EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of the 15th day of March, 2002, by and among Magnum Hunter
Resources, Inc., a Nevada corporation (the "COMPANY"), Pintail Energy, Inc., a
Delaware corporation ("MERGER SUB"), and each of the parties listed as Owners on
Exhibit A hereto (collectively, the "OWNERS" and, individually, an "OWNER").
Certain terms used herein are defined in Section 1 of this Agreement.
Background. The Company, Prize Energy Corp., a Delaware corporation
("PRIZE"), and Merger Sub, have entered into a transaction, which was
consummated on the date hereof, in which Prize was merged with and into Merger
Sub and became a wholly-owned subsidiary of the Company and the stockholders of
Prize received a combination of cash and shares of capital stock in the Company
in exchange for their shares of capital stock in Prize (the "MERGER"). Prize and
the Owners are parties to an Amended and Restated Registration Rights Agreement
dated February 8, 2000 (the "PRIOR PRIZE AGREEMENT"). Pursuant to the Prior
Prize Agreement, the Owners had the right to trigger a request for a shelf
registration (as defined in the Prior Prize Agreement). The parties hereto
desire to enter into this Agreement in order to terminate and replace the Prior
Prize Agreement as to the Owners and to set forth the rights of the parties
hereto with respect to the registration of shares of capital stock of the
Company. The Prior Prize Agreement is hereby terminated and canceled as to the
Owners, effective on the date hereof, and shall have no further force or effect.
In consideration of the Merger and the mutual covenants and agreements
herein set forth, the parties to this Agreement hereby agree, subject to the
terms and conditions hereinafter set forth, as follows:
1. Definitions. As used herein, unless the context otherwise requires,
the following terms shall have the following respective meanings:
Commission: The U.S. Securities and Exchange Commission or any other
governmental authority at the time administering the Securities Act or the
Exchange Act.
Company Public Sale: Any public offering by the Company made pursuant
to a registration statement of the Company filed with the Commission under the
Securities Act of its own common stock for its own account, except (a) a
registration pursuant to the Shelf Registration under Section 2.1 below, (b) a
registration pursuant to a Registration Statement on Form S-4 or S-8 or any
successor form to such Forms, (c) a registration of securities solely relating
to an offering and sale to employees and/or directors of the Company pursuant to
any employee stock plan or other employee benefit plan arrangement, (d) a
registration of securities issued solely in an acquisition or business
combination, or (e) a universal shelf registration statement to the extent sales
of securities thereunder are not made in an underwritten offering.
Exchange Act: The U.S. Securities Exchange Act of 1934, as amended, or
any similar or successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Exchange Act shall
include a reference to the comparable section, if any, of any such similar or
successor federal statute.
Majority Owners: At any time, the owner or owners of more than 50% of
all Registrable Securities then outstanding.
Person: A corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a trust or estate, an
unincorporated organization, or any other entity or organization, including a
government or any department or agency or political subdivision thereof.
Registrable Securities: Any of the capital stock of the Company owned
by an Owner, including all capital stock of the Company issued upon exercise of
options or warrants held by an Owner, and any securities issued or issuable with
respect to any such capital stock by way of distribution or in connection with
any reorganization or other recapitalization, merger, consolidation or
otherwise. As to any particular Registrable Securities, once issued, 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 disposed
of in accordance with such registration statement, (b) such securities shall
have been distributed to the public pursuant to Rules 144, Rule 144A or 145 (or
any successor provision) under the Securities Act, (c) 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 disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, or (d)
such securities shall have ceased to be outstanding.
Registration Expenses: All reasonable expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, all registration, filing and National Association of Securities
Dealers fees, all fees and expenses of complying with applicable laws (including
securities or blue sky laws), all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including, without
limitation, the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, the fees and
expenses of any special experts, including independent petroleum engineers,
retained by the Company in connection with such offering, all travel expenses of
the Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers of the
offered securities, and any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities, but excluding Selling Expenses, if
any; provided, that, in any case where Registration Expenses are not to be borne
by the Company, such expenses shall not include salaries of Company personnel or
general overhead expenses of the Company, auditing fees, premiums or other
expenses relating to liability insurance required by underwriters of the Company
or other expenses for the preparation of financial statements or other data
normally prepared by the Company in the ordinary course of its business or which
the Company would have incurred in any event.
