EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
BY
AND AMONG
WESTPORT RESOURCES CORPORATION
AND
SPINDRIFT PARTNERS, L.P.,
SPINDRIFT INVESTORS (BERMUDA) L.P.,
GLOBAL NATURAL RESOURCES III,
GLOBAL NATURAL RESOURCES III L.P.
DATED AS OF NOVEMBER 15, 2002
TABLE OF CONTENTS
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ARTICLE VII MISCELLANEOUS........................................................................................17
Section 7.1 Notices...............................................................................17
Section 7.2 Changes...............................................................................17
Section 7.3 Headings..............................................................................18
Section 7.4 Severability..........................................................................18
Section 7.5 Governing Law.........................................................................18
Section 7.6 Counterparts..........................................................................18
Exhibit A Opinions of Counsel
Appendix I Registration Statement Questionnaire
Appendix II Purchaser's Certificate of Subsequent Sale
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STOCK PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of November
15, 2002, is made and entered into by and among Westport Resources Corporation,
a
Nevada corporation (the "Company"), Spindrift Partners, L.P., a Delaware
limited partnership, Spindrift Investors (Bermuda) L.P., a Bermuda limited
partnership, Global Natural Resources III, a Cayman corporation, and Global
Natural Resources III L.P., a Delaware limited partnership (each a "Purchaser"
and collectively, the "Purchasers").
WHEREAS, the Company desires to issue and sell to the Purchasers an
aggregate of 3,125,000 shares (the "Shares") of the authorized but unissued
common stock, $0.01 par value per share, of the Company (the "Common Stock");
and
WHEREAS, the Purchasers desire to purchase the Shares on the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
SALE AND PURCHASE
Section 1.1 Issuance and Sale of the Shares. Subject to the terms and
conditions herein set forth and in reliance upon the respective representations
and warranties of the parties set forth herein, the Company hereby agrees to
issue and sell to the Purchasers and the Purchasers hereby agree to purchase
from the Company the number of Shares set forth below at a price per Share of
$16.00:
Number of Shares Aggregate
Name of Purchaser to be Purchased Purchase Price
---------------------------------- ---------------- ----------------
Spindrift Partners, L.P. 1,425,000 $ 22,800,000
Spindrift Investors (Bermuda) L.P. 1,225,000 $ 19,600,000
Global Natural Resources III 455,000 $ 7,280,000
Global Natural Resources III L.P. 20,000 $ 320,000
Section 1.2 Delivery of the Shares at the Closing. Subject to the terms
and conditions contained herein, the closing of the purchase and sale of the
Shares to be acquired by the Purchaser from the Company under this Agreement
(the "Closing") shall take place at 10:00 a.m.
(Eastern Time) on November 19, 2002 or at such other time and date (the "Closing
Date") agreed upon by the Company and the Purchasers. At the Closing, the
Company shall deliver to each Purchaser one or more stock certificates
registered in the name of such Purchaser representing the number of Shares set
forth in Section 1.1 above, against delivery of a transfer of funds to the
account of the Company by wire transfer, representing the purchase price to be
paid for the Shares by the Purchasers.
Section 1.3 Conditions to Closing.
(a) The Company's obligation to complete the purchase and
sale of the Shares and deliver such stock certificate(s) to the Purchasers at
the Closing shall be subject to the following conditions, any one or more of
which may be waived by the Company:
(i) Representations and Warranties. Each of the
representations and warranties set forth in Article III hereof shall be
true, accurate and correct in all material respects at the Closing Date
with the same effect as though made at and as of such time.
(ii) Performance. Each Purchaser shall have performed
and complied in all material respects with all agreements and
conditions contained herein required to be performed or complied by it
prior to or on the Closing Date.
(iii) Officer's Certificate. The Company shall have
received a certificate of an executive officer of each Purchaser, dated
the Closing Date, as to the fulfillment of the conditions set forth in
subsection (i) and (ii) hereof.
(iv) No Proceedings or Litigation. No action, suit or
proceeding before any arbitrator or any governmental authority shall
have been commenced, and no investigation by any governmental authority
shall have been threatened, against any Purchaser seeking to restrain,
prevent or change the transactions contemplated by this Agreement, or
seeking damages in connection with such transactions.
