SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT dated as of November 6, 1998 by
and between (a) XCL Land, Ltd. ("XCL Land"), a company
organized under the laws of the State of Delaware and a
wholly owned subsidiary of XCL Ltd., (b) XCL Ltd., a
Delaware company and (c) the other parties to this Agreement
named on the signature page hereof (collectively, the
"Subscriber").
XCL Land, XCL Ltd. and the Subscriber, each in reliance
upon the representations, warranties and covenants contained
in this Agreement, agree as follows with respect to the
issuance and sale by XCL Land and the purchase by the
Subscriber of the number of units (the "Units") which the
Subscriber has inserted in Section 13 hereof at the purchase
price set forth by the Subscriber in Section 13 hereof, each
Unit being comprised of (a) $100,000 in principal amount of
a promissory note of XCL Land ("Note"); and (b) 21,705
warrants ("Warrants") to purchase 21,705 shares of XCL
Ltd.'s common stock, par value $.01 per share ("Common
Stock"), at $3.50 per share (subject to adjustment).
1. Sale and Purchase of Units. This Agreement is
being executed and delivered in connection with the sale and
purchase of up to an aggregate of 62 Units (issuable in two
tranches) offered by XCL Land and XCL Ltd. to a limited
number of qualified investors (the "Offering"). By
executing and delivering this Agreement, the Subscriber
hereby irrevocably agrees to subscribe for the number of
Units, and at the purchase price, which the Subscriber has
set forth in Section 13 hereof, subject to the terms and
conditions contained in this Agreement. The purchase and
sale of the Units listed in Section 13 hereof shall take
place at a closing (the "Initial Closing") commencing at
10:00 a.m., Central Daylight Time, on November 6, 1998 at
the offices of Xxxxxx, Arata, McCollam, Xxxxxxxxx & Xxxxx,
L.L.P. or on such other date and at such other time and
place as shall be mutually agreed upon by the parties
hereto. The date on which the Initial Closing occurs is
referred to herein as the "Closing Date". The purchase and
sale of such Units shall be subject to the following terms
and conditions.
(1) At closing, the Subscriber shall wire
transfer, or shall cause to be wire transferred, immediately
available United States Funds to Bank One, Louisiana, ABA
Number: 065-400137, Account Number: 711-0000000 for the
account of XCL Land, Ltd. in payment of the purchase price
for the Units. As used herein the term "United States
Funds" shall mean the freely transferable or external
currency of the United States of America.
(2) Payment of the purchase price of the Units
shall be deemed by XCL Land and XCL Ltd. to constitute a
confirmation by the Subscriber of the accuracy and
completeness of its representations and warranties set forth
herein as of the date such payment is made.
(3) Simultaneously with the Subscriber's
subscription payment for the Units, XCL Land shall issue and
deliver, or cause to be issued and delivered to the
Subscriber a promissory note substantially in the form set
forth as Schedule I evidencing the aggregate principal
amount of all Notes subscribed for, and XCL Ltd. shall issue
and deliver, or cause to be issued and delivered, a single
certificate representing the Warrants, in each case
registered in the name of the Subscriber and bearing a
suitably conformed version of the legend set forth in
subsection 4(e) hereof.
(4) XCL Land reserves the unilateral right to
withdraw, cancel or modify the Offering and to reject, in
whole or in part, any subscription for Units, which need not
be accepted in the order received. In the event the
Offering is withdrawn, cancelled or modified, prior to the
issuance of the Units, XCL Land shall notify the Subscriber
and give it the opportunity to cancel its subscription and
shall return to the Subscriber its subscription moneys
(without interest) and the original copies of all
subscription materials.
2. Commitment to Subscribe for Additional Units.
In addition to Subscriber's subscription to the number of
Units set forth in Section 13 hereof, Subscriber hereby
agrees to subscribe for an additional number of Units up to
the number specified in Section 13 on the same terms and
conditions as set forth herein upon written request by XCL
Land at any time before December 31, 1998. The closing of
such transaction shall be held on the date and at the place
reasonably designated by XCL Land.
3. Representations and Warranties by XCL Land and
XCL Ltd. XCL Land and XCL Ltd. hereby represent and warrant
to the Subscriber that, except as set forth in the
Preliminary Prospectus (a copy of which is attached hereto
as Exhibit "A") (the "Preliminary Prospectus") filed by XCL
Ltd. with the Securities and Exchange Commission on October
23, 1998 as part of Amendment No. 2 to a Registration
Statement on Form S-1 registering certain securities of XCL
Ltd. described therein (which the parties hereto acknowledge
is subject to further amendment):
(1) Organization and Good Standing. XCL Land
and XCL Ltd. each is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its organization, has corporate power and
authority to carry on its business as now being conducted
and is not required to qualify to do business as a foreign
corporation in any other jurisdiction where the failure so
to qualify would have a material adverse effect on the
business or assets of XCL Land or XCL Ltd. and its
subsidiaries, taken as a whole.