Securities Act: The U.S. Securities Act of 1933, as amended, or any
similar or successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall
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be in effect at the time. References to a particular section of the Securities
Act shall include a reference to the comparable section, if any, of any such
similar or successor federal statute.
Selling Expenses: Underwriting discounts and commissions and stock
transfer taxes relating to securities registered by the Company.
Shelf Registration: As defined in Section 2.1 of this Agreement.
2. Registration under Securities Act, etc.
2.1 Shelf Registration.
(a) Filing. The Company will prepare and file with the Commission, as
soon as possible following the date hereof, a "shelf" registration statement on
an appropriate form pursuant to Rule 415 under the Securities Act (or any
similar rule that may be adopted by the Commission) relating to the offer and
sale of the Registrable Securities by the holders thereof from time to time in
accordance with the methods of distribution elected by such holders and set
forth in such shelf registration statement (the "SHELF REGISTRATION"). The
parties acknowledge that it is their mutual intent to have the Shelf
Registration statement declared effective as soon as reasonably possible
following the consummation of the Merger. The Company will use its reasonable
best efforts to have the Shelf Registration declared effective under the
Securities Act as soon as reasonably practicable following filing thereof (but
not earlier than the Effective Time of the Merger). The Company will pay all
Registration Expenses in connection with the Shelf Registration.
(b) Continued Effectiveness. Subject to Section 2.1(c) below, so long
as permitted by applicable law, the Company shall use its reasonable best
efforts to keep the Shelf Registration continuously effective in order to permit
the prospectus forming a part thereof to be usable by holders of Registrable
Securities until the earlier of the date on which (i) all Registrable Securities
covered by the Shelf Registration have been sold pursuant to the Shelf
Registration or (ii) all restrictive legends have been removed from certificates
representing the Registrable Securities and counsel to the Company, reasonably
acceptable to the Majority Holder, shall have delivered a written opinion, which
opinion shall be satisfactory in form, scope and substance, addressed to each
holder of Registrable Securities affected thereby, to the effect that
registration of the Registrable Securities is (A) no longer required under the
Securities Act and (B) such holder may sell all remaining Registrable Securities
in the open market in the U.S. free from any limitations as to volume or manner
of sale and without being required to file any forms or reports with the
Commission under the Securities Act (the "REGISTRATION PERIOD"). The Company
shall be deemed not to have used its reasonable best efforts to keep the Shelf
Registration effective during the Registration Period if, among other things, it
voluntarily takes any action that would result in holders of Registrable
Securities covered thereby not to be able to offer and sell such Registrable
Securities during the Registration Period, unless such action is required by
applicable law, is pursuant to clause (c) below or is otherwise permitted under
this Agreement, and in such cases, so long as the Company promptly thereafter
complies with the applicable requirements of Section 2.3 hereof. Following the
expiration of the Registration Period, the Company shall have the right
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to terminate the effectiveness of the Shelf Registration.
(c) Suspension of Use of Shelf Registration. The Company may, upon
giving prompt written notice (the "NOTICE") to the holders of Registrable
Securities, suspend the use of the Shelf Registration (a "SHELF SUSPENSION") for
a period not to exceed an aggregate of ten business days in any three month
period for valid business reasons (not including avoidance of the Company's
obligations hereunder), including without limitation the acquisition or
disposition of assets, public filings with the Commission, pending corporate
developments and similar events. The Company shall have no obligation to inform
such holders of the reason for such Shelf Suspension other than to inform such
holders that such action is being taken pursuant to this Section 2.1(c), and,
except as required by law, such holders and their affiliates (as defined in the
Securities Act) shall not make any public disclosure regarding, and shall treat
as confidential, any Shelf Suspension or Notice. In the event of a Shelf
Suspension, such holders agree to suspend use of the prospectus related to the
Shelf Registration in connection with any sale or purchase of or offer to sell
or purchase Registrable Securities upon receipt of the Notice. The Company shall
promptly notify the holders upon the termination of any Shelf Suspension,
promptly amend or supplement the Shelf Registration following the termination of
such Shelf Suspension, if necessary, so it does not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein in order to make the statements therein not misleading, and furnish to
such holders such numbers of copies of the prospectus therein as so amended or
supplemented as such holders may reasonably request. The Company agrees, if
necessary, to supplement or make amendments to the Shelf Registration, if
required by the registration form used by the Company for the Shelf Registration
or by the instructions applicable to such registration form or by the Securities
Act.