(b) The Purchasers' obligation to accept delivery of such
stock certificate(s) and to pay for the Shares evidenced thereby shall be
subject to the following conditions, any one or more of which may be waived by
the Purchasers:
(i) Representations and Warranties. Each of the
representations and warranties set forth in Article II hereof shall be
true, accurate and correct in all material respects at the Closing Date
with the same effect as though made at and as of such time.
(ii) Performance. The Company shall have performed
and complied in all material respects with all agreements and
conditions contained herein required to be performed or complied by it
prior to or on the Closing Date.
(iii) Officer's Certificate. Each Purchaser shall
have received a certificate of an executive officer of the Company,
dated the Closing Date, as to the fulfillment of the conditions set
forth in subsection (i) and (ii) hereof.
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(iv) No Proceedings or Litigation. No action, suit or
proceeding before any arbitrator or any governmental authority shall
have been commenced, and no investigation by any governmental authority
shall have been threatened, against the Company seeking to restrain,
prevent or change the transactions contemplated by this Agreement, or
seeking damages in connection with such transactions.
(v) Legal Opinions. Each Purchaser shall have
received a legal opinion, dated the Closing Date, as to the matters set
forth in (and in substantially the form attached hereto as) Exhibit A.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company hereby represents and warrants to, and covenants with, the
Purchasers as follows:
Section 2.1 Organization. The Company is a corporation validly existing
and in good standing under the laws of the State of
Nevada, is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the Company's properties or the nature of
its business makes such qualification necessary, except where the failure to be
so qualified or in good standing would not have a material adverse effect upon
the business, financial condition, properties or results of operations of the
Company and its Subsidiaries taken as a whole ("Material Adverse Effect"). The
Company has all requisite corporate power and authority to own, use and lease
its properties and to carry on its business as it is now being conducted.
Section 2.2 Due Authorization. The Company has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
of the Company. This Agreement has been duly and validly executed and delivered
by the Company, and, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) (the "Enforceability Exception").
Section 2.3 Non-Contravention. The execution and delivery of the
Agreement, the issuance and sale of the Shares to be sold by the Company under
the Agreement, the performance by the Company of its obligations hereunder will
not:
(a) conflict with any provision of the certificate of
incorporation or bylaws of Company;
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(b) require any consent, waiver, approval, order,
authorization or permit of, or registration, filing with or notification to, any
regulatory body, administrative agency, or other governmental body of the United
States, other than such as have been made or obtained, except for (i) the filing
of a registration statement with the Securities and Exchange Commission (the
"Commission") in accordance with Section 6.1 hereof, (ii) such consents,
approvals, orders, authorizations and regulations, declarations and filings as
may be required under applicable state securities or blue sky laws, and (iii)
approvals, waivers, authorizations, permits or and registrations that, if not
obtained or made, would not have a Material Adverse Effect;
(c) result in any violation of or the breach of or constitute
a default (with or without notice or lapse of time or both) under, or give rise
to any right of termination, forfeiture, cancellation or acceleration, transfer
fees or guaranteed payments or a loss of a material benefit under, or require a
consent, waiver or approval under any of the terms, conditions or provisions of
any contract, lease, indenture, agreement or arrangement ("Material Contracts")
filed as an exhibit to the Company's reports, registration statements and
definitive proxy statements as filed by the Company with the Commission ("SEC
Documents") under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), except for any such conflicts, violations, breaches, defaults,
terminations, cancellations or accelerations that, individually or in the
aggregate, would not have a Material Adverse Effect;
(d) conflict with or violate the provisions of any order,
writ, injunction, judgment, decree, statute, rule or regulation applicable to
Company or any Subsidiary or any of their properties or assets, except for such
conflicts or violations which would not result in a Material Adverse Effect; or
(e) result in the creation of any lien, encumbrance, claim,
security interest or restriction upon any material properties or assets or on
any shares of capital stock of Company or any of its Subsidiaries under any
Material Contract.
Section 2.4 Capitalization. The capitalization of the Company is as
described in the Company's SEC Documents. The Shares to be sold pursuant to the
Agreement have been duly authorized, and when issued and paid for in accordance
with the terms of the Agreement, will be duly and validly issued, fully paid and
nonassessable. The outstanding shares of capital stock of the Company have been
validly issued and are fully paid and nonassessable, have been issued in
compliance with all applicable federal and state securities laws, and were not
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities. Except as set forth in or contemplated by this Agreement
or the Company's SEC Documents, there are no outstanding subscriptions, options,
rights, warrants, convertible securities, stock appreciation rights, phantom
equity, or other agreements or commitments obligating Company to issue,
transfer, sell, redeem, repurchase or otherwise acquire any shares of its
capital stock of any class. Except as disclosed in the Company's SEC Documents,
no preemptive right, co-sale right, registration right, right of first refusal
or other similar right exists with respect to the issuance and sale of the
Shares and there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Common Stock to which the Company is a
party.
