Exhibit (10.3)
PURCHASE AND SALE AGREEMENT
BY AND AMONG
NEW YORK LIFE INSURANCE COMPANY,
RAMCO OPERATING COMPANY,
OKLAHOMA DOUBLE R CORPORATION,
RAMCO - NYL 1987 LIMITED PARTNERSHIP,
XXXXXXX X. XXXXXX, XX, INDIVIDUALLY AND
AS TRUSTEE OF
THE XXXXXXX X. XXXXXX XX, 1982
REVOCABLE TRUST, XXXXX X. XXX
AND M. XXXXX XXXXXXX, FORMERLY XXXXXX, INDIVIDUALLY
AND AS TRUSTEE OF THE M. XXXXX XXXXXX
1992 TRUST
DATED AS OF JULY 24, 1996
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made and entered into as of July 24,
1996, by and among New York Life Insurance Company, a New York mutual life
insurance company ("NYL"), RAMCO Operating Company, a Delaware corporation,
("RAMCO"), Oklahoma Double R Corporation, formerly Double R Corporation, a
Delaware corporation, ("Double R"), Xxxxxxx X. Xxxxxx XX, Individually and as
Trustee of the Xxxxxxx X. Xxxxxx, XX, 1982 Revocable Trust ("Xxxxxx"), Xxxxx
X. Xxx ("Xxx") and M. Xxxxx Xxxxxxx, formerly Xxxxxx, Individually and as
Trustee of the M. Xxxxx Xxxxxx 1992 Trust ("Xxxxxx"). RAMCO and Double R are
sometimes referred to collectively as the "RAMCO Entities" and Xxxxxx, Xxx
and Xxxxxx are sometimes referred to collectively as the "RAMCO Group
Stockholders".
PREAMBLE
A. The RAMCO-NYL 1987 Limited Partnership (the "Partnership") is a Texas
limited partnership of which NYL owns a 96.5% limited partnership interest
(the "NYL Partnership Interest") and the RAMCO Entities own a combined 3.5%
partnership interest.
B. RAMCO and NYL are parties to that certain RAMCO-NYL 1987 Limited
Partnership Agreement, dated October 26, 1987 (the "Partnership Agreement"),
relating to the Partnership.
C. RAMCO is the managing general partner of the Partnership. RAMCO's
issued and outstanding Common Stock, par value $225.00 (the "RAMCO Common
Stock"), is owned as follows:
Name Number of Shares
---- ----------------
Xxxxxx 25
Xxx 25
Xxxxxx 25
NYL 26
---
Total 101
D. NYL and RAMCO were parties to that certain litigation (the "Lawsuit")
styled NEW YORK LIFE INSURANCE COMPANY V. RAMCO HOLDING CORPORATION, ET. AL.,
United States District Court for the Northern District of Oklahoma, Case No.
93-C-1049-H, which Lawsuit has been dismissed by the Court for lack of
jurisdiction.
E. The parties desire to resolve and settle the issues raised in the
Lawsuit by either (i) the sale by NYL to RAMCO of the NYL Partnership
Interest or, alternatively (ii) the sale to NYL by Xxxxxx, Xxx and Xxxxxx of
all of their total of 75 shares of RAMCO Common Stock, all of their shares of
RAMCO's Series B Preferred Stock, and all of their shares of the Common Stock
of Double R, par value $0.01 (the "Double R Common Stock"), all on the terms
set forth herein.
NOW, THEREFORE, in consideration of the above recitals and the mutual
warranties, representations, covenants, and agreements set forth in this
Agreement, the parties agree as follows:
I.
DEFINITIONS
Except as otherwise provided herein, when used in this Agreement the
capitalized terms set forth below shall have the following meanings:
AFFILIATE of a Person means (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled
by or under common control with such Person; (ii) any officer,
director, partner, employer, or direct or indirect beneficial owner
of any 10% or greater equity or voting interest of such Person; or
(iii) any other Person for which a Person described in clause (ii)
acts in any such capacity.
AGREEMENT means this Agreement, including the exhibits attached or
delivered pursuant hereto and incorporated herein by reference.
DOUBLE R NOTES means all indebtedness owed the RAMCO Group
Stockholders by Double R.
ESCROW AGENT means the entity appointed in accordance with SECTION
4.01.
EXPIRATION DATE means the first to occur of (i) the RAMCO Purchase
Closing, (ii) the NYL Purchase Closing, (iii) termination of this
Agreement by NYL, or (iv) the close of business on December 17, 1996.
GAAP means generally accepted accounting principles, consistently
applied during the periods involved.
INTELLECTUAL PROPERTY means computer programs and software and
geological information and data.
MATERIAL for purposes of this Agreement shall be determined in
light of the facts and circumstances of the matter in question,
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
MATERIAL ADVERSE EFFECT on a Party means an event, change, or
occurrence which, individually or together with any other event, change
or occurrence, has a material adverse impact on (i) the financial
position, business, or results of operations of such Party and its
subsidiaries, taken as a whole, or (ii) the ability of such Party to
perform its obligations under this Agreement or to consummate the
other transactions contemplated by this Agreement.
NYL SPECIAL REPRESENTATIVE means R. Xxxxx Xxxxxxxxxx or such other
person as may be appointed by NYL.
PERSON means a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
RAMCO DISCLOSURE MEMORANDUM shall have the meaning set forth in
SECTION 8.
RAMCO ENTITIES means and includes RAMCO and Double R, together with
the subsidiaries of each.
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RAMCO STOCK means all of the shares of stock owned by the RAMCO
Group Stockholders in the RAMCO Entities.
Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
II.
RAMCO'S PURCHASE OF THE NYL PARTNERSHIP INTEREST
2.01 PURCHASE AND SALE. RAMCO shall have the right (the "RAMCO Option")
at any time commencing on the date hereof and ending December 16, 1996, at
12:00 noon CST (the "Option Period") to purchase from NYL all of the NYL
Partnership Interest (the "RAMCO Purchase"). The RAMCO Option may be
exercised during the Option Period by payment of the RAMCO Purchase Price in
the manner set forth in SECTION 2.02.
2.02 RAMCO PURCHASE PRICE. The RAMCO purchase price payable by RAMCO to
NYL under SECTION 2.01 (the "RAMCO Purchase Price") shall be either (a) Sixty
Million Dollars ($60,000,000) if the RAMCO Option is exercised and such sum
is paid to NYL by wire transfer of immediately available funds initiated by
RAMCO on or before 12:00 noon CST, November 29, 1996, or (b) Sixty Million,
Five Hundred Thousand Dollars ($60,500,000) if the RAMCO Option is exercised
and such sum is paid to NYL by wire transfer of immediately available funds
initiated by RAMCO after 12:00 noon CST on November 29, 1996, but prior to
12:00 noon CST on December 16, 1996.
2.03 LAPSE OF OPTION. In the event that the RAMCO Option is not
exercised prior to the expiration of the Option Period, the RAMCO Option
shall immediately lapse and be of no further force and effect, the RAMCO
Purchase shall not occur and the provisions of SECTION 3 regarding the
purchase by NYL of the RAMCO Stock shall automatically and immediately apply.
2.04 EFFECT OF CLOSING. The representations and warranties of the RAMCO
Entities and the RAMCO Group Stockholders set out herein, together with the
covenants of the RAMCO Entities and the RAMCO Group Stockholders set out
herein relating to conduct of the business and financial condition of the
RAMCO Entities prior to the closing, shall expire and be of no further effect
upon and as of the closing of the RAMCO Purchase, and neither the RAMCO
Entities nor any of the RAMCO Group Stockholders shall have any liability
with respect thereto; provided, however, that all covenants and agreements
relating to matters to occur after closing shall continue to be applicable and
in full force and effect.
III.
NYL PURCHASE OF RAMCO ENTITIES STOCK
3.01 PURCHASE AND SALE. In the event that the RAMCO Option is not timely
and properly exercised as set forth in SECTION 2, then subject to
satisfaction of the conditions to closing set out in SECTION 3.03 hereof, the
RAMCO Group Stockholders shall sell to NYL and NYL shall purchase from the
RAMCO Group Stockholders (the "NYL Purchase") all of the following:
(a) Seventy-five (75) shares of RAMCO Common Stock owned by the
RAMCO Group Stockholders, which represents all of the issued and outstanding
RAMCO Common Stock other than the shares of RAMCO Common Stock owned by NYL;
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(b) Seven hundred fifty (750) shares of Double R's Common Stock
owned by the RAMCO Group Stockholders, which represents all of the issued and
outstanding shares of Double R Common Stock other than the shares of Double R
Common Stock owned by NYL;
(c) All shares of RAMCO's Series B Preferred Stock owned by the
RAMCO Group Stockholders; and
(d) The Double R Notes owned by the RAMCO Group Stockholders.
