SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT
Exhibit 99.1
SECURITIES
PURCHASE AND
REGISTRATION
RIGHTS AGREEMENT
This
SECURITIES PURCHASE AND
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is
entered into as of the 5th day
of November, 2009, by and among Magnum Hunter Resources Corporation, a Delaware
corporation (the “Company”), and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively, the “Purchasers”).
WHEREAS, the Company filed a
universal shelf registration statement on Form S-3 (the “Existing Registration
Statement”) under the Securities Act that was declared effective by the
Commission on October 15, 2009;
WHEREAS, the Company is
issuing and selling to each Purchaser, and each Purchaser is purchasing from the
Company, Common Stock and Warrants pursuant to a “take-down” under the Company’s
Existing Registration Statement; and
WHEREAS, the Company is
willing to grant, and the Purchasers desire that the Company grant, registration
rights with respect to the Registrable Securities for which the Warrants are
exercisable;
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” is defined
in the preamble to this Agreement.
“Closing” is defined
in Section 2.3.
“Commission” means the
Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.
“Common Stock” means
the common stock, par value $.01 per share, of the Company.
“Company” is defined
in the preamble to this Agreement.
“Effectiveness Period”
is defined in Section 3.1.
“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.
“Existing Registration
Statement” is defined in the preamble to this Agreement.
“Filing Date” means
the 90th calendar day after the Closing.
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“Indemnified Party” is
defined in Section 5.3.
“Indemnifying Party”
is defined in Section 5.3.
“Notices” is defined
in Section 7.2.
“Purchase Price” is
defined in Section 2.2.
“Purchaser” is defined
in the preamble to this Agreement.
“Purchaser Indemnified
Party” is defined in Section 5.1.
“Register,” “registered” and
“registration”
mean a registration with respect to the Registrable Securities 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” means (a) an aggregate of 457,982 shares of Common Stock
underlying the Warrants issued to the Purchasers pursuant to this Agreement and
(b) any Common Stock issued as a dividend or other distribution with respect to,
or in exchange for, or in replacement of the shares of Common Stock referenced
in clause (a) above. As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when (i) such
securities shall have ceased to be outstanding or (ii) the Registrable
Securities are saleable under Rule 144 without volume limitations or time
restrictions.
“Registration
Statement” means a registration statement filed by the Company with the
Commission in compliance with the Securities Act for the resale of the
Registrable Securities underlying the Warrants.
“Rule 144” means Rule
144 promulgated under the Securities Act or any successor rule thereto or any
complementary rule thereto (including, without limitation, Rule
144A).
“Rule 415” means Rule
415 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
rule.
“Rule 424” means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
rule.
“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.
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“Warrants” means the
three-year warrants issued to any of the Purchasers to purchase Common Stock of
the Company that will (i) be exercisable at any time after the Registration
Statement is effective for 0.20 of a share of Common Stock for each share of
Common Stock purchased at the Closing by the applicable Purchaser; (ii) have a
cash exercise price of $2.50 per share of Common Stock; and (iii) upon notice to
the holder of the Warrant, be redeemable by the Company for $0.01 per share of
Common Stock underlying the Warrant if (A) the Registration Statement is
effective and (B) the average trading price of the Common Stock as traded or
quoted on the NYSE Amex equals or exceeds $3.75 per share for at least 20 days
in any period of 30 consecutive days.
2.
PURCHASE AND SALE OF COMMON STOCK AND WARRANTS.
2.1 Purchase and
Sale.
At the
Closing the Company will issue and sell to each Purchaser, and each Purchaser
will severally and not jointly purchase from the Company, the number of shares
of Common Stock and Warrants set forth below such Purchaser’s name on the
signature pages to this Agreement. The aggregate purchase price of
the shares of Common Stock and Warrants sold to all of the Purchasers shall not
exceed $5,000,000.
2.2 Purchase
Price.
