EXHIBIT 4.4
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REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
PACIFIC ENERGY RESOURCES LTD.,
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.,
SPCP GROUP, L.L.C.
AND
SPCP GROUP III LLC
DATED AS OF NOVEMBER 30, 2006
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TABLE OF CONTENTS
PAGE
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ARTICLE I --INTERPRETATION...................................................1
Section 1.1. Certain Definitions........................................1
ARTICLE II --REGISTRATION UNDER APPLICABLE SECURITIES LAWS...................7
Section 2.1. Demand Registration........................................7
Section 2.2. Incidental Registration....................................9
Section 2.3. Registration Procedures...................................10
Section 2.4. Incidental Underwritten Offerings.........................15
Section 2.5. Preparation; Reasonable. Investigation....................15
Section 2.6. Indemnification...........................................16
Section 2.7. Adjustments Affecting Registrable Shares. ................18
Section 2.8. Expenses..................................................18
ARTICLE HI --ADDITIONAL COVENANTS...........................................19
Section 3.1. POP System Eligibility. ................................. 19
Section 3.2. Other Registration Rights.................................19
Section 3.3. Rule 144 and Rule 144A....................................19
ARTICLE IV --MISCELLANEOUS..................................................20
Section 4.1. Calculation of Time Periods...............................20
Section 4.2. Severability..............................................20
Section 4.3. Amendments................................................20
Section 4.4. Waiver....................................................20
Section 4.5. Time of Essence...........................................20
Section 4.6. Further Acts..............................................20
Section 4.7. Notices...................................................20
Section 4.8. Entire Agreement..........................................20
Section 4.9. Binding Effect; Assignment................................21
Section 4.10. Descriptive Headings......................................21
Section 4.11. GOVERNING LAW.............................................21
Section 4.12. CONSENT TO EXCLUSIVE JURISDICTION.........................21
Section 4.13. WAIVER OF JURY TRIAL......................................21
Section 4.14. Counterparts..............................................22
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), is dated as of
November 30, 2006, between Pacific Energy Resources Ltd., a Delaware corporation
(the "COMPANY"), ▇▇▇▇▇▇▇, Sachs & Co. ("GOLDMAN"), and SPCP Group, L.L.C. and
SPCP Group III LLC (together, "SILVER POINT", and each with Goldman, each a
"BUYER," and collectively, the "BUYERS").
RECITALS:
A. Reference is hereby made to those certain Warrant Purchase
Agreements dated of even date herewith (as they may be amended, supplemented or
otherwise modified, the "WARRANT PURCHASE AGREEMENT"), by and between the
Company and each Buyer. Terms used but not defined herein shall have the
respective meanings assigned to such terms in the Warrant Purchase Agreement.
B. The Company and the Buyers are entering enter into this Agreement to
reflect the agreement of the parties hereto regarding registration rights with
respect to the shares of common stock of the Company, par value $0.0001 per
share (the "COMMON STOCK") now owned or hereafter acquired by a Buyer.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company and the Buyers hereby agree as follows.
ARTICLE I--INTERPRETATION
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SECTION 1.1. CERTAIN DEFINITIONS.
(a) In this Agreement, unless the context otherwise requires, the
following terms have the following respective meanings:
"AFFILIATE" has the meaning assigned to such term in Rule 405 under the
U.S. Securities Act.
"APPLICABLE SECURITIES LAWS" means the applicable Canadian Securities
Laws and the applicable U.S. Securities Laws.
"BOARD OF DIRECTORS" means the board of directors of the Company.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close.
"CANADIAN SECURITIES COMMISSIONS" means, collectively, the securities
commission of each of the Qualifying Jurisdictions in Canada or any other
securities regulatory authority of any such Qualifying Jurisdiction at the time
administering the Canadian Securities Laws of such Qualifying Jurisdiction.
"CANADIAN SECURITIES LAWS" means, collectively, the securities laws
from time to time in effect of each of the Qualifying Jurisdictions in Canada
and the respective rules and regulations from time to time made and forms from
time to time prescribed thereunder and all published policy statements, notices,
interpretation notes, blanket orders and rulings and other instruments from time
to time in effect of the Canadian Securities Commissions of such Qualifying
Jurisdictions (including national policy statements, notices and other
instruments from time to time in effect of the Canadian Securities
Administrators).
"COMMON SHARE OPTION PLAN" means the stock option plan or any similar
or replacement plan established by the Company or any of its direct or indirect
wholly-owned subsidiaries from time to time and pursuant to which Common Shares
are issuable
"COMMON SHARES" means shares of Common Stock of the Company.
"COMPANY SECURITIES" means all outstanding Common Shares and Common
Shares issuable upon exercise of Convertible Securities and Stock Options.
"CONVERTIBLE SECURITIES" means (i) the Warrants, and (ii) any other
securities convertible into, or exchangeable or exercisable for, Common Shares,
including exchangeable securities, convertible debentures, convertible preferred
shares, warrants and rights but excluding Stock Options.
"DEMAND REGISTRATION NOTICE" has the meaning attributed thereto in
SECTION 2.1(a).
"EFFECTIVE" means, with respect to the registration of any securities,
(i) in circumstances in which any Canadian Securities Laws are applicable, the
issuance by applicable Canadian Securities Commissions of receipts (including a
mutual reliance review system decision document pursuant to the Expedited Review
System) under such Canadian Securities Laws for a Prospectus (excluding, if the
PREP Procedures are applicable, any PREP Information omitted therefrom) relating
to the qualification of such securities; and (ii) in circumstances in which the
U.S. Securities Laws are applicable, the declaration by the SEC of the
effectiveness or the deemed effectiveness under the U.S. Securities Act of a
Registration Statement relating to the registration of such securities, and
"EFFECTIVENESS" and similar terms have correlative meanings and "EFFECTIVE TIME"
means the time and date as of which any such Prospectus or Registration
Statement becomes effective.
"EXPEDITED REVIEW SYSTEM" means National Policy 43-201 - MUTUAL
RELIANCE REVIEW SYSTEM FOR PROSPECTUSES AND ANNUAL INFORMATION FORMS - of the
Canadian Securities Administrators, or any successor thereto, as from time to
time amended.
"INCIDENTAL REGISTRATION NOTICE" has the meaning attributed thereto in
SECTION 2.2(a).
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"MATERIAL ADVERSE CHANGE" means any change (or any condition, event or
development involving a prospective change) in the business, operations, results
of operations, assets, capitalization, financial condition, licenses, permits,
concessions, rights, liabilities, prospects or privileges, whether contractual
or otherwise, of the Company or Buyer, as the case may be, taken as a whole,
which is materially adverse to the business of the Company or Buyer, as the case
may be, taken as a whole, or which would have a material adverse effect on the
ability of such party to consummate the transactions contemplated hereby.
