Exhibit 4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of February 3,
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1999, between ONEOK Resources Company, a Delaware corporation (the
"Shareholder") and Magnum Hunter Resources, Inc., a Nevada corporation (the
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"Company").
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RECITALS
A. The Company and Shareholder have entered into a Stock Purchase Agreement
dated February 3, 1999 (the "Purchase Agreement"), pursuant to which the
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Shareholder will purchase 50,000 newly issued shares of the Company's 1999
Series A 8% Convertible Preferred Stock, par value $.001 per share, having a
liquidation value of $50,000,000.00 or $1,000.00 per share (the "Preferred
Stock").
B. The parties each desire to make certain covenants and agreements
concerning, among other things, the registration from time to time of the
Shareholder's shares of the Common Stock obtainable upon conversion of the
Preferred Stock (the "Shares") under the Securities Act of 1933, as amended (the
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"Securities Act").
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NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein, the
Company and the Shareholder hereby agree as follows:
ARTICLE I
Certain Definitions
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Section 1.1. Defined Terms. In addition to other terms defined elsewhere in
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this Agreement, as used in this Agreement, the following capitalized terms have
the respective meanings set forth below:
"Affiliate" shall mean, with respect to any Person, any other Person that
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directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such Person.
"Blackout Period" shall have the meaning assigned to such term in Section
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3.1(b).
"Claims" shall have the meaning assigned to such term in Section 3.6(a).
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"Demand Period" shall have the meaning assigned to such term in Section
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3.1(a).
"Demand Registration" shall have the meaning assigned to such term in
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Section 3.1(a).
"Demand Request" shall have the meaning assigned to such term in Section
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3.1(a).
"Effective Period" shall have the meaning assigned to such term in Section
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3.4(a)(iii).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
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"Holder" shall mean, with respect to any shares of Common Stock, the
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Shareholder and as long as there is a direct chain of ownership by the
Shareholder and its Affiliate any Affiliate of Shareholder holding Shares;
and the terms "hold", "held" and "holding" shall have meanings correlative
to the foregoing.
"Inspectors" shall have the meaning assigned to such term in Section
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3.4(a)(iv).
"Maximum Number" shall have the meaning assigned to such term in Section
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3.2(b).
"Other Holder" shall have the meaning assigned to such term in Section
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3.2(b).
"Person" shall mean any individual, corporation, company, partnership,
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joint venture, trust, group (as such term is used in Rule 13d-5 under the
Exchange Act), business association, government or political subdivision
thereof, governmental body or other entity.
"Piggy-Back Registration" shall have the meaning assigned to such term in
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Section 3.2(a).
"Piggy-Back Request" shall have the meaning assigned to such term in
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Section 3.2(a).
"Preferred Stock" shall have the meaning assigned to such term in the first
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recital of this Agreement.
"Records" shall have the meaning assigned to such term in Section
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3.4(a)(iv).
"Registered Shares" shall have the meaning assigned to such term in Section
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3.4(a)(xviii).
"Registration" shall have the meaning assigned to such term in Section
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3.2(a).
"Registration Expenses" shall have the meaning assigned to such term in
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Section 3.5.
"Rule 144" shall have the meaning assigned to such term in Section 3.8
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"SEC" shall mean the United States Securities and Exchange Commission or
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any other United States federal agency at the time administering the Securities
Act or the Exchange Act, as applicable, whichever is the relevant statute.
"Securities Act" shall have the meaning assigned to such term in the second
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recital to this Agreement.
"Shares" shall have the meaning assigned to such term in the second recital
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of this Agreement.
Section 1.2. General. Unless the context otherwise requires, references in
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this Agreement to any "section" or "article" shall mean a section or article of
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this Agreement, as the case may be, and the terms "hereof," "hereunder" and
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"hereto" and words of similar meaning shall mean this Agreement in its entirety
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and not any particular provisions of this Agreement. Unless the context
otherwise requires, the terms defined herein include the singular as well as the
plural.
Unless the context otherwise requires, each reference herein to the
Securities Act, the Exchange Act or Rule 144 (or any other rule, regulation or
form promulgated under either such statute) shall be deemed to mean, as of any
time, such statute, rule, regulation or form as then in effect, after all
amendments thereto, or, if not then in effect, any successor statute, rule,
regulation or form as then in effect, after all amendments thereto.
Section 1.3. Headings. The descriptive headings of the several Sections and
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paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
ARTICLE II
Representations and Warranties
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Section 2.1. Representations and Warranties of the Shareholder. The
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Shareholder hereby represents and warrants to the Company (i) that it has been
duly organized and is an existing corporation in good standing under the laws of
the State of Delaware; (ii) that it has all requisite corporate power and
authority and has received all requisite approvals (including any necessary
approval of its board of directors) to complete the transactions contemplated
hereby, and (iii) that this Agreement has been duly authorized, executed and
delivered by the Shareholder and constitutes a valid and binding agreement of
the Shareholder enforceable against the Shareholder in accordance with its
terms.
Section 2.2. Representations and Warranties of the Company. The Company
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hereby represents and warrants to the Shareholder (i) that the Company has been
duly organized and is an existing corporation in good standing under the laws of
the State of Nevada; (ii) that it has all requisite corporate power and
authority, and has received all requisite approvals (including any necessary
approval of its Board of Directors) to complete the transactions contemplated
hereby; and (iii) this Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms.
ARTICLE III
Registration Rights
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Section 3. 1. Demand Registrations.
