Exhibit 4.11
CRIMSON EXPLORATION, INC.
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is entered into as of
March 20, 2006, by and among Crimson Exploration, Inc., a Delaware corporation
(the "Company"), and the entities and Persons identified on the signature pages
of this Agreement (individually, a "Shareholder," and collectively, the
"Shareholders").
RECITALS
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WHEREAS, this Agreement is made pursuant to the Agreement and Plan of
Merger (the "Merger Agreement") dated as of March 14, 2006, among the Company,
Crimson Exploration Operating, Inc., a Delaware corporation and wholly owned
subsidiary of the Company ("Crimson Sub"), Core Natural Resources, Inc, a Texas
corporation ("Target") and the Shareholders;
WHEREAS, pursuant to the Merger Agreement, (a) Target will be merged with
and into Crimson Sub (the "Merger") and (b) the Company will issue shares of
Common Stock of the Company to the Shareholders in conversion of and exchange
for the outstanding shares of capital stock of Target then held by the
Shareholders;
WHEREAS, pursuant to the Merger Agreement, certain of the Shareholders will
also assign certain of their overriding royalty interests in oil and gas
properties of the Target to the Company and the Company will issue additional
shares of Common Stock of the Company to such Shareholders (the "Assignment of
ORRI"); and
WHEREAS, in connection with the Merger and the Assignment of ORRI, the
parties desire to enter into this Agreement in order to grant certain
registration rights with respect to the Common Stock issued to the Shareholders.
AGREEMENT
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NOW, THERFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereto agree as follows:
Section 1. Piggyback Registration Rights.
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(a) Right to Include Registrable Securities. At any time the
Company proposes for any reason to register any of its Common Stock
under the Securities Act, either for its own account or for the account
of a securityholder of the Company exercising demand registration
rights other than pursuant to a Registration Statement on Forms S-4
or S-8 (or similar or successor forms) (a "Proposed Registration"), the
Company shall promptly give written notice of such Proposed Registration
to all of the Shareholders holding Registrable Securities (which
notice shall be given not less than twenty (20) days before the expected
effective date of the Company's Registration Statement) and shall offer
such Shareholders the right to request inclusion of any of such
Shareholder's Registrable Securities in the Proposed Registration. The
rights to piggyback registration may be exercised an unlimited number of
occasions.
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(b) Piggyback Procedure. Each Shareholder shall have ten
(10) days from the date of receipt of the Company's notice referred
to in Section 1(a) to deliver to the Company a written request specifying
the number of Registrable Securities such Shareholder intends to sell and
such Shareholder's intended method of disposition. Any Shareholder
may withdraw such Shareholder's request for inclusion of such
Shareholder's Registrable Securities in any Registration Statement
pursuant to this Section 1 by giving written notice to the Company of
such withdrawal; provided, however, that the Company may ignore a
notice of withdrawal made within twenty-four (24) hours of the time the
Registration Statement is to become effective. Subject to Section 1(d),
the Company shall use its reasonable best efforts to include in such
Registration Statement all such Registrable Securities so requested to
be included therein; provided, however, that the Company may at any time
withdraw or cease proceeding with any such Proposed Registration if it
withdraws or ceases proceeding with the registration of all other
securities originally proposed to be registered. If the Proposed
Registration is, in whole or in part, an underwritten public
offering of securities of the Company, any request under this Section
1(b) shall specify that the Registrable Securities be included in the
underwriting on the same terms and conditions as the shares, if any,
otherwise being sold through underwriters under such registration.