(d) Selection of Underwriters. The methods of distribution of
Registrable Securities under the Shelf Registration designated by the Owners may
include one or more underwritten offerings. The underwriter or underwriters
thereof shall be selected by the Majority Owners with the approval of the
Company.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company at any time
prior to June 30, 2004 proposes to register any of its equity securities under
the Securities Act in a Company Public Sale, and such securities are to be
distributed by or through one or more underwriters, each such time it will give
prompt (and in any event no later than five business days prior to the
anticipated filing date) written notice to all holders of Registrable Securities
of its intention to do so, and of such holders' rights under this Section 2.2.
Upon the written request of any such holder made within five calendar days after
receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder in such underwritten
offering), the Company will use its reasonable best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by a holder or holders of Registrable
Securities, to the extent requisite to permit the disposition through such
underwriter or underwriters of the Registrable Securities so to be registered
and to cause such underwriter or underwriters to permit the Registrable
Securities requested to be
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included in the offering to be so included on the same terms and conditions as
any similar securities of the Company and any other securityholder included
therein and to permit the sale or other disposition of the Registrable
Securities in accordance with the intended method of distribution thereof;
provided, that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason, after consultation with the holder or holders of
Registrable Securities which have requested inclusion in such registration, not
to register or to delay registration of all the securities being registered
under such registration statement, the Company may, at its election, give
written notice of such determination to each such holder of Registrable
Securities and, thereupon, (i) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities. Any holder of Registrable Securities shall have the right to
withdraw its request for the inclusion of its Registrable Securities in any
registration statement pursuant to this Section 2.2(a) by giving written notice
to the Company of its request to withdraw at any time up to one business day
prior to the effectiveness of such registration statement. No registration
effected under this Section 2.2 shall relieve the Company of its obligation to
effect any registration under Section 2.1 above. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 2.2.
(b) Priority in Incidental Registrations. If the Company at any time
proposes to register any of its equity securities under the Securities Act as
contemplated by Section 2.2(a) above, the Company will, if requested by any
holder of Registrable Securities as provided in said Section 2.2(a) and subject
to the provisions of this Section 2.2(b), arrange for such underwriters to
include all of the Registrable Securities to be offered and sold by such holder
among the securities to be distributed by such underwriters. In the event that
the managing underwriter of any such underwritten offering shall inform the
Company and the holder or holders of Registrable Securities requesting the
inclusion of their securities in such offering in writing of its reasonable and
good faith belief that the size of the offering that such holders, the Company
and/or any other securityholders intend to make is such that the success of the
offering would be materially and adversely affected by the inclusion of the
Registrable Securities requested to be included, then the Company shall include
in such offering only securities proposed to be sold by the Company for its own
account and Registrable Securities and securities having registration rights
that are pari passu to those relating to the Registrable Securities (the "PARI
PASSU SECURITIES"). The Company may include in such offering all securities
proposed by the Company to be sold for its own account and may decrease the
number of Registrable Securities and Pari Passu Securities so proposed to be
sold and so requested to be included in such offering (pro rata on the basis of
the percentage of the securities, by number of shares, of the Company requested
to be included in the offering by the holder or holders of such Registrable
Securities and Pari Passu Securities) to the extent necessary to reduce the
number of securities to be included in such offering to the level recommended by
the managing underwriter. If, prior to the effectiveness of any registration
statement contemplated by this Section 2.2, the managing underwriter reasonably
determines in good faith, and gives written notice to the holders of Registrable
Securities requesting the
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inclusion of their securities in such offering, that in its opinion the
underwriting cannot be achieved at a price acceptable to the Company due to the
size of the offering, the Company may further decrease the number of Registrable
Securities and Pari Passu Securities in the manner described in the preceding
sentence to the minimum extent necessary in order to achieve a price acceptable
to the Company. The holder or holders of Registrable Securities to be
distributed by such underwriters shall be parties to the underwriting agreement
between the Company and such underwriters and any necessary or appropriate
custody agreements which are reasonably acceptable to such holders, shall
execute appropriate powers of attorney which are reasonably acceptable to such
holders, and shall take all such actions as are reasonably requested by the
managing underwriters in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, provided, however, that (i) such
holder or holders of Registrable Securities participating in such registration
shall not be required to make any representations or warranties other than those
relating solely to such holder, its Registrable Securities, and its intended
method of distribution and (ii) the liability of each such holder to any
underwriter under such underwriting agreement will be limited to liability
arising from misstatements or omissions regarding such holder, its Registrable
Securities and its intended method of distribution and any such liability shall
not exceed an amount equal to the net proceeds such holder derives from such
registration.
