Exhibit 4.1
WARRANT AGREEMENT
This WARRANT AGREEMENT (the "Agreement") is dated as of May __,1999,
between Magnum Hunter Resources, Inc., a Nevada corporation (the "Company"), and
Securities Transfer Corporation, a Texas corporation, as Warrant Agent (the
"Warrant Agent").
RECITALS
WHEREAS, the Company proposes to issue Warrants (the "Warrants") entitling
the holders thereof to purchase an aggregate of up to 10,512,149 shares of the
Company's Common Stock, $.002 par value per share (the "Common Stock"); and
WHEREAS, the Warrant Agent, at the request of the Company, has agreed to
act as the agent of the Company in connection with the issuance, registration,
transfer, exchange and exercise of the Warrants;
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereto agree as follows:
AGREEMENT
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent to act as agent for the Company in accordance with the instructions
hereinafter set forth; and the Warrant Agent hereby accepts such appointment,
upon the terms and conditions hereinafter set forth.
2. Amount Issued. Subject to the provisions of this Agreement, the Company
shall issue and distribute to Record Holders (as defined below) transferable
Warrants to purchase an aggregate of 10,512,149 shares of Common Stock. The
Company shall distribute to holders of Common Stock, its 1996 Series A
Convertible Preferred Stock and its 1999 Series A 8% Convertible Preferred Stock
(collectively, "Record Holders") as of May 31, 1999 (the "Record Date") one (1)
Warrant for every three (3) shares of Common Stock held of record on the Record
Date; 0.63492 Warrant for every one (1) share of 1996 Series A Convertible
Preferred Stock held of record on the Record Date; and 63.402 Warrants for every
one (1) share of 1999 Series A 8% Convertible Preferred Stock held of record on
the Record Date. No fractional warrants or cash in lieu thereof will be issued
or paid. The number of Warrants distributed to each Record Holder will be
rounded down to the nearest whole number. Each Warrant shall entitle the holder
thereof to purchase one share of Common Stock at a price of $6.50 per share upon
exercise of the Warrant as herein provided.
3. Form of Warrant Certificates. The Warrants shall be evidenced by
certificates (the "Warrant Certificates") to be delivered pursuant to this
Agreement in registered form only. The Warrant Certificates and the forms of
election to purchase shares of Common Stock and of assignment to be printed on
the reverse thereof shall be in substantially the form set forth in Exhibit A
hereto together with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Agreement, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any law or with
any rules made pursuant thereto or with any rules of any securities exchange,
any
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agreement between the Company and any holder of a Warrant (a "Warrantholder"),
or as may, consistently herewith, be determined by the officers executing such
Warrant Certificates, as evidenced by their execution of such Warrant
Certificates.
4. Execution of Warrant Certificates. Warrant Certificates shall be signed
on behalf of the Company by its President or any Vice President, and by its
Treasurer, Secretary or Assistant Secretary by manual signatures or by facsimile
signatures printed thereon, and shall have imprinted thereon a facsimile of the
Company's seal. Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company before the date of
issuance of the Warrant Certificates or before countersignature by the Warrant
Agent and issue and delivery thereof, such Warrant Certificates may nevertheless
be countersigned by the Warrant Agent, issued and delivered with the same force
and effect as though the person who signed such Warrant Certificates had not
ceased to be such officer of the Company.
5. Registration. The Warrant Certificates shall be numbered and shall be
registered in a register (the "Warrants Register") to be maintained by the
Warrant Agent. The Company and the Warrant Agent may deem and treat the
registered holder of a Warrant Certificate as the absolute owner thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for the purpose of any exercise thereof or any distribution to the
holder thereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
6. Registration of Transfers and Exchanges. Until the Close of Business on
the Expiration Date (as hereinafter defined), the Warrant Agent shall from time
to time register the transfer of any outstanding Warrant Certificates in the
Warrants Register, upon surrender of such Warrant Certificates, duly endorsed,
and, if not surrendered by or on behalf of an original holder of Warrant
Certificates or a transferee thereof, accompanied by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, duly signed
by the registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney, such signature to be
guaranteed by (a) a bank or trust company, (b) a broker or dealer that is a
member of the National Association of Securities Dealers, Inc. (the "NASD"), (c)
a member of a national securities exchange or (d) an "eligible guarantor
institution" as defined under Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended. Upon any such registration of transfer, a new
Warrant Certificate shall be issued to the transferee.