(c) Priority for Piggyback Registration. Notwithstanding
any other provision of this Section 1, if the managing underwriter of
an underwritten public offering determines and advises the Company
that the inclusion of all Registrable Securities proposed to be included
by the Participating Shareholders in the underwritten public offering
would materially and adversely interfere with the successful marketing
of the Company's securities, then the Participating Shareholders may not
include any Registrable Securities in excess of the amount, if any, of
Registrable Securities which the managing underwriter of such
underwritten public offering shall reasonably and in good faith
agree in writing to include in such public offering in addition to the
amount of securities to be registered for the Company. The Company
must include in such Registration Statement, as to each Participating
Shareholder, only a portion of the Registrable Securities such
Participating Shareholder has requested be registered equal to the ratio
which such Participating Shareholder's requested Registrable
Securities bears to the total number of Registrable Securities requested
to be included in such Registration Statement by all Participating
Shareholders who have requested that their Registrable Securities be
included in such Registration Statement. Pursuant to the foregoing
provision, the securities to be included in a registration initiated
by the Company shall be allocated:
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(i) first, to the Company;
(ii) second, to any others requesting registration of
securities of the Company pursuant to demand registration rights;
(iii) third to persons or entities exercising registration
rights under the Shareholders Rights Agreement of the Company, dated
February 28, 2006, as amended from time to time; and
(iv) fourth, to the Participating Shareholders and others
having the right to include securities in such Registration Statement.
If as a result of the provisions of this Section 1(c), any Participating
Shareholder may not include all of its Registrable Securities in a registration
that such Shareholder has requested to be so included, such Participating
Shareholder may withdraw such Participating Shareholder's request to include
Registrable Securities in such Registration Statement.
(d) Registration Procedures. The Company shall use its best efforts to
effect the registration and sale of the Registrable Securities in accordance
with the intended method of distribution thereof as promptly as possible, and in
connection with any such request, the Company shall, as expeditiously as
possible:
(i) Preparation of Registration Statement; Effectiveness.
Prepare and file with the SEC a Registration Statement on any form on
which the Company then qualifies, which counsel for the Company shall
deem appropriate and pursuant to which such offering may be made in
accordance with the intended method of distribution thereof (except that
the Registration Statement shall contain such information as may
reasonably be requested for marketing or other purposes by the
managing underwriter), and use its best efforts to cause any registration
required hereunder to become effective as soon as practicable after
the initial filing thereof and remain effective until the securities
are no longer Registrable Securities;
(ii) 10b-5 Notification. Promptly notify in writing the
Participating Shareholders, the sales or placement agent, if any,
therefor and the managing underwriter of the securities being sold
pursuant to the Registration Statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
upon discovery that, or upon the happening of any event as a result of
which, any prospectus included in the Registration Statement (or
amendment or supplement thereto) contains 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
light of the circumstances under which they were made, and the Company
shall promptly prepare a supplement or amendment to such prospectus and
file it with the SEC (in any event no later than ten days following
notice of the occurrence of such event to each Participating
Shareholder, the sales or placement agent and the managing underwriter)
so that after delivery of such prospectus, as so amended or
supplemented, to the purchasers of such Registrable Securities, such
prospectus, as so amended or supplemented, shall not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which
they were made;
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(iii) Notification of Stop Orders; Suspensions of
Qualifications and Exemptions. Promptly notify in writing the
Participating Shareholders, the sales or placement agent, if any,
therefor and the managing underwriter of the securities being sold of
the issuance by the SEC of (A) any stop order issued or threatened to be
issued by the SEC or (B) any notification with respect to the suspension
of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and the Company agrees to
use its best efforts to (x) prevent the issuance of any such stop order,
and in the event of such issuance, to obtain the withdrawal of any such
stop order and (y) obtain the withdrawal of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in the Registration
Statement for sale in any jurisdiction at the earliest practicable date;
(iv) Amendments and Supplements. Prepare and file with the
SEC such amendments, including post-effective amendments to the
Registration Statement as may be necessary to keep the
Registration Statement continuously effective for the applicable time
period required hereunder and, if applicable, cause the related
prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the
Securities Act; and comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all securities
covered by the Registration Statement during such period in accordance
with the intended methods of disposition by the sellers thereof set
forth in the Registration Statement as so amended or in such prospectus
