1
EXHIBIT 2.2
--------------------------------------------------------------------------------
Common Stock Purchase Agreement
by and among
SOUTHERN MINERAL CORPORATION
(the "Company")
and
The Purchasers Listed on Schedule 1
("Purchasers")
December 23, 1996
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
ARTICLE I. AUTHORIZATION AND SALE OF COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Sale of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. CLOSING DATE; DELIVERY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.2 Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE III. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3.1. Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3.2. Representations, Warranties and Covenants of the Purchasers . . . . . . . . . . . . . . . . . 7
ARTICLE IV. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.1 Closing Conditions of each Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.2 Conditions to Closing of Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.3 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.4 Registration Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.5 Indemnification and Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V. RESTRICTIONS ON TRANSFERABILITY OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.1 Restrictions on Transferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.2 Instruction Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.3 Transfer of Shares After Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.4 Purchaser Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.1 Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.2 Broker's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.4 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.7 Notices, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.8 Severability of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.11 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.12 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.13 Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.14 Effectiveness of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3
SOUTHERN MINERAL CORPORATION
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is made as of
December 23, 1996, by and among Southern Mineral Corporation, a Nevada
corporation (the "Company") with its principal office at 000 Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, and the persons listed on the Schedule of
Purchasers attached hereto as Schedule I (the "Purchasers").
ARTICLE I. AUTHORIZATION AND SALE OF COMMON STOCK
SECTION 1.1 AUTHORIZATION. The Company has authorized the
issuance and sale pursuant to this Agreement of 2,500,000 shares of its common
stock, par value $0.01 per share (the "Common Stock"). The Common Stock shall
have the rights as set forth in the Company's Amended and Restated Articles of
Incorporation, as amended.
SECTION 1.2 SALE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, the Company agrees to issue and sell to each
Purchaser and each Purchaser severally agrees to purchase from the Company, at
the Closing, the number of Shares of Common Stock ("Shares") set forth opposite
each Purchaser's name on Schedule I for $4.50 per Share.
ARTICLE II. CLOSING DATE; DELIVERY
SECTION 2.1 CLOSING DATE. The closing of the purchase and sale of
the Shares hereunder (the "Closing") shall be held at the offices of Xxxxxx &
Xxxxxx, L.L.P., Houston, Texas, at 10:00 a.m. Houston Time, on December 23,
1996, or at such other time and place upon which the Company and the Purchasers
purchasing the majority of the Shares shall agree. The date of the Closing is
hereinafter referred to as the "Closing Date."
SECTION 2.2 DELIVERY. At the Closing, the Company will deliver to
each Purchaser a certificate or certificates, registered in the Purchaser's
name as shown on Schedule B-1, representing the number of shares of Common
Stock to be purchased by the Purchaser. Such delivery shall be against payment
of the purchase price therefor by wire transfer to the Company's bank account
in the amount set forth on Schedule I.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Purchasers as of the Closing Date as
follows:
(a) ORGANIZATION AND GOOD STANDING. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation. The Company has full
corporate power and
4
authority to own, use and lease its properties and to conduct its
business as such properties are owned, used or leased and as such
business is currently conducted. The Company is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which it owns or leases property or where the conduct
of its business would require such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its Significant
Subsidiaries (as hereinafter defined) taken as a whole ("Material
Adverse Effect").
(b) CORPORATE POWER AND AUTHORITY; AUTHORIZATION. The
Company has full corporate power and authority to enter into this
Agreement and to perform its obligations hereunder, including the
issuance and sale of the Shares to the Purchasers. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized and approved
by the Board of Directors of Company, and no other corporate proceeding
on the part of the Company is necessary to authorize and approve this
Agreement and the transactions contemplated hereby. This Agreement has
been duly executed and delivered by, and constitutes a valid and
binding obligation of, the Company, enforceable against the Company in
accordance with its terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by the principles
governing the availability of equitable remedies, and except that the
enforceability of indemnification provisions for the violation of
securities laws may be limited by public policy).
(c) CAPITAL STOCK. The authorized capital stock of the
Company consists of 20,000,000 shares of Common Stock, of which
6,588,519 shares are issued and outstanding as of November 29, 1996.
All of the outstanding shares of Common Stock are validly issued, fully
paid and nonassessable. There are not any outstanding agreements,
warrants, options, calls, preemptive or other rights, or other
commitments of any nature relating to any of the authorized but
unissued shares of capital stock or other shares held in the treasury
of the Company, other than as described in the SEC Documents (as
hereinafter defined) and the Memorandum (as hereinafter defined).
(d) ISSUANCE AND DELIVERY OF THE SHARES. The Shares, when
issued in compliance with the provisions of this Agreement, will be
validly issued, fully paid and nonassessable and will conform to the
description of the Common Stock set forth in the Memorandum. The
issuance and delivery of the Shares is not subject to preemptive or any
other similar rights of the stockholders of the Company or any liens or
encumbrances.
(e) SIGNIFICANT SUBSIDIARIES. Each Significant Subsidiary
of the Company, as defined in the rules and regulations of the
Securities and Exchange Commission ("SEC"), is listed in the SEC
Documents. Each such Significant Subsidiary has been legally
incorporated, duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, and has full corporate power and authority to conduct
its business as now being conducted. Each Significant Subsidiary is
duly qualified and in good
-2-
5
standing under the laws of any jurisdiction in which such Subsidiary
does business or is otherwise required to be so qualified, except where
the failure to be so qualified would not have a Material Adverse
Effect. All of the outstanding shares of capital stock of each such
Significant Subsidiary have been duly authorized and validly issued,
and are fully paid and non-assessable, and, except as otherwise
disclosed in the SEC Documents, are owned directly or indirectly by the
Company, free and clear of any of the following (collectively
"Claims"): security interests, liens, pledges, interests arising in
connection with community property laws or other laws relating to the
rights of spouses, claims, charges, escrows, encumbrances, options,
rights of first refusal, mortgages, indentures, security agreements or
other agreements, arrangements, contracts, commitments, understandings,
obligations, whether or not relating in any way to credit or the
borrowing of money, voting agreements or proxies. There are not any
outstanding agreements, warrants, options, calls, preemptive or other
similar rights, or other commitments of any nature relating to any of
the authorized but unissued shares of capital stock or other shares
held in the treasury of any Significant Subsidiary, except as disclosed
in the SEC Documents.
