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EXHIBIT 1.10
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REGISTRATION RIGHTS AGREEMENT
DATED AS OF MAY 6, 1997
BY AND BETWEEN
QUEEN SAND RESOURCES, INC.
AND
JOINT ENERGY DEVELOPMENT
INVESTMENTS LIMITED
PARTNERSHIP
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TABLE OF CONTENTS
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.01. Demand Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.02. Piggy-Back Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.03. Registration Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.04. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.01. Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.02. Successor and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.03. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.04. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.05. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.06. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.07. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.08. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.09. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.10. Registrable Securities Held by the Company or Its Affiliates . . . . . . . . . . . . . . . 12
Section 3.11. Assignment of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is made and
entered into as of May 6, 1997, by and between Queen Sand Resources, Inc., a
Delaware corporation (the "Company"), and Joint Energy Development Investments
Limited Partnership, a Delaware limited partnership (the "Purchaser").
This Agreement is made pursuant to the Securities Purchase
Agreement (the "Purchase Agreement") dated as of March 27, 1997 between the
Company and the Purchaser. In order to induce the Purchaser to enter into the
Purchase Agreement, the Company has agreed to provide the registration and
other rights set forth in this Agreement. The execution and delivery of this
Agreement is a condition to the Closing (as defined in the Purchase Agreement)
under the Purchase Agreement.
The parties agree as follows:
ARTICLE I
Section 1.1. Definitions. Capitalized terms used and not
otherwise defined herein which are defined in the Purchase Agreement are used
herein as so defined. The terms set forth below are used herein as so defined:
"Holder" means the record holder of any shares of Convertible
Preferred Stock, ▇▇▇▇▇▇▇▇▇ Warrants, Purchaser Warrants, Maintenance Warrants
or Registrable Securities.
"Registrable Securities" means the Conversion Shares, the
▇▇▇▇▇▇▇▇▇ Warrant Shares, the Purchaser Warrant Shares and the Maintenance
Warrant Shares and all other securities receivable upon the conversion of
Convertible Preferred Stock or the exercise of ▇▇▇▇▇▇▇▇▇ Warrants, the
Purchaser Warrants or the Maintenance Warrants and, if held by a Person who is
the record holder of shares of Convertible Preferred Stock or other Registrable
Securities, any other shares of Common Stock or other securities of the same
class as those receivable upon conversion of Convertible Preferred Stock or
exercise of ▇▇▇▇▇▇▇▇▇ Warrants, the Purchaser Warrants or the Maintenance
Warrants, until such time as such securities cease to be Registrable Securities
pursuant to Section 1.02 hereof.
"Selling Holder" means a Holder who is selling Registrable
Securities pursuant to a Registration Statement (as defined herein).
Section 1.2. Registrable Securities. Any
Registrable Security will cease to be a Registrable Security when (i) a
Registration Statement covering such Registrable Security has been
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declared effective by the Commission and such Registrable Security has been
issued, sold or disposed of pursuant to such effective Registration Statement
or (ii) such Registrable Security is disposed of pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act, (iii) such
Registrable Security is eligible to be disposed of pursuant to paragraph (k) of
Rule 144 (or any similar provision then in force) under the Securities Act or
(iv) such Registrable Security is held by the Company or one of its
Subsidiaries.
ARTICLE II
Section 2.1. Demand Registration. (a) Any time after the
date of this Agreement, any Holder or Holders who collectively beneficially own
at least a majority of the Registrable Securities outstanding at such time may
request (a "Request Notice") the Company to register under the Securities Act
all or any portion (provided that such portion will have an aggregate offering
price of at least $1,000,000) of the Registrable Securities that are held or
will be held upon the conversion of shares of Convertible Preferred Stock or
the exercise of Warrants by such Holder or Holders (collectively, the
"Requesting Holder") for sale in the manner specified in the Request Notice.