A complete list of the holders of all classes of stock, common and preferred,
in RAMCO and Double R to include the number of shares owned by each such
person or entity is attached in Exhibit "A" hereto. It is the intent of these
provisions that in the event the RAMCO Option is not timely and properly
exercised, NYL shall acquire all of the stock and other interests in the
RAMCO Entities owned by the RAMCO Group Stockholders.
3.02 PURCHASE PRICE. The Purchase Price payable to the RAMCO Group
Stockholders by NYL for the RAMCO Stock under SECTION 3.01 shall be an
aggregate of Six Million Dollars ($6,000,000) (the "NYL Purchase Price"),
payable to each of the RAMCO Group Stockholders, as follows:
Xxxxxx $2,000,000
Xxx $2,000,000
Xxxxxx $2,000,000
The NYL Purchase Price shall be paid, as follows: Five percent (5%) of the
NYL Purchase Price shall be paid to the Escrow Agent at the NYL Purchase
Closing and the remaining ninety-five percent (95%) shall be paid by NYL to
the RAMCO Group Stockholders (one-third (1/3) each) on January 2, 1997. The
sum of $300,000 to be paid to the Escrow Agent shall be by wire transfer of
immediately available funds initiated by NYL before 12:00 noon on December 17,
1996 (provided the RAMCO Option has not theretofore been exercised); and on
January 2, 1997, NYL shall wire transfer to the RAMCO Group Stockholders
(one-third (1/3) each) immediately available funds in the aggregate sum of
$5,700,000. If NYL elects to acquire the RAMCO stock, the NYL payment of
January 2, 1997, shall be unconditional and not subject to setoff.
3.03 CLOSING CONDITIONS.
(a) NYL shall not be required to close the NYL Purchase (i) if
there has occurred a material adverse effect in the financial condition of
the RAMCO Entities between the date hereof and December 16, 1996, or (ii)
unless (A) the covenants of the RAMCO Entities and of the RAMCO Group
Stockholders have been performed in all material respects prior to the
closing, and (B) the representations and warranties of the RAMCO Entities and
the RAMCO Group Stockholders shall be true and correct in all material
respects at and as of the closing as though made on such date.
(b) In the event NYL elects to close the NYL Purchase with knowledge
of any breach of any such covenant or the inaccuracy of any such
representation or warranty, the act of closing shall constitute a waiver of
same, unless the breach of such covenant or inaccuracy in such representation
or warranty is the result of actions taken in bad faith by either the RAMCO
Entities or the RAMCO Group Stockholders for the purpose of discouraging or
impeding the NYL Purchase.
(c) In the event that NYL closes the NYL Purchase without knowledge
of a material breach of any covenant or material inaccuracy of any
representation or warranty, the act of closing shall not constitute a waiver
of the same; provided, however, that if no action or claim is made by NYL
with ninety (90) days of the NYL Purchase Closing, NYL will be deemed to have
waived any such breach or inaccuracy.
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3.04 TERMINATION. In the event NYL does not close the NYL Purchase by
reason of the failure of the conditions described in SECTION 3.03(a) hereof,
then (i) if such failure relates to a material inaccuracy (i.e., such
inaccuracy gives rise to a material adverse effect) in any of the
representations and warranties of any of the RAMCO Entities or the RAMCO
Group Stockholders as of the closing date, but such representation and/or
warranty was true when made, then NYL's only recourse shall be to terminate
this Agreement as of such date with no Party having any further rights or
obligations under this Agreement with respect to such inaccuracy, or (ii) if
such failure is due to a material breach (i.e., such breach gives rise to a
material adverse effect) of any of the covenants of any of the RAMCO Entities
or the RAMCO Group Stockholders set out herein, or relates to a material
inaccuracy when made in any of the representations or warranties of any of
the RAMCO Entities or the RAMCO Group Stockholders, then NYL may terminate
this Agreement and pursue whatever claims or causes of action NYL may have
against the offending RAMCO Entity or RAMCO Group Stockholder arising out of
such breach or inaccuracy or representation or warranty. In the event NYL
terminates this Agreement pursuant to this SECTION 3.04, notice promptly
shall be given to the Escrow Agent and the RAMCO Group Stockholders. Upon
receipt of such notice, the Escrow Agent shall return or dispose of the
documents in escrow as follows: the documents described in SECTION 4.02(a)
shall be returned to NYL; the documents described in SECTION 4.02(b) shall be
returned to the RAMCO Entities or the RAMCO Group Stockholders; and, the
documents described in SECTION 4.02(c) shall be destroyed by the Escrow Agent
and notice of such destruction given to the parties. The RAMCO Group
Stockholders shall be entitled to specific performance of this Agreement in
the event that it is determined by appropriate proceedings that NYL was not
entitled to termination under SECTION 3.03 OR 3.04.
IV.
ESCROW AGENT AND ESCROW DOCUMENTS
4.01 APPOINTMENT OF ESCROW AGENT. The parties do each hereby appoint
The Trust Company of Oklahoma to serve as the Escrow Agent for all purposes
related to this Agreement, to receive the closing documents set forth in
SECTION 4.02 and to distribute the closing documents deposited with the
Escrow Agent as set forth herein. Upon execution of this Agreement, the
parties and Escrow Agent shall enter into an Escrow Agreement substantially
in the form attached as Exhibit "B" hereto.
4.02 ESCROW DOCUMENTS. Upon execution of this Agreement, the following
documents shall be delivered to the Escrow Agent:
(a) NYL shall deliver an assignment in the form attached
hereto as Exhibit "C" of all of the NYL Partnership
Interest to RAMCO which shall be effective only if the
RAMCO Purchase Closing occurs.
(b) RAMCO shall deliver:
(i) A Certificate of good standing certifying that each
RAMCO Entity is in existence and has paid all
franchise taxes and is in good standing in the
states of their incorporation;
(ii) Stock certificates together with stock powers duly
endorsed by the RAMCO Group Stockholders providing
for the transfer free and clear of any liens,
claims or encumbrances of all of the shares of the
RAMCO Stock owned by the RAMCO Group Stockholders;
(iii) The written resignations in the form attached
hereto as Exhibit "D" of each of the RAMCO Group
Stockholders as Officers and/or Directors of any
of the RAMCO Entities, as trustees or fiduciaries
on any employee benefit plans of a
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RAMCO Entity, and as signatories on any of the
RAMCO Entities bank accounts effective as of the
NYL Purchase Closing;
(iv) Assignments in the form attached hereto as Exhibit
"E" of the Double R Notes in the amount of
$333,687.25 to NYL executed by the RAMCO Group
Stockholders.
(c) The Parties shall further deliver:
(i) Five executed originals of the General Release
described in SECTION 5.01(a).
(ii) Five executed originals of the Mutual Release of
all claims specified in SECTION 5.01(b).
4.03 RAMCO PURCHASE CLOSING. The Escrow Agent, upon receiving notice
from NYL that the RAMCO Option has been exercised and that NYL has received
the RAMCO Purchase Price, shall promptly deliver to RAMCO all of the
documents described in SECTIONS 4.02(a) AND 4.02(b)(the "RAMCO Purchase
Closing"). The Escrow Agent shall deliver one original of the General Release
and the Mutual Release to each of the RAMCO Group Stockholders, RAMCO and NYL.
4.04 NYL PURCHASE CLOSING. Upon exercise of the NYL Option and receipt
of the first installment ($300,000) of the NYL Purchase Price, the Escrow
Agent shall promptly deliver to NYL all of the documents set forth in
SECTIONS 4.02(a) AND 4.02(b) hereof. The Escrow Agent shall deliver one
original of the General Release and the Mutual Release to each of the RAMCO
Group Stockholders, RAMCO and NYL (the "NYL Purchase Closing") and shall
forward to the RAMCO Group Stockholders the first installment of the NYL
Purchase Price, all in accordance with the provisions of the Escrow Agreement.