(f) NO CONFLICTS. The execution, delivery and performance
by the Company of this Agreement and the consummation of the
transactions contemplated hereby will not violate any provision of law
or conflict with, or result in any breach of, or constitute a default
under, or result in the creation of a Claim on any of the properties or
assets of the Company pursuant to any corporate charter, bylaw or
regulation or any agreement, instrument, judgment or decree to which
the Company or any Significant Subsidiary is a party or by which the
Company or any Significant Subsidiary or their respective properties is
or may be bound or affected, or eliminate or impair any intangible
right, concession (including any tax concession), license or privilege
allowed to or enjoyed by the Company or any Significant Subsidiary. No
unobtained approval, authorization, consent, order or other action of,
or filing with, any person, firm or corporation, or any court,
administrative agency (including the National Association of Securities
Dealers, Inc.) or other governmental authority, domestic or foreign, is
required in connection with the execution and delivery by the Company
of this Agreement or the consummation by the Company of the
transactions contemplated hereby, including the issuance of the Shares
to the Purchasers except for post-Closing filings required to perfect
exemptions under federal and state securities laws.
(g) PRIVATE PLACEMENT OFFERING MEMORANDUM; SEC DOCUMENTS;
FINANCIAL STATEMENT. Each complete or partial statement, report, or
proxy statement included as an Attachment to the Company's Confidential
Private Placement Memorandum dated December [], 1996 (the "Memorandum")
is a true and complete copy of or excerpt from such document as filed
by the Company with the SEC. The Company has filed in a timely manner
all documents that the Company was required to file with the SEC under
Sections 13, 14(a) and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), during the 24 months preceding the date
of this Agreement (the "SEC Documents"). As of their respective filing
dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act or the Securities Act of 1933, as
amended (the "Securities Act"), as applicable. Neither the Memorandum
nor any of the SEC Documents as of their respective dates contained any
untrue
-3-
6
statement of material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the
SEC Documents (the "Financial Statements") comply as to form in all
material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto. The
Financial Statements have been prepared in accordance with generally
accepted accounting principles consistently applied and fairly present
the consolidated financial position of the Company and any subsidiaries
at the dates thereof and the consolidated results of their operations
and consolidated cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal, recurring adjustments that are
not in the aggregate material).
(h) NO MATERIAL CHANGE. Except as otherwise disclosed
herein, since September 30, 1996, there have not been:
(1) Any changes in the financial condition or
results of operations of the Company and the Significant
Subsidiaries from that reflected in the Financial Statements
except changes in the ordinary course of business which have
not been, either individually or in the aggregate, materially
adverse;
(2) Any material increase in indebtedness for
borrowed money, current liabilities or total liabilities
(whether absolute, accrued, contingent or otherwise) incurred
by the Company or any Significant Subsidiary, except for
liabilities, commitments and obligations incurred in the
ordinary course of business;
(3) Any sale, assignment, transfer or other
disposition of any material tangible or intangible asset of
the Company or any Significant Subsidiary, except in the
ordinary course of business;
(4) Any extraordinary transaction by the Company
or any Significant Subsidiary; and
(5) Any execution or authorization of a material
agreement that the Company would be required to file with the
SEC.
(i) LITIGATION. There are no actions, suits, proceedings
or investigations pending or, to the best of the Company's knowledge,
threatened against the Company or any Significant Subsidiary or any of
their respective properties before or by any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
likelihood (in the judgment of the Company) of an adverse decision that
(a) could have a Material Adverse Effect or (b) could impair the
ability of the Company to perform in any material respect its
obligations under this Agreement.
(j) COMPLIANCE. The Company, the Significant Subsidiaries
and their use and occupancy of their assets and properties wherever
located, are in compliance in all material respects with all, and not
in violation of any, and the
-4-
7
Company has not received any claim or notice that it is not in material
compliance with, or that it is in violation of any, applicable federal,
state, local or other governmental laws or ordinances, or any order,
rule or regulation of any federal, state or local or other governmental
agency or body, to which the Company, the Significant Subsidiaries or
their respective businesses, operations, agents, employees, assets or
properties are subject (including, without limitation, all
recordkeeping and reporting requirements thereof); nor has the Company
or any Significant Subsidiary failed to obtain or to adhere to the
requirements of any government license, permit or authorization
reasonably necessary to the ownership of its assets and properties or
the conduct of its business, which noncompliance, violation or failure
to obtain or adhere would have a Material Adverse Effect.
(k) INDEPENDENT ACCOUNTANTS. Xxxxx Xxxxxxxx LLP, who have
certified certain financial statements of the Company included in the
SEC Documents, are independent public accountants as required by the
Securities Act and the rules and regulations of the SEC thereunder.
(l) RESERVE INFORMATION. The information supplied by the
Company to the independent petroleum engineering consultants for the
Company for purposes of preparing the reserve reports and estimates of
such consultants included in the Memorandum and the SEC Documents,
including, without limitation, production, costs of operation and
development, current prices for production, agreements relating to
current and future operations and sales of production, was true and
correct in all material respects on the date supplied and was prepared
in accordance with customary industry practices; Netherland, Xxxxxx &
Associates, Inc. and XxXxxxxx & Associates Consultants Ltd., who
prepared estimates of the amount and value of proved reserves of the
Company as set forth in certain of the SEC Documents, are independent
with respect to the Company. Information with respect to the estimated
quantities of the Company's proved reserves and the present value of
such reserves included in the SEC Documents were prepared in accordance
with the rules and guidelines set forth in the rules and regulations of
the SEC.
(m) INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY.