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(a) At any time following the date upon which the Shareholder has
converted or given the Company notice of its election to convert any or all
of the Preferred Stock into shares and prior to the date on which the
Company shall have obtained a written opinion of legal counsel reasonably
satisfactory to the Shareholder and addressed to the Company and the
Shareholder to the effect that the Shares may be publicly offered for sale
in the United States by the Shareholder without restriction as to manner of
sale and amount of securities sold and without registration under the
Securities Act (such period, the "Demand Period"), the Shareholder shall
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have the unlimited right to require the Company to file a registration
under the Securities Act in respect of all or a portion of the Shares by
delivering to the Company written notice stating that such right is being
exercised, specifying the number of Shares to be included in such
registration and describing the intended method of distribution thereof (a
"Demand Request"). As promptly as practicable, but in no event later than
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thirty (30) days after the Company receives a Demand Request, the Company
shall file with the SEC and thereafter use its best efforts to cause to be
declared effective promptly a registration statement (including, without
limitation, by means of a shelf registration pursuant to Rule 415 under the
Securities Act if so requested by Shareholder and if the Company is then
eligible to use such a registration) (a "Demand Registration") providing
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for the registration of such number of Shares as the Shareholder shall have
demanded be registered for distribution in accordance with such intended
method of distribution. The Company shall have the right and option to
designate any one of the Demand Registrations be filed as a shelf
registration or other successor procedure as prescribed by the SEC, as
above provided as a shelf registration statement, for which the Company
agrees to pay certain costs therefor pursuant to Section 3.5 below (the
"Free Shelf Registration"). After completion of any Demand Registration
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designated as a shelf registration by the Company, any subsequent Demand
Registrations shall not be shelf registrations unless the Company otherwise
agrees. Notwithstanding the foregoing, the Company shall not be obligated
to effect any Demand Registration requested pursuant to this Section 3.1 if
the number of Shares then held by the Shareholder shall be less than 1% of
the then outstanding Common Stock.
(b) Anything in this Agreement to the contrary notwithstanding, the
Company shall be entitled to postpone and delay, for a reasonable period of
time, not to exceed ninety (90) days in the case of clauses (i) and (ii)
below, or thirty (30) days in the case of clause (iii) below (each, a
"Blackout Period"), the filing of any Demand Registration if the Company
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shall determine that any such filing or the offering of any Shares would
(i) in the good faith judgment of the Board of Directors of the Company,
unreasonably impede, delay or otherwise interfere with any pending or
contemplated financing, acquisition, merger, corporate reorganization or
other similar transaction involving the Company, (ii) based upon advice
from the Company's investment banker or financial advisor, adversely affect
any pending or contemplated offering or sale of any class of
securities by the Company, or (iii) in good faith judgment of the Board
require disclosure of material non-public information (other than
information relating to an event described in clause (i) or (ii) of this
subsection (b)) which, if disclosed at such time, would be materially
harmful to the interests of the Company and its stockholders; provided,
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however, that in the case of a Blackout Period pursuant to clause (i)
above, the Blackout Period shall earlier terminate upon the completion, or
abandonment of the relevant financing, acquisition, merger, corporate
reorganization or other similar transaction; provided, further, in the case
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of a Blackout Period pursuant to clause (ii) above, the Blackout Period
shall either terminate thirty (30) days after the completion or upon the
abandonment, of the relevant securities offering or sale; and provided,
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further, that in the case of a Blackout Period pursuant to clauses (i) or
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(iii) above, the Company shall give written notice of its determination to
postpone or delay the filing of any Demand Registration and in the case of
clause (iii) above, the Blackout Period shall earlier terminate upon public
disclosure by the Company or public admission by the Company of such
material non-public information or such time as such material non-public
information shall be publicly disclosed; and provided, further, that in the
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case of a Blackout Period pursuant to clause (i), (ii) or (iii) above, the
Company shall furnish to the Shareholder a certificate of an executive
officer of the Company to the effect that an event permitting a Blackout
Period has occurred. Notwithstanding anything herein to the contrary, the
Company shall not exercise pursuant to clause (i) or (ii) of the preceding
sentence the right to postpone or delay the filing of any Demand
Registration more than twice in any twelve (12) month period. Upon notice
by the Company to the Shareholder of its determination that a Blackout
Period exists, the Shareholder covenants that it shall keep the fact of any
such notice strictly confidential, and, in the case of a Blackout Period
pursuant to clauses (iii) above or Section 3.1(c) below, promptly halt any
offer, sale, trading or transfer by it or any of its Affiliates of any
Common Stock for the duration of the Blackout Period set forth in such
notice (or until such Blackout Period shall be earlier terminated in
writing by the Company) and promptly halt any use, publication,
dissemination or distribution of the Demand Registration, each prospectus
included therein, and any amendment or supplement thereto by it and any of
its Affiliates for the duration of the Blackout Period set forth in such
notice (or until such Blackout Period shall be earlier terminated in
writing by the Company) and, if so directed by the Company, will deliver to
the Company any copies then in such Shareholder's possession of the
prospectus covering such Shares, that was in effect at the time of receipt
of such notice. After the expiration of any Blackout Period and without
further request from the Shareholder, the Company shall effect the filing
of the relevant Demand Registration and shall use its best efforts to cause
any such Demand Registration to be declared effective as promptly as
practicable unless the Shareholder shall have, prior to the effective date
of such Demand Registration, withdrawn in writing its initial request.
(c) Anything in this Agreement to the contrary notwithstanding, in
case a Demand Registration has been filed, if a transaction of the type
specified in Section 3.1(b)(i) occurs other than as a result of actions
taken by the Company, the Company may cause such Demand Registration to be
withdrawn and its effectiveness terminated or may
postpone amending or supplementing such Demand Registration for a
reasonable period of time, not to exceed the Blackout Period applicable to
Section 3.1(b)(i).
(d) The Shareholder may withdraw a Demand Request in circumstances
including, but not limited to, the following: if (i) the Company is in
material breach of its obligation hereunder and has not cured such breach
after having received notice thereof and a reasonable opportunity to do so
or (ii) the withdrawal occurs during a Blackout Period.
(e) The Company may elect to include in any registration statement
filed pursuant to this Section 3.1 any Common Stock to be issued by it or
held by any of its subsidiaries or by any other shareholders only to the
extent such Common Stock is offered and sold pursuant to, and on the terms
and subject to the conditions of, any underwriting agreement or
distribution arrangements entered into or effected by the Shareholder. No
securities shall be included in a Demand Registration unless the managing
underwriter advises the Company in writing that inclusion of such
securities will not materially and adversely affect the price or success of
the Demand Registration.
(f) The managing underwriter for any Demand Registration shall be
selected by the Shareholder, provided that such underwriter shall be
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reasonably satisfactory to the Company.
(g) Anything in this Agreement to the contrary notwithstanding, the
Company shall not be required to register any Shares pursuant to this
Section 3.1 if the Shareholder had the opportunity to register Shares
pursuant to Section 3.2 hereof within the 60 days immediately preceding
such request, and no Shares were excluded from the offering by the managing
underwriter or underwriters thereof.
Section 3.2. "Piggy-Back" Registrations.