4.05 COOPERATION. The Parties agree to fully cooperate and not impede
either the RAMCO Purchase Closing (if RAMCO timely and properly exercises the
RAMCO Option) or, failing the timely and proper exercise of the RAMCO Option,
the NYL Purchase Closing. In the event that the RAMCO Entities or RAMCO Group
Stockholders impede in any way the completion of the NYL Purchase Closing,
NYL may, at its sole option, reinstitute the Lawsuit in addition to any other
remedies available under this Agreement or otherwise arising out of RAMCO's
conduct.
V.
RELEASES/CONFIDENTIALITY AGREEMENT
5.01 NYL, the RAMCO Group Stockholders and the RAMCO Entities shall
execute simultaneously with this Agreement:
(a) Five counterpart originals of a General Release, in the
form attached hereto as Exhibit "F," executed on behalf of each of the RAMCO
Entities and by NYL as the sole disinterested stockholder of the RAMCO
Entities, of all claims of every nature whatsoever against Xxx, Xxxxxx and
Xxxxxx with respect to all actions taken or omitted to be taken by them in
their respective capacities as officers, directors, employees, stockholders
and consultants of and to the RAMCO Entities.
(b) Five counterpart originals of a Mutual Release of all
claims (annexed hereto as Exhibit "G"), which shall be executed and delivered
to the Escrow Agent for subsequent delivery to the Parties after either the
RAMCO Purchase Closing or the NYL Purchase Closing, whichever shall occur.
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5.02 CONFIDENTIALITY AGREEMENT. NYL, the RAMCO Entities and the RAMCO
Group Stockholders shall execute and deliver, simultaneously with the
execution of this Agreement, a Confidentiality Agreement in the form attached
hereto as Exhibit "H" which shall become immediately effective between the
parties and shall continue in effect beyond the closing of either the RAMCO
Purchase, the NYL Purchase or the termination of this Agreement.
VI.
COVENANTS PENDING CLOSING
6.01 RAMCO AFFIRMATIVE COVENANTS. From the date of this Agreement
until the Expiration Date, unless the prior written consent of NYL shall have
been obtained, and except as otherwise expressly contemplated herein, each
RAMCO Entity covenants and agrees that it shall use its reasonable best
efforts to, and shall use its reasonable best efforts to cause the
Partnership to, comply with the following (and each RAMCO Group Stockholder
shall take such action as reasonably may be within each Stockholder's control
(i.e., Xxx and Xxxxxx have day-to-day management and operational control
whereas Xxxxxx'x ability to control the following covenants by the RAMCO
Entities is limited to the right to vote as a director or shareholder on
matters brought before the Boards of Directors or stockholders) to assure
that each RAMCO Entity complies with the following):
(a) Each RAMCO Entity and the Partnership shall (i) preserve intact
its present business organization, (ii) preserve its present good will and
advantageous relationships with employees, vendors, suppliers and all persons
having business dealings with them, (iii) preserve and maintain in force all
of its licenses, registrations, franchises, patents, trademarks, copyrights,
permits and other similar rights, and (iv) maintain in force all property,
casualty, crime, product, directors' and officers' liability, and other forms
of insurance which they are presently carrying, except to the extent failure
to do any of the foregoing does not have a material adverse effect.
(b) Each RAMCO Entity and the Partnership shall operate their
businesses in the regular and ordinary course and manner.
(c) Subject only to the provisions of SECTION 10.05 hereinafter, all
monies otherwise distributable under SECTION 4.4 of the Partnership
Agreement shall be maintained in the Partnership account or paid to retire
the Partnership's obligation to Chase Bank.
(d) Each RAMCO Entity and the Partnership shall maintain their
books, accounts and records in the usual, regular and ordinary manner, and on
a basis consistent with prior years, and will make and keep books, records
and accounts, which, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of their assets and shall allow the NYL Special
Representative reasonable access thereto.
(e) Each RAMCO Entity and the Partnership will provide to the NYL
Special Representative:
(i) Contemporaneously, any letters furnished to it by its
independent public accountants which comment on its
accounting practices.
(ii) Promptly, but in any event within five days after the
discovery thereof, notice of any material adverse event or
circumstance affecting it including, but not limited to
the filing of any material litigation or threat thereof,
against it and the discovery that it is not, or with the
passage of time will not be, in compliance with any
provision of this Agreement, or any of its other material
agreements, a notice specifying the nature and period of
existence thereof.
(iii) Promptly, but in any event within 5 days following the
preparation thereof, copies of the minutes of proceedings
(or consents) of its Board of Directors or
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shareholders with appropriate deletions with respect to
matters, materials and actions not required to be disclosed
to NYL pursuant to SECTIONS 10.12 and 10.13 hereof, together
with all written materials given to Directors in connection
with any meeting of the Board of Directors, with appropriate
deletions with respect to matters, materials and actions not
required to be disclosed to NYL pursuant to SECTIONS 10.12
and 10.13 hereof, such materials to be in addition to any
materials to which NYL is otherwise entitled to as a
stockholder of the RAMCO Entities or a limited partner of
the Partnership.
(iv) Monthly and year-to-date balance sheets and income statements
prepared in accordance with historical practices, to be
provided as soon as available but not later than thirty (30)
days from the end of each month.
(v) The right to review at all reasonable times the current
check register (including wire transfer information),
accounts receivable ledger and accounts payable ledger for
the RAMCO Entities and the Partnership.
(vi) The right to review each contract to which a RAMCO Entity
or its assets is bound and which involves future payments
or performance in an amount in excess of $10,000.
(f) The NYL Special Representative shall have the right, at NYL's
expense, to visit and inspect any of the properties or assets of the RAMCO
Entities or the Partnership, to review and copy the Certificate of
Incorporation and Bylaws and review (but not copy) the minute books of the
RAMCO Entities, and to discuss the affairs, finances and accounts with the
officers and managers of each RAMCO Entity, all at such reasonable times and
as often as may be reasonably requested.
(g) Each RAMCO Entity will give the NYL Special Representative prior
written notice of each meeting of the Board of Directors of the company,
specifying the time and place of such meeting and, to the extent then known,
the matters to be discussed.
(h) Each RAMCO Entity and the Partnership shall perform and
observe, or cause to be performed or observed as the case may be, all of its
obligations pursuant to the terms, agreements and covenants of its
Certificate of Incorporation, its Bylaws, the Partnership Agreement, this
Agreement and all documents and agreements executed or delivered in connection
with this Agreement.
(i) Each RAMCO Entity and the Partnership will preserve intact
relationships existing with other parties and will at all times cause to be
done all things necessary to maintain, preserve, and renew its corporate
and/or partnership existence and will observe and conform with all valid
requirements of all governmental authorities relating to the conduct of its
business except to the extent that failure to do so does not have a material
adverse effect. Each RAMCO Entity and the Partnership will maintain and
keep in force all material licenses, permits and agreements necessary to the
conduct of its businesses except to the extent that failure to do so does not
have a material adverse effect.
(j) Each RAMCO Entity and the Partnership will maintain and keep its
material properties and assets, real and personal, in good repair, working
order and condition so that its business may be properly and advantageously
conducted at all times.
(k) Each RAMCO Entity and the Partnership will file all tax returns
and pay and discharge all taxes, assessments, interest and installments on
mortgages and governmental charges against it or against any of its
properties, upon the respective dates when due, except to the extent that
such taxes, assessments, interest, install-
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ments and governmental charges are contested in good faith and by appropriate
proceedings in such manner as not to cause any materially adverse effect on
its financial condition or loss of any right of redemption from any sale.
(l) Each RAMCO Entity and the Partnership shall comply with
all of the obligations which it has incurred or to which it becomes subject
pursuant to any contract or agreement, whether oral or written, express or
implied, the breach of which might have a material adverse effect upon its
business or financial condition, unless and to the extent that the same are
being contested in good faith and by appropriate proceedings. Each RAMCO
Entity and the Partnership shall comply with all applicable laws, rules and
regulations of all governmental authorities, the violation of which might
have a material adverse effect upon its business or financial condition.