The Company is not an "investment company" as defined in the Investment
Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder, and the Company is not a "holding company" or
and "affiliate" of a holding company or public utility as defined in
the Public Utility Holding Company Act of 1940, as amended, and the
rules and regulations promulgated thereunder.
(n) OIL AND GAS PROPERTIES. The Company and its
Significant Subsidiaries have defensible title to their producing oil
and gas properties and gas gathering properties free and clear of all
liens, encumbrances and defects, except (1) those described in the
Memorandum and SEC Documents, (2) liens securing taxes and other
governmental charges, or claims of materialmen, mechanics and similar
persons, not yet due and payable, (3) liens and encumbrances under
operating agreements, unitization and pooling agreements, and gas sales
contracts, securing payment of amounts not yet due and payable and of a
scope and nature customary in the oil and gas business and (4) liens,
encumbrances and
-5-
8
defects that do not in the aggregate materially and adversely affect
the value of such oil and properties or gas gathering properties or
materially and adversely affect the use made or proposed to be made of
such properties by the Company and its Significant Subsidiaries; except
as described in the Memorandum and the SEC Documents, the oil, gas and
mineral leases, options to lease, concessions or other property
interests held by the Company and its Significant Subsidiaries reflect
in all material respects the right of the Company and its Significant
Subsidiaries to explore for or receive production from the undeveloped
properties described in the SEC Documents, and the care taken by the
Company and its Significant Subsidiaries with respect to acquiring or
otherwise procuring such leases, options to lease, drilling concessions
and other property interests was generally consistent with standard
industry practices for acquiring or procuring leases and interests
therein to explore such for hydrocarbons.
(o) PAYMENTS. All royalties, rentals, deposits and other
amounts required to be paid under the producing oil and gas leases of
the Company and its Significant Subsidiaries have been properly and
timely paid, and no proceeds from the sale or production attributable
to the producing oil and gas leases of the Company and its Significant
Subsidiaries are currently being held in suspense by any purchaser
thereof, and there are no claims under take-or-pay contracts pursuant
to which natural gas purchasers have any make-up rights affecting the
interest of the Company and its Significant Subsidiaries in its oil and
gas properties which, in any such case, would have a Material Adverse
Effect.
(p) BALANCING. The aggregate undiscounted net monetary
liability, after giving effect to oil and gas due from co-owners, of
the Company and its Significant Subsidiaries for oil or gas taken or
received under any operating or gas balancing and storage agreement
relating to its oil and gas properties that permits any person to
receive any portion of the interest of the Company or any of its
Significant Subsidiaries in oil or gas or to receive cash or other
payments to balance any disproportionate allocation of oil or gas could
not, singularly or in the aggregate, have a Material Adverse Effect.
(q) ENVIRONMENTAL LAWS. The Company and its Significant
Subsidiaries (A) are in compliance with any and all applicable federal,
state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or waste, pollutants or contaminants ("Environmental Laws"),
(B) have received all permits, licenses or other approvals required of
it under applicable Environmental Laws to conduct their respective
businesses and (C) are in compliance with all terms and conditions of
any such permit, license or approval, except for such noncompliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals that would not, singularly or in
the aggregate, have a Material Adverse Effect. There has been no
storage, disposal, generation, transportation, handling or treatment of
hazardous substances or solid wastes by the Company or any of its
Significant Subsidiaries (or to the knowledge of the Company and the
Significant Subsidiaries, any of their respective predecessors in
interest) at, upon or from any of the property now or previously owned
or leased by the Company or any Significant Subsidiary in violation of
any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action by the Company
or any Significant Subsidiary under any applicable law, ordinance,
rule,
-6-
9
regulation, order, judgment, decree or permit, except for any violation
or remedial action which would not result in, or which would not be
reasonably likely to result in, singularly or in the aggregate with all
such violations and remedial actions, a Material Adverse Effect; there
has been no spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the
environment surrounding such property of any solid wastes or hazardous
substances due to or caused by a knowing act or omission by the Company
or a Significant Subsidiary, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
result in or would not be reasonably likely to result in, singularly or
in the aggregate with all such spills, discharges, leaks, emissions,
injections, escape, dumping or releases, a Material Adverse Effect: and
the terms "hazardous substances" and "solid wastes" shall have the
meanings specified in any applicable local, state and federal laws or
regulations with respect to environmental protection.
(r) REGISTRATION RIGHTS. Except for the registration
rights granted in connection with (i) this Agreement and (ii) described
in the Memorandum or SEC Documents, the Company has not agreed to
register the sale of any of its securities under the Securities Act.
SECTION 3.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PURCHASERS. Each Purchaser hereby severally represents and warrants to the
Company, effective as of the Closing Date, as follows:
(a) AUTHORIZATION. Purchaser represents and warrants to
the Company that: (i) Purchaser has all requisite legal and corporate
or other power and capacity and has taken all requisite corporate or
other action to execute and deliver this Agreement, to purchase the
Shares to be purchased by it and to carry out and perform all of its
obligations under this Agreement; and (ii) this Agreement constitutes
the legal, valid and binding obligation of the Purchaser, enforceable
in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, or similar laws relating to or
affecting the enforcement of creditors' rights generally and (b) as
limited by equitable principles generally.
(b) INVESTMENT EXPERIENCE. Purchaser is an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Purchaser
is aware of the Company's business affairs and financial condition and
has had access to and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
Shares. Purchaser has such business and financial experience as is
required to give it the capacity to protect its own interests in
connection with the purchase of the Shares.
(c) INVESTMENT INTENT. Purchaser has not been formed for
the purpose of acquiring the Shares. Purchaser is purchasing the
Shares for its own account as principal, for investment purposes only,
and not with a present view to, or for, resale, distribution or
fractionalization thereof, in whole or in part, within the meaning of
the Securities Act. Purchaser understands that its acquisition of the
-7-
10
Shares has not been registered under the Securities Act or registered
or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other
things, the bona fide nature of Purchaser's investment intent as
expressed herein. Purchaser has completed or caused to be completed and
delivered to the Company, the Purchaser Questionnaire attached hereto
as Exhibit B-2 for use in preparation of the Registration Statement (as
hereinafter defined). Purchaser has, in connection with its decision to
purchase the number of Shares set forth in Schedule I hereto, relied
solely upon the Memorandum and the documents attached thereto and the
representations and warranties of the Company contained herein.
Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Shares
except in compliance with the Securities Act, applicable state
securities laws, and the rules and regulations promulgated thereunder.
The information provided by Purchaser in the Schedules and Exhibits
hereto is true, complete and correct in all material respects.
(d) REGISTRATION OR EXEMPTION REQUIREMENTS. Purchaser
further acknowledges and understands that the Shares may not be resold
or otherwise transferred except in a transaction registered under the
Securities Act or unless an exemption from such registration is
available. Purchaser understands that the certificate(s) evidencing the
Shares will be imprinted with a legend that prohibits the transfer of
the Shares unless (i) they are registered or such registration is not
required, and (ii) if the transfer is pursuant to an exemption from
registration other than Rule 144 under the Securities Act and, if the
Company shall so request in writing, an opinion of counsel reasonably
satisfactory to the Company is obtained to the effect that the
transaction is so exempt.
(e) RESTRICTION ON SHORT SALES. Purchaser represents and
warrants to and covenants with the Company that Purchaser has not
engaged and will not engage in any short sales of the Company's Common
Stock prior to the effectiveness of the Registration Statement, except
to the extent that any such short sale is fully covered by shares of
Common Stock of the Company other than the Shares.
(f) NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser
understands that nothing in the Memorandum, this Agreement or any other
materials presented to Purchaser in connection with the purchase and
sale of the Shares constitutes legal, tax or investment advice.
Purchaser has consulted such legal, tax and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares.
ARTICLE IV. CONDITIONS TO CLOSING
SECTION 4.1 CLOSING CONDITIONS OF EACH PURCHASER. Each Purchaser's
obligation to purchase the Shares at the Closing is, at the option of such
Purchaser, subject to the fulfillment or waiver as of the Closing Date of the
following condition:
-8-
11
(a) REPRESENTATIONS AND WARRANTIES TRUE. If the date of
this Agreement is different than the Closing Date, the Company shall
have furnished to the Purchasers and Xxxxxx Xxxxxx & Company, Inc.
certificates of officers of the Company as to the accuracy of the
representations and warranties of the Company as of the Closing Date,
compliance with all agreements and conditions under this Agreement and
as to such other matters as the Purchasers and Xxxxxx Xxxxxx & Company,
Inc. may reasonably request.
(b) DELIVERY OF CERTIFICATES. The Company shall have made
the delivery of certificates as required by Article I.
(c) LEGAL OPINION. Each Purchaser shall receive a legal
opinion of Xxxxxx & Xxxxxx, L.L.P. in substantially the form of Exhibit
E.
Notwithstanding anything herein to the contrary, the obligation of each
Purchaser to close the transactions contemplated hereby expressly is not
subject to the condition that each or any other Purchaser close the
transactions contemplated hereby.
SECTION 4.2 CONDITIONS TO CLOSING OF COMPANY. The Company's
obligation to sell and issue the Shares at the Closing is, at the option of the
Company, subject to the fulfillment or waiver of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by the Purchasers in Section 3.2 hereof shall be
true and correct in all material respects on the Closing Date.
(b) COVENANTS. All covenants, agreements and conditions
contained in this Agreement to be performed by each of the Purchasers
on or prior to the Closing Date shall have been performed or complied
with by each of such Purchasers in all material respects.
SECTION 4.3 FINANCIAL INFORMATION. The Company hereby covenants
and agrees to mail notice of filing of the following reports to each Purchaser
until such Purchaser transfers, assigns or sells all of the Shares purchased by
such Purchaser pursuant to this Agreement:
(a) Within one hundred twenty (120) days after the end of
each fiscal year, a copy of its Annual Report on Form 10-K.
(b) Within sixty (60) days after the end of the first,
second and third quarterly accounting periods of each fiscal year of
the Company, a copy of its Quarterly Report on Form 10-Q.
(c) Within ten (10) days after the Company files any
Current Report on Form 8-K with the SEC, such Current Report on Form
8-K.
SECTION 4.4 REGISTRATION REQUIREMENTS.
(a) No later than five business days after the Closing
Date, the Company shall prepare and file a registration statement with
the SEC under the
-9-
12
Securities Act to register the resale of the Shares by the Purchasers
(the "Registration Statement").
(b) The Company shall pay all Registration Expenses (as
defined below) in connection with any registration, qualification or
compliance hereunder, and each Purchaser shall pay all Selling Expenses
(as defined below) relating to the Shares resold by such Purchaser.
"Registration Expenses" shall mean all expenses, except for Selling
Expenses, incurred by the Company in complying with the registration
provisions herein described, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses and the expense of any special audits incident to or
required by any such registration. "Selling Expenses" shall mean all
selling commissions, underwriting fees and stock transfer taxes
applicable to the Shares and all fees and disbursements of counsel for
any Purchaser.
(c) In the case of the registration effected by the
Company pursuant to these registration provisions, the Company will use
its best efforts to: (i) keep such registration effective until the
earlier of (A) the third anniversary date of the Closing Date, (B) such
date as all of the Shares have been resold pursuant to the Registration
Statement, or (C) such time as all of the Shares held by the Purchasers
can be sold within a given three-month period without compliance with
the registration requirements of the Securities Act pursuant to Rule
144; (ii) prepare and file with the SEC such amendments and supplements
to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statement; (iii) furnish such
number of prospectuses and other documents incident thereto, including
any amendment of or supplement to the prospectus, as a Purchaser from
time to time may reasonably request; (iv) cause all Shares registered
as described herein to be listed on each securities exchange and quoted
on each quotation service on which similar securities issued by the
Company are then listed or quoted; (v) provide a transfer agent and
registrar for all Shares registered pursuant to the Registration
Statement and a CUSIP number for all such Shares; (vi) otherwise use
its best efforts to comply with all applicable rules and regulations of
the SEC; and (vii) file the documents and pay any fees required of the
Company in (A) all jurisdictions in which any of the Shares are
originally sold and (B) all other states specified in writing by a
Purchaser, provided as to clause (B), however, that the Company shall
not be required to qualify to do business or consent to service of
process in any state in which it is not now so qualified or has not so
consented.
