EXHIBIT 4.5
EXECUTION COPY
SHARE ACQUISITION AND REGISTRATION RIGHTS AGREEMENT
THIS SHARE ACQUISITION AND REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT") is entered into as of July 31, 2007 by and between Pacific Energy
Resources Ltd., a Delaware corporation (the "COMPANY"), and Forest Oil
Corporation, a New York corporation ("HOLDER").
RECITALS
A. The Company and the Holder are parties to an Asset Sales Agreement
dated as of May 24, 2007, as amended by a First Amendment to Asset Sales
Agreement dated as of July 31, 2007 ("ASA"), and a Membership Interest Purchase
Agreement dated as of May 24, 2007, as amended by a First Amendment to
Membership Interest Purchase Agreement dated as of July 31, 2007 ("MIPA").
B. Pursuant to the ASA and the MIPA, as a portion of the consideration
for the Membership Interests (as defined in the MIPA) and certain Assets (as
defined in the ASA), the Holder will acquire up to 10,000,000 shares of Common
Stock of the Company. The shares of Common Stock acquired by the Holder pursuant
to the ASA and the MIPA are referred to herein as the "SHARES."
C. The Shares, when issued pursuant to the ASA and the MIPA, will be
issued without registration under the 1933 Act (as defined below) and,
therefore, the resale thereof by the Holder of any Shares will be subject to
restrictions under the 1933 Act.
D. The obligation of the Holder to acquire and the Company to issue the
Shares under the ASA and the MIPA is subject to the condition that the Company
and the Holder enter into this Agreement concurrently with the issuance of the
Shares to provide for (i) certain representations by the parties with respect to
the issuance of the Shares by the Company and their acquisition by the Holder
and (ii) registration rights with respect to the Shares in accordance with the
terms and conditions set forth in this Agreement.
AGREEMENT
In consideration of the mutual covenants and agreements set forth
herein, and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1 DEFINITIONS. For purposes of this Agreement, the following terms have the
meanings specified with respect thereto below:
"1933 ACT" means the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder, all as the same shall be in effect
at the time.
"1934 ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect at the time.
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"COMMISSION" means the Securities and Exchange Commission or any other
federal agency at the time administering the 1933 Act.
"COMMON STOCK" means the common stock, $0.001 par value, of the
Company.
"COMPANY" has the meaning set forth in the preamble of this Agreement.
"HOLDER(S)" means Forest Oil Corporation, a New York corporation, and
any permitted transferee of Registrable Securities.
"INDEMNIFIED PARTY" has the meaning specified in SECTION 4.3.
"INDEMNIFYING PARTY" has the meaning specified in SECTION 4.3.
"INSPECTORS" has the meaning specified in SECTION 3.1.8.
"MAXIMUM NUMBERS OF SHARES" has the meaning specified in SECTION 2.2.
"OTHER SHAREHOLDER" means any holder of shares of Common Stock or
securities convertible into or entitling the holder thereof to purchase Common
Stock who has Piggyback Registration rights which have been granted by the
Company; collectively, two or more such shareholders shall be referred to as
"OTHER SHAREHOLDERS."
"PIGGYBACK REGISTRATION" has the meaning specified in SECTION 2.1.2.
"PURCHASE AGREEMENT" has the meaning set forth in the recitals to this
Agreement.
"RECORDS" has the meaning specified in SECTION 3.1.8.
"REGISTRABLE SECURITIES" means, collectively, the Shares and any
securities issued or issuable upon any stock dividend, stock split,
recapitalization, merger, consolidation or similar event with respect to the
Shares. As to any particular Registrable Securities, such securities shall cease
to be Registrable Securities when (i) a registration statement covering such
securities shall have become effective under the 1933 Act and such securities
shall have been disposed of in accordance with such registration statement, (ii)
such securities shall have been distributed to the public pursuant to Rule 144
or Rule 144A (or any successor provisions) under the 1933 Act, or (iii) such
securities shall have ceased to be outstanding.