6.02 RAMCO NEGATIVE COVENANTS. From the date of this Agreement until
the Expiration Date, each RAMCO Entity covenants and agrees that it will not
do or agree or commit to do, any of the following without the prior written
consent of NYL (and each RAMCO Group Stockholder covenants and agrees to take
such action as reasonably may be within each such Stockholder's control
(i.e., Xxx and Xxxxxx have day-to-day management and operational control
whereas Xxxxxx has only the ability to affect performance of the following
covenants by voting as a director or shareholder on matters brought before
the Boards of Directors or stockholders) to assure compliance by each RAMCO
Entity:
(a) Amend the Certificate of Incorporation, Bylaws or other
governing instruments of any RAMCO Entity or the Certificate of Limited
Partnership of the Partnership or the Partnership Agreement.
(b) Incur any additional debt obligation or other obligation
for borrowed money except in the ordinary course of the business of such
entity consistent with past practices, but in any event not greater than
$50,000 in any one transaction or series of transactions, or impose, or
suffer the imposition, on any oil and gas property or material operating
asset of such entity of any lien or permit any such lien to exist for a
period in excess of 30 days (other than in connection with liens being
contested in good faith and liens in effect as of the date hereof that are
disclosed in the RAMCO Disclosure Memorandum).
(c) Repurchase, redeem, or otherwise acquire or exchange,
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of any RAMCO Entity, or declare or pay any
dividend or make any other distribution in respect thereof.
(d) Except for this Agreement, issue, sell, pledge, encumber,
authorize the issuance of, enter into any contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of the capital stock of any RAMCO Entity,
or any stock appreciation rights, or any option, warrant, or other right.
(e) Adjust, split, combine or reclassify any capital stock of
any RAMCO Entity or issue or authorize the issuance of any other securities
in respect of or in substitution for shares of the capital stock of any RAMCO
Entity, or sell, lease, mortgage or otherwise dispose of or otherwise
encumber any shares of capital stock of any RAMCO Entity or any asset of any
RAMCO Entity, other than in the ordinary course of business for reasonable
and adequate consideration.
(f) Purchase any securities or make any material investment,
either by purchase of stock or securities, contributions to capital, or asset
transfers, in any person or otherwise acquire direct or indirect control over
any person.
(g) Grant any increase in compensation or benefits to the
RAMCO Group Stockholders; pay any severance or termination pay or any bonus
other than pursuant to written policies or written contracts in effect on the
date of this Agreement and disclosed in the RAMCO Disclosure Memorandum; or
enter into or amend any severance agreements with officials of any RAMCO
Entity, grant any increase in fees or other compensation or other benefits to
directors of any RAMCO Entity except in accordance with past practice
disclosed in the RAMCO
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Disclosure Memorandum; or voluntarily accelerate the vesting of any stock
options, other stock-based compensation or employee benefits or any rights.
(h) Enter into or amend any employment contract between a
RAMCO Entity and any person (unless such amendment is required by law).
(i) Adopt any new employee benefit plan or terminate or
withdraw from, or make any material change in or to, any existing employee
benefit plans other than any such change that is required by law or that, in
the opinion of counsel, is necessary or advisable to maintain the tax
qualified status of any such plan, or make any distributions from such
employee benefit plans, except as required by law, the terms of such plans or
consistent with past practice.
(j) Sell any material assets except in the ordinary cause of
business.
(k) Make any significant change in any tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in tax laws or GAAP.
(l) Enter into, modify, amend or terminate any contract to
which their directors, shareholders, or related persons are a party
(including any loan contract) or waive, release, compromise or assign any
material rights or claims against any such persons, other than for reasonable
value consistent with historical practice.
(m) Cause any division or splitting of any securities or any
stock dividend, reclassification, exchange or substitution thereof or approve
or agree to any reorganization, merger, consolidation or combination with any
corporation or other entity or sell or lease (as lessor) more than 5 percent
of their total assets, or liquidate, dissolve, recapitalize or reorganize in
any form of transaction.
(n) Pay or declare any dividends or make other distributions
upon their shares of capital stock.
(o) Engage in any transaction with or make any distribution
(excluding payment of salary, expense allowance, consulting fees and director
fees in the same amount as paid to the RAMCO Group Stockholders during the
first half of calendar year 1996, as set out in the RAMCO Disclosure
Memorandum, and monthly interest on the Double R Notes) to any of their
directors, stockholders, or related persons or make any gift, transfer, loan,
or similar transaction with any such person.
(p) Take any action that violates the spirit and intent of the
terms hereof.
6.03 NYL AFFIRMATIVE COVENANTS. From the date of this Agreement until
the Expiration Date, NYL covenants and agrees as follows:
(a) Consistent with historical practices, NYL shall cause the
Special Representative to timely authorize, upon RAMCO's request, the use of
Partnership cash flow to fund development operations of the Partnership when
recommended by RAMCO and approved by Xxxxxxx X. Xxxx & Associates as meeting
the projected rate of return requirements of the Partnership Agreement.
(b) NYL shall not initiate any new litigation against any of
the RAMCO Entities, the RAMCO Group Stockholders, or any counsel or
accountants to any such Party, with reference to any matter involving the
RAMCO Entities or the RAMCO Group Stockholders based upon facts presently
known to NYL, unless (i) any of the RAMCO Entities or the RAMCO Group
Stockholders commits a material breach of this Agreement which remains
uncured for a period of ten (10) days after notice from NYL to each of the
RAMCO Group Stockholders, and (ii) as a result of such uncured breach, NYL
elects in writing to terminate this Agreement.
10
6.04 ADVERSE CHANGES IN CONDITION. Prior to the Expiration Date, each
RAMCO Entity agrees to give written notice promptly to NYL upon becoming
aware of the occurrence or impending occurrence of any event or circumstance
relating to it or the Partnership which (a) is reasonably likely to have,
individually or in the aggregate, a material adverse effect on it or the
Partnership, or (b) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use its
reasonable efforts to prevent or promptly to remedy the same.
VII.
REPRESENTATIONS AND WARRANTIES OF NYL
RELATING TO RAMCO PURCHASE OF THE NYL PARTNERSHIP INTEREST
NYL represents and warrants to the RAMCO Entities and the RAMCO Group
Stockholders that the statements contained in this SECTION 7 are correct and
complete as of the date of this Agreement and will be correct and complete as
of the RAMCO Purchase Closing.
7.01 ORGANIZATION, STANDING AND POWER. NYL is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of New York, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its assets. NYL is
duly qualified or licensed to transact business as a foreign corporation in
good standing in the states of the United States and foreign jurisdictions
where the character of its assets or the nature or conduct of its business
requires it to be so qualified or licensed.
7.02 AUTHORITY; NO BREACH BY AGREEMENT.
(a) NYL has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transaction
contemplated herein, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of NYL. This Agreement
represents a legal, valid, and binding obligation of NYL, enforceable against
it in accordance with its terms (except in all cases as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by NYL,
nor the consummation by NYL of the transactions contemplated hereby, nor
compliance by NYL with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of NYL's Certificate of Incorporation
or Bylaws, (ii) constitute or result in a default under, or require any
consent pursuant to, or result in the creation of any lien on any asset of
NYL under any contract or permit of NYL, or, (iii) violate any law or order
applicable to NYL or any of its material assets.
(c) No notice to, filing with, or consent of, any public body or
authority is necessary for the consummation by NYL of the transactions
contemplated in this Agreement.
7.03 OWNERSHIP OF NYL'S PARTNERSHIP INTEREST. NYL owns the NYL
Partnership Interest free and clear of any liens, claims, encumbrances, or
transfer restrictions and has the absolute right to sell the NYL Partnership
Interest to RAMCO as set forth herein without the need for the consent of any
other person.
7.04 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument
or other writing furnished by NYL or any of the Affiliates pursuant to this
Agreement contains or will contain any untrue statement of material
11
fact or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which there were made, not
misleading.
7.05 SECURITIES LAW MATTERS. NYL hereby acknowledges that if the NYL
Purchase occurs, the RAMCO Stock will not be registered under the Securities
Act of 1933 or any applicable state securities laws. NYL expressly
represents and warrants to the RAMCO Group Stockholders that NYL (i) has or
will have prior to closing reviewed such information concerning the RAMCO
Entities as NYL has or will deem relevant in connection with NYL's
acquisition of the RAMCO Stock, and (ii) will be acquiring the RAMCO Stock
for investment purposes only and not for resale with a view to, or in
connection with, a distribution within the meaning of the securities laws.
VIII.
