Exhibit 9.1
AGREEMENT
THIS AGREEMENT (this "Agreement") is entered by and among New Edge
Petroleum Corporation, a Texas corporation (the "Company" or "New Edge"), Edge
Petroleum Corporation, a Texas corporation ("EPC"), and the undersigned persons
and entities who are either to become owners of issued and outstanding shares of
Common Stock of the Company, partners of Edge Petroleum Partnership ("EPP"), a
Texas general partnership, or other interested Persons. This Agreement also
constitutes authorization by the Board of Directors and Shareholders of the
Company authorizing certain actions and matters as more fully hereafter set
forth.
W I T N E S S E T H :
WHEREAS, the Articles of Incorporation for the Company ("Articles of
Incorporation") were filed in the office of the Secretary of State of Texas on
March 29, 1991 (a true and correct copy of such Articles are attached hereto as
Exhibit H); and
WHEREAS, at the date of this Agreement, the authorized capital of the
Company consists of one hundred fifty thousand (150,000) shares of common stock,
par value $0.01 per share (the "Common Stock"), none of which has been issued;
and
WHEREAS, Xxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx, Xxxx Xxxxx, Xxxxx Xxxxxxxx,
Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxxx and Xxxxxxxxxxx Xxxxxx are indicated in the
Articles of Incorporation of the Company as the initial directors of the
Company, and such initial directors wish to complete the organization of the
Company; and
WHEREAS, the Subscribers wish to subscribe for shares of Common Stock of
the Company in the amounts and on the terms and conditions hereinafter set
forth; and
WHEREAS, the Company wishes to sell the shares of Common Stock to the
Subscribers, on the terms and conditions hereinafter set forth; and
WHEREAS, the Subscribers and the Company and others indicated, wish to
enter into certain agreements relating to the ownership, voting, and
transferability rights pertaining to all Common Stock of the Company they may
now own or hereafter acquire, among other things, as well as other matters
regarding or affecting the Company; and
WHEREAS, the partners of EPP wish to terminate EPP and enter into
certain agreements in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement:
"Affiliate" means as to any Subscriber:
(i) if such Subscriber is a corporation, partnership or other
business entity, any corporation, partnership or other business entity
which is directly or indirectly controlled by or under common control
with such Subscriber or any officer, director or key employee of such
Subscriber and also any of the shareholders or partners (general or
limited) of such Subscriber;
(ii) if such Subscriber is an individual Subscriber, any spouse
or descendant of such individual Subscriber, and any trust created for
the benefit of such individual Subscriber or for the benefit of any
spouse or descendant of such individual Subscriber, and any Person whom
shall upon the death of an individual Subscriber be an heir or legal
devisee.
"Agreement of Sale" shall mean an agreement pursuant to which the JV
Assets and Liabilities will be purchased by the Edge Joint Venture II.
"Xxxxxxxx" shall mean Xxxxx X. Xxxxxxxx.
"Xxxxxxx" shall mean Xxxx X. Xxxxxxx.
"X.X. Xxxxxxx" shall mean Xxxxx X. Xxxxxxx.
"X.X. Xxxxxxx" shall mean Xxxxx X. Xxxxxxx.
"COG" shall mean Xxxxxxx Oil and Gas Corporation, a Texas corporation,
all of the stock of which is owned by Xxxxxxx.
"Common Stock" shall mean the Common Stock, par value $0.01 per share,
of the Company as identified and described in the Company's Articles of
Incorporation.
"Xxxxx" shall mean Xxxx X. Xxxxx.
"Edge Group Joint Venture" shall mean that certain joint venture between
EPP and Edge Group I, evidenced by that certain operating agreement dated July
1, 1987.
"Edge Group I" shall mean the Edge Group general partnership, Xxxx
Xxxxxxxxx, authorized person, the partners of which are Edge I Limited
Partnership, Edge II Limited Partnership and Edge III Limited Partnership.
"Edge Group II" shall mean Edge Group II Limited Partnership, a
Connecticut limited partnership, whose general partners are Xxxx Xxxxxxxxx and
Napamco, Inc.
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"EHCLP" shall mean Edge Holding Company Limited Partnership, a
Connecticut partnership, whose general partners are Xxxx Xxxxxxxxx and Napamco,
Inc.
"Edge Joint Venture II" shall mean a proposed Texas joint venture by and
between the Company and Edge Group II Limited Partnership, and others.
"Jamtex" shall mean Jamtex, Inc., a Connecticut corporation, all of the
Stock of which is owned by Xxxxx Xxxxxxxx.
"Joint Venture partnerships" shall mean as follows:
(a) Joint Venture Agreement between Edge Limited Partnership
and EPC pursuant to a partnership agreement dated March 23, 1983;
(b) Joint Venture Agreement between Edge II Limited Partnership
and EPC pursuant to a partnership agreement dated May 5, 1985;
(c) Operating Agreement between EPP and Edge Group partnership
pursuant to a partnership agreement dated July 1, 1987; and
(d) Any extension, renewal or successor partnership or other
entity to either of the two above described Joint Venture partnerships,
or any other entity of any type the funding of which is wholly or
partially from the same source as the funding for the above described
Joint Venture partnerships, or where any of the principals are the same
as any of the principals of the Joint Venture partnerships.
"JV Assets and Liabilities" shall mean certain assets of the Edge Group
Joint Venture to be sold to the Edge Joint Venture II, consisting primarily of
prospects, advanced leads, leads, cash and accounts receivable, and liabilities
associated therewith, all as set forth in the Agreement of Sale.
"KPC" shall mean KPC Interest, Inc., a Texas corporation, all of the
Stock of which is owned by X.X. Xxxxxxx.
"Lawford" shall mean Lawford Energy, Inc., a Texas corporation, all of
the shares of which are owned by Xxxxxxxx.
"Loan Documents" shall mean, collectively, a note purchase agreement,
any promissory note or notes, any interest-deferred notes, a pledge agreement
whereby the partners of the Edge Joint Venture II pledge their partnerships
interest and rights to RIMCO, and any security agreements, mortgages,
guaranties, instruments, financing
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statements or other documents which RIMCO may request or require be executed by
the Edge Joint Venture II to secure or evidence the obligation of the Edge Joint
Venture II with respect to the borrowing by the Edge Joint Venture II of
$4,500,000.
"Northedge" shall mean Northedge Corp., a Texas corporation, all of the
shares of which are owned by Xxxxx.
"Partnership" shall mean Gulfedge Limited Partnership, a Texas limited
partnership, with the Company as the corporate general partner.
"Person" means an individual, a corporation, a trust, a partnership, a
joint stock association, a business trust or a government, or agency or
subdivision thereof, and shall include the singular and the plural.
"Raphael" shall mean Xxxxxxx Xxxxxxx, a resident of the State of
Florida.
"RIMCO Purchasers" means all of RIMCO II, RIMCO III and RIMCO/NYL.
"RIMCO II" means RIMCO Partners, X.X. XX.
"RIMCO III" means RIMCO Partners, L.P. III.
"RIMCO/NYL" MEANS RIMCO/NYL, L.P.
"Sfondrini" means Xxxx Xxxxxxxxx.
"Special Assets" means those certain assets identified in Section 2.3 of
the Agreement of Sale.
"Subscribers" means COG, KPC, Lawford, Northedge, Texedge, Jamtex,
Raphael and EHCLP.
"Stock" shall mean all Common Stock now or hereafter owned by any
Subscriber.
"Texedge" shall mean Texedge Energy Corporation, a Texas corporation.
2. Contribution of Assets to New EPC and Issuance of Stock.
Each Subscriber subscribes for and agrees to purchase the following number of
shares of Stock for and in consideration of the transfer and conveyance to the
Company of the assets and properties indicated on Exhibits X-0, X-0, and A-3,
such assets and properties having values being greater than the par value of
the shares being issued, which subscriptions are accepted by the Company and its
Board of Directors, in the following amounts from the following persons:
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Subscriber No. of Shares
---------- -------------
COG 41,057
KPC 5,306
Lawford 5,269
Northedge 5,269
EHCLP 38,500
Texedge 2,044
Jamtex 1,022
Raphael 1,533
--------
Total 100,000
========
It is agreed that the conveyances of property identified on Exhibit A-1
shall be by appropriate stock power, in the form of the stock power attached
hereto as Exhibit C, which each transferor agrees to execute. It is further
agreed that the conveyances of property identified on Exhibits A-2 and A-3 shall
be by the Master Conveyance and Assignment, in the form of that attached hereto
as Exhibit B, which each indicated transferor and transferee agrees to execute.
Upon receipt by the Company of the appropriate evidences of transfer for
the assets indicated on Exhibits X-0, X-0, and A-3, the President and Secretary
of the Company (as hereafter elected) are authorized and empowered to issue and
deliver to each of the aforementioned Subscribers certificates of Stock of the
Company evidencing the number of shares to which such Subscribers are entitled,
which shares when so issued will be duly authorized, validly issued and
outstanding shares of capital stock of the Company, fully paid and nonassessable
for all purposes. The form of stock certificate approved by the President as
he in his sole discretion shall determine shall be adopted as the form of stock
certificate for the Company.