"SHARES" has the meaning set forth in the recitals of this Agreement.
"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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2 REGISTRATION RIGHTS.
2.1 PIGGYBACK RIGHTS. If at any time after the date hereof, the Company
proposes to file a registration statement under the 1933 Act with respect to an
offering of equity securities, or securities convertible or exchangeable into
equity securities, by the Company for its own account other than a registration
statement (i) on Form S-4 or S-8 (or any substitute or successor form that may
be adopted by the Commission), (ii) filed in connection with any employee stock
option or other benefit plan, (iii) for an exchange offer or offering of
securities solely to the Company's existing shareholders, or (iv) for a dividend
reinvestment plan, then the Company shall:
(a) give written notice of such proposed filing to the Holder
as soon as practicable but in no event less than 20 days before the
anticipated filing date, which notice shall describe the amount and
type of securities to be included in such offering, the intended
method(s) of distribution, and the name of the proposed managing
Underwriter or Underwriters, if any, of the offering; and
(b) offer in such notice to the Holder the opportunity to
register such number of shares of Registrable Securities as the Holder
may request in writing within 10 days following receipt of such notice
(a "PIGGYBACK REGISTRATION"). The Company shall cause such Registrable
Securities to be included in such registration and shall use its
reasonable best efforts to cause the managing Underwriter or
Underwriters of a proposed underwritten offering to permit the
Registrable Securities requested to be included in a Piggyback
Registration on the same terms and conditions as any similar securities
of the Company and to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method of
distribution thereof.
2.2 REDUCTION OF OFFERING. If the managing Underwriter or Underwriters
for a Piggyback Registration that is to be an underwritten offering advises the
Company, the Holder and any Other Shareholders requesting inclusion in the
Piggyback Registration, in writing, that the dollar amount or number of shares
of Registrable Securities and other shares of Common Stock to be included in the
offering exceeds the maximum dollar amount or number that can be sold in such
offering without adversely affecting the proposed offering price, the timing,
the distribution method or the probability of success of such offering ("MAXIMUM
NUMBER OF SHARES"), then the Company shall include in such registration: (i)
first, the shares of Common Stock or other securities that the Company proposes
to sell which can be sold without exceeding the Maximum Number of Shares; and
(ii) second, to the extent the Maximum Number of Shares has not been reached
under the foregoing clause (i), the Registrable Securities as to which
registration has been requested by the Holder pursuant to its Piggyback
Registration rights and other shares of Common Stock requested to be included by
Other Shareholders pursuant to their registration rights (and pro rata among
them based on the number of shares requested to be registered except to the
extent the Company is contractually obligated to use another allocation method
pursuant to an agreement in effect on the date hereof) which can be sold without
exceeding the Maximum Number of Shares.
2.3 WITHDRAWAL. The Holder may elect to withdraw its request for
inclusion of its Registrable Securities in any Piggyback Registration by giving
written notice to the Company of its request to withdraw prior to the
effectiveness of the registration statement. The Company may also elect to
withdraw a registration statement including shares being registered pursuant to
the Holder's Piggyback Registration rights at any time prior to the
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effectiveness of the registration statement. Notwithstanding any such
withdrawal, the Company shall pay all expenses incurred by the Holder in
connection with such Piggyback Registration as provided in SECTION 3.3.
2.4 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its commercially reasonable efforts to:
(a) Make and keep public information regarding the Company
available, as those terms are understood and defined in Rule 144 under
the Securities Act, at all times from and after the date hereof; and
(b) File with the Commission in a timely manner all reports
and other documents required of the Company under the Exchange Act at
all times from and after the date the Company first becomes subject to
the reporting requirements of the Exchange Act.
2.5 TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register Registrable Securities granted to the Purchasers by the
Company under this Article II may be transferred or assigned by Holder to one or
more transferee(s) or assignee(s) of such Registrable Securities; provided,
however, that each such transferee (i) acquires no less than 1,000,000 shares of
Registrable Securities and (ii) assumes in writing responsibility for its
portion of the obligations of Holder under this Agreement.