REPRESENTATIONS AND WARRANTIES OF RAMCO ENTITIES AND
RAMCO GROUP STOCKHOLDERS RELATING TO NYL PURCHASE OF THE RAMCO ENTITIES STOCK
Each of the RAMCO Entities and the RAMCO Group Stockholders do hereby
severally, and not jointly, represent and warrant to NYL that, to such
entity's or person's actual knowledge (as to the RAMCO Group Stockholders,
without inquiry), except as set forth in the RAMCO Disclosure Memorandum, the
statements contained in this SECTION 8 are correct and complete in all
material respects as of the date of this Agreement. Nothing in the RAMCO
Disclosure Memorandum shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the RAMCO Disclosure Memorandum
identifies the exception with reasonable particularity. The RAMCO Disclosure
Memorandum will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this SECTION 8.
8.01 ORGANIZATION, STANDING, AND POWER. Each of the Ramco Entities is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, and has the corporate power and authority to
carry on its business as now conducted and to own, lease and operate its
assets. Each of the RAMCO Entities is duly qualified or licensed to transact
business as a foreign corporation in good standing in the states of the
United States and foreign jurisdictions where the character of its assets or
the nature or conduct of its business requires it to be so qualified or
licensed, except where the failure to so qualify would not have a material
adverse effect.
8.02 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Each of the RAMCO Entities has the corporate power and
together with the RAMCO Group Stockholders each has the authority necessary
to execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of each RAMCO Entity. This
Agreement represents a legal, valid, and binding obligation of each of the
RAMCO Entities and the RAMCO Group Stockholders, enforceable against each in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by the
RAMCO Entities and the RAMCO Group Stockholders, nor the consummation by any
of them of the transactions contemplated hereby, nor compliance by them with
any of the provisions hereof, will (i) conflict with or result in a breach of
any provision of their respective Articles of Incorporation or Bylaws, (ii)
constitute or result in a default under, or require any
12
consent pursuant to, or result in the creation of any lien on any asset of
any of them under any contract or permit, or, (iii) violate any law or order
applicable to any of them or any of their material assets.
(c) No notice to, filing with, or consent of, any public body
or authority or of any person is necessary for the consummation by the RAMCO
Entities or the RAMCO Group Stockholders of any of the transactions
contemplated in this Agreement.
8.03 CAPITAL STOCK.
(a) The authorized capital stock of RAMCO consists of 222 shares
of Common Stock, par value $225.00 per share, of which 101 shares are issued
and outstanding as of the date of this Agreement; 100,000 shares of Series A
Preferred Stock, par value $.01 per share, of which 77,714 shares are issued
and outstanding as of the date hereof; and 100,000 shares of Series B
Preferred Stock, par value $0.01 per share, of which 69,652 shares are issued
and outstanding as of the date hereof. The authorized capital stock of Double R
consists of 1,500 shares of common stock, $0.01 par value per share, of which
1,010 shares are issued and outstanding. The RAMCO Group Stockholders own
seventy-five (75) shares of RAMCO Common Stock, -0- shares of RAMCO Series A
Preferred Stock, 52,239 shares of RAMCO Series B Preferred Stock and 750 shares
of Double R Common Stock. All of the issued and outstanding shares of stock in
each RAMCO Entity are duly and validly issued and outstanding and are fully paid
and nonassessable. None of the outstanding shares of capital stock of any RAMCO
Entity has been issued in violation of any preemptive rights of the current or
past stockholders of such entity.
(b) There are no shares of capital stock or other equity
securities of any RAMCO Entity outstanding (other than the shares of common
and preferred stock listed in Exhibit "A") and there are no outstanding
rights against any RAMCO Entities or RAMCO Group Stockholders relating to the
capital stock of any RAMCO Entity. There are no voting trusts, voting
agreements, proxies or any other agreements or understandings with respect to
the voting of any voting securities of any RAMCO Entity.
8.04 OWNERSHIP OF RAMCO STOCK. Each of the RAMCO Group Stockholders
owns the shares of RAMCO stock which may be sold hereunder free and clear of
any liens, claims, encumbrances and transfer restrictions and has the absolute
right to sell the RAMCO Stock as set forth herein without the need for any
consent from any other person. The deliveries of the certificates
representing the RAMCO Stock will, upon delivery by the Escrow Agent to NYL,
transfer good and marketable title thereto.
8.05 NO SUBSIDIARIES. The RAMCO Entities have no subsidiaries except
as set forth in Exhibit 8.05 of the RAMCO Disclosure Memorandum.
8.06 FINANCIAL STATEMENTS. Attached as Exhibit 8.06 to the RAMCO
Disclosure Memorandum are as to each RAMCO Entity: the unaudited balance sheet
(including related notes and schedules, if any) as of May 31, 1996 and the
related unaudited statements of operations, stockholders equity and cash
flows (the "RAMCO Financial Statements"). Each of the RAMCO Financial
Statements (including, in each case, any related notes and schedules) was
prepared in accordance with historical practices consistently applied and
substantially in accordance with GAAP and fairly present in all material
respects the financial position of each RAMCO Entity as at the respective
dates and the results of operations and cash flows for the periods indicated.
8.07 EVENTS SUBSEQUENT. Since May 31, 1996, there has not been any
material adverse change in the assets, liabilities, business, financial
condition, operation, or results of operations of any RAMCO Entity. Without
limiting the generality of the foregoing, since that date:
(a) No RAMCO Entity has sold, leased, transferred or assigned any
of its material assets, tangible or intangible, other than for a fair
consideration and in the ordinary course of business;
13
(b) No RAMCO Entity has entered into any material contract (or
series of related contracts) outside the ordinary course of business;
(c) No person (including a RAMCO Entity) has accelerated,
terminated, modified or cancelled any material contract, (or series of
related contracts) to which a RAMCO Entity is a party or by which any of its
assets are bound;
(d) No RAMCO Entity has granted or imposed any lien upon any of
its assets, tangible or intangible;
(e) No RAMCO Entity has made any capital expenditure (or series
of related capital expenditures) outside the ordinary course of business;
(f) No RAMCO Entity has made any capital investment in, any loan
to, or any acquisition of the securities or assets of any other person (or
series of related capital investments, loans and acquisitions) outside the
ordinary course of business;
(g) No RAMCO Entity has created, incurred, assumed or guaranteed
any indebtedness (including capitalized lease obligations) outside the
ordinary course of business;
(h) No RAMCO Entity has delayed or postponed (beyond its normal
practice) the payment of accounts payable and other liabilities;
(i) No RAMCO Entity has cancelled, compromised, waived or
released any right or claim (or series of related rights and claims) outside
the ordinary course of business;
(j) There has been no change made or authorized in the Articles
of Incorporation or Bylaws of any RAMCO Entity;
(k) No RAMCO Entity has issued, sold or otherwise disposed of any
of its capital stock or granted any rights with respect to any of its capital
stock;
(l) No RAMCO Entity has declared, set aside or paid any dividend
or distribution with respect to its capital stock or redeemed, purchased or
otherwise acquired any of its capital stock;
(m) No RAMCO Entity has experienced any material damage,
destruction or loss (whether or not covered by insurance) to its property;
(n) Except for routine renewals of existing severance agreements,
no RAMCO entity has made any loan to or entered into any other transaction
with, any of its directors, officers, employees or related person giving rise
to any claim or right on its part against the person or on the part of the
person against it;
(o) Except for routine renewals of existing severance agreements,
no RAMCO Entity has entered into any employment contract or collective
bargaining agreement, written or oral, or modified the terms of any existing
such contract or agreement;
(p) No RAMCO Entity has granted any increase in the compensation
of any of its directors or officers;
(q) No RAMCO Entity has adopted any (i) bonus (ii) profit-sharing,
(iii) incentive compensation, (iv) pension, (v) retirement, (vi) medical,
hospitalization, life or other insurance, (vii) severance, or
14
(viii) other plan, contract or commitments for any of its directors,
officers and employees or modified or terminated any existing such plan,
contract or commitment;
(r) Except for routine renewals of existing severance
agreements, no RAMCO Entity has made any other change in employment terms for
any of its directors and officers;
(s) No RAMCO Entity has made or pledged to make any charitable
or other capital contribution other than as consistent with past practices;
and
(t) No RAMCO Entity has committed in writing or orally to any of
the foregoing.