(b) Promptly following receipt of a Request Notice, the
Company shall immediately notify any Person who is a Holder of Registrable
Securities (except the Requesting Holder) of the receipt of a Request Notice
and shall use its best efforts to file a registration statement under the
Securities Act (each such registration statement is hereinafter referred to as
a "Registration Statement") effecting the registration under the Securities
Act, for public sale in accordance with the method of disposition specified in
such Request Notice, the Registrable Securities specified in the Request Notice
(and in any notices received from other Holders no later than the 10th Business
Day after receipt of the notice sent by the Company) (such other Holders and
the Requesting Holder are hereinafter referred to as the "Requesting Holders").
If such method of disposition shall be an underwritten public offering, the
Company may designate the managing underwriter of such offering, subject to the
approval of the Requesting Holders holding a majority of the Registrable
Securities to be registered, which approval shall not be withheld unreasonably.
The Company shall be obligated to register Registrable Securities pursuant to
this Section 2.01 on three occasions only. A request pursuant to this Section
2.01 shall be counted only when (i) all the Registrable Securities requested to
be included in any such registration have been so included, (ii) the
corresponding Registration Statement has become effective under the Securities
Act, and (iii) the public offering has been consummated and the Registrable
Securities have been sold on the terms and conditions specified therein.
Notwithstanding anything to the contrary contained herein, the Company may
delay the filing or effectiveness of a Registration Statement after receipt of
a Request Notice (i) for up to 90 days if at the time of such request, the
Company is engaged in a firm commitment underwritten public offering of its
securities in which Holders may include Registrable Securities and for which
the Company has delivered the notice to Holders required by the first sentence
of Section 2.02 or (ii) for up to 60 days if at the time of such request, the
Board of Directors of the
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Company determines in its reasonable judgment and in good faith that the filing
of such a Registration Statement or the making of any required disclosure in
connection therewith would have a material adverse effect on the Company or
substantially interfere with a significant transaction in which the Company is
then engaged; provided that the Company may not delay the filing of a
Registration Statement in reliance on this clause (ii) more than once during
any period of twelve consecutive calendar months.
(c) The Company shall be entitled to include in any
Registration Statement filed pursuant to this Section 2.01, for sale in
accordance with the method of disposition specified by the Requesting Holders,
Voting Securities to be sold by the Company for its own account, except as and
to the extent that, in the opinion of the managing underwriter (if such method
of disposition shall be an underwritten public offering), such inclusion would
materially jeopardize the successful marketing of the Registrable Securities to
be sold. Any Person other than a Holder entitled to piggy-back registration
rights with respect to a Registration Statement filed pursuant to this Section
2.01 may include Voting Securities of the Company with respect to which such
rights apply in such Registration Statement for sale in accordance with the
method of disposition specified by the Requesting Holder, except and to the
extent that, in the opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering) such inclusion would
materially jeopardize the successful marketing of the Registrable Securities to
be sold. Except as provided in this subsection (c), the Company will not
effect any other registration of its Voting Securities (except with respect to
Registration Statements on Form S-4 or S-8 for purposes permissible under such
forms as of the date hereof, or any successor forms for comparable purposes
that may be adopted by the Commission), whether for its own account or that of
any other security holder, from the date of receipt of a Request Notice
requesting the registration of an underwritten public offering until the
completion of the distribution by the underwriters of all securities
thereunder.
(d) From and after the date of this Agreement and until
no Registrable Securities remain outstanding, the Company shall not issue any
demand registration rights to any Person without the prior written consent of
the Purchaser.