"MATERIAL CHANGE", "MATERIAL FACT" and "MISREPRESENTATION" have the
respective meanings attributed thereto under applicable Canadian Securities
Laws, provided that, in circumstances in which the Canadian Securities Laws of
any Qualifying Jurisdiction in Canada are applicable and any such term is not
defined thereunder or in circumstances in which no Canadian Securities Laws are
applicable, such term or terms, as the case may be, shall have the respective
meanings attributed thereto in the SECURITIES ACT, and provided further that, in
circumstances in which the U.S. Securities Laws are applicable, "MATERIAL FACT"
shall have the meaning attributed thereto under applicable U.S. Securities Laws
having regard to Rules 405 and 408 under the U.S. Securities Act and
"MISREPRESENTATION" shall mean an untrue statement of a material fact or an
omission to state a material fact required to be stated or necessary to make a
statement not misleading in light of the circumstances under which it was made.
"NASD" means the National Association of Securities Dealers, Inc., or
any successor thereto.
"NI 44-103" means National Instrument 44-103 - POST-RECEIPT PRICING -
of the Canadian Securities Administrators, or any successor thereto, as from
time to time amended.
"OFFERING DOCUMENTS" means, with respect to any registration of
Registrable Shares, a Preliminary Prospectus and a Prospectus (and, if the PREP
Procedures are applicable, a Supplemental PREP Prospectus) relating to such
registration and any other document (including, unless the context otherwise
requires, any amendment or supplement to such Preliminary Prospectus, Prospectus
or Supplemental PREP Prospectus) required by Applicable Securities Laws to be
delivered by or on behalf of Participating Securityholders to prospective
purchasers of such Registrable Shares in connection with the resale and
distribution thereof.
"PARTICIPATING SECURITYHOLDER" has the meaning attributed thereto in
SECTION 2.1(a) and SECTION 2.2(a)(i), as the case may be.
"PERSON" includes any individual, corporation, body corporate, limited
liability company, partnership, association, trust, estate or unincorporated
organization, or any trustee, executor, administrator or other legal or personal
representative, government body or regulatory authority or other entity however
designated or constituted.
"POP SYSTEM" means the prompt offering qualification system for the
distribution of securities by means of a short form prospectus provided for
under National Instrument 44-101 -SHORT FORM PROSPECTUS DISTRIBUTIONS - of the
Canadian Securities Administrators, or under any successor to such national
instrument, as from time to time amended.
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"PRELIMINARY PROSPECTUS" means a preliminary prospectus or preliminary
short form prospectus, as applicable, of the Company, in a form which counsel to
the Company and counsel to the Requesting Securityholder shall consider
suitable, relating to the resale and distribution of Registrable Shares (and
such other securities, if any, as provided in SECTION 2.1(b) and SECTION 2.2(a))
in the Qualifying Jurisdictions in Canada under Applicable Securities Laws or
the POP System, as applicable and, unless the context otherwise requires,
includes any documents incorporated or deemed to be incorporated by reference
therein under the POP System and, if Quebec is a Qualifying Jurisdiction, the
French language version thereof, provided that such term shall also mean, unless
the context otherwise requires, such prospectus which shall constitute part of,
and be included in, the Registration Statement relating to such resale and
distribution in the United States.
"PREP INFORMATION" means the information to be set forth in a
Supplemental PREP Prospectus that is permitted to be omitted from the Prospectus
relating to such Supplemental PREP Prospectus in accordance with the PREP
Procedures.
"PREP PROCEDURES" means the rules and procedures established under NI
44-103 for the pricing of securities in certain prospectus offerings after a
receipt for the prospectus has been obtained.
"PROPOSED REGISTRATION NOTICE" has the meaning attributed thereto in
SECTION 2.2(a).
"PROSPECTUS" means a final prospectus or final short form prospectus,
as applicable, of the Company, in a form which counsel to the Company and
counsel to the Requesting Securityholder shall reasonably consider suitable,
relating to the resale and distribution of Registrable Shares (and such other
securities, if any, as provided in SECTION 2.2(a)) in the Qualifying
Jurisdictions in Canada under Applicable Securities Law or the POP System, if
applicable, and, unless the context otherwise requires, includes any documents
incorporated or deemed to be incorporated by reference therein under the POP
System (including, if the PREP Procedures are applicable, any PREP Information
set forth in a Supplemental PREP Prospectus relating to such resale and
distribution that is deemed under the PREP Procedures to be incorporated by
reference into such final short form prospectus) and, if Quebec is a Qualifying
Jurisdiction, the French language version thereof provided that such term shall
also mean, unless the context otherwise requires, such final short form
prospectus which shall constitute part of, and be included in, the Registration
Statement relating to such resale and distribution in the United States.
"QUALIFYING JURISDICTIONS" means each of the provinces of Canada and,
(i) with respect to any registration of securities in connection with a demand
registration pursuant to SECTION 2.1, the United States (and the applicable
states thereof) if so designated; or (ii) with respect to any registration of
securities in connection with an incidental registration pursuant to SECTION
2.2, such other jurisdictions (including the United States and the applicable
states thereof) as may be designated by the Company in a Proposed Registration
Notice.
"REGISTER" means, with respect to any securities, (i) in circumstances
in which any Canadian Securities Laws are applicable, the qualification for
distribution of such securities under such Canadian Securities Laws effected by
preparing and filing with applicable Canadian
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Securities Commissions a Preliminary Prospectus and a Prospectus
relating to such distribution, and obtaining receipts therefor from such
Canadian Securities Commissions, in accordance with such Canadian Securities
Laws; and (ii) in circumstances in which the U.S. Securities Laws are
applicable, the registration of the offer and sale of such securities under the
U.S. Securities Act effected by preparing and filing with the SEC a Registration
Statement covering such offer and sale and causing such Registration Statement
to become effective in accordance with the U.S. Securities Act, and
"REGISTERED", "REGISTRATION" and similar terms have correlative meanings.
"REGISTRABLE SHARES" means any (a) Common Shares, (b) Common Shares
issued on exercise of Warrants or issuable upon the due exercise of Warrants, or
(c) Common Shares issued or issuable upon exercise of any security, held by any
Securityholder as of the date of any Demand Registration Notice or Incidental
Registration Notice, as the case may be, and any Common Shares issued or
distributed by the Company in respect of such securities in connection with a
stock dividend, subdivision or other reorganization of the Company's capital,
that are held by any Securityholder as of the date of any Demand Registration
Notice or Incidental Registration Notice, as the case may be, provided that any
such securities shall cease to be Registrable Shares when: (i) a registration of
such securities in accordance with the terms hereof shall have become effective
and the underwriting in respect thereof has been successfully completed; (ii)
such securities shall have ceased to be outstanding; (iii) such securities shall
have ceased to be held or beneficially owned by any Securityholder; or (iv) the
Company and the Securityholder shall each have received an opinion of its
counsel to the effect that, under the Canadian Securities Laws and U.S.
Securities Laws, such securities are no longer subject to any restrictions on
resale under the Canadian Securities Laws or U.S. Securities Laws.