8.08 SUBSEQUENT EVENTS. No RAMCO Entity has incurred or paid any
material liability since May 31, 1996, except for such liabilities incurred
or paid in the ordinary course of business consistent with past business
practice. No RAMCO Entity is directly or indirectly liable, by guarantee,
indemnity, or otherwise, upon or with respect to, or obligated by, discount
or repurchase agreement or in any other way, to provide funds in respect to,
or obligated to guarantee or assume any liability of any person.
8.09 TAX MATTERS.
(a) All tax returns required to be filed by or on behalf of the
RAMCO Entities have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1995, and all tax returns filed are complete and accurate in all
material respects. All taxes shown on filed tax returns have been paid.
There is no audit examination, deficiency, or refund litigation with respect
to any taxes. All taxes and other liabilities due with respect to completed
and settled examinations or concluded litigation have been paid.
(b) No RAMCO Entity has executed an extension or waiver of any
statute of limitations on the assessment or collection of any tax due
(excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) The provision for any taxes due or to become due for any
RAMCO Entity for the period or periods through and including the date of the
respective RAMCO Financial Statements that has been made and is reflected on
such RAMCO Financial Statements is sufficient to cover all such taxes.
(d) The RAMCO Entities are in substantial compliance with, and
their records contain all information and documents (including properly
completed Internal Revenue Service Form W-9s) necessary to comply with, all
applicable information reporting and tax withholding requirements under
federal, state, and local tax laws, and such records identify with
specificity all accounts subject to backup withholding under Section 3406
of the Internal Revenue Code.
8.10 ASSETS. Each RAMCO Entity has defensible title, free and clear of
all liens, to all of its material assets except as set forth in SECTION 8.10
of the RAMCO Disclosure Memorandum. All tangible properties material to the
businesses of a RAMCO Entity are usable in the ordinary course of business
consistent with past practices. The assets of each RAMCO Entity include all
assets required to operate the business of that RAMCO Entity as presently
conducted. All assets which are material to a RAMCO Entity's business, held
under leases or subleases by each RAMCO Entity, are held under valid
contracts enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceedings may be brought), and
each such contract is in full force and effect. No RAMCO Entity has received
notice from any insurance carrier that (i) any policy of insurance has been
or will be cancelled or that coverage thereunder will be
15
reduced or eliminated, or (ii) premium costs with respect to such policies of
insurance will be substantially increased. There are presently no claims
pending under such policies of insurance.
8.11 INTELLECTUAL PROPERTY. Each RAMCO Entity owns all Intellectual
Property necessary for the operation of the business of each RAMCO Entity as
presently conducted. Each RAMCO Entity has taken all necessary action to
maintain and protect each item of Intellectual Property that it owns. Each
of the RAMCO Group Stockholders further represent that neither they nor any
related person or entity has retained possession of copies of any
Intellectual Properties of the RAMCO Entities or the Partnership.
8.12 COMPLIANCE WITH LAWS. Each RAMCO Entity has in effect all permits
necessary for it to own, lease, or operate its material assets and to carry
on its business as now conducted, and there has occurred no default under any
such permit. No RAMCO Entity:
(a) is in material violation (i.e., a violation that would have a
material adverse effect) of any laws, orders, or permits, including
environmental laws, applicable to its business or employees conducting its
business; or
(b) has received any notification or communication, which remains
effective and outstanding, from any agency or department of federal, state,
or local government or any, regulatory authority or the staff thereof (i)
asserting that it is not in compliance with any of the laws or orders which
such governmental authority or regulatory authority enforces, (ii) threatening
to revoke any permits, or (iii) requiring it to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or to adopt any board resolution
or similar undertaking.
8.13 LABOR RELATIONS. No RAMCO Entity is the subject of any litigation
or threatened claim asserting that it has committed an unfair labor practice
(within the meaning of the National Labor Relations Act or comparable state
law) or seeking to compel it to bargain with any labor organization as to
wages or conditions of employment, nor is it party to any collective
bargaining agreement, nor is there any strike or other material ongoing labor
dispute involving it, pending or, to its knowledge, threatened, or to its
knowledge, is there any activity involving its employees seeking to certify a
collective bargaining unit or engaging in any other organizational activity.
8.14 EMPLOYEE BENEFIT PLANS.
(a) Each RAMCO Entity has disclosed in SECTION 8.14 of the RAMCO
Disclosure Memorandum and delivered or made available to NYL prior to the
execution of this Agreement, copies of all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plans, all
other written employee programs, arrangements, or agreements, all medical,
vision, dental, or other health plans, all life insurance plans, and all other
employee benefit plans or fringe benefit plans currently adopted, maintained
by, sponsored in whole or in part by, or contributed to by any RAMCO Entity.
(b) All RAMCO Benefit Plans are in compliance, in all material
respects, with the applicable terms of ERISA, the Internal Revenue Code, and
any other applicable laws.
(c) Except as disclosed in SECTION 8.14 of the RAMCO Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute,
or otherwise) becoming due to any director or any employee of any RAMCO
Entity from a RAMCO Entity under any RAMCO Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any RAMCO Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any
such benefit.
16
8.15 LEGAL PROCEEDINGS. Except for those matters set forth in
SECTION 8.15 of the RAMCO Disclosure Memorandum, there is no litigation
instituted or pending, or, to the knowledge of any RAMCO Entity, threatened
against a RAMCO Entity, which, if decided adversely, would have a material
adverse effect, nor are there any orders of any regulatory authorities, other
governmental authorities, or arbitrators outstanding against any of them.
SECTION 8.15 of the RAMCO Disclosure Memorandum includes a summary report of
all litigation as of the date of this Agreement to which each RAMCO Entity is
a party and which names it as a defendant or cross-defendant, or for which it
has potential liability.
8.16 SECURITIES LAWS MATTERS. RAMCO hereby acknowledges that if
the RAMCO Purchase occurs, the NYL Partnership Interest will not be
registered under the Securities Act of 1933 or any applicable state
securities laws. RAMCO expressly represents and warrants to NYL that RAMCO
(i) has or will have prior to Closing reviewed such information concerning
the NYL Partnership Interest as RAMCO has or will deem relevant in connection
with RAMCO's acquisition of the NYL Partnership Interest, and (ii) will be
acquiring the NYL Partnership Interest for investment purposes only and not
for resale with a view to, or in connection with, a distribution within the
meaning of the securities laws.
IX.
MINORITY STOCKHOLDER PROTECTIONS
9.01 INTENT. In the event that RAMCO acquires the NYL Partnership
Interest from NYL, NYL will continue to own 26 shares of the 101 issued and
outstanding shares of the Common Stock of RAMCO and 260 shares of the 1,010
issued and outstanding shares of the Common Stock of Double R.
9.02 DISTRIBUTIONS. For so long as NYL owns any shares of stock in
the RAMCO Entities, in the event that either of the RAMCO Entities sells any
properties or other assets, it shall do so in a manner consistent with the
best interests of all stockholders including NYL and to the extent any
distribution (excluding salaries, fees and expense reimbursements) is made
to stockholders, all stockholders of the same class will be treated equally
based upon their ownership interest in the RAMCO Entities.
9.03 NO DILUTION. In the event the RAMCO Purchase Closing occurs,
then for and during the period ending on the first to occur of (i) the
disposition by NYL of all or any part of its stock in the RAMCO Entities or
any of them, other than in connection with a similar and proportionate
disposition by the RAMCO Group Stockholders (as a group), or (ii) one year
from and after the RAMCO Purchase Closing, neither the RAMCO Entities nor the
RAMCO Group Stockholders -- this is an individual obligation to vote against
any action prohibited by this provision -- shall take any action which would
cause the dilution (i.e., a reduction) of NYL's current percentage stock
ownership in either of the RAMCO Entities as compared with the current
percentage stock ownership of the RAMCO Group Stockholders (as a group). This
provision shall not be construed as requiring that NYL's stock ownership
percentage in the RAMCO Entities be maintained at twenty-six percent (26%) or
as prohibiting members of the RAMCO Group Stockholders from transferring
shares among themselves. After the first to occur of (i) or (ii) above, this
provision shall expire and be of no further force or effect and neither NYL,
its successors or assigns, shall have these or any similar anti-dilution
rights but rather the rights and obligations of all of the stockholders shall
be governed by applicable Delaware law.
X.
