Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of April 14,
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2000 by and among Grace Development Inc., a Colorado corporation (the
"Company"), and the purchasers named on the signature pages hereto (the
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"Purchasers").
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PRELIMINARY STATEMENT
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Pursuant to the Securities Purchase Agreement (as defined below), the
Purchasers have agreed to purchase the Notes, the Sale Shares and the Warrants
(as each is defined in the Securities Purchase Agreement) on the condition,
among others, that the Company grant the registration rights set forth in this
Agreement.
ACCORDINGLY, to induce the Purchasers to purchase the Notes, the Sale
Shares and the Warrants and in consideration of the mutual representations and
agreements set forth in this Agreement, the Company and the Purchasers,
intending to be legally bound, now agree as follows:
STATEMENT OF AGREEMENT
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SECTION 1. DEFINITIONS.
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1.1 Certain Definitions. As used in this Agreement, the following
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terms shall have the following meanings:
"Affiliate" means any entity controlling, controlled by or under
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common control with a designated Person. For the purposes of this definition,
"control" shall have the meaning specified as of the date of this Agreement for
that word in Rule 405 promulgated by the Securities and Exchange Commission (the
"SEC") under the Securities Act.
"Equity Security" shall mean any stock or similar security, including
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without limitation securities containing equity features and securities
containing profit participation features, or any security convertible or
exchangeable, with or without consideration, into or for any stock or similar
security, or any security carrying any warrant or right to subscribe to or
purchase any stock or similar security, or any such warrant or right.
"Registrable Securities" shall mean (i) the Sale Shares, (ii) the
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Common Stock issuable upon conversion of the Notes, (iii) the Common Stock
issuable upon exercise of the Warrants, and (iv) any Common Stock issued with
respect to the Common Stock described in (i), (ii) or (iii) above by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or in connection
with any anti-dilution provisions relating to the Notes or the Warrants, until
the earliest to occur of (a) the date on which such security has been
effectively registered under the Securities Act and disposed of in accordance
with a registration statement and (b) the date on which all of the Registrable
Securities may be sold pursuant to Rule 144 (without any volume limitations
thereunder) or may
be sold without compliance with such rule. The Holder hereby acknowledges and
agrees that the Notes and the Warrants shall not be deemed to be Registrable
Securities.
"Rule 144" means Rule 144 promulgated by the SEC under the Exchange
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Act, as such rule may be amended from time to time, or any successor rule
thereto.
"Securities Purchase Agreement" shall mean the Securities Purchase
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Agreement dated as of April 14, 2000 among the Company and the Purchasers.
1.2 Incorporated Definitions. Capitalized terms used in this
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Agreement and not otherwise defined herein shall have the meanings set forth in
the Securities Purchase Agreement.
SECTION 2. REGISTRATION.
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2.1 Mandatory Registration. Within 30 days following the date on
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which the Company becomes eligible to use Form S-3 (or any similar successor
form that permits incorporation by reference of filings made by the Company
under the Exchange Act, the Company shall file with the SEC a registration
statement with respect to the offering and sale or other disposition of all of
the Registrable Securities. The Company agrees to use its reasonable best
efforts to cause such registration statement to become effective as soon as
practicable following its filing with the SEC. The Company shall file such
additional registration statements on Form S-3 (or any similar successor form)
as the Holders of Registrable Securities may reasonably request to effect the
registration of Registrable Securities.
2.2 Piggyback Registration.
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(a) Except as set forth in Section 2.2 (b), as, if and when the
Company proposes to register any Common Stock under the Securities Act
for sale to the public, whether for its own account or for the account
of other security holders or both on a form that would also permit the
registration of the Registrable Securities (other than registrations
on Form S-8, or any successor form, or Form S-4, or any successor
form) (an "Eligible Registration), each such time it will give written
notice to the holders of Registrable Securities (the "Holders") of its
intention so to do. Upon the written request of a Holder received by
the Company within 20 days after the giving of any such notice by the
Company, to register such number of shares of Registrable Securities
held by such Holder specified in such written request, the Company
will cause the Registrable Securities as to 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 with
respect to such Eligible Registration, all to the extent requisite to
permit the sale or other disposition by such Holder (in accordance
with its written request) of such Registrable Securities so
registered. In the event that any Eligible Registration pursuant to
this Section 2.2 shall be, in whole or in part an underwritten
offering of Common Stock (an "Underwritten Offering"), the number of
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shares of Registrable Securities to be included in such an
underwriting may be reduced if and to the extent that the managing
underwriter shall be of the opinion that such inclusion would
materially adversely affect the marketing of the securities to be sold
by the Company therein. In the
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event such a reduction is necessary, the reduction shall be borne
first by holders of securities that are not Registrable Securities
pursuant to this Agreement, and if a further reduction is necessary in
the judgment of the managing underwriter, then holders proposing to
sell Registrable Securities in the Underwritten Offering shall bear
the reduction on a pro-rata basis, based on the aggregate number of
shares of Registrable Securities that each holder proposed to offer
for sale in the Underwritten Offering. Notwithstanding the foregoing
provisions, the Company may for any reason and without the consent of
the Holders in good faith withdraw any registration statement referred
to in this Section 2.2 without thereby incurring any liability to the
Holders.