Warrant Certificates may be exchanged at the option of the holder or
holders thereof, when surrendered to the Warrant Agent at its offices or agency
maintained in Dallas, Texas (or at such other offices or agencies as may be
designated by the Agent) for the purpose of exchanging, transferring and
exercising the Warrants (a "Warrant Agent Office,") or at the offices of any
successor Warrant Agent as provided in Section 18 hereof, for another Warrant
Certificate or other Warrant Certificates of like tenor and representing in the
aggregate a like number of Warrants.
The Company shall not be required to issue any Warrant Certificate
evidencing a fraction of a Warrant or to issue fractions of shares of securities
on the exercise of the Warrants, and any fractional interest in a Warrant alone
shall be of no value whatsoever. By accepting a Warrant Certificate, the holder
thereof expressly waives any right to receive a Warrant Certificate evidencing
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any fraction of a Warrant, to receive any fractional share of securities upon
exercise of a Warrant, or to receive any value whatsoever upon exercise of a
fractional interest in a Warrant.
7. Duration and Exercise of Warrants; Exercise Price.
(a) Unless the Warrants are redeemed in accordance with Section 14, the
Warrants shall expire at (i) 5:00 p.m. New York City time (the "Close of
Business") on July 1, 2002, subject to extension, in the sole discretion of the
Company, in a written statement to the Warrant Agent and with at least thirty
(30) days' prior notice to registered Warrantholders in the manner provided for
in Section 15 (such date of expiration being hereinafter referred to as the
"Expiration Date"). At such time as the Warrants become exercisable, and
thereafter until the Close of Business on the Expiration Date, the Warrants may
be exercised on any business day. After the Close of Business on the Expiration
Date, the Warrants will become void and of no value.
(b) Subject to the provisions of this Agreement, each Warrant shall entitle
the holder thereof to purchase from the Company (and the Company shall issue and
sell to such holder of a Warrant) one fully paid and nonassessable share of
Common Stock at the price of $6.50 per share (the "Exercise Price").
(c) A Warrantholder shall exercise such Holder's right to purchase shares
of Common Stock by depositing with the Warrant Agent at a Warrant Agent Office,
the Warrant Certificate evidencing such Warrant with the form of election to
purchase on the reverse thereof duly completed and signed by the registered
holder or holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney, such signature (if not signed by or on behalf
of an original holder of Warrants) to be guaranteed in the manner described in
Section 6 hereof, and paying to the Warrant Agent an amount equal to the
Exercise Price multiplied by the number of shares of Common Stock in respect of
which the Warrants are being exercised. Payment shall be in lawful money of the
United States of America in cash or by official bank, certified check or
personal check made payable to the Warrant Agent for the account of the Company;
provided, however, if payment is made by personal check, sufficient time must be
allowed fro the check to clear prior to the Expiration Date. Once a
Warrantholder exercises a Warrant, that exercise may not be revoked.
Unless a Warrant Certificate (i) provides that the shares of Common Stock
to be issued pursuant to the exercise of Warrants represented thereby are to be
delivered directly to the holder of such Warrants or (ii) is submitted for the
account of an Eligible Institution, signatures on such Warrant Certificate must
be guaranteed by an Eligible Institution.
(e) Subject to Section 8, upon such surrender of a Warrant Certificate and
payment of the Exercise Price, and as soon as practicable thereafter, the
Warrant Agent, in its capacity as the Company's transfer agent (the "Transfer
Agent"), shall requisition for issuance and delivery to or upon the written
order of the registered holder of such Warrant Certificate and in such name or
names as such registered holder may designate, a certificate or certificates for
the share or shares of Common Stock issuable upon the exercise of the Warrants.
Such certificate or certificates shall be deemed to have been issued and any
person
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so designated to be named therein shall be deemed to have become the holder
of record of such share or shares of Common Stock upon the date of issuance
thereof.
The Exercise Price will be deemed to have been received by the Warrant
Agent only upon (i) clearance of any uncertified check, or (ii) receipt by the
Warrant Agent of any certified check or bank draft drawn upon a U.S. bank.
(f) The Warrants evidenced by a Warrant Certificate shall be exercisable,
at the election of the registered holder thereof, either as an entirety or from
time to time for a portion of the number of Warrants specified in the Warrant
Certificate. If less than all of the Warrants evidenced by a Warrant Certificate
surrendered upon the exercise of Warrants are exercised at any time prior to the
Expiration Date, a new Warrant Certificate or Certificates shall be issued for
the number of Warrants evidenced by the Warrant Certificate so surrendered that
have not been exercised.
(g) The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay or deliver to the Company all moneys and
other consideration received by it upon the purchase of shares of Common Stock
through the exercise of Warrants.
