Exhibit 4.2
REGISTRATION RIGHTS
AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT
(this “Agreement”) is entered into as of the 13th day
October, 2005, by and among: Energy XXI Acquisition Corporation
(Bermuda) Limited, a company organized under the laws of
Bermuda (the “Company”); and the undersigned parties
listed under Investors on the signature page hereto (each, an
“Investor” and collectively, the
“Investors”).
WHEREAS, the Investors currently
hold all of the issued and outstanding securities of the
Company;
WHEREAS, the Investors and the
Company desire to enter into this Agreement to provide the
Investors with certain rights relating to the registration of
Common Shares held by them;
NOW, THEREFORE, in consideration of
the mutual covenants and agreements set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS . The
following capitalized terms used herein have the following
meanings:
“ Agreement ”
means this Agreement, as amended, restated, supplemented, or
otherwise modified from time to time.
“ Commission ”
means the Securities and Exchange Commission, or any other federal
agency then administering the Securities Act or the Exchange
Act.
“ Common Shares ”
means the common shares par value $0.001 per share, of the
Company.
“ Company ” is
defined in the preamble to this Agreement.
“ Demand Registration
” is defined in Section 2.1.1.
“ Demanding Holder
” is defined in Section 2.1.1.
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder, all
as the same shall be in effect at the time.
“ Form S-3 ” is
defined in Section 2.3.
“ Indemnified Party
” is defined in Section 4.3.
“ Indemnifying Party
” is defined in Section 4.3.
“ Investor ” is
defined in the preamble to this Agreement.
“ Investor Indemnified
Party ” is defined in Section 4.1.
“ Maximum Number of
Shares ” is defined in Section 2.1.4.
“ Notices ” is
defined in Section 6.3.
“ Piggy-Back
Registration ” is defined in
Section 2.2.1.
“ Register ,”
“ registered ” and “ registration
” mean a registration effected by preparing and filing a
registration statement or similar document in compliance with the
requirements of the Securities Act, and the applicable rules and
regulations promulgated thereunder, and such registration statement
becoming effective.
“ Registrable
Securities ” mean all of the Common Shares owned or held
by Investors. Registrable Securities include any warrants, shares
of capital stock or other securities of the Company issued as a
dividend or other distribution with respect to or in exchange for
or in replacement of such Common Shares. As to any particular
Registrable Securities, such securities shall cease to be
Registrable Securities when: (a) a Registration Statement with
respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall have been sold,
transferred, disposed of or exchanged in accordance with such
Registration Statement; (b) such securities shall have been
otherwise transferred, new certificates for them not bearing a
legend restricting further transfer shall have been delivered by
the Company and subsequent public distribution of them shall not
require registration under the Securities Act; (c) such
securities shall have ceased to be outstanding, or (d) the
Securities and Exchange Commission makes a definitive determination
to the Company that the Registrable Securities are salable under
Rule 144(k).
“ Registration
Statement ” means a registration statement filed by the
Company with the Commission in compliance with the Securities Act
and the rules and regulations promulgated thereunder for a public
offering and sale of Common Shares (other than a registration
statement on Form F-4, Form S-4 or Form S-8, or their successors,
or any registration statement covering only securities proposed to
be issued in exchange for securities or assets of another
entity).
“ Release Date ”
means the date on which Common Shares are disbursed from escrow
pursuant to Section 3 of that certain Share Escrow Agreement
dated as of October, 2005 by and among the
parties hereto and Collins Stewart (Channel Islands)
Limited.
“ Securities Act
” means the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder, all as
the same shall be in effect at the time.
“ Underwriter ”
means a securities dealer who purchases any Registrable Securities
as principal in an underwritten offering and not as part of such
dealer’s market-making activities.
2. REGISTRATION RIGHTS.
2.1 Demand Registration
.