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(a) If, at any time following the date of this Agreement, the Company
proposes to register any Common Stock under the Securities Act on a
registration statement on Form S-1, Form S-2 or Form S-3 (or any equivalent
general registration form then in effect) other than pursuant to a Demand
Registration under Section 3. 1 for purposes of a primary offering,
secondary offering or combined offering of such Common Stock, the Company
shall give prompt written notice to the Shareholder of its intention to do
so. Such notice shall specify, at a minimum, the number of shares of Common
Stock so proposed to be registered, the proposed date of filing of such
registration statement, any proposed means of distribution of such Common
Stock, any proposed managing underwriter or underwriters of such offering
and a good faith estimate by the Company of the proposed maximum offering
price thereof, as such price is proposed to appear on the facing page of
such registration statement. Upon the written direction of the Shareholder
(a "Piggy-Back Request"), notifying the Company of the Shareholder's desire
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to convert all or a portion of the Preferred Stock into shares of the
Company, such notice to be given within fifteen (15) business days
following the receipt by the Shareholder of any such
written notice (which direction shall specify the number of Shares intended
to be disposed of by the Shareholder), the Company shall include in such
registration statement (a "Piggy-Back Registration" and, collectively with
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a Demand Registration, a "Registration"), subject to the provisions of
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Section 3.2 hereof and the registration rights originally granted to Trust
Company of the West as the holder of the Company's 1996 Series A
Convertible Preferred Stock (the "Existing Registration Rights"), such
numbers of the Shares as shall be set forth in such Piggy-Back Request.
(b) In the event that the Company proposes to register Common Stock in
connection with an underwritten offering and an independent investment
banking firm selected by the Company to act as managing underwriter thereof
reasonably and in good faith shall have advised the Company, any holder of
Common Stock intending to offer such Common Stock in a secondary offering
or combined offering (each, an "Other Holder") or the Shareholder in
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writing that, in its opinion, the inclusion in the registration statement
of some or all of the Shares sought to be registered by the Shareholder
creates a substantial risk that the price per share of Common Stock that
the Company or any Other Holder will derive from such registration will be
materially and adversely affected or that the number of shares of Common
Stock sought to be registered (including any shares of Common Stock sought
to be registered at the request of the Company and any Other Holder and
those sought to be registered by the Shareholder) is a greater number than
can reasonably be sold or the success of the offering would otherwise be
materially and adversely affected, the Company shall include in such
registration statement such number of shares of Common Stock as the
Company, any Other Holder and the Shareholder are so advised can be sold in
such offering without such an effect (the "Maximum Number") as follows and
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in the following order of priority: (A) first, such number of shares of
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Common Stock as the Company intended to be registered and sold by the
Company; (B) second, in the case of a secondary offering or a combined
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offering and if and to the extent that the number of shares of Common Stock
to be registered under clause (A) is less than the Maximum Number, such
number of shares of Common Stock as is required to be registered by the
Existing Registration Rights; and (C) third, in the case of a secondary
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offering or a combined offering and if and to the extent that the aggregate
number of shares of Common Stock to be registered under clauses (A) and (B)
is less than the Maximum Number, such number of shares of Common Stock as
the Shareholder shall have intended to register which, when added to the
number of shares of Common Stock to be registered under clauses (A); and
(B), is less than or equal to the Maximum Number; provided that if such
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number exceeds the Maximum Number, the shares of Common Stock of the
Shareholder in excess of the amount necessary to achieve the maximum number
will be excluded; and (D), fourth, to the extent that the number of shares
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of Common Stock of the Company, the holders of the Existing Registration
Rights and the Shareholder to be included in the Registration are not equal
to or more than the Maximum Number, then any Other Holders may include such
additional shares up to the maximum number on a pro rata basis with Other
Holders desiring to participate in the Registration.
(c) No Piggy-Back Registration effected under this Section 3.2 shall
be deemed to have been effected pursuant to Section 3.1 hereof or shall
release the Company of its obligations to effect any Demand Registration
(including the Free Shelf Registration) upon request as provided under
Section 3.1 hereof.
(d) Notwithstanding any request under this Section 3.2, a selling
Holder may elect in writing to withdraw its request for inclusion of its
Shares in any registration statement provided, however, that (i) such
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request must be made in writing prior to the earlier of the execution of
the underwriting agreement or the execution of the custody agreement with
respect to such registration and (ii) such withdrawal shall be irrevocable
and, after making such withdrawal, a Holder shall no longer have any right
to include Shares in the registration as to which such withdrawal was made.
(e) If, at any time after giving written notice of its intention to
register any Common Stock under Section 3.2 and prior to the effective date
of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register or to delay
registration of such Common Stock, the Company may, at its election, give
written notice of such determination to all Holders of record of Shares and
(i) in the case of a determination not to register, shall be relieved of
its obligation to register any Shares in connection with such abandoned
registration, without prejudice, however, to the rights of Holders under
Section 3.1 and (ii) in the case of a determination to delay such
registration of the Company's Common Stock, shall be permitted to delay the
registration of such Shares for the same period as the delay in registering
such other Common Stock.
(f) If, as a result of the proration provisions of this Section 3.2,
any Holder shall not be entitled to include all Shares in a registration
that such Holder has requested to be included, such Holder may elect to
withdraw such Holder's request to include Shares in such registration or
may reduce the number requested to be included.
Section 3.3. Additional Agreements.
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(a) Sale Without Registration. Anything in this Agreement to the
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contrary notwithstanding, if at any time the Company shall obtain a written
opinion of legal counsel reasonably satisfactory to the Shareholder and
addressed to the Company and the Shareholder to the effect that the Shares
may be publicly offered for sale in the United States by the Shareholder
without restriction as to manner of sale and amount of securities sold and
without registration under the Securities Act, the Company shall no longer
be obligated to file or maintain a registration statement with respect to
the Shares pursuant to this Agreement. In such case, the Company shall
issue to the Shareholder certificates representing the Shares without any
legend restricting transfer and shall remove all stop transfer orders
relating to the Shares, except for any legal or stock transfer order
required by a shareholder or voting agreement to which the Shareholder is a
party.
(b) Registration Rights of Affiliates. Affiliates of the Shareholder
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who become Holders of the Shares (as long as there is a direct chain of
ownership by the Shareholder and its Affiliates) shall have the same rights
as the Shareholder under this Agreement; provided, however, the Company
shall not be obligated to file more than one Free Shelf Registration.
