EXECUTION COPY
180,000 Shares
DUNE ENERGY, INC.
10% Senior Redeemable Convertible Preferred Stock
REGISTRATION RIGHTS AGREEMENT
May 15, 2007
XXXXXXXXX & COMPANY, INC.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Dune Energy, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to Xxxxxxxxx & Company, Inc. (the "Initial Purchaser"), upon the
terms set forth in a purchase agreement, dated May 1, 2007 (the "Purchase
Agreement"), 180,000 shares of its 10% Senior Redeemable Convertible Preferred
Stock, par value $0.001 per share (liquidation preference $1000 per share) (the
"Convertible Preferred Stock"). The Convertible Preferred Stock will be
convertible into shares of Common Stock, par value $0.001 per share, of the
Company (the "Common Stock") at the conversion price set forth in the offering
circular, dated May 1, 2007 (the "Offering Memorandum"), subject to adjustment
in accordance with the Certificate of Designations governing the Convertible
Preferred Stock (the "Certificate of Designations"). The Convertible Preferred
Stock and the Common Stock issuable upon conversion of any shares of the
Convertible Preferred Stock and any shares of Convertible Preferred Stock or
Common Stock issued in lieu of cash dividends on the Convertible Preferred Stock
are collectively referred to as "Securities" and each is referred to singularly
as a "Security" As an inducement to the Initial Purchaser to enter into the
Purchase Agreement, the Company agreed with the Initial Purchaser, for the
benefit of the Initial Purchaser and the holders of the Securities,
(collectively the "Holders"), as follows:
1. Shelf Registration. So long as any Transfer Restricted Security (as
defined below) exists, the Company shall take the following actions:
(a) The Company shall, within 90 days after the date on which the
Initial Purchaser purchases the Convertible Preferred Stock pursuant to
the Purchase Agreement (the "Closing Date"), file with the Securities and
Exchange Commission (the "Commission"), and thereafter use its reasonable
best efforts to cause to be declared effective within 180 days after the
Closing Date (the "Effective Date"), a registration statement (together
with all documents incorporated by reference or deemed incorporated by
reference therein, the "Shelf Registration Statement" and, together with
the Additional Registration Statement (as defined in Section 10), the
"Registration Statement") on an appropriate form under the Securities Act
of 1933 (as amended, the "Securities Act") relating
to the offer and sale of the Transfer Restricted Securities by the Holders
thereof from time to time in accordance with the methods of distribution
designated by the Holders and set forth in the Shelf Registration
Statement and Rule 415 under the Securities Act (hereinafter, the "Shelf
Registration"); provided, however, that no Holder (other than the Initial
Purchaser) shall be entitled to have the Securities held by it covered by
such Shelf Registration Statement unless such Holder agrees in writing to
be bound by all the provisions of this Agreement applicable to such
Holder. If the Company shall file a post-effective amendment to the Shelf
Registration Statement, it shall use its reasonable best efforts to cause
such post-effective amendment to be declared effective as promptly as
practicable, but in any event within 30 days after the date such
post-effective amendment is filed. "Transfer Restricted Securities" means
each Security until (i) the date on which such Security has been
effectively registered under the Securities Act and disposed of pursuant
to the Shelf Registration Statement or (ii) the date on which such
Security is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities
Act.
(b) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective, in order to permit
the prospectus included therein to be lawfully delivered by the Holders of
the relevant Securities, until such time as all of the Securities covered
by the Shelf Registration Statement (i) have been sold in the manner
provided for therein and pursuant thereto, (ii) are eligible to be sold
under Rule 144(k) under the Securities Act (or any successor rule
thereof), assuming for this purpose that the Holders thereof are not
affiliates of the Company or (iii) cease to be outstanding (in any such
case, such period being called the "Shelf Registration Period"). The
Company shall be deemed not to have used its reasonable best efforts to
keep the Shelf Registration Statement effective during the Shelf
Registration Period if it voluntarily takes any action that would result
in Holders of Securities covered thereby not being able to offer and sell
such Securities during that period, unless such action is required by
applicable law.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the
effective date of the Shelf Registration Statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, the Company shall have no such obligations or liabilities with
respect to any written information pertaining to any Holder and furnished
to the Company by or on behalf of such Holder specifically for inclusion
therein.
2. Shelf Registration Procedures. In connection with the Shelf
Registration contemplated by Section 1 hereof, the following provisions shall
apply so long as any Transfer Restricted Security exists:
(a) The Company shall (i), if requested by the Initial Purchaser,
furnish, without charge, to the Initial Purchaser, prior to the filing
thereof with the Commission, a copy of the Shelf Registration Statement
and each amendment thereof and each supplement, if any, to
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the prospectus included therein and, in the event that the Initial
Purchaser (with respect to any portion of an unsold allotment from the
original offering) is participating in the Shelf Registration Statement,
the Company shall use its best efforts to reflect in each such document,
when so filed with the Commission, such comments as the Initial Purchaser
reasonably may propose, (ii) include in each such document the names of
the Holders who have delivered written notice, and a duly completed
selling stockholder questionnaire in the form attached as Annex A to the
Offering Circular (a "Questionnaire") to the Company at least five
business days prior to the date that the Shelf Registration Statement is
first declared effective, that they propose to include Transfer Restricted
Securities in the Shelf Registration Statement as selling securityholders
and (iii) file pursuant to Rule 424(b) under the Securities Act a
supplement to the prospectus contained in the Shelf Registration Statement
or, if required, file a post-effective amendment to the Shelf Registration
Statement, in each case, to cover new Holders of Securities upon at least
seven business days prior written notice by such new Holders to such
effect and the delivery by such new Holder of duly completed
Questionnaires.