as so supplemented;
(v) Blue Sky. Use its reasonable best efforts to, prior to
any public offering of the Registrable Securities, register or qualify
(or seek an exemption from registration or qualifications) such
Registrable Securities under such other securities or blue sky laws of
such jurisdictions as any Participating Shareholder or underwriter may
request, and to continue such qualification in effect in each such
jurisdiction for as long as is permissible pursuant to the laws of
such jurisdiction, or for as long as a Participating Shareholder or
underwriter requests or until all of such Registrable Securities are
sold, whichever is shortest, and do any and all other acts and things
which may be reasonably necessary or advisable to enable any
Participating Shareholder to consummate the disposition in such
jurisdictions of the Registrable Securities; provided, however, that
the Company shall not be required to (i) qualify generally to do
business in any jurisdiction or to register as a broker or dealer in
such jurisdiction where it would not otherwise be required to qualify
but for this Section 1(d)(v), (ii) subject itself to taxation in any
such jurisdiction, or (iii) submit to the general service of process
in any such jurisdiction;
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(vi) Other Approvals. Use its reasonable best efforts to
obtain all other approvals, consents, exemptions or authorizations from
such governmental agencies or authorities as may be necessary to enable
the Participating Shareholders and underwriters to consummate the
disposition of Registrable Securities;
(vii) Agreements. Enter into customary agreements (including
any underwriting agreements in customary form), and take such other
actions as may be reasonably required in order to expedite or facilitate
the disposition of Registrable Securities;
(viii) SEC Compliance, Earnings Statement. Comply with all
applicable rules and regulations of the SEC and make available to its
Shareholders, as soon as reasonably practicable, but no later than
fifteen (15) months after the effective date of the Registration
Statement, an earnings statement covering a period of twelve (12) months
beginning after the effective date of the Registration Statement, in a
manner which satisfies the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder;
(ix) Certificates, Closing. Provide officers' certificates and
other customary closing documents;
(x) NASD. Cooperate with each Participating Shareholder
and each underwriter participating in the disposition of such
Registrable Securities and underwriters' counsel in connection with
any filings required to be made with the NASD;
(xi) Listing. Use its best efforts to cause all such
Registrable 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 the NASD automated quotation system;
(xii) Transfer Agent, Registrar and CUSIP. Provide a
transfer agent and registrar for all Registrable Securities
registered pursuant hereto and a CUSIP number for all such Registrable
Securities, in each case, no later than the effective date of such
registration; and
(xiii) Best Efforts. Use its reasonable best efforts to take all
other actions necessary to effect the registration of the Registrable
Securities contemplated hereby.
(e) Seller Information. The Company may require each Participating
Shareholder as to which any registration of such Shareholder's Registrable
Securities is being effected to furnish to the Company with such information
regarding such Participating Shareholder and such Participating Shareholder's
method of distribution of such Registrable Securities as the Company may from
time to time reasonably request in writing. If a Participating Shareholder
refuses to provide the Company with any of such information on the grounds that
it is not necessary to include such information in the Registration Statement,
the Company may exclude such Participating Shareholder's Registrable Securities
from the Registration Statement if the Company provides such Participating
Shareholder with an opinion of counsel to the effect that such information
should be included in the Registration Statement and such Participating
Shareholder continues thereafter to withhold such information. The exclusion of
a Participating Shareholder's Registrable Securities shall not affect the
registration of the other Registrable Securities to be included in the
Registration Statement.
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(f) Notice to Discontinue. Each Participating Shareholder whose
Registrable Securities are covered by the Registration Statement filed pursuant
to this Agreement agrees that, upon receipt of written notice from the Company
of the happening of any event of the kind described in Section 1(d)(ii) or
Section 1(d)(iii), such Participating Shareholder shall forthwith discontinue
the disposition of Registrable Securities until such Participating Shareholder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 1(d)(ii) or Section 1(d)(iii) or until it is advised in writing by the
Company that the use of the prospectus may be resumed and has received copies of
any additional or supplemental filings which are incorporated by reference into
the prospectus, and, if so directed by the Company in the case of an event
described in Section 1(d)(ii) or Section 1(d)(iii), such Participating
Shareholder shall deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in such Participating Shareholder's
possession, of the prospectus covering such Registrable Securities which is
current at the time of receipt of such notice.
(g) Registration Expenses. Except as otherwise provided herein, all
Registration Expenses shall be borne by the Company. All Selling Expenses
relating to Registrable Securities registered shall be borne by the
Participating Shareholders of such Registrable Securities pro rata on the basis
of the number of shares so registered.