Section 2.2. Piggy-Back Registration. If the Company
proposes to register any equity securities under the Securities Act for sale to
the public for cash, whether for its own account or for the account of other
security holders or both (except with respect to Registration Statements on
Forms S-4 or S-8 for purposes permissible under such forms as of the date
hereof, or any successor forms for comparable purposes that may be adopted by
the Commission) each such time it will give written notice to all Holders of
its intention to do so no less than 15 Business Days prior to the anticipated
filing date. Upon the written request of any Holder, received by the Company
no later than the 10th Business Day after receipt by such Holder of the notice
sent by the Company, to register, on the same terms and conditions as the
securities otherwise being sold pursuant to such registration, any of its
Registrable Securities (which request shall state the intended method of
disposition thereof), the Company will use its best efforts to cause the
Registrable Securities as to
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which registration shall have been so requested to be included in the
securities to be covered by the Registration Statement proposed to be filed by
the Company, on the same terms and conditions as any similar securities
included therein, all to the extent requisite to permit the sale or other
disposition by each Holder (in accordance with its written request) of such
Registrable Securities so registered; provided, however, that the Company may
at any time prior to the effectiveness of any such Registration Statement, in
its sole discretion and without the consent of any Holder, abandon the proposed
offering in which any Holder had requested to participate. The number of
Registrable Securities to be included in such a registration may be reduced or
eliminated if and to the extent, in the case of an underwritten offering, the
managing underwriter shall render to the Company its opinion that such
inclusion would materially jeopardize the successful marketing of the
securities (including the Registrable Securities) proposed to be sold therein;
provided, however, that such number of shares of Registrable Securities shall
not be reduced (i) if any securities included in such registration are included
other than for the account of (x) the Company or (y) persons exercising
registration rights granted pursuant to the agreements listed on Schedule I
hereto (as in effect as of the date hereof) (the "Schedule I Agreements") and
(ii) unless the shares included in the registration pursuant to piggy- back
registration rights granted pursuant to the Schedule I Agreements are also
reduced on a pro rata basis. From and after the date of this Agreement and
until no Registrable Securities remain outstanding, the Company shall not grant
any piggy-back registration rights to any Person unless such rights are
expressly made subject to the prior right of Holders to include any or all of
their Registrable Shares before such other Person includes any shares in any
registration relating to an underwritten public offering with respect to which,
in the opinion of the managing underwriter, the inclusion in the offering of
all shares requested to be registered by all Persons holding registration
rights would materially jeopardize the successful marketing of the securities
(including the Registrable Securities) to be sold. In the event that the
number of Registrable Securities to be included in a registration is to be
reduced as provided above, within 10 Business Days after receipt by each Holder
proposing to sell Registrable Securities pursuant to the registered offering of
the opinion of such managing underwriter, all such Selling Holders may allocate
among themselves the number of shares of such Registrable Securities which such
opinion states may be distributed without adversely affecting the distribution
of the securities covered by the Registration Statement, and if such Holders
are unable to agree among themselves with respect to such allocation, such
allocation shall be made in proportion to the respective numbers of shares
specified in their respective written requests. Notwithstanding anything to
the contrary contained in this Section 2.02, in the event that there is a firm
underwriting commitment offer of securities of the Company pursuant to a
Registration Statement covering Registrable Securities and a Person does not
elect to sell its Registrable Securities to the underwriters of the Company's
securities in connection with such offering, such Person shall not offer for
sale, sell, grant any option for the sale of, or otherwise dispose of, directly
or indirectly, any shares of Common Stock, or any securities convertible into
or exchangeable into or exercisable for any shares of Common Stock during the
period of distribution of the Company's securities by such underwriters, which
shall be specified in writing by the underwriters, shall not exceed any period
during which management of the Company and others are similarly prohibited from
disposing of shares of Common Stock and shall not exceed 180 days
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following the date of effectiveness under the Securities Act of the
Registration Statement relating thereto if the net proceeds to the Company from
such offering will be $25,000,000 or greater and shall not exceed 60 days
following the date of effectiveness under the Securities Act of the
Registration Statement relating thereto if the net proceeds to the Company from
such offering will be less than $25,000,000.