ADDITIONAL AGREEMENTS
10.01 CONFIDENTIALITY. Each Party agrees that the terms of this
Agreement are strictly confidential and shall not be revealed to any person,
corporation, or entity with the exception of a federal or state judicial,
legislative,
17
regulatory, or administrative body as mandated by a subpoena, process,
directive, or order, either to testify or to produce or file documents, in
which event, the Party so served shall:
(a) Immediately notify the other Parties to this Agreement
of such service of a subpoena, process, directive or order;
(b) Give only such testimony or produce or file only such
documents as legally compelled to so do; and
(c) In the event any other Party to this Agreement objects
or moves to quash or restrict the scope or operation of such subpoena,
process, directive, or order, give only such testimony or produce or file
only such documents as a judicial, legislative, regulatory, or administrative
body shall require after ruling upon such objection or motion to quash.
Notwithstanding the provisions of this Section, nothing herein shall restrict
any Party from revealing the terms of this Agreement if litigation is
instituted by any Party. Further, this Agreement shall not be construed as
prohibiting any Party from reflecting any payments made hereunder in
financial statements, tax filings, or regulatory filings, or limiting in any
manner oversight and review by the New York State Insurance Department or the
National Association of Insurance Commissioners. The Parties shall agree upon
an abstract of this Agreement which may be disclosed by RAMCO if required to
obtain financing to exercise the RAMCO Option. The provisions of this Section
supersede the terms of the Confidentiality Order entered in the Lawsuit on
July 11, 1994.
10.02 PRESS RELEASES. The Parties shall not make any press release
or other public disclosure related to this Agreement or any other transaction
contemplated hereby; provided, that nothing in this SECTION 10.02 shall be
deemed to prohibit any Party from making any disclosure which its counsel
deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by law. The Parties shall agree upon a public statement
respecting the resolution of their differences.
10.03 NYL SPECIAL REPRESENTATIVE. Between the date hereof and the
Expiration Date, the NYL Special Representative shall have all of the
following rights, powers and duties:
(a) Those rights, powers and duties contained in the Orders
entered December 17, 1993, and April 5, 1994, in the Lawsuit, except that the
Special Representative shall promptly approve all tech time charges up to
$10,000 per month;
(b) Those rights and powers to monitor and investigate
compliance by the RAMCO Entities and the RAMCO Group Stockholders of the
affirmative and negative covenants contained in SECTION 6 and the other
applicable provisions of this Agreement; and
(c) Those rights and powers incident to NYL's position as a
shareholder of the RAMCO Entities and a limited partner under the Partnership
Agreement.
10.04 RAMCO MANAGEMENT FEE AND TECH TIME. Prior to the Expiration
Date, RAMCO shall be paid a monthly "Management Fee" of $109,000 ($99,000 if
Coquille Bay is sold) and "Tech Time" paid to RAMCO shall not exceed $10,000
per month.
10.05 DISTRIBUTIONS. Prior to the Expiration Date, NYL shall
receive a distribution from the Partnership of $50,000 per month payable in
each month during the period from and including July, 1996, through the month
in which the Expiration Date occurs.
10.06 ANR JIB. NYL shall receive from RAMCO as general partner of
the Partnership NYL's 96.5% share of the Partnership's share of the ANR JIB
audit credit when received by the Partnership. RAMCO covenants
18
to use its best efforts in securing, but shall not be obligated to commence
litigation to secure the timely receipt of same.
10.07 NO SEVERANCE/PERSONAL PROPERTY. In the event that NYL purchases
the RAMCO Stock pursuant to this Agreement, Xxxxxx, Xxx and Xxxxxx agree that
they shall not be entitled to and do hereby waive any right to receive,
whether by contract or by operation of law, any and all severance,
termination or similar payments to which they might otherwise be entitled
upon termination of employment. However, in such event, each shall be
entitled to receive and shall remove the office furniture and other items
described on Exhibit "I" hereof (the "Personal Items") as soon as possible,
but not later than February 28, 1997.
10.08 COOPERATION. Each of the RAMCO Group Stockholders specifically
agrees to fully cooperate in any transition following the purchase by NYL of
the RAMCO Stock, including signing any documents, returning any proprietary
or geological information or data of the RAMCO Entities and refrain from
using any such properties, Intellectual Property, or assets, and enter the
premises only when specifically authorized by NYL.
10.09 HEALTH INSURANCE. In the event that the NYL Purchase Closing
shall occur, NYL agrees to pay all costs and expenses of COBRA health
insurance coverage on behalf of the RAMCO Group Stockholders for a period of
eighteen (18) months from the NYL Purchase Closing.
10.10 AUDIT. NYL hereby consents to allow RAMCO to engage Ernst & Young
L.L.P. to conduct an audit and issue a report on the RAMCO Entities and the
Partnership for the year ended December 31, 1995, provided that NYL shall be
a signatory party to any engagement letter with such accountants and shall be
entitled to receive all draft reports and accountants' letters issued in
respect thereof. NYL shall be entitled to receive all such reports and
letters contemporaneously with the RAMCO Entities and to participate and be
privy to all meetings.
10.11 PARTNERSHIP AGREEMENT. Except as modified in this Agreement, the
Partnership Agreement shall remain in full force. To the extent that there is
any conflict between this Agreement and the Partnership Agreement, this
Agreement shall control.
10.12 ATTORNEY CLIENT PRIVILEGE. NYL acknowledges and agrees that all
communications between McAfee & Xxxx, A Professional Corporation (counsel to
the RAMCO Entities and, with the express consent of NYL heretofore granted,
counsel to the RAMCO Group Stockholders in connection with the matters
described in this Agreement) and the RAMCO Entities, the RAMCO Group
Stockholders, their respective employees, officers, agents, representatives,
other counsel, accountants, brokers, investment advisors, and others engaged by
them, in connection with the proposed RAMCO Purchase or the proposed NYL
Purchase or otherwise with respect to matters arising under this Agreement,
shall be privileged attorney-client communications and that NYL shall neither
seek to obtain any such communications nor attempt to discover the contents
thereof, whether through its Special Representative, by making a demand for
inspection of corporate records, in any court proceeding or otherwise.
10.13 INFORMATION RELATING TO THE RAMCO PURCHASE. NYL agrees that prior
to the closing of the RAMCO Purchase, all drafts, correspondence,
information, discussions, deliberations, alternatives, proposals, contracts,
etc., relating to the proposed RAMCO Purchase or the funding of same,
including, without limitation, documents and information of the kind
described in SECTION 10.14 hereof, shall be confidential information to which
NYL shall have no access, whether as a stockholder of the RAMCO Entities or
otherwise. RAMCO will, however, make a monthly report to a NYL officer
beginning September 30, 1996, of the status of financing efforts and the
probability of success of RAMCO acquiring the NYL Partnership Interest. In
the event the RAMCO Purchase closes, NYL shall have access to such
information as would be available to a stockholder under Delaware law.
10.14 FUNDING ARRANGEMENTS. Notwithstanding any provisions of this
Agreement to the contrary, the RAMCO Entities, for themselves and as general
partners for and on behalf of the Partnership, and the RAMCO Group
Stockholders, may enter into any agreements or commitments they deem
appropriate or desirable for the purpose of securing the financing or funding
required for the closing of the RAMCO Purchase, including, without
19
limitation, loan agreements, mortgages, asset purchase and sale agreements,
stock sale, purchase and subscription agreements, brokerage agreements,
forward sale, swap or other transactions in derivatives, and other agreements
of every other nature and kind for the purpose of raising cash, debt or
equity financing, provided that (i) such agreements, transactions and
commitments that affect the ownership of, impose a lien upon or create rights
in third parties with respect to the stock, partnership interests or
properties of the RAMCO Entities or the Partnership may not be effective
until after or contemporaneous with the closing of the RAMCO Purchase, and
(ii) NYL shall not have the obligation to pledge its stock in the RAMCO
Entities. Any reorganization or recapitalization of the RAMCO Entities,
including any credit agreement or other debt financing, agreed to or
implemented for the purpose of effecting the RAMCO Purchase, regardless of
whether such agreements are to have present or future effect, shall be
structured so as to preserve the relative stock ownership percentages of NYL
on the one hand and the RAMCO Group Stockholders (as a group) on the other
hand, and any dilution of equity ownership or the creation of new stock or
rights or any changes to existing rights with respect to stock in the RAMCO
Entities in connection with effecting the RAMCO Purchase, regardless of
whether such agreements are to have present or future effect, shall affect
NYL on the one hand and the RAMCO Group Stockholders on the other hand in the
same manner and in proportion to their respective stock ownership interests.