Section 3.4. Registration Procedures. (a) In connection with each
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registration statement prepared pursuant to this Agreement, and in accordance
with the intended method or methods of distribution of the Shares as described
in such registration statement, the Company shall, as soon as reasonably
practicable (and, in any event, subject to the terms of this Agreement,
including, without limitation, Section 3. l(a), at or before the time required
by applicable laws and regulations):
(i) Prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC, with respect to such Shares,
which form shall be selected by the Company with the Shareholder's
reasonable consent, and use its reasonable best efforts to cause such
registration statement to become effective promptly; provided that
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before filing a registration statement or prospectus or any amendments
or supplements thereto, the Company will furnish to one counsel
selected by the Shareholder, and the sales or placement agent or
agents, if any, for the Shares and the managing underwriter or
underwriters, if any, draft copies of all such documents proposed to
be filed at least four (4) days prior to such filing, which documents
will be subject to the reasonable review of the Shareholder, the sales
or placement agent or agents, if any, for the Shares and the managing
underwriter or underwriters, if any, and their respective agents and
representatives and (x) the Company will not include in any
registration statement information concerning or relating to the
Shareholder to which the Shareholder shall reasonably object in
writing (unless the inclusion of such information is required by
applicable law or the regulations of any securities exchange to which
the Company may be subject), and (y) the Company will not file any
Demand Registration or amendment thereto or any prospectus or any
supplement thereto to which the Shareholder shall reasonably object in
writing (unless the Demand Registration was theretofore filed and the
filing of such amendment, prospectus or supplement is required by
applicable law or the regulations of any securities exchange
applicable to the Company);
(ii) Furnish without charge to the Shareholder, the sales or
placement agent or agents, if any, and the managing underwriter or
underwriters, if any, such number of copies of such registration
statement and of each amendment and supplement thereto (in each case
including all exhibits), such number of copies of the summary,
preliminary, final, amended or supplemented prospectuses included in
such registration statement in conformity with the requirements of the
Securities Act and any regulations promulgated thereunder and (upon
the reasonable request by the Shareholder) any documents incorporated
therein by reference and such other documents as the Shareholder may
reasonably request in
order to facilitate the public sale or other disposition of such
Shares (the Company hereby consenting to the use in accordance with
all applicable law of the prospectus or any amendment or supplement
thereto by the Shareholder in connection with the offering and sale of
the Shares covered by the prospectus or any amendment or supplement
thereto);
(iii) In respect to the Free Shelf Registration, use its
reasonable best efforts to keep such registration statement effective
for at least eighteen months and in respect to any other Demand
Registration , use its reasonable best efforts to keep such
registration statement effective for at least 180 days (the "Effective
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Period"); prepare and file with the SEC such amendments,
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post-effective amendments and supplements to the registration
statement and the prospectus as may be necessary to maintain the
effectiveness of the registration for the Effective Period and to
cause the prospectus (and any amendments or supplements thereto) to be
filed pursuant to Rules 424 and 430A under the Securities Act and/or
any successor rules that may be adopted by the SEC, as such rules may
be amended from time to time; and comply with the provisions of the
Securities Act with respect to the disposition of all Shares covered
by such registration statement during the Effective Period in
accordance with the intended method or methods of distribution
thereof, as specified in writing by the Shareholder;
(iv) Except during any Blackout Period upon not less than three
(3) days prior notice to the Company, make available for inspection
during normal business hours by the Shareholder or by any underwriter,
attorney, accountant or other agent retained by the Shareholder
(collectively, the "Inspectors") financial and other records and
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pertinent corporate documents of the Company (collectively, the
"Records"), provide the Inspectors with opportunities to discuss the
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business of the Company with its officers and provide opportunities to
discuss the business of the Company with the independent public
accountants who have certified its most recent annual financial
statements, in each case to the extent customary for transactions of
the size and type intended, as specified by the Shareholder, but only
to the extent reasonably necessary to enable the Shareholder or any
underwriter retained by the Shareholder to conduct a "reasonable
investigation" for purposes of Section 11(a) of the Securities Act.
Records which the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspector unless (A) the disclosure of
such Records is necessary to avoid or correct a misstatement of a
material fact or omission to state a material fact in the
Registration, (B) the disclosure of such Records is required by any
court or governmental body with jurisdiction over the Shareholder or
Inspector or (C) all of the information contained in such Records has
been made generally available to the public. The Shareholder agrees
that it will, upon learning that disclosure of such Records is sought
in a court of competent jurisdiction or by any governmental body,
promptly give prior notice to the Company and allow the Company, at
its expense,
to undertake appropriate action to prevent disclosure of those Records
deemed confidential;
(v) If requested by the Shareholder, promptly incorporate in a
prospectus, prospectus supplement or post-effective amendment such
information as the Shareholder reasonably specifies should be included
therein, including, without limitation, information relating to the
planned distribution of Shares, the number of Shares being sold by the
Shareholder, the name and description of the Shareholder, the offering
price of such Shares and any discount, commission or other
compensation payable in respect of the Shares being sold, the purchase
price being paid therefor to the Shareholder and information with
respect to any other terms of the underwritten offering of the Shares
to be sold in such offering, except to the extent that the Company is
advised in a written opinion of outside counsel that the inclusion of
such information is reasonably likely to violate applicable securities
laws; and make all required filings of such prospectus, prospectus
supplement or post-effective amendment promptly after notification of
the matters to be incorporated in such prospectus, prospectus
supplement or post-effective amendment;
(vi) If requested by the Shareholder, use reasonable efforts to
participate in and assist with a "road show" and other customary
marketing efforts in connection with the sale of Shares pursuant to a
Demand Registration or Piggy-Back Registration, at such times and in
such manner as the Company and the Shareholder mutually may determine
(and as do not unreasonably interfere with the Company's operations);
(vii) Use its best efforts to register or qualify the Shares
covered by a Demand Registration Statement under such other securities
or "blue sky" laws of such jurisdictions in the United States as the
Shareholder shall reasonably request, keep such registrations or
qualifications in effect for so long as the registration statement
remains in effect, and do any and all other acts and things which may
be reasonably necessary to enable the Shareholder or any underwriter