All Subscribers hereby ratify such stock issuances made by the Company.
3. Additional Transfers. As of the date hereof, the prospects indicated on
Exhibit A-4 are "partially committed" or fully committed prospects and thus are
Special Assets. Each Person who is a partner of EPP (as set forth in Section 15
hereto) agrees to and does hereby contribute to the Company, as an additional
capital contribution, one-half of all reversionary rights or interests in such
prospects which such partner may ultimately receive as a result of the
subsequent resale of such prospect by the Edge Joint Venture II. Based on the
present status of commitments and assuming that no commitments fail, the
Assignment shall be in the percentages as set forth in Exhibit A-4. Each partner
agrees (a) to execute any necessary special warranty deeds to further evidence
the conveyance herein made or agreed to be made, as requested by the Company,
and (b) until such special warranty deeds have been duly and properly executed,
not to sell, assign, convey or otherwise dispose of any interest in such
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prospects, or in residual rights in and to such prospects (such as those hereby
conveyed).
As of the date hereof, the prospects indicated on Exhibit A-5,
paragraph 1, are "partially sold" which means that Edge Group Joint Venture has
conveyed a portion of the Prospect to third parties, reserving for itself a
reversionary in the portion so conveyed. Title to such assets shall be held in
trust by EPC to be assigned in accordance with this paragraph. If Edge Joint
Venture II completes the sale of the Prospect, EPC shall execute appropriate
special warranty deeds substantially in the form of Exhibit B hereto,
transferring (x) the interests indicated on Exhibit A-5, paragraph 1 to New
Edge; (y) the interests indicated on Exhibit A-5, paragraph 2 to the partners of
EPP as indicated in such provision; and (z) the interests indicated on Exhibit
A-5, paragraph 3 to the Edge Group. In the event one or more of such prospects
is not subsequently resold by the Edge Joint Venture II, and the Edge Joint
Venture II shall make a refund to the purchasers of the consideration paid for
the Prospect, then EPC shall convey by special warranty deed the interests
listed on Exhibit A-5 for the Prospect in their entirety to the Edge Joint
Venture II.
4. Representations and Warranties of Subscribers. Each of the
Subscribers severally (not jointly) represents and warrants to and agrees with
the Company and with each other, as follows:
(a) Investment Purposes. The Stock to be acquired by the
Subscribers pursuant to this Agreement is being acquired for investment
for such Subscriber's own account and not with a view to, or for resale
in connection with, any distribution of such Stock within the meaning of
the Securities Act of 1933 (the "Securities Act"), and such Stock will
not be sold, transferred or otherwise disposed of without registration
under the Securities Act or exemption therefrom. Each Subscriber agrees
that the certificate or certificates representing any shares of Stock
purchased or previously held by such Subscribers may be inscribed with a
legend to the foregoing effect.
Each Subscriber agrees that the Company may place a stop
transfer order with its transfer agent, if any, with respect to the
certificates representing any shares of Stock. Each Subscriber
represents that it or he is an "accredited investor" within the meaning
of Regulation D under the Securities Act and agrees to provide to the
Company, on or before the execution hereof, such evidence of such fact
as the Company may reasonably require. Each Subscriber acknowledges that
the shares of Stock acquired or being acquired hereunder have not been
registered by the Company pursuant to the registration provisions of the
Securities Act or the securities laws of any state in reliance upon the
availability of exemptions from such registration which depend in part
on such Subscriber's representations contained herein.
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(b) Authority. If such Subscriber is a partnership or
corporation, such Subscriber represents that its partners or directors
and shareholders have taken all action required by law, its partnership
agreement, corporate charter or bylaws, or otherwise, to authorize the
execution, delivery and performance of this Agreement, and the
acquisition of the Stock to be acquired by such Subscriber pursuant
hereto. All Subscribers represent that this Agreement is the valid and
binding obligation of such Subscriber enforceable against such
Subscriber in accordance with its terms. The execution and delivery of
this Agreement does not and will not violate any order, writ, injunction
or decree of any court, administrative agency or governmental body, or
any material contract, lease, note or other agreement to which any such
Subscriber is a party or by which any of them is bound, the effect of
which violation would be materially adverse to the Company.
(c) Title. Each Subscriber indicated on Exhibit A-1 represents
severally for himself or itself (and not for any other transferor) that
(i) with respect to the assets indicated on Exhibit A-1, he or it, as
the case may be, holds good title to such property indicated on Exhibit
A-1, free and clear of any and all liens, claims or encumbrances of any
kind or character, and upon the execution and delivery of the
appropriate stock power indicated on Exhibit C in favor of the Company,
the Company will own such asset free and clear of the claims of any
other Persons and (ii) with respect to the assets indicated on Exhibits
X-0, X-0, and A-4, each Subscriber makes the representations set forth
in Exhibit B.
(d) Evaluating Merits. Each Subscriber represents that it or he
is capable of evaluating the merits and risks of an investment in the
Stock to be acquired by such Subscriber.
(e) Opportunity for Information. Each Subscriber has had the
opportunity to ask questions of and receive answers from all other
Subscribers and the Company concerning the Company, the proposed
business of the Company, the terms and conditions of the offering of the
Stock, and the proposed joint venture with Edge Joint Venture II.
(f) Additional Information. The Company has given each
Subscriber the opportunity to obtain any additional information which
the Company possesses or can acquire without unreasonable effort or
expense that is necessary to verify the accuracy of the information
furnished to such Subscriber pursuant to subparagraph (e) above.
(g) Capability of Bearing Risks. Each Subscriber represents that
it or he is able to bear the economic risk of an investment in the Stock
to be purchased by such Subscriber, including without limitation the
risk of losing part or all of such Subscriber's investment and the
possible inability to
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sell or transfer the Stock to be purchased by such Subscriber for an
indefinite period of time.
(h) Tax Consequences. Each Subscriber has been advised to
procure their own tax counsel as to the tax consequences to such
Subscriber of an investment in the Stock to be purchased by such
Subscriber, and the ramifications of the transactions herein
contemplated, and each Subscriber represents he or it has done so and is
not relying on the Company or any other Person for tax advice.
(i) No Regulatory Approval. Each Subscriber understands that no
federal or state agency has made any finding or determination as to the
fairness of the offering of the Stock to be purchased by such
Subscriber or any recommendation or endorsement of such Stock.
(j) No Brokers. With respect to their respective purchases of
the Stock, no Subscriber has made any agreement with any broker or
finder which might give rise to any valid claim against the Company for
a finder's fee, brokerage commission or other like payment.
(k) Restriction on Transfer. The Stock to be acquired by the
Subscribers pursuant to this Agreement has not been registered under the
Securities Act of 1933, as amended, or the securities laws of any state
pursuant to one or more exemptions therefrom, and such Stock may not be
sold, transferred, assigned or otherwise disposed of unless and until
the Stock is first registered under such Securities Act and all
applicable state securities laws and rules and regulations promulgated
thereunder, or unless and until the holder of the Stock provides to the
Company either (i) information satisfactory to the Company that such
registration is not required, or (ii) an opinion of counsel acceptable
to the Company to the effect that such registration is not required.
Each Subscriber agrees that the Company may place a stop transfer order
with its transfer agent, if any, with respect to the certificates
representing any shares of Stock purchased. Each Subscriber represents
that it or he is an "accredited investor" within the meaning of
Regulation D under the Securities Act and agrees to provide to the
Company, on or before the Closing Date, such evidence of such fact as
the Company may reasonably require. Each Subscriber acknowledges that
the Stock herein subscribed has not been registered by the Company
pursuant to the registration provisions of the Securities Act or the
securities laws of any state in reliance upon the availability of
exemptions from such registration which depend in part on such
Subscriber's representations contained herein.
(1) Each Subscriber represents and warrants that they are
entitled to and do not hold or have rights to any other securities,
subscriptions, options, calls or any capital stock
8
of the Company, and is not a party to any agreement or commitment relating
thereto, except as expressly herein set forth.
(m) Xxxxxxx and COG represent and warrant that Xxxxxxx is the sole
shareholder of COG; X.X. Xxxxxxx and KPC represent and warrant that X.X.
Xxxxxxx is the sole shareholder of KPC; Xxxxxxxx and Xxxxxxx represent and
warrant that Xxxxxxxx is the sole shareholder of Lawford; and Xxxxx and
Northedge represent and warrant that Xxxxx is the sole shareholder of
Northedge.
(5) Election of Officers. Effective immediately upon the Effective Date,
the following persons be and hereby are elected as officers of the Company, to
serve in the capacities set forth below until their successors have been duly
elected and qualified or their resignation or removal in the manner authorized
by the Bylaws (to be hereafter adopted):
Name Office
---- ------
Xxxx X. Xxxxxxx Chairman of the Board,
President and Chief Executive
Officer
Xxxxx X. Xxxxxxxx Vice President--Land
Xxxx X. Xxxxx Vice President
Xxxxxxx X. Xxxx Secretary, Treasurer and
Controller
Xxxxxx X. Xxxxxx General Counsel
6. Adoption of Bylaws. The directors of the Company hereby adopt the
proposed Bylaws attached hereto as Exhibit D as the Bylaws of the Company.