(2) Capitalization. XCL Ltd.'s authorized
capital stock consists of 500,000,000 shares of Common
Stock, par value $0.01 per share of which 22,926,333 shares
of Common Stock were validly issued and outstanding as of
September 30, 1998 excluding 69,471 shares held in treasury,
and are fully paid and non-assessable, and 2,400,000 shares
of preferred stock, par value $1.00 per share, 70,000 of
which have been designated Amended Series B, Cumulative
Converted Preferred Stock with 48,405 of such shares
outstanding as of September 30, 1998 and 2,085,000 of which
have been designated Amended Series A, Cumulative
Convertible Preferred Stock with 1,181,614 of such shares
outstanding as of September 30, 1998. The Warrants, when
executed and delivered on behalf of XCL Ltd. and issued and
sold as set forth in this Agreement and the Warrant
Agreement annexed hereto as Schedule II, will have been duly
executed, issued and delivered and will be valid and legally
binding obligations of XCL Ltd. and the shares of Common
Stock issuable upon exercise of the Warrants ("Warrant
Stock") will, following such exercise in the manner provided
for in the Warrant Agreement, be duly authorized, validly
issued, fully paid and non-assessable.
(3) Corporate Authority. XCL Land and XCL
Ltd. each has full power and authority to enter into this
Agreement, and, as to XCL Ltd., the Warrant Agreement, and
to issue, sell and deliver the Warrants and Warrant Stock
and to incur and perform the obligations provided for herein
and under the Warrant Agreement and, as to XCL Land, the
Notes, which have been or will be duly authorized by all
necessary corporate or other action of XCL Land (as to this
Agreement and the Notes) and XCL Ltd. (as to this Agreement
and the Warrant Agreement). The execution, delivery and
performance of this Agreement, the Warrant Agreement and the
Notes and the issuance and sale of the Warrants, Warrant
Stock and Notes to the Subscriber, in the manner
contemplated by this Agreement, the Warrant Agreement and
the Notes, do not require the approval or consent of the
stockholders of XCL Land or XCL Ltd. or other holders of
securities or indebtedness of XCL Land or XCL Ltd. (other
than as has been obtained), do not violate any provision of
any law of the United States, or the Certificate of
Incorporation or By-Laws of XCL Land or XCL Ltd., or any
material agreement or instrument by which XCL Land or XCL
Ltd., or any of its properties are bound and (except as
contemplated thereunder) will not result in the creation of
any encumbrance or charge upon any asset of XCL Land or XCL
Ltd. This Agreement, the Warrant Agreement, and the Notes
constitute valid and binding obligations of XCL Land or XCL
Ltd. (as appropriate) in accordance with their terms.
(4) Governmental Consents. All consents,
authorizations and approvals (if any) of any governmental
agency or other regulatory body within the United States
required by XCL Land or XCL Ltd. for the execution and
delivery of this Agreement, the Warrant Agreement, and Notes
and the issuance of the Warrants and Notes in the manner
contemplated in the Warrant Agreement and this Agreement,
respectively, and the performance of its obligations
hereunder and thereunder have been or, in the case of
certain state securities regulatory agencies with
jurisdiction, will be obtained.
(5) Financial Statements. Attached as
Exhibits "B" and "C" are the audited financial statements
of XCL Ltd. and its consolidated subsidiaries for the fiscal
year ended December 31, 1997 and the unaudited financial
statements of XCL Ltd. and its consolidated subsidiaries for
the six-month period ended June 30, 1998, respectively.
Such financial statements present fairly the financial
position of XCL Land and XCL Ltd. on the dates and for the
periods specified therein in all material respects.
(6) Absence of Certain Material Changes and
Events. Since June 30, 1998, there has been no material
adverse change in the financial condition, assets,
liabilities or business of XCL Land and its subsidiaries,
taken as a whole or of XCL Ltd. and its subsidiaries, taken
as a whole.
(7) Contracts. Except as set forth in the
Preliminary Prospectus, neither XCL Land nor XCL Ltd. is in
material violation of or in material default under any
material contract to which it is a party or by which it is
bound. To the best of the knowledge of XCL Land and XCL
Ltd., all such contracts are valid and effective in
accordance with their terms and XCL Land and XCL Ltd. know
of no material default by any third party that would
materially impair its ability to perform hereunder or XCL
Land's ability to perform under the Notes.
(8) Litigation. There is no material
litigation, proceeding or investigation of any nature
pending or, to the knowledge of XCL Land or XCL Ltd.,
threatened against or relating to XCL Land or XCL Ltd. or
any of its properties or business. Neither XCL Land nor XCL
Ltd. is subject to any judgment, decree or order of any
court or any other governmental or administrative body or
agency. There is no action pending, or, to the best of XCL
Land's or XCL Ltd.'s knowledge, threatened against XCL Land,
XCL Ltd. or any of their respective subsidiaries which
either (a) involves the transactions contemplated by this
Agreement or (b) is likely to have a material adverse effect
on the ability of XCL Land to perform its obligations under
this Agreement or the Notes or on the ability of XCL Ltd. to
perform its obligations under this Agreement or the Warrant
Agreement.
(9) Absence of Undisclosed Liabilities. To
the best knowledge of XCL Land and XCL Ltd., none of XCL
Land, XCL Ltd. or any of their respective subsidiaries has
any material liabilities or obligations (whether accrued,
absolute, contingent or otherwise) exclusive of those (1)
arising hereunder or under the Warrant Agreement and Notes,
(2) described herein or in the Schedules hereto, (3)
reflected in the financial statements referred to in
paragraph (e) of this Section 3 or the Preliminary
Prospectus or (4) liabilities and obligations arising under
its leases and under contracts relating to the exploration,
operations, production and sales of hydrocarbons from those
leases, which, in the aggregate, are in general conformance
with industry practice and standards.