to consummate the public sale or other disposition of the Shares in
such jurisdictions; provided, however, that in no event shall the
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Company be required to qualify to do business as a foreign corporation
in any jurisdiction where it is not so qualified; to execute or file
any general consent to service of process under the laws of any
jurisdiction; to take any action that would subject it to service of
process in suits other than those arising out of the offer and sale of
the Shares covered by the registration statement; or to subject itself
to taxation in any jurisdiction where it would not otherwise be
obligated to do so, but for this paragraph (vii);
(viii) Use its reasonable best efforts to cause the Shares to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the Shareholder to
consummate the public sale or other disposition of the Shares;
(ix) Use its reasonable best efforts to cause all Shares covered
by such registration statement to be approved for trading on a
national interdealer quotation system or listed on the securities
exchanges, if any, on which the Common Stock of the Company is then
listed;
(x) Promptly notify the Shareholder, at any time when a
prospectus relating to any of the Shares covered by such registration
statement is required to be delivered under the Securities Act, of the
Company's becoming aware that the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing, and, at the request of the Shareholder, promptly prepare and
furnish to the Shareholder a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to
the purchasers of such Shares, such prospectus shall not include 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 in the light of the circumstances then
existing;
(xi) Promptly notify the Shareholder, the sales or placement
agent or agents, if any, for the Shares and the managing underwriter
or underwriters, if any, thereof, after becoming aware thereof, when
the registration statement or any related prospectus or any amendment
or supplement has been filed, and, with respect to the registration
statement or any post-effective amendment, when the same has become
effective, (A) of any request by the SEC for amendments or supplements
to the registration statement or the related prospectus or for
additional information, (B) of the issuance by the SEC of any stop
order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose, (C) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Shares for sale in any jurisdiction or the
initiation of any proceeding for such purpose or (D) within the
Effective Period of the happening of any event which makes any
statement in the registration statement or any post-effective
amendment thereto, prospectus or any amendment or supplement thereto,
or any document incorporated therein by reference untrue in any
material respect or which requires the making of any changes in the
registration statement or post-effective amendment thereto or any
prospectus or amendment or supplement thereto so that they will not
contain any 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 (in light of the circumstances under which they
were made) not misleading;
(xii) During the Effective Period, use its best efforts to obtain
the withdrawal of any order suspending the effectiveness of the
registration statement or any post-effective amendment thereto;
(xiii) Deliver promptly to the Shareholder, upon the
Shareholder's request, copies of all correspondence between the SEC
and the Company, its counsel or auditors and all memoranda relating to
discussions with the SEC or its staff with respect to the registration
statement and permit the Shareholder to do such investigation, with
respect to information contained in or omitted from the registration
statement, as is reasonably necessary. The Shareholder agrees that it
will use its best efforts not to interfere unreasonably with the
Company's business when conducting any such investigation;
(xiv) Provide a transfer agent and registrar for all such Shares
covered by such registration statement not later than the effective
date of such registration statement, which transfer agent and
registrar may be the Company, subject to any applicable law or
regulations;
(xv) Cooperate with the Shareholder and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing such Shares to be sold under the
registration statement, which certificates shall not bear any
restrictive-legends except as required by law; and, in the case of an
underwritten offering, enable such Shares to be in such denominations
and registered in such names as the managing underwriter or
underwriters, if any, may request in writing at least two (2) business
days prior to any sale of the Shares to the underwriters;
(xvi) In connection with any Demand Registration, enter into such
agreements (including, if the offering is an underwritten offering, an
underwriting agreement) as are customary in transactions of such kind
(it being recognized that certain of the below listed items may not be
considered customary for the Free Shelf Registration) and take such
other actions as are reasonably necessary in connection therewith in
order to expedite or facilitate the disposition of such Shares; and
(A) make such representations and warranties with respect to the
registration statement, post-effective amendment or supplement
thereto, prospectus or any amendment or supplement thereto, and
documents incorporated by reference, if any, to the managing
underwriter or underwriters, if any, of the Shares and, at the option
of the Shareholder, make to and for the benefit of such Shareholder
the representations, warranties and covenants of the Company which are
being made to the underwriters, in form, substance and scope as are
customarily made by the Company in connection with offerings of shares
in transactions of such kind (representations and warranties by the
participating holders shall also be made as are customary in
agreements of that type); provided that the Company shall not be
--------
required to make any representations or warranties with respect to
information specifically provided by a holder for inclusion in the
registration documents; (B) obtain an opinion of counsel to the
Company (which counsel may be internal counsel for the Company unless
the managing underwriter or underwriters shall otherwise reasonably
request) in customary form and covering matters of the type
customarily covered by such an opinion, addressed to such managing
underwriter or underwriters, if any, and to the Shareholder and dated
the date of the closing of the sale of the Shares relating thereto;
(C) obtain a "comfort" letter or letters from the independent
certified public accountants who have certified the Company's most
recent audited financial statements that are incorporated by reference
in the registration statement which is addressed to the Shareholder
and the managing underwriter or underwriters, if any, and is dated the
date of the prospectus used in connection with the offering of such
Shares and/or the date of the closing of the sale of such Shares
relating thereto, such letter or letters to be in customary form and
covering such matters of the type customarily covered by "comfort"
letters of such type; (D) deliver such documents and certificates as
may be reasonably requested by the Shareholder and the managing
underwriter or underwriters, if any, of the Shares to evidence
compliance with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (E)
undertake such obligations relating to expense reimbursement,
indemnification and contribution as provided in Sections 3.5 and 3.6
hereof, and
(xvii) Comply with all applicable rules and regulations of the
SEC in all material respects and generally make available to its
security holders an earnings statement (which need not be audited), as
soon as reasonably practicable but in no event later than ninety (90)
days after the end of the period of twelve (12) months commencing on
the first day of any fiscal quarter next succeeding each sale by the
Shareholder of Shares which have been registered pursuant to this
Agreement (the "Registered Shares") after the date hereof, which
-----------------
earnings statement shall cover such twelve (12) month period and shall
satisfy the provisions of Section 11(a) of the Securities Act and may
be prepared in accordance with Rule 158 under the Securities Act.