(b) The Company shall give written notice to the Initial Purchaser
and, through the Company's transfer agent and registrar for the
Convertible Preferred Stock and Common Stock, to the Holders of the
Securities and the Holders of Transfer Restricted Securities included
within the coverage of the Shelf Registration Statement (which notice
pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction
to suspend the use of the prospectus until the requisite changes have been
made):
(i) when the Shelf Registration Statement or any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the prospectus
included therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or
the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Shelf Registration Statement or the prospectus
in order that the Shelf Registration Statement or the prospectus do
not contain an untrue statement of a material fact nor 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.
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(c) The Company shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Shelf Registration Statement.
(d) The Company shall furnish to each Holder of Transfer Restricted
Securities included within the coverage of the Shelf Registration
Statement, without charge, if the Holder so requests in writing, at least
one copy of the Shelf Registration Statement and any post-effective
amendment thereto, including, but only if expressly requested by such
Holder, financial statements and schedules and all exhibits thereto
(including those, if any, incorporated by reference).
(e) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Transfer Restricted Securities included within the
coverage of the Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus, if any)
included in the Shelf Registration Statement and any amendment or
supplement thereto as such person may reasonably request. The Company
consents, subject to the provisions of this Agreement, to the use of the
prospectus or any amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Transfer
Restricted Securities covered by the prospectus, or any amendment or
supplement thereto, included in the Shelf Registration Statement.
(f) Prior to any public offering of the Securities pursuant to the
Shelf Registration Statement, the Company shall register, or qualify or
cooperate with the Holders of the Transfer Restricted Securities included
therein and their respective counsel in connection with the registration
or qualification of, the Securities for offer and sale under the
securities or "blue sky" laws of such states of the United States as any
Holder reasonably requests in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such
jurisdictions of the Securities covered by the Shelf Registration
Statement; provided, however, that the Company shall not be required to
(i) qualify generally to do business in any jurisdiction where it is not
then so qualified or (ii) take any action which would subject it to
general service of process or to taxation in any jurisdiction where it is
not then so subject.
(g) The Company shall cooperate with the Holders of the Transfer
Restricted Securities to facilitate the timely preparation and delivery of
certificates representing the Securities to be sold pursuant to the Shelf
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as the Holders may request a
reasonable period of time prior to sales of the Securities pursuant to the
Shelf Registration Statement, except in such cases where such Transfer
Restricted Securities are required to be issued only in book-entry form
pursuant to the terms of the Certificate of Designations.
(h) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 2(b) above during the Shelf Registration Period,
the Company shall promptly prepare and file a post-effective amendment to
the Shelf Registration Statement or a supplement to the related prospectus
and any other required document so that, as thereafter delivered to
Holders of the Securities or purchasers of Securities, the prospectus will
not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light
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of the circumstances under which they were made, not misleading. If the
Company notifies the Initial Purchaser or the Holders of Transfer
Restricted Securities included within the coverage of the Shelf
Registration Statement to suspend the use of the prospectus as a result of
any of the events described in paragraphs (ii) through (v) of Section 2(b)
above or as a result of the filing of any post-effective amendment
pursuant to Section 2(a)(iii), until the requisite changes to the
prospectus have been made or the post-effective amendment has become
effective, as the case may be, the Initial Purchaser and the Holders shall
suspend use of such prospectus.
(i) [reserved]
(j) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act)
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act, no later than 45 days after the end of a 12-month period
(or 90 days, if such period is a fiscal year) beginning with the first
month of the Company's first fiscal quarter commencing after the effective
date of the Shelf Registration Statement, which statement shall cover such
12-month period.
(k) The Company may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company,
pursuant to the Questionnaire or otherwise, such information regarding the
Holder and the distribution of the Securities as the Company may from time
to time reasonably require for inclusion in the Shelf Registration
Statement, and the Company may exclude from such registration the
Securities of any Holder that fails to furnish such information within the
applicable time period specified in Section 2(a) above.
(l) The Company shall enter into such customary agreements and take
all such other action, if any, as any Holder of the Securities shall
reasonably request in order to facilitate the disposition of the
Securities pursuant to any Shelf Registration.
(m) In the case of any Shelf Registration, the Company shall (i)
make reasonably available for inspection by the Holders of the Securities,
any underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent
retained by the Holders of the Securities or any such underwriter all
relevant financial and other records, pertinent corporate documents and
properties of the Company and (ii) cause the Company's officers,
directors, employees, accountants and auditors to supply all relevant
information reasonably requested by the Holders of the Securities or any
such underwriter, attorney, accountant or agent in connection with the
Shelf Registration Statement, in each case, as shall be reasonably
necessary to enable such persons, to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act; provided, however,
that the foregoing inspection and information gathering shall be
coordinated on behalf of the Initial Purchaser by you and on behalf of the
other parties, by one counsel designated by and on behalf of such other
parties as described in Section 3 hereof.