7. Certain Matters Regarding EPC. Effective after the completion of the
matters contemplated by Section 2, EPC shall be a wholly-owned subsidiary of New
Edge. Thereupon,
(a) The directors of EPC shall be the same persons as are the initial
directors of New Edge.
(b) EPC and the Company will use and cause to be used any seismic
contracts and other items within the Regional Information Base exclusively
for the benefit of the Edge Joint Venture II, without charge, as a result
of the benefits arising to EPC from the transactions referenced in this
Agreement, including, without limitation, the release by the Edge Group of
its encumbrances on significant assets of EPC.
9
(c) All signatories hereto agree that any and all voting agreements
among any such signatories, and any other restrictions or agreements which
any signatories may have had with each other or with EPC, regarding the
ownership, operation or any other matter affecting EPC, are automatically
and without further action terminated, including without limitation that
certain agreement between Xxxxxxx and Sfondrini, dated March 18, 1989.
(d) The directors and Shareholders of EPC unanimously agree and
approve that the Articles of Incorporation of EPC shall be amended, as
follows:
Name. The name of the Company shall be changed from "Edge Petroleum
Corporation" to "Old EPC, Inc."
Furthermore, the officers of EPC are empowered and directed to execute and
file appropriate Articles of Amendment with the Secretary of State, and pay
any fees incurred in connection with such filing, and do any and all other
such acts as may be necessary to accomplish the foregoing.
(e) It is understood and agreed that EPC does hereby assign its rights
and delegate its duties (but only those arising after the Effective Date),
arising under certain drilling program agreements dated May 1, 1990, by and
between EPC and RIMCO and certain RIMCO affiliates (the "RIMCO Drilling
Agreements"), to the Company, and the Company accepts such assignment and
delegation and agrees to fully discharge any and all duties and obligations
arising after the Effective Date under such RIMCO Drilling Agreements.
(f) It is understood and agreed that EPC does hereby assign its rights
and delegate its duties (but only those arising after the Effective Date,
and only to the extent EPC has any rights to assign) arising under that
certain agreement with X.X. Xxxxxxx, dated February 2, 1989, to the
Company, and the Company accepts such assignments and delegation of duties
and agrees to fully discharge and end all duties and obligations arising
thereunder after the Effective Date.
(g) The Company does hereby agree to pay to EPC the sum of $40,000 per
year to cover amounts owing X.X. Xxxxxxx under that certain agreement dated
March 18, 1989, for so long as EPC shall owe this amount to X.X. Xxxxxxx.
(h) All shareholders of EPC and partners of EPP hereby approve and
ratify the prior sales of Stock of EPC and partnership interests of EPP and
reserves heretofore made to Raphael, Texedge and Jamtex, and waive any
rights including without limitation any preferential purchase rights, with
respect thereto. Further, such parties waive any such rights upon a
transfer of stock of EPC, partnership interest in EPP,
10
and reserves, to X.X. Xxxxxxx, by Xxxxxxx, in the event the transactions
contemplated hereby do not for any reason occur. This provision shall be
valid once agreed to by all relevant persons notwithstanding that the
Agreement may not be executed by all indicated parties.
(i) The directors of EPC desire to make a distribution of the assets
shown on Exhibit M to the Company. The directors have reviewed the
financial information of Old EPC, which has been prepared in accordance
with the requirements of Article 2.38-3 of the Texas Business Corporation
Act, and have determined that the value of the distribution does not exceed
the surplus (net assets less stated capital) of the Company. Accordingly,
the assets shown on Exhibit M are distributed to the Company as a dividend.
(j) At the time of formation of EHCLP, Sfondrini offered to Xxxxxxxx,
Xxxxx and Xxxxxxx Xxxx a right to participate in a portion of his general
partner's interest in EHCLP. Xxxxxxxx and Xxxxx declined personally to
accept any interest offered. Xxxxxxx Xxxx accepted such, and has been
granted certain rights as are more particularly set forth in that certain
letter agreement between Xxxxxxx Xxxx and Sfondrini dated February 16,
1989. EPC agrees with Sfondrini to rescind and release such interest, if
any, which EPC has in such, save and except for such interests which have
heretofore been granted to Xxxxxxx Xxxx. Sfondrini agrees that if any
employees of EPC should later assert a claim or commence litigation
challenging such release and rescission, EPC will notify Sfondrini and
permit Sfondrini to designate counsel to answer and defend against such
claim, and will indemnify EPC, its officers, directors, employees, agents
and affiliates, for EPC's release and rescission hereof and hold EPC, and
its officers, directors, employees, agents and affiliates, harmless as a
result of any such decision and action taken in this regard.
8. Formation of Edge Joint Venture II. The Board of Directors of the
Company hereby authorize and empower the Company to enter into a joint venture
with the Edge Group II, and to do any and all things necessary to fully organize
the Edge Joint Venture II. In connection therewith, the following is agreed,
authorized and approved.
(a) The President of the Company is authorized and empowered for the
Company to execute a joint venture agreement with Edge Group II
substantially in the form of the draft agreement attached hereto as Exhibit
E, with any changes, deletions, additions, modifications or alterations as
such officer shall deem necessary or proper, the execution by such officer
of such agreement being conclusive evidence of such determination; and
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(b) The President, Secretary and any other officer of the Company are
authorized and empowered to convey and contribute to the Joint Venture II
the sum of $500,000 (said $500,000 to be received from the consideration
paid by the RIMCO Purchasers for their shares, as referenced in Section 17
hereof) and the assets indicated on Exhibit F, such assets to be conveyed
by deed substantially in the form of the Master Conveyance and Assignment
set forth on Exhibit B, with appropriate changes thereto as such officers
shall determine, which deed such officers are authorized to execute; and
(c) The President and any other officers of the Company are authorized
and empowered to convey and contribute any and all other oil and gas
reserves which they in their judgment deem to be prudent to the Joint
Venture II, and in connection therewith make such representations,
warranties, and covenants as they deem necessary or proper.
(d) The officers of the Company are authorized and empowered to pay
all fees and expenses incurred by the Company, or EPC, in connection with
the formation and completion of the Edge Joint Venture II.
All of the Subscribers of Stock ratify and approve these actions and matters.
(9) Formation of the Partnership. The Board of the Company hereby
authorizes and empowers the Company to form the Partnership. In connection
therewith, the following is agreed, authorized and approved:
(a) The President of the Company is authorized and empowered for the
Company to prepare and execute an agreement of limited partnership in such
form and on such terms as such officer in his sole discretion shall
approve, with such Persons as limited partners as such officer shall
determine; and
(b) The President shall be authorized to set in his sole judgment the
terms, conditions and considerations on which all partners, general or
limited, shall be admitted into the Partnership, his determination being
conclusive for all purposes; and
(c) The President shall be authorized and empowered to take any and
all other steps, acts and actions, and execute such further agreements,
certificates and instruments, as shall be necessary and proper in his
judgment to accomplish the formation of the Partnership, and to cause the
Partnership to invest in the Edge Joint Venture II on any and all terms and
conditions as he shall approve in his sole judgment, the taking of such
action or execution of such document being conclusive evidence of such
determination.
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(d) The President and the Treasurer of the Company are each hereby
authorized and directed to establish banking relations with any state or
national banking institutions as the officers of the Company shall choose
(the "Bank"), for and on behalf of the Partnership and to establish such
checking accounts and borrowing accounts with such institutions as the
President or Treasurer of the Company shall deem necessary and appropriate.
Any resolutions which such Bank may require be adopted by the Board of this
Company in order to establish such accounts are hereby approved in their
entirety, and the Secretary is authorized to certify that the Board has
approved such resolutions as of the date such resolutions are stated by the
President or the Treasurer to be so approved.
All of the Subscribers of Stock ratify and approve these actions and matters.
10. Edge Joint Venture II Matters. Upon execution of the Joint Venture
Agreement by the Company and Edge Group II, respectively, the Company shall be
and become the Managing General Partner of the Edge Joint Venture II. In
connection with such joint venture, the Board of Directors agree, authorize and
approve the following:
(a) The President and other officers of the Company are authorized by
the Company to cause the Edge Joint Venture II to borrow from the RIMCO
Purchasers or their affiliated companies the sum of $4,500,000 generally on
terms and conditions as set forth in Exhibit J hereto, with any changes,
additions or deletions therein as such officers shall deem are necessary or
prudent in connection with such borrowing, and to cause the Joint Venture
II to pledge or mortgage any and all of the present or future assets of the
Joint Venture II to secure such loan, as the RIMCO Purchasers may request
and the officers of the Company may determine in their sole discretion to
be prudent or necessary to procure such loan; and to execute any and all
Loan Documents, including, without limitation, note purchase agreements,
promissory notes, interest deferral notes, mortgages, security agreements,
collateral mortgages, collateral mortgage notes (up to $10,000,000) and
other certificates and agreements and to take all steps and actions,
including without limitation the pledge of any collateral mortgage note,
which such officers deem in their sole discretion to be necessary or proper
to cause the Edge Joint Venture II to borrow from the RIMCO Purchasers or
their affiliated companies such $4,500,000, the execution of such items
being conclusive evidence of such determination.