(h) If either the number of Warrants being exercised is not specified on a
Warrant Certificate, or the payment delivered is not sufficient to pay the full
aggregate Exercise Price for all shares of Common Stock stated to be subscribed
for, the Warrantholder will be deemed to have exercised the maximum number of
Warrants that could be exercised for the amount of the payment delivered by such
Warrantholder. If the payment delivered by the Warrantholder exceeds the
aggregate Exercise Price for the number of Warrants evidenced by the Warrant
Certificate(s) delivered by such Warrantholder, the payment will be applied,
until the Warrant is depleted, to subscribe for shares of Common Stock. Any
excess payment remaining after the foregoing allocation will be returned to such
Warrantholder.
(i) No issuance of shares of Common Stock upon exercise of Warrants shall
be made unless there is a current prospectus covering such shares of Common
Stock under an effective registration statement under the Securities Act (or an
exemption therefrom), and registration or qualification of such shares of Common
Stock (or an exemption therefrom) has been obtained from the state or other
regulatory authorities in the jurisdiction in which such shares of Common Stock
are sold. The Company will provide to the Warrant Agent written confirmation of
such registration or qualification, or an exemption therefrom, when requested by
the Warrant Agent, and the determination of the Company shall be final and
binding on the Warrant Agent and each Warrantholder.
(j) Notwithstanding any other provision of this Agreement to the contrary,
no issuance of shares of Common Stock shall be made, and the Company is
authorized to refuse to honor the exercise of any Warrant, if the exercise of
any Warrant would result, in the opinion of the Company's Board of Directors
upon advice of counsel, in the violation of law.
8. Cancellation of Warrants. If the Company shall purchase or otherwise
acquire Warrants, the Warrant Certificates representing such Warrants shall
thereupon be delivered to the
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Warrant Agent and be canceled by it and retired. The Warrant Agent shall cancel
all Warrant Certificates surrendered for exchange, substitution, transfer or
exercise in whole or in part.
9. Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrants and of shares of Common Stock
upon the exercise of Warrants; provided, that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue of any Warrant Certificates or any certificates for shares of
Common Stock in a name other than the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid or adequate provision has been made for the payment
thereof.
10. Mutilated or Missing Warrant Certificates. If any of the Warrant
Certificates shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and the Warrant Agent shall deliver, in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity or bond, if requested, also satisfactory to
them. Applicants for such substitute Warrant Certificates shall also comply with
such other reasonable regulations and pay such other reasonable charges as the
Company or the Warrant Agent may prescribe.
11. Reservation of Shares of Common Stock. For the purpose of enabling it
to satisfy any obligation to issue shares of Common Stock upon exercise of
Warrants, the Company will at all times through the Close of Business on the
Expiration Date, reserve and keep available, free from preemptive rights and out
of its aggregate authorized but unissued shares of Common Stock, the number of
shares of Common Stock deliverable upon the exercise of all outstanding Warrants
and the Transfer Agent is hereby irrevocably authorized and directed at all
times to reserve such number of authorized and unissued shares of Common Stock
as shall be required for such purpose. The Warrant Agent, in its capacity as
Transfer Agent, is hereby irrevocably authorized to requisition from time to
time stock certificates issuable upon exercise of outstanding Warrants.
Before taking any action that would cause an adjustment pursuant to Section
13(b) reducing the Exercise Price below the then par value (if any) of the
shares of Common Stock issuable upon exercise of the Warrants, the Company will
take any corporate action that may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at the Exercise Price as so adjusted.
The Company covenants that all shares of Common Stock issued upon exercise
of the Warrants will, upon issuance in accordance with the terms of this
Agreement, be fully paid and nonassessable and free from all liens, charges and
security interests created by or imposed upon the Company with respect to the
issuance thereof.
12. Registration of Warrants and Shares of Common Stock. The Company has
filed with the SEC a registration statement on Form S-3 (the "Registration
Statement") which has been or will
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be declared effective. Except as set forth in the last sentence of this Section
12, the Company will use its best efforts to keep the Registration Statement
continuously effective from the date hereof through the Expiration Date and to
keep such registration statement and prospectus included therein current while
any of the Warrants are outstanding. So long as any unexpired Warrants remain
outstanding, the Company will in good faith and as expeditiously as possible
endeavor to obtain and keep effective any and all permits, consents and
approvals of government agencies and authorities and to make filings under
federal and state securities acts and laws, which may be or become necessary in
connection with the issuance, sale, transfer and delivery of the Warrant
Certificates, the exercise of the Warrants and the issuance, sale, transfer and
delivery of the shares of Common Stock issued upon exercise of Warrants.