(10) Preliminary Prospectus. The Preliminary
Prospectus does not contain any untrue statement of a
material fact nor does it omit to state a material fact
necessary in order to make the statements contained therein
not misleading.
(11) Compliance with Laws. Each of XCL Land,
XCL Ltd. and their respective subsidiaries has all required
governmental approvals, authorizations, consents, licenses,
orders, registrations and permits necessary for the
operation of its business as presently conducted and the
absence of which would have a material adverse effect.
(12) Labor Matters.
(1) None of XCL Land, XCL Ltd. or their
respective subsidiaries has entered into any collective
bargaining agreement and, to the best of the knowledge of
XCL Land and XCL Ltd., no labor union or similar
organization or any representative thereof has made any
attempt to organize or represent employees of any of XCL
Land, XCL Ltd. or their respective subsidiaries.
(2) To the best knowledge of XCL Land and
XCL Ltd., there are no controversies pending or threatened
between any of XCL Land, XCL Ltd. or their respective
subsidiaries, on the one hand, and its employees or any
contractor or subcontractor thereof which reasonably would
be expected to have a material adverse effect.
(13) Taxes. Each of XCL Land and XCL Ltd.
have filed all tax returns required to be filed by law and
has paid all taxes shown thereon to be due, including
interest and penalties. Neither XCL Land or XCL Ltd. is a
party to any action or proceeding by any governmental
authority for the assessment or collection of taxes, nor has
any claim for assessment or collection of taxes been
asserted against either XCL Land or XCL Ltd., except for a
pending Louisiana income and franchise tax case described in
the Preliminary Prospectus. There is no audit pending of
any tax return filed by either XCL Land or XCL Ltd. or with
respect to any consolidated group of which either XCL Land
or XCL Ltd. was a member in the applicable year, although
notices of proposed deficiencies are outstanding as
described in the Preliminary Prospectus.
(14) Title to Property. XCL Land, XCL Ltd.
and their respective subsidiaries have good and valid title
to all their plants, structures and equipment and such
plants, structures and equipment are in good operating
condition and repair, except where a defect in title or the
failure of such plants, structures and equipment to be in
such good operating condition and repair would not,
individually or in the aggregate, have a material adverse
effect.
(15) Environmental Matters.
(A) For purposes of this Agreement,
(x) "Environmental Laws" shall mean any
federal, state, local or common law or any foreign law, and
any rules and regulations under any thereof, relating to (I)
releases or threatened releases of Hazardous Substances or
materials containing Hazardous Substances, (II) the
manufacture, handling, transport, import, export, use,
treatment, storage or disposal of Hazardous Substances or
materials containing Hazardous Substances or (III) otherwise
relating to pollution of the environment or the protection
of human health; and
(y) "Hazardous Substances" shall mean (I)
substances which are or which contain substances defined in
or regulated as hazardous under the following federal
statutes and their state counterparts, as well as any
similar foreign statutes and each such statute's
implementing regulations as amended from time to time; the
Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the
Clean Water Act, and Safe Drinking Water Act, the Atomic
Energy Act, the Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, the Federal
Food, Drug and Cosmetics Act and the Clean Air Act, (II)
petroleum and petroleum products including crude oil and any
fractions thereof, (III) natural gas, synthetic gas and any
mixtures thereof, (IV) radon, (V) any other contaminant and
(VI) any substances with respect to which a federal, state,
local or foreign agency requires environmental
investigation, monitoring, reporting or remediation.
(B) (x) Each of XCL Land and XCL Ltd. have
obtained or caused to have been obtained all material
permits, licenses and other authorizations which are
required under Environmental Laws relating to the oil and
gas properties and leases and other assets of XCL Land and
XCL Ltd. and their respective subsidiaries (collectively,
the "Environmental Assets");
(y) XCL Land, XCL Ltd. and their
respective subsidiaries and the Environmental Assets are in
compliance in all material respects with all Environmental
Laws and all terms and conditions of such permits, licenses
and authorizations; and
(z) None of XCL Land, XCL Ltd. or their
respective subsidiaries has received written notice of (I)
any material claims of present or past non-compliance with
Environmental Laws, (II) any material claims against them
for damages, fines, penalties, environmental investigation
or remediation, or administrative, injunctive or other
relief arising under Environmental Laws or (III) other than
in connection with the XxXxxxx litigation as described in
the Preliminary Prospectus, any past, present or future
events, conditions, circumstances, activities, practices,
incidents, actions or plans which are reasonably likely to
interfere with or prevent continued compliance, or which are
reasonably likely to give rise to any material liability, or
otherwise form the basis of any material claim, action,
suit, proceeding, hearing or investigation arising under
Environmental Laws.
4. Representations, Warranties and Agreements by
the Subscriber. The Subscriber hereby represents and
warrants to and agrees with XCL Land and XCL Ltd. as
follows:
(1) Preliminary Prospectus. The Subscriber
hereby acknowledges to XCL Land and XCL Ltd. that (i) any
estimates, plans, projections etc. which are incorporated in
the Preliminary Prospectus or which have been furnished to
it with respect to the activities undertaken originally or
to be undertaken by XCL Land or XCL Ltd. are based on
certain assumptions made by XCL Land and XCL Ltd. regarding
such factors as estimated values of the properties, prices
of oil and gas, future revenues, proved, probable and
potential reserve values, degrees of success of disposition
transactions and exploration and development activities and
other factors, (ii) actual experience may vary from such
assumptions, (iii) such estimates, plans and projections may
never be achieved, (iv) the Subscriber has not relied upon
the achievement of any such estimates and projections in
making its investment decision to acquire the Units, (v) the
Subscriber has carefully reviewed the Preliminary Prospectus
and the Exhibits thereto, in particular, the "Risk Factors"
section thereof, and (vi) the Subscriber is aware of the
current conditions existing in the United States and
international oil and gas industry which affect the business
of XCL Land and XCL Ltd.