The
purchase price for one share of Common Stock and 0.20 of a Warrant shall equal
90% of the volume weighted average price of the Common Stock on the NYSE Amex
for the five consecutive trading days ending on the trading day immediately
preceding the Closing Date (the “Purchase Price”);
provided, however, in order to comply with NYSE Amex rules the purchase price
for officers, directors, employees and consultants of the Company will be the
greater of (i) the foregoing purchase price or (ii) the closing price for the
Company’s Common Stock on the trading day immediately preceding the Closing
Date. The Common Stock and Warrants will only be issued and sold at
the Closing in integral multiples of five to avoid the issuance of Warrants
exercisable for fractional shares of Common Stock. At the Closing
each Purchaser will pay the Purchase Price for the number of shares of Common
Stock and Warrants such Purchaser is acquiring by wire transfer of immediately
available funds to the Company pursuant to the following wire transfer
instructions:
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Account
Name:
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Bank:
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Amegy
Bank
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Account
Number:
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0003931617
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ABA:
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000000000
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The
Company will deliver to each Purchaser at the Closing (i) certificates
evidencing the shares of Common Stock purchased by such Purchaser and (ii) 0.20
Warrants for each share of Common Stock so purchased.
2.3 Closing.
The
closing (the “Closing”) will occur
on November 5, 2009.
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2.4 Representations and
Warranties of the Company.
Except as
otherwise set forth in its filings with the Commission under the Exchange Act,
the Company represents to the Purchasers as follows:
2.4.1 The
Company is duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite power and authority to own its
properties and conduct its business as presently conducted.
2.4.2 This
Agreement (i) has been duly authorized, executed and delivered by the Company;
(ii) does not conflict with, or constitute a default or violation under, the
Certificate of Incorporation or Bylaws of the Company; (iii) does not conflict
with, or constitute a default or violation under, any material agreement to
which the Company is a party or any judgment, order or decree to which the
Company is subject; and (iv) constitutes a valid and binding agreement of the
Company enforceable against it in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
2.4.3 The
issuance and sale of the shares of Common Stock and Warrants have been duly
authorized by all corporate action required on the part of the Company, and the
Company has reserved for issuance at least that number of shares of Common Stock
for which the Warrants are exercisable.
2.5 Representations and
Warranties of the Purchasers.
Each
Purchaser, severally and not jointly, represents and warrants to the Company as
follows:
2.5.1 Such
Purchaser (i) if an entity, is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation and has the
requisite power and authority to own its properties and conduct its business as
presently conducted and (ii) if a natural person has the capacity to enter into
this Agreement.
2.5.2 This
Agreement (i) has been duly authorized (if applicable), executed and delivered
by such Purchaser; (ii) if the Purchaser is an entity, does not conflict with or
constitute a default or violation under, the certificate of incorporation,
certificate of formation, partnership agreement, limited liability company
agreement or other charter documents to which such Purchaser is subject; (iii)
does not conflict with any material agreement to which such Purchaser is a party
or any judgment, order or decree to which such Purchaser is subject; and
(iv) constitutes a valid and binding agreement of such Purchaser
enforceable against such Purchaser in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
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2.6 Reservation of
Shares.
The
Company covenants to the Purchasers that, for so long as any Warrants remain
outstanding, the Company will reserve for issuance at least that number of
shares of Common Stock for which the then outstanding Warrants are
exercisable.
3.
REGISTRATION RIGHTS.
3.1 Mandatory
Registration.
3.1.1 On
or prior to the Filing Date, the Company shall prepare and file with the
Commission the Registration Statement covering the resale of all of the
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415, or if Rule 415 is not available for offers or sales of the
Registrable Securities, for such other means of distribution of Registrable
Securities as the Purchasers may specify. The Registration Statement
required hereunder shall be on Form S–3 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form S–3, in which
case the Registration Statement shall be on another appropriate form in
accordance herewith). The Company shall use its reasonable best
efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof (but in any
event, within 180 days after the Filing Date), and shall use its reasonable best
efforts to keep such Registration Statement continuously effective under the
Securities Act (including the filing of any necessary amendments, post-effective
amendments and supplements) until such date that is the later of: (i) when there
are no longer any Registrable Securities outstanding or (ii) the date on which
all Registrable Securities are saleable under Rule 144 without volume
limitations or time restrictions (the “Effectiveness
Period”).
3.1.2 The
Company shall promptly notify the Purchasers by written notification of the
effectiveness of the Registration Statement.
4.
REGISTRATION PROCEDURES.