(b) Notwithstanding the foregoing, in connection with the first
underwritten Offering for the account of the Company after the date of
this Agreement, the Company will not have any obligation to register
in excess of 50% of the Registrable Securities as long as the price
per share offered in the Offering is equal to or greater than $3.00
per share in the event of Offerings on or before December 31, 2000 and
$5.00 per share thereafter (as such per share amounts are
appropriately adjusted for stock splits, stock dividends and other
recapitalizations after the date of this Agreement).
2.3 Method of Distribution. The Purchasers shall determine the method
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of distribution of the Registrable Securities registered pursuant to Section
2.1.
2.4 Registration Statement Form. Registrations pursuant to Section
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2.1 shall be on such appropriate registration form of the SEC (i) as shall be
selected by the Company and as shall be reasonably acceptable to the Purchasers,
and (ii) as shall permit the disposition of such Registrable Securities in
accordance with the method or methods of disposition selected pursuant to
Section 2.3 hereof.
2.5 Expenses. Except as otherwise provided in this Section 2.6, all
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expenses incurred in connection with the effective registration pursuant to this
Section 2.1 and each registration pursuant to Section 2.2 hereof (excluding in
each case underwriting discounts and commissions applicable to Registrable
Securities), including, without limitation, in each case, all registration,
filing and NASD fees; all fees and expenses of complying with securities or blue
sky laws; all word processing, duplicating and printing expenses, messenger,
delivery and shipping expenses; fees and disbursements of the accountants and
counsel for the Company including the expenses of any special audits or "cold
comfort" letters or opinions required by or incident to such registrations; fees
and disbursements of one firm of counsel selected by the Holders, and any fees
and disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions, if any, shall
be borne by the Company. In all cases, the Purchasers shall pay the underwriting
discounts and commissions applicable to the securities sold by the Purchasers.
2.6 Effective Registration Statement. Registrations pursuant to this
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Section 2 shall not be deemed to have been effected (i) unless a registration
statement with respect thereto has become effective (unless a substantial cause
of the failure of such registration statement to become effective shall be
attributable to the Purchasers), (ii) if after it has become effective, such
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registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court for any reason,
resulting in a failure to consummate the offering of Registrable Securities
offered thereby, (iii) if after a registration statement with respect thereto
has become effective, the offering of Registrable Securities offered thereby is
not consummated due to factors beyond the control of the Purchasers, other than
the fact that the underwriters have advised the Purchasers that the Registrable
Securities cannot be sold at a net price equal to or above the net price
anticipated at the time of filing of the preliminary prospectus, or (iv) if the
conditions to closing specified in the Securities Purchase Agreement or
underwriting agreement entered into in connection with such registration are not
satisfied (unless a substantial cause of such conditions to closing not being
satisfied shall be attributable to the Purchasers).
2.7 Selection of Underwriters. If a registration pursuant to Section
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2.2 hereof involves an underwritten offering, the underwriter or underwriters
thereof shall be selected by the Company.
SECTION 3. REGISTRATION PROCEDURES.