(2) Independent Investigation. The Subscriber
has relied solely upon the independent investigations made
by it and its representatives in making a decision to
purchase the Units and has a full understanding and
appreciation of the risks inherent in such a speculative
investment. In connection with such investigation, the
Subscriber and its attorneys, accountants and other
representatives and advisers, if any, (i) have been given an
opportunity to ask, and have to the extent the Subscriber
considered necessary, asked questions of, and have received
answers from, officers of XCL Land and XCL Ltd. concerning
the terms of the Offering and the affairs of XCL Land and
XCL Ltd. and its proposed activities and (ii) have been
given or afforded access to all documents, records, books
and additional information which the Subscriber has
requested regarding such matters.
(3) Unregistered Shares. The Subscriber
recognizes that the offer and sale by XCL Land and XCL Ltd.
of the Notes and the Warrants (and Warrant Stock) and the
offer and sale of the Units have not been and (except to
the extent set forth herein and in the Warrant Agreement)
will not be registered under the United States Securities
Act of 1933, as amended (the "Act"), and have not been and
will not be registered under any other applicable domestic
or foreign securities laws (the Act and any such other
applicable securities laws are hereinafter collectively
referred to herein as the "Securities Laws") in reliance
upon exemptions from the registration requirements thereof;
the Subscriber is acquiring the Units and the Notes,
Warrants, and Warrant Stock (collectively referred to herein
as the "Securities") solely for its account for investment
and not with a view to, or for offer or resale in connection
with, a distribution thereof in violation of any Securities
Laws; the investment will not constitute more than one fifth
of the Subscriber's consolidated net worth; and the
Subscriber is either (a) a "qualified institutional buyer"
(as defined in Rule 144A promulgated under the Act) or
(b) an institutional "accredited investor" (as defined in
Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) promulgated
under the Act). The Subscriber hereby covenants and agrees
that it will not sell the Units or any of the Securities
until such time as XCL Ltd. or XCL Land, as applicable, has
effectively registered such securities under the Act or
counsel reasonably acceptable to XCL Ltd. or XCL Land, as
applicable (which shall include in-house counsel) shall have
furnished an opinion, in form and substance reasonably
acceptable to XCL Ltd. or XCL Land, as applicable, to the
effect that the transaction contemplated by Subscriber would
be in compliance with the Act. The Subscriber understands
that the effect of such representation and warranty is that
the Units and Securities must be held unless the sale or
transfer thereof is subsequently registered under the
Securities Laws or an exemption from such registration is
available at the time of any proposed sale or other transfer
thereof. Except to the extent hereinafter set forth and in
the Warrant Agreement neither XCL Land nor XCL Ltd. is under
any obligation either to file a registration statement under
the Act covering the sale or transfer of such securities or
otherwise to register such securities for sale under the
Securities Laws. The Subscriber is familiar with, or has
been advised by its counsel regarding, (i) the applicable
limitations upon the resales of the Units and the
Securities, (ii) the circumstances under which the
Subscriber is required to hold such securities and (iii) the
limitations upon the transfer or other disposition thereof.
The Subscriber is either (a) a "qualified institutional
buyer" (as defined in Rule 144A promulgated under the
Securities Act) or (b) an institutional "accredited
institutional buyer" (as defined in Rule 501(a)(1), (a)(2),
(a)(3), (a)(7) or (a)(8) under the Securities Act). The
Subscriber acknowledges that XCL Land and XCL Ltd. are and
will be relying upon the truth and accuracy of the foregoing
representations and warranties in offering and selling the
Units and the Securities to the Subscriber without first
registering them under the Securities Laws.
(4) Transfer Conditions. Except as to any
Securities that (i) are then effectively registered under
the Act, or (ii) are represented by certificates that, with
the consent of XCL Ltd. or XCL Land, as applicable, no
longer bear restrictive legends and are otherwise freely
tradeable under the Act, prior to any sale, transfer or
other disposition of any of the Subscriber's Units and the
Securities the Subscriber agrees to give at least three days
prior written notice to XCL Ltd. or XCL Land, as applicable,
of its intention to effect such transfer and to comply in
all other respects with this subsection 4(d). Each such
notice shall describe the identity of the transferee and the
manner and circumstances of the proposed transfer in
sufficient detail to enable counsel to render the opinions
required herein, and shall be accompanied by an opinion of
counsel acceptable to XCL Ltd. or XCL Land, as applicable,
addressed to XCL Ltd. or XCL Land, as applicable, and
satisfactory in form and substance to XCL Ltd. or XCL Land,
as applicable, stating that, in the opinion of such counsel,
such transfer will be a transaction exempt from registration
under the Securities Laws and that all consents, approvals
or authorizations to such transfer have been obtained.