(b) The President and other officers of the Company are authorized for
the Company to execute any security and pledge agreements necessary to
cause the Company to pledge its partnerships interest in the Edge Joint
Venture II to the RIMCO Purchasers or their affiliated companies who shall
loan such $4,500,000, such agreements to be in the form which such
13
officers deem in their sole discretion to be necessary or proper to cause
or permit such borrowing by the Edge Joint Venture II, the execution of
such agreements being conclusive evidence of such determination.
Furthermore, the President and other officers of the Company are authorized
to cause the Company to issue to the RIMCO Purchasers a guaranty of the
amounts and matters referenced in subparagraph (a), up to the amount of
$500,000, such guarantee to be on the terms and conditions as such officers
shall in their sole discretion determine, the execution thereof being
conclusive evidence of such determination.
(c) The President and other officers of the Company are authorized for
the Edge Joint Venture II to cause the Edge Joint Venture II to (i) execute
an Agreement of Sale purchasing the JV Assets and Liabilities,
substantially in the form of the draft agreement attached hereto as Exhibit
I, with any changes, deletions, additions, modifications or alterations as
such officer shall deem necessary or proper, the execution by such officer
of such agreement being conclusive evidence of such determination, as well
as any and all other documents or agreements necessary or proper in the
judgment of such officer to effectuate the acquisition by the Edge Joint
Venture II of the JV Assets and Liabilities, and (ii) pay any and all sums
due third parties by the Edge Joint Venture II, including without
limitation any sums due the Edge Group Joint Venture pursuant to any
Agreement of Sale.
(d) The President and the Treasurer of the Company are each hereby
authorized and directed to establish banking relations with any state or
national banking institutions as the officers of the Company shall choose
(the "Bank"), for and on behalf of the Edge Joint Venture II and to
establish such checking accounts and borrowing accounts with such
institutions as the President or Treasurer of the Company shall deem
necessary and appropriate. Any resolutions which such Bank may require be
adopted by the Board of this Company in order to establish such accounts
are hereby approved in their entirety, and the Secretary is authorized to
certify that the Board has approved such resolutions as of the date such
resolutions are stated by the President or the Treasurer to be so approved.
All of the Subscribers of Stock ratify and approve these actions and matters.
11. Certain Matters Regarding Voting of Shares of Stock.
(a) Voting Agreement between COG and EHCLP.
(i) Rights of COG and Obligations of EHCLP. In any matters
involving the election of directors of New Edge, EHCLP (for itself and
its assigns) agrees that all shares of Stock issued to it in
connection with this Agreement,
14
and any additional shares which it acquires hereafter will be voted
for a total of five of the nine total directorship positions which the
Company shall have at any time, as designated by COG. Additionally,
EHCLP shall not vote to remove any directors which COG shall have
designated, except on the written instruction of COG, in which case,
EHCLP (for itself and its assigns) agrees to vote for the removal of
such director and to vote for his or her replacement, as designated in
writing by COG, subject to certain restrictions regarding the removal
of COG's designated "independent" director, set forth below. The
foregoing notwithstanding, COG agrees that no less than one such
director designated by COG shall be a person who is (x) not an
employee of the Company or an affiliated company, (y) not a relative
of Xxxxxxx to the third degree of consanguinity, and (z) free of any
relationship that would interfere with the exercise of independent
judgment. In connection with the designation by COG of the
"independent" director, COG shall in advance of any vote, designate
such proposed independent Board member in writing to EHCLP,
identifying all relationships which COG, or its officers and
directors, have with such candidate. Failure to deliver a written
objection to the independence of such Board candidate within five (5)
days of receipt of the designation thereof shall waive the ability of
EHCLP to later object based upon a relationship described in the
original designation. Regarding such independent Board member, COG may
select new proposed independent candidates annually, but may not
remove any independent Board member it shall have designated more
frequently than annually, except for good cause.
(ii) Rights of EHCLP and Obligations of COG. In any matters
involving the election of directors of New Edge, COG (for itself and
its assigns) agrees that all shares of Stock issued to it in
connection with this Agreement, and any additional shares which it
acquires hereafter will be voted for a total of three of the nine
total directorship positions which the Company shall have at any time,
as designated by EHCLP. Additionally, COG (for itself and its assigns)
shall not vote to remove any directors which EHCLP shall have
designated, except on the written instruction of EHCLP, in which case,
COG (for itself and its assigns) agrees to vote for the removal of
such director and to vote for his or her replacement, as designated in
writing by EHCLP.
(iii) Rights and Obligations of EHCLP and COG. Furthermore, (A)
on any matter brought to the shareholders of the Company for a vote or
for approval, which Texas law requires be approved by the affirmative
vote or approval of 66-2/3 percent of the shareholders of the Company,
and (B) on any shareholder vote to amend,
15
alter, repeal or add to, the Bylaws of the Company, EHCLP and COG
shall in advance of such vote discuss such matter to be voted on, and
unless EHCLP and COG agree in writing to vote their shares in a
certain way, both shall vote their shares against such measure.
(iv) The provisions of subsection (iii) shall terminate seven (7)
years from the Effective Date. All of the provisions of subsection (a)
shall terminate on the earlier to occur of (x) ten (10) years or (y)
at such time as any common stock of the Company shall be traded on a
national securities exchange or a reputable regional or international
exchange, or in the over-the-counter market and reported on the
National Association of Securities Dealers Automated Quotation System.
In the event that EHCLP shall for any reason distribute shares of the
Company to its partners (general or limited) and not retain all voting
rights with respect to all such distributed shares, then the
provisions of subsection (a) (ii) shall terminate. Additionally, on
the occurrence of any of the following: (i) the death of Xxxxxxx; (ii)
COG shall cease to own (either itself or through Affiliates) at least
forty percent (40%) of the number of shares subscribed herein; (iii)
Xxxxxxx shall be legally adjudicated to be a mentally ill person, as
that term is defined in Tex. Rev. Civ. Stat. Xxx. art. 5547-4(9),
(Xxxxxx 1958, Supp. 1991) as amended, or if a guardian has been
appointed for him pursuant to the provisions of the Texas Probate
Code; (iv) a merger or consolidation of New Edge, with another entity
(except between New Edge and EPC) and as a result of which transaction
Xxxxx X. Xxxxxxx and Xxxx X. Xxxxxxx, taken together, lose "control,"
as such term is used in the Securities and Exchange Act of 1934, as
amended; then for a period of ten days from the occurrence of any such
event and notice thereof to Sfondrini of such circumstance, EHCLP
shall have the right to terminate all voting provisions set forth in
this Section (a) by written notice. Failure to give such notice shall
constitute a waiver of the right so to terminate for the event which
gave rise to such right.
(b) Voting Agreement between COG and Northedge. For any and all
questions, resolutions, consents, or other matters presented for action to
the shareholders of the Company, including, without limitation, the
election of directors of the Company and amendment of Articles of
Incorporation of the Company, the shares of Stock of the Company herein
purchased by Northedge (for itself and its assigns) shall be voted or
consents executed on such questions, resolutions or other matters by
Northedge for itself and its assigns in accordance with the instructions of
COG. Northedge for itself and its assigns shall vote or consent in the
manner so directed by COG within twenty-four (24) hours after Northedge has
received
16
voting or consent instructions. In exercising the powers and authority
hereunder conveyed to direct the voting and consent of the Stock of the
Company, COG shall be free to act or not act, to direct a vote for or
against, to direct a vote to consent or to withhold consent, on any basis
it shall choose, including, without limitation, its own interests, and
shall not be obligated, among other things, to act for the best interest of
Northedge or otherwise account or explain any such action to Northedge or
any other Person. Such voting agreement shall extend perpetually unless
Texas law shall mandate a shorter termination period, in which case the
term shall be as long as is permitted by Texas law. The foregoing
notwithstanding, the voting agreement set forth in this subsection (b)
shall terminate on the occurrence of any of the following: (i) the death of
Xxxxxxx; (ii) Xxxxxxx shall cease to be the active President of the Company
for greater than six consecutive and successive months without
interruption; (iii) COG shall cease to own (either itself or through
Affiliates) at least forty percent (40%) of the number of shares subscribed
herein; (iv) Xxxxxxx shall be legally adjudicated to be a mentally ill
person, as that term is defined in Tex. Rev. Civ. Stat. Xxx. art. 5547-
4(9), (Xxxxxx 1958, Supp. 1991) as amended, or if a guardian has been
appointed for him pursuant to the provisions of the Texas Probate Code; (v)
a merger or consolidation of New Edge, with another entity (except between
New Edge and EPC) and as a result of which transaction Xxxxx X. Xxxxxxx and
Xxxx X. Xxxxxxx, taken together, lose "control," as such term is used in
the Securities and Exchange Act of 1934, as amended; (vi) any common stock
of New Edge shall be traded on a national securities exchange or in the
over-the-counter market and reported on the National Association of
Securities Dealers Automated Quotation System.