However, Warrants may not be exercised or sold by, nor may shares of Common
Stock or other securities be issued to, any registered Warrantholder in any
state or jurisdiction in which such exercise or sale would be unlawful.
Notwithstanding anything to the contrary in this Section 12, the Company shall
not be required to keep the Registration Statement, or any other registration
statement covering the shares of Common Stock issuable upon exercise of the
Warrants, or any related prospectus current if in the reasonable judgment of the
Company the discrepancy between the market price of the Common Stock and the
Exercise Price makes it extremely unlikely that the Warrants will be exercised.
13. Adjustment of Exercise Price and Number of Shares of Common Stock
Purchasable or Number of Warrants.
(a) Except as provided in subsection (b) or (d) below, the Exercise Price
and the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall not be adjusted prior to the Expiration Date or upon exercise of
any Warrant or Warrants.
(b) If the Company shall (i) pay a dividend on its shares of Common Stock
in shares of Common Stock, (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) reclassify the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), the number of shares of Common Stock
purchasable upon exercise of each Warrant immediately prior thereto and the
Exercise Price payable therefor shall be adjusted so that the holder of each
Warrant shall be entitled upon exercise to receive, for the same aggregate
consideration, the kind and number of shares of Common Stock or other securities
of the Company which such holder would have owned or have been entitled to
receive after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such event or any
record date with respect thereto. An adjustment made pursuant to this
subparagraph (b) shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event. In addition,
in the event of any reclassification of the Common Stock, references in this
Agreement to Common Stock shall thereafter be deemed to refer to the securities
into which the Common Stock shall have been reclassified.
(c) In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety or the Company is a party to a merger or binding share exchange which
reclassifies or changes its outstanding
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shares of Common Stock, the Company or such successor or purchasing
corporation, as the case may be, shall execute with the Warrant Agent an
agreement, in form and substance substantially equivalent to this Agreement,
that each holder of a Warrant Certificate shall have the right thereafter,
subject to terms and conditions substantially equivalent to those contained in
this Agreement, upon payment of the Exercise Price in effect immediately prior
to such action to purchase upon exercise of each Warrant the kind and amount of
shares and other securities and property which such holder would have owned or
have been entitled to receive after the happening of such consolidation, merger,
sale or conveyance had such Warrant been exercised immediately prior to such
action. The Company shall mail by first-class mail, postage prepaid, to each
registered holder of a Warrant, notice of the execution of any such agreement.
Such agreement shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
13. The provisions of this subparagraph (c) shall similarly apply to successive
consolidations, mergers, sales or conveyances. The Warrant Agent shall be under
no duty or responsibility to determine the correctness of any provisions
contained in any such agreement relating either to the kind or amount of shares
of stock or other securities or property receivable upon exercise of Warrants or
with respect to the method employed and provided therein for any adjustments and
shall be entitled to rely upon the provisions contained in any such agreement.
(d) The Company shall have the right, at any time, voluntarily to reduce
the then current Exercise Price to such amount (the "Reduced Exercise Price")
and for such period or periods of time which may be through the Close of
Business on the Expiration Date (the "Reduced Exercise Price Period") as may be
deemed appropriate by the Board of Directors of the Company. Notice of any such
Reduced Exercise Price and Reduced Exercise Price Period shall be given to the
registered Warrantholders in the manner provided in Section 15 and to the
Warrant Agent in the manner provided in Section 21. After the termination of the
Reduced Exercise Price Period, the Exercise Price shall be such Exercise Price
which would have been in effect, as adjusted pursuant to subsection (b) above,
had there been no reduction in the Exercise Price pursuant to the provisions of
this subsection (d). Any adjustment in the Exercise Price pursuant to subsection
(b) above during the Reduced Exercise Price Period shall also be made in the
Reduced Exercise Price in the manner specified in subsection (b) above.
14. Redemption.
(a) At any time the Company may, at its option, redeem the Warrants in
whole, but not in part, for a redemption price of $0.01 per Warrant (subject to
equitable adjustment to reflect stock splits, stock dividends, stock
combinations, recapitalizations and like occurrences), on at least thirty (30)
days' prior written notice to the registered Warrantholders. In the event the
Company exercises its right to redeem the Warrants, the Expiration Date shall be
deemed to be, and the Warrants will be exercisable until the close of business
on, the date fixed for redemption in such notice. If any Warrant called for
redemption is not exercised by such time, it will cease to be exercisable and
the registered holder thereof will be entitled only to the redemption price of
$0.01 per Warrant.
