EXHIBIT 2.1
EXCHANGE AND COMBINATION AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into by and
between Xxxxxx Exploration Company, a Delaware corporation (the "Company"),
and the persons and entities identified below as the "Contributors" who
execute a counterpart of this Agreement, and, solely with respect to the
representations, warranties and agreements set forth in Section 4.3,
Section 5.1, Section 5.2, and Section 5.4 hereof, and with respect to
Article VIII hereof, Xxxxxx Oil Corporation, a Michigan corporation
("MOC"). The date of this Agreement shall be the date on which the Company
executes and delivers this Agreement, as evidenced next to its signature
herein.
RECITALS:
WHEREAS, the Company has been organized under the General Corporation
Law of Delaware (the "Delaware Act") for the purpose of combining certain
oil and gas properties and operations owned and/or conducted by the
Contributors or MOC, in connection with an underwritten public offering
(the "Public Offering") of shares of its Common Stock (the "Stock"),
pursuant to a registration statement to be prepared on Form S-1 (the
"Registration Statement") and filed with the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the
"1933 Act"), and related registrations pursuant to the laws of any other
jurisdictions within the United States ("Blue Sky Laws") that require such
registration;
WHEREAS, the Company is governed by the Delaware Act, by the Company's
Certificate of Incorporation which was filed with the Delaware Secretary of
State on the effective date hereof, and by the Company's Bylaws (the
"Organizational Documents");
WHEREAS, the Contributors own, or are the stockholders of MOC which
owns, working interests in the various oil and gas prospects/projects
identified on EXHIBIT A-1, which are individually described in more detail
on EXHIBIT A-3 through EXHIBIT A-112, respectively (the "Properties"), and
the percentage working interest of each Contributor and MOC as to each of
the Properties is set forth thereon under the Contributor's or MOC's name
and opposite the name of each of the Properties;
WHEREAS, the Contributors own, or are stockholders of MOC which owns
net revenue interests in the Properties, and the percentage net revenue
interests of each Contributor and MOC as to each of the Properties is set
forth on EXHIBIT A-2 under the Contributor's or MOC's name and opposite the
name of each of the Properties;
WHEREAS, Xxxxxxx Xxxxxxxxx, C&H Exploration, LLC, Xxx Xxxxx, X.X.
Xxxxx, Xxxxxx XxXxxxx, O.O. Investments, Inc., Xxxxxx Xxxxxxx, Xxxxxxx
Xxxxx and Xxxxxxx Exploration, LLC (collectively, the "1994 JEP
Contributors") is each a party to that certain Xxxxxx Oil Corporation Joint
Exploration Program 1994 Participation Agreement dated as of May 23, 1994
(the "1994 JEP"), pursuant to which MOC has acquired, on behalf of the 1994
JEP Contributors, working and net revenue interests in certain of the
Properties, as identified on EXHIBIT A-1 and EXHIBIT A-2, respectively (the
"1994 JEP Interests");
WHEREAS, C&H Exploration, LLC, Xxx Xxxxx, Xxxxxx Xxxxxxx, and Xxxxxxx
Exploration, LLC (the "1995 JEP Contributors") is each a party to that
certain Xxxxxx Oil Corporation Joint Exploration Program 1995 Participation
Agreement dated as of May 18, 1995 (the "1995 JEP"), pursuant to which MOC
has acquired, on behalf of the 1995 JEP Contributors, working and net
revenue interests in certain of the Properties, as identified on EXHIBIT A-1
and EXHIBIT A-2, respectively (the "1995 JEP Interests");
WHEREAS, Eagle Investments, Inc., a Michigan corporation d/b/a
Victory, Inc. (the "Victory") owns undivided working and net revenue
interests in certain of the Properties, as identified on EXHIBIT A-1 and
EXHIBIT A-2, respectively (the "Victory Interests");
WHEREAS, Eagle International, Inc., a Michigan corporation ("Eagle")
owns undivided working and net revenue interests in certain of the
Properties, as identified on EXHIBIT A-1 and EXHIBIT A-2, respectively (the
"Eagle Interests");
WHEREAS, XXXX Minerals Company, a Delaware corporation ("XXXX") owns
undivided working and net revenue interests in certain of the Properties,
as identified on EXHIBIT A-1 and EXHIBIT A-2, respectively (the "XXXX
Interests");
WHEREAS, Xxx X. Xxxxxx, Xx. ("Xxxxxx") owns undivided working and net
revenue interests in certain of the Properties, as identified on EXHIBIT A-1
and EXHIBIT A-2, respectively, such amounts representing an undivided 10%
of his working and net revenue interests in such Properties (the "Xxxxxx
Interests");
WHEREAS, Xxxxxx and Xxxxxx, Inc. ("Xxxxxx and Xxxxxx"), owns undivided
working and net revenue interests in certain of the Properties, as
identified on EXHIBIT A-1 and EXHIBIT A-2, respectively (the "Xxxxxx and
Xxxxxx Interests");
WHEREAS, Frontier Investments, Inc. ("Frontier"), owns undivided
working and net revenue interests in certain of the Properties, as
identified on EXHIBIT A-1 and EXHIBIT A-2, respectively (the "Frontier
Interests");
WHEREAS, Oak Shores Investment, Inc. ("Oak Shores"), owns undivided
working and net revenue interests in certain of the Properties, as
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identified on EXHIBIT A-1 and EXHIBIT A-2, respectively (the "Oak Shore
Interests");
WHEREAS, Double Diamond Enterprises, Inc. ("Double Diamond"), owns
undivided working and net revenue interests in certain of the Properties,
as identified on EXHIBIT A-1 and EXHIBIT A-2, respectively (the "Double
Diamond Interests");
WHEREAS, Xxxxx X. Xxxxxx, as Trustee of the Xxxxx X. Xxxxxx Trust,
u/a/d April 29, 1986 (the "Xxxxx X. Xxxxxx Trust"), and Xxx X. Xxxx, as
Trustee of the Xxx X. Xxxx Trust, u/a/d February 7, 1989 (the "Xxx X. Xxxx
Trust"), and Xxxxx X. Xxxxxx, as Trustee of the Xxxxx X. Xxxxxx Trust,
u/a/d July 14, 1989 (the "Xxxxx X. Xxxxxx Trust"), and Xxxxxx X. Xxxxxx, as
Trustee of the Xxxxxx X. Xxxxxx Trust, u/a/d April 5, 1989 (the "Xxxxxx X.
Xxxxxx Trust"), and X.X. Xxxxxx, as Trustee of the Xxxxx X. Xxxxxx Retained
Annuity Trust # 1, u/a/d November 3, 1997 (the "KEM Annuity Trust"), and
X.X. Xxxxxx, as Trustee of the Xxxxxx X. Xxxxxx Retained Annuity Trust #1 ,
u/a/d November 3, 1997 (the "DRM Annuity Trust"), and X.X. Xxxxxx, as
Trustee of the Xxx Xxxxx Xxxx Retained Annuity Trust # 1, u/a/d November 3,
1997 (the "SEB Annuity Trust"), and X.X. Xxxxxx, as Trustee of the Xxxxx X.
Xxxxxx Retained Annuity Trust # 1, u/a/d November 7, 1997 (the "DAM Annuity
Trust") (collectively, the "MOC Contributors") together are the holders of
100%, of the issued and outstanding capital stock of MOC (the "MOC Stock"),
which owns undivided working and net revenue interests in certain of the
Properties, as identified on EXHIBIT A-1 and EXHIBIT A-2, respectively (the
"MOC Interests");
WHEREAS, the parties hereby intend to complete an exchange (the
"Exchange") whereby (i) the 1994 JEP Contributors, the 1995 JEP
Contributors, Victory, Eagle, SASI, Hughes, Xxxxxx and Xxxxxx, Frontier,
Oak Shores, and Double Diamond (collectively, the "Interest Contributors");
and (ii) the MOC Contributors (together with the Interest Contributors, the
"Contributors"), will exchange the above-described interests or stock, as
the case may be, owned by each of them (collectively, the "Contributed
Properties") for capital stock of the Company (the "Exchange Stock"), in a
transaction intended to qualify for tax-free treatment under Section 351 of
the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, the parties desire to set forth the terms and conditions of
the Exchange and to provide for certain obligations among the parties
following the Closing, and to enter into certain related transactions
described herein;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual acts and promises hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
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ARTICLE I
THE COMPANY; THE OFFERING
Section 1.1. The Company's Organizational Documents existing as of
the date of this Agreement have been delivered to all of the Contributors.
The parties hereto agree that the Company, acting through its Board of
Directors (the "Board"), shall have the right to make such amendments to
the Organizational Documents as may be necessary or desirable in the
judgment of the Board to effectuate the purposes of this Agreement and to
effectuate the Public Offering on terms and conditions acceptable to the
Board, provided, however, that the Exchange Stock shall be of the same
class of stock as that to be issued in the Public Offering.
Section 1.2. It is contemplated that in the Public Offering, the
Company will offer to the public for cash, through underwriters selected by
the Company (the "Underwriters"), shares of Stock on terms, including the
number of shares to be offered, the public offering price and any
over-allotment option, as shall be determined by the Board in its sole
discretion. All decisions of the Board shall be final and conclusive.
ARTICLE II
TRANSFER OF CONTRIBUTED PROPERTIES IN CONSIDERATION OF EXCHANGE STOCK
Section 2.1. SUBSCRIPTION AND PURCHASE. Subject to the terms and
conditions of this Agreement, each Contributor hereby subscribes for and
agrees to purchase its "Applicable Percentage" (as defined below) of the
Exchange Stock, at the time, on the terms and for the consideration set
forth in Section 2.2 below. The Applicable Percentage of Exchange Stock
attributable to each Contributor shall be the percentage set forth opposite
such Contributor's name on EXHIBIT B attached hereto. The total number of
Exchange Stock to be issued under this Agreement shall be determined by the
Board in consultation with the Underwriters, prior to Closing.
Section 2.2. TRANSFER OF CONTRIBUTED PROPERTIES FOR EXCHANGE STOCK.