2.3 Registration Procedures. Whenever the Company is required to use
its reasonable best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Section 2.1 or 2.2 above, the
Company will, as expeditiously as possible:
(a) (i) prior to filing the registration statement or prospectus or any
amendment or supplement thereto, furnish and afford each holder with
Registrable Securities covered by such registration statement, and each
managing underwriter, if any, of the Registrable Securities covered by
such registration statement or prospectus, a reasonable opportunity to
review copies of such document as proposed to be filed, together with
exhibits thereto, (ii) thereafter furnish each such holder and managing
underwriter, if any, such number of copies of such registration
statement, each amendment and supplement thereto (in each case
including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus) and such
other documents incident thereto as such holder or managing
underwriter, if any, may from time to time reasonably request, and
(iii) during the Registration Period, deliver to each holder of
Registrable Securities included within the coverage of the Shelf
Registration, without charge, as many copies of the prospectus
(including each preliminary prospectus) included in such Shelf
Registration and any amendment and supplement thereto as such holder
may require in connection with the offering and sale of securities
covered by the prospectus or any amendment or supplement thereto, and
the Company hereby consents to the use of the prospectus or amendment
or supplement thereto by each such holder in connection with such
offers and sales;
(b) prepare and file with the Commission such amendments and
supplements to the requisite registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration
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statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in such registration statement or 90 days from the date on
which the registration statement became effective, whichever first occurs;
provided, however, that the Shelf Registration shall be kept effective for the
time period set forth in Section 2.1 above;
(c) except with respect to information provided by any holder for
inclusion in the registration statement, ensure that (i) such registration
statement and any amendment thereto and any prospectus forming a part thereof
and any amendment or supplement thereto complies in all material respects with
the Securities Act, (ii) such registration statement and any amendment thereto
does not, when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and (iii) any prospectus forming
a part of such registration statement and any amendment or supplement to such
prospectus does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(d) use its reasonable best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or blue sky laws of each state and other
jurisdiction as each seller thereof shall reasonably request, or as may be
necessary by virtue of the business and operations of the Company, and to keep
such registration or qualification in effect for so long as such registration
statement remains in effect, and take any other action which may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to either qualify generally
to do business as a foreign corporation, or subject itself to taxation in any
jurisdiction wherein it would not, but for the requirements of this subparagraph
(d), be obligated to be so qualified or subject to taxation or to consent to
general service of process in any such jurisdiction, or to any material
restriction on the conduct of its business or any restrictions on dividends or
distributions to any of its shareholders;
(e) (i) advise the holders of Registrable Securities in writing (A)
when such registration statement and any amendment thereto has been
filed with the Commission and when such registration statement or any
post-effective amendment has become effective; and (B) of any request
by the Commission for amendments or supplements to such registration
statement or the prospectus included therein or for additional
information;
(ii) advise the holders of Registrable Securities in writing: (A)
of the issuance by the Commission of any stop order suspending the
effectiveness of such a registration statement or the initiation or
threatening of any such proceeding for such purpose; (B) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the securities included in any registration
statement for sale in such jurisdiction or the initiation or
threatening of any such proceeding for such purpose; and (C) in the
case of the Shelf Registration, if such holder has delivered a Selling
Notice, as defined below, to the Company, of the suspension of the use
of the prospectus pursuant to
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Section 2.1(c) hereof or of the happening of any event that requires
the making of any changes in such registration statement or the
prospectus so that, as of such date, the statements therein are not
misleading and do not omit to state a material fact required to be
stated therein (in the case of the prospectus, in light of the
circumstances under which they were made); provided that such notice
shall not be required to specify the nature of the event giving rise to
such notice requirement;
(iii) use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of such registration statement
at the earliest possible time;