2.6 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date hereof, the Company shall not, without the prior written consent of the
Holders holding a majority of the outstanding Registrable Securities, enter into
any agreement with any current or future holder of any securities of the Company
that would allow such current or future holder to require the Company to include
securities in any registration statement filed by the Company on a basis other
than pari passu with, or subject to priority in favor of, the Registrable
Securities.
3 REGISTRATION PROCEDURES.
3.1 FILINGS; INFORMATION. If and whenever the Company is required to
effect the registration of any Registrable Securities under the 1933 Act
pursuant to SECTION 2.1, the Company shall use its reasonable best efforts to
effect the registration of such Registrable Securities as expeditiously as
practicable, and in connection with any such request:
3.1.1 FILING REGISTRATION STATEMENT. The Company shall, as
expeditiously as reasonably possible, prepare and file with the
Commission a registration statement on any form for which the Company
then qualifies or which counsel for the Company shall deem appropriate
and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended
method of distribution thereof, and subject to SECTION 2.3, use its
reasonable best efforts to cause such filed registration statement to
become and remain effective.
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3.1.2 COPIES. The Company shall, prior to filing a
registration statement or prospectus or any amendment or supplement
thereto, furnish without charge to the Holder, 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 if
requested by the Holder), the prospectus included in such registration
statement (including each preliminary prospectus), and such other
documents as the Holder may request in order to facilitate the
disposition of the Registrable Securities owned by the Holder.
3.1.3 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 1933 Act until all Registrable Securities have been
disposed of in accordance with the intended methods of disposition set
forth in such registration statement (which period shall not exceed the
sum of nine months plus any period during which any such disposition is
interfered with by any stop order, injunction or other order or
requirement of the Commission or any governmental agency or court) or
such securities have been withdrawn.
3.1.4 NOTIFICATION. After the filing of the registration
statement, the Company shall promptly, and in no event more than two
Business Days, notify the Holder, and confirm such advice in writing,
(i) when such registration statement becomes effective, (ii) when any
post-effective amendment to such registration statement becomes
effective, (iii) of any stop order issued or threatened by the
Commission (and the Company shall take all actions required to prevent
the entry of such stop order or to remove it if entered) and (iv) of
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 Registrable Securities
covered by the 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 Holder any
such supplement or amendment; except that before filing with the
Commission a registration statement or prospectus or any amendment or
supplement thereto, including documents incorporated by reference, the
Company shall furnish to the Holder and to legal counsel representing
the Holder, copies of all such documents proposed to be filed
sufficiently in advance of filing to provide the Holder, Underwriters
and legal counsel with a reasonable opportunity to review such
documents and comment thereon, and the Company shall reflect in any
registration statement or prospectus or amendment or supplement thereto
such comments as the Holder or legal counsel representing the Holder
may propose on a timely basis with regard to the selling security
holder information relating to the Holder; provided, however, that the
Company shall make the final decision as to the form and content of
each such document.
3.1.5 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
Holder (in light of the Holder's intended plan of distribution)
reasonably requests and (ii) cause the Registrable Securities covered
by the registration statement to be registered with or approved by such
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other governmental agencies or authorities in the United States as may
be necessary by virtue of the business and operations of the Company to
enable the Holder to consummate the disposition of the Registrable
Securities owned by the Holder in those 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 3.1.5, or subject itself to
taxation in any such jurisdiction.
3.1.6 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 Holder may, at its option, require
that any or all of the representations, warranties and covenants of the
Company in any underwriting agreement to or for the benefit of any
Underwriters also be made to and for the benefit of the Holder. The
Holder shall not be required to make any representations or warranties
in the underwriting agreement except with respect to its organization,
good standing, authority, title to Registrable Securities, lack of
conflict of such sale with its material agreements and organizational
documents, and with respect to written information relating to the
Holder that the Holder has furnished expressly for inclusion in such
registration statement.