Subject to satisfaction of the conditions to Closing set forth herein, in
consideration for the issuance by the Company of the Applicable Percentage
of Exchange Stock subscribed for pursuant to Section 2.1 hereof, and
effective as of 11:59 p.m., September 30, 1997 (the "Effective Time"):
a. Each 1994 JEP Contributor hereby assigns and transfers to the
Company all of his, her, or its right, title and interest in and
to the 1994 JEP Interests, and agrees to execute and deliver such
instruments of assignment and any other documents or instruments
of transfer deemed necessary by the Company to effectuate the
transfer.
b. Each 1995 JEP Contributor hereby assigns and transfers to the
Company all of his, her, or its right, title and interest in and
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to the 1995 JEP Interests, and agrees to execute and deliver such
instruments of assignment and any other documents or instruments
of transfer deemed necessary by the Company to effectuate the
transfer.
c. Victory hereby assigns and transfers to the Company all of its
right, title and interest in and to the Victory Interests, and
agrees to execute and deliver such instruments of assignment and
any other documents or instruments of transfer deemed necessary
by the Company to effectuate the transfer.
d. Eagle hereby assigns and transfers to the Company all of its
right, title and interest in and to the Eagle Interests, and
agrees to execute and deliver such instruments of assignment and
any other documents or instruments of transfer deemed necessary
by the Company to effectuate the transfer.
e. SASI hereby assigns and transfers to the Company all of its
right, title and interest in and to the XXXX Interests, and
agrees to execute and deliver to the Company, in recordable form,
instruments of assignment and any other documents or instruments
of transfer deemed necessary by the Company to effectuate the
transfer.
x. Xxxxxx hereby assigns and transfers to the Company all of his
right, title and interest in and to the Xxxxxx Interests, and
agrees to execute and deliver to the Company, in recordable form,
instruments of assignment and any other documents or instruments
of transfer deemed necessary by the Company to effectuate the
transfer.
x. Xxxxxx and Xxxxxx hereby assigns and transfers to the Company all
of its right, title and interest in and to the Xxxxxx and Xxxxxx
Interests, and agrees to execute and deliver to the Company, in
recordable form, instruments of assignment and any other
documents or instruments of transfer deemed necessary by the
Company to effectuate the transfer.
h. Frontier hereby assigns and transfers to the Company all of its
right, title and interest in and to the Frontier Interests, and
agrees to execute and deliver to the Company, in recordable form,
instruments of assignment and any other documents or instruments
of transfer deemed necessary by the Company to effectuate the
transfer.
i. Oak Shores hereby assigns and transfers to the Company all of its
right, title and interest in and to the Oak Shores Interests, and
agrees to execute and deliver to the Company, in recordable form,
instruments of assignment and any other documents or instruments
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of transfer deemed necessary by the Company to effectuate the
transfer.
j. Double Diamond hereby assigns and transfers to the Company all of
its right, title and interest in and to the Double Diamond
Interests, and agrees to execute and deliver to the Company, in
recordable form, instruments of assignment and any other
documents or instruments of transfer deemed necessary by the
Company to effectuate the transfer.
x. XXX Annuity Trust hereby assigns and transfers to the Company all
of the MOC Stock issued in its name, and shall execute and
deliver to the Company an Assignment Separate From Certificate in
substantially the form of that attached hereto as EXHIBIT C, and
shall deliver therewith the original certificates issued in its
name representing the MOC Stock, and any other documents or
instruments of transfer deemed necessary by the Company to
effectuate the transfer.
l. DRM Annuity Trust hereby assigns and transfers to the Company all
of the MOC Stock issued in its name, and shall execute and
deliver to the Company an Assignment Separate From Certificate in
substantially the form of that attached hereto as EXHIBIT C, and
shall deliver therewith the original certificates issued in its
name representing the MOC Stock, and any other documents or
instruments of transfer deemed necessary by the Company to
effectuate the transfer.
m. SEB Annuity Trust hereby assigns and transfers to the Company all
of the MOC Stock issued in its name, and shall execute and
deliver to the Company an Assignment Separate From Certificate in
substantially the form of that attached hereto as EXHIBIT C, and
shall deliver therewith the original certificates issued in its
name representing the MOC Stock, and any other documents or
instruments of transfer deemed necessary by the Company to
effectuate the transfer.
n. DAM Annuity Trust hereby assigns and transfers to the Company all
of the MOC Stock issued in its name, and shall execute and
deliver to the Company an Assignment Separate From Certificate in
substantially the form of that attached hereto as EXHIBIT C, and
shall deliver therewith the original certificates issued in its
name representing the MOC Stock, and any other documents or
instruments of transfer deemed necessary by the Company to
effectuate the transfer.
o. Xxxxx X. Xxxxxx Trust hereby assigns and transfers to the Company
all of the MOC Stock issued in its name, and shall execute and
deliver to the Company an Assignment Separate From Certificate in
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substantially the form of that attached hereto as EXHIBIT C, and
shall deliver therewith the original certificates issued in its
name representing the MOC Stock, and any other documents or
instruments of transfer deemed necessary by the Company to
effectuate the transfer.
p. Xxx X. Xxxx Trust hereby assigns and transfers to the Company all
of the MOC Stock issued in its name, and shall execute and
deliver to the Company an Assignment Separate From Certificate in
substantially the form of that attached hereto as EXHIBIT C, and
shall deliver therewith the original certificates issued in its
name representing the MOC Stock, and any other documents or
instruments of transfer deemed necessary by the Company to
effectuate the transfer.
q. Xxxxx X. Xxxxxx Trust hereby assigns and transfers to the Company
all of the MOC Stock issued in its name, and shall execute and
deliver to the Company an Assignment Separate From Certificate in
substantially the form of that attached hereto as EXHIBIT C, and
shall deliver therewith the original certificates issued in its
name representing the MOC Stock, and any other documents or
instruments of transfer deemed necessary by the Company to
effectuate the transfer.
r. Xxxxxx X. Xxxxxx Trust hereby assigns and transfers to the
Company all of the MOC Stock issued in its name, and shall
execute and deliver to the Company an Assignment Separate From
Certificate in substantially the form of that attached hereto as
EXHIBIT C, and shall deliver therewith the original certificates
issued in its name representing the MOC Stock, and any other
documents or instruments of transfer deemed necessary by the
Company to effectuate the transfer.
Section 2.3. ISSUANCE OF EXCHANGE STOCK FOR CONTRIBUTED PROPERTIES.
Upon satisfaction of the conditions to Closing set forth herein, and in
consideration for and upon completion of the transfers of the Contributed
Properties in accordance with Section 2.2 above, the Company agrees to
issue to each Contributor the Applicable Percentage of Exchange Stock
subscribed for by such Contributor pursuant to Section 2.1 hereof.
ARTICLE III
CLOSING; CONDITIONS TO CLOSING
Section 3.1. CLOSING. The transactions contemplated hereby shall be
consummated (the "Closing") immediately preceding the consummation of the
purchase of Stock by the Underwriters pursuant to the Underwriting
Agreement (as defined in Section 3.2 below). The Closing shall occur at
the same place and on the same date as, and immediately prior to, the
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closing of the purchase of Stock contemplated by the Underwriting Agreement
(as defined in Section 3.2 below).
It is the intent of the parties hereto that the transfers of
Contributed Properties shall qualify as transfers to a controlled
corporation pursuant to Section 351 of the Code, and that immediately after
the transfers and the issuance of Stock pursuant to the Public Offering the
Contributors and the purchasers of such Stock, as a group, shall be in
control of the Company within the meaning of Section 351 and 368 of the
Code.
Section 3.2. CONDITIONS TO CLOSING.
(a) The obligations of each Contributor hereunder are subject to the
following conditions precedent: (i) the execution and delivery by the
Company and the Underwriters of a written, binding, firm commitment
underwriting agreement, that legally obligates the Underwriters to pay for
Stock on terms and at a price acceptable to the Board, which agreement
contains no conditions precedent to such payment except for the
consummation of the transactions contemplated herein and contains no
contingencies to such payment other than standard contingencies by which
the Underwriters, under exceptional circumstances, may be excused from
performing (the "Underwriting Agreement"); (ii) consummation of the
transactions contemplated hereby with respect to all, but not less than
all, of the other Contributors signatory hereto, (iii) all of the
representations and warranties of the Company and MOC made herein shall be
materially true and complete on the Closing Date as if made on such date;
and (iv) each of the other parties hereto shall have performed and complied
in all material respects with the covenants and agreements contained in
this Agreement that are required to be performed and complied with by them
at the time of or prior to the Closing. In addition, as a condition
subsequent to the obligations of each Contributor hereunder, the closing of
the purchase of Stock contemplated by the Underwriting Agreement (as
defined in Section 3.2 below), must occur promptly following the Closing.
(b) The obligations of the Company hereunder are subject to the
following conditions precedent: (i) all consents and approvals by, or
filings with, any governmental authority, agency or official, or any other
person required in connection with the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby, and which are required to be obtained prior to closing, shall have
been received or made and shall be in full force and effect, (ii) the
consummation of the transactions contemplated hereby with respect to all,
but not less than all, of the Contributors signatory hereto, (iii) each
Contributor shall have completed, executed and delivered to the Company a
Purchaser Questionnaire, in the form acceptable to the Company, (iv) the
Board, in its sole discretion after consultation with its advisors, shall
have determined that the issuance of the Exchange Stock hereunder does not
require registration under the 1933 Act or any Blue Sky Laws, or if such
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registration is required, that all actions necessary to register such
shares shall have been taken, (v) all of the representations and warranties
of the Contributors and MOC made herein shall be materially true and
complete on the Closing Date as if made on such date; and (vi) each of the
other parties hereto shall have performed and complied in all material
respects with the covenants and agreements contained in this Agreement that
are required to be performed and complied with by them at the time of or
prior to the Closing.
(c) To facilitate the Closing, prior to Closing Xxxxxx, XXXX, Xxxxxx
and Xxxxxx, Frontier, Oak Shores, and Double Diamond shall each execute a
recordable assignment of interests required to be delivered by it pursuant
to Section 2.2, and Xxxxx X. Xxxxxx Trust, Xxx X. Xxxx Trust, Xxxxx X.
Xxxxxx Trust, Xxxxxx X. Xxxxxx Trust, KEM Annuity Trust, SEB Annuity Trust,
DRM Annuity Trust and DAM Annuity Trust shall each execute the Assignment
Separate From Certificate required to be delivered by it pursuant to
Section 2.2, and each Contributor and MOC shall execute a closing
certificate required to be delivered by it pursuant to Section 5.8, and,
prior to Closing, shall deposit them with Mika, Meyers, Xxxxxxx & Xxxxx,
P.L.C., to be held by that firm pending the Closing. Upon satisfaction of
all of the conditions to Closing set forth herein, such firm is hereby
authorized to deliver those assignments to the Company on behalf of such
parties.
3.3. TERMINATION.
(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(i) By mutual consent of the Company and a number of Contributors to
whom, in the aggregate, are allocated in this Agreement at least
75% of the Exchange Stock issuable hereunder;
(ii) By the Company or any of the Contributors if the Closing does not
occur by February 14, 1997, unless the Closing has not occurred
because of the failure of the party seeking termination to
perform the agreements and covenants under this Agreement
required to be performed by such party on or prior to the
Closing;
(iii) By the Company or any of the Contributors if a court of
competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an
order or decree or ruling, or taken any other action, in
each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement;
or
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(iv) By the Company if the Board, in consultation with the
Underwriters, determines that the Public Offering is not likely
to be consummated on acceptable terms, or at an acceptable
initial offering price.
(b) In the event of termination of this Agreement as provided in
Section 3.3(a) above, written notice of such termination shall be promptly
given to the other parties and this Agreement shall terminate without
further action. Following such action, this Agreement shall become
immediately null and void and have no effect, and no party hereto shall
have any liability to the other parties hereto by reason of any term or
provision contained herein, and Mika, Meyers, Xxxxxxx & Xxxxx shall return
the assignments deposited in accordance with Section 3.2(c) to the parties
that deposited such assignments.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 4.1. INVESTMENT AND TAX REPRESENTATIONS AND WARRANTIES OF
CONTRIBUTORS. Each Contributor as to itself and not to the others, hereby
represents, warrants and agrees, severally and not jointly, as follows:
(a) The Contributor (i) is acquiring the Exchange Stock being
issued to the Contributor hereunder for its own account for an indefinite
period and not with a view to, or for resale in connection with, any
distribution thereof, except pursuant to Article VII hereof; (ii)
understands and acknowledges that such Exchange Stock have not been
registered under the 1933 Act or any Blue Sky Laws by reason of certain
exemptions from the registration provisions thereof which depend upon,
among other things, the bona fide nature of such holder's investment intent
as expressed herein; (iii) is able to bear the economic risk of investment
in such Exchange Stock and is capable of evaluating the risks and merits of
that investment; and (iv) understands and acknowledges that the Exchange
Stock will be "restricted securities" as that term is defined in Rule 144
under the 1933 Act and that the certificate representing such Exchange
Stock will bear a legend stating that transfer is prohibited unless (A) the
transfer is exempt from the registration requirements under the 1933 Act
and any applicable state securities law and an opinion of counsel
reasonably satisfactory to the Company that such transfer is exempt
therefrom is delivered to the Company or (B) the transfer is made pursuant
to an effective registration statement under the 1933 Act and any
applicable state securities law.