(iv) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with
or approved by such other governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(f) with respect to the Shelf Registration, upon the occurrence of any
event contemplated by Section 2.3(e)(ii)(C) above, the Company shall (if a
seller of Registrable Securities covered by the Shelf Registration has delivered
a Selling Notice, as defined below, to the Company) as promptly as reasonably
practicable prepare a post-effective amendment to any Shelf Registration or an
amendment or supplement to the related prospectus or file any other required
document so that, as thereafter delivered to purchasers of the securities
included therein, the prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein in light of the circumstances under which they were made, not
misleading;
(g) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders, as soon as reasonably practicable (but not more than 15
months) after the effective date of such registration statement, an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act and
the rules and regulations thereunder;
(h) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by such registration statement from and
after a date not later than the effective date of such registration statement
and reasonably cooperate with holders of Registrable Securities to facilitate
the timely preparation and delivery of certificates representing the same to be
sold pursuant to the Shelf Registration free of any restrictive legends and in
such denominations and registered in such names as such holders may request;
(i) use its best reasonable efforts to list all Registrable Securities
covered by such registration statement on the primary national securities
exchange (or Nasdaq) on which the common stock of the Company is then listed;
(j) promptly as is reasonably practicable, incorporate in a prospectus
supplement or
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post-effective amendment to such registration statement such information as the
managing underwriters, if any, and the holders of a majority of the Registrable
Securities registered thereunder agree should be included therein and shall make
all required filings of such prospectus supplement or post-effective amendment
as soon as reasonably practicable after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
(k) enter into such agreements (including underwriting agreements)
which are requested by the Majority Owners and are reasonably acceptable to the
Company and take all other reasonably appropriate actions in order to expedite
or facilitate the registration or the disposition of the Registrable Securities
and, in connection therewith, if an underwriting agreement is entered into, such
agreement shall contain indemnification provisions and procedures not materially
less favorable than those set forth in Section 2.6 of this Agreement (or other
provisions acceptable to the Majority Owners), with respect to all parties to be
indemnified under Section 2.6 of this Agreement by holders of Registrable
Securities; and
(l) cooperate with the reasonable requests of the underwriters or the
Majority Owners to facilitate the marketing and disposition of the Registrable
Securities, including causing appropriate officers of the Company to attend
roadshows and other similar marketing activities; and
(m) (i) make reasonably available for inspection by any managing
underwriter participating in any disposition pursuant to such
registration statement, the holders of the majority of the Registrable
Securities thereunder, and any attorney, accountant or other agent
retained by such underwriter and/or the holders of the majority of the
Registrable Securities thereunder, all relevant financial and other
records, pertinent corporate documents and properties of the Company
and its subsidiaries; (ii) cause the Company's officers, directors and
employees to supply all relevant information reasonably requested by
any such managing underwriter, attorney, accountant or agent, or
holders in connection with such registration statement as is customary
for similar due diligence examinations; (iii) make such representations
and warranties to such underwriters, if any, in form, substance and
scope as are customarily made by issuers to underwriters in primary
underwritten offerings; (iv) obtain opinions of counsel to the Company
and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriters, if any) addressed to the underwriters, covering such
matters as are customarily covered in opinions requested in
underwritten offerings; (v) obtain "cold comfort" letters and updates
thereof from the independent certified public accountants of the
Company and its subsidiaries, addressed to the managing underwriters,
if any, in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with primary
underwritten offerings; and (vi) deliver such documents and
certificates as may be reasonably requested by the holders of a
majority of the Registrable Securities registered thereunder and the
managing underwriters, if any, including those contained in the
underwriting agreement. The foregoing actions contained in (i) through
(vi) above shall be performed (to the extent requested) at (A) the
effectiveness of such registration statement (including the Shelf
Registration) and each post-effective amendment thereto, and (B) each
closing under any underwriting or similar
9
agreement as and to the extent required thereunder.