"REGISTRATION DOCUMENTS" means, with respect to any registration of
Registrable Shares, a Preliminary Prospectus, a Prospectus, a Supplemental PREP
Prospectus (if the PREP Procedures are applicable) and a Registration Statement,
or other form of disclosure document, relating to such registration and any
other document (including, unless the context otherwise requires, any amendment
or supplement to such Preliminary Prospectus, Prospectus, Supplemental PREP
Prospectus or Registration Statement) required by Applicable Securities Laws to
be filed with applicable Securities Commissions by or on behalf of Participating
Securityholders or the Company in order to cause such registration to become
effective and/or required by Applicable Securities Laws to be delivered by or on
behalf of Participating Securityholders to prospective purchasers of such
Registrable Shares in connection with the resale and distribution thereof.
"REGISTRATION STATEMENT" means a registration statement under the U.S.
Securities Act, in a form which counsel to the Company and counsel to the
Requesting Securityholder shall reasonably consider suitable, relating to the
resale and distribution of Registrable Shares in the United States, as from time
to time amended, and, unless the context otherwise requires, includes the
exhibits thereto, any documents incorporated or deemed to be incorporated by
reference therein and, if the PREP Procedures are applicable, any PREP
Information set forth in a Supplemental PREP Prospectus relating to such resale
and distribution.
"REQUESTING SECURITYHOLDER" means any Securityholder (a) making a
request for demand registration under a Shelf Demand Registration Notice
pursuant to SECTION 2.1(a) OR (b) making a request for incidental registration
under an Incidental Registration Notice pursuant to SECTION 2.2(a), as the case
may be, including in each case any Participating Securityholders.
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"SEC" means the United States Securities and Exchange Commission or any
other federal agency of the United States at the time administering the U.S.
Securities Act or the U.S. Exchange Act, whichever is the relevant statute in
the context in which such term is used.
"SECURITIES ACT" means the SECURITIES ACT (Alberta), or any successor
thereto, as from time to time amended.
"SECURITIES COMMISSIONS" means the Canadian Securities Commissions and,
if the United States is a Qualifying Jurisdiction, the SEC.
"SECURITYHOLDER" means a Buyer and any affiliate of a Buyer which holds
Registrable Shares and, if applicable, any person who is an assignee pursuant to
SECTION 4.9.
"SHELF DEMAND REGISTRATION NOTICE" has the meaning attributed thereto
in SECTION 2.1(A).
"STOCK OPTIONS" means any Common Share options granted by the Company
or any of its direct or indirect wholly-owned subsidiaries pursuant to the
Common Share Option Plan.
"SUBSIDIARY" has the meaning attributed thereto in the SECURITIES ACT.
"SUPPLEMENTAL PREP PROSPECTUS" means a supplemented short form
prospectus of the Company, in a form which counsel to the Company and counsel to
the Requesting Securityholder shall reasonably consider suitable, which sets
forth the PREP Information omitted from a Prospectus relating to the resale and
distribution of Registrable Shares (and such other securities, if any, as
provided in SECTION 2.1(b) and SECTION 2.2(a)) in the Qualifying Jurisdictions
in Canada and, if Quebec is a Qualifying Jurisdiction, includes, unless the
context otherwise requires, the French language version thereof, provided that
such term shall also mean, unless the context otherwise requires, such
supplemented short form prospectus forming part of the Registration Statement
relating to such resale and distribution in the United States.
"TERMINATION DATE" means the first date on which no Securityholder
holds Registrable Shares.
"UNDERWRITING" means (i) with respect to any resale of Registrable
Shares by any Securityholder, a firm commitment underwriting (including a
"BOUGHT DEAL") by one or more investment dealers to purchase such Registrable
Shares as principal from such Securityholder for resale or a "BEST EFFORTS" or
other commitment by one or more investment dealers to sell such Registrable
Shares as broker or as sales or placement agent for such Securityholder; and
(ii) with respect to any issue and sale of securities of the Company by the
Company, a firm commitment underwriting by one or more investment dealers to
purchase such securities as principal from the Company for resale, and
"UNDERWRITE", "UNDERWRITTEN" and similar terms have correlative meanings and
"UNDERWRITER" means any such investment dealer acting or proposing to act in any
such capacity.
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"U.S. EXCHANGE ACT" means the UNITED STATES SECURITIES EXCHANGE ACT OF
1934, or any successor thereto, as from time to time amended, and the rules,
regulations and forms from time to time promulgated thereunder.
"U.S. SECURITIES ACT" means the UNITED STATES SECURITIES ACT OF 1933,
or any successor thereto, as from time to time amended, and the rules,
regulations and forms from time to time promulgated thereunder.
"U.S. SECURITIES LAWS" means, collectively, the U.S. Securities Act,
the U.S. Exchange Act and such other federal statutes of the United States and
state "BLUE SKY" laws as contemplated by SECTION 2.3(a)(ix) from time to time in
effect relating to the regulation of securities markets and trading in
securities and the respective rules, regulations and forms from time to time
promulgated thereunder.
"WARRANTS" means the common stock purchase warrants issued or to be
issued to Buyer from time to time pursuant to the Warrant Purchase Agreement.
"WARRANT PURCHASE AGREEMENT" means each Warrant Purchase Agreement
dated the date hereof between the Company and each Buyer.
(b) Unless the context otherwise requires, any reference herein to any
Preliminary Prospectus, Prospectus, Supplemental PREP Prospectus or Registration
Statement as of any time shall include any amendment or supplement thereto and
any document incorporated or deemed to be incorporated by reference therein as
of such time.
(c) Unless the context otherwise requires, any reference herein to a
"SECTION" or "CLAUSE" refers to a Section or clause, as the case may be, of this
Agreement, and the words "HEREIN" "HEREOF" and other words of similar import
refer to this Agreement as a whole and not to any particular Section or other
subdivision.
ARTICLE II--REGISTRATION UNDER APPLICABLE SECURITIES LAWS
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SECTION 2.1. DEMAND REGISTRATION.