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3.1 Procedures. The Company will, subject to the limitations provided
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herein, as expeditiously as possible:
(a) prepare and file with the SEC the requisite registration
statement to effect such registration, and thereafter, use reasonable
efforts to cause such registration statement to become effective;
provided that before filing a registration statement or prospectus or
any amendments or supplements thereto, including documents
incorporated by reference, the Company will furnish to counsel to the
holders of the Registrable Securities covered by such registration
statement and the managing underwriter or underwriters, if any, draft
copies of all such documents proposed to be filed (other than
exhibits, unless so requested) a reasonable time prior thereto, which
documents will be subject to the reasonable review of such counsel and
such holders and underwriters, and will notify each holder of the
Registrable Securities of any stop order issued or threatened by the
SEC in connection therewith and take all reasonable actions required
to prevent the entry of such stop order or to remove it if entered;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement until such time as all of such
securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in
such registration statement; provided, however, that the Company shall
not in any event be required to keep (i) the registration statement
filed pursuant to Section 2.1 effective for a period of more than two
years after such registration statement becomes effective and (ii) a
registration statement filed pursuant to Section 2.2 effective for a
period of more than nine months after such registration statement
becomes effective; and
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provided further that the Company may, at any time, delay the filing
or suspend the effectiveness of any registration under this Agreement,
or without suspending such effectiveness, instruct the Purchasers not
to sell any Registrable Securities included in any such registration,
(i) if the Company shall have determined upon the advice of counsel
that the Company would be required to disclose any actions taken or
proposed to be taken by the Company in good faith and for valid
business reasons, including without limitation, the acquisition or
divestiture of assets, which disclosure would have a material adverse
effect on the Company or on such actions, or (ii) if required by law,
to update the prospectus relating to any such registration to include
updated financial statements (a "Suspension Period") by providing the
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Purchasers with written notice of such Suspension Period and the
reasons therefor; provided, however, that the Company will not be
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required to disclose such reasons with particularity if an authorized
executive officer of the Company certifies that the Company believes
it is required by law to delay the filing or suspend the effectiveness
of any such registration. In addition, the Company shall not be
required to keep any registration effective, or may without suspending
such effectiveness, instruct the Purchasers if it has Registrable
Securities included in such registration not to sell such securities,
during any period which the Company is instructed, directed, ordered
or otherwise requested by any governmental agency or self-regulatory
organization to stop or suspend such trading or sales ("Supplemental
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Extension Period"). In the event of a Suspension Period or
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Supplemental Extension Period, the period during which any
registration under this Agreement is to remain effective pursuant to
this Section 3.1(b) shall be tolled until the end of any such
Suspension Period or Supplemental Extension Period. The Company will
use reasonable efforts to restrict any Suspension Period or
Supplemental Extension Period to less than 30 days;
(c) furnish to the Purchasers such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement (including
each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, and such
other documents, as the Purchasers may reasonably request;
(d) use its reasonable efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such jurisdictions as each seller thereof shall reasonably request and
to keep such registration or qualification in effect for so long as
such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not for
any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for
the requirements of this Section 3.1(d) be obligated to be so
qualified or to consent to general service of process in any such
jurisdiction.
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(e) use its reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered
with or approved by such other United States Federal or state
governmental agencies or authorities as may be necessary to enable the
Purchasers to consummate the disposition of such Registrable
Securities;
(f) notify in writing the Purchasers, if Registrable Securities
are covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any
event as a result of which the prospectus included 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 under which
they were made, and at the request of the Purchasers prepare and
furnish to the Purchasers a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such securities,
such prospectus shall 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 under which they were made.
(g) otherwise use reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its
securityholders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning with
the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(h) provide and cause to be maintained a transfer agent for all
Registrable Securities covered by such registration statement from and
after a date not later than the effective date of such registration
statement; and
(i) use its reasonable efforts to list all Registrable
Securities covered by such registration statement on any securities
exchange on which any of the Company's Common Stock is then listed.
3.2 Information Requirements. It shall be a condition precedent to
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the obligations of the Company to take any action with respect to registering
the Purchasers' Registrable Securities pursuant to this Section 3 that the
Purchasers furnish the Company in writing such information regarding the
Purchasers, the Registrable Securities and other securities of the Company held
by the Purchasers, and the distribution of such securities as the Company may
from time to time reasonably request in writing. If a Purchaser refuses to
provide the Company with any of such information on the grounds that it is not
necessary to include such information in the registration statement, the Company
may exclude the Purchaser's Registrable Securities from the registration
statement unless such Purchaser provides the Company with an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to the Company and
its counsel, to the effect that such information need not be included in the
registration statement.
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The Purchasers agree by acquisition of such Registrable Securities
that upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 3.1(f), the Purchasers will forthwith
discontinue the Purchasers' disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until the
Purchasers' receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3.1(f) and, if so directed by the Company, will deliver
to the Company copies, other than permanent file copies then in the Purchasers'
possession, of the current prospectus relating to such Registrable Securities at
the time of receipt of such notice.
SECTION 4. UNDERWRITTEN OFFERINGS.