(d) With a view to making available to the Purchasers and
Permitted Assignees the benefits of Rule 144 promulgated under the
Securities Act ("Rule 144") and any other rule or regulation of the SEC
that may at any time permit a Purchaser to sell Shares to the public
without registration or pursuant to a registration on Form S-3, the
Company covenants and agrees to: (i) make and keep public information
available, as those terms are understood and defined in Rule 144, until
the earlier of (A) the third anniversary of the date hereof or (B) such
date as all of the Shares shall have been resold; (ii) file with the
SEC in a timely manner all reports and other documents required of the
Company under the
-10-
13
Securities Act and Exchange Act; and (iii) furnish to any Purchaser
upon request, as long as the Purchaser owns any Shares, (A) a written
statement by the Company that it has complied with the reporting
requirements of the Securities Act and the Exchange Act, (B) a copy of
the most recent annual or quarterly report of the Company, and (C) such
other information as may be reasonably requested in order to avail any
Purchaser of any rule or regulation of the SEC that permits the sale of
any such Shares without registration or pursuant to such Form S-3.
(e) In the event that a Purchaser disposes of Shares
pursuant to an exemption from the registration provisions of the
Securities Act, the Purchaser shall have the right to assign its rights
and delegate its obligations under Sections 4.4 and 4.5 in respect of
the Shares so transferred to the person acquiring such Shares who shall
be deemed a Purchaser as provided in Sections 4.4 and 4.5. As a
condition to the assignment of such rights and obligations, the Company
and such assignee shall execute a written acknowledgment of such
assignment and assumption and the assignee shall provide the Company
such information about itself as the Company shall reasonably request
for purposes of complying with Sections 4.4 and 4.5.
SECTION 4.5 INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Purchaser (for purposes of this Section 4.5(a), including its officers,
directors, agents and employees, each person who controls such holder,
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and the officers, directors, agents or employees of
such controlling person) from and against any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) to which
such Purchaser may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of, or are based
upon, any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including any
post-effective amendment thereto), on the effective date thereof, or
arise out of, or are based upon, any omission or alleged omission of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or arise out of any failure by the
Company to fulfill any undertaking included in the Registration
Statement, and the Company will, as incurred, reimburse such Purchaser
for any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim;
provided, however, that the Company shall not be liable in any such
case to the extent that such loss, claim, damage or liability arises
out of, or is based upon (i) an untrue statement or omission, or
alleged untrue statement or omission in such Registration Statement in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Purchaser specifically for use in
preparation of the Registration Statement including, without
limitation, statements made by Purchaser in this Agreement or documents
delivered pursuant hereto, (ii) breach or inaccuracy of such
Purchaser's representations and warranties in this Agreement or
documents delivered pursuant hereto, or the failure of such Purchaser
to comply with the covenants and agreements contained in this Agreement
or documents delivered
-11-
14
pursuant hereto, or (iii) any untrue statement or omission, or alleged
untrue statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Purchaser prior to the
pertinent sale or sales by the Purchaser. If requested, the Company
shall also indemnify the underwriters, selling brokers, dealer managers
and similar securities industry professionals participating in the
distribution covered by the Registration Statement, their officers,
directors, agents and employees and each person who controls such
person (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act) pursuant to customary indemnification
and contribution provisions, to the same extent as provided above.
(b) Each Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company and its officers, directors,
agents and employees and each person who controls such persons (within
the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act) from and against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) to which the
Company and such other persons may become subject (under the Securities
Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon (i) an untrue statement or omission, or alleged
untrue statement or omission made in such Registration Statement in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Purchaser specifically for use in
preparation of the Registration Statement including, without
limitation, statements made by such Purchaser in this Agreement and
documents delivered pursuant hereto, provided, however, that no
Purchaser shall be liable in any such case for any untrue statement or
omission, or alleged untrue statement or omission in any Prospectus
which has been corrected, in writing, by such Purchaser and delivered
to the Company before the sale from which such loss occurred, (ii)
breach or inaccuracy of such Purchaser's representations and warranties
in this Agreement or documents delivered pursuant hereto, or the
failure of such Purchaser to comply with the covenants and agreements
contained in this Agreement, or (iii) any untrue statement or omission,
or alleged untrue statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the
Purchaser prior to the pertinent sale or sales by the Purchaser, and
each Purchaser, severally and not jointly, will, as incurred, reimburse
the Company for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action,
proceeding or claim; provided, however, that the indemnity agreement
contained in this subsection (b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if
such settlement is effected without the consent of such Purchaser
(which consent shall not be unreasonably withheld). Notwithstanding the
provisions of this subsection (b), no Purchaser shall be liable for any
amount in excess of the amount by which the net amount received by the
Purchaser from the sale of the Shares to which such loss relates
exceeds the amount of any damages which such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to
this Section 4.5, such indemnified
-12-
15
person shall notify the indemnifying person in writing of such claim or
of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and the indemnifying person shall have been notified
thereof, the indemnifying person shall be entitled to participate
therein, and, to the extent that it shall wish, to assume the defense
thereof, with counsel reasonably satisfactory to the indemnified
person. After notice from the indemnifying person to such indemnified
person of the indemnifying person's election to assume the defense
thereof, the indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided,
however, that if there exists or may exist a conflict of interest that
would make it inappropriate in the reasonable judgment of counsel to
the indemnified person for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or
associate thereof, the indemnified person shall be entitled to retain
its own counsel at the expense of such indemnifying person.