Assuming the receipt by XCL Ltd. or XCL Land, as applicable,
of such satisfactory opinion, the Subscriber shall thereupon
be entitled to transfer such shares in accordance with the
terms of the notice delivered by the Subscriber to XCL Ltd.
or XCL Land, as applicable, and this Agreement. Each
certificate or other document issued representing the
Securities shall bear the legend set forth in subsection
4(e) hereof, suitably conformed, unless, in the opinion of
the respective counsel for the Subscriber and XCL Ltd. or
XCL Land, as applicable, such legend is not required in
order to aid in assuring compliance with applicable
Securities Laws.
The Subscriber agrees that it will not sell,
transfer or otherwise dispose of any of its Units or
Securities, and XCL Land and XCL Ltd. will not be required
to recognize any such sale, transfer or disposition, unless
such sale, transfer or disposition complies with this
subsection 4(d).
(5) Restrictive Legends and Stop Order. In
addition to any specific restrictive legends that may be
required by applicable Securities Laws or agreements to
which the Subscriber may be a party, as to any Securities
that are not effectively registered under the Act, the
Subscriber agrees to be bound by a restrictive legend in
substantially the following form which may be placed on the
certificates or other documents representing the Securities:
THE SECURITIES [NOTE] REPRESENTED BY
THIS [INSTRUMENT] [CERTIFICATE] HAVE
[HAS] NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE SECURITIES OR BLUE SKY LAWS OF
ANY OTHER DOMESTIC OR FOREIGN
JURISDICTION. SUCH SECURITIES [NOTE]
MAY NOT BE SOLD, OFFERED FOR SALE, OR
OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH SUCH LAWS AND THE RULES
AND REGULATIONS PROMULGATED THEREUNDER.
SUCH SECURITIES [NOTE] ARE [IS] ALSO
SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER CONTAINED IN THAT CERTAIN
SUBSCRIPTION AGREEMENT DATED AS OF
NOVEMBER 6, 1998 BETWEEN THE ISSUER AND
THE INITIAL HOLDER OF THE SECURITIES
[NOTE] NAMED THEREIN. A COPY OF SUCH
AGREEMENT IS AVAILABLE FOR INSPECTION AT
THE PRINCIPAL OFFICE OF THE ISSUER AND
WILL BE FURNISHED WITHOUT CHARGE TO THE
HOLDER THEREOF UPON WRITTEN REQUEST TO
THE SECRETARY OF THE ISSUER AND THE
HOLDER OF THE SECURITIES [NOTE] AGREES
TO BE BOUND THEREBY.
The Subscriber understands and agrees that XCL
Land or XCL Ltd., as applicable, may place and instruct any
transfer agent for the Securities, to place a stop transfer
notation in the records in respect of the certificates
representing such securities, provided that such securities
may be transferred upon compliance with the provisions of
this Section 4.
(6) Notes are Obligations of XCL Land Only.
IT IS EXPRESSLY UNDERSTOOD AND AGREED BY SUBSCRIBER THAT THE
NOTE IS INDEBTEDNESS OF XCL LAND AND NOT INDEBTEDNESS OF ANY
OF ITS AFFILIATES, INCLUDING BUT NOT LIMITED TO XCL LTD. OR
XCL-CHINA LTD., AND SUBSCRIBER HEREBY EXPRESSLY ACKNOWLEDGES
AND AGREES THAT EXCEPT WITH RESPECT TO THE SECURITY
INTERESTS GRANTED TO IT PURSUANT TO THE SECURITY AGREEMENTS
DESCRIBED IN SECTION 6(c)(iii) HEREOF, IT SHALL HAVE NO
RECOURSE AGAINST ANY OF XCL LAND'S AFFILIATES, INCLUDING BUT
NOT LIMITED TO XCL LTD. OR XCL-CHINA LTD., OR ANY OF THEIR
ASSETS AND THAT SUBSCRIBER SHALL LOOK SOLELY TO XCL LAND,
ITS ASSETS AND THE COLLATERAL IN WHICH A SECURITY INTEREST
HAS BEEN GRANTED BY THE SECURITY AGREEMENTS DESCRIBED IN
SECTION 6(c)(iii) HEREOF, FOR REPAYMENT OF ANY AND ALL
AMOUNTS DUE UNDER THE NOTE.
5. Tax Advisor. Subscriber acknowledges that XCL
Land has advised Subscriber that Subscriber should consult
with its own tax advisor as to the possible tax consequences
of original issue discount for federal income tax purposes.
6. Survival of Representations and Warranties. The
representations and warranties of XCL Land and XCL Ltd. set
forth in this Agreement or in any certificate or other
document or instrument furnished to the Subscriber by or on
behalf of XCL Land and XCL Ltd. in connection with the
transactions contemplated hereby, which shall be deemed to
be effective as of the date made, and the representations
and warranties of the Subscriber set forth in Section 4
shall survive the execution, delivery and termination of
this Agreement and the consummation of the transactions
contemplated hereby.
7. Conditions Precedent to Obligations of
Subscriber.
(1) Representations True at Closing;
Performance. The representations and warranties of XCL Land
and XCL Ltd. contained in Section 3 hereof shall be deemed
to have been made again at and as of the Closing Date, and
shall then be true and correct in all material respects, and
XCL Land and XCL Ltd. shall have performed and complied in
all material respects with all agreements and conditions
required by this Agreement to be performed or complied with
by it on or before the Closing Date.
(2) Legal Opinions. The Subscriber shall have
received opinion of counsel, dated the Closing Date, from
Xxxxxx, Arata, McCollam, Xxxxxxxxx & Xxxxx, L.L.P., in
substantially the form attached as Exhibit "D".