(b) The Contributor acknowledges receipt of the Company's draft
Organizational Documents and its Private Placement Memorandum of even date
herewith relating to the Exchange, and has received all the information
considered necessary or appropriate by the Contributor for deciding whether
to acquire the Exchange Stock, including, without limitation, the
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appendices to the Private Placement Memorandum and the Registration
Statement, the reserve report prepared by X.X. Xxxxxxxx and Associates, as
of September 30, 1997, and the reserve report prepared by Xxxxxx & Xxxxx,
Ltd, as of September 30, 1997. The Contributor has had an opportunity to
ask questions and receive answers from the Company regarding the terms and
conditions of the issuance of the Exchange Stock, the basis upon which the
Applicable Percentages have been determined, and the business, properties,
prospects and financial condition of the Company and to obtain additional
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to the Contributor or to which the
Contributor had access.
(c) The address set forth on the Contributor's signature page to
this Agreement is the Contributor's true and correct principal place of
business, and the Contributor has no present intention of becoming a
resident of, or maintaining its principal place of business in, any other
state or jurisdiction.
(d) In connection with the investment in the Exchange Stock, the
Contributor has had an opportunity to employ and consult with personnel who
are experienced in evaluating and investing in securities of companies
involved in oil and gas exploration and production activities and the
Contributor acknowledges that the Contributor is able to fend for itself,
can bear the economic risk of its investment, and has such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of the investment in the Exchange Stock.
(e) The Contributor (i) has adequate means of providing for the
current needs and possible contingencies of the Contributor, apart from any
income that the Contributor might earn from an investment in the Company;
and (ii) has no need for liquidity of the investment made by the
Contributor in the Company.
(f) Except with respect to the Registrable Securities of a
Selling Stockholder (as defined in Section 7.1), the Contributor has no
present intention to sell, exchange, gift or otherwise dispose of any of
the Exchange Stock received by the Contributor pursuant to this Agreement.
(g) The Contributor will not receive any Exchange Stock in
consideration for services rendered, or to be rendered, for the benefit of
the Company.
(h) The Contributor will not receive any Exchange Stock in
exchange for indebtedness of the Company or for interest on indebtedness of
the Company.
Section 4.2. OTHER REPRESENTATIONS AND WARRANTIES OF CONTRIBUTORS.
Each Contributor, as to itself and not to the others, hereby represents,
warrants and agrees, severally and not jointly, as follows:
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(a) The Contributor has all requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. All proceedings and approvals necessary to authorize
the execution and delivery of this Agreement and consummation of the
transactions contemplated hereby have been completed or received. This
Agreement has been duly executed and delivered by the Contributor and,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Contributor enforceable against the Contributor in accordance with its
terms, except as the enforceability hereof may be limited by (A)
bankruptcy, insolvency, reorganization, fraudulent conveyance or other laws
relating to or affecting the enforcement of creditors' rights or the
collection of debtors' obligations in general or by general equitable
principles, (B) laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (C) to the extent the
indemnification provisions of this Agreement may be limited by applicable
federal or state law.
(b) To the knowledge of the Contributor, there is no action,
claim, or proceeding pending or threatened to which the Contributor is or
would be a party before any court or governmental authority acting in an
adjudicative capacity or any arbitrator or arbitration tribunal with
respect to which there is a reasonable likelihood of a determination
having, or which, insofar as reasonably can be foreseen, in the future
would have a material adverse effect on the interests being transferred to
the Company hereby by the Contributor.
(c) The Contributor is not subject to any outstanding order,
writ, injunction or decree having, or which, insofar as reasonably can be
foreseen, in the future would have a material adverse effect on the
interests being transferred to the Company hereby by the Contributor.
(d) As to Interest Contributors only, to the knowledge of the
Contributor, the Contributor owns all of the right, title and interest in
and to the working and net revenue interests described as owned by the
Contributor in the Recitals hereto. The Contributor has not sold,
assigned, pledged, encumbered, or otherwise transferred such interests, and
such interests are free and clear of all liens, encumbrances and defects
(collectively, "Liens"), except for the following ("Permitted
Encumbrances"):
(i) burdens, encumbrances and obligations taken into account in
computing the working interest and net revenue interest of the
Contributor in Exhibits A-1 and A-2;
(ii) all rights to consent by, required notices to, filings with, or other
actions by governmental entities in connection with the sale or
conveyance by such Contributor of the Contributed Properties if the same
are customarily obtained subsequent to such sale or conveyance;
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(iii) rights of reassignment upon surrender of the Contributed
Properties held by such Contributor's predecessors in
interest;
(iv) rights and regulatory powers reserved to or vested in any
municipality or governmental, statutory or public authority;
(v) liens for taxes, fees, claims, charges, assessments, government
charges or levies not yet due, or which are being contested in
good faith and by appropriate proceedings; and
(vi) mechanics', materialmen's, operators' or other like liens arising
in the ordinary course of business which are not yet due, or
which are being contested in good faith and by appropriate
proceedings and for which there is no material risk of forfeiture
or loss of any of the Contributed Properties.
(e) As to the MOC Contributors only, such Contributor owns all
of the right, title and interest in and to the capital stock described as
owned by the Contributor in the Recitals hereto, free and clear of all
Liens, except Liens that will be released and discharged prior to Closing.
(f) To the knowledge of the Contributor, the condition and
operation of the interests described as owned by the Contributor in the
Recitals hereto, do not violate any federal, state, local or other laws or
regulations or any order or requirement of any court or governmental agency
or authority in any material respect, including without limitation, those
laws, regulations, orders or requirements relating to environment or
health. To the knowledge of the Contributor, such operations are not
subject to any existing, pending or, threatened action, suit,
investigation, inquiry or proceeding by or before any court or governmental
agency or authority under any federal, state or local environmental law,
rule or regulation, except in each case for any matter that would not have
a material adverse effect on the interests being transferred to the Company
hereby by the Contributor.
(g) The execution, delivery and performance of this Agreement by
the Contributor and the consummation of the transactions contemplated
hereby by the Contributor will not conflict with or result in a breach of
any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default) or
require consent under the terms of any agreement, instrument, franchise,
license or permit to which the Contributor is a party or, to the
Contributor's knowledge, by which the Contributor may be bound, except for
(A) consents that may be required from third parties to the assignment of
the interests being transferred by such Contributor hereby, (B) approvals
that may be required to be obtained from governmental entities who are
lessors under leases forming a part of the Contributed Properties (or who
administer such leases on behalf of such lessors) and which are customarily
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obtained subsequent to sale or conveyance (the "Post-Closing Governmental
Consents"), and (C) waivers of requirements under applicable operating or
other agreements relating to maintaining uniform interests.
(h) The execution, delivery and performance of this Agreement by
the Contributor and the consummation of the transactions contemplated
hereby by the Contributor will not violate or conflict with any provision
of the charter or organizing documents of the Contributor, if any, or, to
the Contributor's knowledge, any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Contributor. To the Contributor's
knowledge, no consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any
public, governmental or regulator agency or body having jurisdiction over
the Contributor is required for the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby, except such as have been obtained or will be obtained by the
Contributor prior to Closing, and except for Post-Closing Governmental
Consents, if any. Contributor has no reason to believe that such Post-Closing
Governmental Consents will not be delivered in a timely manner
following the Closing.
(i) As to Interest Contributors only, to the knowledge of the
Contributor, there are no gas imbalances existing with respect to the
interests described as owned by the Contributor in the Recitals hereto.
Section 4.3. REPRESENTATIONS AND WARRANTIES OF MOC. MOC hereby
represents, warrants and agrees as follows:
(a) It has all requisite power and authority to execute and
deliver this Agreement. All proceedings and approvals necessary to
authorize the execution and delivery of this Agreement by it have been
completed or received. This Agreement has been duly executed and delivered
by it and, assuming the due authorization, execution and delivery hereof by
the other parties hereto, constitutes a legal, valid and binding obligation
of it enforceable against it in accordance with its terms, except as the
enforceability hereof may be limited by (A) bankruptcy, insolvency,
reorganization, fraudulent conveyance or other laws relating to or
affecting the enforcement of creditors' rights or the collection of
debtors' obligations in general or by general equitable principles, (B)
laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, and (C) to the extent the
indemnification provisions of this Agreement may be limited by applicable
federal or state law.
(b) To the extent that any statements or omissions made in the
Registration Statement or the Private Placement Memorandum are made in
reliance on and in conformity with information furnished to the Company by
MOC, such Registration Statement and Private Placement Memorandum, each on
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its effective date, shall conform in all material respects with the
requirements of the 1933 Act and the rules and regulations of the SEC
thereunder, and, to such extent, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(c) There is no action, claim, or proceeding pending or, to the
knowledge of MOC, threatened, to which MOC is or would be a party before
any court or governmental authority acting in an adjudicative capacity or
any arbitrator or arbitration tribunal with respect to which there is a
reasonable likelihood of a determination having, or which, insofar as
reasonably can be foreseen, in the future would have a material adverse
effect on MOC or on its assets or business prospects.
(d) MOC is not subject to any outstanding order, writ,
injunction or decree having, or which, insofar as reasonably can be
foreseen, in the future would have a material adverse effect on it or on
its assets or business prospects.
(e) There have been no claims made or actions or proceedings
brought against any officer or director of MOC arising out of or pertaining
to any action or omission within the scope of his or her employment or
position with MOC, which claim, action or proceeding is material to MOC.
(f) MOC owns all of the right, title and interest in and to the
MOC Interests, free and clear of all liens, encumbrances and defects
(collectively, "Liens"), except for Permitted Encumbrances, for those Liens
disclosed in the Registration Statement, and for those Liens that are not
materially affect the value of the MOC Interests.
(g) The operations of MOC and the operation of the MOC
Interests, do not violate any federal, state, local or other laws or
regulations or any order or requirement of any court or governmental agency
or authority in any material respect, including without limitation, those
laws, regulations, orders or requirements relating to environment or
health. Such operations are not subject to any existing, pending or, to
the knowledge of MOC, threatened action, suit, investigation, inquiry or
proceeding by or before any court or governmental agency or authority under
any federal, state or local environmental law, rule or regulation, except
in each case for any matter that would not have a material adverse effect
on MOC or on its assets or business prospects.
(h) The execution, delivery and performance of this Agreement by
MOC and the consummation of the transactions contemplated hereby by MOC
will not (A) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or
lapse of time, or both, would constitute a default) or require consent
under the terms of any agreement, instrument, franchise, license or permit
to which MOC is a party or by which MOC may be bound or (B) violate or
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conflict with any provision of the charter or organizing documents of MOC,
or any judgment, decree, order, statute, rule or regulation of any court or
any public, governmental or regulatory agency or body having jurisdiction
over MOC. No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any
public, governmental or regulatory agency or body having jurisdiction over
MOC is required for the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
except such as have been obtained or will be obtained by MOC prior to
Closing.
(i) There are no gas imbalances existing with respect to the MOC
Interests.