(d) If the indemnification provided for in this Section
4.5 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as
result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Purchasers on the
other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or a Purchaser on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Purchasers agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Purchasers were treated
as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (d), no Purchaser shall be required
to contribute any amount in excess of the amount by which the net
amount received by the Purchaser from the sale of the Shares to which
such loss relates exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Purchasers' obligations in this subsection (d) to
-13-
16
contribute are several in proportion to their respective sales of
Shares to which such loss relates and not joint.
(e) The obligations of the Company and the Purchasers
under this Section 4.5 shall be in addition to any liability which the
Company and the respective Purchasers may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls the Company or any Purchaser within the meaning of the
Exchange Act or the Securities Act.
ARTICLE V. RESTRICTIONS ON TRANSFERABILITY OF SHARES
SECTION 5.1 RESTRICTIONS ON TRANSFERABILITY. The Shares shall not
be transferred in the absence of a registration under the Securities Act or an
exemption therefrom or in the absence of compliance with any term of this
Agreement. The Company shall be entitled to give stop transfer instructions to
its transfer agent with respect to the Shares in order to enforce the foregoing
restrictions.
SECTION 5.2 INSTRUCTION SHEET. Each certificate representing the
Shares shall bear the legend set forth on the Instruction Sheet attached hereto
as Exhibit C (in addition to any legends required under applicable securities
laws).
SECTION 5.3 TRANSFER OF SHARES AFTER REGISTRATION. Each Purchaser
hereby covenants with the Company not to make any sale of the Shares except
either (i) in accordance with the Registration Statement, in which case
Purchaser covenants to comply with the requirement of delivering a current
prospectus, or (ii) in accordance with Rule 144, in which case Purchaser
covenants to comply with Rule 144. Purchaser further acknowledges and agrees
that such Shares are not transferable on the books of the Company unless the
certificate submitted to the Company's transfer agent evidencing such Shares
are accompanied by a separate certificate executed by an officer of, or other
person duly authorized by, the Purchaser in the form attached hereto as Exhibit
D.
SECTION 5.4 PURCHASER INFORMATION. Each Purchaser covenants that
it will promptly notify the Company of any changes in the information set forth
in the Registration Statement regarding such Purchaser or such Purchaser's
"Plan of Distribution."
ARTICLE VI. MISCELLANEOUS
SECTION 6.1 WAIVERS AND AMENDMENTS. With the exception of Section
4.5 hereof, the terms of this Agreement may be waived or amended with the
written consent of the Company and each Purchaser. With respect to Section 4.5
hereof, with the written consent of the Company and the record holders of more
than fifty percent (50%) of the Shares then outstanding and held by Purchasers,
the terms of the Agreement may be waived or amended and any such amendment or
waiver shall be binding upon the Company and all holders of Shares.
SECTION 6.2 BROKER'S FEE. Each Purchaser acknowledges that the
Company has agreed to pay a fee to Xxxxxx Xxxxxx & Company, Inc. in respect of
the sale of the Shares to the Purchaser. Each of the parties hereto hereby
represents that, on the basis of
-14-
17
any actions and oral or written agreements by it, there are no other brokers or
finders entitled to compensation in connection with the sale of the Shares to
the Purchasers.
SECTION 6.3 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
WITHOUT ANY REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 6.4 SURVIVAL. The representations, warranties, covenants
and agreements made in this Agreement shall survive any investigation made by
the Company or the Purchasers and the Closing.
SECTION 6.5 SUCCESSORS AND ASSIGNS. The provisions hereof shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties to this Agreement. Notwithstanding
the foregoing, except as provided in Section 4.4(f), no Purchaser shall assign
this Agreement or assign any of such Purchaser's rights or delegate any of such
Purchaser's duties under this Agreement without the prior written consent of
the Company.
SECTION 6.6 ENTIRE AGREEMENT. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subjects thereof.
SECTION 6.7 NOTICES, ETC.. All notices and other communications
required or permitted under this Agreement shall be effective upon receipt and
shall be in writing and may be delivered in person, by telecopy, overnight
delivery service or registered or certified United States mail, addressed to
the Company or the Purchasers, as the case may be, at their respective
addresses set forth at the beginning of this Agreement or on Schedule I, or at
such other address as the Company or the Purchasers shall have furnished to the
other party in writing. All notices and other communications shall be effective
upon the earlier of actual receipt thereof by the person to whom notice is
directed or (i) in the case of notices and communications sent by personal
delivery or telecopy, one business day after such notice or communication
arrives at the applicable address or was successfully sent to the applicable
telecopy number, (ii) in the case of notices and communications sent by
overnight delivery service, at noon (local time) on the second business day
following the day such notice or communication was sent, and (iii) in the case
of notices and communications sent by United States mail, seven days after such
notice or communication shall have been deposited in the United States mail.
SECTION 6.8 SEVERABILITY OF THIS AGREEMENT. If any provision of
this Agreement shall be judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 6.9 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
SECTION 6.10 FURTHER ASSURANCES. Each party to this Agreement shall
do and perform or cause to be done and performed all such further acts and
things and shall execute and deliver all such other agreements, certificates,
instruments and documents as
-15-
18
the other party hereto may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
SECTION 6.11 TERMINATION. In the event that the Closing Date shall
not have occurred on or before 90 days from the date hereof, this Agreement
shall terminate at the close of business on such date.
SECTION 6.12 EXPENSES. The Company and each such Purchaser shall
bear its own expenses incurred on its behalf with respect to this Agreement and
the transactions contemplated hereby, including fees of legal counsel except
that the Company shall pay the reasonable fees and expenses of Xxxxxx & Xxxxxx,
L.L.P. as legal counsel for the Purchasers.
SECTION 6.13 CURRENCY. All references to "dollars" or "$" in this
Agreement shall be deemed to refer to United States dollars.
SECTION 6.14 EFFECTIVENESS OF AGREEMENT. The Company's agreement to
sell the Shares to the Purchasers pursuant to the terms of this Agreement will
only be effective upon acceptance of this Agreement by the Company as evidenced
by the Company's execution of this Agreement.
-16-
19
IN WITNESS WHEREOF, the Company and Purchaser have executed this
Purchase Agreement as of the date first above written.