4.1 Filings;
Information. Whenever the Company is required to effect the
registration of any Registrable Securities pursuant to Section 3, 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:
4.1.1 Filing Registration
Statement. The Company shall prepare and file with the
Commission a Registration Statement by the Filing Date; provided, however, that the
Company shall have the right to defer seeking the effectiveness of, or to
suspend sales of Registrable Shares under, the Registration Statement for up to
30 days if the Company shall furnish to the holders of Registrable Securities 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 (in the
exercise of its fiduciary duties to the Company and its stockholders), it would
be materially detrimental to the Company and its stockholders for such
Registration Statement to be effected at such time, or for sales of Registrable
Securities to be made thereunder, because such action would (a) materially
interfere with a significant acquisition, corporate reorganization, or other
similar transaction involving the Company, (b) require premature disclosure of
material information that the Company has a bona fide business purpose for
preserving as confidential, or (c) render the Company unable to comply with
requirements under the Securities Act or the Exchange Act; provided further, however, that the
Company shall not register any securities for its own account or that of any
other stockholder during such 30 day period other than a registration relating
to the sale of securities to employees of the Company or a subsidiary pursuant
to a stock option, stock purchase, or similar plan.
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4.1.2 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 the
Registrable Securities or their legal counsel, copies of such Registration
Statement as proposed to be filed, each amendment and supplement to such
Registration Statement (in each case including all exhibits thereto and
documents incorporated by reference therein), the prospectus included in such
Registration Statement (including each preliminary prospectus), and such other
documents as the holders of the Registrable Securities or their legal counsel
may request in order to facilitate the disposition of the Registrable Securities
owned by such holders.
4.1.3 Amendments and
Supplements. The Company shall prepare and file with the
Commission such amendments, including post-effective amendments, and supplements
to such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective and in
compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such Registration Statement (which period shall not exceed the sum of 180
days plus any period during which any such disposition is interfered with by any
stop order or injunction of the Commission or any governmental agency or court)
or such securities have been withdrawn.
4.1.4 Notification. After
the filing of a Registration Statement, the Company shall promptly notify the
holders of Registrable Securities included in such Registration Statement of
such filing, and shall further notify such holders promptly of the occurrence of
any of the following: (i) when such Registration Statement becomes effective;
(ii) when any post-effective amendment to such Registration Statement becomes
effective; (iii) the issuance or threatened issuance by the Commission of any
stop order (and the Company shall take all actions required to prevent the entry
of such stop order or to remove it if entered); and (iv) any request by the
Commission for any amendment or supplement to such Registration Statement or any
prospectus relating thereto or for additional information or of the occurrence
of an event requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of the securities
covered by such Registration Statement, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and promptly make available to the holders of Registrable Securities included in
such Registration Statement any such supplement or amendment; except that before
filing a Registration Statement or prospectus or any amendment or supplement
thereto, the Company shall furnish to such holders and their legal counsel,
copies of all such documents proposed to be filed sufficiently in advance of
filing to provide such holders and their legal counsel with a reasonable
opportunity to review such documents and comment thereon, and the Company shall
not file any Registration Statement or prospectus or amendment or supplement
thereto to which such holders and their legal counsel shall object.
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4.1.5 State Securities Laws
Compliance. The Company shall use its reasonable best efforts
to (i) register or qualify the Registrable Securities covered by the
Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action necessary to cause such
Registrable Securities covered by the Registration Statement to be registered
with or approved by such other governmental authorities as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the holders of
Registrable Securities included in such Registration Statement to consummate the
disposition of such Registrable Securities in such jurisdictions; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 4.1.5 or subject itself to taxation in any such
jurisdiction.