(a) REQUEST FOR SHELF REGISTRATION. Subject to the provisions of this
SECTION 2.1, upon the written request (a "SHELF DEMAND REGISTRATION NOTICE") of
any Securityholder, given to the Company at any time until such time as such
Securityholder and its affiliates no longer beneficially own (including Common
Shares issuable pursuant to Warrants) at least 5% of the outstanding Common
Shares, that the Company register some or all of the Registrable Shares held at
such time by the Requesting Securityholder and any other Securityholder
requesting registration of any of its Registrable Shares (each of which shall
join in such request by signing the Demand Registration Notice, and all of which
together with the Requesting Securityholder, are collectively referred to in
this Agreement (other than SECTION 2.2) as the "PARTICIPATING SECURITYHOLDERS")
pursuant to Rule 415 promulgated under the U.S. Securities Act providing for the
sale by the Participating Securityholders of their respective Registrable Shares
(such registration statement, the "SHELF REGISTRATION STATEMENT"). The Company
shall give prompt written notice to all holders of Registrable Shares of the
Shelf Demand Registration Notice, and each holder of Registrable Shares who
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wished to include all or a portion of such holder's Registrable Shares in the
Shelf Demand registration Statement (each such holder including shares of
Registrable Securities in such registration also a Participating Securityholder)
shall so notify the Company within 15 days after the receipt by the holder of
the notice from the Company. Upon any such request, each Participating
Securityholder shall be entitled to have their Registrable Securities included
in the Shelf Registration Statement. The Participating Securityholders may, at
their option, request that the Company file the Shelf Registration Statement
using Form S-3, if such form is available for use by the Company. The Company
shall use its best efforts to file the Shelf Registration Statement at the
earliest practicable date, but in any event not later than 90 days after the
Shelf Demand Registration Notice is received by the Company, and use its best
efforts to have the Shelf Registration Statement thereafter declared effective
by the SEC at the earliest practicable date. The Company agrees to use its best
efforts to keep the Shelf Registration Statement continuously effective for a
period beginning on the date on which the Shelf Registration Statement is
declared effective by the SEC until the earlier to occur of (i) five years and
six months after November 30, 2006, (ii) the day after the date on which all of
the Common Shares covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement, or (iii) the first date on which
there shall cease to be any Common Shares covered by the Shelf Registration
Statement. The Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement, if required by the rules, regulations, or
instructions applicable to the registration form used by the Company or by the
U.S. Securities Act or by any other rules and regulations thereunder for shelf
registration, and the Company agrees to furnish to the Participating
Securityholders whose Common Shares are included in the Shelf Registration
Statement copies of any such supplement or amendment promptly after its issuance
or filing with the SEC.
(b) NUMBER OF DEMAND REGISTRATIONS. Subject to the other provisions of
this SECTION 2A, the Company shall not be required to effect more than two
demand registrations pursuant to this SECTION 2.1 in any 12 month period
following the date hereof without regard to the Securityholder making such
request.
(c) REGISTRATION OF OTHER SECURITIES. In connection with any
registration of Registrable Shares to be effected by the Company pursuant to
this SECTION 2.1, the Company may include securities other than Registrable
Shares among the securities covered by such registration.
(d) EFFECTIVENESS. A demand registration requested pursuant to this
SECTION 2.1 shall not be deemed to have been effected and will not be considered
to be a demand registration which may be requested by the Securityholders
pursuant to this SECTION 2.1 where: (i) such registration has not become
effective; or (ii) if such registration has become effective, it does not remain
effective until five years and six months after November 30, 2006, or such
registration is interfered with by any cease trading or stop order, injunction
or other order or requirement of any of the Securities Commissions or other
governmental agency or court for any reason (other than as a result of any act
or omission or alleged act or omission of any of the Participating
Securityholders or any of the underwriters in respect of the distribution
relating to such registration) and has not thereafter become effective and,
thereafter, it does not remain effective until five years and six months after
November 30, 2006.
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(e) POSTPONEMENTS. The Company shall be entitled to postpone for a
reasonable period of time (but not exceeding 21 days) the filing of any
Registration Document or the effectiveness of any registration otherwise
required pursuant hereto if the Board of Directors determines in good faith,
based on the advice of counsel, that it is in possession of material information
that has not been disclosed to the public and that the disclosure of such
information at such time in a Registration Document would be seriously
detrimental to the Company, and, in any such case the Company will promptly give
the Requesting Securityholder written notice of such determination containing an
approximation of the anticipated period of time of such postponement, provided
that the Company shall only be entitled to one such postponement in any three
year period.
SECTION 2.2. INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SHARES.
(i) If the Company, at any time before the Termination Date,
proposes to register any securities of the Company, whether for its own
account or for the account of one or more security holders of the
Company by way of any registration form that may be used for
registration of Registrable Securities, the Company will, subject to
SECTION 2.2(b), give written notice (a "PROPOSED REGISTRATION NOTICE")
to the Securityholders of such proposal at least 15 Business Days prior
to the filing of any Registration Document relating to such proposed
registration. The Proposed Registration Notice shall include the
particulars of the proposed offering, if available, including the
Qualifying Jurisdictions, in which such registration is to be effected,
the estimated number of securities of the Company proposed to be
issued, the range of the estimated offering price per security of the
Company, the proposed plan of distribution and the proposed terms of
the underwriting arrangements, if any. The Company shall also provide
to the Securityholders any current draft Preliminary Prospectus, if
available, and any current draft underwriting agreement, if available,
relating to the proposed offering. Subject to the provisions of this
SECTION 2.2, upon the written request (an "INCIDENTAL REGISTRATION
NOTICE") of any Securityholder, given to the Company within, in the
case of a "BOUGHT DEAL", 15 Business Days, and otherwise, 10 Business
Days after the receipt of the Proposed Registration Notice, that the
Company register some or all of the Registrable Shares held at such
time by the Requesting Securityholder and any other Securityholder
requesting registration of any of its Registrable Shares at that time
(each of which shall join in such request by signing the Incidental
Registration Notice, and all of which, together with the Requesting
Securityholder, are collectively referred to in this Agreement (other
than SECTION 2.1(a) as the "PARTICIPATING SECURITYHOLDERS") the Company
will use its commercially reasonable efforts to register such
Registrable Shares and cause such registration to become effective
under the Applicable Securities Laws, so as to permit the resale and
distribution of such Registrable Shares to be effected in the
Qualifying Jurisdictions in accordance with the Applicable Securities
Laws in such manner as the Requesting Securityholder may reasonably
designate in connection with such proposed offering by the Company. The
Incidental Registration Notice shall specify the number of Registrable
Shares to be registered and the intended manner of disposition thereof.
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(ii) If the Company, at any time after it has given a Proposed
Registration Notice, determines for any reason not to proceed with or
to delay the registration specified in such Proposed Registration
Notice, the Company will promptly give the Requesting Securityholder
written notice of such determination and, thereupon, (i) in the case of
a determination not to proceed with such registration, the Company
shall be relieved of its obligations hereunder to register any
Registrable Shares in connection with such registration, and (ii) in
the case of a determination to delay such registration, the Company
shall be permitted to delay registering any Registrable Shares for the
same period as the delay in such registration. No registration of
Registrable Shares effected under this SECTION 2.2 shall, subject to
SECTION 2.1, relieve the Company of its obligations with respect to any
demand registration which may be requested by the Securityholders
pursuant to SECTION 2.1.
(b) PRIORITY IN INCIDENTAL REGISTRATIONS. If the Company is advised by
letter by the managing underwriter in respect of the proposed offering relating
to a registration specified in a Proposed Registration Notice of the managing
underwriter's belief that the resale and distribution of the Registrable Shares
to be included in such registration could materially adversely affect its
ability to effect such offering, the Company will be required to include in such
registration only that number of Registrable Shares, if any, that such letter
states may be so included without having such effect, and, in such case, the
Company will promptly give the Participating Securityholders written notice of
such advice (such notice to state the basis of such belief and the approximate
number of such securities which may be so included without having such effect)
and the Participating Securityholders shall allocate the Registrable Shares
among themselves on a pro rata basis based on the number of Registrable Shares
of each Participating Securityholder requested to be included in such offering.