(j) The financial information attributable to MOC and included
in the combined financial statements included in the Registration Statement
(including the related notes and schedules) fairly presents, in all
material respects, the financial position of MOC as of its date, and the
financial information attributable to MOC and included in the combined
statements of income and changes in financial position included in the
Registration Statement (including any related notes and schedules) fairly
presents the results of operations, stockholders' equity, retained earnings
and changes in financial position, as the case may be, of MOC for the
periods set forth therein (subject, in the case of unaudited financial
statements, to normal year-end audit adjustments not material in amount or
effect), in each case in accordance with methods of accounting used by MOC
for federal income tax purposes during the periods involved, except as may
be noted therein. Since the date of the above-referenced financial
information, there has been no material adverse change in the financial
condition, assets or operation of the business of MOC from that set forth
in the Private Placement Memorandum and in the Registration Statement.
Section 4.4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents, warrants and agrees as follows:
(a) The Company has all requisite power and authority to execute
and deliver this Agreement. All proceedings and approvals necessary to
authorize the execution and delivery of this Agreement by the Company have
been completed or received. This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of it enforceable against it in accordance with its
terms, except as the enforceability hereof may be limited by (A)
bankruptcy, insolvency, reorganization, fraudulent conveyance or other laws
relating to or affecting the enforcement of creditors' rights or the
collection of debtors' obligations in general or by general equitable
principles, (B) laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (C) to the extent the
indemnification provisions of this Agreement may be limited by applicable
federal or state law.
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(b) There is no action, claim, or proceeding pending or, to the
knowledge of the Company, threatened, to which the Company is or would be a
party before any court or governmental authority acting in an adjudicative
capacity or any arbitrator or arbitration tribunal with respect to which
there is a reasonable likelihood of a determination having, or which,
insofar as reasonably can be foreseen, in the future would have a material
adverse effect on the Company or on the Company's assets or business
prospects.
(d) The Company is not subject to any outstanding order, writ,
injunction or decree having, or which, insofar as reasonably can be
foreseen, in the future would have a material adverse effect on the Company
or on the Company's assets or business prospects.
(e) There have been no claims made or actions or proceedings
brought against any officer or director of the Company arising out of or
pertaining to any action or omission within the scope of his or her
employment or position with the Company, which claim, action or proceeding
is material to the Company.
(f) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby by
the Company will not (A) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default) or require
consent under the terms of any agreement, instrument, franchise, license or
permit to which the Company is a party or by which the Company may be bound
or (B) violate or conflict with any provision of the charter or organizing
documents of the Company, or any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulator agency
or body having jurisdiction over the Company is required for the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, except such as have been obtained or will
be obtained by the Company prior to Closing.
(g) After the Public Offering, the outstanding capital stock of
the Company will consist solely of: (i) the shares of Exchange Stock
issued to the Contributors under this Agreement; (ii) the shares of Common
Stock issued in the Public Offering; and (iii) stock issued or issuable
pursuant to the "Incentive Awards" described in the Registration Statement.
Except as set forth in this Agreement and as disclosed in the Registration
Statement , there are no outstanding subscriptions, options, warrants,
rights or convertible or exchangeable securities issued by the Company.
Except for this Agreement and the agreements and commitments necessary to
consummate the Public Offering, there are no other agreements or
commitments to which the Company is a party relating to the issued or
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unused capital stock or other securities of the Company, including without
limitation, any agreement or commitment to issue, deliver, or sell, or
cause to be issued, delivered or sold, shares of capital stock or other
securities of the Company, or granting or obligating the Company to grant,
extend or enter into any subscription, option, warrant, right or
convertible or exchangeable security or other similar agreement or
commitment with respect to the capital stock of the Company. All of the
shares of Exchange Stock that will be issued pursuant to Section 2.3 hereof
will be validly issued, fully paid and nonassessable and will not be
subject to any preemptive rights.
(h) The information provided to Contributors in the Private
Placement Memorandum, in the Registration Statement and in the other
written documents and materials delivered to them by the Company in
connection herewith does not contain any untrue statement of a material
fact, nor does it omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(i) None of the Exchange Stock are being issued for indebtedness
of the Company or for interest on such indebtedness, and there is no
indebtedness existing between the Company and any Contributor nor will
there be created any indebtedness in favor of any Contributor as a result
of the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1. RESTRICTION ON TRANSFERS AND DISTRIBUTIONS.
(a) Each Contributor agrees not to sell, transfer, convey, encumber,
lease or otherwise dispose of, or elect not to participate in an operation
with respect to, such Contributor's Contributed Properties from the date
hereof until the Closing.
(b) MOC agrees not to sell, transfer, convey, encumber, lease or
otherwise dispose of, or elect not to participate in an operation with
respect to, the MOC Interests.
(c) After the Effective Time, MOC shall not make, and the MOC
Contributors shall not receive, any dividends or other distributions or
payments with respect to MOC Stock (whether in cash or property), except
for an amount equal to the tax burden from any taxable income attributable
to MOC after the Effective Time. In determining the tax burden, it shall
be assumed that all such taxable income is taxable at the highest nominal
statutory income tax rates applicable to the MOC Contributors (regardless
of whether the effective marginal rates are different, for example, as a
result of phase outs, limitations or other provisions). Until the Closing,
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MOC shall not (a) issue any capital stock or debt securities, or any
rights, options, or securities convertible or exchangeable therefor, or (b)
amend or modify its certificates or articles of incorporation, by-laws or
other governing documents or instruments. Nothing in this Section 5.1
shall prohibit the Company from paying interest that accrues on the Notes
(as defined in Section 5.5) before or after the Effective Time, nor does
anything herein prohibit the Noteholders (as defined in Section 5.5) from
receiving such interest.
(d) The Interest Contributors shall not have any right to receive or
retain any cash, revenues or other property related to his, her, or its
respective interests in the production attributable to the Contributed
Properties for the periods or portions thereof beginning on or after the
Closing.
Section 5.2. ALLOCATION OF REVENUES AND EXPENSES.
(a) Each Interest Contributor hereby agrees that all revenues from
the sale of oil and gas produced prior to the Effective Time with respect
to such Interest Contributor's Contributed Properties, and all costs and
expenses attributable thereto which are properly accrued for any period or
portion thereof ending at or prior to the Effective Time in accordance with
the method of accounting used in connection with the operating agreements
applicable to such properties, shall be for such Interest Contributor's
account, and all revenues from the sale of oil and gas produced after the
Effective Time with respect to such Interest Contributor's Contributed
Properties, and all costs and expenses attributable thereto which are
properly accrued for any period or portion thereof beginning after the
Effective Time, shall be for the account of the Company.
(b) Within 120 days after the Closing, the Company shall apply the
foregoing subsection (a) and shall determine with respect to each Interest
Contributor and the Contributed Properties transferred by such Contributor
under this Agreement: (1) the net profit or net loss, as the case may be,
for periods ending at or prior to the Effective Time, but not received or
paid on or prior to Closing (the "Contributor Net Profit" or "Contributor
Net Loss", as the case may be), and (2) the net profit or net loss, as the
case may be, for periods beginning after the Effective Time, and received
or paid on or prior to Closing (the "Company Net Profit" or "Company Net
Loss", as the case may be). The Company shall provide a written report of
the same to each Contributor within such 120 day period. Within ten days
following the date of the written report, the Company shall pay each such
Contributor the Contributor Net Profit and Company Net Loss attributable to
such Contributor's Contributed Properties, and such Contributor shall pay
the Company the Company Net Profit and the Contributor Net Loss
attributable to such Contributed Properties, and each such Contributor
hereby agrees to indemnify the Company against such costs and expenses. In
any case, the amount of the payment shall be reduced by the income tax
burden of the Net Profit on the payor, and the income tax benefit of the
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Net Loss to the payee. In determining the tax burden or tax benefit, it
shall be assumed that the Net Profit is taxable as income, and the Net Loss
is allowable as a deduction, at the highest nominal statutory income tax
rates applicable to the person (regardless of whether the effective
marginal rates are different, for example, as a result of phase outs,
limitations or other provisions).
Section 5.3. RULE 144 REPORTING. With a view to making available
the benefits of certain rules and regulations of the SEC that may permit
the sale of the Exchange Stock to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
1933 Act, at all times from and after ninety (90) days following the
effective date of the Registration Statement;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), at any time after it
has become subject to such reporting requirements;
(c) So long as a Contributor owns any Exchange Stock that
constitutes "restricted securities" as defined in Rule 144, furnish to such
Contributor forthwith upon written request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144
(at any time from and after ninety (90) days following the effective date
of the Registration Statement), and of the 1933 Act and the Exchange Act
(at any time after it has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed as such a Contributor may reasonably
request in availing itself of any rule or regulation of the SEC allowing a
Contributor to sell any such securities without registration.
Section 5.4. CONDUCT OF BUSINESS. Each of the Company, the
Contributors (solely with respect to their respective Contributed
Properties), and MOC hereby agrees that prior to the Closing, and except as
otherwise contemplated herein or consented to in writing by the other
parties hereto, it shall conduct its business in the ordinary course and
shall use reasonable efforts to preserve intact its present business and
relationships.
Section 5.5. CONTRIBUTION OF NOTES. MOC is currently indebted to
Xxxxx X. Xxxxxx, Xxx X. Xxxx, Xxxxx X. Xxxxxx, and Xxxxxx X. Xxxxxx (for
purposes of this Section 5.5, the "Noteholders") under those four
promissory notes, each in the original principal amount of $1,910,500,
which are described in the Registration Statement (collectively, the
"Notes"). Prior to the Closing, the Noteholders shall each contribute to
the capital of MOC the Notes and the indebtedness represented thereby.
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Section 5.6. "MARKET STAND-OFF" AGREEMENT. Each Contributor agrees
that, if requested by the Underwriters or the Company, it will not offer,
sell, grant any option for the sale of, or otherwise transfer or dispose
of, directly or indirectly, or agree to do any of the foregoing with
respect to, any securities of the Company held by such Contributor (other
than those included in the Registration Statement pursuant to Article VII
hereof) during the one hundred eighty (180) day period following the
effective date of the Registration Statement, without the consent of the
representative of the Underwriters. Each Contributor agrees to enter into
a written agreement with the Underwriters substantially to that effect, if
so requested by the Underwriters or the Company.
Section 5.7. CONSENTS. Each Contributor covenants and agrees to
obtain prior to Closing all consents, waivers and approvals required in
connection with the execution and delivery of, and performance of its
obligations under, this Agreement, except for the "Post-Closing
Governmental Consents", if any, for which Contributor covenants and agrees
to obtain within 120 days following the Closing.
Section 5.8. COMPANY COVENANT. The Company covenants and agrees to
take all actions necessary such that the Exchange Stock (excluding the
Registrable Shares actually included in the Public Offering) will comprise
at least 80% of the shares of Stock outstanding immediately preceding the
consummation of the Public Offering, assuming the exercise at Closing of
any Company Stock rights, options, warrants, or subscriptions that are
vested at Closing and are exercisable at a price less than the initial
offering price of the Stock in the Public Offering, and after accounting
for any Stock issued at Closing for services rendered or to be rendered,
and excluding all of the shares of Stock issued by the Company for its own
account pursuant to the Registration Statement.
Section 5.9. CLOSING CERTIFICATE. Each Contributor and MOC shall
execute and deliver at Closing a certificate stating and affirming that (i)
all of the representations and warranties of such Contributor or MOC, as
the case may be, are true and complete on the Closing Date as if made on
such date; and (ii) such Contributor or MOC, as the case may be, has
performed and complied in all material respects with the covenants and
agreements contained herein that are required to be performed or complied
with by it at the time of or prior to the Closing.
ARTICLE VI
INDEMNIFICATION
Section 6.1. INDEMNIFICATION.