4.1.6 Agreements for
Disposition. The Company shall enter into customary agreements
(including, if applicable, an underwriting agreement in customary form) and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities. The representations,
warranties and covenants of the Company in any underwriting agreement which are
made to or for the benefit of any Underwriters, to the extent applicable, shall
also be made to and for the benefit of the holders of Registrable Securities
included in the Registration Statement. No holder of Registrable
Securities included in such Registration Statement shall be required to make any
representations or warranties in the underwriting agreement except, if
applicable, with respect to such holder’s organization, good standing,
authority, title to Registrable Securities, lack of conflict of such sale with
such holder’s material agreements and organizational documents, and with respect
to written information relating to such holder that such holder has furnished in
writing expressly for inclusion in such Registration
Statement. Holders of Registrable Securities shall agree to such
covenants and indemnification and contribution obligations for selling
stockholders as are customarily contained in agreements of that
type. Further, such holders shall cooperate fully in the preparation
of the Registration Statement and other documents relating to any offering
including their Registrable Securities. Each holder shall also
furnish to the Company such information regarding itself, the Registrable
Securities held by such holder and the intended method of disposition of such
securities as shall be reasonably required to effect the registration of the
Registrable Securities.
4.1.7 Cooperation. The
principal executive officer of the Company, the principal financial officer of
the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully in
any offering of Registrable Securities hereunder, which cooperation shall
include, without limitation, the preparation of the Registration Statement with
respect to such offering and all other offering materials and related documents,
and participation in meetings with Underwriters, attorneys, accountants and
potential investors.
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4.1.8 Records. The
Company shall make available for inspection by the holders of Registrable
Securities included in the Registration Statement, any Underwriter participating
in any disposition pursuant to such registration statement and any attorney,
accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information requested by any of them in connection with such
Registration Statement.
4.1.9 Opinions and Comfort
Letters. The Company shall, upon written request, furnish to
each holder of Registrable Securities included in any Registration Statement a
signed counterpart, addressed to such holder, of (i) any opinion of counsel to
the Company delivered to any Underwriter and (ii) any comfort letter from the
Company’s independent public accountants delivered to any
Underwriter. In the event no legal opinion is delivered to any
Underwriter, the Company shall furnish to each holder of Registrable Securities
included in such Registration Statement, at any time that such holder elects to
use a prospectus, an opinion of counsel to the Company to the effect that the
Registration Statement containing such prospectus has been declared effective
and that no stop order is in effect.
4.1.10 Earnings
Statement. The Company shall comply with all applicable rules
and regulations of the Commission and the Securities Act, and make available to
its stockholders, as soon as practicable, an earnings statement covering a
period of 12 months, beginning within three months after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
4.1.11 Listing. The
Company shall use its best efforts to cause all Registrable Securities included
in any registration to be listed on such exchanges or otherwise designated for
trading in the same manner as similar securities issued by the Company are then
listed or designated or, if no such similar securities are then listed or
designated, in a manner satisfactory to the holders of a majority of the
Registrable Securities included in such registration.
4.2 Obligation to Suspend
Distribution. Upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 4.1.4(iv), or upon
any suspension by the Company of sales under the Registration Statement pursuant
to Section 4.1.1 hereof, each holder of Registrable Securities included in any
registration shall immediately discontinue disposition of such Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such holder receives the supplemented or amended prospectus
contemplated by Section 4.1.4(iv) or the Company’s suspension of sales under the
Registration Statement is removed, as applicable, and, if so directed by the
Company, each such holder will deliver to the Company all copies, other than
permanent file copies then in such holder’s possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice.
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4.3 Registration
Expenses. The Company shall bear all costs and expenses
incurred in connection with any registration pursuant to Section 3.1, and all
expenses incurred in performing or complying with its other obligations under
this Agreement, whether or not the Registration Statement becomes effective or
whether any or all holders of Registrable Securities withdraw from any
Registration Statement, including, without limitation: (i) all registration and
filing fees; (ii) fees and expenses of compliance with securities or “blue sky”
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registrable Securities); (iii) printing expenses;
(iv) the Company’s internal expenses (including, without limitation, all
salaries and expenses of its officers and employees); (v) the fees and expenses
incurred in connection with the listing of the Registrable Securities as
required by Section 4.1.11; (vi) Financial Industry Regulatory Authority fees;
(vii) fees and disbursements of counsel for the Company and fees and expenses
for independent certified public accountants retained by the Company (including
the expenses or costs associated with the delivery of any opinions or comfort
letters requested pursuant to Section 4.1.9); and (viii) the fees and expenses
of any special experts retained by the Company in connection with such
registration. The Company shall have no obligation to pay any
underwriting discounts or selling commissions attributable to the Registrable
Securities being sold by the holders thereof, which underwriting discounts or
selling commissions shall be borne by such holders.