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(n) In the case of any Shelf Registration, the Company, if requested
by any Holder of Securities covered thereby in connection with an
underwritten offering of the Securities pursuant to the Shelf Registration
Statement, shall cause (i) its counsel (which may include the Company's
general counsel and/or the Company's outside counsel) to deliver an
opinion or opinions and updates thereto relating to the Securities in
customary form addressed to the Managing Underwriters (as defined in
Section 7) thereof and dated, in the case of the initial opinion, the
effective date of such Shelf Registration Statement (it being agreed that
the matters to be covered by such opinion shall include, without
limitation, the due incorporation and good standing of the Company and its
subsidiaries; the qualification of the Company and its subsidiaries to
transact business as foreign corporations; the due authorization,
execution and delivery of the relevant agreement of the type referred to
in Section 7 hereof; the due authorization, execution, authentication and
issuance, and the validity and enforceability, of the applicable
Securities; the absence of material legal or governmental proceedings
involving the Company and its subsidiaries; the absence of governmental
approvals required to be obtained in connection with the Shelf
Registration Statement, the offering and sale of the applicable
Securities, or any agreement of the type referred to in Section 7 hereof;
the compliance as to form of such Shelf Registration Statement and any
documents incorporated by reference therein with the requirements of the
Securities Act; and, as of the date of the opinion and as of the effective
date of the Shelf Registration Statement or most recent post-effective
amendment thereto, as the case may be, the absence from such Shelf
Registration Statement and the prospectus included therein, as then
amended or supplemented, and from any documents incorporated by reference
therein of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of any such documents,
in the light of the circumstances existing at the time that such documents
were filed with the Commission under the Securities and Exchange Act of
1934, as amended (the "Exchange Act")); (ii) its officers to execute and
deliver all customary documents and certificates and updates thereof
requested by any underwriters of the applicable Securities and (iii) its
independent public accountants to provide to the underwriter(s) of the
applicable Securities a comfort letter in customary form and covering
matters of the type customarily covered in comfort letters in connection
with primary underwritten offerings, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by Statement of
Auditing Standards No. 72.
(o) The Company shall use its reasonable best efforts to cause the
Common Stock included in such Shelf Registration Statement to be, upon
resale thereunder, listed on each U.S. securities exchange, if any, on
which any shares of Common Stock are then listed.
(p) The Company shall use its reasonable best efforts to take all
other steps necessary to effect the registration of the Transfer
Restricted Securities covered by the Shelf Registration Statement
contemplated hereby.
3. Registration Expenses.
(a) All fees and expenses incident to the Company's performance of
and compliance with this Agreement will be borne by the Company,
regardless of whether any Registration Statement required hereunder is
ever filed or becomes effective, including without limitation:
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(i) all registration and filing fees and expenses;
(ii) all fees and expenses of compliance with federal
securities and state "blue sky" or securities laws;
(iii) all expenses of printing (including printing
certificates and printing of prospectuses), messenger and delivery
services and telephone usage;
(iv) all fees and disbursements of counsel for the Company;
(v) all application and filing fees in connection with listing
on a national securities exchange or automated quotation system
pursuant to the requirements hereof;
(vi) all fees and disbursements of independent certified
public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such
performance); and
(vii) in connection with each Demand Registration and each
Piggyback Registration, the Company shall reimburse holders of
Transfer Restricted Securities for the reasonable fees and expenses
of one counsel chose by the holders of a majority of the Transfer
Restricted Securities included in such registration.
provided that, notwithstanding any provision of this Agreement to the
contrary, in no event shall the Company bear or be responsible for the
payment or reimbursement of underwriting discounts, commissions or similar
compensation in connection with an underwritten offering of the
Securities.
The Company will bear its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit
and the fees and expenses of any person, including special experts,
retained by the Company.
(b) In connection with the Shelf Registration Statement, the Company
will reimburse the Initial Purchaser and the Holders of Transfer
Restricted Securities who are selling or reselling Securities pursuant to
the "Plan of Distribution" section contained in the Shelf Registration
Statement for the reasonable fees and disbursements of not more than one
counsel, who shall be a nationally recognized firm experienced in
securities laws matters that is chosen by the Holders of a majority in
number of shares of the Transfer Restricted Securities for whose benefit
such Registration Statement is being prepared or, if the Holders do not so
choose, the Initial Purchaser.
4. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Holder
and each person, if any, who controls any such Holder within the meaning
of the Securities Act or the Exchange Act and the respective officers,
directors, partners, employees, representatives and agents of any Holder
(including any predecessor holder) or any controlling person of a Holder
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(each Holder and such persons are referred to as an "Indemnified Holder")
from and against any losses, claims, damages or liabilities, joint or
several, or any actions in respect thereof (including, but not limited to,
any losses, claims, damages, liabilities or actions relating to purchases
and sales of the Securities) to which each Indemnified Holder may become
subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or prospectus or in
any amendment or supplement thereto or in any preliminary prospectus
relating to any registration hereunder or any other materials or
information provided to investors by, or with the written approval of, the
Company in connection with any offering pursuant to the Registration
Statement, or arise out of, or are based upon, the 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
under which they were made, not misleading, and shall reimburse, as
incurred, the Indemnified Holders for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action in respect thereof;
provided, however, that (i) the Company shall not be liable under this
Section 4(a) in any such case to the extent that such loss, claim, damage
or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to any registration
hereunder in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Company by or on behalf of
such Holder specifically for inclusion therein and (ii) with respect to
any untrue statement or omission or alleged untrue statement or omission
made in any preliminary prospectus relating to the Registration Statement,
the indemnity agreement contained in this subsection (a) shall not inure
to the benefit of any Holder from whom the person asserting any such
losses, claims, damages or liabilities purchased the Securities concerned,
to the extent that a prospectus relating to such Securities was required
to be delivered by such Holder under the Securities Act in connection with
such purchase and any such loss, claim, damage or liability of such Holder
results from the fact that there was not sent or given to such person, at
or prior to the written confirmation of the sale of such Securities to
such person, a copy of the final prospectus if the Company had previously
furnished or made available copies thereof to such Holder. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have to any Indemnified Holder. The Company shall notify each
Indemnified Party promptly of this institution, threat or assertion of any
Claim, proceeding (including any governmental investigation) or litigation
in connection with the matters addressed by this Agreement that involves
the Company or such Indemnified Party.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, its officers and directors and each person, if
any, who controls the Company, its officers and directors within the
meaning of the Securities Act or the Exchange Act from and against any
losses, claims, damages or liabilities or any actions in respect thereof,
to which the Company or any such person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained
in a Registration Statement or prospectus or in any amendment or
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supplement thereto or in any preliminary prospectus relating to any
registration hereunder or any other materials or information provided to
investors by, or with the written approval of, the Company in connection
with any offering pursuant to the Registration Statement, or arise out of
or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but in each case
only to the extent that the untrue statement or omission or alleged untrue
statement or omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Company
by or on behalf of such Holder specifically for inclusion therein. The
liability of any Holder under this Section 4(b) shall in no event exceed
the net proceeds received by such Holder from sales of Transfer Restricted
Securities giving rise to such obligation.
(c) Promptly after receipt by a party of notice of the commencement
of any action or proceeding (including a governmental investigation), such
party (the "Indemnified Person") will, if a claim in respect thereof is to
be made against any party under this Section 4 (each an "Indemnifying
Person"), notify the Indemnifying Person of the commencement thereof; but
the omission so to notify the Indemnifying Person will not, in any event,
relieve the Indemnifying Person from any obligations to any Indemnified
Person (including the contribution provision hereof) that the Indemnifying
Person may have under paragraph (a) or (b) above, except to the extent
that the Indemnifying Person has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure, or
otherwise than under paragraph (a) or (b) above. In case any such action
is brought against any Indemnified Person, and it notifies the
Indemnifying Person of the commencement thereof, the Indemnifying Person
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other Indemnifying Person similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
Indemnified Person (who shall not, except with the consent of the
Indemnified Person, be counsel to the Indemnifying Person), and after
notice from the Indemnifying Person to such Indemnified Person of its
election so to assume the defense thereof the Indemnifying Person will not
be liable to such Indemnified Person under this Section 4 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such Indemnified Person in connection with the defense
thereof. In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the Indemnifying Person shall pay as incurred (or within 30
days of presentation) the fees and expenses of the counsel retained by the
Indemnified Person in the event (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the retention of such
counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them or (iii) the Indemnifying Person shall have failed to assume
the defense of and employ counsel reasonably acceptable to the Indemnified
Person within a reasonable period of tune after notice of commencement of
the action. The Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify the Indemnified Person from and
against any loss or liability by reason of such settlement or judgment. No
Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
action in respect of which any Indemnified Person is or could have been a
9
party and indemnity could have been sought hereunder by such Indemnified
Person unless such settlement (i) includes an unconditional release of
such Indemnified Person from all liability on any claims that are the
subject matter of such action, and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf
of any Indemnified Person.
(d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an Indemnified Person under
subsections (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, except by reason of the exceptions set forth in Section 4(a) or
(b) or the failure of the Indemnified Person to give notice as required in
Section 4(c), then each Indemnifying Person shall contribute to the amount
paid or payable by such Indemnified Person as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
in subsection (a) or (b) above in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Person or Persons on the
one hand and the Indemnified Person on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or such Holder or such other Indemnified Person,
as the case may be, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid by an Indemnified Person as a
result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such Indemnified Person in
connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding any other provision of
this Section 4(d), no Holder shall be required to contribute any amount in
excess of the amount by which the net proceeds received by such Holder
from the sale of the Securities pursuant to the Registration Statement
exceeds the amount of damages which such Holder would have otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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. For purposes of this paragraph (d),
each person, if any, who controls such Indemnified Person within the
meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such Indemnified Person and each person, if any,
who controls the Company within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as the Company.