2.1.1. Request for
Registration . At any time and from time to time on or after
the Release Date, the holders of a majority-in-interest of the
Registrable Securities held by the Investors or the transferees of
the Investors, may make a written demand for registration under the
Securities Act of all or part of their Registrable Securities (a
“ Demand Registration ”). Any demand for a
Demand Registration shall specify the number of shares of
Registrable Securities proposed to be sold and the intended
method(s) of distribution thereof. The Company will notify all
holders of Registrable Securities of the demand, and each holder of
Registrable Securities who wishes to include all or a portion of
such holder’s Registrable Securities in the Demand
Registration (each such holder including shares of Registrable
Securities in such registration, a “ Demanding Holder
”) shall so notify the Company within fifteen (15) days
after the receipt by the holder of the notice from the Company.
Upon any such request, the Demanding Holders shall be entitled to
have their Registrable Securities included in the Demand
Registration, subject to Section 2.1.4 and the provisos set
forth in Section 3.1.1. The Company shall not be obligated to
effect more than an aggregate of two (2) Demand Registrations
under this Section 2.1.1 in respect of Registrable
Securities.
2.1.2. Effective Registration
. A registration will not count as a Demand Registration until the
Registration Statement filed with the Commission with respect to
such Demand Registration has been declared effective and the
Company has complied with all of its obligations under this
Agreement with respect thereto; provided , however ,
that if, after such Registration Statement has been declared
effective, the offering of Registrable Securities pursuant to a
Demand Registration is interfered with by any stop order or
injunction of the Commission or any other governmental agency or
court, the Registration Statement with respect to such Demand
Registration will be deemed not to have been declared effective,
unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) a
majority-in-interest of the Demanding Holders thereafter elect to
continue the offering; provided , further , that the
Company shall not be obligated to file a second Registration
Statement until a Registration Statement that has been filed is
counted as a Demand Registration or is terminated.
2
2.1.3. Underwritten Offering
. If a majority-in-interest of the Demanding Holders so elect and
such holders so advise the Company as part of their written demand
for a Demand Registration, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the
form of an underwritten offering. In such event, the right of any
holder to include its Registrable Securities in such registration
shall be conditioned upon such holder’s participation in such
underwriting and the inclusion of such holder’s Registrable
Securities in the underwriting to the extent provided herein. All
Demanding Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in
customary form with the Underwriter or Underwriters selected for
such underwriting by a majority-in-interest of the holders
initiating the Demand Registration.
2.1.4. Reduction of Offering
. If the managing Underwriter or Underwriters for a Demand
Registration that is to be an underwritten offering advises the
Company and the Demanding Holders in writing that the dollar amount
or number of shares of Registrable Securities which the Demanding
Holders desire to sell, taken together with all other Common Shares
or other securities which the Company desires to sell and the
Common Shares, if any, as to which registration has been requested
pursuant to written contractual piggy-back registration rights held
by other shareholders of the Company who desire to sell, exceeds
the maximum dollar amount or maximum number of shares that can be
sold in such offering without adversely affecting the proposed
offering price, the timing, the distribution method, or the
probability of success of such offering (such maximum dollar amount
or maximum number of shares, as applicable, the “ Maximum
Number of Shares ”), then the Company shall include in
such registration: (i) first, the Registrable Securities as to
which Demand Registration has been requested by the Demanding
Holders (pro rata in accordance with the number of shares of
Registrable Securities which such Demanding Holder has requested be
included in such registration, regardless of the number of shares
of Registrable Securities held by each Demanding Holder) that can
be sold without exceeding the Maximum Number of Shares;
(ii) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (i), the Common
Shares or other securities that the Company desires to sell that
can be sold without exceeding the Maximum Number of Shares;
(iii) third, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clauses (i) and (ii),
the Common Shares for the account of other persons that the Company
is obligated to register pursuant to written contractual
arrangements with such persons and that can be sold without
exceeding the Maximum Number of Shares; and (v) fourth, to the
extent that the Maximum Number of Shares have not been reached
under the foregoing clauses (i), (ii), and (iii), the Common Shares
that other shareholders desire to sell that can be sold without
exceeding the Maximum Number of Shares.