Section 2.5 Legal Proceedings. Except as set forth in SEC Documents and
except for matters that would not have a Material Adverse Effect, there is no
material legal or governmental
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proceeding pending to which the Company is a party or of which the business or
property of the Company is subject.
Section 2.6 No Violations. The Company is not (i) in violation of its
certificate of incorporation or bylaws, or in violation of any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company, which
violation would have a Material Adverse Effect, or (ii) in default (and there
exists no condition which, with the passage of time or otherwise, would
constitute a default) in the performance of any Material Contract which would
have a Material Adverse Effect.
Section 2.7 Financial Statements. The financial statements of the
Company and the related notes contained in the Company's SEC Documents present
fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of the dates indicated, and the results of
its operations and cash flows for the periods therein specified. Such financial
statements (including the related notes) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified, except as disclosed in the Company's
SEC Documents.
Section 2.8 No Material Adverse Change. Except as disclosed in the
Company's press releases or other information provided to the Purchasers in
writing by the Company in contemplation of this transaction, since September 30,
2002, there has not been
(a) any change or development that would be reasonably likely
to have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of Company, or
any repurchase, redemption or other acquisition by Company or any of its
Subsidiaries of any outstanding shares of capital stock or other securities of,
or other ownership interests in, Company or any of its Subsidiaries; or
(c) any damage, destruction or casualty loss, whether or not
covered by insurance, that individually or in the aggregate would have a
Material Adverse Effect.
Section 2.9 Reporting Status. The Company has filed in a timely manner
all documents that the Company was required to file under the Exchange Act,
during the 12 months preceding the date of this Agreement. The following
documents complied in all material respects with the applicable requirements of
Securities Act of 1933, as amended (the "Securities Act") and the Exchange Act
and the applicable rules and regulations of the Commission promulgated
thereunder as of their respective filing dates, and the information contained
therein as of the date thereof did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading:
(a) The Company's Annual Report on Form 10-K for the year
ended December 31, 2001 (the "10-K");
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(b) The Company's Quarterly Reports on Form 10-Q for each of
the quarters ended March 31, 2002, June 30, 2002 and September 30, 2002; and
(c) All other documents filed by the Company with the
Commission since December 31, 2001 pursuant to the reporting requirements of the
Exchange Act.
Section 2.10 No Manipulation of Stock. The Company has not taken and
will not, in violation of applicable law, take, any action outside the ordinary
course of business designed to or that might reasonably be expected to cause or
result in unlawful manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
Section 2.11 Investment Company. The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for an investment company, within the meaning of the Investment Company Act of
1940, as amended.
Section 2.12 Private Placement. The Company has not taken any action to
sell, offer for sale or solicit offers to buy any securities of the Company
which would bring the offer, issuance or sale of the Shares, as contemplated by
this Agreement, within the provisions of Section 5 of the Securities Act, unless
such offer, issuance or sale was within the exemptions from the provisions of
Section 5 of the Securities Act.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
Section 3.1 Representations, Warranties and Covenants of the
Purchasers. Each Purchaser represents and warrants to, and covenants with, the
Company that:
(a) such Purchaser, taking into account the personnel and
resources it can practically bring to bear on the purchase of the Shares
contemplated hereby, is knowledgeable, sophisticated and experienced in making,
and is qualified to make, decisions with respect to investments in shares
presenting an investment decision like that involved in the purchase of the
Shares, including investments in securities issued by the Company;
(b) such Purchaser or its counsel, accountants or other
investment advisers have requested, received, reviewed and considered all
information deemed relevant by them, including the Company's SEC Documents, in
making an informed decision to purchase the Shares;
(c) such Purchaser is acquiring the number of Shares set forth
in Section 1.1 above in the ordinary course of its business and for its own
account for investment only and with no present intention of distributing any of
such Shares or any arrangement or understanding with any other persons regarding
the distribution of such Shares;
(d) such Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Shares except in
compliance with the Securities Act, and the rules and
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regulations promulgated thereunder, and such Purchaser acknowledges that
certificates representing such Purchaser's Shares shall bear the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH SECURITIES UNDER THE ACT, AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT
REQUIRED UNDER THE ACT OR UNLESS SUCH OFFER, SALE, TRANSFER OR
HYPOTHECATION IS IN COMPLIANCE WITH THE REQUIREMENTS OF RULE
144 PROMULGATED UNDER THE ACT.
(e) such Purchaser has, in connection with its decision to
purchase the number of Shares set forth in Section 1.1 above, relied solely upon
the representations and warranties of the Company contained herein, as well as
any investigation of the Company completed by the Purchaser or its counsel,
accountants or other investment advisers; and
(f) such Purchaser is an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act.
Section 3.2 Additional Covenants. Each Purchaser hereby covenants with
the Company that no resale of the Shares will be made except in compliance with
applicable securities laws. Each Purchaser hereby covenants that the information
contained in the Registration Statement Questionnaire completed by such
Purchaser and delivered to the Company on the date hereof (the form of which is
attached as Appendix I hereto) will be true, correct and complete as of the
effective date of the Registration Statement. Each Purchaser hereby covenants
(on behalf of itself and any affiliates or nominees named in the Registration
Statement Questionnaire) not to make any sale of Shares under the Registration
Statement without effectively causing the prospectus delivery requirement under
the Securities Act to be satisfied, and such Purchaser acknowledges and agrees
that such Shares are not transferable on the books of the Company unless the
certificate submitted to the transfer agent evidencing the Shares is accompanied
by a separate officer's certificate: (a) in the form of Appendix II hereto, (b)
executed by an officer of, or other authorized person designated by, the
Purchaser, and (c) to the effect that (i) the Shares have been sold in
accordance with the Registration Statement and (ii) the requirement of
delivering a current prospectus has been satisfied.
Section 3.3 Further Representations, Warranties and Covenants of the
Purchasers. Each Purchaser further represents and warrants to, and covenants
with, the Company that:
(a) the Purchaser is a corporation or limited partnership, as
applicable, validly existing and in good standing under the laws of the
jurisdiction of its organization;
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(b) the Purchaser has all requisite corporate power and
authority or limited partnership power and authority, as applicable, to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of the Purchaser. This Agreement
has been duly and validly executed and delivered by the Purchaser, and, assuming
the due authorization, execution and delivery hereof by the other parties
hereto, constitutes a valid and binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms, except as enforceability may
be limited by the Enforceability Exception;
(c) The execution and delivery of the Agreement, the purchase
of the Shares to be acquired by the Purchaser under the Agreement, the
performance by the Purchaser of its obligations hereunder will not:
(i) conflict with any provision of the charter,
bylaws or other organizational documents of the Purchaser;
(ii) require any consent, waiver, approval, order,
authorization or permit of, or registration, filing with or
notification to, any regulatory body, administrative agency, or other
governmental body of the United States, other than such as have been
made or obtained; or
(iii) conflict with or violate the provisions of any
order, writ, injunction, judgment, decree, statute, rule or regulation
applicable to the Purchaser.
ARTICLE IV
COMPANY COVENANTS
The Company hereby covenants and agrees with the Purchasers that, in
consideration for the mutual covenants and agreements contained herein:
Section 4.1 Issuance of Securities. The Company agrees that it will not
solicit any offer to buy or make any offer or sale of, or otherwise negotiate in
respect of, securities of the Company of any class if, as a result of the
doctrine of "integration" referred to in Rule 502 under the Securities Act, such
offer or sale would render invalid the exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof.
Section 4.2 Investment Company Act. The Company agrees to take such
steps as shall be necessary to ensure that it will not become an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
ARTICLE V
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Notwithstanding any investigation made by any party to this Agreement,
all covenants, agreements, representations and warranties made by the Company
and the Purchasers herein
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shall survive the execution of this Agreement, the delivery to the Purchasers of
the Shares being purchased and the payment therefore for a period of
twenty-seven months after the date hereof.
ARTICLE VI
REGISTRATION OF THE REGISTRABLE SECURITIES;
COMPLIANCE WITH THE SECURITIES ACT
Section 6.1 Registration Procedures.