(c) Voting Agreement between COG and Lawford. For any and all
questions, resolutions, consents, or other matters presented for action to
the shareholders of the Company, including, without limitation, the
election of directors of the Company and amendment of Articles of
Incorporation of the Company, the shares of Stock of the Company herein
purchased by Lawford (for itself and its assigns) shall be voted or
consents executed on such questions, resolutions or other matters by
Lawford (for itself and its assigns), in accordance with the instructions
of COG. Lawford (for itself and its assigns) shall vote or consent in the
manner so directed by COG within twenty-four (24) hours after Lawford has
received voting or consent instructions. In exercising the powers and
authority hereunder conveyed to direct the voting and consent of the Stock
of the Company, COG shall be free to act or not act, to direct a vote for
or against, to direct a vote to consent or to withhold consent, on any
basis it shall choose, including, without limitation, its own interests,
and shall not be obligated, among other things, to act for the best
interest of Lawford or otherwise account or explain any such
17
action to Lawford or any other Person. Such voting agreement shall extend
perpetually unless Texas law shall mandate a shorter termination period, in
which case the term shall be as long as is permitted by Texas law. The
foregoing notwithstanding, the voting agreement set forth in this
subsection (b) shall terminate on the occurrence of any of the following:
(i) the death of Xxxxxxx; (ii) Xxxxxxx shall cease to be the active
President of the Company for greater than six consecutive and successive
months without interruption; (iii) COG shall cease to own (either itself or
through Affiliates) at least forty percent (40%) of the number of shares
subscribed herein; (iv) Xxxxxxx shall be legally adjudicated to be a
mentally ill person, as that term is defined in Tex. Rev. Civ. Stat. Xxx.
art. 5547-4(9) (Xxxxxx 1958, Supp. 1991), as amended, or if a guardian has
been appointed for him pursuant to the provisions of the Texas Probate
Code; (v) a merger or consolidation of New Edge, with another entity
(except between New Edge and EPC) as a result of which transaction Xxxxx X.
Xxxxxxx and Xxxx X. Xxxxxxx, taken together, lose "control," as such term
is used in the Securities and Exchange Act of 1934, as amended; (vi) any
common stock of New Edge shall be traded on a national securities exchange
or in the over-the-counter market and reported on the National Association
of Securities Dealers Automated Quotation System.
(d) Voting Agreement between COG and Texedge. Texedge (for itself and
its assigns) agrees that with respect to any and all questions presented
for action to the shareholders of New Edge, including without limitation,
the election of directors, and amendment of Articles of Incorporation of
New Edge, all shares of stock now owned or hereafter acquired by Texedge
(for itself and its assigns) shall be voted on such questions by Texedge
(for itself and its assigns) in accordance with the instructions of COG.
Such voting agreement shall terminate on the occurrence of any of the
following: (i) a merger or consolidation of New Edge, with another entity
(except between New Edge and EPC) as a result of which transaction Xxxxx X.
Xxxxxxx and Xxxx X. Xxxxxxx, taken together, lose "control", as such term
is used in the Securities and Exchange Act of 1934, as amended; (ii)
Northedge and Lawford, shareholders of New Edge, receive voting rights on
the shares of New Edge Stock they own which are otherwise subject to the
voting restrictions herein set forth; or (iii) any common stock of New Edge
shall be traded on a national securities exchange or in the over-the-
counter market and reported on the National Association of Securities
Dealers Automated Quotation System.
(e) Voting Agreement between COG and Raphael. Raphael (for himself and
his assigns) agrees that with respect to any and all questions presented
for action to the shareholders of New Edge, including without limitation,
the election of directors, and amendment of Articles of incorporation of
New
18
Edge, all shares of stock now owned or hereafter acquired by Raphael (for
himself and his assigns) shall be voted on such questions by Raphael (for
himself and his assigns) in accordance with the instructions of COG. Such
voting agreement shall terminate on the occurrence of any of the following:
(i) a merger or consolidation of New Edge, with another entity (except
between New Edge and EPC) as a result of which transaction Xxxxx X. Xxxxxxx
and Xxxx X. Xxxxxxx, taken together, lose "control", as such term is used
in the Securities and Exchange Act of 1934, as amended; (ii) Northedge and
Lawford, shareholders of New Edge, receive voting rights on the shares of
New Edge Stock they own which are otherwise subject to the voting
restrictions herein set forth; or (iii) any common stock of New Edge shall
be traded on a national securities exchange or in the over-the-counter
market and reported on the National Association of Securities Dealers
Automated Quotation System.
(f) Voting Agreement between KPC and Jamtex. Jamtex (for itself and
its assigns) agrees that with respect to any and all questions presented
for action to the shareholders of New Edge, including without limitation,
the election of directors, and amendment of Articles of incorporation of
New Edge, all shares of stock now owned or hereafter acquired by Jamtex
(for itself and its assigns) shall be voted on such questions by Jamtex
(for itself and its assigns) in accordance with the instructions of KPC.
Such voting agreement shall terminate on the occurrence of any of the
following: (i) a merger or consolidation of New Edge, with another entity
(except between New Edge and EPC) as a result of which transaction Xxxxx X.
Xxxxxxx and Xxxx X. Xxxxxxx, taken together, lose "control", as such term
is used in the Securities and Exchange Act of 1934, as amended; (ii)
Northedge and Lawford, shareholders of New Edge, receive voting rights on
the shares of New Edge Stock they own which are otherwise subject to the
voting restrictions herein set forth; or (iii) any common stock of New Edge
shall be traded on a national securities exchange or in the over-the-
counter market and reported on the National Association of Securities
Dealers Automated Quotation System.
(g) Voting Agreement between A11 Subscribers and the RIMCO Purchasers.
For so long as the RIMCO Purchasers shall own the shares of Stock herein
subscribed, in any matters involving the election of directors of New EPC,
all Subscribers agree that all shares of Stock issued to them in connection
with this Agreement, and any additional shares which any of them hereafter
acquires, will be voted for one directorship position as designated by the
RIMCO Purchasers who shall own 51% of the Stock held by all RIMCO
Purchasers. Additionally, all Subscribers agree not to vote to remove any
director which the RIMCO Purchasers shall have designated, except on the
written instruction of the RIMCO Purchasers who shall own 51% of the Stock
held by all RIMCO Purchasers, in
19
which case, the Subscribers agree to vote for the removal of such director
and to vote for his or her replacement, as designated in writing by the
RIMCO Purchasers who shall own 51% of the Stock held by all RIMCO
Purchasers. In the event a Subscriber has granted voting rights to anyone
else herein, the Person exercising the voting rights of another shall cause
such shares to be voted so as to fulfill the commitments herein made. All
Subscribers expressly acknowledge and agree that the RIMCO Purchasers are
third-party beneficiaries of the provisions of this Subsection (g).
(h) General. All terms of the voting agreements contained in this
Section 11 shall be binding on all assigns and transferees of the shares of
Stock herein burdened with such voting requirements. All obligors under
this Section 11 agree to deliver prior to any meeting or vote of
Shareholders, a proxy in favor of the proper obligee, in advance of such
meeting or vote, as requested by the obligee.
12. Employment Agreement between Xxxxxxx and the Company. The Board of
Directors of the Company hereby designates Xxxx Xxxxxxxxx and Xxxxxxx Xxxxxxx as
special agents of the Company for the limited purposes set forth in this
Section. Such persons are authorized and empowered for and on behalf of the
Company to enter into an employment agreement with Xxxxxxx on terms and
conditions deemed by such persons to be reasonable and proper, the execution
thereof by such persons being conclusive evidence of such determination.
13. Employment Agreement between Xxxxx and the Company. The Board of
Directors of the Company hereby authorize and empower the President of the
Company to enter into an employment agreement with Xxxxx on terms and conditions
deemed by such officer to be reasonable and proper, the execution thereof by
such officer being conclusive evidence of such determination.
14. Amendment of Articles of Incorporation. Upon the completion of the sale
of shares of Stock to the Subscribers, the directors and Shareholders of the
Company unanimously agree and approve that the Articles of Incorporation of the
Company shall be amended, as follows:
Name. The name of the Company shall be changed from "New Edge
Petroleum Corporation" to "Edge Petroleum Corporation."
Furthermore, the officers of the Company are empowered and directed to
execute and file appropriate Articles of Amendment with the Secretary of State,
and pay any fees incurred in connection with such filing, and do any and all
other such acts as may be necessary to accomplish the foregoing.