SECTION 2.3. REGISTRATION PROCEDURES. In connection with the Company's
obligations pursuant to SECTION 2.1 and SECTION 2.2, the Company will use its
commercially reasonable efforts to cause any registration of Registrable Shares
required thereunder to become effective under the Applicable Securities Laws so
as to permit the resale and distribution of such Registrable Shares to be
effected in the Qualifying Jurisdictions in accordance with the Applicable
Securities Laws in the manner designated by the Requesting Securityholder
pursuant hereto.
(a) Without limiting the generality of the foregoing, the Company will
as expeditiously as possible:
(i) prepare, approve and file with each Securities Commission
the Registration Documents (but in no event later than 90 days after a
request is received from any Participating Securityholder) and use its
commercially reasonable efforts to cause such registration to become
effective (but in any event not later than 120 days after a request is
received from any Participating Securityholder) and to remain
continuously effective for such period as may be reasonably necessary
to effect the resale and distribution of such Registrable Shares in the
manner designated by the Requesting Securityholder pursuant hereto,
provided that the Company shall have no obligation to maintain the
effectiveness of such registration after five years and six months
after November 30, 2006, and provided further that the time periods set
forth in the Registration Rights Agreement by and among the Company,
each subscriber thereunder, D&D Securities Company, Energy Capital
Solutions, LLC, Octagon Capital Corporation, and the holders of the
Lender Warrants, as defined therein, and not the time periods set forth
in this SECTION 2.3(a)(i), shall apply to the Company's initial
registration of its securities;
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(ii) if requested by the Requesting Securityholder, promptly
incorporate in a Supplemental PREP Prospectus such PREP Information as
the Requesting Securityholder agrees should be included therein
relating to the resale and distribution of such Registrable Shares,
promptly make all required filings of such Supplemental PREP Prospectus
as soon as practicable following receipt of such PREP Information, and
supplement or make amendments to any Registration Document relating to
the manner of resale and distribution of such Registrable Shares if
requested by the Requesting Securityholder;
(iii) prior to filing a Registration Document, furnish to the
Participating Securityholders, copies of such Registration Document as
is proposed to be filed or delivered, and thereafter furnish to the
Participating Securityholders, such number of copies of such
Registration Document (in each case including all exhibits thereto and
all documents incorporated by reference therein) and such other
documents as the Participating Securityholders may reasonably request
in order to facilitate the intended transaction and such Participating
Securityholders shall have the opportunity to object to any information
pertaining to any such Participating Securityholder that is contained
therein and the Company will make the corrections reasonable and
promptly requested by such Participating Securityholders with respect
to such information prior to filing any Registration Document or
amendment thereto;
(iv) notify the Participating Securityholders promptly, and
(if requested by any such person) confirm such advice in writing:
A. when any Registration Document has been filed and
when such registration has become effective;
B. of any request received by the Company from any
Securities Commission for any amendment or supplement to any
Registration Document or for additional information;
C. when the Company receives notification of the
issuance by any Securities Commission of any cease trading or
stop order suspending the effectiveness of such registration
or the initiation of any proceedings for that purpose;
D. if at any time the representations and warranties
of the Company made as contemplated in the last paragraph of
this SECTION 2.3 cease to be true and correct in all material
respects;
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E. of the occurrence of any material change which
requires the making of any amendment to any Registration
Document so that such document will not contain any
misrepresentation; and
F. of the Company's reasonable determination that any
amendment to any Registration Document would be appropriate;
(v) make available for inspection or examination by the
Participating Securityholders and any solicitor, accountant, reserve
engineer or other professional retained by the Participating
Securityholders (collectively, the "PROFESSIONALS"), the officers,
employees, advisors and consultants of the Company, and all financial
and other records, pertinent corporate documents and properties of the
Company (collectively, the "RECORDS") as shall be reasonably necessary
to enable the Participating Securityholders, and the Professionals to
complete their respective due diligence and cause the Company's
officers, directors or employees to supply all information reasonably
requested by any Professionals in connection with such Registration
Document. Records which the Company determines, in good faith, to be
confidential and which it notifies the Participating Securityholders,
or the Professionals are confidential shall not be disclosed by the
Participating Securityholders, the Underwriters or the Professionals
unless and to the extent the disclosure of such Records would be
required under the Applicable Securities Laws. The Participating
Securityholders agrees that information obtained by them as a result of
such inspection shall not be used except for the purpose of fulfilling
their due diligence obligations;
(vi) promptly use its commercially reasonable efforts to
prevent the issuance of any cease trading, stop or other order
suspending the effectiveness of such registration, and, if any such
order should be issued, to obtain the withdrawal of such order;
(vii) furnish to each Participating Securityholder such number
of conformed copies of the Registration Documents, including all
documents incorporated therein by reference, all exhibits thereto, all
correspondence from a Securities Commission or other governmental
agency, each letter written by or on behalf of the Company to a
Securities Commission and such other documents as the Requesting
Securityholder may reasonably request in order to facilitate the resale
and distribution of such Registrable Shares;
(viii) prior to any public offering of such Registrable
Shares, unless appropriate exemptions are available, qualify or
register such Registrable Shares for offer and sale under the
securities or "BLUE SKY" laws of such states of the United States as
the Requesting Securityholder reasonably requests, keep each such
qualification or registration effective during the period beginning on
the date of such registration and ending five years and six months
after November 30, 2006, and do any and all other acts or things which
may be necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Shares, provided that the Company
shall not be required for any such purpose to qualify generally to do
business as a foreign corporation in any such jurisdiction, consent to
general service of process in any such jurisdiction (other than in
connection with such offering) or make any changes to its constituent
documents or any agreement between it and its Securityholders;
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(ix) upon the occurrence of any event contemplated by SECTION
2.3(a)(iv)(e), prepare and file a supplement or amendment to the
applicable Registration Document or any document incorporated therein
by reference or file any other required document so that, as thereafter
delivered to the prospective purchasers of such Registrable Shares, the
applicable Registration Document will not contain any
misrepresentation;
(x) with respect to underwritten offerings, enter into such
agreements (including an underwriting agreement) and take all such
other actions in connection therewith as may be reasonably necessary in
order to facilitate the disposition of such Registrable Shares and in
such connection: (i) make such representations and warranties to the
Participating Securityholders and the managing underwriters with
respect to the Registration Documents in form, scope and substance as
are customarily made by the Company to underwriters in underwritten
offerings of Common Shares made by the Company in Canada or the United
States, as the case may be, and confirm the same if and when requested;
(ii) enter into an underwriting agreement in form, scope and substance
as is customary in underwritten offerings of Common Shares made by the
Company in Canada or the United States, as the case may be; (iii)
obtain and furnish to each Participating Securityholder and the
managing underwriters opinions of counsel and auditors to the Company
and updates thereof with respect to the Registration Documents in form,
scope and substance as are customarily made by such counsel in
underwritten offerings of Common Shares made by the Company in Canada