(h) Indemnification.
(i) Indemnification by the Company. The Company agrees,
notwithstanding termination of this Agreement, to indemnify and hold
harmless to the fullest extent permitted by applicable law, each
Shareholder, each of its directors, officers, employees, advisors, agents
and general or limited partners (and the directors, officers, employees,
advisors and agents thereof), their respective Affiliates and each Person
who controls (within the meaning of the Securities Act or the Exchange Act)
any of such Persons, and each underwriter and each Person who controls
(within the meaning of the Securities Act or the Exchange Act) any
underwriter (collectively, "Shareholder Indemnified Parties") from and
against any and all losses, claims, damages, expenses (including,
reasonable costs of investigation and fees, disbursements and other charges
of counsel and experts and any amounts paid in settlement effected with the
Company's consent, which consent shall not be unreasonably withheld or
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delayed) or other liabilities (collectively, "Losses") to which any such
Shareholder Indemnified Party may become subject under the Securities Act,
Exchange Act, any other federal law, any state or common law or any rule or
regulation promulgated thereunder or otherwise, insofar as such Losses (or
actions or proceedings, whether commenced or threatened, in respect
thereof) are resulting from or arising out of or based upon (i) any untrue,
or alleged untrue, statement of a material fact contained in the
Registration Statement, prospectus or preliminary prospectus (as amended or
supplemented) or any document incorporated by reference in any of the
foregoing or resulting from or arising out of or 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 the case of a
prospectus, in light of the circumstances under which they were made), not
misleading, or (ii) any violation by the Company of the Securities Act,
Exchange Act, any other federal law, any state or common law or any rule or
regulation promulgated thereunder or otherwise incident to any
registration, qualification or compliance and in any such case, the Company
will promptly reimburse each such Shareholder Indemnified Party for any
legal expenses and any other Losses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage,
liability, action or investigation or proceeding (collectively, a "Claim").
Such indemnity obligation shall remain in full force and effect regardless
of any investigation made by or on behalf of the Shareholder Indemnified
Parties and shall survive the transfer of Registrable Securities by such
Shareholder Indemnified Parties.
(ii) Indemnification by Shareholders. In connection with any
proposed registration in which a Shareholder is participating pursuant
to this Agreement, each such Shareholder shall furnish to the Company
in writing such information with respect to such Shareholder as the Company
may reasonably request or as may be required by law for use in connection
with the Registration Statement or prospectus or preliminary prospectus to
be used in connection with such registration and each Shareholder agrees,
severally and not jointly, to indemnify and hold harmless the Company, any
underwriter retained by the Company and their respective directors,
officers, partners, employees, advisors and agents, their respective
Affiliates and each Person who controls (within the meaning of the
Securities Act or the Exchange Act) any of such Persons to the same extent
as the foregoing indemnity from the Company to the Shareholders as set
forth in Section 1(h)(i) (subject to the exceptions set forth in the
foregoing indemnity, the proviso to this sentence and applicable law), but
only with respect to any such information furnished in writing by such
Shareholder expressly for use therein; provided, however, that, unless such
liability is directly caused by such Shareholder's willful or intentional
misconduct, the liability of any such Shareholder under this Section
1(h)(ii) shall be limited to the amount of the net proceeds received by
such Shareholder in the offering giving rise to such liability. Such
indemnity obligation shall remain in full force and effect regardless of
any investigation made by or on behalf of the Shareholder Indemnified
Parties (except as provided above) and shall survive the transfer of
Registrable Securities by such Shareholder.