(b) In the event that the Company would be required, pursuant to
Section 3.4(a)(xi)(D) above, to notify the Shareholder, the sales or
placement agent or agents, if any, for the Shares and the managing
underwriter or underwriters, if any, thereof, the Company shall, subject to
the provisions of Section 3.1(b) hereof, as promptly as practicable,
prepare and furnish to the Shareholder, to each placement or sales agent,
if any, and to each underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to
purchasers of Registered Shares, such prospectus shall not 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,
in the light of the circumstances under which they were made, not
misleading. The Shareholder agrees that, upon receipt of any notice from
the Company pursuant to Section 3.4(a)(xi)(D) hereof, the Shareholder
shall, and shall use its best efforts to cause any sales or placement agent
or agents for the Shares and the underwriters, if any, thereof,
to forthwith discontinue disposition of the Shares until such person shall
have received copies of such amended or supplemented prospectus and, if so
directed by the Company, to destroy or to deliver to the Company all
copies, other than permanent file copies, then in its possession of the
prospectus (prior to such amendment or supplement) covering such Shares as
soon as practicable after the Shareholder's receipt of such notice.
(c) The Shareholder shall furnish to the Company in writing such
information regarding the Shareholder and its intended method of
distribution of the Shares as the Company may from time to time reasonably
request in writing, but only to the extent that such information is
required in order for the Company to comply with its obligations under all
applicable securities and other laws and to ensure that the prospectus
relating to such Shares conforms to the applicable requirements of the
Securities Act and the rules and regulations thereunder. The Shareholder
shall notify the Company as promptly as practicable of any inaccuracy or
change in information previously furnished by the Shareholder to the
Company or of the occurrence of any event, in either case as a result of
which any prospectus relating to the Shares contains or would contain an
untrue statement of a material fact regarding the Shareholder or its
intended method of distribution of such Shares or omits to state any
material fact regarding the Shareholder or its intended method of
distribution of such Shares required to be stated therein or necessary to
make the statement therein, in light of the circumstances under which they
were made, not misleading, and promptly furnish to the Company any
additional information required to correct and update any previously
furnished information or required so that such prospectus shall not
contain, with respect to the Shareholder or the distribution of the Shares,
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,
in light of the circumstances under which they were made, not misleading.
(d) Each Holder agrees not to effect any public sale or distribution
of any Shares, including any sale pursuant to Rule 144 under the Securities
Act, and not to effect any such public sale or distribution of any other
equity security of the Company or of any security convertible into or
exchangeable or exercisable for any equity security of the Company (in each
case, other than as part of such underwritten public offering) during the
ten (10) days prior to, and during the ninety (90) day period (or such
longer period as each Holder agrees with the underwriter of such offering)
beginning on the consummation of any underwritten public offering of the
Shares covered by a registration statement referred to in Section 3.2 to
the extent such Registered Shares are being sold thereunder.
(e) In the case of any registration under Section 3.1 pursuant to an
underwritten offering, or in the case of a registration under Section 3.2
if the Company has determined to enter into an underwriting agreement in
connection therewith, all Shares to be included in such registration shall
be subject to an underwriting agreement and no person may participate in
such registration unless such person agrees to sell such person's
securities on the basis provided therein and completes and executes all
questionnaires, indemnities, underwriting agreements and other document
(other than
powers of attorney) which must be executed in connection therewith, and
provides such other information to the Company or the underwriter as may be
necessary to register such Holder's Shares.
Section 3.5. Registration Expenses. Except as otherwise provided, the
---------------------
Shareholder agrees to bear and to pay, or cause to be paid promptly upon request
being made therefor, all reasonable expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation:
(a) all registration fees payable to the SEC under the Securities Act and all
fees and expenses in connection with the qualification of the Registered Shares
for offering and sale under state securities or "blue sky" laws referred to in
Section 3.4(a)(vii) hereof, including reasonable fees and disbursements of
counsel for any placement or sales agent or underwriter in connection with such
qualifications, (b) all expenses relating to the preparation, printing,
distribution and reproduction of the registration statement, each prospectus
included therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the certificates representing the Registered Shares
and all other documents relating hereto, (c) the costs and charges of any escrow
agent, transfer agent, registrar, any custodian or attorney-in-fact appointed to
act on behalf of the Shareholder (including, without limitation, all salaries
and expenses of the Company's officers and employees performing legal or
accounting duties) relating to the Registered Shares, (d) fees, disbursements
and expenses of the Company's counsel and its other advisors and experts and
independent certified public accountants of the Company (including the expenses
of any opinions or "comfort" letters required by or incident to such performance
and compliance) relating to the Registered Shares, (e) the fees and expenses
incurred in connection with the listing of the Registered Shares on The American
Stock Exchange and such other stock exchange or national securities exchange on
which the Common Stock of the Company shall at such time be listed, (f)
reasonable fees and disbursements of counsel retained by the Shareholder in
connection with registration pursuant to this Agreement; provided, however, that
the Shareholder shall pay all costs, fees and expenses of any special audit
required as a result of the timing of the demand for the Free Shelf Registration
(collectively, the "Registration Expenses"). In respect to the Free Shelf
---------------------
Registration, the Company shall pay all out-of-pocket Registration Expenses
except underwriter discounts and commissions applicable to the Registered Shares
and to the extent that any such Registration Expenses are incurred, assumed or
paid by the Shareholder, any sales or placement agent or agents for the
Registered Shares and the underwriters, if any, thereof, the Company shall
reimburse such person for the full amount of the Registration Expenses so
incurred, assumed or paid promptly after receipt of a request therefor and (g)
all expenses relating to any "road show" in connection with a Demand
Registration. The Holder of the Registered Shares shall pay all underwriting
discounts and commissions and any capital gains, income or transfer taxes, if
any, attributable to the sale of such Registered Shares.
Section 3.6. Indemnification: Contribution.