Section 2.3. Registration Procedures. If and whenever the Company
is required pursuant to this Agreement to effect the registration of any of the
Registrable Securities under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare and file as promptly as possible with the
Commission a Registration Statement, on a form available to the
Company, with respect to such securities (which filing shall be made
within 45 days after the receipt by the Company of a Request Notice)
and use its best efforts to cause such Registration Statement to
become and remain effective for the period of the distribution
contemplated thereby (determined pursuant to subparagraph (g) below);
(b) 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 for the period specified in subsection (g) below
and as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such Registration Statement in accordance with the sellers'
intended method of disposition set forth in such Registration
Statement for such period;
(c) furnish to each Selling Holder and to each
underwriter such number of copies of the Registration Statement and
the prospectus included therein (including each preliminary prospectus
and each document incorporated by reference therein to the extent then
required by the rules and regulations of the Commission) as such
Persons may reasonably request in order to facilitate the public sale
or other disposition of the Registrable Securities covered by such
Registration Statement;
(d) use its best efforts to register or qualify the
Registrable Securities covered by such Registration Statement under
the securities or blue sky laws of such jurisdictions as the Selling
Holders or, in the case of an underwritten public offering, the
managing underwriter, shall reasonably request, provided, however,
that the Company will not be required to subject itself to taxation in
any such jurisdiction or to consent to general service of process in
any such jurisdiction;
(e) immediately notify each Selling Holder and each
underwriter, 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 as a result of which the prospectus contained
in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing
and as promptly as practicable amend the Registration Statement or
supplement the prospectus or take other appropriate action so that the
prospectus does not include 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 the light
of the circumstances then existing; provided, however, that, in the
case of a shelf registration, the Company, on one occasion during each
such registration, may delay taking such action for a period of 45
days, during which time the Selling Holders shall not sell any
Registrable Securities, if the Board of Directors determines in its
reasonable judgment and in good faith that the making of any required
disclosure in connection therewith would have a material adverse
effect on the Company or substantially interfere with a significant
transaction in which the Company is then engaged;
(f) in the case of an underwritten public offering,
furnish, (i) on the date that Registrable Securities are delivered to
the underwriters for sale pursuant to such Registration Statement, an
opinion of counsel for the Company dated as of such date and addressed
to the underwriters and to the Selling Holders, stating that such
Registration Statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (B) the Registration Statement,
the related prospectus, and each amendment or supplement thereof,
comply as to form in all material respects with the requirements of
the Securities Act and the applicable rules and regulations thereunder
of the Commission (except that such counsel need express no opinion as
to the financial statements or any engineering report contained or
incorporated therein) and (C) to such other effects as may reasonably
be requested by counsel for the underwriters, and (ii) on the
effective date of the Registration Statement and on the date that
Registrable Securities are delivered to the underwriters for sale
pursuant to such Registration Statement, a letter dated such dates
from the independent accountants retained by the Company, addressed to
the underwriters and to the Selling Holders, stating that they are
independent public accountants within the meaning of the Securities
Act and that, in the opinion of such accountants, the financial
statements of the Company and the schedules thereto that are included
or incorporated by reference in the Registration Statement or the
prospectus, or any amendment or supplement thereof, comply as to form
in all material respects with the applicable requirements of the
Securities Act and the published rules and regulations thereunder, and
such letter shall additionally address such other financial matters
(including information as to the period ending no more than five
Business Days prior to the date of such letter) included in the
Registration Statement in respect of which such letter is being given
as the underwriters may reasonably request;
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(g) make available for inspection by one representative
of the Selling Holders designated by a majority thereof, any
underwriter participating in any distribution pursuant to such
Registration Statement, and any attorney, accountant or other agent
retained by such representative of the Selling Holders or underwriter
(the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such Inspector in connection with such
Registration Statement. For purposes of subsections (a) and (b) above
and of Section 2.01(c) of this Agreement, the period of distribution
of Registrable Securities in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has
completed the distribution of all securities purchased by it, and the
period of distribution of Registrable Securities in any other
registration shall be deemed to extend until the earlier of the sale
of all Registrable Securities covered thereby or one year, excluding
any period of time during which Selling Holders are prohibited from
selling Registrable Securities pursuant to Section 2.02 or Section
2.03(e);
(h) use its best efforts to keep effective and maintain
for the period specified in subparagraph (g) a registration,
qualification, approval or listing obtained to cover the Registrable
Securities as may be necessary for the Selling Holders to dispose
thereof and shall from time to time amend or supplement any prospectus
used in connection therewith to the extent necessary in order to
comply with applicable law;
(i) use its best efforts to cause the Registrable
Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of
the business and operations of the Company to enable the Selling
Holders to consummate the disposition of such Registrable Securities;
and
(j) enter into customary agreements (including, if
requested, an underwriting agreement in customary form) and take such
other actions as are reasonably requested by the Selling Holders or
the underwriters, if any, in order to expedite or facilitate the
disposition of such Registrable Securities.