3.1.7 COOPERATION. The Chief Executive Officer and President
of the Company, the Chief Financial Officer of the Company, any Senior
Vice President of the Company and other 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 and all other
offering materials and related documents, and participation in meetings
with Underwriters, attorneys, accountants and potential investors.
3.1.8 RECORDS. The Company shall make available for inspection
by the Holder, any Underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or
other professional retained by the Holder or any Underwriter
(collectively, the "INSPECTORS"), all financial and other records,
pertinent corporate documents and properties of the Company
(collectively, the "RECORDS"), 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 Inspectors in connection with such registration statement,
provided that such inspection and information gathering shall be
accomplished in a manner compliant with Regulation FD (including
execution of appropriate confidentiality agreements) and, to the
greatest extent possible, be coordinated by one counsel designated by
and on behalf of the Holder and other parties.
3.1.9 OPINIONS AND COMFORT LETTERS. The Company shall furnish
to the Holder a signed counterpart, addressed to the 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. If no legal opinion is delivered to any
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Underwriter, the Company shall furnish to the Holder, at any time that
the Holder elects to use a prospectus, an officer's certification to
the effect that the registration statement containing such prospectus
has been declared effective and that to such officer's knowledge no
stop order is in effect.
3.1.10 EARNINGS STATEMENT. The Company shall comply with all
applicable rules and regulations of the Commission and the 1933 Act,
and make available to its shareholders, 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 1933 Act and Rule 158 thereunder.
3.1.11 LISTING. The Company shall use its reasonable best
efforts to cause all Registrable Securities registered pursuant to this
Agreement 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 Holder.
3.2 HOLDER'S OBLIGATIONS TO PROVIDE INFORMATION AND SUSPEND
DISTRIBUTION. The Holder shall provide such information as reasonably requested
by the Company in connection with the preparation of any registration statement,
including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the 1933 Act pursuant to this
Agreement. The Holder shall promptly advise the Company in writing if changes in
a registration statement or prospectus are required in order that disclosures
made in such registration statement or prospectus based on information
previously provided by the Holder for use in the registration statement or
prospectus do not contain an untrue statement of a material fact and do not omit
to state a material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in light of the circumstances
under which they are made) not misleading. The Holder agrees that, if changes
are required as described in the immediately preceding sentence and/or upon
receipt of any notice from the Company of the happening of any event of the kind
described in CLAUSE 3.1.4(iv), the Holder will forthwith discontinue disposition
of Registrable Securities pursuant to the registration statement covering such
Registrable Securities until the Holder' receipt of the copies of the
supplemented or amended prospectus contemplated by CLAUSE 3.1.4(iv), and, if so
directed by the Company, the Holder will deliver to the Company all copies,
other than permanent file copies then in the Holder's possession, of the most
recent prospectus covering such Registrable Securities at the time of receipt of
such notice. If the Company gives such notice, the Company shall extend the
period during which such registration statement shall be maintained effective by
the number of days during the period from and including the date of the giving
of notice pursuant to CLAUSE 3.1.4(iv) to the date when the Company shall make
available to the Holder a prospectus supplemented or amended to conform with the
requirements of CLAUSE 3.1.4(iv).
3.3 REGISTRATION EXPENSES. The Company shall pay all expenses incurred
by the Company in connection with any Piggyback Registration pursuant to SECTION
2, and all expenses incurred in performing or complying with the Company's
obligations under this SECTION 3, whether or not the registration statement
becomes effective, in each case including, but not limited to: (i) all
registration and filing fees, (ii) fees and expenses of compliance with
securities or blue sky laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (iii)
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printing expenses, (iv) the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (v) the fees and expenses incurred in connection
with the listing of the Registrable Securities as required by SECTION 3.1.11,
(vi) National Association of Securities Dealers, Inc., Nasdaq or American Stock
Exchange 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 3.1.9, and (viii) the
fees and expenses of any special experts retained by the Company in connection
with such registration. The Company will also pay all reasonable fees and
expenses (not to exceed $25,000) incurred by the Holder to one legal counsel in
connection with the preparation and review of the registration statement. The
Company shall have no obligation to pay any underwriting fees, discounts or
selling commissions, or transfer taxes attributable to the Registrable
Securities being sold by the Holder, which expenses shall be borne by the
Holder.