(e) The remedies provided by this Section 4 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to
any indemnified party at law or in equity. The agreements contained in
this Section 4 shall survive the sale of the Securities pursuant to the
Registration Statement and shall remain in fall force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
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5. Additional Dividends Under Certain Circumstances.
(a) Additional dividends ("Additional Dividends") with respect to
the Convertible Preferred Stock shall accrue as follows if any of the
following events occur (each such event in clauses (i) through (iii) below
being herein called a "Registration Default"):
(i) the Shelf Registration Statement required by this
Agreement is not filed with the Commission within 90 days after the
Closing Date;
(ii) the Shelf Registration Statement required by this
Agreement is not declared effective by the Commission within 180
days after the Closing Date; or
(iii) after the Shelf Registration Statement required by this
Agreement has been declared effective by the Commission (A) such
Shelf Registration Statement thereafter ceases to be effective or
(B) the Shelf Registration Statement or the related prospectus
ceases to be usable in connection with resales of Transfer
Restricted Securities during the Shelf Registration Period.
Each of the foregoing will constitute a Registration Default whatever the
reason for any such event and whether it is voluntary or involuntary or is
beyond the control of the Company or pursuant to operation of law or as a
result of any action or inaction by the Commission.
Additional Dividends shall accrue on the shares of Convertible Preferred
Stock from and including the date on which any such Registration Default
shall occur to but excluding the date on which all such Registration
Defaults have been cured, at a rate of 1.00% per annum, in addition to the
dividends otherwise accruing on the Convertible Preferred Stock.
(b) Additional Dividends shall not accrue as a result of any
Registration Default referred to in Section 5(a)(iii) hereof if (i) such
Registration Default has occurred solely as a result of (x) the filing of
a post-effective amendment to the Shelf Registration Statement to
incorporate annual audited financial information with respect to the
Company where such post-effective amendment is not yet effective and needs
to be declared effective to permit Holders to use the related prospectus,
(y) the filing of a post- effective amendment to the Shelf Registration
Statement pursuant to Section 2(a)(iii) or (z) other material events with
respect to the Company that would need to be described in the Shelf
Registration Statement or the related prospectus and (ii) in the case of
clauses (x) and (z), the Company is proceeding promptly and in good faith
to amend or supplement such Shelf Registration Statement and related
prospectus to describe such events; provided, however, that in the case of
clauses (x) or (z) if such Registration Default occurs for a continuous
period in excess of 30 days or for more than 90 days in the aggregate
during any 365-day period, Additional Dividends shall be payable in
accordance with the above paragraph from the day such Registration Default
occurs until such Registration Default is cured.
(c) Any amounts of Additional Dividends due pursuant to Section 5(a)
will be payable on the regular dividend payment dates with respect to the
Convertible Preferred Stock on the same terms and conditions and subject
to the same limitations as pertain at such time for the payment of regular
quarterly dividends. The amount of Additional Dividends will be determined
by multiplying 1.00% by the aggregate liquidation preference of the
11
outstanding shares of Convertible Preferred Stock and further multiplied
by a fraction, the numerator of which is the number of days such
Additional Dividend rate was applicable during such period, and the
denominator of which is 360.
6. Rules 144 and 144A. The Company shall file the reports required to be
filed by it under the Securities Act and the Exchange Act in a timely manner
and, if at any time during the Shelf Registration Period the Company is not
required to file such reports, it will, upon the request of any Holder of
Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of their Securities pursuant to Rules 144 and
144A. The Company covenants that it will take such further action as any Holder
of Transfer Restricted Securities may reasonably request, all to the extent
required from time to time to enable such Holder to sell Transfer Restricted
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)). The Company will provide a copy of this Agreement to
prospective purchasers of Securities identified to the Company by the Initial
Purchaser upon request. Upon the request of any Holder of Transfer Restricted
Securities, the Company shall deliver to such Holder a written statement as to
whether it is subject to and has complied with the reporting requirements
referenced in the first sentence of this Section 6. Notwithstanding the
foregoing, nothing in this Section 6 shall be deemed to require the Company to
register any of its securities or to file periodic, current or other reports
pursuant to the Exchange Act.
7. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any registration hereunder are to be sold in an
underwritten offering, (a) the investment banker or investment bankers and
manager or managers that will administer the offering ("Managing Underwriters")
will be selected by the Holders of a majority in number of shares of such
Transfer Restricted Securities to be included in such offering and (b) the
Company shall, if requested, enter into an underwriting agreement in customary
form in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
8. Demand Registration.
(a) Upon receipt of a written request (a "Demand Request") from the
Holders of not less than 5% of the then outstanding Transfer Restricted
Securities (the "Requisite Securities"), the Company shall, as promptly as
practicable prepare and cause to be filed with the Commission pursuant to
Rule 415 under the Securities Act a registration statement relating to the
registration for resale of Transfer Restricted Securities filed pursuant
to the provisions of this Section 8, including the Prospectus (as defined
below) included therein, all amendments thereto (including post-effective
amendments) and all exhibits and all material incorporated by reference
therein (a "Registration Statement") on the appropriate form relating to
resales of all Transfer Restricted Securities ("Demand Registration").