(a) On the terms and subject to the conditions of this Section 6.1,
each Contributor hereby agrees to indemnify, defend and hold harmless the
Company from and against any and all actions, suits, proceedings, claims,
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demands, assessments, judgments, liabilities, losses, damages, costs and
expenses, including without limitation, any interest, fines, court costs
and attorneys' fees, to the extent arising out of or based upon any breach
by such Contributor of any representation, warranty or covenant made or
given by such Contributor herein.
(b) On the terms and subject to the conditions of this Article VI,
each Stock Contributor hereby agrees to indemnify, defend and hold harmless
the Company from and against any and all actions, suits, proceedings,
claims, demands, assessments, judgments, liabilities, losses, damages,
costs and expenses, including without limitation, any interest, fines,
court costs and attorneys' fees, to the extent arising out of or based upon
any breach by MOC of any representation, warranty or covenant made or given
by MOC herein.
(c) On the terms and subject to the conditions of this Section 6.1,
the Company hereby agrees to indemnify, defend and hold harmless the
Contributors from and against any and all actions, suits, proceedings,
claims, demands, assessments, judgments, liabilities, losses, damages,
costs and expenses, including without limitation, any interest, fines,
court costs and attorneys' fees, arising out of or based upon:
(i) any breach by the Company of any representation, warranty or
covenant made or given by the Company herein; or
(ii) the ownership or operation of the Contributed Properties from and
after the Closing, including, without limitation:
(A) the presence, release, or disposal of any material subject
to environmental, health and safety laws on or from any of
the Contributed Properties or the MOC Interests;
(B) the disposal, arrangement for disposal, transportation,
release or placement by the Company of any such material on,
from or to any such properties; and
(C) any noncompliance by the Company with environmental, health
and safety laws after the Closing.
In connection with, but without limiting, the foregoing, it is specifically
understood and agreed that such obligations and liabilities relating to the
ownership and/or operation of the Contributed Properties after the Closing
shall be deemed to include all matters arising out of the condition of the
Properties on the date of Closing (including, without limitation, all
obligations to properly plug and abandon, or replug and re-abandon, xxxxx
located on the Contributed Properties, to restore the surface of the
Contributed Properties and to comply with, or to bring the Properties into
compliance with, applicable environmental laws, rules, regulations, and
orders, including conducting any remediation activities which may be
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required on or otherwise in connection with activities on the Contributed
Properties), regardless of whether such condition or the events giving rise
to such condition arose or occurred before or after the Closing, and the
assumptions and indemnifications by the Company herein shall expressly
cover and include such matters.
(d) The indemnification obligations set forth in this Section 6.1
with respect to a breach of a representation or warranty shall be subject
to the limitations set forth in Section 9.5.
Section 6.2. INDEMNITY PROCEDURE; THIRD-PARTY CLAIMS.
(a) If a Contributor or the Company (each, an "Indemnified Party")
makes a claim for indemnification hereunder based upon a third party claim,
the Indemnified Party will give the party against which the claim is made
(the "Indemnifying Party") prompt notice of such third party claim and of
its demand for indemnification hereunder, and the Indemnifying Party will
assume the defense thereof by representatives chosen by it; PROVIDED,
HOWEVER, that the Indemnified Party shall be entitled to participate in the
defense thereof and to employ counsel at its own expense to assist in the
handling of such Indemnity Claim.
(b) If the Indemnifying Party, within twenty (20) days after notice
of any such third party Indemnity Claim fails to assume the defense
thereof, the Indemnified Party shall (upon further notice to the
Indemnifying Party) have the right to undertake the defense, compromise or
settlement of such third party claim, subject to the right of the
Indemnifying Party to assume the defense of such third party claim at any
time prior to the settlement, compromise or final determination thereof
(including reimbursement to the Indemnified Party of all expenses incurred
by it in defending against any such third party Indemnity Claim but only if
and to the extent that the Indemnified Party is entitled to indemnification
on the Indemnity Claim itself).
(c) Anything in this Section 6.2 to the contrary notwithstanding, (i)
the Indemnifying Party shall not, without the written consent of the
Indemnified Party (which consent shall not be unreasonably withheld),
settle or compromise any third party Indemnity Claim or consent to the
entry of any judgment which imposes any future obligation on the
Indemnified Party or which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified
Party a release from all liability in respect to such Indemnity Claim.
(d) The Indemnified Party shall provide the Indemnifying Party with
such assistance (without charge) as may reasonably be requested by the
Indemnifying Party in connection with any indemnification or defense
provided for herein.
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Section 6.3. INDEMNITY PROCEDURE; OTHER THAN THIRD-PARTY CLAIMS.
(a) If an Indemnified Party makes a claim for indemnification
hereunder which does not involve a third party claim, the Indemnified Party
shall transmit to the Indemnifying Party a written notice of such claim and
of its demand for indemnification hereunder, describing in reasonable
detail the nature of the claim, an estimate of the amount of the damages
attributable to such claim and the basis for the Indemnifying Party's
liability for such claim. If the Indemnifying Party does not dispute such
claim in writing within 60 days after it receives the aforedescribed
notice, the claim shall become a liability of the Indemnifying Party,
payable within 30 days of the expiration of such 60 day period. If the
Indemnifying Party does dispute the claim within such period of time, such
dispute shall be resolved by litigation in an appropriate court of
competent jurisdiction. Any amount owed by a Contributor to the Company
under this Section 6.3 may be paid, in whole or in part, by transferring to
the Company a number of Exchange Stock having a market value on the date
prior to such transfer at least equal to the amount owed hereunder,
provided, however, to the extent such market value of the transferred
Exchange Stock is less than the amount owed, the Contributor shall pay the
balance in immediately available funds.
Section 6.4. NOTICES. The failure to provide notice as described in
this Article VI shall not excuse any party from its continuing obligations
hereunder; however, any claim shall be reduced by the damages resulting
form such party's delay or failure to provide notice as provided herein.
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1. CERTAIN DEFINITIONS. In addition to the other terms
defined in this Agreement, the following terms used in this Article VII
shall have the meanings set forth below:
(a) "Selling Stockholder" shall mean the Contributors identified
on EXHIBIT D.
(b) "Other Stockholders" shall mean persons other than Selling
Stockholders who, by virtue of agreements with the Company, are entitled to
include their securities in the registration pursuant to the Registration
Statement.
(c) "Registrable Securities" shall mean (i) the number of shares
of Exchange Stock held by a Selling Stockholder which shall be equal to the
number of shares identified on EXHIBIT D, expressed as a percentage of the
total Exchange Stock, and which in the aggregate is less than 20% of all of
the Exchange Stock to be issued hereunder.
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(d) The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing the Registration
Statement in compliance with the 1933 Act and applicable rules and
regulations thereunder, and the declaration or ordering of the
effectiveness of the Registration Statement.
(e) "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Article VII, 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 expenses of any regular or special audits
incident to or required by any such registration, but shall not include
Selling Expenses and fees and disbursements of counsel for the Selling
Stockholders (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company).
(f) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and
fees and disbursements of counsel for any Selling Stockholder (other than
the fees and disbursements of counsel included in Registration Expenses).
Section 7.2. COMPANY REGISTRATION.
(a) Except as set forth below in this Section 7.2, the Company
will use its best efforts to include all the Registrable Securities in the
Registration Statement (and any related qualification under Blue Sky Laws
or other compliance), and in any underwriting involved therein.
(b) The right of any Selling Stockholder to registration
pursuant to this Section 7.2 shall be conditioned upon such Selling
Stockholder's participation in the related underwriting and the inclusion
of such Selling Stockholder's Registrable Securities in the underwriting to
the extent provided herein. All Selling Stockholders proposing to
distribute their securities through such underwriting shall (together with
the Company and the other holders of securities of the Company with
registration rights to participate therein distributing their securities
through such underwriting) enter into an underwriting agreement in
customary form with the representative of the Underwriters.
(c) If any person does not agree to the terms of any such
underwriting, he shall be excluded therefrom by written notice from the
Company or the Underwriters. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration.
Section 7.3. EXPENSES OF REGISTRATION. All Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to Section 7.2 shall be borne by the Company.
-25-
Section 7.4. INDEMNIFICATION.
(a) The Company will indemnify each Contributor, each of its
officers, directors and partners, legal counsel, and accountants and each
person controlling such Contributor within the meaning of Section 15 of the
1933 Act, with respect to which registration, qualification, or compliance
has been effected pursuant to this Article VII, against all expenses,
claims, losses, damages, and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular, or other document (including any related
registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the 1933 Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration,
qualification, or compliance, and will reimburse each such Contributor,
each of its officers, directors, partners, legal counsel, and accountants
and each person controlling such Contributor, for any legal and any other
expenses reasonably incurred in connection with investigating and defending
or settling any such claim, loss, damage, liability, or action; PROVIDED,
HOWEVER, that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability, or expense arises out of or
is based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular, or other
document (including any related registration statement, notification, or
the like) incident to any such registration, qualification, or compliance,
or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, which statement or omission is based upon written
information furnished to the Company by such Contributor and stated to be
specifically for use therein. It is agreed that the indemnity agreement
contained in this Section 7.4(a) 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 the Company (which consent
has not been unreasonably withheld).
(b) Each Selling Stockholder will, if Registrable Securities
held by him are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify the Company, each
of its directors, officers, partners, legal counsel, and accountants, each
person who controls the Company within the meaning of Section 15 of the
1933 Act, each other such Selling Stockholder and Other Stockholder, and
each of their officers, directors, and partners, and each person
controlling such Selling Stockholder or Other Stockholder, against all
claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue
-26-
statement) of a material fact contained in any such registration statement,
prospectus, offering circular, or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse the Company and such Selling Stockholders, Other
Stockholders, directors, officers, partners, legal counsel, and
accountants, persons, or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability, or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular, or other document in
reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder and stated to be specifically for use
therein, provided, however, that the obligations of such Selling
Stockholder hereunder shall not apply to amounts paid in settlement of any
such claims, losses, damages, or liabilities (or actions in respect
thereof) if such settlement is effected without the consent of such Selling
Stockholder (which consent shall not be unreasonably withheld).
(c) Each party entitled to indemnification under this Section
7.4 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the
defense of such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such party's
expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 7.4, to the extent such failure is not
prejudicial. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim and litigation
resulting therefrom.
(d) If the indemnification provided for in this Section 7.4 is
held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
-27-
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party on the one hand and
of the Indemnified Party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage, or expense
as well as any other relevant equitable considerations. The relative fault
of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the
Indemnified Party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
Section 7.5. INFORMATION BY SELLING STOCKHOLDER. Each Selling
Stockholder of Registrable Securities shall furnish to the Company such
information regarding such Selling Stockholder and the distribution
proposed by such Selling Stockholder as the Company may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification, or compliance referred to in this Article VII.
Section 7.6. DELAY OF REGISTRATION. No Selling Stockholder shall
have any right to take any action to restrain, enjoin, or otherwise delay
any registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Article VII.
Section 7.8. OTHER REGISTRATION RIGHTS. At the Closing, the
Company and the Contributors, including the Selling Stockholders, shall
execute and deliver a Registration Rights Agreement in the form of that
attached hereto as EXHIBIT E, which, subject to the limitations set forth
therein, provides the Contributors with certain rights to have the Exchange
Stock registered under the circumstances described therein.
