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