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(iii) Conduct of Indemnification Proceedings. Any person or
entity entitled to indemnification hereunder (the "Indemnified Party")
agrees to give prompt written notice to the indemnifying party (the
"Indemnifying Party") after the receipt by the Indemnified Party of any
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which the Indemnified
Party intends to claim indemnification or contribution pursuant to this
Agreement; provided, however, that, the failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of any
liability that it may have to the Indemnified Party hereunder unless and to
the extent such Indemnifying Party is materially prejudiced by such
failure. If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party may
participate in and, to the extent it may wish, jointly with any other
Indemnifying Party similarly notified, to assume the defense of such action
at its own expense, with counsel chosen by it and reasonably satisfactory
to such Indemnified Party. The Indemnified Party may employ separate
counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be paid by the Indemnified Party
unless (i) the Indemnifying Party agrees to pay the same, (ii) the
Indemnifying Party fails to assume the defense of such action with counsel
satisfactory to the Indemnified Party in its reasonable judgment or (iii)
the named parties to any such action reasonably believe that the
representation of such Indemnified Party and the Indemnifying Party by the
same counsel would be inappropriate under applicable standards of
professional conduct. In the case of clause (ii) above and (iii) above, the
Indemnifying Party may not assume the defense of such action on behalf of
such Indemnified Party. No Indemnifying Party shall be liable for any
settlement entered into without its written consent, which consent shall
not be unreasonably withheld. No Indemnifying Party may, without the
written consent of the Indemnified Party, (which consent shall not be
unreasonably withheld), effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened
Claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the Indemnified Party is an actual or potential
party to such Claim) unless such settlement, compromise or judgment (A)
includes an unconditional release of the Indemnified Party from all
liability arising out of such Claim and (B) 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 Party. The rights afforded to any Indemnified
Party hereunder shall be in addition to any rights that such Indemnified
Party may have at common law, by separate agreement or otherwise.
(iv) Contribution. If the indemnification provided for in
this Section 1(h) from the Indemnifying Party is unavailable or
insufficient to hold harmless an Indemnified Party in respect of any
Losses, then the Indemnifying Party, in lieu of indemnifying the
Indemnified Party, shall contribute to the amount paid or payable by
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the Indemnified Party as a result of such Losses in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party
and the Indemnified Party, as well as any other relevant equitable
considerations. The relative faults of the Indemnifying Party and
Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, was made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the Indemnifying
Party's and Indemnified Party's relative intent, knowledge, access to
information and opportunity to correct or prevent such action; provided,
however, that, unless such liability is directly caused by such
Shareholder's willful or intentional misconduct, the liability of any such
Shareholder under this Section 1(h)(iv) shall be limited to the amount of
the net proceeds received by such Shareholder in the offering giving rise
to such liability. The amount paid or payable by a party as a result of the
Losses or other liabilities referred to above shall be deemed to include,
subject to the limitations set forth in Sections 1(h)(i), Section 1(h)(ii),
or Section 1(h)(iii), any legal or other fees, charges or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(v) The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 1(h)(iv) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
the immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution pursuant to this Section 1(h)(iv).
(i) Rule 144 and Rule 144A; Other Exemptions. The Company shall use
its commercially reasonable efforts to (i) file in a timely manner all reports
and other documents required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder and
(ii) take such further action as each Shareholder may reasonably request
(including providing any information necessary to comply with Rule 144), all to
the extent required from time to time to enable such Shareholder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (x) Rule 144 under the Securities Act,
as such rules may be amended from time to time or (y) any other rules or
regulations now existing or hereafter adopted by the SEC. Upon the written
request of a Shareholder, the Company shall deliver to the Shareholder a written
statement as to whether it has complied with such requirements.
(j) Certain Limitations On Registration Rights. No Shareholder may
participate in the Registration Statement hereunder unless such Shareholder
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, and other documents reasonably required under the terms
of such underwriting arrangements and agrees to sell such Shareholder's
Registrable Securities on the basis provided in any underwriting agreement
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approved by the Shareholder or Shareholders entitled hereunder to approve such
arrangements; provided, however, that no such Shareholder shall be required to
make any representations or warranties to the Company or the underwriters in
connection with any such registration other than representations and warranties
as to (i) such Shareholder's ownership of its Registrable Securities to be sold
or transferred, (ii) such Shareholder's power and authority to effect such
transfer and (iii) such matters pertaining to compliance with securities laws as
may be reasonably requested. Such Shareholders of Registrable Securities to be
sold by such underwriters may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of the
Company to and for the benefit of such underwriters, shall also be made to and
for the benefit of such Shareholders and that any or all of the conditions
precedent to the obligations of the underwriters under the underwriting
agreement be conditions precedent to the obligations of the Shareholders.