2.1.5. Withdrawal . If a
majority-in-interest of the Demanding Holders disapprove of the
terms of any underwriting or are not entitled to include all of
their Registrable Securities in any offering, such
majority-in-interest of the Demanding Holders may elect to withdraw
from such offering by giving written notice to the Company and the
Underwriter or Underwriters of their request to withdraw prior to
the effectiveness of the Registration Statement filed with the
Commission with respect to such Demand Registration. If the
majority-in- interest of the Demanding Holders withdraws from a
proposed offering relating to a Demand Registration, then such
registration shall not count as a Demand Registration provided for
in Section 2.1.1.
2.2 Piggy-Back Registration
.
2.2.1. Piggy-Back Rights . If
at any time on or after the Release Date the Company proposes to
file a Registration Statement under the Securities Act with respect
to an offering of equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into,
equity securities, by the Company for its own account or for
shareholders of the Company for their account (or by the Company
and by shareholders of the Company including, without limitation,
pursuant to Section 2.1), other than a Registration Statement
(i) filed in connection with any employee stock option or
other benefit plan, (ii) for an exchange offer or offering of
securities solely to the Company’s existing shareholders,
(iii) for an offering of debt that is convertible into equity
securities of the Company or (iv) for a dividend reinvestment
plan, then the Company shall (x) give written notice of such
proposed filing to the holders of Registrable Securities as soon as
practicable but in no event less than ten (10) days before the
anticipated filing date, which notice shall describe the amount and
type of securities to be included in such offering, the intended
method(s) of distribution, and the name of the proposed managing
Underwriter or Underwriters, if any, of the offering, and
(y) offer to the holders of Registrable Securities in such
notice the opportunity to register the sale of such number of
shares of Registrable Securities as such holders may request in
writing within fifteen (15) days following receipt of such
notice (a “ Piggy-Back Registration ”). The
Company shall cause such Registrable Securities to be included in
such registration and shall use its best efforts to cause
the
3
managing Underwriter or Underwriters of a
proposed underwritten offering to permit the Registrable Securities
requested to be included in a Piggy-Back Registration to be
included on the same terms and conditions as any similar securities
of the Company and to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method(s) of
distribution thereof. All holders of Registrable Securities
proposing to distribute their securities through a Piggy-Back
Registration that involves an Underwriter or Underwriters shall
enter into an underwriting agreement in customary form (with
respect to selling stockholders) with the Underwriter or
Underwriters selected for such Piggy-Back Registration.
2.2.2. Reduction of Offering
. If the managing Underwriter or Underwriters for a Piggy-Back
Registration that is to be an underwritten offering advises the
Company and the holders of Registrable Securities in writing that
the dollar amount or number of Common Shares which the Company
desires to sell, taken together with Common Shares, if any, as to
which registration has been demanded pursuant to written
contractual arrangements with persons other than the holders of
Registrable Securities hereunder, the Registrable Securities as to
which registration has been requested under this Section 2.2,
and the Common Shares, if any, as to which registration has been
requested pursuant to the written contractual piggy-back
registration rights of other shareholders of the Company, exceeds
the Maximum Number of Shares, then the Company shall include in any
such registration:
(i) If the registration is
undertaken for the Company’s account: (A) first, the
Common Shares or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares;
(B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the Common
Shares, if any, including the Registrable Securities, as to which
registration has been requested pursuant to written contractual
piggy-back registration rights of security holders (pro rata in
accordance with the number of Common Shares which each such person
has actually requested to be included in such registration,
regardless of the number of Common Shares with respect to which
such persons have the right to request such inclusion) that can be
sold without exceeding the Maximum Number of Shares; and
(ii) If the registration is a
“demand” registration undertaken at the demand of
persons other than the holders of Registrable Securities pursuant
to written contractual arrangements with such persons,
(A) first, the Common Shares for the account of the demanding
persons that can be sold without exceeding the Maximum Number of
Shares; (B) second, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clause (A), the
Common Shares or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares;
and (C) third, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clauses (A) and (B),
the Registrable Securities as to which registration has been
requested under this Section 2.2 (pro rata in
accordance with the number of shares of Registrable Securities held
by each such holder); and (D) fourth, to the extent that the
Maximum Number of Shares has not been reached under the foregoing
clauses (A), (B) and (C), the Common Shares, if any, as to
which registration has been requested pursuant to written
contractual piggy-back registration rights which other shareholders
desire to sell that can be sold without exceeding the Maximum
Number of Shares.