(a) The Company shall, at its cost, prepare and file with the
Commission within 45 days of the Closing Date, and shall use its reasonable best
efforts to cause to be declared effective within 90 days of the Closing Date, a
registration statement on Form S-3 (or other appropriate form) (the
"Registration Statement") covering the offer and sale by each Purchaser of the
Shares listed in Section 1.1 (the "Registrable Securities") which are Transfer
Restricted Securities (as defined below) from time to time in accordance with
the methods of distribution elected by such Purchasers and set forth in the
Purchasers' Registration Statement Questionnaires and the Registration Statement
and Rule 415 under the Securities Act (such registration being hereinafter
referred to as the "Shelf Registration"). A Registrable Security shall be a
"Transfer Restricted Security" until earliest of (i) the date on which such
Registrable Security has been disposed of in accordance with the Registration
Statement, (ii) the date on which such Registrable Security is distributed to
the public pursuant to Rule 144(k) under the Securities Act or (iii) the second
anniversary of the Closing Date.
(b) For so long as the Purchasers hold Registrable Securities
that are Transfer Restricted Securities, the Company shall use its best efforts
to keep the Registration Statement continuously effective, in order to permit
the prospectus included therein to be lawfully delivered by the Purchasers, for
a period of two years ending on the second anniversary of the Closing Date.
(c) Notwithstanding any other provisions of this Agreement to
the contrary, the Company shall cause (other than in respect of the information
required to be supplied by the Purchasers pursuant to this Agreement) (i) the
Registration Statement and the related prospectus and any amendment or
supplement thereto to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission promulgated thereunder, (ii) the Registration Statement and any
amendment thereto not to contain, when it becomes effective, an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and (iii) any
prospectus forming a part of the Registration Statement, and any amendment or
supplement to such prospectus, not to contain, as of the date of such prospectus
or amendment or supplement, any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
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Section 6.2 Holdback Agreements.
(a) Each Purchaser agrees that, for a period of ninety (90)
days after the Closing Date, such Purchaser will not, and will cause each
individual or entity directly or indirectly through one or more intermediaries
controlled (as defined under Rule 405 of the Securities Act) by such Purchaser
not to, effect any sale or distribution, including any sale pursuant to Rule 144
or any successor provision under the Securities Act, of any Common Stock of the
Company and not to effect any sale or distribution of any other equity security
of the Company or of any security convertible into or exchangeable or
exercisable for any equity security of the Company.
(b) For so long as each Purchaser holds Registrable
Securities, if requested by the Company or the managing underwriters in
connection with a registration statement for an underwritten public offering,
each Purchaser agrees not to and will cause each individual or entity directly
or indirectly through one or more intermediaries controlled (as defined under
Rule 405 of the Securities Act) by such Purchaser not to effect any sale or
distribution, including any sale pursuant to Rule 144 or any successor provision
under the Securities Act, of any Shares during the time period reasonably
requested by the managing underwriters, not to exceed seven (7) days prior to
and the 180-day period beginning on the effective date of such registration
statement. Each Purchaser agrees to execute and deliver such other agreements as
may be reasonably requested by the Company or the underwriter which are
consistent with the foregoing or which are necessary to give effect thereto. The
Company may make the request under this Section 6.2(b) only once. The
requirements under this Section 6.2(b) shall terminate on the second anniversary
of the Closing Date.
Section 6.3 Further Procedures. In connection with the Shelf
Registration contemplated by Section 6.1 hereof, the following provisions shall
apply:
(a) The Company shall furnish to each Purchaser, prior to the
filing thereof with the Commission, a copy of the Registration Statement, and
each amendment thereof and each amendment or supplement, if any, to the
prospectus included therein, which shall include the information provided by the
Purchasers in their respective Registration Statement Questionnaires.
(b) The Company shall give prior written notice of at least 2
business days prior to an activation of the suspension to the Purchasers (which
notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite changes
have been made):
(i) when the Registration Statement or any amendment
thereto has been filed with the Commission and when the Registration
Statement or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments
or supplements to the Registration Statement or the prospectus included
therein or for additional information;
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(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal
counsel of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(v) of the happening of any event that requires the
Company to make changes to the Registration Statement or the prospectus
in order that the Registration Statement or the prospectus do not
contain an untrue statement of a material fact nor omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in light of the
circumstances under which they were made) not misleading, which written
notice need not provide any detail as to the nature of such event.