(b) In case the Company shall exercise its right to redeem all of the
Warrants, it
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shall give or cause to be given notice to the registered Warrantholders, by
mailing to such registered Warrantholders a notice of redemption, first class,
postage prepaid, at their last address as shall appear on the records of the
Warrant Agent. Any notice mailed in the manner provided herein shall be
conclusively presumed to have been duly given, whether or not the registered
Warrantholder receives such notice.
(c) The notice of redemption shall specify (i) the redemption price, (ii)
the date fixed for redemption, which shall in no event be less than thirty (30)
days after the date of mailing of such notice, (iii) the place where the Warrant
Certificates shall be delivered and the redemption price shall be paid, and (iv)
that the right to exercise the Warrant shall terminate at 5:00 p.m. New York
City time on the business day fixed for redemption. The date fixed for the
redemption of the Warrants shall be the "Redemption Date" for purposes of this
Agreement. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for such redemption
except as to a holder (A) to whom notice was not mailed or (B) whose notice was
defective. An affidavit of the Warrant Agent or the Secretary or Assistant
Secretary of the Company that notice of redemption has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00 p.m. New York
City time on the Redemption Date. The redemption price payable to the registered
Warrantholders shall be mailed to such persons at their addresses of record.
15. Notices to Warrantholders.
If:
(a) the Company shall declare any dividend payable in any securities upon
its shares of Common Stock or make any distribution (other than a cash dividend
declared in the ordinary course) to the holders of its shares of Common Stock,
or
(b) the Company shall offer to the holders of its shares of Common Stock
any additional shares of Common Stock or securities convertible or exchangeable
into shares of Common Stock or any right to subscribe for or purchase Common
Stock, or
(c) there shall be a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger or sale of all or
substantially all of its property, assets and business as an entirety), or
(d) the Company fixes a Reduced Exercise Price and Reduced Exercise Price
Period,
then the Company shall cause written notice of such event to be filed with
the Warrant Agent and shall cause written notice of such event to be given to
each of the registered holders of the Warrant Certificates at such holder's
address appearing on the Warrants Register, by first-class mail, postage
prepaid, such giving of notice to be completed (i) except in the case of clause
(d) above, at least ten (10) calendar days (or twenty (20) calendar days in any
case
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specified in clause (c) above) prior to the date fixed as a record date or
the date of closing the transfer books for the determination of the stockholders
entitled to such dividend, distribution or subscription rights, or for the
determination of stockholders entitled to vote on such proposed dissolution,
liquidation or winding up and (2) in the case of clause (d) above, as soon as
practicable after such event. Such notice shall, as and if applicable, specify
such record date or the date of closing the transfer books, as the case may be.
The failure to give the notice required by this Section 15 or any defect therein
shall not affect the legality or validity of any dividend, distribution, right,
option, warrant, dissolution, liquidation or winding up or the vote upon or any
other action taken in connection therewith.
16. Merger, Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to the shareholder services business of the Warrant
Agent, shall be the successor to the Warrant Agent hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Warrant Agent under the provisions of Section 18.
17. Warrant Agent. The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Warrant Certificates, by their acceptance
thereof, shall be bound:
(a) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company nor shall it at any
time be under any duty or responsibility to any holder of a Warrant to make or
cause to be made any adjustment in the Exercise Price or in the number of shares
of Common Stock issuable upon exercise of any Warrants (except as instructed by
the Company);
(b) The Company agrees to indemnify the Warrant Agent and save it harmless
against any and all losses, liabilities and expenses, including judgments, costs
and reasonable counsel fees and expenses, for anything done or omitted by the
Warrant Agent arising out of or in connection with this Agreement except as a
result of its gross negligence or bad faith;
(c) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Warrant Agent for the carrying out or performing of the provisions of
this Agreement; and
(d) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chief Executive Officer, Executive Vice President, the Treasurer or an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer or in good faith
reliance upon any statement signed by any one of such officers of the Company
with respect to any fact or matter (unless other evidence in respect thereof is
herein specifically
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prescribed) which may be deemed to be conclusively proved and established
by such signed statement.