4.4 Information. The
holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any, in
connection with the preparation of the Registration Statement, including
amendments and supplements thereto, in order to effect the registration of any
Registrable Securities under the Securities Act pursuant to Section 3 and in
connection with the Company’s obligation to comply with federal and applicable
state securities laws.
4.5 Holder
Obligations. No holder of Registrable Securities may
participate in any underwritten offering pursuant to this Section 4 unless such
holder (i) agrees to sell only such holder’s Registrable Securities on the basis
reasonably provided in any underwriting agreement, and (ii) completes, executes
and delivers any and all questionnaires, powers of attorney, custody agreements,
indemnities, underwriting agreements and other documents reasonably required by
or under the terms of any underwriting agreement or as reasonably requested by
the Company.
5.
INDEMNIFICATION AND
CONTRIBUTION.
5.1 Indemnification by the
Company. The Company agrees to indemnify and hold harmless
Purchasers and each other holder of Registrable Securities, and each of their
respective officers, employees, affiliates, directors, partners, members,
attorneys and agents, and each Person, if any, who controls a Purchaser and each
other holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) of Registrable Securities (each, a “Purchaser Indemnified
Party”), from and against any expenses, losses, judgments, claims,
damages or liabilities, whether joint or several, arising out of or based upon
any untrue statement (or allegedly untrue statement) of a material fact
contained in the Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained in the Registration Statement,
or any amendment or supplement to such Registration Statement, or arising out of
or based upon any omission (or alleged omission) to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law, or any rule or
regulation promulgated under state securities laws. The Company shall
promptly reimburse the Purchaser Indemnified Party for any legal and any other
expenses reasonably incurred by such Purchaser Indemnified Party in connection
with investigating and defending any such expense, loss, judgment, claim,
damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such expense,
loss, claim, damage or liability (i) arises out of or is based upon any untrue
statement or allegedly untrue statement or omission or alleged omission made in
such Registration Statement, preliminary prospectus, final prospectus, or
summary prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein, or (ii) is due to the failure of any
Purchaser to deliver a prospectus supplement correcting a material misstatement
or omission after having been furnished with such supplement by the Company with
the express understanding that such information may need to be updated, revised
or corrected. The Company also shall indemnify any Underwriter of the
Registrable Securities, their officers, employees, affiliates, directors,
partners, members and agents and each person who controls such Underwriter on
substantially the same basis as that of the indemnification provided above in
this Section 5.1.
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5.2 Indemnification by Holders
of Registrable Securities. Each selling holder of Registrable
Securities will, in the event that any registration is being effected under the
Securities Act pursuant to this Agreement of any Registrable Securities held by
such selling holder, indemnify and hold harmless the Company, each of its
directors and officers and each Underwriter (if any), and each other Person, if
any, who controls another selling holder or such Underwriter or the Company
within the meaning of the Securities Act or Section 20 of the Exchange Act,
against any losses, claims, judgments, damages or liabilities, severally and not
jointly, insofar as such losses, claims, judgments, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or allegedly untrue statement of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or the alleged omission to state a material fact required to be stated
therein or necessary to make the statement therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information specifically furnished in writing to the Company by such selling
holder expressly for use therein, and shall reimburse the Company, its directors
and officers, and each other selling holder or such controlling person for any
legal or other expenses reasonably incurred by any of them in connection with
investigation or defending any such loss, claim, damage, liability or
action. Each selling holder’s indemnification obligations hereunder
shall be several and not joint and shall be limited to the amount of any net
proceeds actually received by such selling holder in connection with the sale of
the Registrable Securities by such selling holder pursuant to the Registration
Statement containing such untrue statement.