"COMPANY"
SOUTHERN MINERAL CORPORATION,
a Nevada corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
"PURCHASER"
-------------------------------------------
(Name of Purchaser)
-------------------------------------------
(Authorized signature for Purchaser)
-------------------------------------------
(Name of person signing on behalf of
Purchaser, printed)
-------------------------------------------
(Title of person on behalf of Purchaser)
The number of Shares Subscribed is set
forth on Schedule I
-17-
20
Schedule I
LIST OF PURCHASERS
Number of Shares Purchase Price Total Purchase
Name and Address of Purchaser Purchased Per Share Price
----------------------------- ------------------ ------------------- -----------------
Trinity Capital 125,000 $4.50 $562,500
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Blue Ridge Capital 250,000 $4.50 $1,125,000
000 Xxxxx Xxxxxx, #0000
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Capital 100,000 $4.50 $450,000
000 Xxxxxxx Xxxxxx, #0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxxx/Ashfield 50,000 $4.50 $225,000
000 Xxxxxxx Xxxxxx, #000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Warburg Pincus Counsellors 235,500 $4.50 $1,059,750
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Schaenen Fox Capital 55,500 $4.50 $249,750
000 Xxxx Xxxxxx, #0000
Xxx Xxxx, Xxx Xxxx 00000
Strong Quest Limited Partnership 2,500 $4.50 $11,250
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxx 00000
Strong Special Investment Limited 28,000 $4.50 $126,000
Partnership
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxx 00000
Harbour Investments Ltd. 124,500 $4.50 $560,250
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxx 00000
Kirr Xxxxxxx 100,000 $4.50 $450,000
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Northriver 50,000 $4.50 $225,000
Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
WAFRA 100,000 $4.50 $450,000
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
-18-
21
Number of Shares Purchase Price Total Purchase
Name and Address of Purchaser Purchased Per Share Price
----------------------------- ------------------ ------------------- -----------------
Xxxx Xxx, Jr. 50,000 $4.50 $225,000
Xxx 000
Xxx Xxx, Xxxxxxx 00000-0000
Financial Institutions Retirement 50,000 $4.50 $225,000
Fund
0 Xxxxxxxxx Xxxx Xxxxx, 0xx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Carillon Advisors, Inc. 350,000 $4.50 $1,575,000
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Centennial 444,000 $4.50 $1,998,000
000 0xx Xxxxxx, #0000
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Capital Management 185,000 $4.50 $832,500
00000 Xxxxx Xxxx, 0xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Xxxxxx Bank Winnetka 50,000 $4.50 $225,000
F/B/O Xxxxxx Xxxxxx
000 Xxxxx Xxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Putnam Capital Appreciation Fund 100,000 $4.50 $450,000
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Xxxxxx Xxxxx 25,000 $4.50 $112,500
000 Xxxxxxx Xx.
Xxxxxxx, Xxxxxxxx 00000
EnCap Investments LC 25,000 $4.50 $112,500
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
-19-
22
Exhibit A
INSTRUCTION SHEET FOR PURCHASER
(TO BE READ IN CONJUNCTION WITH THE ENTIRE COMMON STOCK PURCHASE AGREEMENT)
A. Complete the following items in the Common Stock Purchase
Agreement:
1. SIGNATURE PAGE: Provide the information regarding the
Purchaser requested on the signature page. The Agreement must be
executed by an individual authorized to bind the Purchaser.
2. EXHIBIT B-1: Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire;
3. EXHIBIT B-2: Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
4. EXHIBIT B-3: Purchaser Certificate: Provide the
information requested by the Certificate for the Purchasers or the
Certificate for Corporate, Partnership, Trust, Foundation and Joint
Purchasers, as applicable.
5. Return the signed Purchase Agreement including the
properly completed Exhibits to:
XXXXXX XXXXXX & COMPANY, INC.
PLACEMENT AGENT
FIFTY XXXXX XXXXXX
00XX XXXXX
XXXXXXX, XXXXXXXXX 00000
ATTN: MS. XXX XXXXX
FAX: (000) 000-0000
B. Instructions regarding the transfer of funds for the purchase
of Shares will be telecopied to the Purchaser by the Placement Agent at a later
date.
C. Upon the resale of the Shares by the Purchaser after the
Registration Statement covering the Shares is effective, as described in the
Purchase Agreement, the Purchaser:
(1) must deliver a current prospectus, and annual and
quarterly reports of the Company to the buyer (prospectuses, and annual
and quarterly reports may be obtained from the Company at the
Purchaser's request); and
(2) must send a letter in the form of Exhibit D to the
Company so that the Shares may be properly transferred.
-20-
23
Exhibit B-1
SOUTHERN MINERAL CORPORATION
STOCK CERTIFICATE QUESTIONNAIRE
Please provide us with the following information:
1. The exact name that the Shares are to be registered in (this
is the name that will appear on the stock certificate(s)). You may use a
nominee name if appropriate:
___________________________________
2. The relationship between the Purchaser of the Shares and the
Registered Holder listed in response to item 1 above:
___________________________________
3. The mailing address of the Registered Holder listed in
response to item 1 above:
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
4. The Tax Identification Number of the Registered Holder listed
in response to item 1 above:
____________________________________
-21-
24
Exhibit B-2
SOUTHERN MINERAL CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement,
please provide us with the following information regarding the Purchaser.
1. Please state your organization's name exactly as it should
appear in the Registration Statement:
_____________________________
2. Have you or your organization had any position, office or
other material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Prospectus included in the
Registration Statement?
____ Yes ____ No
If yes, please indicate the nature of any such relationships below:
___________________________________
___________________________________
___________________________________
__________________________________
__________________________________
-22-
25
Exhibit B-3
SOUTHERN MINERAL CORPORATION
CERTIFICATE FOR INDIVIDUAL PURCHASERS
If the investor is an individual Purchaser (or married couple) the
Purchaser must complete, date and sign this Certificate.