(3) Units. There shall have been delivered to
the Subscriber the following instruments and documents
evidencing the Units subscribed for by the Subscriber:
(1) a promissory note evidencing the
aggregate principal amount of all Notes so subscribed for;
(2) a certificate representing the
aggregate number of Warrants included as a component of such
Units; and
(3) two fully executed Security
Agreements substantially in the form attached as Exhibit
"E", one executed by XCL Land and one executed by The
Exploration Company of Louisiana, Inc., granting a security
interest in that percentage of such entity's partnership
interest in X.X. Holding Associates, L.P., a Louisiana
Partnership in Commendam, that is equal to the number of
Units subscribed to in Section 13 hereof (and not including
any Units Subscriber has agreed to subscribe to in Section 2
hereof upon the written request of XCL Land) times 3.2258
and two related Louisiana UCC-1 Financing Statements.
(4) No Withdrawal, Cancellation or
Modification. XCL Land or XCL Ltd. shall not have withdrawn,
canceled or modified the Offering, and shall have taken such
action as is contemplated thereby.
(5) Minimum Subscriptions. XCL Land and XCL
Ltd. shall have obtained executed agreements in
substantially the form hereof constituting subscriptions for
such number of Units which, when aggregated with the Units
subscribed for by the Subscriber hereunder, equal at least
31 Units (not including any Units with respect to which
Subscribers have agreed to subscribe to upon the written
request of XCL Land).
(6) Certificates. XCL Land and XCL Ltd. shall
deliver other customary closing certificates.
8. Notices. Any notice, claim, request, demand or
other communication required or permitted to be given under
this Agreement shall be given in writing and shall be deemed
to have been duly given if delivered or mailed, first class
postage prepaid, to the party for whom intended at the
following addresses:
The Subscriber
The address set forth on the signature page hereof
XCL Land
or XCL Ltd.
000 Xxx Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxx
or at such other address, as to any party, as such party
shall specify by like notice to the other parties.
9. Covenants of XCL Land and XCL Ltd. XCL Land and
XCL Ltd. hereby covenant and agree that:
(1) XCL Ltd. shall be obligated to register
the Warrant Stock at the time and on the terms and
conditions set forth in Article 9 of the Warrant Agreement.
(2) XCL Land and XCL Ltd. shall issue no more
than 62 Units and shall not issue any securities convertible
into or exchangeable for Units.
10. Rights of Parties to Terminate.
Notwithstanding anything to the contrary set forth herein,
this Agreement and the transactions contemplated hereby may
be terminated:
(1) at any time by the written agreement of
the parties hereto; or
(2) by either XCL Land or the Subscriber, by
written notice to the other, if the Initial Closing shall
not have occurred prior to or on November 30, 1998;
provided, however, that such right to terminate shall not be
available to a party which has breached this Agreement if
such breach shall have prevented such Closing from occurring
prior to or on November 30, 1998.
11. Entire Agreement; etc. This Agreement together
with the Schedules hereto, the Notes, the Warrant Agreement
and the Security Agreement set forth the entire
understanding and agreement between XCL Land, XCL Ltd. and
the Subscriber pertaining to the subject matter hereof and
thereof superseding any and all prior agreements, proposals,
understandings and arrangements among the parties hereto,
all of which shall be deemed terminated, cancelled and of no
further force and effect. No prior or contemporaneous
understanding or agreement shall alter or constitute a
waiver of any term, condition, obligation, covenant,
representation or warranty contained in this Agreement, nor
shall any waiver, understanding or agreement purportedly
amending or waiving any provision hereof be effective unless
and until it shall be reduced to writing and signed by the
parties hereto. Any other agreements pursuant to which a
limited number of qualified investors agree to subscribe for
Units shall be identical in form and content (except as to
the identity of the Subscriber and the number of Units
subscribed for) as this Agreement, and although each such
agreement (including this Agreement) may be executed in
counterparts with each counterpart being deemed an original
and all such counterparts being deemed as one single
instrument, each such agreement shall constitute an
individual, several agreement with XCL Land and XCL Ltd. and
no partnership, joint venture, agency or other relationship,
expressed or implied, shall be created by and among the
Subscriber and other purchasers of the Units. Further, XCL
Land and XCL Ltd. covenant with and warrant each Subscriber
that, until such Subscriber's Note is paid in full, if the
terms of any of the Units or any Subscriber's investment in
the Units (including the Notes and the Warrant Agreements)
are amended either directly or indirectly, then no such
amendment shall be effective until and unless each
Subscriber is offered and either expressly accepts or
rejects the same amendment; and no benefit or inducement for
such amendment will be offered to any Subscriber unless the
same is offered to all Subscribers. The headings in this
Agreement have been inserted for convenience of reference
only and shall not affect the interpretation or enforcement
of any provision hereof. XCL Land and XCL Ltd. further
covenant and agree that it is the intent of the parties to
this Agreement that the Subscriber herein will purchase and
hold the Units on the same terms and conditions as the other
investors in the Units unless said Subscriber explicitly
elects otherwise after being offered the opportunity to so
elect.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE FOR ALL PURPOSES WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAW.
13. Special Federal and State Securities Laws
Notices.