-----------------------------
(a) Indemnification by the Company. The Company shall, and it hereby
------------------------------
agrees to, indemnify and hold harmless the Shareholder, its directors,
officers, employees and controlling persons, if any, controlling and each
person who participates as a placement or sales agent or as an underwriter
in any offering or sale of the Shares, against
any losses, claims, damages or liabilities to which the Shareholder or such
agent or underwriter may become subject, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
(collectively, "Claims") arise out of or are based upon an untrue statement
------
or alleged untrue statement of a material fact contained in any
registration statement, or any preliminary or final prospectus contained
therein, or any amendment or supplement thereto, or any document
incorporated by reference therein, or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, and the Company
shall, and it hereby agrees to, reimburse the Shareholder or any other
indemnified Person such agent or underwriter for any legal or other
out-of-pocket expenses reasonably incurred by them in connection with
investigating or defending any such Claims; provided, however, that the
--------
Company shall not be liable to any such Person in any such case to the
extent that any such Claims arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in such registration statement, or preliminary or final prospectus, or
amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by the Shareholder or any
agent, underwriter or representative of the Shareholder expressly for use
therein, or by the Shareholder's failure to furnish the Company, upon
request, with the information with respect to the Shareholder, or any
agent, underwriter or representative of the Shareholder, or the
Shareholder's intended method of distribution, that is the subject of the
untrue statement or omission or if the Company shall sustain the burden of
proving that the Shareholder or such agent or underwriter sold securities
to the person alleging such Claims without sending or giving, at or prior
to the written confirmation of such sale, a copy of the applicable
prospectus (excluding any documents incorporated by reference therein) or
of the applicable prospectus, as then amended or supplemented (excluding
any documents incorporated by reference therein), if the Company had
previously furnished copies thereof to the Shareholder or such agent or
underwriter, and such prospectus corrected such untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement.
(b) Indemnification by the Shareholder. The Shareholder shall, and
----------------------------------
hereby agrees to (i) indemnify and hold harmless the Company, its
directors, officers, employees and controlling Persons, if any, and each
underwriter, its partners, officers, directors, employees and controlling
persons, if any, in any offering or sale of Shares, against any Claims to
which the Company, its directors, officers, employees and controlling
Persons, if any, may become subject, insofar as such Claims (including any
amounts paid in settlement as provided herein), arise out of or are based
upon (A) an untrue statement or alleged untrue statement of a material fact
contained in such registration statement, or any preliminary or final
prospectus contained therein, or any amendment or supplement thereto, or
any document incorporated by reference therein, or arise out of or are
based upon 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, in each case only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information
furnished to the Company by the Holder or such agent or underwriter (as the
case may be) expressly for use therein, and/or (B) an untrue statement or
alleged untrue statement or omission in a preliminary prospectus if the
Company furnished copies of a final prospectus, amendment or supplement
thereto that corrected such untrue statement, alleged untrue statement or
omission, provided that the maximum amount for which the Shareholder should
be liable under this indemnity shall not exceed the net proceeds recovered
by all Holders from the sale of the Shares, and (ii) reimburse the Company
for any legal or other out-of-pocket expenses reasonably incurred by the
Company or any other indemnified Persons in connection with investigating
or defending any such Claim.
(c) Notice of Claims, Etc. Promptly after receipt by an indemnified
---------------------
party under subsection (a) or (b) above of written notice of the
commencement of any action or proceeding for which indemnification under
subsection (a) or (b) may be requested, such indemnified party shall,
without regard to whether a claim in respect thereof is to be made against
an indemnifying party pursuant to the indemnification provisions of, or as
contemplated by, this Section 3.6, notify such indemnifying party in
writing of the commencement of such action or proceeding; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party in respect of such action or
proceeding on account of the indemnification provisions of or contemplated
by Section 3.6(a) or 3.6(b) hereof except to the extent the indemnifying
party was materially prejudiced by such failure of the indemnified party to
give such notice, and in no event shall such omission relieve the
indemnifying party from any other liability it may have to such indemnified
party. In case any such action or proceeding shall be brought against any
indemnified party and it shall notify an indemnifying party of the
commencement thereof, unless in the reasonable opinion of outside counsel
to the indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, such
indemnifying party shall be entitled to participate therein and, to the
extent that it shall determine, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel selected by
the indemnifying party and reasonably satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, such indemnifying
party shall not be liable to such indemnified party for any legal or any
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation (unless such indemnified party reasonably objects to such
assumption on the grounds that there may be defenses available to it which
are different from or in addition to the defenses available to such
indemnifying party, in which event the indemnified party shall have the
right to control its defense and shall be reimbursed by the indemnifying
party for the reasonable fees and expenses of its counsel; provided,
however, under no circumstances will the indemnifying party be obligated to
pay the fees and expenses of more than one separate counsel for all
indemnified persons in any jurisdiction). If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it will not
be obligated to pay the fees and expenses of more than one counsel for all
indemnified parties in any jurisdiction. The indemnifying party will not be
subject to any liability for any settlement made without its
prior written consent, which consent shall not be unreasonably withheld or
delayed. No indemnifying party shall, without the prior written consent of
the indemnified party, compromise or consent to entry of any judgment or
enter into any settlement agreement with respect to any action or
proceeding in respect of which indemnification is sought under Section
3.6(a) or (b) (whether or not the indemnified party is an actual or
potential party thereto), unless such compromise, consent or settlement
includes as an unconditional term thereof the giving by the claimant or
plaintiff to the indemnified party of a release from all liability in
respect of such claim or litigation and does not subject the indemnified
party to any injunctive relief or other equitable remedy.
(d) Contribution. The Shareholder and the Company agree that if, for
------------
any reason, the indemnification provisions contemplated by Sections 3.6(a)
or 3.6(b) hereof are unavailable to or are insufficient to hold harmless an
indemnified party in respect of any Claims referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such Claims in such proportion as is
appropriate to reflect the relative fault of, and benefits derived by, the
indemnifying party and the indemnified party, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or by such indemnified
party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
relative benefit derived by the parties shall be determined by reference to
the fact that the Company entered into this Agreement to induce the
Shareholder to engage in the transaction in which the Shares were acquired.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.6(d) were determined (i) by pro
---
rata allocation (even if the Shareholder or any agents for, or underwriters
----
of, the Shares, or all of them, were treated as one entity for such
purpose); or (ii) by any other method of allocation which does not take
into account the equitable considerations referred to in this Section
3.6(d). The amount paid or payable by an indemnified party as a result of
the Claims referred to above shall be deemed to include (subject to the
limitations set forth in Section 3.6(c) hereof) any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action, proceeding or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) Beneficiaries of Indemnification. The obligations of the Company
--------------------------------
under this Section 3.6 shall be in addition to any liability that it may
otherwise have and shall extend, upon the same terms and conditions, to
each employee, officer and director of the Shareholder and each agent and
underwriter of the Shares and each person, if any, who controls the
Shareholder or any such agent or underwriter within the meaning of the
Securities Act; and the obligations of the Shareholder and any agents or
underwriters contemplated by this Section 3.6, shall be in addition to any
liability that the Shareholder
or its respective agent or underwriter may otherwise have and shall extend,
upon the same terms and conditions, to each employee, officer and director
of the Company (including any person who, with his consent, is named in any
registration statement as about to become a director of the Company) and to
each person, if any, who controls the Company within the meaning of the
Securities Act.