10.15 FEES, COSTS AND EXPENSES. All reasonable legal fees, and all other
costs and expenses reasonably incurred by any of the RAMCO Entities or any of
the RAMCO Group Stockholders in connection with the attempted funding or
financing of the RAMCO Purchase or the NYL Purchase or otherwise in connection
with the negotiation, execution or performance of this Agreement by the RAMCO
Entities and the RAMCO Group Stockholders shall be paid by RAMCO and such
payment hereby is authorized and approved by NYL in its capacity as sole
disinterested stockholder of RAMCO and with the same effect as though put to
a vote of the stockholders of RAMCO. All commitment fees, arrangement fees,
initial fees, review fees, transaction fees, and other similar charges made
by, and all expense reimbursements paid to, any prospective third party
(i.e., not an Affiliate of any of the RAMCO Entities or RAMCO Group
Stockholders) lender, financing entity, investor representative, investment
banker or broker in connection with the proposed financing or funding of the
RAMCO Purchase shall be paid by the Partnership, which fees shall not exceed
the aggregate sum of Five Hundred Thousand Dollars ($500,000); provided,
however, that the RAMCO Entities, acting through Xxx and Xxxxxx, shall use
their reasonable best efforts to avoid the requirement of paying any such
fees prior to the closing of the RAMCO Purchase.
XI.
[6~ BREACH OF COVENANTS
11.01 GOVERNING LAW AND VENUE. The validity, construction and
performance of this Agreement shall be determined in accordance with the laws
of the state of Oklahoma applicable to agreements made and to be performed in
Oklahoma, and the venue of any action pertaining to this document shall lie
in Tulsa, Oklahoma; inasmuch as, the signatories hereby acknowledge and
stipulate that this Agreement was negotiated, made, executed, and delivered
in Tulsa, Oklahoma and the subject matter hereof arose in Tulsa, Oklahoma.
11.02 RAMCO BREACH. In the event of a breach of any provision of this
Agreement by the RAMCO Entities or RAMCO Group Stockholders, NYL may
institute an action at law, or in equity, in the District Court for the
Northern District of Oklahoma or District Court of Tulsa County, Oklahoma,
and the RAMCO Entities and RAMCO Group Stockholders hereby waive any
objection to the jurisdiction of such court.
11.03 NYL BREACH. In the event of a breach of any provision of this
Agreement by NYL, the RAMCO Entities or the RAMCO Group Stockholders may
institute an action at law, or in equity, in the District Court for the
Northern District of Oklahoma or the District Court of Tulsa County,
Oklahoma, and NYL hereby waives any objection to the jurisdiction of such
court.
20
XII.
NOTICES
12.01 NOTICES. All notices and other communications required
hereunder shall be in writing and shall be deemed given:
(i) when received, if delivered personally,
(ii) when sent, if by facsimile transmission during normal business
hours of the receiving party (or if after normal business hours of such party
on the next business day), or
(iii) twenty-four hours after deposit with an overnight express courier
(but if the end of such twenty-four hour period falls on other than a normal
business day, then on the next business day).
All notices to the parties shall be at the following addresses (or at such
other address for a party as shall be specified by like notice; provided that
notices of a change of address shall be effective only upon receipt thereof):
(a) to NYL as follows:
Xx. Xxxxxxx X. Xxxxx
Vice President
New York Life Insurance
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Xxxx Xxxxx, Esq.
Associate General Counsel
New York Life Insurance
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
with copies to:
R. Xxxxx Xxxxxxxxxx, Esq.
000 Xxxxx Xxxxxx Xxxxxxxx
Xxxxx 0000
Xxxxx, XX 00000
Fax: (000) 000-0000
J. Xxxxxx Xxxxxxx, Esq.
Pray, Walker, Jackman,
Xxxxxxxxxx & Xxxxxx
000 XXXXX Xxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx, XX 00000
Fax: (000) 000-0000
21
(b) to RAMCO or Double R as follows:
Xx. Xxxxx X. Xxx
President
RAMCO
0000 X. Xxxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000
Fax: (000) 000-0000
with copies to:
C. Xxxxx Xxxxxxx, Esq.
McAfee & Xxxx
Two Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
(c) to the RAMCO Group Stockholders as follows:
Xx. Xxxxxxx X. Xxxxxx XX
0000 X. Xxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Xx. Xxxxx X. Xxx
RAMCO
0000 X. Xxxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000
Fax: (000) 000-0000
Ms. Xxxxx Xxxxxx-Xxxxxxx
RAMCO Director
0000 Xxxxx Xxxx
Xxxx, XX
Fax: (000) 000-0000
with copies to:
C. Xxxxx Xxxxxxx, Esq.
McAfee & Xxxx
Two Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
22
XIII.
MISCELLANEOUS
13.01 SURVIVAL OF REPRESENTATIONS AND COVENANTS. Subject to the
provisions of SECTIONS 2.04, 3.03 and 3.04 hereof, the respective
representations, warranties, obligations, covenants, and agreements of the
parties shall survive the NYL Purchase Closing or the RAMCO Purchase Closing,
as the case may be.
13.02 ENTIRE AGREEMENT. Except as otherwise expressly, provided herein,
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this
Agreement expressed or implied, is intended to confer upon any person, other
than the parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement.
13.03 AMENDMENTS. This Agreement may not be amended except by a
subsequent writing signed by each of the parties.
13.04 WAIVERS. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right of
such party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained
in this Agreement in one or more instances shall be deemed to be or construed
as a further or continuing waiver of such condition or breach or a waiver of
any other condition or of the breach of any other term of this Agreement. No
waiver shall be effective against a party unless in writing.
13.05 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto
(whether by operation of law or otherwise) without the prior written consent
of the other party. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns.
13.06 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
13.07 CAPTIONS AND SECTIONS. The captions contained in this Agreement
are for reference purposes only and are not part of this Agreement. Unless
otherwise indicated, all references to particular Sections shall mean and
refer to the referenced Sections of this Agreement.
13.08 INTERPRETATION. This document shall not construed in favor or
against any signatory hereto, but shall be construed as if all involved
herein prepared it.
13.09 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
13.10 ATTORNEY FEES. In the event of any breach hereof resulting in
litigation, or should it ever become necessary for a party to bring suit in
order to enforce the provisions of this Agreement, all costs thereof, plus
reasonable attorney fees shall be awarded to the prevailing party. It shall
be irrebuttably presumed that any such fees actually billed and paid were
reasonable and necessary.
23
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as of the day and year first above written.
New York Life Insurance Company
By /s/ Xxxxxxx X. Xxxxx
---------------------------------
Title VICE PRESIDENT
-----------------------
RAMCO Operating Company
By /s/ Xxxxx X. Xxx
---------------------------------
Title President
----------------------
Oklahoma Double R Corporation
By /s/ Xxxxx X. Xxx
---------------------------------
Title President
----------------------
/s/ Xxxxxxx X. Xxxxxx XX
-----------------------------------
Xxxxxxx X. Xxxxxx XX, Individually
and as Trustee of the Xxxxxxx X.
Xxxxxx XX 1982 Revocable Trust
/s/ Xxxxx X. Xxx
-----------------------------------
Xxxxx X. Xxx
/s/ M. Xxxxx Xxxxxxx
-----------------------------------
M. Xxxxx Xxxxxxx, formerly Xxxxxx,
Individually and as Trustee of
the M. Xxxxx Xxxxxx 1992 Trust
24
EXHIBIT LIST
"A" Holders of all classes of stock, common and preferred, in RAMCO and
Double R (McAfee & Xxxx)
"B" Escrow Agreement (McAfee & Xxxx)
"C" Assignment of all of the NYL Partnership Interest to RAMCO
(McAfee & Xxxx)
"D" Written resignations of each of the RAMCO Group Stockholders as
Officers and/or Directors of any of the RAMCO Entities, as trustees
or fiduciaries on any employee benefit plans of a RAMCO Entity, and
as signatories on any of the RAMCO Entities bank accounts (Pray Xxxxxx)
"E" Assignments of the Double R Notes (Pray Xxxxxx)
"F" General Release (McAfee & Xxxx)
"G" Mutual Releases of All Claims (Pray Xxxxxx)
"H" Confidentiality Agreement (McAfee & Xxxx)
"I" Office Furniture and Other Personal Items (McAfee & Xxxx)