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If requested by the underwriters for any underwritten offering of
Registrable Securities pursuant to a registration under Section 2 hereof, the
Company will enter into an underwriting agreement with such underwriters for
such offering, such agreement to be satisfactory in substance and form to the
Purchasers and the underwriters and to contain such representations and
warranties by the Company and such other terms as are generally prevailing in
agreements of this type, including, without limitation, indemnities to the
effect and to the extent provided in Section 6 hereof. The Purchasers will
cooperate with the Company in the negotiation of the underwriting agreement and
will give consideration to the reasonable requests of the Company regarding the
form thereof, provided that nothing herein contained shall diminish the
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foregoing obligations of the Company. If requested by the underwriters of any
underwritten offering pursuant to a registration under Section 2 hereof, the
Purchasers agree to enter into an agreement with such underwriters not to sell
their shares of stock in the Company for a period of time (not to exceed 180
days) after the effectiveness of a registration statement equal to the period of
time which the sellers of securities in such registration have agreed not to
sell their shares after the effectiveness of such registration statement. The
Purchasers shall be a party to such underwriting agreement. The Purchasers shall
not be required to make any representations, warranties or agreements with the
Company other than representations, warranties or agreements regarding the
Purchasers, Purchasers' Registrable Securities and other securities of the
Company, the Purchasers' intended method of distribution, and any
representations, warranties or agreements required by law.
SECTION 5. PREPARATION; REASONABLE INVESTIGATION.
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In connection with the preparation and filing of each registration
statement under the Securities Act pursuant to this Agreement, the Company will
give the Purchasers and their respective agents and advisors and the
underwriters, if any, the reasonable opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the SEC, and each amendment thereof or supplement thereto, and will
give each of them such access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the option of the Purchasers' counsel, to conduct a reasonable investigation
within the meaning of the Securities Act. Subject to the rights and obligations
of the Company under the Securities Act and other applicable laws, the
Purchasers
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shall have the right to review and approve those portions of such registration
statement that directly pertain to the Purchasers.
SECTION 6. INDEMNIFICATION.
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6.1 Indemnification by the Company. In the event any Registrable
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Securities are included in a registration statement under this Agreement, to the
extent permitted by law, the Company will, and hereby does, indemnify and hold
harmless each Purchaser, 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 each Purchaser or any such underwriter
within the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which each Purchaser or any such director or
officer or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, 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 securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse the Purchasers and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
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in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by the
Purchasers, and provided further that the Company shall not be liable to any
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Person who participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within the
meaning of the Securities Act, in any such case 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 and such delivery would have mitigated liability. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Purchasers or any such director, officer,
underwriter or controlling person and shall survive the transfer of such
securities by such seller.
6.2 Indemnification by the Purchasers. In the event any Registrable
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Securities are included in a registration statement under this Agreement, to the
extent permitted by law, each Purchaser whose Registrable Securities are
registered pursuant to such registration statement will, and hereby does
indemnify and hold harmless (in the same manner and to the same extent
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as set forth in Section 6.1) each underwriter, each Person who controls such
underwriter within the meaning of the Securities Act, the Company, each director
of the Company, each officer of the Company and each other Person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in strict conformity with written information furnished to the
Company by the Purchasers expressly for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement; provided that the Purchasers shall not be
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liable to any Person who participates as an underwriter in the offering or sale
of Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case 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 any
underwriter, the Company or any such director, officer or controlling Person and
shall survive the transfer of such securities by such seller.
6.3 Notices of Claims, etc. Promptly after receipt by an indemnified
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party of notice of the commencement of any action or proceeding involving a
claim referred to in Sections 6.1 and 6.2, 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
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the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 6, except to the extent that the indemnifying party
is actually prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, 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, the indemnifying party
shall be entitled to participate in and 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. 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. No indemnified party shall consent to
entry of any judgment or enter into any settlement without the consent of the
indemnifying party.
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6.4 Other Indemnification. Indemnification similar to that specified
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in the preceding subdivisions of this Section 6 (with appropriate modifications)
shall be given by the Company and the Purchasers with respect to any required
registration or other qualification of securities under any Federal or state law
or regulation of any governmental authority other than the Securities Act.
6.5 Indemnification Payments. The indemnification required by this
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Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
6.6 Contribution. If the indemnification provided for in this Section
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6 from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such loss, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue statement of material fact
or omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such indemnifying party or indemnified
parties, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 6.3 hereof, any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.6 were determined by pro rata allocation
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or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6.6 no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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.
If indemnification is available under this Section 6, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Section 6.1 through Section 6.5 hereof without regard to the relative fault of
said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 6.6.