ARTICLE VIII
TERMINATION OF CERTAIN ARRANGEMENTS
Section 8.1. TERMINATION OF 1994 JEP. The 1994 JEP Contributors and
MOC hereby agree that, effective immediately upon the Closing, the 1994 JEP
shall become immediately null and void and have no effect, and no party
thereto shall have any liability to the other parties thereto by reason of
any term or provision contained therein, except as provided below in this
Section 8.1. Each 1994 JEP Contributor hereby represents and warrants to
-28-
the Company, to each other and to MOC that the Contributed Properties
attributable to him, her or it as listed on EXHIBIT A-1 and EXHIBIT A-2
constitute all of the rights and interest held by him, her or it under and
pursuant to the 1994 JEP. Subject to and effective upon the Closing, MOC
and the 1994 JEP Contributors hereby mutually release and discharge each
other from any further obligations and liabilities under the 1994 JEP,
except for the obligations either may have to the other under the 1994 JEP
to account for revenues and expenses accrued and incurred prior to Closing.
Section 8.2. TERMINATION OF 1995 JEP. The 1995 JEP Contributors and
MOC hereby agree that, effective immediately upon the Closing, the 1995 JEP
shall become immediately null and void and have no effect, and no party
thereto shall have any liability to the other parties thereto by reason of
any term or provision contained therein, except as provided below in this
Section 8.2. Each 1995 JEP Contributor hereby represents and warrants to
the Company, to each other and to MOC that the Contributed Properties
attributable to him, her or it as listed on EXHIBIT A-1 and EXHIBIT A-2
constitute all of the rights and interest held by him, her or it under and
pursuant to the 1995 JEP. Subject to and effective upon the Closing, MOC
and the 1995 JEP Contributors hereby mutually release and discharge each
other from any further obligations and liabilities under the 1995 JEP,
except for the obligations either may have to the other under the 1995 JEP
to account for revenues and expenses accrued and incurred prior to Closing.
Section 8.3. TERMINATION OF 1997 DRILLING PROGRAM. Victory and MOC
hereby agree that, effective immediately upon the Closing, that certain
agreement titled "Eagle Investments, Inc./MOC 1997 Drilling Program,
Exploration and Participation Agreement," dated as of August 15, 1997,
shall become immediately null and void and have no effect, and no party
thereto shall have any liability to the other parties thereto by reason of
any term or provision contained therein, except as provided below in this
Section 8.3. Victory hereby represents and warrants to the Company and to
MOC that the Contributed Properties attributable to it as listed on EXHIBIT
A-1 and EXHIBIT A-2 constitute all of the rights and interest held by it
under and pursuant to the above-referenced agreement. Subject to and
effective upon the Closing, MOC and Victory hereby mutually release and
discharge each other from any further obligations and liabilities under the
above-referenced agreement, except for the obligations either may have to
the other under the above-referenced agreement to account for revenues and
expenses accrued and incurred prior to Closing.
ARTICLE IX
MISCELLANEOUS
Section 9.1. ENTIRE AGREEMENT. This Agreement (together with any
exhibits and documents delivered pursuant hereto), and the various
agreements and instruments contemplated hereby constitute the entire
agreement between the parties hereto with respect to the subject matter
-29-
hereof, and supersede all prior agreements and understandings relating to
the subject matter of this Agreement. There are no representations,
warranties, covenants, promises or agreements on the part of any party
hereto to or with any other party hereto with respect to the matters set
forth herein which are not explicitly set forth herein, in the agreements
and instruments contemplated hereby, or in the Private Placement
Memorandum.
Section 9.2. GOVERNING LAW; JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the state of
Michigan. Any action, suit or proceeding seeking to enforce any provision
of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought against
any of the parties in the federal or state courts situated in the state of
Michigan, and each of the parties hereby consents to the exclusive
jurisdiction of such courts (and of the appropriate appellate courts) in
any such suit, action or proceeding and waives any objection to venue laid
therein. Process in any such suit, action or proceeding may be served on
any party anywhere in the world, whether within or without the state of
Michigan.
Section 9.3. COUNTERPARTS. This Agreement may be executed by
facsimile and/or in counterparts, and when so executed, each counterpart
shall be deemed to be an original and said counterparts together shall
constitute one and the same instrument. This Agreement shall be binding
upon each party that executes a counterpart of this Agreement,
notwithstanding the fact that certain of the persons or entities identified
as Contributors herein elect not to execute this Agreement.
Section 9.4. SUCCESSORS. The representations, warranties and
agreements contained in this Agreement shall be binding on each party
hereto and the successors, assigns, and legal representatives of each such
party and shall inure to the benefit of the other parties and their
respective successors and permitted assigns.
Section 9.5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made pursuant hereto,
and any indemnity obligations related to any breaches thereof, whether
express or implied, shall survive the Closing Date and shall continue in
full force and effect for a period lasting until the second anniversary of
this Agreement, and thereafter shall be of no force or effect unless a
representation or a warranty shall have been breached and the party that
made the representation or warranty shall have been given notice of such
breach within such period, in which event the survival period for such
representation or warranty and the related indemnity obligations shall be
tolled. All covenants and agreements contained in this Agreement shall
survive the Closing Date for so long as such covenants and agreements shall
have applicability.
-30-
Section 9.6. MODIFICATION AND AMENDMENT. This Agreement may be
modified and amended only by the written consent of all of the parties
hereto.
Section 9.7. ASSIGNMENT. This Agreement shall not be assignable
by operation of law or otherwise except with the prior written consent of
all of the parties hereto.
Section 9.8. NOTICES. Any notice or other communication required or
permitted under this Agreement shall be by facsimile actually received or
in writing and mailed by certified or registered mail, return receipt
requested, postage prepaid. Any such notice shall be deemed given upon its
receipt at the following address:
(a) If to the Company and/or MOC:
c/x Xxxxxx Exploration Company
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: President
with a copy to:
Mika, Meyers, Xxxxxxx & Xxxxx, P.L.C.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxxx, Esq.
(b) If to a Contributors, at the address set forth beneath such
Contributor's name on the signature pages hereto.
-31-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
XXXXXX EXPLORATION COMPANY, a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------------
Its: President and Chief Executive Officer
--------------------------------------------
XXXXXX OIL CORPORATION, a Michigan
corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------------
Its: President
--------------------------------------------
CONTRIBUTORS: See attached counterpart
signature pages
-32-
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
INDIVIDUAL:
----------
Date: November 12, 1997
/s/ Xxx X. Xxxxxx, Xx.
---------------------------------------
XXX X. XXXXXX, XX.
Principal Place of Business Address:
000 X. Xxxxxxx Xx.
---------------------------------------
Xxxxxxxx, XX 00000
---------------------------------------
---------------------------------------
Social Security Number:
----------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
INDIVIDUAL:
----------
Date: November __, 1997
/s/ Xxxxxxx Xxxxx
----------------------------------------
XXXXXXX XXXXX
Principal Place of Business Address:
0000 Xxxxxxx Xxxx Xxxxx, Xxxxx X
----------------------------------------
Xxxxxxxx Xxxx, XX 00000
----------------------------------------
----------------------------------------
Social Security Number:
-----------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
INDIVIDUAL:
----------
Date: November 12, 1997
/s/ Xxxxxx X. Xxxxxxx / /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
XXXXXX XXXXXXX
Principal Place of Business Address:
000 Xxxxxxxx Xxxxx
---------------------------------------------
Xxxxxxxxxx XX 00000
---------------------------------------------
---------------------------------------------
Social Security Number:
---------------------
---------------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
INDIVIDUAL:
----------
Date: November 10, 1997
/s/ Xxx Xxxxx
----------------------------------------------
XXX XXXXX
Mail: X.X. Xxx 0000, Xxxx Xxxxxxx, XX 00000
-----------------------------------------------
Delivery: 000 X. Xxxxxxx Xxxxx 000
-----------------------------------------------
Xxxx Xxxxxxx, XX 00000
-----------------------------------------------
Social Security Number:
-----------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
INDIVIDUAL:
----------
Date: November 10, 1997
/s/ Xxxxxxx Xxxxxxxxx
--------------------------------
XXXXXXX XXXXXXXXX
Principal Place of Business Address:
Milw. Marble & Granite Co.
------------------------------------
0000 X. Xxxxxxxx Xx.
------------------------------------
Xxxx., XX 00000
Social Security Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
INDIVIDUAL:
----------
Date: November 10, 1997
/s/ X.X. Xxxxx, Xx
--------------------------------
X.X. XXXXX, XX
Principal Place of Business Address:
325 Commons Ford
------------------------------------
Xxxxxx, XX 00000
------------------------------------
------------------------------------
Social Security Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
INDIVIDUAL:
----------
Date: November 10, 1997
/s/ Xxxxxx XxXxxxx
---------------------------------------
XXXXXX XXXXXXX
Principal Place of Business Address:
00000 X. Xxx Xxxxx
---------------------------------------
Xxxxxxxx Xxxx, XX
---------------------------------------
49684
---------------------------------------
Social Security Number:
---------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
TRUST:
-----
Date: November 13, 1997
XXXXX X. XXXXXX TRUST
u/a/d July 14, 1989
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx, Trustee
Principal Place of Business Address:
X.X. Xxx 000
---------------------------------
Xxxxxxxx Xxxx, XX 00000
---------------------------------
---------------------------------
State of Settlement: Michigan
Tax Identification Number:
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
TRUST:
-----
Date: November ___, 1997
XXXXX X. XXXXXX RETAINED AUTHORITY
TRUST #1 u/a/d November 3, 1997
By: /s/ X.X. Xxxxxx
-------------------------------------
X.X. Xxxxxx, Trustee
Principal Place of Business Address:
----------------------------------------
0000 Xxxxx Xxxxxx Xxxx
----------------------------------------
Xxxxxxxx Xxxx, XX 00000
----------------------------------------
State of Settlement: Michigan
Tax Identification Number:______________
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
TRUST:
-----
Date: November __, 1997
XXXXX X. XXXXXX TRUST
u/a/d April 29, 1986
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx, Trustee
Principal Place of Business Address:
0000 Xxxxx Xxxxxx Xxxx
----------------------------------
Xxxxxxxx Xxxx, XX 00000
----------------------------------
----------------------------------
State of Settlement: Michigan
Tax Identification Number:
--------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
TRUST:
-----
Date: November __, 1997
XXXXX X. XXXXXX RETAINED ANNUITY
TRUST #1 u/a/d November 3, 1997
By: /s/ X. X. Xxxxxx
---------------------------------
X. X. Xxxxxx, Trustee
Principal Place of Business Address:
0000 Xxxxx Xxxxxx Xxxx
-------------------------------------
Xxxxxxxx Xxxx, XX 00000
-------------------------------------
-------------------------------------
State of Settlement: Michigan
Tax Identification Number: __________
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
TRUST:
-----
Date: November __, 1997
Xxxxxx X. XXXXXX RETAINED ANNUITY
TRUST #1 u/a/d November 3, 1997
By: /s/ X. X. Xxxxxx
---------------------------------
X. X. Xxxxxx, Trustee
Principal Place of Business Address:
-------------------------------------
0000 Xxxxx Xxxxxx Xxxx
-------------------------------------
Xxxxxxxx Xxxx, XX 00000
-------------------------------------
State of Settlement: Michigan
Tax Identification Number: __________
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
TRUST:
-----
Date: November __, 1997
XXXXXX X. XXXXXX TRUST
u/a/d April 5, 1989
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx, Trustee
Principal Place of Business Address:
-------------------------------------
0000 Xxxxx Xxxxxx Xxxx
-------------------------------------
Xxxxxxxx Xxxx, XX 00000
-------------------------------------
-------------------------------------
State of Settlement: Michigan
Tax Identification Number: __________
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
TRUST:
-----
Date: November __, 1997
XXX X. XXXX TRUST
u/a/d February 7, 1989
By: /s/ Xxx X. Xxxx
---------------------------------
Xxx X. Xxxx, Trustee
Principal Place of Business Address:
-------------------------------------
0000 Xxxxx Xxxxxx Xxxx
-------------------------------------
Xxxxxxxx Xxxx, XX 00000
-------------------------------------
State of Settlement: Michigan
Tax Identification Number: __________
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
TRUST:
-----
Date: November __, 1997
XXX XXXXX XXXX RETAINED ANNUITY
TRUST #1 u/a/d November 3, 1997
By: /s/ X. X. Xxxxxx
------------------------------
X.X. Xxxxxx, Trustee
Principal Place of Business Address:
---------------------------------
0000 Xxxxx Xxxxxx Xxxx
---------------------------------
Xxxxxxxx Xxxx, XX 00000
---------------------------------
State of Settlement: Michigan
Tax Identification Number:
-------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
LIMITED LIABILITY COMPANY:
-------------------------
Date: November 11, 1997
C & H EXPLORATION, L.L.C.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
(Authorized Signature)
Xxxxx X. Xxxxxxxx -- Vice President
-----------------------------------
(Print Name and Title of Signatory)
Principal Place of Business Address:
0000 X. Xxxxxxxxx Xxx
-----------------------------------
Xxxxx, XX 00000
-----------------------------------
-----------------------------------
State of Formation: Michigan
-------------
Tax Identification Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
LIMITED LIABILITY COMPANY:
-------------------------
Date: November 11, 1997
NIBLICK EXPLORATION, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
(Authorized Signature)
Xxxxxxx X. Xxxxxx, Equity Owner
-----------------------------------
(Print Name and Title of Signatory)
Principal Place of Business Address:
0000 X. Xxxx Xxxx Xxxx
-----------------------------------
Xxxxxxxx Xxxx, Xxxxxxxx 00000
-----------------------------------
-----------------------------------
State of Formation: Michigan
-------------
Tax identification Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
CORPORATION:
-----------
Date: November 11, 1997
XXXXXX AND XXXXXX, INC., a Michigan
corporation
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
(Authorized Signature)
Xxxxx X. Xxxxxx, President
-----------------------------------
(Print Name and Title of Signatory)
Principal Place of Business Address:
X.X. Xxx 000
-----------------------------------
Xxxxxxxx Xxxx, XX 00000-0000
-----------------------------------
-----------------------------------
Tax Identification Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
CORPORATION:
-----------
Date: November __, 1997
DOUBLE DIAMOND ENTERPRISES, INC., a
Michigan corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
(Authorized Signature)
Xxxxxx X. Xxxxxx, Trustee
-----------------------------------
(Print Name and Title of Signatory)
Principal Place of Business Address:
-----------------------------------
0000 Xxxxx Xxxxxx Xxxx
-----------------------------------
Xxxxxxxx Xxxx, XX 00000
-----------------------------------
Tax Identification Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
CORPORATION:
-----------
Date: November __, 0000
XXXXX XXXXXXXXXXXXX, INC., a Michigan
corporation
By: /s/ X. X. Xxxxxx
--------------------------------
(Authorized Signature)
X. X. Xxxxxx, President
-----------------------------------
(Print Name and Title of Signatory)
Principal Place of Business Address:
-----------------------------------
0000 Xxxxx Xxxxxx Xxxx
-----------------------------------
Xxxxxxxx Xxxx, XX 00000
-----------------------------------
Tax identification Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
CORPORATION:
-----------
Date: November __, 1997
EAGLE INVESTMENTS, INC.