CERTIFICATE:
I certify that the representations and responses below are true and
accurate:
In order for the Company to offer and sell the Shares in
conformance with state and federal securities laws, the following
information must be obtained regarding your investor status. Please
initial each category applicable to you as an investor in the Company.
___ (1) A natural person whose net worth, either
individually or jointly with such person's spouse exceeds
$1,000,000;
___ (2) A natural person who had an income in excess
of $200,000, or joint income with that person's spouse in
excess of $300,000, in 1993, 1994 and 1995, and reasonably
expects to have individual income reaching the same level in
1996;
___ (3) An executive officer or director of the
Company.
_________________________________
(Name of Purchaser)
_________________________________
(Signature)
_________________________________
(Signature)
_________________________________
(Date)
-23-
26
Exhibit B-3
SOUTHERN MINERAL CORPORATION
CERTIFICATE FOR CORPORATE, PARTNERSHIP, TRUST, FOUNDATION AND JOINT PURCHASERS
If the investor is a corporation, partnership, trust, pension plan,
foundation, joint purchaser (other than a married couple) or other entity, an
authorized officer, partner, or trustee must complete, date and sign this
Certificate.
CERTIFICATE
The undersigned certifies that the representations and responses below
are true and accurate:
(a) The investor has been duly formed and is validly
existing and has full power and authority to invest in the Company. The
person signing on behalf of the undersigned has the authority to
execute and deliver the Common Stock Purchase Agreement on behalf of
the Purchaser and to take other actions with respect thereto.
(b) Indicate the form of entity of the undersigned:
___ Limited Partnership
___ General Partnership
___ Corporation
___ Revocable Trust (identify each grantor and
indicate under what circumstances the trust is revocable by
the grantor:
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
(Continue on a separate piece of paper, if necessary.)
___ Other Type of Trust (indicate type of trust
and, and, for trusts other than pension trusts, name the
grantors and beneficiaries:
_______________________________________________________
_______________________________________________________
_______________________________________________________
(Continue on a separate piece of paper, if necessary.)
-24-
27
___ Other form of organization (indicate form of
organization (_______________________).
(c) Indicate the approximate date the undersigned entity was
formed:
__________________________.
(d) In order for the Company to offer and sell the Shares in
conformance with state and federal securities laws, the following information
must be obtained regarding your investor status. Please initial each category
applicable to you as an investor in the Company.
___ 1. A bank as defined in Section 3(a)(2) of the
Securities Act, or any savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities Act
whether acting in its individual or fiduciary capacity;
___ 2. A broker or dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934;
___ 3. An insurance company as defined in Section 2(13) of
the Securities Act;
___ 4. An investment company registered under the
Investment Company Act of 1940 or a business development company as
defined in Section 2(a)(48) of that Act;
___ 5. A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958;
___ 6. A plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or
its political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000;
___ 7. An employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of
such act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons
that are accredited investors;
___ 8. A private business development company as defined
in Section 202(a)(22) of the Investment Advisers Act of 1940;
___ 9. An organization described in Section 501(c)(3) of
the Internal Revenue Code, a corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of
acquiring the Shares, with total assets in excess of $5,000,000;
-25-
28
___ 10. A trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the
Shares, whose purchase is directed by a sophisticated person who has
such knowledge and experience in financial and business matters that
such person is capable of evaluating the merits and risks of investing
in the Company;
___ 11. An entity in which all of the equity owners
qualify under any of the above subparagraphs. If the undersigned
belongs to this investor category only, list the equity owners of the
undersigned, and the investor category which each such equity owner
satisfies:
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
(Continue on a separate piece of paper, if necessary.)
Dated: December __, 1996
____________________________________________
(Name of investor)
____________________________________________
(Signature and title of authorized officer,
partner or trustee)
-26-
29
Exhibit C
SOUTHERN MINERAL CORPORATION
IMPORTANT - DO NOT REMOVE THIS INSTRUCTION SHEET FROM THE ATTACHED SHARE
CERTIFICATE UNLESS AND UNTIL THE SHARES ARE SOLD AS FOLLOWS:
(1) THE SHARES ARE RESOLD PURSUANT TO THE REGISTRATION STATEMENT
ON FORM S-3 (NO. 333- ), AND, IN CONNECTION WITH SUCH RESALE, THE HOLDER
HAS DELIVERED TO THE PURCHASER OF THE SHARES A CURRENT PROSPECTUS AND HAS
PROVIDED TO THE COMPANY A PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE; OR
(2) THE SHARES ARE RESOLD IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, PROVIDED
THAT, PRIOR TO SUCH RESALE, THE HOLDER HAS NOTIFIED THE COMPANY OF SUCH
DISPOSITION AND PROVIDED THE COMPANY WITH WRITTEN ASSURANCES, IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY OF COMPLIANCE WITH THE REQUIREMENTS OF
SUCH EXEMPTION.
DO NOT REMOVE THIS INSTRUCTION SHEET FROM THE ATTACHED SHARE
CERTIFICATE EXCEPT IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH ABOVE.
-27-
30
Exhibit D
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
To : [Name and Address of Transfer Agent]
Attention:
The undersigned, the Purchaser or an officer of, or other person duly
authorized by the Purchaser, hereby certifies that
________________________________________________________________________ [fill
in name of Purchaser] was the Purchaser of the shares evidenced by the attached
certificate, and as such, proposes to transfer such shares on or about
______________ [date] either (i) in accordance with the registration statement,
file number ________ in which case the Purchaser certifies that the requirement
of delivering a current prospectus has been complied with or will be complied
with in connection with such sale, or (ii) in accordance with Rule 144 under
the Securities Act of 1933 ("Rule 144"), in which case the Purchaser certifies
that it has complied with or will comply with the requirements of Rule 144.
Print or type:
Name of Purchaser: __________________________________________________
Name of Individual representing Purchaser (if an
Institution):_________________________________________________________
Title of Individual representing Purchaser (if an
Institution):_________________________________________________________
Signature by:
_________________________________________________
(Purchaser or Individual representing Purchaser)
-28-