5.3 Conduct of Indemnification
Proceedings. Promptly after receipt by any person of any
notice of any loss, claim, damage or liability or any action in respect of which
indemnity may be sought pursuant to Section 5.1 or 5.2, such person (the “Indemnified Party”)
shall, if a claim in respect thereof is to be made against any other person for
indemnification hereunder, notify such other person (the “Indemnifying Party”)
in writing of the loss, claim, judgment, damage, liability or action; provided,
however, that the failure by the Indemnified Party to notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability which the
Indemnifying Party may have to such Indemnified Party hereunder, except and
solely to the extent the Indemnifying Party is actually prejudiced by such
failure. If the Indemnified Party is seeking indemnification with
respect to any claim or action brought against the Indemnified Party, then the
Indemnifying Party shall be entitled to participate in such claim or action,
and, to the extent that it wishes, jointly with all other Indemnifying Parties,
to assume control of the defense thereof with counsel selected by the
Indemnifying Party and reasonably satisfactory to the Indemnified
Party. After notice from the Indemnifying Party to the Indemnified
Party of its election to assume control of the defense of such claim or action,
the Indemnifying Party shall not be liable to the Indemnified Party for any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that in any action in which both the
Indemnified Party and the Indemnifying Party are named as defendants, the
Indemnified Party shall have the right to employ separate counsel (but no more
than one such separate counsel for all Indemnified Parties) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses of
such counsel to be paid by such Indemnifying Party if, based upon the opinion of
counsel to such Indemnified Party, representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all
liability arising out of such claim or proceeding.
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5.4 Contribution.
5.4.1 If
the indemnification provided for in the foregoing Sections 5.1, 5.2 and 5.3 is
unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative
fault of the Indemnified Parties and the Indemnifying Parties in connection with
the actions or omissions which resulted in such loss, claim, damage, liability
or action, as well as any other relevant equitable
considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
5.4.2 The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding Section
5.4.1. The amount paid or payable by an Indemnified Party as a result
of any loss, claim, damage, liability or action referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 5.4, no holder
of Registrable Securities shall be required to contribute any amount in excess
of the dollar amount of the net proceeds (after payment of any underwriting
fees, discounts, commissions or taxes) actually received by such holder from the
sale of Registrable Securities which gave rise to such contribution
obligation. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
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6.
REPORTS UNDER SECURITIES ACT AND EXCHANGE
ACT. The Company covenants that it shall file any reports required to
be filed by it under the Securities Act and the Exchange Act and shall take such
further action as the holders of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, as
such rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission. Without limiting the foregoing,
the Company shall do each of the following:
(a) make
and keep available adequate current public information, as those terms are
understood and defined in Rule 144, at all times after the effective date of the
Registration Statement filed by the Company;
(b) use
commercially reasonable efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act (at any time after the Company has become subject to such
reporting requirements); and
(c) furnish
to any Purchaser or holder of Registrable Securities, so long as the Purchaser
or such holder owns any Registrable Securities, forthwith upon request such
information as may be reasonably requested and not otherwise publicly available
in availing any Purchaser or such holder of any rule or regulation of the
Commission that permits the selling of any such securities without registration
(at any time after the Company has become subject to the reporting requirements
under the Exchange Act) or pursuant to Form S 3 (at any time after the Company
so qualifies to use such form).
7.
MISCELLANEOUS.
7.1 Assignment; No Third Party
Beneficiaries. This Agreement and the rights, duties and
obligations of the Company hereunder may not be assigned or delegated by the
Company in whole or in part. After the Closing this Agreement and the
rights, duties and obligations of the holders of Registrable Securities
hereunder may be freely assigned or delegated by such holder of Registrable
Securities in conjunction with and to the extent of any transfer of Registrable
Securities by any such holder. This Agreement and the provisions
hereof shall be binding upon and shall inure to the benefit of each of the
parties and their respective successors and the permitted assigns of the
Purchasers or holders of Registrable Securities or of any assignee of the
Purchaser or holder of Registrable Securities. This Agreement is not
intended to confer any rights or benefits on any Persons that are not party
hereto other than as expressly set forth in Article 5 and this Section
7.1.
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7.2 Notices. All
notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”) required or
permitted to be given hereunder or which are given with respect to this
Agreement shall be deemed sufficient if hand delivered, sent by recognized
courier service with confirmation of receipt, transmitted by facsimile with
confirmation of receipt, or sent by registered or certified mail with postage
prepaid and return receipt requested and if addressed:
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(i)
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if
to the Company, to
Magnum
Hunter Resources Corporation
000
Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Facsimile:
832/369-6992
Attention:
Xxxxxx
X. Xxxxxx
Executive Vice President
and
Chief Financial Officer
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(ii)
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if
to the Purchasers, to the addresses set forth below their respective
signatures
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or to
such other address as any party may advise the other parties in writing in
accordance with this Section 7.2.