4 INDEMNIFICATION AND CONTRIBUTION.
4.1 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and
hold harmless the Holder and its affiliates and agents from and against any
loss, claim, damage or liability and any action in respect thereof to which the
Holder and its affiliates and agents may become subject under the 1933 Act or
the 1934 Act or any other statute or common law, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (a) any untrue
statement of a material fact made in connection with the sale of Registrable
Securities or shares of Common Stock, whether or not such statement is contained
or incorporated by reference in any registration statement or prospectus
relating to the Registrable Securities (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, (b) any omission to state a material fact required to be
stated in any registration statement or prospectus or necessary to make the
statements therein not misleading, or (c) any violation by the Company of any
federal, state or common law, rule or regulation applicable to the Company and
relating to action required of or inaction by the Company in connection with
such registration. The Company also shall promptly, but in no event more than
ten Business Days after request for payment, pay directly or reimburse the
Holder and his affiliates and agents for any legal and other expenses reasonably
incurred by the Holder and his affiliates and agents in investigating or
defending or preparing to defend against any such indemnifiable loss, claim,
damage, liability or action. The Company shall either promptly, but in no event
in more than ten Business Days after request for payment, pay directly all
amounts which it is required to pay hereunder or shall reimburse the requesting
party for such amounts within ten Business Days after any request for such
reimbursement. The Company also shall indemnify any Underwriter of the
Registrable Securities, their officers, affiliates, directors, partners, members
and agents and each person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Holder provided in this SECTION
4.1.
The indemnity agreement contained in this SECTION 4.1 shall not apply
to amounts paid in settlement of any such loss, claim, damage or liability or
any action in respect thereof if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable to the Holder and its affiliates and agents in any such case
for any loss, claim, damage, liability or any action in respect thereof to the
extent that it arises from or is based upon and is in conformity with
information related to the Holder furnished in writing by the Holder expressly
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for use in connection with such registration by the Holder, nor shall the
Company be liable to the Holder for any such loss, claim, damage or liability or
any action in respect thereof to the extent it arises from or is based upon (i)
any untrue statement of a material fact contained in any registration statement
or prospectus relating to the Registrable Securities delivered by the Holder
after the Company had provided written notice to the Holder that the
registration statement or prospectus contained such untrue statement of a
material fact, or (ii) any omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading
after the Company had provided written notice to the Holder that the
registration statement or prospectus contained the omission.
4.2 INDEMNIFICATION BY THE HOLDER. The Holder shall indemnify and hold
harmless the Company, its officers, directors, partners, members and agents and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act to the same extent as the
foregoing indemnity from the Company to the Holder, but solely with reference to
information in conformity with and related to the Holder furnished in writing by
the Holder expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. The Holder also shall indemnify and hold harmless
any Underwriter of the Registrable Securities, their officers, directors,
partners, members and agents and each person who controls such Underwriters on
substantially the same basis as that of the indemnification of the Company
provided in this SECTION 4.2; PROVIDED, HOWEVER, that in no event shall any
indemnity obligation under this SECTION 4.2 exceed the dollar amount of the net
proceeds actually received by the Holder from the sale of Registrable Securities
which gave rise to the indemnification obligation under the registration
statement or prospectus.
4.3 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 4.1 OR 4.2, that
person ("INDEMNIFIED PARTY") shall, if a claim in respect thereof is to be made
against any other person for indemnification hereunder, notify such other person
("INDEMNIFYING PARTY") in writing of the loss, claim 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 the Indemnified Party
hereunder except to the extent that the Indemnifying Party is materially
prejudiced as a result of not receiving such notice. 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 the claim or action, and, to the extent that it wishes, jointly with all
other Indemnifying Parties, to assume the defense thereof with counsel
satisfactory to the Indemnified Party. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume 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) 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 written opinion of counsel of the
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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 the
Indemnified Party, unless the judgment or settlement includes an unconditional
release of the Indemnified Party from all liability arising out of the claim or
proceeding.