18. Change of Warrant Agent. If the Warrant Agent shall resign (such
resignation to become effective not earlier than sixty (60) days after the
giving of written notice thereof to the Company and the registered holders of
Warrant Certificates) or shall become incapable of acting as Warrant Agent or if
the Board of Directors of the Company shall by resolution remove the Warrant
Agent (such removal to become effective not earlier than thirty (30) days after
the filing of a certified copy of such resolution with the Warrant Agent and the
giving of written notice of such removal to the registered holders of Warrant
Certificates), the Company shall appoint a successor to the Warrant Agent. If
the Company shall fail to make such appointment within a period of thirty (30)
days after such removal or after it has been so notified in writing of such
resignation or incapacity by the Warrant Agent or by the registered holder of a
Warrant Certificate (in the case of incapacity), then the registered holder of
any Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by such a court, the
duties of the Warrant Agent shall be carried out by the Company. Any successor
Warrant Agent, whether appointed by the Company or by such a court, shall be a
bank or trust company, in good standing, incorporated under the laws of any
state or of the United States of America. As soon as practicable after
appointment of the successor Warrant Agent, the Company shall cause written
notice of the change in the Warrant Agent to be given to each of the registered
holders of the Warrant Certificates at such holder's address appearing on the
Warrants Register. After appointment, the successor Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed. The former
Warrant Agent shall deliver and transfer to the successor Warrant Agent, the
Warrants Register and any other property at the time held by it hereunder and
execute and deliver, at the expense of the Company, any further assurance,
conveyance, act or deed necessary for that purpose. Failure to give any notice
provided for in this Section 18 or any defect therein, shall not affect the
legality or validity of the removal of the Warrant Agent or the appointment of a
successor Warrant Agent, as the case may be.
19. Warrantholder Not Deemed a Stockholder. Nothing contained in this
Agreement or in any of the Warrant Certificates shall be construed as conferring
upon the holders thereof the right to vote or to receive dividends or to consent
or to receive notice as stockholders in respect of the meetings of stockholders
or for the election of directors of the Company or any other matter, or any
rights whatsoever as stockholders of the Company.
20. Delivery of Prospectus. Subject to Section 12, if the Company is
required under applicable federal or state securities laws to deliver a
prospectus upon exercise of Warrants, the Company will furnish to the Warrant
Agent sufficient copies of a prospectus, and the Warrant Agent agrees that upon
the exercise of any Warrant Certificate by the holder thereof, the Warrant Agent
will deliver to such holder, prior to or concurrently with the delivery of the
certificate or certificates for the shares of Common Stock issued upon such
exercise, a copy of the prospectus.
21. Notices to Company and Warrant Agent. Any notice or demand authorized
by this Agreement to be given or made by the Warrant Agent or by any registered
holder of any Warrant Certificate to or on the Company shall be sufficiently
given or made if sent by mail, first-class or registered, postage prepaid,
addressed (until another address is filed in writing by the Company with the
Warrant Agent), as follows:
-10-
Magnum Hunter Resources, Inc.
000 Xxxx Xxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
If the Company shall fail to maintain such office or agency or shall fail
to give such notice of any change in the location thereof, presentation may be
made and notices and demands may be served at the principal office of the
Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or by any
registered holder of any Warrant Certificate to the Warrant Agent shall be
sufficiently given if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing by the Warrant Agent with the
Company), as follows:
Securities Transfer Corporation
X.X. Xxx 00000000
Xxxxxx, Xxxxx 00000
Attention: Mr. Xxxxxx Xxxxxxx
22. Supplements and Amendments. The Company and the Warrant Agent may from
time to time supplement or amend this Agreement without the approval of any
holders of Warrant Certificates in order to cure any ambiguity, manifest error
or other mistake in this Agreement, or to correct or supplement any provision
contained herein that may be defective or inconsistent with any other provision
herein, or to make any other provisions in regard to matters or questions
arising hereunder that the Company and the Warrant Agent may deem necessary or
desirable and that shall not adversely affect, alter or change the interests of
the holders of the Warrants in any material respect.
Any supplement or amendment of this Agreement which may not be made by the
Company and the Warrant Agent without the approval of holders of Warrant
Certificates pursuant to the preceding paragraph shall require the approval of
the Company, the Warrant Agent and the holders of Warrant Certificates entitled
to purchase upon exercise thereof a majority of the shares of Common Stock which
may be purchased upon the exercise of all outstanding Warrant Certificates at
the time that such amendment or supplement is to be made. Notwithstanding the
foregoing, any amendment or supplement to this Agreement which would provide for
an adjustment to either (i) the number of shares of Common Stock purchasable
upon exercise of a Warrant or (ii) the exercise price for which shares of Common
Stock are purchasable upon exercise of a Warrant, in either case, in a manner
not provided for in this Agreement and in a manner that would have a substantial
negative impact on the holders of Warrant Certificates, shall require the
consent of the holders of Warrant Certificates entitled to purchase upon
exercise thereof seventy-five percent (75%) of the shares of Common Stock which
may be purchased upon the exercise of all outstanding Warrant Certificates at
the time such amendment or supplement is to be made.
23. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
-11-
24. Termination. This Agreement shall terminate at the Close of Business on
the Expiration Date or such earlier date upon which all Warrants have been
exercised, except that the Warrant Agent shall account to the Company for cash
held by it and the provisions of Section 17 shall survive such termination. Upon
termination of the Agreement, the Warrant Agent shall retain all canceled
Warrant Certificates and related documentation as required by applicable law.
25. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Texas and for all purposes shall be construed in accordance with the internal
laws of the State of Texas without regard to principles of conflict of law or
choice of laws of the State of Texas or any other jurisdiction which would cause
the application of any laws other than of the State of Texas.
26. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement, and this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant Certificates.
27. Counterparts. This Agreement may be executed in a number of
counterparts and each of such counterparts shall all for purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
28. Headings. The headings of sections of this Agreement have been inserted
for convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.
-12-
IN WITNESS WHEREOF the parties hereto have caused this Warrants Agreement
to be executed and delivered as of the day and year first above written.
MAGNUM HUNTER RESOURCES, INC.
By:
Name:
Title:
Attest:
By:
Name:
Title:
SECURITIES TRANSFER CORPORATION
By:
Name:
Title:
Attest:
By:
Name:
Title:
-13-
EXHIBIT A
NO. W- WARRANTS
COMMON STOCK PURCHASE WARRANT CERTIFICATE
MAGNUM HUNTER RESOURCES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
VOID (UNLESS EXTENDED) AFTER 5:00 P.M., NEW YORK CITY TIME,
ON JULY 1, 2002
THIS CERTIFIES THAT, for value received, or registered assigns (the
"Registered Holder"), is the owner of the number of Common Stock Purchase
Warrants (the "Warrants") set forth above. Each Warrant entitles the Registered
Holder to purchase, subject to the terms and conditions set forth in this
Warrant Certificate and the Warrant Agreement (as hereinafter defined), one
fully paid and nonassessable share of Common Stock, par value $.002 per share
(the "Common Stock"), of Magnum Hunter Resources, Inc., a Nevada corporation
(the "Company"), at any time prior to at 5:00 p.m., New York City time, on July
1, 2002 (the "Expiration Date"), upon the presentation and surrender of this
Warrant Certificate with the Election to Purchase Form on the reverse hereof
duly executed, at the corporate office of Securities Transfer Corporation as
Warrant Agent, or its successor (the "Warrant Agent"), accompanied by payment of
$6.50 per Warrant, subject to adjustment (the "Warrant Price"), and any and all
applicable taxes due in connection with the exercise of the Warrant, in lawful
money of the United States of America in cash or by official bank, certified
check or personal check made payable to the Warrant Agent for the account of the
Company; provided, however, if payment is made by personal check, sufficient
time must be allowed fro the check to clear prior to the Expiration Date.
THIS WARRANT CERTIFICATE AND EACH WARRANT REPRESENTED HEREBY ARE ISSUED
PURSUANT TO AND ARE SUBJECT IN ALL RESPECTS TO THE TERMS AND CONDITIONS SET
FORTH IN THE WARRANT AGREEMENT (THE "WARRANT AGREEMENT"), DATED AS OF MAY __,
1999, BY AND BETWEEN THE COMPANY AND THE WARRANT AGENT. REFERENCE IS HEREBY MADE
TO THE WARRANT AGREEMENT FOR A MORE COMPLETE STATEMENT OF THE RIGHTS AND
LIMITATIONS OF RIGHTS OF THE REGISTERED HOLDERS HEREOF, THE RIGHTS AND DUTIES OF
THE WARRANT AGENT AND THE RIGHTS AND OBLIGATIONS OF THE COMPANY THEREUNDER.
COPIES OF THE WARRANT AGREEMENT ARE ON FILE AT THE OFFICE OF THE WARRANT AGENT.
In the event of certain contingencies provided for in the Warrant
Agreement, the Warrant Price and the number of shares of Common Stock subject to
purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment. The Company also has the right voluntarily to lower
the Warrant Price, as set forth in the Warrant Agreement.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent in Dallas, Texas,
for a new Warrant Certificate or Warrant Certificates of like tenor representing
an equal aggregate number of Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment together with any tax
or other charge imposed in connection therewith, for registration of transfer of
this Warrant Certificate at such office, a new Warrant Certificate or Warrant
Certificates representing an equal aggregate number of Warrants will be issued
to the transferee in exchange therefor, subject to the limitations provided in
the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Common Stock or other securities
purchasable upon the exercise of this Warrant Certificate are closed for any
purpose, the Warrant Agent shall not be required to make delivery of
certificates for the securities purchasable upon such exercise until the date of
the reopening of such transfer books.
