EXHIBIT C
The Agreement Between Advanced Financial, Inc., Xxxxxxx X. Xxxxxxxxxx,
Xxxxx Investments VI LP, and Xxxxx Drilling Acquisition Company.
AGREEMENT
THIS AGREEMENT is made as of April 30, 2003, between Advanced Financial, Inc., a
Delaware Corporation with its principal office located at 0000 Xxxxxxxxxx,
Xxxxxxx, XX 00000 ("AFI"), Xxxxxxx X. Xxxxxxxxxx, an individual residing at 0000
Xxxx 00xx Xx., Xxxxxxx, XX 00000 ("Xxxxxxxxxx"), Xxxxx Investments VI, LP, a
Missouri Limited Partnership with offices at 000 Xxxx 00xx Xxxxxx, Xxxxx 0-Xxxx,
Xxxxxx Xxxx, XX 00000 ("Xxxxx"), and Xxxxx Drilling Acquisition Corporation
Company, a corporation organized under the laws of the State of Nebraska, with
its principal office located at 0000 Xxxxxxxxxx, Xxxxxxx, XX 00000, here
referred to as "Corporation".
RECITALS
A. AFI is the sole voting shareholder of Corporation.
B. Corporation has an opportunity to make an investment with
Gateway Energy Corporation for a natural gas transportation
facility in accordance with that certain agreement between
Gateway Energy Corporation and certain of its subsidiaries
(collectively "Gateway") and the Corporation dated March 6,
2003, (the "Madisonville Project Agreement") but does not have
the financial ability to make the required investment.
X. Xxxxxxxxxx and Xxxxx have the ability to provide the
Corporation with the required funding to pursue the
Madisonville Project.
In consideration of the premises and the mutual agreements contained in
this agreement, made by each of the parties to the other, the parties agree as
follows:
1. Preferred Stock Purchases by Xxxxxxxxxx and Xxxxx
Xxxxxxxxxx and Xxxxx shall provide the aggregate amount of $900,000 for
Corporation's use in the form of Letters of Credit. The Letters of Credit shall
be provided in exchange for shares of Series A Preferred Stoch of the
Corporation whose terms are set forth in that certain Certificate of Designation
of Preferences and Rights of Senior Series A Preferred Stock of Corporation
dated April 4, 2003 ("Certificate of Designation"), a copy of which is attached
as EXHIBIT A.
2. Directors of Corporation
AFI agrees that it will vote its shares, to the extent legally
possible, to accomplish the following:
(a) The board of directors of Corporation shall consist of 3 persons,
which number shall not be increased without the consent of Xxxxxxxxxx and Xxxxx.
So long as Xxxxxxxxxx and Xxxxx remain as Series A Preferred Shareholders, AFI
shall elect each of Xxxxxxxxxx and
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Xxxxxxxxxxx X. Xxxxx, Trustee of the General Partner of Xxxxx, as
directors of the Corporation. AFI may elect AFI's nominee as the third director.
(b) The board of directors shall perform such functions for and on
behalf of the Corporation, as are not otherwise delegated to some other
individual(s) or entity(ies) under either the provisions of this agreement, the
Certificate of Designation, or by the operation of law. The board of directors
shall take all actions by unanimous consent. If the board of directors should
ever reach an impasse and be unable to take any action because of the lack of a
necessary consensus of the members thereof, then an interim director ("Interim
Director") shall be designated by AFI, solely for the purpose of resolving the
particular impasse. If the Interim Director is ever appointed under the
provisions of this Section, then the Interim Director shall be indemnified and
held harmless by the Corporation against any claim, loss, damage, liability or
cost asserted against or incurred by the Interim Director that is related to any
action taken by such individual in the capacity of Interim Director to the
Corporation, unless such claim, loss, damage, liability or cost is determined by
a competent court of law having proper jurisdiction, to be the direct result of
either a fraud committed by, or the gross negligence of, the Interim Director.
The by-laws of the Corporation shall be amended to incorporate the provisions of
this paragraph 2(b) to the extent deemed advisable.
(c) Except as otherwise required by this agreement, or by operation of
law, or the bylaws of the Corporation, no meeting of either the shareholders, or
the board of directors, needs to be held at any time.
3. Exercise of Preferred Stock Redemption Rights
The Corporation's right to call for redemption all the outstanding
Series A Preferred Stock, as a whole, as set forth in the Certificate of
Designation may only be exercised upon the passage of a resolution by the board
of directors by unanimous consent of all of the directors authorizing the
exercise of such right.
4. Conflicting Obligations
Each of AFI, Xxxxxxxxxx, and Xxxxx warrants that they are not limited
or restricted in any way from entering into this agreement and each agrees to
hold each other and the Corporation harmless in the event of any suit in which
the moving party or parties allege that the relationships or activities of AFI,
Xxxxxxxxxx and Xxxxx with the Corporation violate any agreement or duty at
common law not to engage in Corporation's business.
IN WITNESS WHEREOF, the parties, intending to be bound have executed
this agreement as of the date hereof.
ADVANCED FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx, Chairman & President
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/s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx
XXXXX INVESTMENTS VI, LP
By: XXXXX IRREVOCABLE MANAGEMENT
TRUST, General Partner
By: /s/ Xxxxxxxxxxx X. Xxxxx
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Xxxxxxxxxxx X. Xxxxx, Trustee
XXXXX DRILLING ACQUISITION COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx, President
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EXHIBIT A
See Attached Certificate of Designation of Preferences and Rights
of Senior Series A Preferred Stock of Corporation dated April 4, 2003
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