or the United States, as the case may be, including any translation
opinions required in respect of any French language Prospectus filed
with any Canadian Securities Commission; (iv) obtain and furnish to
each Participating Securityholder and the managing underwriters a
comfort letter, dated the later of the date of the Prospectus and, if
the PREP Procedures are applicable, the date of the Supplemental PREP
Prospectus and brought forward to a date prior to the date of closing
as required under such underwriting agreement signed by the independent
chartered accountants or certified public accountants who have audited
the Company's financial statements included or incorporated by
reference in such Registration Document, covering substantially the
same matters with respect to such Registration Document and with
respect to events subsequent to the date of such financial statements
as are or would be customarily covered in "COMFORT" letters delivered
by the Company's auditors to underwriters in underwritten public
offerings of Common Shares made by the Company in Canada or the United
States, as the case may be; (v) ensure that included in such
underwriting agreement are the indemnification provisions and
procedures of SECTION 2.6 with respect to all parties to be indemnified
pursuant thereto; and (vi) deliver such documents and certificates as
may be reasonably requested by the Requesting Securityholder and the
managing underwriters to evidence compliance with this clause (x) and
with any customary conditions contained in such underwriting agreement;
all of the above to be done at the closing under such underwriting
agreement or as and to the extent required thereunder;
(xi) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
Registration Document;
(xii) cooperate with the Participating Securityholders and the
managing underwriters to facilitate the timely preparation and delivery
of certificates representing
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Registrable Shares to be sold, not bearing any restrictive
legends, and enable such certificates to be in such denominations and
registered in such names as the managing underwriters may request at
least two Business Days prior to any sale of such Registrable Shares;
(xiii) comply with all Applicable Securities Laws and make
generally available to its securityholders, as soon as practicable but
no later than 18 months after the effective time of any registration
under the U.S. Securities Act, an earnings statement of the Company and
its subsidiaries complying with Section 11(a) of the U.S. Securities
Act (including Rule 158 thereunder); and
(xiv) use commercially reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange on
which securities of the same class issued by the Company are then
listed or, if no such similar securities are then listed, on The NASDAQ
Stock Market or a national securities exchange selected by the Company.
(b) The Company may require each Participating Securityholder to
furnish to the Company in writing such information regarding itself and the
distribution of such Registrable Shares as the Company may from time to time
reasonably request in order to comply with the Applicable Securities Laws. Each
Participating Securityholder agrees to notify the Company in writing as promptly
as practicable of any inaccuracy or change in information previously furnished
by such Participating Securityholder to the Company or of the occurrence of any
event, in either case as a result of which any Registration Document relating to
such registration contains any misrepresentation regarding such Participating
Securityholder or the distribution of such Registrable Shares, and to promptly
furnish to the Company in writing any additional information required to correct
and update any previously furnished information or required such that such
Registration Document shall not contain, with respect to such Participating
Securityholder or the distribution of such Registrable Shares, any
misrepresentation.
(c) Upon receipt of any notice from the Company of the occurrence of
any event of the kind described in SECTION 2.3(iv)(B), (C), (E), OR (F), each
Participating Securityholder shall be required to forthwith discontinue
disposition and distribution of such Registrable Shares for a reasonable length
of time not to exceed 60 days until such Participating Securityholder receives
the copies of the supplement or amendment to the applicable Registration
Document, or until it is advised in writing by the Company that the use of the
applicable Registration Document may be resumed and it has received copies of
any additional or supplemental filings which are incorporated by reference in
such Registration Document, and, if so directed by the Company, such
Participating Securityholder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Participating
Securityholder's possession, of the Registration Documents current at the time
of receipt of such notice.
(d) The Company agrees that the delivery to an underwriter, pursuant to
the foregoing provisions, of any Registration Document shall constitute the
representation and warranty by the Company to such underwriter and to the
Participating Securityholders that all information and statements (except
information or statements relating solely to such underwriter or the
Participating Securityholders) contained in such Registration Document are, at
the date of delivery, true and correct in all material respects, contain no
misrepresentation and constitute full, true and plain disclosure of all material
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facts relating to the Company and its subsidiaries. The Company also agrees that
such respective deliveries shall also constitute the consent of the Company to
the use by such underwriter of the Registration Documents in connection with the
offer for sale, sale or distribution of the Registrable Shares then being sold
and distributed in compliance with the relevant provisions of such underwriting
agreement, this Agreement and Applicable Securities Laws.
(e) No Registration Document shall contain any misrepresentation or
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
(except, with respect to any Participating Securityholder, for an untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission of a material fact made in reliance on and in conformity with written
information furnished to the Company by or on behalf of such Participating
Securityholder specifically for use therein).
SECTION 2.4. INCIDENTAL UNDERWRITTEN OFFERINGS. In any distribution
pursuant to which incidental registration is requested under SECTION 2.2 the
Company will, if requested by the Requesting Securityholder in the Incidental
Registration Notice relating to such request and subject to SECTION 2.2(b),
arrange for the underwriters in respect of the proposed offering of the Company
relating to such request to include all of the Registrable Shares to be resold
by the Participating Securityholders among the securities of the Company to be
distributed by such underwriters under such offering, and the Participating
Securityholders shall be parties to the underwriting agreement between the
Company and all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Participating
Securityholders and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement shall be
conditions precedent to the obligations of the Participating Securityholders.
None of the Participating Securityholders shall be required to make any
representations or warranties to or agreements with the Company or such
underwriters other than representations, warranties or agreements regarding such
Participating Securityholder, such Participating Securityholders' Registrable
Shares and such Participating Securityholders' intended method of distribution
as are customarily required and any other representation required by law.
SECTION 2.5. PREPARATION; REASONABLE INVESTIGATION. In connection with
the preparation and filing of each Registration Document under the Applicable
Securities Laws pursuant to this Agreement, the Company will give the Requesting
Securityholder and its counsel the opportunity to participate in the preparation
of such Registration Document 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 independent chartered accountants who have audited its
financial statements as shall be necessary, in the opinion of such counsel,
acting reasonably, to conduct a reasonable investigation within the meaning of
the Applicable Securities Laws, provided that each such person shall be required
to maintain in confidence and not to disclose to any other person any
information or documents designated by the Company as being confidential until
such time as such information becomes a matter of public record (whether by
virtue of its inclusion in the Registration Documents or otherwise) or such
person shall be required so to disclose such information pursuant to Applicable
Securities Laws or an order of any court or governmental agency or other body
having jurisdiction (subject to the requirements of such order, and only after
such person shall have given the Company prompt prior written notice of such
requirement).