4.4 CONTRIBUTION. If the indemnification provided for in the foregoing
SECTIONS 4.1, 4.2 AND 4.3 is unavailable to any Indemnified Party in respect of
any loss, claim, damage, liability or action referred to herein, then each
Indemnifying Party, in lieu of indemnifying the Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of the 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 the 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 statement of a material fact or the omission to state a
material fact relates to information supplied by the Indemnified Party or the
Indemnifying Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent the statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this SECTION 4.4 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 paragraph. 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 the Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this SECTION 4.4, the Holder shall not be required to contribute
any amount in excess of the dollar amount of the net proceeds actually received
by the Holder from the sale of Registrable Securities which gave rise to the
contribution obligation. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
5 UNDERWRITING AND DISTRIBUTION.
5.1 RULE 144. The Company covenants that it shall file any reports
required to be filed by it under the 1933 Act and the 1934 Act and shall take
such further action as the Holder may reasonably request, all to the extent
required from time to time to enable the Holder to sell Registrable Securities
without registration under the 1933 Act within the limitation of the exemptions
provided by Rule 144 or Rule 144A under the 1933 Act, as such Rules may be
amended from time to time, or any similar Rule or regulation hereafter adopted
by the Commission.
5.2 "LOCK-UP" AGREEMENT BY THE HOLDER. The Holder, by its acceptance
hereof, agrees that, upon request and so long as the Holder owns at least 1% of
the issued and outstanding common stock of the Company, in connection with any
underwritten public offering by the Company, the Holder will enter "lock-up"
agreements, in customary form, pursuant to which it will agree not to effect any
sale or distribution of any securities similar to those being registered by the
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Company, or any securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 or 144A under the 1933
Act, during the 14 days prior to, and during the 180-day period beginning on,
the effective date of the registration statement relating to such offering
(except as part of such registration statement); PROVIDED, HOWEVER, that the
obligation of the Holder to execute a lock-up agreement is subject to the
execution of similar agreements by (i) all of the officers and directors of the
Company and (ii) all other similarly situated shareholders of the Company, which
agreements are no less restrictive than that requested from Holder.
6 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE ISSUANCE AND ACQUISITION OF
THE SHARES.
6.1 BY THE COMPANY. The Company represents and warrants to the Holder
that:
(a) The Shares, when issued, delivered and paid for in
compliance with the provisions of the ASA and the MIPA, will be validly
issued, and will be fully paid and nonassessable. The Shares will be
free of any liens or encumbrances, other than any liens or encumbrances
created by or imposed upon the Holder; provided, however, that the
Shares are subject to restrictions on transfer under U.S. state and/or
federal securities laws.
(b) All corporate action on the part of the Company necessary
for the authorization, execution, delivery and performance of this
Agreement by the Company, the authorization, sale, issuance and
delivery of the Shares, and the performance of all of the Company's
obligations under this Agreement has been taken. This Agreement, when
executed and delivered by the Company, shall constitute the valid and
binding obligation of the Company, enforceable in accordance with its
terms, except (i) as limited by laws of general application relating to
bankruptcy, insolvency and the relief of debtors, (ii) as limited by
rules of law governing specific performance, injunctive relief or other
equitable remedies and by general principles of equity, and (iii) to
the extent the indemnification or other provisions contained herein may
further be limited by applicable laws and principles of public policy.