(k) Restrictions on Public Sale by Shareholders. If requested by the
lead managing underwriter with respect to any firm underwriting public offering
in which Shareholders are permitted to participate hereunder, each Shareholder
of Registrable Securities agrees not to effect any public sale or distribution
of any Registrable Securities being registered or of any securities convertible
into or exchangeable or exercisable for such Registrable Securities, including a
sale pursuant to Rule 144 under the Securities Act, during a period of not more
than one hundred eighty (180) days after any firm underwriting public offering
of Common Stock of the Company, commencing on the effective date of the
Registration Statement (the "Lock-Up Period"), unless expressly authorized to do
so by the lead managing underwriter; provided, however, that if any other
Shareholder of securities of the Company is subject to a shorter period or
receives more advantageous terms relating to the Lock-Up Period, then the
Lock-Up Period shall be such shorter period and also on such more advantageous
terms. Notwithstanding the foregoing, the Shareholders shall not be required to
sign lock-up agreements unless other Persons permitted to include securities on
such Registration Statement and all of the Company's directors and executive
officers have signed substantially similar lock-up agreements with the managing
underwriters. Any such lock-up agreements signed by the Shareholders shall
contain reasonable and customary exceptions.
(l) Transfer of Registration Rights. The rights of a Shareholder under
this Section 1 may not be transferred or assigned in connection with a transfer
of Registrable Securities.
(m) Amendment. The provisions of this Section 1 may be waived or amended
by the agreement of Shareholders holding a majority of the Registrable
Securities.
(n) Definitions. For this Section 1:
"Affiliate" means with respect to any Person, any other Person directly or
indirectly Controlling or Controlled by, or under direct or indirect common
Control with, such Person.
"Claim" is defined in Section 1(h)(i).
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"Common Stock" means shares of common stock, $0.01 par value per share, of
the Company.
"Company" means Crimson Exploration, Inc., a Delaware corporation.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Indemnified Party" is defined in Section 1(h)(iii).
"Indemnifying Party" is defined in Section 1(h)(iii).
"Losses" is defined in Section 1(h)(i).
"NASD" means the National Association of Securities Dealers, Inc.
"Participating Shareholders" means Shareholders participating, or electing
to participate, in an offering of Registrable Securities.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Proposed Registration" is defined in Section 1(a).
"Registrable Securities" means any shares of Common Stock held by
Shareholder as listed as Registrable Securities on Schedule I and any shares of
Common Stock issued to a Shareholder as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
on the Common Stock, including any resulting shares issued, by virtue of the
effect of antidilution provisions or combination, merger, consolidation or other
similar event; provided, however, that shares of Common Stock that are
considered to be Registrable Securities shall cease to be Registrable Securities
(i) upon the sale thereof pursuant to an effective registration statement, (ii)
upon the first anniversary of the date of the issuance of such shares or (iii)
when such securities cease to be outstanding.
"Registration Expenses" means all expenses (other than underwriting
discounts and commissions) arising from or incident to the performance of, or
compliance with, Section 1, including, (i) SEC, stock exchange, NASD and other
registration and filing fees, (ii) all fees and expenses incurred in connection
with complying with any securities or blue sky laws (including, fees, charges
and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) all printing, messenger and delivery expenses,
(iv) the fees, charges and disbursements of counsel to the Company and of its
independent public accountants and any other accounting and legal fees, charges
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and expenses incurred by the Company (including, any expenses arising from any
special audits or "comfort letters" required in connection with or incident to
any registration), (v) the fees, charges and disbursements of any special
experts retained by the Company in connection with any registration pursuant to
the terms of this Agreement, (vi) all internal expenses of the Company
(including, all salaries and expenses of its officers and employees performing
legal or accounting duties), (vii) the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange,
over-the-counter market or Nasdaq and (viii) Securities Act liability insurance
(if the Company elects to obtain such insurance), regardless of whether the
Registration Statement filed in connection with such registration is declared
effective. "Registration Expenses" shall not include fees, charges and
disbursements of any firm of counsel to any Participating Shareholders.