Section 2.4.A. Information by the Holders and Suspension of Sales. The
Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such seller, including its ownership of Registrable Securities, and the plan of
distribution of such securities as the Company may from time to time reasonably
request in writing. Each holder of Registrable Securities agrees to furnish such
information to the Company and to cooperate with the Company as is reasonably
necessary to enable the Company to comply with the provisions of this Agreement.
No holder of Registrable Securities shall be required, in connection with any
underwriting agreements entered into in connection with any registration, to
provide any information, representations or warranties, or covenants with
respect to the Company, its business or its operations nor shall it be required
to provide any indemnification beyond that contemplated herein. Each holder of
Registrable Securities agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 2.3(e)(ii)(c)
above, (i) such holder shall forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by this Agreement, or until such
holder is advised in writing by the Company that the use of the prospectus may
be resumed, (ii) such holder will promptly deliver copies of such supplemented
or amended prospectus to each purchaser or potential purchaser to whom such
holder had delivered the initial prospectus, and (iii) if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such holder's possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice.
Each holder of Registrable Securities further agrees that (a) prior to
any disposition of Registrable Securities pursuant to the Shelf Registration,
such holder shall give written notice of the desired disposition to the Company,
including the anticipated date thereof (a "SELLING NOTICE"), and such holder
shall not effect such disposition until such holder either (i) has received from
the Company copies of a supplemented or amended prospectus as contemplated in
this Agreement, or (ii) has been advised in writing by the Company that the use
of the applicable prospectus is appropriate and has received copies of any
previous amendments or supplements thereto, provided, however, that the Company
must comply with either (i) or (ii) of this subsection (a) within two business
days after receiving written notice of a desired disposition by such holder; and
(b) it will notify the Company in writing upon completion of such offer or sale
or at such time as such holder no longer intends to make offers or sales under
the Shelf Registration.
2.4.B. Black-out Period. In the event of a Company Public Sale, the
holders of Registrable Securities agree, if requested by the Company, and, in
the case of a Company Public Sale that is an underwritten offering, by the
managing underwriter or underwriters in such underwritten offering, not to
effect any public sale or distribution of any securities the same as or similar
to those being offered in connection with such Company Public Sale, or any
securities convertible into or exchangeable or exercisable for such securities
for a period (as specified by the Company or such managing underwriters) not to
exceed 120 days (or such lesser period as may
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be permitted by the Company or such managing underwriters), during the period
beginning seven days before the Company's reasonable good faith estimate of the
proposed date of filing, in connection with such Company Public Sale, of a
registration statement or a preliminary prospectus supplement relating to a then
existing shelf registration statement, and ending on the date 120 days following
the effective date of such registration statement or the date of filing the
final prospectus supplement, to the extent timely notified in writing by the
Company or the managing underwriter or underwriters.
2.5 Reasonable Assistance. Subject to compliance with Regulation FD,
the Company agrees to take reasonable best efforts to assist each Owner with any
sale of its Registrable Securities, including permitting potential buyers of
Registerable Securities to meet with management of the Company.