(1) The undersigned understands and
acknowledges that:
THE UNITS AND SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
WILL BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD,
OFFERED FOR SALE OR TRANSFERRED FOR VALUE IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION UNDER THE ACT OR AN EXEMPTION
THEREFROM.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST
RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF
THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED
THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
(2) Investors in the following jurisdictions
must review the following legends required by each
jurisdiction and be aware of their contents.
CALIFORNIA SUPPLEMENT
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF
THESE SECURITIES. IT IS UNLAWFUL TO CONSUMMATE A SALE OR
TRANSFER OF THESE SECURITIES, OR ANY INTEREST THEREIN, OR TO
RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE
STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE
COMMISSIONER'S RULES.
FLORIDA SUPPLEMENT
THE SECURITIES REFERRED TO HEREIN WILL BE SOLD TO,
AND ACQUIRED BY, THE HOLDER IN A TRANSACTION EXEMPT UNDER
517.061 OF THE FLORIDA SECURITIES ACT. THE SECURITIES HAVE
NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA.
IN ADDITION, ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE
OF VOIDING THE PURCHASE WITHIN THREE (3) DAYS AFTER THE
FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO
THE ISSUER, AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR
WITHIN 3 DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS
COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.
MARYLAND SUPPLEMENT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR
OTHER DOCUMENT) HAVE BEEN ISSUED PURSUANT TO A CLAIM OF
EXEMPTION FROM THE REGISTRATION OR QUALIFICATION PROVISIONS
OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR
QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
PENNSYLVANIA SUPPLEMENT
UNDER PROVISIONS OF THE PENNSYLVANIA SECURITIES
ACT OF 1972, EACH PENNSYLVANIA RESIDENT SHALL HAVE THE RIGHT
TO WITHDRAW HIS ACCEPTANCE WITHOUT INCURRING ANY LIABILITY
TO THE SELLER, UNDERWRITER (IF ANY), OR ANY PERSON, WITHIN
TWO (2) BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE ISSUER
OF HIS WRITTEN BINDING CONTRACT OF PURCHASE OR IN THE CASE
OF A TRANSACTION IN WHICH THERE IS NO WRITTEN BINDING
CONTRACT OF PURCHASE, WITHIN TWO BUSINESS DAYS AFTER HE
MAKES THE INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED.
EACH PENNSYLVANIA RESIDENT WHO SUBSCRIBES FOR THE
SECURITIES BEING OFFERED HEREBY AGREES NOT TO SELL THESE
SECURITIES FOR A PERIOD OF TWELVE MONTHS AFTER THE DATE OF
PURCHASE. UNDER PROVISIONS OF THE PENNSYLVANIA SECURITIES
ACT OF 1972 (THE "1972 ACT"), EACH PENNSYLVANIA RESIDENT
SHALL HAVE THE RIGHT TO WITHDRAW HIS ACCEPTANCE WITHOUT
INCURRING ANY LIABILITY TO THE SELLER, UNDERWRITER (IF ANY)
OR ANY OTHER PERSON, WITHIN TWO BUSINESS DAYS FROM THE DATE
OF RECEIPT BY THE ISSUER OF HIS WRITTEN BINDING CONTRACT OF
PURCHASE OR IN THE CASE OF A TRANSACTION IN WHICH THERE IS
NO WRITTEN BINDING CONTRACT OF PURCHASE, WITHIN TWO BUSINESS
DAYS AFTER HE MAKES THE INITIAL PAYMENT FOR THE SECURITIES
BEING OFFERED. TO ACCOMPLISH THIS WITHDRAWAL, A SUBSCRIBER
NEED ONLY SEND A LETTER OR TELEGRAM TO THE ISSUER AT THE
ADDRESS SET FORTH HEREIN, INDICATING HIS OR HER INTENTION TO
WITHDRAW. SUCH LETTER OR TELEGRAM SHOULD BE SENT AND
POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED SECOND
BUSINESS DAY. IT IS PRUDENT TO SEND SUCH LETTER BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE THAT IT
IS RECEIVED AND ALSO TO EVIDENCE THE TIME WHEN IT WAS
MAILED. IF THE REQUEST IS MADE ORALLY IN PERSON OR BY
TELEPHONE TO THE ISSUER, A WRITTEN CONFIRMATION THAT THE
REQUEST HAS BEEN RECEIVED SHOULD BE REQUESTED.
14. Subscription. The undersigned hereby
subscribes for the following number of Units:
Number of Units
to be purchased __________
(minimum purchase one Unit)
Total Unit Purchase Price:
U.S. $__________
(Number of Units x $100,000)
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement effective on the date first above
written.
TYPE OF OWNERSHIP
(Check One)
Individual (one signature required)
Joint Tenants with right of survivorship
(each must sign)
Tenants in Common (each must sign)
Tenants by the Entirety (both husband and
wife must sign)
Community Property (one signature required if
interest held in one name, i.e., managing
spouse; signatures of both spouses required
if interest is held in both names)
Corporation (include resolution authorizing
this investment)
Partnership (include partnership agreement)
Trust (include instrument creating the trust)
Estate (include certified copy of letters
testamentary or letters of administration)
Please print here the exact name in which Unit(s)
are to be registered.
INDIVIDUALS ONLY
SIGNATURE PAGE
FOR INDIVIDUAL INVESTORS
(and joint tenants, tenants in common and
tenants by the entirety)
Investor #1 Investor #2
____________________________
Signature Signature
___________________________
Social Security Number Social Security
Number
____________________________
Print or Type Name Print or Type
Name
Residence Address: Residence
Address:
____________________________
____________________________
Telephone No. ______________ Telephone No.