(c) The Company has delivered to the Holder its audited
balance sheet and statement of operations for the period ended December
31, 2006 and its unaudited balance sheet and statement of operations
for the period ended March 31, 2007 (the "FINANCIAL STATEMENTS"). The
Financial Statements are correct in all material respects and present
fairly the financial condition and operating results of the Company as
of the date(s) and during the period(s) indicated. The audited
Financial Statements have been prepared in accordance with Canadian
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the period indicated, except as disclosed
therein. The unaudited Financial Statements do not contain additional
financial statements and footnotes required under GAAP, and are subject
to normal year-end adjustments.
(d) The execution, delivery and performance of and compliance
with this Agreement, and the issuance of the Shares, will not result in
any material violation of, or materially conflict with, or constitute a
material default under, the Company's Certificate of Incorporation or
Bylaws, each as amended to date, or, to the Company's knowledge, any
material agreement to which it is a party, except for those as to which
appropriate consents have been or will be obtained.
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6.2 BY THE HOLDER. The Holder represents and warrants to the Company
that:
(a) The Holder understands that the issuance of the Shares has
not been, and will not be, registered under the 1933 Act by reason of a
specific exemption from the registration provisions of the 1933 Act,
the availability of which depends upon, among other things, the bona
fide nature of the investment intent and the accuracy of the Holder's
representations as expressed herein or otherwise made pursuant hereto.
(b) The Holder is acquiring the Shares for investment for its
own account, not as a nominee or agent, and not with the view to, or
for resale in connection with, any distribution thereof, and that the
Holder has no present intention of selling, granting any participation
in, or otherwise distributing the Shares. The Holder further represents
that it does not have any contract, undertaking, agreement or
arrangement with any person or entity to sell, transfer or grant
participation to such person or entity or to any third person or entity
with respect to any of the Shares.
(c) The Holder has substantial experience in evaluating and
investing in private placement transactions of securities in companies
similar to the Company and acknowledges that the Holder is able to fend
for itself. The Holder has such knowledge and experience in financial
and business matters so that the Holder is capable of evaluating the
merits and risks of its investment in the Company.
(d) The Holder understands and acknowledges that an investment
in the Company is highly speculative and involves substantial risks.
The Holder can bear the economic risk of the Holder's investment and is
able, without impairing the Holder's financial condition, to hold the
Shares for an indefinite period of time and to suffer a complete loss
of the Holder's investment.
(e) The Holder has had an opportunity to ask questions of, and
receive answers from, the officers of the Company concerning this
Agreement and the transactions contemplated by this Agreement, as well
as the Company's business, management and financial affairs, which
questions were answered to its satisfaction. The Holder believes that
it has received all the information the Holder considers necessary or
appropriate for deciding whether to acquire the Shares. The Holder
understands that such discussions, as well as any information issued by
the Company, were intended to describe and summarize certain aspects of
the Company's business and prospects, but were not necessarily a
thorough or exhaustive description. The Holder also acknowledges that
it is relying solely on its own counsel and not on any statements or
representations of the Company or its agents for legal advice with
respect to this investment or the transactions contemplated by this
Agreement.
(f) The Holder is an "accredited investor" within the meaning
of Regulation D, Rule 501(a), promulgated by the Commission under the
1933 Act and shall submit to the Company such further assurances of
such status as may be reasonably requested by the Company.
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(g) The Holder acknowledges that the Shares must be held
indefinitely unless subsequently registered under the 1933 Act or an
exemption from such registration is available. The Holder is aware of
the provisions of Rule 144 promulgated under the 1933 Act which permit
limited resale of shares purchased in a private placement subject to
the satisfaction of certain conditions, including among other things,
the existence of a public market for the shares, the availability of
certain current public information about the Company, the resale
occurring not less than one year after a party has purchased and paid
for the security to be sold, the sale being effected through a
"broker's transaction" or in transactions directly with a "market
maker" and the number of shares being sold during any three-month
period not exceeding specified limitations. The Holder acknowledges
that, if all of the requirements of Rule 144 are not met, registration
under the 1933 Act or an exemption from registration will be required
for any disposition of the Shares. The Holder understands that,
although Rule 144 is not exclusive, the Commission has expressed its
opinion that persons proposing to sell restricted securities received
in a private offering other than in a registered offering or pursuant
to Rule 144 will have a substantial burden of proof in establishing
that an exemption from registration is available for such offers or
sales and that such persons and the brokers who participate in the
transactions do so at their own risk.