(c) The Company shall use commercially reasonable efforts to
obtain the withdrawal at the earliest possible time of any order suspending the
effectiveness of the Registration Statement.
(d) The Company shall notify via email to each Purchaser,
without charge, confirmation of the filing with the Commission of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Purchaser so requests in
writing, all exhibits thereto (including those incorporated by reference).
(e) The Company shall deliver to each Purchaser (so long as it
shall hold Registrable Securities which are Transfer Restricted Securities),
without charge, as many copies of the prospectus (including each preliminary
prospectus) included in the Registration Statement and any amendment or
supplement thereto as such person may reasonably request. The Company consents,
subject to the provisions of this Agreement, to the use of the prospectus or any
amendment or supplement thereto by each of the Purchasers in connection with the
offering and sale of the Registrable Securities covered by the prospectus, or
any amendment or supplement thereto, included in the Registration Statement in
the manner provided for in such prospectus.
(f) Prior to any public offering of the Registrable Securities
pursuant to the Registration Statement, the Company shall register or qualify or
cooperate with the Purchasers and their respective counsel in connection with
the registration or qualification of the Registrable Securities for offer and
sale under the securities or "blue sky" laws of such states of the United States
as any Purchaser reasonably requests in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the Registrable Securities covered by the Registration Statement; provided,
however, that the Company shall not be obligated to file any general consent to
service of process or to qualify or register as a foreign partnership or as a
dealer in securities in any jurisdiction in which it is not so qualified or
registered, or provide any undertaking or make any change in its certificate of
incorporation or bylaws that the Board of directors of the Company reasonably
determines to be contrary to the
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best interests of the Company and its stockholders or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(g) The Company, at its own expense, shall cooperate with the
Purchasers to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities to be sold pursuant to the Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as the Purchasers may request a reasonable period of
time prior to sales of the Registrable Securities pursuant to the Registration
Statement.
(h) Upon the occurrence of any event contemplated by
paragraphs (ii) through (v) of Section 6.3(b) above during the period for which
the Company is required to maintain an effective Registration Statement, the
Company shall as promptly as practicable prepare and file a post-effective
amendment to the Registration Statement or an amendment or supplement to the
related prospectus and any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities, the prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated herein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
provided in the case of paragraph (v) of Section 6.3(b) the Company's
obligations pursuant to this paragraph (h) may be suspended if the Board of
Directors of the Company has determined in good faith and using reasonable
judgment that disclosure of information sufficient to ensure that the
Registration Statement and related prospectus contain no such misstatement or
omission would be significantly and materially disadvantageous to the Company's
financial condition, business or prospects. If the Company notifies the
Purchasers in accordance with paragraphs (ii) through (v) of Section 6.3(b)
above to suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Purchasers shall immediately discontinue its
disposition of its Registrable Securities pursuant to the Registration Statement
and use of the prospectus until the Purchasers' receipt of written notice from
the Company that such disposition may be made. In the event of the delivery of
the notice described above by the Company, the Company shall use its best
efforts to amend such Registration Statement and/or amend or supplement the
related prospectus if necessary and to take all other actions necessary to allow
the proposed sale to take place as promptly as possible, subject, however, to
the right of the Company to delay further sales of Registrable Securities
pursuant to the Registration Statement until the conditions or circumstances
referred to in the notice have ceased to exist or have been disclosed.
(i) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act) an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act, within the time periods required by the rules and regulations of the
Commission.
(j) The Company may require each Purchaser to deliver to the
Company promptly upon request therefor a completed Registration Statement
Questionnaire in substantially the form of Appendix I hereto containing such
information regarding the Purchaser and the distribution of the Registrable
Securities as the Company may from time to time reasonably require for inclusion
in the Registration Statement, and the Company may exclude
12
from such registration the Registrable Securities of any Purchaser that fails to
furnish such information within a reasonable time after receiving such request.
Upon the written request of a Purchaser, the Company will prepare and file with
the Commission an amendment or supplement to the prospectus which forms a part
of the Registration Statement with respect to the information contained in the
Purchaser's Registration Statement Questionnaire so that such information is
correct.
(k) The Company will cause the Registrable Securities to be
sold pursuant to the Registration Statement to be listed on the principal
securities exchange or market, if any, on which the Common Stock shall then be
traded.