In connection with each registration hereunder, each Selling Holder
will furnish promptly to the Company in writing such information with respect
to itself and the proposed distribution by it as shall be reasonably necessary
in order to ensure compliance with federal and applicable state securities
laws.
In connection with each registration hereunder with respect to an
underwritten public offering, the Company and each Selling Holder agrees to
enter into a written agreement with the managing underwriter or underwriters
selected in the manner herein provided in such form and containing such
provisions as are customary in the securities business for such an arrangement
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between underwriters and companies of the Company's size and investment
stature, provided that such agreement shall not contain any such provision
applicable to the Company or the Selling Holders that is inconsistent with the
provisions hereof; and further provided, that the time and place of the closing
under said agreement shall be as mutually agreed upon among the Company, the
Selling Holders and such managing underwriter.
Section 2.4. Expenses. (a) All expenses incident to the
Company's performance under or compliance with this Agreement, including
without limitation, all registration and filing fees, blue sky fees and
expenses, printing expenses, listing fees, fees and disbursements of counsel
and independent public accountants for the Company, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer
agents and registrars and costs of insurance and reasonable out-of-pocket
expenses (including, without limitation, legal fees of one counsel for all
Selling Holders) of the Selling Holders, but excluding any Selling Expenses (as
defined below), are herein called "Registration Expenses." All underwriting
fees, discounts and selling commissions allocable to the sale of the
Registrable Securities are herein called "Selling Expenses."
(b) The Company will pay all Registration Expenses in
connection with each Registration Statement filed pursuant to this Agreement,
whether or not the Registration Statement becomes effective, and the Selling
Holders shall pay Selling Expenses in connection with any Registrable
Securities registered pursuant to this Agreement.
Section 2.5. Indemnification. (a) In the event of a
registration of any Registrable Securities under the Securities Act pursuant to
this Agreement, the Company will indemnify and hold harmless each Selling
Holder thereunder and each underwriter of Registrable Securities thereunder and
each Person, if any, who controls such Selling Holder or underwriter within the
meaning of the Securities Act and the Exchange Act, against any losses, claims,
damages or liabilities (including reasonable attorneys' fees) ("Losses"), joint
or several, to which such Selling Holder or underwriter or controlling Person
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Losses, (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable
Securities were registered under the Securities Act pursuant to this Agreement,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon 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, and will
reimburse each such Selling Holder, each such underwriter and each such
controlling Person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Loss or actions;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such
Selling
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Holder, such underwriter or such controlling Person in writing specifically for
use in such Registration Statement or prospectus.
(b) Each Selling Holder agrees to indemnify and hold
harmless the Company, its directors, officers, employees and agents and each
Person, if any, who controls the Company within the meaning of the Securities
Act or of the Exchange Act to the same extent as the foregoing indemnity from
the Company to such Selling Holder, but only with respect to information
regarding such Selling Holder furnished in writing by or on behalf of such
Selling Holder expressly for inclusion in any Registration Statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto; provided, however, that the liability of such Selling
Holder shall not be greater in amount than the dollar amount of the proceeds
(net of any Selling Expenses) received by such Selling Holder from the sale of
the Registrable Securities giving rise to such indemnification.
(c) Promptly after receipt by an indemnified party
hereunder of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party other than under this
Section 2.05. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof 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 and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 2.05 for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with
counsel so selected; provided, however, that, (i) if the indemnifying party has
failed to assume the defense and employ counsel or (ii) if the defendants in
any such action include both the indemnified party and the indemnifying party
and counsel to the indemnified party shall have concluded that there may be
reasonable defenses available to the indemnified party that are different from
or additional to those available to the indemnifying party or if the interests
of the indemnified party reasonably may be deemed to conflict with the
interests of the indemnifying party, then the indemnified party shall have the
right to select a separate counsel and to assume such legal defense and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred, provided that such fees
and expenses shall be reimbursed for only one counsel for all indemnified
parties.