15. Certain Matters Regarding EPP.
20
(a) Representations. Each of the following persons represents
for themselves, severally, that they own the percentage indicated in EPP
as of the date hereof, and to their best knowledge and belief, without
any independent inquiry, the other persons own the percentage indicated
of EPP as of the date hereof:
Name Percentage
---- ----------
EHCLP 34.50%
COG 40.30
KPC 5.25
Northedge 5.25
Lawford 5.25
Jamtex 1.00
Raphael 1.50
Texedge 2.00
EPC 5.00
------
100.00%
(b) Each indicated partner represents that he or it, as the
case may be, has not granted any rights or options, fixed or
contingent, to any person to acquire any interest in EPP, not shown
above, except that COG has granted a right to X.X. Xxxxxxx to purchase
interests under certain conditions which, upon the effectiveness of this
agreement, shall be moot. Each indicated partner represents that he or
it, as the case may be, owns the indicated interest set forth above,
free and clear of all liens, security interests, mortgages, charges and
encumbrances. Each indicated partner represents that he or it, as the
case may be, is aware of no actions, suits, proceedings or claims
pending or threatened with respect to, or in any manner affecting, such
partner's ownership interests in EPP as set forth above.
(c) Termination. All the partners of EPP hereby elect to
terminate and dissolve EPP for all purposes. EPP shall not enter into
any new business or operations after the Effective Date. EPP shall not
conduct any further business or operations after the Effective Date
except as same are necessary to preserve the value of the assets and
property to be distributed by EPP to the Partners on final distribution.
(d) Liquidating Agent.
(i) Designation. The partners hereby designate EPC as the
liquidating agent to wind-up and terminate the business and
affairs of EPP (the "Liquidating Agent").
(ii) Responsibilities. The winding-up of the affairs of EPP
and the termination of EPP shall be performed by the Liquidating
Agent in accordance with the Texas General partnership Laws and
the Articles of
21
partnership of EPP, as amended. The partners of EPP hereby designate, appoint
and authorize the Liquidating Agent to take all actions necessary or
appropriate to wind-up and terminate the business and operations of EPP. Any
reversionary working interests, overriding royalties, or other forms of
promoted interest, and also any cash amounts to be distributed, in either case
with respect to EPP's interest in any Joint Venture partnership shall be
promptly and forthwith delivered to the partners of EPP in accordance with
their respective percentage ownership interest set forth in subsection (a)
hereof.
(iii) Payment of Liabilities of EPP. In paying the liabilities of EPP, the
Liquidating Agent shall pay such liabilities in the following order of
priority:
(A) first, amounts owing to creditors other than partners;
(B) second, amounts owing to partners other than for capital and
profits;
(C) third, amounts owing to partners in respect of capital; and
(D) fourth, amounts owing to partners in respect of profits, which
shall be based on the percentages set forth in subparagraph (a) hereof.
(iv) The Liquidating Agent may take all such action and is hereby granted
such powers as may appear necessary or proper to comply with the laws of the
appropriate jurisdictions and to effectuate and carry out the terms and purposes
of the transactions contemplated in this Agreement with respect to EPP. The
Liquidating Agent shall have the following specific powers, and the enumeration
of such powers shall not be considered in any way to limit or control the power
of the Liquidating Agent to act as specifically authorized in any other section
or provision of this Agreement:
(A) To sell or otherwise convert into cash or cash equivalents all
assets of EPP, and to pay, discharge and satisfy all remaining
obligations, liabilities and expenses of EPP with the right to prosecute
or defend litigation (in the name of EPP, or otherwise), and to pay,
discharge or otherwise satisfy claims, liabilities, and expenses and to
pay all expenses incurred in connection therewith, and to distribute to
the partners all such net proceeds remaining in the hands of the
Liquidating Agent as soon as practicable.
22
(B) While serving as the Liquidating Agent to employ legal counsel,
accountants and other professionals for the benefit of EPP and to pay the
fees and expenses of such professionals from the assets of EPP.
(C) If necessary, to borrow funds for winding-up and liquidation
purposes.
(D) To file with the appropriate city, state or other governmental
offices all documents necessary to wind-up and terminate EPP, including
notices of termination, if necessary.
(v) Limitations on Liquidating Agent's Powers. The investment powers of
the Liquidating Agent with respect to EPP shall be limited to demand and time
deposits in federally insured banks or savings institutions, or short-term
certificates of deposits or Treasury bills. No other reinvestment powers are
given to the Liquidating Agent.
(vi) Acceptance By Liquidating Agent. The Liquidating Agent hereby accepts
its appointment made in this Agreement subject to the conditions enumerated
below and agrees to act as liquidating agent pursuant to the terms hereof.
(A) The Liquidating Agent shall in no case or event be liable for any
damage caused by the exercise of its discretion as authorized in this
Agreement in any particular manner, or for any other reason, except gross
negligence or wilful misconduct with reference to the Agreement, and shall
not be liable or responsible for its failure to ascertain the terms or
conditions, or to comply with any of the provisions of any agreement,
contract or other document referred to herein, nor shall it be liable or
responsible for forgeries or false personation.
(B) If any controversy arises, between the parties hereto or with any
third person with respect to the subject matter of the Agreement or its
terms or conditions, the Liquidating Agent shall not be required to
determine the same or take any action, but may await the settlement of any
such controversy by final appropriate legal proceedings or otherwise as it
may reasonably require.
(c) Notwithstanding any other provision of this Agreement, the
Liquidating Agent's responsibility for payment of or provision for any
23
claims against, liabilities of, or expenses of EPP, shall be limited to the
property and assets of EPP and shall be dischargeable only therefrom.
(vii) Liquidating Agent Resignation. The Liquidating Agent shall
have the right to resign at any time, and upon resignation the partners
holding two-thirds (2/3) or more of the ownership interests of EPP shall
appoint a successor Liquidating Agent.
(viii) Removal of Liquidating Agent. The Liquidating Agent may be
removed and its duties terminated at any time and his successor appointed
by partners holding two-thirds (2/3) or more of the ownership interests of
EPP.
(e) Termination of Edge Group Joint Venture. The Partners of EPP hereby
authorize and appoint the Liquidating Agent to take all actions necessary or
appropriate on behalf of EPP to wind-up and terminate the Edge Group Joint
Venture. Without limiting the generality of the foregoing, the Liquidating
Agent, in the name, and on behalf, of the Edge Group Joint Venture, EPP and each
partner of EPP, shall have the right, power and duty to:
(i) negotiate for and on behalf of the Edge Group Joint Venture an
Agreement of Sale pursuant to which the JV Assets and Liabilities shall be
sold to the Edge Joint Venture II, all on such terms and conditions, and
for such considerations, as the Liquidating Agent shall determine, and any
and all other instruments, certificates, documents and agreements as shall
be necessary or expedient to accomplish the consummation of the Agreement
of Sale, all as determined by the Liquidating Agent in its sole judgment;
(ii) in connection with such Agreement of Sale, to grant indemnity to
third parties, including, without limitation, the Edge Joint Venture II as
regards the condition of the JV Assets and Liabilities and any other
matters as requested by Edge Joint Venture II, all in the name, place and
stead of the Edge Group Joint Venture, EPP and each partner of EPP. The EPP
partners agree that any liability which EPP or any of them individually
shall have arising out of the foregoing indemnity, shall be shared, and
limited among themselves, as follows: Old EPC shall be unlimitedly liable
first and primarily to indemnify and hold harmless all the remaining
partners of EPP, but only to the extent of its assets. Thereafter, as to
any balance owing, each other partner shall be liable for the following
percentage: EHCLP, 39.47%; COG, 42.42%; KPC, 5.53%; Northedge, 5.53%;
Lawford, 5.53%; Jamtex, 1.05%; Raphael, 1.58%; and Texedge, 2.1% (such
percentage being its "ratable share"). If any partner
24
shall make a payment (whether voluntarily or involuntarily) on account of
the foregoing indemnities in excess of its ratable share of liability then
each partner which has not already paid its ratable share of liability
shall immediately pay to those partners who have so paid, their ratable
share of liability in such a manner that all payments made on account of
such indemnity shall be borne by each partner in accordance with its
ratable share. If within ten (10) days after the payment referred to in the
preceding sentence has been requested, any partner has not made this
payment in full, the amount owed by the non-performing partners pursuant to
the preceding sentence shall be determined (the "defaulted payment") and
immediately upon request the other partners shall reimburse any partners
who have paid more than their ratable share in such a manner so that the
defaulted payment shall be borne by the other partners ratably. This,
however, shall not absolve any partner from the obligations to bear its
indicated ratable share of liabilities; and
(iii) in connection with the termination of the Edge Group Joint
Venture, and each EPP partner agrees (subject to the restrictions set forth
below) to indemnify the Edge Group I against any claim or liability arising
out of or connected with (A) representations or warranties made by the Edge
Group Joint Venture in the Agreement of Sale or any conveyance documents
conveying assets to the Edge Joint Venture II, or any failure of title with
respect to the JV Assets and Liabilities, or (B) the operation of the Edge
Group Joint Venture (excluding, however, any and all claims and liabilities
being assumed by the Edge Joint Venture II in the Agreement of Sale, any
claim arising under a working interest or reversionary working interest
held by, through or under the Edge Joint Venture, or the Edge Group I, or
any liability for income taxes arising out of or connected with the Edge
Group Joint Venture, including without limitation, those associated with
the Agreement of Sale); provided that Edge Group I agrees that any
liability which EPP or any of the partners thereof individually shall have
arising out of the foregoing indemnity, shall be shared, and limited among
the EPP partners, but only in the following manner: Old EPC shall be
unlimitedly liable first and primarily to Edge Group I, but only to the
extent of its assets. Thereafter, as to any balance owing, each other
partner shall be liable severally (not jointly) only for the following
percentage: EHCLP, 39.47%; COG, 42.42%; KPC, 5.53%; Northedge, 5.53%;
Lawford, 5.53%; Jamtex, 1.05%; Raphael, 1.58%; and Texedge, 2.1%. No other
provision herein to the contrary withstanding, Xxxxxxx Xxxxxxx shall have
no liability to Edge Group I, or any other person, and his wholly-owned
corporation, Trade
25
Consultants, Inc. ("Trade Consultants") shall have any such liability, and
does herewith furnish such indemnity.