Section 3.7. Underwriters. If any of the Shares are to be sold pursuant to
------------
an underwritten offering, the investment banker or bankers and the managing
underwriter or underwriters thereof shall be selected by the Company except in
the case of a Demand Registration, in which the managing underwriter or
underwriters shall be selected by the Shareholder, provided that such managing
--------
underwriter or underwriters must be of recognized national standing and
reasonably acceptable to the Company.
Section 3.8. Exchange Act Filings: Rule 144
------------------------------
(a) The Company covenants to and with the Shareholder that to the
extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange
Act or the Securities Act (including, but not limited to, the reports under
Sections 13 and 15(d) of the Exchange Act referred to in subparagraph
(c)(1) of Rule 144 adopted by the SEC under the Securities Act and the
rules and regulations adopted by the SEC thereunder) and shall take such
further action as the Shareholder may reasonably request, all to the extent
required from time to time to enable the Shareholder to sell Shares without
registration under the Securities Act within the limitations of the
exemption provided by Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC. Upon the request of the Shareholder, the Company shall
deliver to the Shareholder a written statement as to whether it has
complied with such requirements.
(b) The Company covenants to make available "adequate current public
information" concerning the Company within the meaning of Rule 144(c) under
the Securities Act.
Section 3.9. Agreement of the Shareholder. The Shareholder agrees not to,
----------------------------
and it shall cause its Affiliates not to, make any sale, transfer or other
disposition of Shares except in compliance with the registration requirements of
the Securities Act and the rules and regulations thereunder or in accordance
with the terms of this Agreement. The Shareholder will cause any Holder to whom
Shares are transferred to comply with, and agree to, the terms of this
Agreement.
Section 3. 10. Legends.
-------
(a) Stop transfer restrictions will be given to the Company's transfer
agent(s) with respect to the Shares and there will be placed on the
certificates or instruments representing the Shares, and on any certificate
or instrument delivered in substitution therefor, a legend stating in
substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO SUCH REGISTRATION OR IN ACCORDANCE WITH AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
(b) The Company hereby agrees that it will cause stop transfer
restrictions to be released with respect to any Shares that are transferred
(i) pursuant to an effective registration statement under the Securities
Act, (ii) pursuant to Rule 144 under the Securities Act, (iii) in
accordance with the requirements of Rule 903 or 904 of Regulation S under
the Securities Act, (except for any stop transfer instructions and legends
required by Regulation S); or (iv) pursuant to another exemption from the
registration requirements of the Securities Act; provided, however, that in
--------
the case of any transfer pursuant to clause (ii), (iii) or (iv) above, the
request for transfer is accompanied by a written statement signed by the
Shareholder confirming compliance with the requirements of the relevant
exemption from registration; and provided, further, that in the case of any
-------- -------
transfer pursuant to clauses (ii), (iii) and (iv) above, other than any
transfer by the Shareholder to one or more of its direct or indirect
subsidiaries, or among such subsidiaries, or by any such subsidiary to the
Shareholder, the Company shall have received a written opinion of counsel
reasonably satisfactory to the Company. The Company further agrees that it
will cause the legend described in subsection (a) of this Section 3.10 to
be removed in the event of any transfer as provided in clause (i), (ii) or
(iii) above.
ARTICLE IV
Miscellaneous
-------------
Section 4.1. Term of Agreement: Termination. The term of this Agreement
------------------------------
shall commence on the date hereof and such term and this Agreement shall
terminate upon the expiration of the Demand Period.
Section 4.2. Recapitalizations, Exchanges, Etc. Affecting the Shares. The
-------------------------------------------------------
provisions of this Agreement shall apply to any and all shares of capital stock
of the Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for, or in substitution of the Shares, by reason of a stock
dividend, stock split, stock issuance, reverse stock split, combination,
recapitalization, reclassification, merger, consolidation or otherwise.
Section 4.3. Amendment. This Agreement may not be amended except by a
---------
written instrument, duly executed by the Company and the Shareholder.
Section 4.4. Notices. Except as otherwise provided in this Agreement, all
-------
notices, requests, claims, demands, waivers and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
by hand, when delivered personally or by courier, three days after being
deposited in the mail (registered or certified mail, postage prepaid, return
receipt requested), or when received by facsimile transmission if promptly
confirmed by one of the foregoing means, as follows:
If to the Shareholder:
ONEOK Resources Company
000 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx, President
with copy to:
Xxxx X. Xxxxxx, Esq.
XXXXX & XXXXXXX, INC.
000 Xxxx Xxxxx Xxxxxx, Xxx. 0000
Xxxxx, Xxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Company:
Magnum Hunter Resources, Inc.
000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx, President and Chief Executive Officer
Section 4.5. Integration. This Agreement and the other writings referred to
-----------
herein or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or underwritings with respect to its
subject matter other than those expressly set forth or referred to herein.
Section 4.6. Binding Effect & Benefit. This Agreement shall inure to the
------------------------
benefit of and be binding upon the parties hereto, and their respective
successors and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto, and
their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Section 4.7. Assignability. This Agreement shall not be assignable by any
-------------
party hereto.
Section 4.8. Counterparts. This Agreement may be executed by the parties
------------
hereto in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
Section 4.9. Applicable Law. This Agreement shall be governed by and
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construed in accordance with the internal laws of the state of Oklahoma without
giving effect to principles of conflicts of law.
Section 4.10. Shareholder Agreement. This Agreement shall remain in effect
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in accordance with its terms notwithstanding the termination or lapse in
effectiveness of any other agreement between the Shareholder and the Company,
including, but not limited to, the Shareholder and Voting Agreement of event
date herewith.
Section 4.11. Severability. In the event any one or more of the provisions
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outlined herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired, and such unreasonable,
unlawful or unenforceable provision shall be interpreted, revised or applied in
the manner that renders it lawful and enforceable to the fullest extent possible
under law.
ONEOK RESOURCES COMPANY,
a Delaware corporation
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, President
"SHAREHOLDER"
MAGNUM HUNTER RESOURCES, INC.,
a Nevada corporation
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, President and Chief Executive Officer
"COMPANY"