(d/b/a/ Victory, Inc.), a Michigan
corporation
By: /s/ X. X. Xxxxxx
--------------------------------
(Authorized Signature)
X. X. Xxxxxx, President
-----------------------------------
(Print Name and Title of Signatory)
Principal Place of Business Address:
-----------------------------------
0000 Xxxxx Xxxxxx Xxxx
-----------------------------------
Xxxxxxxx Xxxx, XX 00000
-----------------------------------
Tax identification Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
CORPORATION
-----------
Date: November , 1997
--
FRONTIER INVESTMENTS, INC., a Michigan
corporation
By: /s/ Xxx Xxxxx Xxxx
--------------------------------
(Authorized Signature)
Xxx Xxxxx Xxxx, President
-----------------------------------
(Print Name and Title of Signatory)
Principal Place of Business Address:
-----------------------------------
0000 Xxxxx Xxxxxx Xxxx
-----------------------------------
Xxxxxxxx Xxxx, XX 00000
-----------------------------------
Tax Identification Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
CORPORATION:
-----------
Date: November , 1997
--
OAK SHORES INVESTMENT INC., a Michigan
corporation
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
(Authorized Signature)
Xxxxx X. Xxxxxx, President
-----------------------------------
(Print Name and Title of Signatory)
Principal Place of Business Address:
0000 Xxxxx Xxxxxx Xxxx
-----------------------------------
Xxxxxxxx Xxxx, XX 00000
-----------------------------------
-----------------------------------
Tax Identification Number:
------------
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
CORPORATION
-----------
Date: November 11, 1997
NAME OF CORPORATION:
XXXX MINERALS COMPANY
Principal Place of Business Address:
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
STATE OF INCORPORATION:
Delaware
By: /s/ Xxxxxxx Xxxxx XxXxxxxxx
-----------------------------------
Xxxxxxx Xxxxx XxXxxxxxx
Agent and Attorney-in-Fact
Tax Identification Number:
COUNTERPART SIGNATURE PAGE TO
-----------------------------
EXCHANGE AND CONTRIBUTION AGREEMENT
-----------------------------------
CORPORATION:
-----------
Date: November 10, 1997
--
O.O. INVESTMENTS, INC., a Nebraska
-----------
corporation
By: /s/ Xxx X. Xxxxxxxxx
----------------------------------
(Authorized Signature)
Xxx X. Xxxxxxxxx President
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(Print Name and Title of Signatory)
Principal Place of Business Address:
0000 Xxxxxxx Xxxxx Xxxx
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Xxxxxxx, XX 00000
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Tax Identification Number:
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EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of __________, 1997, between and among Xxxxxx Exploration
Company, a Delaware corporation (the "Company"), and the persons identified
on EXHIBIT A attached hereto (the "Stockholders").
RECITALS:
WHEREAS, on even date herewith the Stockholders have acquired from the
Company the number of shares of the Company's Common Stock ("Common Stock")
set forth opposite their respective names on EXHIBIT A attached hereto
(together, the "Shares"); and
WHEREAS, the issuance of the Shares constitutes the issuance of
"restricted securities" within the meaning of Rule 144 promulgated under
the Securities Act (as defined below), and as such the Company and the
Stockholders have set forth herein their agreement as to the manner in
which the Shares may be transferred and registered under said Securities
Act, which agreement was a condition to the purchase and sale of the
Shares,
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:
SECTION 1
RESTRICTIONS ON TRANSFERABILITY OF SHARES; REGISTRATION RIGHTS
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings set forth below:
(a) "Closing" shall mean the date of the initial issuance of the
Shares.
(b) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act.
(c) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar successor federal statute and the rules
and regulations thereunder, all as the same shall be in effect from time to
time.
(d) "Holder" shall mean the Stockholders and any holder of
Registrable Securities to whom the registration rights conferred by this
Agreement have been transferred in compliance with Section 1.8 hereof.
(e) "Other Stockholders" shall mean persons other than Holders
who, by virtue of agreements with the Company, are entitled to include
their securities in certain registrations hereunder.
(f) "Registrable Securities" shall mean (i) the Common Stock and
(ii) any Common Stock issued by the Company as a dividend (issuance of
Common Stock with respect to Shares issued and outstanding) or other
distribution of Common Stock with respect to the Shares, and (iii) any
Common Stock into which the Shares are converted.
(g) The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the
effectiveness of such registration statement.
(h) "Registration Expenses" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, 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 expenses of any regular or special audits
incident to or required by any such registration, but shall not include
Selling Expenses and fees and disbursements of counsel for the Holders (but
excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company).
(i) "Rule 144" shall mean Rule 144 as promulgated by the
Commission under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule that may be promulgated by the
Commission.
(j) "Rule 145" shall mean Rule 145 as promulgated by the
Commission under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule that may be promulgated by the
Commission.
(k) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to
time.
(l) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and
fees and disbursements of counsel for any Holder (other than the fees and
disbursements of counsel included in Registration Expenses).
1.2 "PIGGY BACK" REGISTRATION.
(a) If the Company shall determine to register any of its
securities in a registered public offering, other than (i) the first such
offering by the Company, (ii) a registration relating solely to employee
benefit plans, (iii) a registration relating solely to a Rule 145
transaction, and (iv) a registration on any registration form that does not
permit secondary sales, the Company will:
-2-
(1) promptly give to each Holder written notice thereof; and
(2) use its best efforts to include in such registration (and
any related qualification under blue sky laws or other compliance),
except as set forth in Section 1.2(b) below, and in any underwriting
involved therein, all the Registrable Securities specified in a
written request or requests, made by any Holder and received by the
Company within twenty (20) days after the written notice from the
Company described in clause (i) above is mailed or delivered by the
Company. Such written request may request that all or a part of a
Holder's Registrable Securities be included in such registration.
(b) UNDERWRITING. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting,
the Company shall so advise the Holders as a part of the written notice
given pursuant to Section 1.2(a)(1). In such event, the right of any
Holder to registration pursuant to this Section 1.2 shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of
such Holder's Registrable Securities in the underwriting to the extent
provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and the other
holders of securities of the Company with registration rights to
participate therein distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with
the representative of the underwriter or underwriters selected by the
Company.
Notwithstanding any other provision of this Section 1.2, if the
representative of the underwriters advises the Company in writing that
marketing factors require a limitation on the number of securities to be
underwritten, the representative may (subject to the limitations set forth
below) limit the number of Registrable Securities to be included in, the
registration and underwriting; PROVIDED, HOWEVER, that the aggregate value
of securities (including Registrable Securities) to be included in such
registration by the Company's Stockholders (including the Holders) may not
be so reduced to less than ten percent (10%) of the total value of all
securities included in such registration. The Company shall so advise all
holders of securities requesting registration, and the number of securities
that are entitled to be included in the registration and underwriting shall
be allocated first to the Company for securities being sold for its own
account and thereafter as set forth in Section 1.9.
If any person does not agree to the terms of any such underwriting, he
shall be excluded therefrom by written notice from the Company or the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
If securities are so withdrawn from the registration and if the number of
Registrable Securities to be included in such registration was previously
reduced as a result of marketing factors, the Company shall then offer to
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all persons who have retained the right to include securities in the
registration the right to include additional securities in the registration
in an aggregate amount equal to the number of shares so withdrawn, with
such securities to be allocated among the persons requesting additional
inclusion in accordance with Section 1.9 hereof.
1.3 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Section 1.2 shall be borne by the Company.
1.4 INDEMNIFICATION.
(a) The Company will indemnify each Holder, each of its
officers, directors and partners, legal counsel, and accountants and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification, or
compliance has been effected pursuant to this Section 1, and each
underwriter, if any, and each person who controls within the meaning of
Section 15 of the Securities Act any underwriter, against all expenses,
claims, losses, damages, and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular, or other document (including any related
registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration,
qualification, or compliance, and will reimburse each such Holder, each of
its officers, directors, partners, legal counsel, and accountants and each
person controlling such Holder, each such underwriter, and each person who
controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability, or action; PROVIDED,
HOWEVER, that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability, or expense arises out of or
is based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular, or other
document (including any related registration statement, notification, or
the like) incident to any such registration, qualification, or compliance,
or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, which statement or omission is based upon written
information furnished to the Company by such Holder or underwriter and
stated to be specifically for use therein. It is agreed that the indemnity
agreement contained in this Section 1.4(a) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability, or action if such
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settlement is effected without the consent of the Company (which consent
has not been unreasonably withheld).