"Registration Statement" means the registration statement of the Company
filed with the SEC on the appropriate form pursuant to the Securities Act which
covers shares of Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to the Registration Statement,
including post-effective amendments, in each case including the prospectus
contained therein, all exhibits thereto and all materials incorporated by
reference therein.
"SEC" or "Commission" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Selling Expenses" means the underwriting fees, discounts, selling
commissions and stock transfer taxes applicable to all Registrable Securities
registered by the Participating Shareholders.
"Shareholder" or "Shareholders" means (a) those Persons receiving shares of
Common Stock issued by the Company pursuant to the Merger Agreement and (b)
those Persons receiving shares of Common Stock issued by the Company pursuant to
the Assignment of ORRI, in each case, as set forth on Schedule I hereto.
"Shareholder Indemnified Parties" is defined in Section 1(h)(i).
Section 2. Miscellaneous.
(a) Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given:
(i) two days after deposit in the mail, if sent
first-class United States mail;
(ii) when delivered by hand (with written confirmation of
receipt);
(iii) when sent by facsimile (with written confirmation
of receipt), provided that a copy is mailed by registered mail, return
receipt requested; or
12
(iv) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and facsimile numbers set forth
below (or to such other addresses and facsimile numbers as a party may
designate by notice to the other parties).
(b) If to a Shareholder, as indicated on the signature pages to this
Agreement, with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(c) If to the Company:
Crimson Exploration, Inc.
Attn: ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 3. Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege.
Section 4. Entire Agreement; Amendment; Waiver. This Agreement, the
Merger Agreement, and Assignment of ORRI constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated, except by a written instrument signed by the
Company and the holders of a majority of the Registrable Securities.
Section 5. Term of Agreement. This Agreement shall terminate on
the earlier of (i) the date upon which all of the shares of Registrable
Securities have been sold pursuant to an effective registration statement, (ii)
no Registrable Securities continue to be outstanding and (ii) the first
anniversary of the date hereof. Notwithstanding the foregoing, certain covenants
contained in this Agreement shall expire on the occurrence of the specific
events stated herein that relate to those particular covenants, if such events
occur sooner than an event set forth in this Section 5, and the obligations
contained in Section 1(h) shall survive the termination of this Agreement.
Section 6. Assignments; Successors; No Third-Party Rights. Except as
provided in this Agreement, no party may assign any of its rights under this
Agreement without the prior consent of the other parties. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
13
Section 7. Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
Section 8. Section Headings; Construction. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
Section 9. Governing Law. This Agreement will be governed by the laws of
the State of Texas without regard to conflicts of laws principles.
Section 10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOLLOW]
14
DATED: March 20, 2006.
CRIMSON EXPLORATION, INC.
a Delaware corporation
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
E. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. Vice President & CFO
Signature Page 1
SHAREHOLDERS:
DATED: March 20, 2006. CORE NATURAL RESOURCES GP, LLC,
a Texas limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Manager
Notice Address: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DATED: March 20, 2006. /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notice Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DATED: March 20, 2006. /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notice Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DATED: March 20, 2006. /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notice Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DATED: March 20, 2006. /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notice Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, #▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Signature Page 2
DATED: March 20, 2006. ▇▇▇▇▇▇▇, INC.,
a Texas corporation
By: /s/ M.B. ▇▇▇▇▇
-----------------------
Name: M.B. ▇▇▇▇▇
Title: President
Notice Address: c/o M.B. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Signature Page 3
SCHEDULE I
SHAREHOLDERS
------------
SHARES RECEIVED
UNDER MERGER SHARES RECEIVED UNDER
NAME AGREEMENT ASSIGNMENT OF ORRI
CORE NATURAL RESOURCES GP, LLC, 32,356.24 -0-
a Texas limited liability company...
2,814,993.18 ▇▇▇▇▇▇▇ Lease - 262,231
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇................ Price Lease - 200,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.................. 129,424.97 -0-
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇................... 129,424.97 -0-
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.................... 16,178.12 -0-
▇▇▇▇▇▇▇, INC., 113,246.85 -0-
a Texas corporation................
Signature Page 4