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SECTION 2.6. INDEMNIFICATION
(a) INDEMNIFICATION BY THE COMPANY. The Company will indemnify and hold
harmless each of the Participating Securityholders and each underwriter which
participates in any offering or sale of Registrable Shares registered hereunder
against any losses, claims, damages or liabilities, joint or several, to which
such person may become subject under the Applicable Securities Laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon a misrepresentation or an
alleged misrepresentation contained in any Registration Document under which
such Registrable Shares were registered hereunder, and will reimburse such
person for any legal or other expenses reasonably incurred by it in connection
with investigating or defending any such action or claim as such expenses are
incurred, provided that the Company shall not be liable to any such person in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon a misrepresentation or an alleged
misrepresentation made in any such Registration Document in reliance upon and in
conformity with written information furnished to the Company by such person
expressly for use therein.
(b) INDEMNIFICATION BY THE PARTICIPATING SECURITYHOLDERS. The Company
may require, as a condition to registering any Registrable Shares hereunder and
to entering into any underwriting agreement with respect thereto, that the
Company shall have received an undertaking reasonably satisfactory to it from
each of the Participating Securityholders, severally and not jointly, to:
(i) indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become
subject under the Applicable Securities Laws or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon a misrepresentation or an
alleged misrepresentation contained in any Registration Document under
which such Registrable Shares were registered hereunder, but only to
the extent that such misrepresentation or alleged misrepresentation was
made in reliance upon and in conformity with written information
furnished to the Company by such person expressly for use therein and
(ii) reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred,
provided that no such Participating Securityholder shall be required to
undertake liability to any person under this SECTION 2.6(b) for any
amounts in excess of the amount of the proceeds to be received by such
Participating Securityholder from the sale of such Registrable Shares
pursuant to such registration in such case as reduced by any damages,
penalties or other amounts that such Participating Securityholder is or
was otherwise required to pay by reason of such misrepresentation or
alleged misrepresentation.
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(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party of notice of the commencement of any action, proceeding, investigation or
threat thereof involving a claim referred to in SECTION 2.6(a) or SECTION
2.6(b), such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this SECTION 2.6, notify such indemnifying party in writing
of the commencement of such action, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under the indemnification provisions of or
contemplated by SECTION 2.6(a) or SECTION 2.6(b) hereof. In case any such action
shall be brought against any indemnified party, the indemnified party shall
notify an indemnifying party of the commencement thereof, unless in the
reasonable judgment of such indemnified party a conflict of interest shall exist
between such indemnified party and the indemnifying party with respect to such
action such indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, such indemnifying party shall not be liable to
such indemnified party for any legal expenses of other counsel or other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim, (ii) does not provide for a remedy other than the payment
of money damages, and (iii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) CONTRIBUTION. If for any reason the indemnification provisions
contemplated by SECTION 2.6(a) and SECTION 2.6(b) are unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and the indemnified
party in connection with the misrepresentation which results in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, whether the misrepresentation or alleged misrepresentation relates to
information supplied by such indemnifying party or by such indemnified party,
and the parties relative intent, knowledge, access to information and
opportunity to correct or prevent such misrepresentation. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this
SECTION 2.6(d) were determined by pro rata allocation (even if the Participating
Securityholders or any underwriters or all of them were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this SECTION 2.6(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, or liabilities (or actions in respect thereof) referred to
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above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this SECTION 2.6(d),
no Participating Securityholder shall be required to contribute any amount in
excess of the amount by which the amount of the proceeds received by such
Participating Securityholder from the sale of any Registrable Shares exceeds the
amount of any damages or penalties which such Participating Securityholder has
otherwise been required to pay by reason of such misrepresentation or alleged
misrepresentation, and no underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Registrable Shares
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 misrepresentation or alleged
misrepresentation. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the U.S. Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Participating Securityholders' and any underwriters'
obligations in this SECTION 2.6(d) to contribute shall be several in proportion
to the number of Registrable Shares registered or underwritten, as the case may
be, by them and not joint.
(e) OTHER RIGHTS, LIABILITIES. The obligations of the Company under
this SECTION 2.6 shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and conditions, to each
officer, director, partner and agent of each Participating Securityholder and
underwriter and each person, if any, who controls any Participating
Securityholder or underwriter within the meaning of the Applicable Securities
Laws, and the obligations of the Participating Securityholders and any
underwriters contemplated by this SECTION 2.6 shall be in addition to any
liability which the respective Participating Securityholder or underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company, including any person who, with his consent,
is named in any Registration Document as about to become a director of the
Company and to each person if any, who controls the Company within the meaning
of the Applicable Securities Laws.
SECTION 2.7. ADJUSTMENTS AFFECTING REGISTRABLE SHARES. During any
period commencing on either: (i) the date on which a request for demand
registration has been made pursuant to SECTION 2.1(a), or (ii) the date on which
a request for incidental registration has been made pursuant to SECTION 2.2(a)
and, in either event, terminating on the date which is the earlier of: (A) the
date which is five years and six months after November 30, 2006; (B) the date on
which all Registrable Shares registered hereunder are sold or disposed of; and
(C) the date on which such request is withdrawn or the registration relating
thereto is otherwise not effected pursuant hereto, the Company will not effect
or permit to occur, or announce any future intent to effect or permit to occur,
any consolidation or subdivision of the Common Shares which would materially
adversely affect the ability of the Securityholders to register Registrable
Shares hereunder or the marketability of Registrable Shares under any such
registration.
SECTION 2.8. EXPENSES. The Company shall bear and pay all costs, fees
and expenses of or incidental to the registration and distribution of the
Registrable Shares, including, without limitation, all registration and filing
fees (including fees with respect to filings required to be made with any stock
exchange and the NASD and applicable U.S. state "BLUE SKY" laws), reasonable
fees and disbursements of counsel for the Company, the auditors of the Company
and any other reasonable and standard special experts or advisors retained by
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the Company in connection therewith, word processing, translation, duplicating
and printing expenses, messenger, telephone and delivery expenses, expenses in
connection with the preparation and printing of share certificates and the fees
and expenses of the transfer agent and registrar for the classes of securities
in the Registrable Shares, fees and disbursements of counsel for any of the
Participating Securityholders, expenses in connection with the preparation of
audio-visual material, marketing documents and other marketing devices and
associated with marketing and information meetings, and all other costs, fees
and expenses of or incidental to the sale of the Registrable Shares, whether or
not any registration of the Registrable Shares becomes effective; provided,
however, that the Company shall not bear or pay any expenses related to the
underwriters' fees and disbursements (including discounts, commissions, fees of
underwriters relating to the distribution of the Registrable Shares).
ARTICLE III--ADDITIONAL COVENANTS
--------------------
SECTION 3.1. POP SYSTEM ELIGIBILITY. The Company will use reasonable
commercial efforts to maintain its ability to issue its securities under the POP
System.