2.6 Indemnification.
(a) Indemnification by the Company. In the event of any registration of
any securities of the Company under the Securities Act, the Company will
indemnify and hold harmless the seller of any Registrable Securities covered by
such registration statement, its directors, officers, employees, representatives
and agents, each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who controls such
seller or any such underwriter within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such
seller or any such director, officer, employee, representative, agent,
underwriter or controlling Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or in any qualification or compliance related to such
registration, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and the Company will reimburse such seller and each such
director, officer, employee, representative, agent, underwriter and controlling
Person for any reasonable legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
seller specifically for use therein; and provided further, that the Company
shall not be liable to any Person who participates as an underwriter in the
offering or sale of Registrable Securities or any other Person, if any, who
controls such underwriter within the meaning of the Securities Act, in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of such Person's failure to
send or give a copy of the final prospectus, as the same may be then
11
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such seller or any such director, officer, employee,
representative, agent, underwriter or controlling Person and shall survive the
transfer of such securities by such seller or the assignment by such seller of
its rights pursuant to this Agreement. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Indemnification by Holder of Registrable Securities. In connection
with any registration statement filed by the Company under the Securities Act in
which a holder of Registrable Securities is participating, such holder of
Registrable Securities agrees to indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 2.6(a) above) on a several, but
not joint, basis, the Company, each director, officer, employee, representative
and agent of the Company and each other Person, if any, who controls the Company
within the meaning of the Securities Act, with respect to any statement or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such holder
specifically for use in such registration statement, preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement, provided,
however, that the obligations of each of the holders hereunder shall be limited
to an amount equal to the net proceeds to such holder of securities sold
pursuant to such registration statement or prospectus. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on
behalf of the Company or any such director, officer, representative, agent, or
controlling Person and shall survive the transfer of such securities by such
holder. This indemnity agreement will be in addition to any liability which such
holder may otherwise have.
(c) Notices of Claims and Procedures. Promptly after receipt by an
indemnified Person of notice of the commencement of any action or proceeding
involving a claim referred to in Section 2.6(a) or (b) above, such indemnified
Person will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
provided, however, that the failure of any indemnified Person to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under Section 2.6(a) or (b) above, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified Person, unless counsel for the
indemnifying party reasonably determines that a conflict of interest between
such indemnified Person and such indemnifying party exists in respect of such
claim precluding such counsel from defending the indemnified party under
applicable ethical requirements, the indemnifying party shall be entitled to
participate in and to assume the defense thereof jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified Person, and after notice
from the indemnifying party to such indemnified Person of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified Person for any legal or other expenses subsequently incurred by the
latter in
12
connection with the defense thereof. If such a conflict of interest exists in
respect of such claim, the indemnified Person or Persons shall have the right to
select separate counsel reasonably acceptable to the indemnifying party to
participate in the defense of such action on behalf of such indemnified Person
or Persons, in which case the indemnifying party shall bear the costs of such
defense; provided, however, the indemnifying party shall not be obligated to pay
the fees and expenses of more than one separate firm of legal counsel for all
indemnified parties in any one jurisdiction. No indemnifying party shall,
without the consent of the indemnified Person, consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified Person of a
release from all liability with respect to such claim or litigation and
otherwise in form and substance reasonably satisfactory to the indemnified
Person. The indemnifying party shall not be required to indemnify any
indemnified Person against any settlement or judgment which is consented to by
an indemnified Person without the consent of the indemnifying party.
(d) Contribution. If any of the indemnification provisions provided for
in this Section 2.6 are determined to be unenforceable or unavailable to an
indemnified Person in respect of any claim or action, then each indemnifying
party, in lieu of indemnifying such indemnified Person, shall contribute to the
amount paid or payable by such indemnified Person as a result of such claims in
such proportion as is appropriate to reflect the relative fault of the
indemnified Person and the indemnifying party in connection with the statements
or omissions which resulted in such claim or action as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and the indemnified Person 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 the indemnifying party or by the indemnified Person and their
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 2.6(d) were
determined by any method of allocation that does not take account of the
equitable considerations referred to above in this Section 2.6(d). The amount
paid or payable by a party as a result of the claims referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such Person in connection with investigating or defending any action or claim.
No Person guilty of fraudulent misrepresentation (within the meaning of the
Securities Act) shall be entitled to contribution from any Person who is not
guilty of such fraudulent misrepresentation. Notwithstanding anything to the
contrary contained in this Agreement, no holder of Registrable Securities shall
be required to contribute any amount pursuant to this Section 2.6 in excess of
the net proceeds paid to such holder pursuant to any sale by such holder
pursuant to a registration statement and each holder's obligations to contribute
pursuant to this Section 2.6 are several, in the proportion that the net
proceeds of the offering received by such holder bears to the total net proceeds
of the offering received by all the applicable holders, and not joint.
