EXHIBIT 10.2
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GMX RESOURCES INC.
REGISTRATION AGREEMENT
This Agreement is entered into as of this 23rd day of June 2004, by and
between GMX Resources Inc., an Oklahoma corporation ("Company"), and the persons
designated as the investors on the signature page of this Agreement
("Investors").
WHEREAS, Investors have agreed to purchase shares of common stock of
the Company as indicated on the signature page of this Agreement ("Shares") from
the Company pursuant to certain Subscription Agreements dated as of the date set
forth on the signature page of this Agreement ("Subscription Agreements");
WHEREAS, as an inducement to Investor to purchase the Shares, the
Company has agreed to file, at its own expense, a registration statement
covering resales of the Shares by Investors in non-underwritten transactions;
and
WHEREAS, Investors and the Company desire to enter into this Agreement
providing for matters relating to such registration;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Investors and the Company agree as
follows:
1. Filing of Registration Statement. The Company shall file a shelf
registration statement under the Securities Act of 1933, as amended ("Act"), on
Form S-3 (or other applicable form) to register resales or other dispositions of
the Shares and any Penalty Shares (defined below) (collectively, the
"Registrable Securities") by Investors in non-underwritten transactions
("Registration Statement"). The Company shall file the Registration Statement as
soon as practicable after the date hereof and in no event more than 30 days
thereafter.
2. Effectiveness of Registration Statement. The Company shall use its
best efforts to cause the Registration Statement to become effective under the
Act as soon as practicable after the filing of the Registration Statement and in
no event more than 90 days after the date hereof. In addition, the Company shall
use its best efforts to maintain the effectiveness of the Registration Statement
under the Act on an "evergreen" basis for a period of not less than two years
following the date of the Closing under the Subscription Agreements (the
"Closing Date") or until the intended distribution of Registrable Securities is
completed by Investors, whichever occurs first. Until such time, the Company
will timely file all reports required to be filed by it pursuant to the
Securities Exchange Act of 1934, as amended.
3. State Registration or Qualification. The Company shall use its best
efforts to register or qualify the Registrable Securities covered by the
Registration Statement for public sale under the securities or blue sky laws of
the respective states of principal residence of the Investors, if such
registration or qualification is necessary; provided, however, that the Company
shall not be required by this Section 3 to qualify to do business as a foreign
corporation or
otherwise to subject itself to taxation therein, or to file any general consent
to service of process in any state.
4. Delivery of Prospectuses. The Company shall provide to the Investors
the number of prospectuses relating to the Registrable Securities as the
Investors shall each reasonably request to enable the Investors to comply with
the applicable prospectus delivery requirements. If, during the effectiveness of
the Registration Statement, an intervening event should occur which, in the
reasonable opinion of the Company's counsel, makes the prospectus included in
the Registration Statement no longer comply with the Act, after notice from the
Company to the Investors of the occurrence of such an event, the Investors shall
make no further sales or other dispositions, or offers therefor, of Registrable
Securities under the Registration Statement until they receive from the Company
copies of a new, amended or supplemented prospectus complying with the Act. The
Company shall keep the Investors fully informed as to the status of its efforts,
which shall be prompt and diligent, to cause such new, amended or supplemented
prospectus to be available for use by the Investors as soon as practicable and
in no event more than 45 days following such notice.
5. Expenses of Registration. The Company shall bear all of the expenses
of registration or qualification of the Registrable Securities under the Act and
under the state securities or blue sky laws as provided in Section 3 hereof;
provided, however, that each Investor shall bear its own selling expenses or
commissions attributable to the Registrable Securities being sold by such
Investor and shall bear fees and expenses of its own counsel, if any.
6. Information to be Furnished by Investor. Each Investor shall furnish
in writing to the Company all information within such Investor's possession or
knowledge required by the applicable rules and regulations of the Securities and
Exchange Commission ("Commission"), including the information specified by Items
507 and 508 of Regulation S-K under the Act.