Facsimile No. ______________ Facsimile No.
Executed at: Executed at:
____________________________
City City
____________________________
State State
this ____ day of ___________ this ____ day of
________
_____________________, 199__. _________________,
199__.
Mailing Address (if different)
____________________________________________________________
____________________________________________________________
STATE OF )
:ss.
COUNTY OF )
On this _____ day of __________, in the year 19__,
before me, the undersigned, a Notary Public of said State,
duly commissioned and sworn, personally appeared
, known to me to be the person (or persons) whose name is
(or whose names are) subscribed to the within instrument,
and acknowledged that he (or she or they) executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year in this
certificate first above written.
[SEAL]
Notary Public in and for said State
My commission expires on , 199 .
SUBSCRIPTION ACCEPTED:
XCL LAND, LTD.
By:____________________________
Name:_______________________
Title:______________________
Date:__________________________
XCL LTD.
By:____________________________
Name:_______________________
Title:______________________
Date:__________________________
CORPORATION ONLY
SIGNATURE PAGE
FOR CORPORATE INVESTORS
____________________________________________________________
Name of Corporation (please print or type)
By:_________________________________________________________
(Signature of authorized agent)
Title:______________________________________________________
Taxpayer Identification
No.:______________________________________
Address of Principal
Corporate Office:
_______________________________________________
____________________________________________________________
___________________________________________________________
Mailing Address,
if different:
___________________________________________________
____________________________________________________________
____________________________________________________________
Telephone Number:
_______________________________________________
Facsimile Number:
_______________________________________________
Attention:
______________________________________________________
Executed at ______________________,
_____________________________
(City) (State)
on this ______ day of ________________, 199__.
STATE OF )
.ss:
COUNTY OF )
On this _____ day of ____________, in the year of
199__, before me, the undersigned, a Notary Public of said
State, duly commissioned and sworn, personally appeared
, known to me to be the _____________________ of the
corporation that executed the within instrument, and
acknowledged to me that the said corporation executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand
and affixed my official seal the day and year in this
certificate first above written.
[SEAL]
____________________________________________
Notary Public in and for said State
My commission expires on , 199 .
SUBSCRIPTION ACCEPTED:
XCL LAND, LTD.
By:____________________________
Name:_______________________
Title:______________________
Date:__________________________
XCL LTD.
By:____________________________
Name:_______________________
Title:______________________
Date:__________________________
PARTNERSHIPS ONLY
SIGNATURE PAGE
FOR PARTNERSHIP INVESTORS
____________________________________________________________
Name of Partnership (please print or type)
By:
___________________________________________________________
(Signature of authorized agent)
Title:
_________________________________________________________
Taxpayer Identification No.:
____________________________________
Principal Business
Address:
________________________________________________________
____________________________________________________________
____________________________________________________________
Mailing Address,
if different:
__________________________________________________
____________________________________________________________
____________________________________________________________
Telephone Number:
_______________________________________________
Facsimile Number:
_______________________________________________
Attention:
______________________________________________________
Executed at ______________________,
_____________________________
(City) (State)
on this ______ day of ________________, 199__.
STATE OF )
.ss:
COUNTY OF )
On this day of , in the year
of 199_, before me, the undersigned, a Notary Public of said
State, duly commissioned and sworn, personally appeared
, known to me to be (one)/(other number)/(all) of the
partners of the partnership that executed the within
instrument, and acknowledged to me that said partnership
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my official seal the day and year in this
certificate first above written.
[SEAL]
Notary Public in and for said State
My commission expires on , 199 .
SUBSCRIPTION ACCEPTED:
XCL LAND, LTD.
By:____________________________
Name:_______________________
Title:______________________
Date:__________________________
XCL LTD.
By:____________________________
Name:_______________________
Title:______________________
Date:__________________________
TRUST OR ESTATES ONLY
SIGNATURE PAGE
FOR TRUST OR ESTATE INVESTORS
___________________________________________________________
Name of Trust or Estate (please print or type)
By:
____________________________________________________________
(Signature of authorized agent)
Title:
__________________________________________________________
Taxpayer Identification No.:
____________________________________
Trustee's or Executor's
Address:
________________________________________________________
___________________________________________________________
____________________________________________________________
Mailing Address,
if different:
___________________________________________________
___________________________________________________________
____________________________________________________________
Telephone
Number:________________________________________________
Facsimile Number:
_______________________________________________
Attention:
______________________________________________________
Executed at ______________________,
_____________________________
(City) (State)
on this ______ day of ________________, 199__.
STATE OF )
.ss:
COUNTY OF )
On this day of , in the year
of 199_, before me, the undersigned, a Notary Public of said
State, duly commissioned and sworn, personally appeared
, known to me to be the trustee of the trust or executor or
administrator of estate that executed the within instrument,
and acknowledged to me that the said trust or estate
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand
and affixed my official seal the day and year in this
certificate first above written.
[SEAL]
________________________________________
Notary Public in and for said State
My commission expires on , 199 .
SUBSCRIPTION ACCEPTED:
XCL LAND, LTD.
By:____________________________
Name:_______________________
Title:______________________
Date:__________________________
XCL LTD.
By:____________________________
Name:_______________________
Title:______________________
Date:__________________________
