MEMORANDUM OF UNDERSTANDING
Exhibit
99.4
This
Memorandum Of
Understanding (the "MOU") is entered into this
30th day of November, 2009 by and among Triangle Petroleum Corporation (“Triangle”), a Nevada
corporation, with offices at Xxxxx 0000, 000-0xx Xxxxxx XX, Xxxxxxx,
Xxxxxxx, Xxxxxx X0X 0X0, and Palo Alto Global Energy Master Fund,
L.P. (“Palo
Alto”), with offices at 000 Xxxxxxxxxx Xxxxxx, Xxxx Xxxx,
XX 00000, and Xxxx
Xxxxxxxxx, of the City of Vancouver, British Columbia.
RECITALS
WHEREAS, Triangle is a
publicly traded oil and gas exploration company;
WHEREAS, Palo Alto, by itself
and through affiliated investment funds, beneficially owns approximately 21.22%
of Triangle’s common stock;
WHEREAS, Triangle and Palo
Alto wish to restructure the Board of Directors (“Board”) and management of
Triangle;
WHEREAS, Triangle and Palo
Alto wish to provide for a change in principle strategic direction to pursue
unconventional basins in North America and Canada, which Triangle intends to
support by an appropriate capital raise within the next 12 months;
and
WHEREAS, the parties hereto
desire to memorialize their understanding relating to the proposed restructuring
contemplated hereby.
THEREFORE, in consideration of
the foregoing, the parties hereby agree to the following:
Section 1. Change in
Management. On November 30,
2009: Xxxx Xxxxxxxxx agrees to resign with immediate effect as Chief
Executive Officer and any other officer position of Triangle and its operating
subsidiaries; and the New Board (as defined below) will appoint Xxxxx Xxxx as
the new Chief Executive Officer of Triangle effective
immediately. Xx. Xxxx’x resume is attached hereto as Exhibit
A.
Section 2. Change in
Board. On November 30,
2009: Xxxx Xxxxxxxxx and Xxxxx Xxxxxxxx will resign as directors of
Triangle with immediate effect; and the Board will increase the number of
members of the Board from four to five and appoint Xxxxx Xxxx, Xxxxxxx Xxxxxx
and Xxxxxxxx Xxxxxxx as directors effective immediately (the Board, as so
reconstituted, the “New Board”). The New Board will appoint a
Chairman of the Board. Messrs. Xxxxxx and Xxxxxxx’ resumes and/or
curriculum vitae are also attached hereto as Exhibit
A.
Section 3. Separation
Agreement. Triangle will
enter into, and the New Board will ratify, a separation agreement (the
“Separation Agreement”) with Xx. Xxxxxxxxx pursuant to Section 1
hereof. The Separation Agreement will: (i) contain, among other
things, indemnification for actions taken by Xx. Xxxxxxxxx prior to his
resignation; (ii) provide for the canceling of the 2005 stock options and the
immediate vesting of the 2009 stock options granted to Xx. Xxxxxxxxx, which 2009
stock options shall be exercisable for a period of 12 months from the date of
the Separation Agreement; and (iii) provide that Xx. Xxxxxxxxx will receive a
payment equal to 12 month’s salary in lieu of any other severance provisions of
his employment agreement with Triangle or its subsidiaries.
Section 4. Release
of Escrow Shares. Upon the
resignation or removal of any current officer or director, Triangle will assist
such officer and/or director in obtaining the immediate release of any shares of
Triangle common stock currently held in escrow by the TSX Venture
Exchange.
Section 5. Compensation
of New Officer and Directors. Triangle will
enter into, and the New Board will ratify, an employment agreement with Xx. Xxxx
providing for annual compensation substantially similar to that received by Xx.
Xxxxxxxxx. In addition, the New Board will grant stock options to
Messrs. Xxxxxx and Xxxxxxx for serving on the Board substantially
similar to that received by the current Board members.
Section 6. Publicity. No later than one
business day after the resignations and appointments pursuant to Sections 1 and
2 hereof, Triangle shall issue a press release relating to the restructuring
pursuant to this MOU, in a form reasonably acceptable to all parties
hereto. In addition, Triangle shall file a Current Report on Form 8-K
with the Securities and Exchange Commission (and any required filings with the
TSX Venture Exchange and Canadian securities regulators) no later than two
business days after the resignations and appointments pursuant to Sections 1 and
2 hereof, in a form reasonably acceptable to all parties hereto.
Section
7. Strategic
Direction and Opportunities. Over the next 12
months following the date hereof, the New Board intends to consider the
following matters:
(a) the
location of the principal place of business and other offices of
Triangle;
(b) changes
in the strategic direction of Triangle and pursuit of opportunities and
operations with respect to oil and gas rights in unconventional basins in North
America and Canada; and
(c) the
raising of additional capital for Triangle, including without limitation through
a rights offering or another form of equity offering.
Section 8. Binding
Agreement. This MOU is a
binding agreement on each of the parties hereto, and their successors and
permitted assigns.
Section 9. Costs and
Expenses. Each party hereto
will bear its own legal fees and other costs and expenses incurred in connection
with the negotiation, execution and consummation of the transactions
contemplated hereby.
Section 10. Waiver
and Amendment. This MOU may not
be changed, waived or modified except by a written instrument signed by each of
the parties hereto.
Section 11. Governing
Law. This Agreement
and the rights and duties of the parties hereto shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws.
Section 12. Further
Assurances. The parties
hereto shall execute and deliver such further documents (including without
limitation TSX Venture Exchange filings related to the approval of the directors
and officers appointed pursuant to Sections 1 and 2 of this Agreement) and do
such further acts as any party hereto shall reasonably request in order to
assure and confirm to the parties hereto the rights hereby created or to
facilitate the full performance of the terms of this MOU.
Section 13. Entire
Understanding; No Third-Party Beneficiaries. This MOU (a) constitutes the
entire understanding and supersedes all prior agreements and understandings,
both written and oral, among the parties hereto relating to the subject matter
hereof, and (b) is not intended to confer upon any person other than the parties
hereto any rights (legal, equitable or otherwise) or remedies, whether as
third-party beneficiaries or otherwise.
Section 14. Counterparts. This MOU may be
executed in as many counterparts as may be deemed necessary or convenient, each
of which, when so executed, shall be deemed an original, but all of which shall
constitute one and the same instrument.
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IN WITNESS
WHEREOF, the
parties hereto have caused this Memorandum Of Understanding to be executed as of
the date first written above.
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TRIANGLE
PETROLUEM CORPORATION
/s/ XXXX XXXXXXXXX
By:
Xxxx Xxxxxxxxx
Its:
Chief Executive Officer
/s/ XXXX XXXXXXXXX
Xxxx
Xxxxxxxxx
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PALO
ALTO GLOBAL ENERGY MASTER FUND, L.P.
/s/ XXXX XXXXXX
By:
PALO ALTO INVESTORS, LLC, General Partner
By:
PALO ALTO INVESTORS, INC., Manager
By:
Xxxx Xxxxxx, Chief Operating
Officer
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