No issuance of shares of Common Stock upon exercise of Warrants shall be
made unless there is a current prospectus covering such shares of Common Stock
under an effective registration statement under the Securities Act of 1933, as
amended (or an exemption therefrom), and registration or qualification of such
shares of Common Stock (or an exemption therefrom) has been obtained from the
state or other regulatory authorities in the jurisdiction in which such shares
of Common Stock are sold. The Company will provide to the Warrant Agent written
confirmation of such registration or qualification, or an exemption therefrom,
when requested by the Warrant Agent, and the determination of the Company shall
be final and binding on the Warrant Agent and each Registered Holder. No Warrant
represented hereby shall be exercised or sold by a Registered Holder in any
state or other jurisdiction where such exercise would be unlawful.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company, in whole or in part, at a redemption
price of $.01 per Warrant, at any time, and notice of redemption (the "Notice of
Redemption") shall be given not less than 30 days before the date fixed for
redemption, all as provided in the Warrant Agreement. On and after the date
fixed for redemption, the Registered Holder shall have no rights with respect to
this Warrant except to receive the $.01 per Warrant upon surrender of this
Warrant Certificate.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Prior to due presentment for registration of transfer of this Warrant
Certificate, the Company and the Warrant Agent may deem and treat the Registered
Holder as the absolute owner hereof and of each Warrant represented hereby
(notwithstanding any notations of ownership or writing hereon made by anyone
other than a duly authorized officer of the Company or the Warrant Agent), for
all purposes and shall not be affected by any notice to the contrary.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of Texas, without giving effect to conflicts of laws
principles.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized, and a facsimile of its corporate seal to be imprinted hereon.
Dated: _______________________, 1999
MAGNUM HUNTER RESOURCES, INC.
By:
Xxxx X. Xxxxx, President
and Chief Executive Officer
ATTEST:
By:
Xxxxxx X. Xxxxxxxx, Secretary
COUNTERSIGNED:
SECURITIES TRANSFER CORPORATION
as Warrant Agent
By:
Authorized Officer
MAGNUM HUNTER RESOURCES, INC.
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT.Custodian
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of Under Uniform Gifts to Minors Act
survivorship and not as tenants in
common ___________________________
(State)
Additional abbreviations may also be used though not in the above list.
ELECTION TO PURCHASE FORM
(To be Executed by the Holder In Order to Exercise
Warrants Represented by the Within Warrant Certificate)
To: MAGNUM HUNTER RESOURCES, INC.
The undersigned Registered Holder hereby irrevocably elects to exercise
_____________ Warrants, represented by the within Warrant Certificate, and to
purchase the securities issuable upon exercise of such Warrants, and requests
that certificates for such securities be issued in the name of:
(Please Print or Type, Name, Address and Social Security
or Federal Tax Identification Number)
and, if such number of Warrants shall not be all the Warrants represented
by the within Warrant Certificate, that a new Warrant Certificate for the
balance of such Warrants be registered in the name of, and delivered to the
Registered Holder at the address stated below. The understands and agrees that
the Company may require Registered Holders to establish their exemptions from
backup withholding or to arrange for payment of backup withholding.
Dated: ,
Name of holder of this Warrant Certificate:
(Please Print or Type)
Address:
Signature:
NOTICE: The above signature must correspond with the name as written
upon the face of the within Warrant Certificate in every
particular, without alternation or enlargement or any change
whatsoever, or if signed by any other person the Form of
Assignment hereon must be duly executed and if the certificate
representing the shares or any Warrant Certificate
representing Warrants not exercised is to be registered in a
name other than that in which the within Warrant Certificate
is registered, the signature of the holder hereto must be
guaranteed.
Signature Guaranteed:
ASSIGNMENT
(To Be Executed by the Registered Holder In Order to
Assign Warrants Evidenced by the Within Warrant Certificate)
For value received, the undersigned hereby sells, assigns and transfers
unto
(Name and Address of Assignee)(Print or Type)
(Social Security or Federal Tax Identification
Number of Assignee)
the within Warrants, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint attorney, to transfer said
Warrants on the books of the within-named Company, with full power of
substitution in the premises.
Dated: , _____
Signature of Registered Holder:
NOTICE: The above signature must correspond with the name as written upon
the face of the within Warrant Certificate in every particular, without
alternation or enlargement or any change whatsoever.
Signature Guaranteed:
SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A
MEMBER FIRM OF THE NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE, AMERICAN
STOCK EXCHANGE, CHICAGO STOCK EXCHANGE OR BOSTON STOCK EXCHANGE.