3. Rules 144 and 144A. The Company represents and warrants to the
Owners that it has filed registration statements pursuant to the requirements of
Section 12 of the Exchange Act and/or pursuant to the requirements of the
Securities Act, and has filed the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
Commission thereunder. The Company will take such further action as any holder
of
13
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rules 144, 144A and 145, as applicable, under the Securities
Act, as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
4. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
prior written consent to such amendment, action or omission to act, of the
holder or holders of a majority of the Registrable Securities at the time
outstanding, provided, however, that a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of holders of
Registrable Securities being sold pursuant to a registration statement and that
does not directly or indirectly affect the rights of other holders may be given
by the holders of a majority of the Registrable Securities being so registered.
Each holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any amendment, modification, waiver or consent authorized by
this Section 4, whether or not such Registrable Securities shall have been
marked accordingly, but provided that a copy of such amendment, modification,
waiver or consent has been theretofore delivered to all holders of the
Registrable Securities.
5. Notices. All notices and other communications required or permitted
hereunder shall be in writing, and shall be delivered by hand or transmitted by
telegram, facsimile or by similar means or by recognized courier or overnight
delivery service (fees prepaid), or by mail, registered or certified (postage
prepaid), addressed (a) if to the holders, at the address set forth in opposite
their name on the signature pages hereto, or such other address as the holders
shall have furnished to the Company in writing, or (b) if to the Company, to 000
Xxxx Xxx Xxxxxxx Xxxx., Xxxxx 0000, Xxxxxx, Xxxxx 00000 (Attention: Xxxxxx X.
Xxxxxxxx, Vice President, General Counsel and Secretary), or such other address,
or to the attention of such other Person or Persons, as the Company shall have
furnished to each holder of Registrable Securities at the time outstanding. All
such notices and communications shall be deemed to have been duly given when
received.
6. 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 assigns. In particular, regardless of whether an express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the Owners shall inure to the benefit of and enforceable by a
subsequent holder of any Registrable Securities (a "PERMITTED ASSIGNEE"), that
(i) is either (A) an affiliate or partner of an Owner, or (B) shall have
acquired from an Owner, Registrable Securities constituting not less than
1,000,000 shares of common stock of the Company, and (ii) has executed a copy of
this Agreement or otherwise indicated its agreement to be bound hereby. No
assignee of Registrable Securities, other than a Permitted Assignee, shall have
any rights hereunder and any purported assignment of rights hereunder to anyone
other than a Permitted
14
Assignee shall be null and void, unless the Company shall have provided its
prior written consent thereto.
7. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
8. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties hereto shall be governed by, the
laws of the State of Delaware, without regard to principles of conflicts of
laws.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
10. Severability. If any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement.
WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, or have caused this Agreement to be executed and delivered by their
respective duly authorized officers, on the date first above written.
Magnum Hunter Resources, Inc.
By:
-------------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Pintail Energy, Inc.
By:
-------------------------------------------
Name:
---------------------------------
Title:
--------------------------------
ADDRESS FOR NOTICES: OWNERS
125 East Xxxx Xxxxxxxxx Fwy. Natural Gas Partners V, L.P.
Suite 600 By: G.F.W. Energy V, L.P., general partner
Xxxxxx, XX 00000 By: GFW V, L.L.C., general partner
Attn: Xxxxxxx Xxxxxxxxx
Fax No. 000-000-0000 By:
-------------------------------------------
Xxxxxxx X. Xxxxx, Authorized Member
15
125 East Xxxx Xxxxxxxxx Fwy. G.F.W. Energy V, L.P.
Suite 600 By: GFW V, L.L.C., general partner
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
Fax No. 000-000-0000 By:
--------------------------------------------
Xxxxxxx X. Xxxxx, Authorized Member
0000 Xxxx Xxxxxxx #000
Xxxxxxxxx, Xxxxx 00000
-----------------------------------------------
Xxxxxx X. Xxxxx, Trustee of the Xxxxxx X. Xxxxx
Revocable Trust Dated July 25, 1994
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000
-----------------------------------------------
Xxx X. Xxxx
16