7. Procedures. The Company shall (i) notify the Investors promptly
after it shall receive notice thereof, of the time when the Registration
Statement has become effective or any supplement to any prospectus forming a
part of the Registration Statement has been filed; (ii) notify the Investors
promptly of any request by the Commission for the amending or supplementing of
the Registration Statement or prospectus or for additional information and shall
use its best efforts to file any such amendment or supplement within 10 days,
and in no event more than 20 days after such request or receipt of comments from
the Commission's staff; (iii) prepare and file with the Commission, promptly
upon any Investor's request, any amendment or supplement to such registration
statement or prospectus which, in the opinion of counsel for the Investor and
counsel for the Company, may be necessary or desirable in connection with the
distribution of the Registrable Securities by such Investor; (iv) prepare and
promptly file with the Commission, and promptly notify the Investors of the
filing of, such amendment or supplement to the Registration Statement or
prospectus as may be necessary to correct any misstatement or omission, if at
any time when a prospectus relating to the Registrable Securities is required to
be delivered under the Act, any event shall have occurred as a result of which
any such prospectus would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading and such filing shall be made within the time limitations set forth
in Section 4; (v) in case the Investor is required to deliver a prospectus, at a
time when the prospectus then in effect may no longer be used under the Act,
prepare promptly
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upon request such amendment or amendments to the Registration Statement and such
prospectus or prospectuses as may be necessary to permit compliance with the
requirements of Section 10 of the Act subject to clause (ix) below; (vi) not
file any amendment or supplement to the Registration Statement or prospectus to
which any Investor shall reasonably object after having been furnished a copy at
a reasonable time prior to the filing thereof; (vii) advise the Investors
promptly after it shall receive notice or obtain knowledge thereof of the
issuance of any stop order by the Commission suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceeding for
that purpose and promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such stop order should be issued;
(viii) furnish to the Investors as soon as available copies of the Registration
Statement and each preliminary or final prospectus, or supplement required to be
prepared, pursuant to this Section 7, all in such quantities as the Investors
may from time to time reasonably request; (ix) provided, however, that in no
event shall the Company be obligated to keep the Registration Statement
effective for a period longer than two years from the Closing Date plus a number
of days equal to the number of days, if any, during which the Investor's right
to offer and sell such Registrable Securities shall have been suspended pursuant
to the provisions of Section 4 hereof (which number of days shall in no event
exceed 60 during any period of 12 months) and the Company may after such period
deregister any of the Registrable Securities remaining unsold if the Company
elects to do so or if the Commission or its staff so requests; and (x) if any of
the Company's shares of common stock are then listed on any securities exchange,
the Company will cause all shares covered by the Registration Statement to be
listed on such exchange(s).
8. Registration Default. The Company agrees that, subject to the
Company's right to cause a suspension under Section 4 of this Agreement, if the
Registration Statement has not (i) in the event of a "no review" of the
Registration Statement by the SEC, been declared effective by the SEC within 60
days after the Closing Date, or (ii) in the event the Registration Statement is
reviewed by the SEC, been declared effective by the SEC within 90 days after the
Closing Date, unless in either case the failure to become effective is due to
the fault of the Investor (each such event referred to in clauses (i) and (ii),
a "Registration Default" and the date of such event referred to in clauses (i)
and (ii), an "Event Date"), then:
(A) if the Registration Default exists for 60 or fewer days from the
Event Date, the Company shall issue additional shares to the
Investor equal to 1/6th of 1% of the number of Shares issued to
the Investor at the Closing, per day of the Registration Default
period;
(B) if the Registration Default exists for 61 to 90 days from the
Event Date, then, on the 91st day, the Company shall issue
further additional shares to the Investor equal to 10% of the
number of Shares issued to the Investor at the Closing; and
(C) if the Registration Default exists for more than 90 days from the
Event Date, then the Company shall, on each 30th day after the
91st day, issue further additional shares to the Investor equal
to 10% of the number of Shares issued to the Investor at the
Closing, but such number of shares shall not exceed in the
aggregate 30% of the number of shares issued to the investor at
the Closing.
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To the extent that the Company has insufficient authorized but unissued shares
available to issue such additional shares (the "Penalty Shares"), or such
issuance would result in the Company being required under NASDAQ rules or other
applicable rules to obtain the approval of the Company's stockholders, then the
Company shall pay to the Investor cash in lieu of shares, in an amount equal to
the price per share under the Subscription Agreement. The Company shall deliver
the Penalty Shares or cash payment to the Investor by the fifth business day
after the end of each such period described above. Subject to the Investor's
right to specific performance, but otherwise notwithstanding anything to the
contrary in this Agreement or the Subscription Agreements, the issuance of the
Penalty Shares or cash as provided in this Section 8 shall be the Investor's
sole and exclusive remedy in the event of any Registration Default; provided,
however, that if the foregoing remedy is deemed unenforceable by a court of
competent jurisdiction then the Investor shall have all other remedies available
at law or in equity.