(iv) in the event that pursuant to the Agreement of Sale, any
reversionary working interests, or working interests are received back from
the Edge Joint Venture II, to distribute those to the partner in accordance
with their percentages as set forth in subparagraph (a), or to the Persons
designated by such partners, including the designation as set forth in
Section 3 of this Agreement; and
(v) each Partner authorizes the Liquidating Agent to execute an
Agreement of Termination and Consent to Action with respect to the
termination of the Edge Group Joint Venture, in the form of the agreement
attached hereto as Exhibit O.
(f) Notwithstanding any other term, provision, or agreement in any writing
or contract, all partners consent and agree that Raphael shall have no liability
to them for any cause or reason, whatsoever, whether primary, or in contribution
or indemnity, all such persons agreeing to look only to the wholly-owned company
of Raphael, Trade Consultants, for any such liability, or damage, which company
expressly assumes such indemnity.
(g) EPP and all of its partners without the necessity of any further act
or execution of any further documents, do hereby release and relinquish their
rights and interests in any regional seismic data, and any and all of the
information comprising a regional information base (which includes without
limitation, proprietary regional maps, seismic data, and geological data
including logs, well files, synthetic seismogram, and velocity surveys).
(h) Amendment. The provision of this section may be hereafter amended,
altered, changed, deleted or added to, by the affirmative approval of partner
owning two-thirds (2/3's) or more interests in EPP as set forth in subsection
(a) hereof.
(i) Regarding the Edge Group Joint Venture. The partners of EPP authorize
EPC and /or COG to execute on behalf of the Edge Group Joint Venture a
promissory note in the principal amount of $250,000, plus interest, payable to
Xxxxxxx and Xxxx Xxxxxxxxx, jointly, representing funds loaned by such persons
to the Edge Group Joint Venture, such note to bear terms as set forth in
Exhibit K, together with such changes therein as the officers of EPC and/or COG,
as the case may be, determine to be reasonable or necessary in their sole
judgments.
26
16. Approval of Sale to X. X. Xxxxxxx. After giving effect to all of the
transactions, agreements and matters herein set forth, but prior to the sale of
shares to the RIMCO Purchasers and election of additional directors, each
Subscriber does hereby agree to the sale by COG of one thousand (1,000) shares
of Stock herein subscribed for by COG to X. X. Xxxxxxx, waiving any preferential
purchase rights (preferential and otherwise) thereto which any Subscriber may
have, provided that he executes an agreement by which he agrees to abide by and
hold his shares subject to the buy-sell provisions set forth in Exhibit G
hereof. For purposes of such buy-sell rights, X. X. Xxxxxxx shall be deemed to
be a Xxxxxxx Purchaser for all purposes of such Exhibit G. Such shares are to
be held pursuant to a voting agreement between Xxxxxxx and X. X. Xxxxxxx.
17. Certain Banking Matters. The President and the Treasurer of the
Company are each hereby authorized and directed to establish banking relations
with any state or national banking institutions as the officers of the Company
shall choose (the "Bank"), and to establish such checking accounts and borrowing
accounts with such institutions as the President or Treasurer of the Company
shall deem necessary and appropriate. Any resolutions which such Bank may
require be adopted by the Board of this Company in order to establish such
accounts are hereby approved in their entirety, and the Secretary is authorized
to certify that the Board has approved such resolutions as of the date such
resolutions are stated by the President or the Treasurer to be so approved.
18. Issuance of Stock to the RIMCO Purchasers. Effective immediately
after the consummation of all matters contemplated by this Agreement, except
those set forth in Section 19, a subscription to purchase a total of 5,263
shares of Stock for a total consideration of $500,000 from the RIMCO Purchasers
(in the precise share amounts to each as set forth on Exhibit L), the same being
greater than the par value thereof, is accepted by the Company and its Board of
Directors. Furthermore, the President and the Secretary of the Company are
authorized and empowered to issue and deliver to each RIMCO Purchaser
certificates of Stock of the Company evidencing the number of shares to which
such RIMCO Purchaser is entitled, which shares, when so issued, will be duly
authorized, validly issued and outstanding shares of capital stock of the
Company, fully paid and nonassessable for all purposes. Additionally, the
President and any Vice President are authorized and empowered by the Company to
enter into any additional agreements with the RIMCO Purchasers which they, or
any of them, shall request in connection with or as a part of their subscription
of Stock, such agreement to be in the form of agreement attached hereto as
Exhibit N, together with such additions, deletions, changes or modifications as
such officers determine in their sole discretion to be reasonable and prudent,
the execution of such agreement or agreements being conclusive evidence of such
determination.
27
19. Election of Directors. Effective after the completion of all matters
contemplated by this Agreement, including the issuance of shares to the RIMCO
Purchasers, the size of the Board of Directors shall be increased to nine (9)
members, and the following persons shall be elected as directors of the Company,
such persons to serve until their successors have been duly elected and
qualified or their resignation or removal in the manner authorized by the
Bylaws:
Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxx X. Xxxxx
Xxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx
D. Xxxxxxxxxxx Xxxxxx
Xxxxxx Xxxxx
Furthermore, within 24 hours after receipt of a request from Xxxx X. Xxxxxxx,
the Company shall send out notice of a special telephone shareholders meeting,
for the purpose of electing one additional director, said meeting to occur as
soon as possible pursuant to the Company's Bylaws (as hereinafter adopted).
20. Legends on Share Certificates. Each of the Subscribers hereby agree
that the following legends shall be written, printed or stamped on all
certificates representing shares of Stock:
All Subscribers and the RIMCO Purchasers
"The shares represented by this certificate have
not been registered under the Securities Act of
1933, as amended, or the securities laws of any
state pursuant to one or more exemptions therefrom
and such Shares may not be sold, transferred,
assigned or otherwise disposed of unless and until
they are first registered under such Act and all
applicable state securities laws and rules and
regulations promulgated thereunder or unless and
until the holder hereof provides either (i) information
satisfactory to the Company that such registration is
not required or (ii) an opinion of counsel acceptable
to the Company to the effect that such registration
is not required.
"The shares represented by this certificate are subject
to provisions restricting the transfer of the shares.
Such agreement restricting the transfer of shares is
contained in the Articles of Incorporation as amended
of the Company, which are on file in the office of the
Secretary of State of the
28
State of Texas. The Company will furnish a copy
of such Articles without charge upon written request
to the Company at its principal place of business or
registered office.
"The preemptive right of shareholders to acquire
unissued or treasury shares of the Company by reason
of holding shares has been denied by a statement
contained in the Articles of Incorporation of the
Company that are on file in the office of the
Secretary of State of Texas. The Company will
furnish a copy of such Articles of Incorporation
without charge upon request therefor to the
Company at its principal place of business or
registered office."
All Subscribers Burdened with Voting Agreements
(excluding the RIMCO Purchasers)
"The voting of the shares of Stock is subject
to and restricted by a voting agreement dated
effective April 8, 1991, in favor of other persons
designated in such agreement. A copy of such
agreement is on file at the principal place of
business of the Company and relevant portions
thereof will be furnished without charge upon
written request to the Company at its principal
place of business or registered office."
21. Miscellaneous Provisions.
(a) Governing Law. This Agreement shall be subject to and governed
by the laws of the State of Texas.
(b) Binding Effect. This Agreement shall be binding upon the
Company, the Subscribers and their successors and assigns until terminated.
This Agreement shall apply to, and be binding upon, all Stock owned by any
Subscriber or signatory hereto regardless of the method or manner that such
Stock was acquired or obtained.
(c) Amendment. Except as otherwise hereafter set forth, this
Agreement may be amended from time to time by an instrument in writing
signed by the Company and ninety percent (90%) of the Subscribers who are
parties to this Agreement at the time of such amendment. The foregoing
notwithstanding, the provisions of Section 11 may be amended only on the
written consent of the specific parties who are obligees and obligors
thereunder, without the necessity of consent from any other Person.