Section 6.4 Registration Expenses. All expenses incurred in connection
with the registration of Registrable Securities, including all filing fees,
escrow fees, fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements, if any, of the Company's counsel in
connection with blue sky qualifications of the Registrable Securities), rating
agency fees, printing expenses, messenger and delivery expenses, internal
expenses (including all salaries and expenses of the Company's officers and
employees performing legal or accounting duties), the fees and expenses incurred
in connection with the listing of the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed, and fees and disbursements of counsel for the Company and the Company's
independent certified public accountants (including the expenses of any special
audit or "cold comfort" letters required by or incident to such performance)
directly attributable to the registration of securities, Securities Act
liability insurance (if the Company elects to obtain such insurance), and the
fees and expenses of any special experts or other Persons retained by the
Company will be borne by the Company. The Company shall have no obligation to
pay and shall not pay any underwriting fees, discounts or commissions in
connection with any Registrable Securities registered pursuant to this
Agreement, and each Purchaser shall pay the expenses of its own counsel,
accountants and other experts.
Section 6.5 Indemnification. (a) The Company agrees to indemnify and
hold harmless each Purchaser, its employees and each person, if any, who is an
affiliate or nominee of such Purchaser within the meaning of the Securities Act
or the Exchange Act (each Purchaser and such controlling persons are referred to
collectively as the "Indemnified Parties") from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Registrable Securities) to which
each Indemnified Party becomes subject under the Securities Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to the Shelf Registration, or arise out of, or are based
upon, the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement therein not misleading,
and subject to subsection (c) below, shall reimburse, as incurred, the
Indemnified Parties for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; provided, however, that the Company
shall not be liable in any such case to the extent that such loss, claim, damage
or liability arises out of or is based upon (x) the use of any prospectus in
13
violation of the last sentence of Section 6.3(h) provided that the Company is in
compliance with its obligations pursuant to such Section, or (y) any untrue
statement or omission made in the Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus relating to the
Shelf Registration made in reliance upon and in conformity with written
information pertaining to such Purchaser and furnished to the Company by or on
behalf of such Purchaser specifically for inclusion therein.
(b) Each Purchaser, severally and not jointly, will indemnify
and hold harmless the Company and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act from and against
any losses, claims, damages or liabilities or any actions in respect thereof, to
which the Company or any such controlling person becomes subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement of a material fact contained in the Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to the Shelf Registration, or arise out of or are based upon
the omission to state therein a material fact necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or omission was made in reliance upon and in conformity with written
information pertaining to such Purchaser and furnished to the Company by or on
behalf of such Purchaser specifically for inclusion therein; and, subject to the
limitation set forth immediately preceding this clause, and to subsection (c)
below, shall reimburse, as incurred, the Company for any legal or other expenses
reasonably incurred by the Company or any such controlling person in connection
with investigating or defending any loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
which such Purchaser may otherwise have to the Company or any of its controlling
persons.
(c) Promptly after receipt by an indemnified party under this
Section 6.5 of notice of the commencement of any action or proceeding (including
a governmental investigation), such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this Section
6.5, notify the indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party, except to the
extent the indemnifying party is actually prejudiced by such failure. In case
any 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 therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party if the representation of both such parties by the same
counsel would constitute a conflict of interest). Notwithstanding the foregoing,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded,
upon the advice of counsel, that there exists a conflict of interest between the
indemnifying party and any indemnified party or that there may be legal defenses
available to it and other indemnified parties which are different from or
additional to, and inconsistent or in conflict with, those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such
14
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 6.5 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonably
time after notice of commencement of the action, or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party, and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii). No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnify could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are subject matter of
such action.
(d) If the indemnification provided for in this Section 6.5 is
unavailable or insufficient to hold harmless an indemnified party (including for
purposes of this Section 6.5(d) any Indemnified Party referred to in Section
6.5(a)) under subsections (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to in subsections (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and the indemnified party on the other in connection with the
statement or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
such Purchaser or such other indemnified party, as the case may be, on the
other, and the parties' relevant intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding any other provision of this
Section 6.5(d), the Purchasers shall not be required to contribute any amount in
excess of the amount by which the net proceeds received by such Purchasers from
the sale of the Registrable Securities pursuant to the Registration Statement
exceeds the amount of damages which such Purchasers have otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any, who
controls such indemnified party within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as such indemnified
party and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.
