assigns of the parties hereto. In addition, the rights and
obligations under this Agreement shall automatically be transferred to and
binding on any transferee or assignee of the Registrable Securities; provided,
that (i) the Company is, within a reasonable time after such transfer, furnished
with written notice of the name and address of such transferee or assignee and
the Registrable Securities with respect to which such registration rights are
being transferred or assigned, (ii) such transferee or assignee agrees in
writing to be bound by and subject to the terms and conditions of this
Agreement, (iii) the transfer and assignment of the subject Registrable
Securities is in compliance with the Securities Act and applicable state
securities laws or an exemption from the registration requirements of the
Securities Act and applicable state securities laws, and (iv) such assignment of
rights and obligations under this Agreement shall be effective only if
immediately following such transfer the further disposition of such Registrable
Securities by the transferee or assignee is restricted under the Securities Act.
(e) This Agreement is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter herein contained. There are
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no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein, with respect to the registration rights granted by
the Company to the Holders of the Registrable Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(f) All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or sent
by reputable express courier service (charges prepaid), or mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid, or sent by telefax, to the parties at the following address (or to such
other address or to the attention of such other person as the recipient party
has specified by prior like notice to the sending party):
IF TO THE COMPANY:
------------------
Texoil, Inc.
110 Cypress Station Dr.
Suite 220
Houston, Texas 77090
Telecopier No.: (281)537-8324
Attention: Frank A. Lodzinski
IF TO ENERGY PLC OR ENCAP LP:
-----------------------------
c/o EnCap Investments L.C.
1100 Louisiana
Suite 3150
Houston, Texas 77002
Telecopier No.: (713) 659-6130
Attention: Robert L. Zorich, Managing Director
(g) If any provision of this Agreement is held to be unenforceable, this
Agreement shall be considered divisible and such provision shall be deemed
inoperative to the extent it is deemed unenforceable, and in all other respects
this Agreement shall remain in full force and effect; provided, however, that if
any such provision may be made enforceable by limitation thereof, then such
provision shall be deemed to be so limited and shall be enforceable to the
maximum extent permitted by applicable law.
(h) This Agreement may be executed by the parties hereto in any number
of counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same agreement. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed by
all, the parties hereto.
(i) Each Holder of Registrable Securities, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, will be
entitled to specific
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performance of its rights under this Agreement. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of
breach by it of the provisions of this Agreement and hereby agrees to waive (to
the extent permitted by law) the defense in any action for specific performance
that a remedy of law would be adequate.
(j) In any action or proceeding brought to enforce any provision of this
Agreement, or where any provision hereof is validly asserted as a defense, the
successful party shall be entitled to recover reasonable attorneys' fees in
addition to any other available remedy.
(k) The Company agrees to remove any legends on certificates
representing Registrable Securities describing transfer restrictions applicable
to such securities upon the sale of such securities (i) pursuant to an effective
Registration Statement under the Securities Act or (ii) in accordance with the
provisions of Rule 144 under the Securities Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TEXOIL, INC.
By:___________________________________
Name: ________________________________
Title: President
ENERGY CAPITAL INVESTMENT
COMPANY PLC
By: ___________________________________
Name: Gary R. Petersen
Title : Director
ENCAP EQUITY 1996 LIMITED
PARTNERSHIP
By: EnCap Investments L.C., General Partner
By:________________________________________
Name: Robert L. Zorich
Title: Managing Director
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