29
(d) Notices. Except as otherwise provided herein, all notices and
notices accepting or rejecting offers made, requests, consents and other
communications under this Agreement shall be in writing and shall be deemed to
have been delivered on the date mailed, postage prepaid, by certified mail,
return receipt requested, or on the date personally delivered or telegraphed and
confirmed:
(i) If to the Company, to:
New Edge Petroleum Corporation
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxx X. Xxxxxxx, President
(ii) If to any executing Person, to the
address of such Person as it appears
at the end of this Agreement.
Any party hereto may designate a different address by notice to the
other parties.
(e) Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid, or unenforceable provision, there shall be added automatically as a
part of this Agreement a provision as similar in terms to such illegal, invalid
or unenforceable provision as may be possible and be legal, valid and
enforceable.
(f) Counterparts. This Agreement may be executed in counterparts,
each of which for all purposes is deemed to be an original, and all of which
constitute, collectively, one agreement; in making proof of this Agreement, it
shall not be necessary to produce or account for more than one such counterpart.
(g) Further Assurances. Each Person executing this Agreement agrees
to promptly and/or execute deliver upon request all such other and further
information, documents, agreements and instruments in compliance with or
accomplishment of the covenants and agreements herein made.
(h) No Other Agreements. The parties hereto agree that there are no
agreements or understandings between or among any of them regarding the
ownership of shares of the Company, the
30
voting of shares of the Company, the operations of the Company, except as set
forth herein, or any other matter affecting, dealing with or relating to the
ownership or operation of the Company. Any such agreements, understandings or
commitments, except as set forth in this Agreement, are hereby terminated.
(i) Board and Shareholder Approvals. This Agreement when executed shall
constitute the unanimous consent, resolution, ratification and agreement of all
of the Subscribers, who are all of the initial shareholders of the Company,
except the RIMCO Purchasers, who shall purchase their shares after the
effectiveness of all other matters contemplated in this Agreement, except the
expansion of the Board as set forth in Section 19 hereof. On April 8, 1991 at
10:40 P.M. (CDT), all of the persons indicated as the initial Board of Directors
of the Company assembled in person for a meeting of the initial Board of
Directors of the Company in Houston, Texas, except Xxxxxxxxxxx Xxxxxx who
participated therein by telephone conference call pursuant to which all persons
participating in the meeting could hear each other and fully participate. The
execution hereof by all persons indicated as members of the initial Board of the
Company indicates their approval of the matters addressed, and also certifies
that Xxxxxxxxxxx Xxxxxx approved all such measures. The subsequent execution
hereof by Xxxxxxxxxxx Xxxxxx shall constitute this document further as a
unanimous consent of directors as well, all as of the Effective Date.
(j) The Secretary of the Company is authorized to extract any of the
resolutions and actions herein taken and present them separately in certificate
form, as acts, actions, and matters approved and adopted by the Company.
(k) It is intended that either the Company itself or the Edge Joint
Venture II or another affiliate may raise capital to fund a new royalty program
("Royalty Program"), pursuant to which one of the afore-named raises capital to
finance the purchase of landowners' royalty in the properties or prospects owned
by the Edge Joint Venture II. The Company agrees to cause the entity who
ultimately conducts such Royalty Program to negotiate with Sfondrini in good
faith the terms of such a Royalty Program and the terms upon which Sfondrini or
his assignee or designee shall be authorized to raise the necessary capital to
finance the program. In the event such Royalty Program has not been commenced
on or before twelve months from the date hereof, any right which Sfondrini has
hereunder shall terminate. The foregoing notwithstanding, in the event that
Sfondrini and the Company are unable to agree upon the terms of such Royalty
Program within such twelve-month period, and either the Company or the Edge
Joint Venture II proposes to engage any third party to raise capital to fund
such Royalty Program, Sfondrini shall be given thirty (30) days' notice of the
terms and conditions on which such third
31
party proposes to raise such funds and may within such time-frame elect to
raise such capital on the same terms as proposed for such third party. If
Sfondrini, within such time period, does not affirmatively notify the
Company in writing of his willingness to accept such engagement, Sfondrini
shall be deemed to have declined.
(1) The parties acknowledge that consistent with Section 4, Raphael
may transfer his shares in New Edge to Trade Consultants, which he
represents to be a New York Corporation wholly owned by him. Upon such
transfer, Trade Consultants shall execute an acknowledgement that it and
the shares conveyed to it are bound by the terms and provisions of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
multiple counterparts, each of which shall be deemed an original, to be
effective as of April 8, 1991 (the "Effective Date").
NAME ADDRESS
---- -------
NEW EDGE PETROLEUM CORPORATION 0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
By:/s/ XXXX X. XXXXXXX
-------------------------------------
Xxxx X. Xxxxxxx, President
EDGE PETROLEUM CORPORATION 0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
By: /s/ XXXX X. XXXXXXX
-------------------------------------
Xxxx X. Xxxxxxx, President
/s/ XXXX X. XXXXXXX
---------------------------------------- 1111 Xxxxx, Suite 0000
Xxxx X. Xxxxxxx Xxxxxxx, Xxxxx 00000
XXXXXXX OIL AND GAS CORPORATION 0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
By: /s/ XXXX X. XXXXXXX
-------------------------------------
Xxxx X. Xxxxxxx, President
32
/s/ XXXXX X. XXXXXXXX
----------------------------------------
XXXXX X. XXXXXXXX 0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
LAWFORD ENERGY, INC. 0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------
Xxxxx X. Xxxxxxxx, President
/s/ XXXX X. XXXXX
---------------------------------------- One Energy Square
XXXX X. XXXXX 0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
NORTHEDGE CORP. 000 Xxx Xxxxxx Xxxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
By: /s/ XXXX X. XXXXX Xxxxxx, Xxxxx 00000
-------------------------------------
Xxxx X. Xxxxx, President
/s/ XXXXX X. XXXXXXX
---------------------------------------- 712 Main, Suite 1500 East
XXXXX X. XXXXXXX Xxxxxxx, Xxxxx 00000
KPC INTERESTS, INC. 000 Xxxx, Xxxxx 0000 Xxxx
Xxxxxxx, Xxxxx 00000
By: /s/ XXXXX X. XXXXXXX
-------------------------------------
Xxxxx X. Xxxxxxx, President
/s/ XXXXXXX XXXXXXX
---------------------------------------- 00 Xxx Xxxxx Xxxxxxx
XXXXXXX XXXXXXX Darien, Connecticut 06820
33
TEXEDGE ENERGY CORPORATION 00 Xxx Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxxxx 00000
By: /s/ XXXXXXX XXXXXXX
-------------------------------------
Xxxxxxx Xxxxxxx, President
JAMTEX, INC. 00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
By: /s/ XXXXX X. XXXXXXX
-------------------------------------
Xxxxx X. Xxxxxxx,
Special Vice President
/s/ XXXXXXX XXXXXXX
---------------------------------------- 0000 Xxxxxxxxx Xxxxxxx
XXXXXXX XXXXXXX Apartment 611
Xxxxx, Xxxxxxx 00000
TRADE CONSULTANTS, INC. 0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxx 000
Xxxxx, Xxxxxxx 00000
By: /s/ XXXXXXX XXXXXXX
-------------------------------------
Xxxxxxx Xxxxxxx, President
/s/ XXXX XXXXXXXXX
---------------------------------------- One Landmark Square
XXXX XXXXXXXXX Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
34
EDGE HOLDING COMPANY LIMITED
PARTNERSHIP Xxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
By: /s/ XXXX XXXXXXXXX
-------------------------------------
Xxxx Xxxxxxxxx,
General Partner
and
By: NAPAMCO, LTD., One Landmark Square
General Partner Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
By: /s/ XXXX XXXXXXXXX
-----------------------------
Xxxx Xxxxxxxxx, President
---------------------------------------- 0 Xxxxxxxx Xxxxx, Xxxxx 000
D. XXXXXXXXXXX XXXXXX Xxxxxxxxx, Xxxxxxxxxxx 00000
35
LIST OF EXHIBITS
----------------
Exhibit Description
------- -----------
A-1 Number of shares of EPC transferred to New Edge
A-2 Reversionary and working interests and rights
transferred to New Edge in certain properties
A-3 Reversionary and working interests and rights
transferred to New Edge in other properties
A-4 Partially Committed Prospects
A-5 Partially Sold Prospects
B Form of Master Conveyance and Assignment
C Stock powers pursuant to which stock of
EPC will be transferred to New Edge
D Bylaws
E Joint Venture Agreement
F Assets to be contributed to the Edge
Joint Venture II by the Company
G Intentionally Omitted
H Original Articles of Incorporation
I Agreement of Sale
J RIMCO Letter of Intent
K Terms of Note to Xxxxxxx and Sfondrini
L Number of Shares and Consideration
Paid by the RIMCO Purchasers
M Reserves to be Dividended to New EPC
by Old EPC
N RIMCO Stock Purchase Agreement
O Agreement of Termination of Edge
Joint Venture and Consent to Action
36