15
(e) The agreements contained in this Section 6.5 shall survive
the sale of the Registrable Securities pursuant to the Registration Statement
and shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
indemnified party.
Section 6.6 Rule 144. The Company shall file the reports required to be
filed by it under the Securities Act and the Exchange Act in a timely manner and
it will take such further action as any Purchaser shall reasonably request to
enable such holder to sell such securities without registration, including,
without limitation, making publicly available the information necessary to
permit sales of their securities pursuant to Rule 144. Notwithstanding the
foregoing, nothing in this Section 6.6 shall be deemed to require the Company to
register any of its securities pursuant to the Exchange Act.
Section 6.7 Transfer of Registrable Securities After Registration. Each
of the Purchasers agrees that it will not effect any disposition of the
Registrable Securities or its right to purchase the Shares that would constitute
a sale within the meaning of the Securities Act except as contemplated in the
Registration Statement referred to in Section 6.1 or as otherwise in compliance
with applicable securities laws and that it will promptly notify the Company of
any changes in the information set forth in the Registration Statement regarding
such Purchaser or its plan of distribution by delivering to the Company an
amended Registration Statement Questionnaire.
Section 6.8 Information Available. So long as the Registration
Statement is effective covering the resale of Registrable Securities owned by a
Purchaser, the Company will furnish to such Purchaser (unless such document has
been filed and is available on the Commission's XXXXX database):
(a) as soon as practicable after available, one copy of (i)
its Annual Report to Shareholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting principles
by a firm of certified public accountants), (ii) if not included in substance in
the Annual Report to Shareholders, its Annual Report on Form 10-K, (iii) if not
included in substance in its Quarterly Reports to Shareholders, its quarterly
reports on Form 10-Q, (iv) its Current Reports on Form 8-K, and (v) a full copy
of the particular Registration Statement covering the Registrable Securities
(the foregoing, in each case, excluding exhibits);
(b) upon the reasonable request of the Purchaser, all exhibits
excluded by the parenthetical to subparagraph (a)(v) of this Section 6.8; and
(c) upon the reasonable request of the Purchaser, an adequate
number of copies of the prospectuses to supply to any other party requiring such
prospectuses;
and the Company, upon the reasonable request of such Purchaser, will meet with
such Purchaser or a representative thereof at the Company's headquarters to
discuss all information relevant for disclosure in the Registration Statement
and will otherwise cooperate with any Purchaser conducting an investigation for
the purpose of reducing or eliminating such Purchaser's exposure
16
to liability under the Securities Act, including the reasonable production of
information at the Company's headquarters. Each Purchaser agrees to keep all
such information confidential.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier postage prepaid, and shall be deemed given when so mailed and shall be
delivered as addressed as follows:
(a) if to the Company, to:
Westport Resources Corporation
0000 Xxxxxxxx Xxxxxx, Xxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, General Counsel
with a copy so mailed to:
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, P.C.
Facsimile: 214-969-4343
or to such other person at such other place as the Company shall designate to
the Purchasers in writing; and
(b) if to the Purchasers:
c/o Wellington Management Company, LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xx Xxxxx
Facsimile: 000-000-0000
with a copy so mailed to:
See attached Exhibit B
or to such other person at such other place as any Purchaser shall designate to
the Company in writing.
Section 7.2 Changes. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and each of
the Purchasers.
17
Section 7.3 Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
Section 7.4 Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
Section 7.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Nevada and the federal law
of the United States of America.
Section 7.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
[SIGNATURE PAGES FOLLOW]
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
WESTPORT RESOURCES CORPORATION
By: /s/ XXX XXXXXX
--------------------------------------
Name: Xxx XxXxxx
Title: Vice President and
Chief Financial Officer
Appendix - II
SPINDRIFT PARTNERS, L.P.
Wellington Management Company, LLP
as investment adviser
By: /s/ XXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and Counsel
SPINDRIFT INVESTORS (BERMUDA) L.P.
Wellington Management Company, LLP
as investment adviser
By: /s/ XXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and Counsel
GLOBAL NATURAL RESOURCES III
Wellington Management Company, LLP
as investment adviser
By: /s/ XXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and Counsel
GLOBAL NATURAL RESOURCES III L.P.
Wellington Management Company, LLP
as investment adviser
By: /s/ XXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and Counsel
Appendix - II