7.3 Severability. This
Agreement shall be deemed severable, and the invalidity or unenforceability of
any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties
hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be
possible and be valid and enforceable.
7.4 Counterparts; Facsimile
Signatures. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument. Facsimile
signatures shall be deemed to be original signatures for all purposes of this
Agreement.
7.5 Entire
Agreement. This Agreement (including all agreements entered
into pursuant hereto and all certificates and instruments delivered pursuant
hereto and thereto) constitutes the entire agreement of the parties with respect
to the subject matter hereof and supersedes all prior and contemporaneous
agreements, representations, understandings, negotiations and discussions
between the parties, whether oral or written.
7.6 Modifications and
Amendments. No amendment, modification or termination of this
Agreement shall be binding upon any party unless executed in writing by such
party.
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7.7 Titles and
Headings. Titles and headings of sections of this Agreement
are for convenience only and shall not affect the construction of any provision
of this Agreement.
7.8 Amendments and
Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance, and either retroactively or prospectively) only with the
written consent of the Company and the holders of a majority of the Registrable
Securities then outstanding; provided, however, that any provision hereof may be
waived by any waiving party on such party’s own behalf, without the consent of
any other party. Notwithstanding the foregoing, this Agreement may
not be amended or terminated and the observance of any term hereof may not be
waived with respect to any Purchaser or holder of Registrable Securities without
the written consent of such Purchaser or holder, unless such amendment,
termination, or waiver applies to all Purchasers or holders of Registrable
Securities in the same fashion. The Company shall give prompt notice
of any amendment or termination hereof or waiver hereunder to any party hereto
that did not consent in writing to such amendment, termination, or
waiver. Any amendment, termination, or waiver effected in accordance
with this Section 7.8 shall be binding on all parties hereto, regardless of
whether any such party has consented thereto. No waivers of or
exceptions to any term, condition, or provision of this Agreement, in any one or
more instances, shall be deemed to be or construed as a further or continuing
waiver of any such term, condition, or provision.
7.9 Remedies
Cumulative. In the event that the Company fails to observe or
perform any covenant or agreement to be observed or performed under this
Agreement, the Purchaser or any other holder of Registrable Securities may
proceed to protect and enforce its rights by suit in equity or action at law,
whether for specific performance of any term contained in this Agreement or for
an injunction against the breach of any such term or in aid of the exercise of
any power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to
post a bond. None of the rights, powers or remedies conferred under
this Agreement shall be mutually exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred by this Agreement or now or hereafter available at law, in equity, by
statute or otherwise.
7.10 Governing
Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Texas without regard to the
conflict of laws principles thereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed and delivered by their duly
authorized representatives as of the date first written above.
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COMPANY:
MAGNUM
HUNTER RESOURCES CORPORATION
By:
Name:
Title:
PURCHASERS:
The
Purchasers executing the Signature Page in the form attached hereto as
Annex A
and delivering the same to the Company or its agents shall be deemed to
have executed this Agreement and agreed to the terms
hereof.
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Annex A
Purchaser
Counterpart Signature Page
The
undersigned, desiring to enter into this Securities Purchase and Registration
Rights Agreement, dated as of November 5, 2009 (the “Agreement”), between
the undersigned, Magnum Hunter Resources Corporation, a Delaware corporation
(the “Company”), and the
other parties thereto, in or substantially in the form furnished to the
undersigned agrees to join the Agreement as a party thereto, with all the rights
and privileges appertaining thereto, and to be bound in all respects by the
terms and conditions thereof.
IN WITNESS WHEREOF, the
undersigned has executed the Agreement as of November 5, 2009.
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Name
and Address, Fax No. and Social Security No. /EIN of
Purchaser:
____________________________________________
____________________________________________
____________________________________________
Fax
No.:
Soc.
Sec. No./EIN:
If
a partnership, corporation, trust or other business entity:
By:
Name:
Title:
If
an individual:
_____________________________________________ Signature
Shares
of Common Stock to be purchased:
_____________________________________________
Warrants:
____________________________________
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