(h) The Holder understands and agrees that the certificates
evidencing the Shares, or any other securities issued in respect of the
Shares upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall bear legends similar to the
following (in addition to any legend required under applicable state or
other securities laws):
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE
SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED, ASSIGNED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THESE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY IN
FORM AND SUBSTANCE TO THE CORPORATION TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE
TORONTO STOCK EXCHANGE ("TSX"); HOWEVER, THE SAID SECURITIES CANNOT BE
TRADED THROUGH THE FACILITIES OF TSX SINCE THEY ARE NOT FREELY
TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH
SECURITIES IS NOT "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON TSX.
7 MISCELLANEOUS.
7.1 SUCCESSORS AND ASSIGNS. The rights and obligations of the Holder
under this Agreement shall be freely assignable in whole or in increments of not
less than 500,000 shares of Registrable Securities. Any assignee of such rights
shall, upon agreeing to assume the obligations of the Holder hereunder and
making for the benefit of the Company the representations and warranties
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contained in SECTION 6.2, be entitled to certain benefits of this Agreement as
set forth in an agreement between the Holder and such assignee. The Holder shall
promptly notify the Company in writing of such assignment and any limitations
binding on assignee. The rights and obligations of the Company hereunder may not
be assigned.
7.2 ENTIRE AGREEMENT. This Agreement, the ASA and the MIPA and the
other agreements and instruments furnished pursuant thereto or in connection
therewith, constitute the full and entire agreement and understanding between
the Holder and the Company, and supersede all prior agreements and
understandings relating to the subject matter hereof.
7.3 NOTICES. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if transmitted by telecopier with
receipt acknowledged, or upon delivery, if delivered personally or by recognized
commercial courier with receipt acknowledged, or upon the expiration of 72 hours
after mailing, if mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Holder, at:
Forest Oil Corporation
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, at:
Pacific Energy Resources Ltd.
000 X. Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address or addresses as the Holder or the Company, as the case
may be, may specify by written notice given in accordance with this SECTION 7.3.
7.4 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
7.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.6 DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are for convenience of reference only and do not
constitute a part of this Agreement and are not to be considered in construing
or interpreting this Agreement.
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7.7 WAIVERS AND AMENDMENTS. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or by course of
dealing, except by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.
7.8 REMEDIES. If the Company fails to observe or perform any covenant
or agreement to be observed or performed under this Agreement, the Holder may
proceed to protect and enforce his 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 of the Holder, or to take any one or more of such actions. The Company
agrees to pay all reasonable fees, costs, and expenses, including without
limitation, fees and expenses of attorneys, accountants and other experts
retained by the Holder, and all reasonable fees, costs and expenses of appeals,
incurred by the Holder in connection with the enforcement of this Agreement or
the collection or any sums due hereunder, whether or not suit is commenced
unless and to the extent that the Company prevails in any action, suit or
proceeding initiated by the Holder which a court of competent jurisdiction
determines was initiated or maintained by the Holder in bad faith. 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.
7.9 GOVERNING LAW. In all respects, including all matters of
construction, validity and performance, this Agreement and the rights and
obligations arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of Delaware applicable to contracts
made and performed in such state, without regard to principles thereof regarding
conflicts of laws.
IN WITNESS WHEREOF, the parties have caused this Share Acquisition and
Registration Rights Agreement to be executed and delivered by their duly
authorized representatives as of the date first above written.
PACIFIC ENERGY RESOURCES LTD.,
a Delaware corporation
By: /S/ XXXXXX XXXXX
---------------------------
Xxxxxx Xxxxx, President
FOREST OIL CORPORATION,
a New York Corporation
By: /S/ H. XXXXX XXXXX
---------------------------
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