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SECTION 7. REPORTING REQUIREMENTS UNDER EXCHANGE ACT.
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The Company shall use its reasonable efforts to keep effective the
registration of its Common Stock under Section 12 of the Exchange Act and shall
timely file such information, documents and reports as the SEC may require or
prescribe under Section 13 of the Exchange Act. The Company shall timely file
such information, documents and reports which a corporation, partnership or
other entity subject to Section 13 or 15(d) (whichever is applicable) of the
Exchange Act is required to file.
So long as the Company is subject to the reporting requirements of
either Section 13 or 15(d) of the Exchange Act, the Company shall forthwith upon
request furnish the Purchasers (i) a written statement by the Company that it
has complied with such reporting requirements, (ii) a copy of the most recent
annual or quarterly report of the Company, and (iii) such other reports and
documents filed by the Company with the SEC as the Purchasers may reasonably
request in availing itself of an exemption for the sale of Registrable
Securities without registration under the Securities Act. The Company
acknowledges and agrees that the purpose of the requirements contained in this
Section 7 are to enable the Purchasers to comply with the current public
information requirement contained in Paragraph (c) of Rule 144 under the
Securities Act should the Purchasers ever wish to dispose of any of the
Securities of the Company acquired by it without registration under the
Securities Act in reliance upon Rule 144 (or any other similar exemptive
provision). In addition, the Company shall take such other measures and file
such other information, documents and reports, as shall hereafter be required by
the SEC as a condition to the availability of Rule 144 under the Securities Act
(or any similar exemptive provision hereafter in effect).
SECTION 8. SHAREHOLDER INFORMATION.
-----------------------
The Company may require the Purchasers to furnish the Company such
information in writing with respect to the Purchasers and the distribution of
its Registrable Securities as the Company may from time to time reasonably
request in writing and as shall be required by law or by the SEC in connection
therewith.
SECTION 9. FORMS.
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All references in this Agreement to particular forms of registration
statements are intended to include, and shall be deemed to include, references
to all successor forms which are intended to replace, or to apply to similar
transactions as, the forms herein referenced.
SECTION 10. TRANSFER OF REGISTRATION RIGHTS.
-------------------------------
The registration rights granted to the Purchasers under this Agreement
may not be transferred without the prior written consent of the Company, which
shall not be unreasonably withheld.
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SECTION 11. AMENDMENT.
---------
This Agreement may be amended only by a written agreement signed by
the Company and the Purchasers.
SECTION 12. NOTICES.
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All notices, requests, consents and other communications required or
permitted hereunder shall be in writing and shall be delivered, or mailed first-
class postage prepaid, registered or certified mail,
(a) If to a Purchaser at its respective address as shown on the
books of the Company, or at such other address as such Purchaser may
specify by written notice to the Company, or
(b) If to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: President; or at such other address as the Company
may specify by written notice to the Purchaser,
and such notices and other communications shall for all purposes of this
Agreement be treated as being effective or having been given if delivered
personally, or, if sent by mail, when received.
SECTION 13. COUNTERPARTS.
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This Agreement may be executed concurrently in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 14. CHOICE OF LAW.
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THIS AGREEMENT AND THE VALIDITY AND ENFORCEABILITY HEREOF SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICT OF LAWS RULES OR CHOICE OF
LAWS RULES THEREOF EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
SECTION 15. SEVERABILITY.
------------
Should any one or more of the provisions of this Agreement or any
agreement entered into pursuant to this Agreement be determined to be illegal or
unenforceable, all other provisions of this Agreement and of each other
agreement entered into pursuant to this Agreement, shall be given effect
separately from the provision or provisions determined to be illegal or
unenforceable and shall not be affected thereby.
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SECTION 16. WHOLE AGREEMENT.
---------------
This Agreement constitutes the complete agreement and understanding by
and among the parties hereto and shall supersede any prior understanding,
agreement or representation by or among the parties, whether written or oral,
related to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives effective the day and year
first above written.
GRACE DEVELOPMENT INC.
By: ____________________________________________
Name: _____________________________________
Title: _____________________________________
PURCHASERS:
GREENLIGHT CAPITAL, L.P.
By: Greenlight Capital, L.L.C., its
general partner
By:________________________________________
Name:______________________________________
Title:_____________________________________
GREENLIGHT CAPITAL QUALIFIED L.P.
By: Greenlight Capital, L.L.C., its
general partner
By:________________________________________
Name:______________________________________
Title:_____________________________________
GREENLIGHT CAPITAL OFFSHORE, LTD.
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________