9. Indemnification by Company. The Company will, to the maximum extent
permitted by law, indemnify and hold harmless the Investors and each person, if
any, who controls an Investor within the meaning of the Act, against any losses,
claims, damages, or liabilities, joint or several, to which such Investor or
such controlling person may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
are caused by any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any prospectus contained therein,
or any amendment or supplement thereof, or arising out of or based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
will reimburse such Investor and each such controlling person for any legal or
other expenses incurred by such Investor or such controlling person in
connection with investigating or defending against any such loss, claim, damage,
liability or action; provided, however, that the company will not be liable in
any such case to any Investor or its controlling person(s) to the extent that
any such loss, claim, damage, expense or liability arises out of, or is based
upon, an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformance with information that has been furnished in
writing by such Investor in accordance with Section 6; provided, however that
the Company shall not be required to provide such indemnification if such loss,
claim, damage or liability (or action in respect thereof) arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus, and if, in respect to such
statement, alleged statement, omission or alleged omission, the final prospectus
corrected such statement, alleged statement, omission or alleged omission and a
copy of such final prospectus had not been sent or given at or prior to the
confirmation of the sale with respect to which such loss, claim, damage, expense
or liability relates.
10. Indemnification by Investors. Each Investor shall, to the maximum
extent permitted by law, indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the Registration Statement, and
each person, if any, who controls the Company, within the meaning of the Act,
against any loss, claim, damage or liability of which the Company, or any such
director, officer or controlling person may be or become subject under the Act
or otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) is caused by any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, such prospectus, or
amendment or supplement thereof, or arises out of or is based upon the omission
or the alleged omission to state therein a material fact required to be
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stated therein or necessary to make the statements therein not misleading; in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission relates to the
information that has been furnished in writing by such Investor in accordance
with Section 6.
11. Notice to Indemnitor. Promptly after receipt by an indemnified
party of notice of the commencement of any action, such indemnified party will,
if a claim thereof is to be made against the indemnifying party pursuant
thereto, notify the indemnifying party of the commencement thereof; but the
omission to notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party. In case such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with any other indemnifying party,
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party.
12. Contribution. If the indemnification provided for in Section 9 or
Section 10 is unavailable to an indemnified party thereunder in respect to any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the Company and the Investor(s)
in connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses. The relative fault of the Company and
the Investor(s) in connection with the statements that resulted in such losses,
claims, damages, liabilities or expenses shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of material
facts or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Investor(s) and the parties' relative
intent, knowledge, access to information and opportunity to correct such
statement or omission.
13. Indemnification Limitation and Continuation. Notwithstanding any
other provision of this Agreement, the liability of any Investor for
indemnification or contribution under this Agreement shall not exceed an amount
equal to the number of shares sold by such Investor under the Registration
Statement multiplied by the net amount per share received in such sale(s). The
indemnification and contribution provided for under this Agreement shall remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling person of such
indemnified party and shall survive the transfer of securities.
14. Notices. All notices required or permitted to be given pursuant to
this Agreement shall be in writing and shall be deemed given when received when
delivered personally or, by facsimile, by overnight courier or by first class
mail, postage prepaid, registered or certified with return receipt request, at
the addresses set forth on the signature page or at such other address as any
party shall designate in writing to the other.
15. Governing Law; Counterparts. This Agreement shall in all respects
be governed by and construed and enforced in accordance with the laws of the
State of Oklahoma. It may be executed in any number of counterparts.
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COMPANY SIGNATURE PAGE TO
GMX RESOURCES INC.
REGISTRATION AGREEMENT
DATED JUNE 23, 2004
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above set forth.
"COMPANY"
GMX RESOURCES INC.
0000 X. Xxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
By: ____________________________________
Xxx X. Xxxxxxxxx, Xx., Chief Financial
Officer
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INVESTOR SIGNATURE PAGE TO
GMX RESOURCES INC.
REGISTRATION AGREEMENT
DATED JUNE 23, 2004
"INVESTOR"
_________________________________
Date of Subscription Agreement
_____________, 2004 By: _________________________________
Name: __________________________
Title: __________________________
Number of Shares: ______________ Address:_________________________________
_________________________________
_________________________________
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