SECTION 3.2. OTHER REGISTRATION RIGHTS. The Company covenants that it
will not grant to any person any right of registration under the Applicable
Securities Laws relating to any Common Shares other than pursuant to this
Agreement, unless, subject to SECTION 2.1(c), the rights so granted to such
person do not limit or restrict the Securityholders' right to request demand
registration as provided for in SECTION 2.1 at such times as the Securityholders
determine in their sole judgment.
SECTION 3.3. RULE 144 AND RULE 144A.
(a) The Company hereby covenants that the Company shall timely file the
reports and other documents required to be filed by it under all U.S. Securities
Laws (including but not limited to the reports under Sections 13 and 15(d) of
the U.S. Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by
the SEC and the rules and regulations adopted by the SEC thereunder (or, if the
Company is not required to file such reports, will, upon the request of any
Securityholder, make publicly available such other information including as
provided in Rule 144(c)(2) and 144A(d)) and will take such further action as any
Securityholder may reasonably request, all to the extent required from time to
time to enable such holder to sell securities of the Company in compliance with
applicable U.S. "BLUE SKY" laws and without registration under the U.S.
Securities Laws within the limitation of the exemptions provided by Rule 144 or
144A, as such Rule may be amended from time to time; or
(ii) any similar rule or regulation hereafter adopted by the
SEC. Upon the request of any Securityholder, the Company will deliver
to such holder a written statement as to whether it has complied with
such requirements along with a copy of the most recent annual or
quarterly report (if any) of the Company and such other reports as may
be reasonably requested by Buyer.
(b) If the Company, at any time after the date hereof, proposes to sell
any securities of the Company in connection with a proposed issue and sale of
such securities by the Company by way of a placement pursuant to Rule 144A, the
Securityholders will have the right to include any or all of their Common Shares
in such placement upon substantially the same terms and conditions set forth in
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SECTION 2.2 with respect to underwritten public offerings. If Securityholders
participate in such a Rule 144A placement, the costs, fees and expenses of such
Rule 144A placement, including those of the type described in SECTION 2.8, shall
be allocated pro rata among the Company and such Securityholders on the basis of
the respective value of the securities offered in such Rule 144A placement.
ARTICLE IV--MISCELLANEOUS
-------------
SECTION 4.1. CALCULATION OF TIME PERIODS. Unless otherwise specified
herein, the period of time within which or following which any act is to be done
or step taken pursuant to this Agreement shall be calculated by excluding the
day on which the period commences and including the day on which the period
ends. If the last day of such period is not a Business Day, the period in
question shall end on the next Business Day.
SECTION 4.2. SEVERABILITY. If any provision of this Agreement or any
application thereof shall be declared or held to be invalid, illegal or
unenforceable in whole or in part whether generally or in any particular
jurisdiction, such provision shall be deemed to be amended to the extent
necessary to cure such invalidity, illegality or unenforceability, and the
validity, legality or enforceability of the remaining provisions of this
Agreement, both generally and in every other jurisdiction, shall not in any way
be affected or impaired thereby.
SECTION 4.3. AMENDMENTS. No amendment or modification of this Agreement
shall be binding unless in writing and signed by all of the parties hereto.
SECTION 4.4. WAIVER. No waiver by any party hereto of any breach of any
of the provisions of this Agreement shall take effect or be binding upon the
party unless in writing and signed by such party. Unless otherwise provided
therein, such waiver shall not limit or affect the rights of such party with
respect to any other breach.
SECTION 4.5. TIME OF ESSENCE. Time shall be of the essence of this
Agreement.
SECTION 4.6. FURTHER ACTS. The parties hereto agree to execute and
deliver such further and other documents and perform and cause to be performed
such further and other acts and things as may be reasonably necessary or
desirable in order to give full effect to this Agreement and every part thereof.
SECTION 4.7. NOTICES. All notices, requests, demands, and other
communications required or permitted to be given or made hereunder by any party
hereto shall be in writing and shall be deemed to have been duly given or made
if delivered personally, or transmitted by first class registered or certified
mail, postage prepaid, return receipt requested, or sent by prepaid overnight
delivery service, or sent by facsimile, to the parties at the addresses and
facsimile numbers set forth opposite their name on the signature page hereof (or
at such other addresses and facsimile numbers as shall be specified by the
parties by like notice).
SECTION 4.8. ENTIRE AGREEMENT. This Agreement, together with the
Warrant Purchase Agreement, constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral, between the
parties and their affiliates with respect to the subject matter hereof.
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SECTION 4.9. BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns. Buyer or any other
Securityholder may assign all or any part its rights and obligations hereunder
to any person. Any subsidiary of Buyer which holds Registrable Shares as a
Securityholder shall be entitled to exercise the rights, and in doing so shall
be subject to obligations of, Buyer hereunder, and Buyer holds as trustee for
such subsidiary the benefits of this Agreement.
SECTION 4.10. DESCRIPTIVE HEADLINES. The descriptive headings of the
several Sections and clauses of this Agreement are inserted for reference only
and shall not limit or otherwise affect the meaning hereof.
SECTION 4.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 4.12. CONSENT TO EXCLUSIVE JURISDICTION. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST THE COMPANY ARISING OUT OF OR RELATING HERETO OR ANY
OTHER TRANSACTION DOCUMENT, OR ANY OF THE OBLIGATIONS, SHALL BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, THE COMPANY, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN
ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO THE COMPANY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 4.7; (d) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (c)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; AND (e) AGREES BUYER RETAINS THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST THE
COMPANY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 4.13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER TRANSACTION
DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER HEREOF.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
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DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP
THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND
THE WARRANT PURCHASE AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS
WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 4.13 AND EXECUTED BY EACH OF THE PARTIES
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS HEREUNDER IN
THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
SECTION 4.14. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when executed and delivered is an original
but all of which taken together constitute one and the same instrument and any
party may execute this Agreement by signing any counterpart of it.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK--SIGNATURE PAGES FOLLOW
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IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
THE COMPANY
PACIFIC ENERGY RESOURCES LTD.
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
ADDRESS FOR NOTICE PURPOSES:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, President
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
SIGNATURE PAGE - REGISTRATION RIGHTS AGREEMENT
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IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
BUYER:
▇▇▇▇▇▇▇ SACHS & CO.
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
ADDRESS FOR NOTICE PURPOSES:
c/o ▇. ▇▇▇▇ & Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ E&P Capital
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
SIGNATURE PAGE - REGISTRATION RIGHTS AGREEMENT
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IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed by their duly authorized representatives, all as
of the day and year first above written.
BUYER:
SPCP GROUP, L.L.C.
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
Title: AUTHORIZED SIGNATORY
----------------------
ADDRESS FOR NOTICE PURPOSES:
do Silver Point Capital
Two Greenwich Plaza
Greenwich, Connecticut 06830
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SPCP GROUP III LLC
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
Title: AUTHORIZED SIGNATORY
----------------------
SIGNATURE PAGE - REGISTRATION RIGHTS AGREEMENT
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