(d) If the indemnification provided for in this Section
2.05 is available to the Company or the Selling Holders or is insufficient to
hold them harmless in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each such indemnifying party, in lieu
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of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and expenses as between the Company on the one hand and each
Selling Holder on the other, in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and of each Selling Holder on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and each
Selling Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statements of a material fact or
the omission or alleged omission to state a material fact has been made by, or
relates to, information supplied by such party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
No person of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who is not guilty of such fraudulent misrepresentation.
ARTICLE III
Section 3.1. Communications. All notices and other
communications provided for or permitted hereunder shall be made in writing by
telecopy, courier service or personal delivery:
(i) if to a Holder of Registrable Securities, at
the most current address given by such Holder of the Company
in accordance with the provisions of this Section 3.01, which
address initially is, with respect to the Purchaser, the
address set forth in the Purchase Agreement, and
(ii) if to the Company, initially at its address
set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the
provisions of this Section 3.01.
All such notices and communications shall be deemed to have
been received at the time delivered by hand, if personally delivered; when
receipt acknowledged, if telecopied; and on the next Business Day if timely
delivered to an air courier guaranteeing overnight delivery.
Section 3.2. Successor and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties, including without limitation and without the need for an
express assignment, subsequent holders of Registrable Securities.
Section 3.3. Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts,
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when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
Agreement.
Section 3.4. Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 3.5. Governing Law. The laws of the State of
Texas shall govern this Agreement without regard to principles of conflict of
laws.
Section 3.6. Severability of Provisions. Any provision of
this Agreement which 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 or
affecting or impairing the validity or enforceability of such provision in any
other jurisdiction.
Section 3.7. Entire Agreement. This Agreement, together
with the Purchase Agreement and the other Basic Documents 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 contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Company with respect to the securities sold pursuant to the Purchase Agreement.
This Agreement, the Purchase Agreement and the other Basic Documents supersede
all prior agreements and understandings between the parties with respect to
such subject matter.
Section 3.8. Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement, the successful party shall
be entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.
Section 3.9. Amendment. This Agreement may be amended
only by means of a written amendment signed by the Company and by the Holders
of a majority of the Registrable Securities.
Section 3.10. Registrable Securities Held by the Company or
Its Affiliates. In determining whether the Holders of the required amount of
Registrable Securities have concurred in any direction, amendment, supplement,
waiver or consent, Registrable Securities owned by the Company or one of its
Affiliates shall be disregarded.
Section 3.11. Assignment of Rights. (a) The rights of any
Holder under this Agreement may be assigned to any Person who acquires
Convertible Preferred Stock, Warrants or the Registrable Securities issuable on
conversion or exercise thereof. Any assignment of
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registration rights pursuant to this Section 3.11(a) shall be effective only
upon receipt by the Company of written notice from such assigning Holder
stating the name and address of any assignee.
(b) The rights of an assignee under Section 3.11(a) shall
be the same rights granted to the assigning Holder under this Agreement, except
that the assignee shall be entitled to initiate only one demand registration
pursuant to Section 2.01, unless demands for three registrations have been
previously counted in accordance with Section 2.01(b), in which case such
assignee shall not have any demand registration rights. In the event that an
assignee Holder is not entitled to initiate a demand registration, such
Holder's Registrable Securities shall not be counted as outstanding for
purposes of calculating the majority of Registrable Securities required to
initiate a demand registration. In connection with any such assignment, the
term "Holder" as used herein shall, where appropriate to assign the rights and
obligations of the assigning Holder hereunder to such assignee, be deemed to
refer to the assignee.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
QUEEN SAND RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive
Officer
and
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Operating Officer
JOINT ENERGY DEVELOPMENT
INVESTMENTS LIMITED PARTNERSHIP
By: Enron Capital Management
Limited Partnership, its
General Partner
By: Enron Capital Corp., its
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Agent and Attorney-in-Fact
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