12
(b) No Holder may include any of its Transfer Restricted Securities
in any Registration Statement pursuant to this Section 8 unless and until
such Holder furnishes to the Company in writing, within 20 days after
receipt of a request therefor, the information specified in Item 507 or
508 of Regulation S-K, as applicable, of the Securities Act for use in
connection with any Registration Statement or Prospectus or preliminary
Prospectus included therein. Each selling Holder agrees to promptly
furnish additional information required to be disclosed in order to make
the information previously furnished to the Company by such Holder not
materially misleading.
(c) The Company shall be required to effect no more than two
Registrations pursuant to this Section 8. The Company shall be deemed not
to have used its best efforts to keep the Registration Statement effective
during the requisite period if it voluntarily takes any action that would
result in Holders of Transfer Restricted Securities covered thereby not
being able to offer and sell such Transfer Restricted Securities during
that period, unless such action is required by applicable law or this
Agreement.
(d) If the Company receives a Demand Request during a "lock-up" or
"black out" period (the "Lock Up Period") imposed on the Company pursuant
to or in connection with any underwriting or purchase agreement relating
to a Rule 144A offering or a registered public offering of Common Stock or
securities convertible into or exchangeable for Common Stock, the Company
shall not be required to file a Registration Statement prior to the end of
the Lock Up Period; provided, that such Lock Up Period shall not exceed 60
days. In such event, the Company shall use its reasonable best efforts to
cause the Registration Statement to become effective no later than the
later of (i) 60 days after receipt of the Demand Request and (ii) 60 days
after the end of the Lock Up Period. The Company shall notify the Holders
within 10 days of the imposition of any Lock Up Period on the Company.
9. Piggyback Registrations.
(a) Whenever the Company proposes to register any of its equity
securities under the Securities Act (other than (i) pursuant to a Demand
Registration (which is addressed in Section 8 above rather than this
Section 9) or (iii) pursuant to a registration on Form S-4 or S-8 or any
successor or similar forms) and the registration form to be used may be
used for the registration of Transfer Restricted Securities (a "Piggyback
Registration"), whether or not for sale for its own account, the Company
shall give prompt written notice to all holders of Transfer Restricted of
its intention to effect such a registration and, subject to Sections 2(c)
and 2(d) below, shall include in such registration all Transfer Restricted
Securities with respect to which the Company has received written requests
for inclusion therein within 20 days after the receipt of the Company's
notice.
(b) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters
advise the Company in writing that in their opinion the number of Transfer
Restricted Securities and, if permitted hereunder, other securities
requested to be included in such registration exceeds the number which can
be sold therein without adversely affecting the marketability of the
offering, then the Company shall include in such registration (i) first,
the securities the Company proposes to sell, (ii) second, the Transfer
Restricted Securities requested to be included in such registration, pro
13
rata among the holders of such Transfer Restricted Securities on the basis
of the number of shares of Transfer Restricted Securities owned by each
such holder and its Affiliates and (iii) third, the other securities
requested to be included in such registration pro rata among the holders
of such securities on the basis of the number of such other securities
owned by each such holder and its Affiliates.
(c) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities (it being
understood that secondary registrations on behalf of holders of Transfer
Restricted Securities are addressed in Section 8 above rather than in this
Section 8(d)), and the managing underwriters advise the Company in writing
that in their opinion the number of Transfer Restricted Securities and, if
permitted hereunder, other securities requested to be included in such
registration exceeds the number which can be sold therein without
adversely affecting the marketability of the offering, then the Company
shall include in such registration (i) first, the securities requested to
be included therein by the holders requesting such registration, (ii)
second, the Transfer Restricted Securities requested to be included in
such registration, pro rata among the holders of such Transfer Restricted
Securities on the basis of the number of shares owned by each such holder,
its affiliates, and (iii) third, the other securities requested to be
included in such registration.
(d) If, at any time after giving notice of its intention to register
any of its securities as set forth in Section 8(a) and before the
effective date of such registration statement filed in connection with
such registration, the Company shall determine, for any reason, not to
register such securities, the Company may, in its sole discretion, give
written notice of such determination to each holder of Transfer Restricted
Securities and thereupon shall be relieved of its obligation to register
any Transfer Restricted Securities in connection with such registration
(but not from its obligation to pay the expenses set forth in Section 3
above in connection therewith as provided herein).
(e) If the Company has previously filed a registration statement
with respect to Transfer Restricted Securities pursuant to this Agreement,
and if such previous registration has not been withdrawn or abandoned, the
Company shall not file or cause to be effected any other registration of
any of its equity securities or securities convertible or exchangeable
into or exercisable for its equity securities under the Securities Act
(except on Form S-8 or any successor form), whether on its own behalf or
at the request of any holder or holders of such securities, until a period
of at least 180 days has elapsed from the effective date of such previous
registration.