2.2.3. Withdrawal . Any
holder of Registrable Securities may elect to withdraw such
holder’s request for inclusion of Registrable Securities in
any Piggy-Back Registration by giving written notice to the Company
of such request to withdraw prior to the effectiveness of the
Registration Statement. The Company may also elect to withdraw a
registration statement at any time prior to the effectiveness of
the Registration Statement. Notwithstanding any such withdrawal,
the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back
Registration as provided in Section 3.3.
2.3 Registrations on Form S-3
. The holders of Registrable Securities may at any time and from
time to time, request in writing that the Company register the
resale of any or all of such Registrable Securities on Form S-3 or
any similar short-form registration which may be available at such
time (“ Form S-3 ”); provided ,
however , that the Company shall not be obligated to effect
such request through an underwritten offering. Upon receipt of such
written request, the Company will promptly give written notice of
the proposed registration to all other holders of Registrable
Securities, and, as soon as practicable thereafter, effect the
registration of all or such portion of such holder’s or
holders’ Registrable Securities as are specified in such
request, together with all or such portion of the Registrable
Securities of any other holder or holders joining in such request
as are specified in a written request given within fifteen
(15) days after receipt of such written notice from the
Company; provided , however , that the Company shall
not be obligated to effect any such registration pursuant to this
Section 2.3: (i) if Form S-3 is not available for such
offering; or (ii) if the holders of the Registrable
Securities, together with the holders of any other
4
securities of the Company entitled to inclusion
in such registration, propose to sell Registrable Securities and
such other securities (if any) at any aggregate price to the public
of less than $500,000. Registrations effected pursuant to this
Section 2.3 shall not be counted as Demand Registrations
effected pursuant to Section 2.1.
3. REGISTRATION
PROCEDURES.
3.1 Filings :
Information . Whenever the Company is required to effect the
registration of any Registrable Securities pursuant to
Section 2, the Company shall use its best efforts to effect
the registration and sale of such Registrable Securities in
accordance with the intended method(s) of distribution thereof as
expeditiously as practicable, and in connection with any such
request:
3.1.1. Filing Registration
Statement . The Company shall, as expeditiously as possible and
in any event within sixty (60) days after receipt of a request
for a Demand Registration pursuant to Section 2.1, prepare and
file with the Commission a Registration Statement on any form for
which the Company then qualifies or which counsel for the Company
shall deem appropriate and which form shall be available for the
sale of all Registrable Securities to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and
shall use its best efforts to cause such Registration Statement to
become and remain effective for the period required by
Section 3.1.3; provided , however , that the
Company shall have the right to defer any Demand Registration for
up to thirty (30) days, and any Piggy-Back Registration for
such period as may be applicable to deferment of any demand
registration to which such Piggy-Back Registration relates, in each
case if the Company shall furnish to the holders a certificate
signed by the Chief Executive Officer of the Company stating that,
in the good faith judgment of the Board of Directors of the
Company, it would be materially detrimental to the Company and its
shareholders for such Registration Statement to be effected at such
time; provided further, however, that the Company shall not
have the right to exercise the right set forth in the immediately
preceding proviso more than once in any 365-day period in respect
of a Demand Registration hereunder.
3.1.2. Copies . The Company
shall, prior to filing a Registration Statement or prospectus, or
any amendment or supplement thereto, furnish without charge to the
holders of Registrable Securities included in such registration,
and such holders’ legal counsel, copies of such Registration
Statement as proposed to be filed, each amendment and su