10. Demand and Piggyback Registration Procedures. Whenever the holders of
Transfer Restricted Securities have requested that any Transfer Restricted
Securities be registered pursuant to Section 8 or Section 9 of this Agreement,
the Company shall use its best efforts to effect the registration and the sale
of such Transfer Restricted Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company shall as expeditiously as
possible:
(a) prepare and file promptly (and no later than 45 days after
receipt of the initial request) with the Securities and Exchange
Commission a registration statement with respect to such Transfer
Restricted Securities and use its best efforts to cause such registration
statement to become effective;
14
(b) notify each holder of Transfer Restricted Securities of the
effectiveness of each registration statement filed in as required by
Section 8 or Section 9 of this Agreement and to the extent necessary to
ensure that the registration statement of the Company relating to the
registration for resale of Transfer Restricted Securities under Section 8
or Section 9 of this Agreement that is filed pursuant to the provisions of
this Section 10 including the Prospectus (as defined below) included
therein, all amendments thereto (including pos-effective amendments) and
all exhibits and all material incorporated by reference therein (the
"Additional Registration Statement") is available for sales of Transfer
Restricted Securities by the Holders thereof entitled to the benefit of
Section 8 or Section 9, the Company shall use its reasonable best efforts
to keep any Additional Registration Statement required by Section 8 or
Section 9 continuously effective, supplemented, amended and current as
required by and subject to the provisions of Section 8 or Section 9 hereof
and in conformity with the requirements of this Agreement, the Securities
Act and the rules and regulations of the Commission promulgated thereunder
from time to time (including (A) preparing and filing with the Commission
such amendments and post-effective amendments to the Additional
Registration Statement as may be necessary to keep such Additional
Registration Statement effective; (B) cause the prospectus included in any
Additional Registration Statement at the time such Additional Registration
Statement is declared effective, as supplemented by any prospectus
supplement and all material incorporated by reference into such prospectus
(the "Prospectus") to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Securities Act, and complying fully with Rules 424, 430A and 462, as
applicable, under the Securities Act in a timely manner; and (C) comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Additional Registration Statement),
until the second anniversary of the effective date of the Additional
Registration Statement; provided that such obligation shall expire before
such date if all the Transfer Restricted Securities covered by the
Additional Registration Statement (i) have been sold pursuant thereto or
(ii) are no longer Transfer Restricted Securities;
(c) furnish to each seller of Transfer Restricted Securities such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such Additional
Registration Statement (including each preliminary prospectus) and such
other documents as such seller may reasonably request in order to
facilitate the disposition of the Transfer Restricted Securities owned by
such seller;
(d) use its best efforts to register or qualify such Transfer
Restricted Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Transfer Restricted Securities owned by such seller (provided that the
Company shall not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but
for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
15
(e) notify each seller of such Transfer Restricted Securities, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the prospectus included in such Additional Registration Statement
contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the
request of any such seller, the Company shall prepare a supplement or
amendment to such prospectus and/or Additional Registration Statement so
that, as thereafter delivered to the purchasers of such Transfer
Restricted Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading;
(f) cause all such Transfer Restricted Securities to be listed on
each securities exchange on which similar securities issued by the Company
are then listed and, if not so listed, to be listed on a securities
exchange or the National Association of Securities Dealers (the "NASD")
automated quotation system and, if listed on the NASD automated quotation
system, use its best efforts to secure designation of all such Transfer
Restricted Securities covered by such Additional Registration Statement as
a "national market system security" of The Nasdaq Stock Market within the
meaning of Rule 11 Aa2-1 of the Securities and Exchange Commission or,
failing that, to secure The Nasdaq Stock Market's authorization for such
Transfer Restricted Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such
with respect to such Transfer Restricted Securities with the NASD;
(g) provide a transfer agent and registrar for all such Transfer
Restricted Securities not later than the effective date of the first
Additional Registration Statement relating to Transfer Restricted
Securities or securities of any class of the Company;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
holders of a majority of such Transfer Restricted Securities being sold or
the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Transfer Restricted Securities
(including, without limitation, effecting a stock split, combination of
shares, recapitalization or reorganization);
(i) make available for inspection by any seller of such Transfer
Restricted Securities, any underwriter participating in any disposition
pursuant to such Additional Registration Statement and any attorney,
accountant or other agent retained by any such seller or underwriter, all
financial and other records, pertinent corporate and business documents
and properties of the Company, and cause the Company's officers,
directors, employees, agents, representatives and independent accountants
to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such
Additional Registration Statement;
(j) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Securities and Exchange
Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months beginning with the first day of the Company's first
full calendar quarter after the effective date of the Additional
Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
16
(k) in the event of the issuance of any stop order suspending
the effectiveness of an Additional Registration Statement, or of any order
suspending or preventing the use of any related Prospectus or suspending the
qualification of any securities included in such Additional Registration
Statement for sale in any jurisdiction, use its best efforts promptly to obtain
the withdrawal of such order;
(l) use its reasonable best efforts to cause such Transfer
Restricted Securities covered by such Additional Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the sellers thereof to consummate the disposition
of such Transfer Restricted Securities; provided that the Company shall not be
required, in connection therewith or as a condition thereto, to qualify to do
business or to file a general consent to service of process in any state or
jurisdiction;
(m) if the underwriters so request, use its reasonable best
efforts to obtain a cold comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters, which letter shall be addressed to the
underwriters; and
(n) if the underwriters so request, use its reasonable best
efforts to obtain an opinion from the Company's outside counsel in customary
form and covering such matters of the type customarily covered by such opinions,
which opinion shall be addressed to the underwriters.
11. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure
by the Company to comply with its obligations under Section 1, Section 8
or Section 9 hereof may result in material injury to the Initial Purchaser
or the Holders for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that,
in the event of any such failure and in addition to the Additional
Dividends or other rights of the Initial Purchaser or any Holder, the
Initial Purchaser or any Holder may obtain such relief as may be required
to specifically enforce the Company's obligations under Section 1, Section
8 or Section 9 hereof. The Company further agrees to waive the defense in
any action for specific performance that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. The
rights granted to the Holders hereunder do not in any way conflict with
and are not inconsistent with the rights granted to the holders of the
Company's securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, except by the
Company and the written consent of the Holders of a majority in number of
the shares of the Transfer Restricted Securities affected by such
17
amendment, modification, supplement, waivers or consents (provided that
Holders of Common Stock issued upon conversion of Convertible Preferred
Stock shall be deemed to be Holders of the aggregate number of shares of
Convertible Preferred Stock from which such Common Stock was converted)
without the consent of each Holder of each share of Convertible Preferred
Stock then outstanding, including in the case of an amendment,
modification or supplement of Section 4, any person who was a holder of
Transfer Restricted Securities disposed of pursuant to the Registration
Statement (provided that Holders of Common Stock issued upon conversion of
Convertible Preferred Stock shall be deemed to be Holders of the aggregate
number of shares of Convertible Preferred stock from which such Common
Stock was converted). Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Transfer Restricted Securities
whose Securities are being sold pursuant to the Registration Statement and
that does not directly or indirectly affect, impair, limit or compromise
the rights of other Holders of Transfer Restricted Securities may be given
by Holders of at least a majority in number of shares of the Transfer
Restricted Securities being sold by such Holders pursuant to such
Registration Statement (provided that Holders of Common Stock issued upon
conversion of Convertible Preferred Stock shall be deemed to be Holders of
the aggregate number of shares of Convertible Preferred Stock from which
such Common Stock was converted). Each Holder of Transfer Restricted
Securities outstanding at the time of any amendment, modification,
supplement, waiver, or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver, or consent effected pursuant
to this Section, whether or not any notice of such amendment,
modification, supplement, waiver, or consent is delivered to such Holder
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, facsimile transmission, or courier which guarantees
overnight delivery:
(1) if to the Holders, at the most current address shown for
the Holders in the records of the Company's transfer agent and registrar
for the Convertible Preferred Stock and Common Stock, unless the Holder
shall have provided notice information in a notice and questionnaire
related to the Registration Statement or any amendment thereto, in which
case such information shall control:
(2) if to the Initial Purchaser:
Xxxxxxxxx & Company, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxxxx
with a copy (which shall not constitute notice) to:
Jefferies & Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
18
(3) if to the Company, at its address as follows:
Dune Energy, Inc.
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
with a copy to:
Xxxxx & Xxx Xxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered;
the earlier of the date indicated on the notice of receipt and five
business days after being deposited in the mail, postage prepaid, if
mailed; when receipt is acknowledged by recipient's facsimile machine
operator, if sent by facsimile transmission during normal business hours;
and on the day delivered, if sent by overnight air courier guaranteeing
next day delivery.
(e) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Initial Purchaser, on the other hand, and shall have the
right to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect their rights or the rights
of Holders hereunder.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any
consent by the Company thereto, subsequent Holders of Transfer Restricted
Securities. The Company hereby agrees to extend the benefits of this
Agreement to any Holder of Transfer Restricted Securities and any such
Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, including
by facsimile, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE JURISDICTION OF THE FEDERAL AND NEW YORK STATE
COURTS SITTING IN MANHATTAN, NEW YORK CITY, THE STATE OF NEW YORK, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
19
(j) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held by a court
of competent jurisdiction to be 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 thereby, and the parties hereto shall use their best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(k) Securities Held by the Company. Whenever the consent or approval
of Holders of a specified number of Transfer Restricted Securities is
required hereunder, Securities held by the Company or its affiliates
(other than the Initial Purchaser or other Holders of Transfer Restricted
Securities deemed to be affiliates solely by reason of their holdings of
such Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
(l) Entire Agreement. This Agreement, together with the Purchase
Agreement and the Certificate of Designations related to the Convertible
Preferred Stock, is intended by the parties as a final and exclusive
statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein and any and all
prior oral or written agreements, representations, or warranties,
contracts, understandings, correspondence, conversations and memoranda
between the Initial Purchaser, on the one hand, and the Company, on the
other, or between or among any agents, representatives, parents,
subsidiaries, affiliates, predecessors in interest or successors in
interest with respect to the subject matter hereof and thereof are merged
herein and replaced hereby.
[Remainder of page intentionally left blank.]
20
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a
binding agreement among the Initial Purchaser and the Company in
accordance with its terms.
Very truly yours,
DUNE ENERGY, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------------------
Name: Xxxxx X. Xxxx
Title: President and Chief Executive Officer
Accepted and Agreed to:
XXXXXXXXX & COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Director