(b) Each Holder will, if Registrable Securities held by him are
included in the securities as to which such registration, qualification, or
compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if
any, of the Company's securities covered by such a registration statement,
each person who controls the Company or such underwriter within the meaning
of Section 15 of the Securities Act, each other such Holder and Other
Stockholder, and each of their officers, directors, and partners, and each
person controlling such Holder or Other Stockholder, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out
of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus,
offering circular, or other document, or any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse the
Company and such Holders, Other Stockholders, directors, officers,
partners, legal counsel, and accountants, persons, underwriters, or control
persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus,
offering circular, or other document in reliance upon and in conformity
with written information furnished to the Company by such Holder and stated
to be specifically for use therein, provided, however, that the obligations
of such Holder hereunder shall not apply to amounts paid in settlement of
any such claims, losses, damages, or liabilities (or actions in respect
thereof) if such settlement is effected without the consent of such Holder
(which consent shall not be unreasonably withheld).
(c) Each party entitled to indemnification under this Section
1.4 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the
defense of such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such party's
expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 1.4, to the extent such failure is not
prejudicial. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
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include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in
respect to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim and litigation
resulting therefrom.
(d) If the indemnification provided for in this Section 1.4 is
held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party on the one hand and
of the Indemnified Party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage, or expense
as well as any other relevant equitable considerations. The relative fault
of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the
Indemnified Party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
1.5 INFORMATION BY HOLDER. Each Holder of Registrable Securities
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification, or compliance referred to in this Section 1.
1.6 RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the Commission that may permit the sale
of "restricted securities" to the public without registration, the Company
agrees to use its best efforts to:
(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act, at all times from and after ninety (90) days following the
effective date of the first registration under the Securities Act filed by
the Company for an offering of its securities to the general public;
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(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act at any time after it has become subject to such reporting
requirements;
(c) So long as a Holder owns any "restricted securities" within
the meaning of Rule 144, furnish to the Holder forthwith upon written
request a written statement by the Company as to its compliance with the
reporting requirements of Rule 144 (at any time from and after ninety (90)
days following the effective date of the first registration statement filed
by the Company for an offering of its securities to the general public),
and of the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and
documents so filed as a Holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing a Holder to sell any such
securities without registration.
1.7 TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to
cause the Company to register securities granted to a Holder by the Company
under this Section 1 may be transferred or assigned by a Holder only to a
transferee or assignee of not less than _______ Shares (as presently
constituted and proportionately adjusted for any increase or decrease in
the number of Shares resulting from (a) a subdivision or consolidation of
Shares or any other capital adjustment, (b) the payment of a stock dividend
(i.e. an issuance of stock with respect to Shares issued and outstanding),
or (c) other increase or decrease in such Shares affected without receipt
of consideration by the Company), provided that the Company is given
written notice at the time of or within a reasonable time after said
transfer or assignment, stating the name and address of the transferee or
assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned, and, provided
further, that the transferee or assignee of such rights assumes the
obligations of such Holder under this Section 1.
1.8 "MARKET STAND-OFF" AGREEMENT. If requested by the Company and an
underwriter of the Shares (or other securities) of the Company, each
Stockholder agrees that it shall not sell or otherwise transfer or dispose
of any Shares (or other securities) of the Company held by such stockholder
(other than those included in the registration) during the one hundred
eighty (180) day period following the effective date of a registration
statement of the Company filed under the Securities Act.
The Company may impose stop-transfer instructions with respect to the
shares (or securities) subject to the foregoing restriction until the end
of said one hundred eighty (180) day period.
1.9 ALLOCATION OF REGISTRATION OPPORTUNITIES. In any circumstance in
which all of the Registrable Securities and other securities of the Company
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having registration rights (the "Other Shares") requested to be included in
a registration on behalf of the Holders or Other Stockholders cannot be so
included as a result of limitations of the aggregate number of Registrable
Securities and Other Shares that may be so included, the number of
Registrable Securities and Other Shares that may be so included shall be
allocated among the Holders and Other Stockholders requesting inclusion of
securities pro rata on the basis of the number of Registrable Securities
and Other Shares that are held by such Holders and Other Stockholders;
provided, however, in order that such allocation shall not operate to
reduce the aggregate number of Registrable Securities and Other Shares to
be included in such registration, if any Holder or Other Stockholder does
not request inclusion of the maximum number of shares of Registrable
Securities and Other Shares allocated to him pursuant to the
above-described procedure, the remaining portion of his allocation shall be
reallocated among those requesting Holders and Other Stockholders whose
allocations did not satisfy their requests pro rata on the basis of the
number of shares of Registrable Securities and Other Shares that would be
held by such Holders and Other Stockholders, assuming inclusion, and this
procedure shall be repeated until all of the shares of Registrable
Securities and Other Shares which may be included in the registration on
behalf of the Holders and Other Stockholders have been so allocated.
1.10 DELAY OF REGISTRATION. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.11 REGISTRATION PROCEDURES. In the case of each registration
effected by the Company pursuant to Section 1 hereof, the Company will keep
each Holder advised in writing as to the initiation of each registration
and as to the completion thereof. At its expense, the Company will use its
best efforts to:
(a) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such 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 such registration statement;
(b) Furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the
prospectus, as a Holder from time to time may reasonably request;
(c) Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
-8-
necessary to make the statements therein not misleading or incomplete in
the light of the circumstances then existing, and at the request of any
such seller, prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
shares, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or incomplete in
the light of the circumstances then existing;
(d) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange or automated trading
system on which similar securities issued by the Company are then listed,
PROVIDED, HOWEVER, that nothing contained herein shall require the Company
to list the Registrable Securities if no similar securities of the Company
are then listed; and
(e) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.
1.12 TERMINATION OF REGISTRATION RIGHTS. The right of any Holder to
request inclusion in any registration pursuant to Section 1.2 shall
terminate on the later of (i) the first date that all Registrable
Securities held by such Holder may immediately be sold under Rule 144
during any ninety (90) day period, or (ii) the first anniversary of the
date of this Agreement.
SECTION 2
MISCELLANEOUS
2.1 GOVERNING LAW. This Agreement shall be governed in all respects
by the laws of the State of Michigan.
2.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
2.3 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement (including
the Exhibits hereto) constitutes the full and entire understanding and
agreement between the parties with regard to the subject matter hereof.
Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated, except by a written instrument signed by the
Company and the holders of at least a majority of the Registrable Shares
and any such amendment, waiver, discharge or termination shall be binding
on all the Holders, but in no event shall the obligation of any Holder
hereunder be materially increased, except upon the written consent of such
Holder.
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2.4 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United
States first-class mail, postage prepaid, or delivered personally by hand
or nationally recognized courier addressed (a) if to a Holder, as indicated
on the list of Holders attached hereto as EXHIBIT A, or at such other
address as such holder or permitted assignee shall have furnished to the
Company in writing, or (b) if to the Company, at 0000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000, or at such other address as the Company
shall have furnished to each holder in writing. All such notices and other
written communications shall be effective (i) if mailed, five (5) days
after mailing and (ii) if otherwise delivered, upon delivery.
2.5 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any Holder, upon any breach or default of the
Company under this Agreement shall impair any such right, power or remedy
of such Holder nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind
or character on the part of any Holder of any breach or default under this
Agreement or any waiver on the part of any Holder of any provisions or
conditions of this Agreement must be made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies,
either under this Agreement or by law or otherwise afforded to any Holder,
shall be cumulative and not alternative.
2.6 RIGHTS; SEPARABILITY. Unless otherwise expressly provided
herein, a Holder's rights hereunder are several rights, not rights jointly
held with any of the other Holders. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
2.7 INFORMATION CONFIDENTIAL. Each Holder acknowledges that the
information received by it pursuant hereto may be confidential and for its
use only, and it will not use such confidential information in violation of
the Exchange Act or reproduce, disclose or disseminate such information to
any other person (other than its employees or agents having a need to know
the contents of such information, and its attorneys), except in connection
with the exercise of rights under this Agreement, unless the Company has
made such information available to the public generally or such Holder is
required to disclose such information by a governmental body.
2.8 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and
are not to be considered in construing this Agreement.
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2.9 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.
IN WITNESS WHEREOF, the parties hereto have executed this Rights
Agreement effective as of the day and year first above written.
XXXXXX EXPLORATION COMPANY
By
------------------------------------------
Its
-------------------------------------
STOCKHOLDERS: (See signature pages
attached hereto)
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RIGHTS AGREEMENT SIGNATURE PAGES
INDIVIDUAL:
Date: November __, 1997
_____________________________________
Name of Individual
_____________________________________
(Signature)
Address of Principal Residence :
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Social Security Number
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CORPORATION:
Please include articles of incorporation and corporate resolutions
certified by the secretary of the corporation authorizing execution of this
Agreement by the person signing below.
Date: November __, 1997
_____________________________________
Name of Corporation
_____________________________________
Principal Place of Business Address:
_____________________________________
_____________________________________
_____________________________________
State of Incorporation
By: _________________________________
(Authorized Signature)
_____________________________________
(Print Name and Title of Signatory)
_____________________________________
Tax Identification Number
-13-
PARTNERSHIP:
Please include a certified copy of the Partnership Agreement or any other
documentation necessary to establish the authority of the person signing
this Agreement.
Date: November __, 1997
_____________________________________
Name of Partnership
Principal Place of Business Address:
_____________________________________
_____________________________________
_____________________________________
State of Formation
By: __________________________________
(Authorized Signature)
_____________________________________
(Print Name and Title of Signatory)
_____________________________________
Tax Identification Number
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TRUST:
Please include a certified copy of the Trust Agreement and any other
documentation necessary to establish the authority of the person signing
this Agreement.
Date: November __, 1997
_____________________________________
Name of Trust
Principal Place of Business Address:
_____________________________________
_____________________________________
_____________________________________
State of Settlement
By:__________________________________
(Authorized Signature)
_____________________________________
(Print Name and Title of Signatory)
_____________________________________
Tax Identification Number
-15-
OTHER:
Please specify the nature of the entity and provide all documentation
necessary to establish the power of such entity to subscribe for the shares
and the authority of the person signing this Agreement.
Date: November __, 1997
_____________________________________
Name of Entity
Principal Place of Business Address:
_____________________________________
_____________________________________
_____________________________________
State of Formation
By:__________________________________
(Signature of Authorized Person)
_____________________________________
(Print Name and Title of Signatory)
_____________________________________
Tax Identification Number
-16-
CORPORATE ACKNOWLEDGMENT
STATE OF ___________________ )
) SS.
COUNTY OF _________________ )
On this _____ day of _______________, 19 ___, before me, a Notary
Public in and for said State, duly commissioned and sworn, personally
appeared _______________________, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the
___________________________________________ of
_______________________________, a ______________________________
corporation, and executed the within instrument, on behalf of such
corporation, and acknowledged to me that such corporation executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal on the date in this certificate first above written.
_____________________________________
, Notary Public
My Commission expires:
_____________________________________
(Notary Seal)
-00-
XXXXXXXXXXX XXXXXXXXXXXXXX
XXXXX OF ___________________ )
) SS.
COUNTY OF _________________ )
On this _____ day of _______________, 19 ___, before me, a Notary
Public in and for said State, duly commissioned and sworn, personally
appeared _______________________, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the General Partner of
_______________________________, a ______________________________
partnership, and executed the within instrument, on behalf of such
corporation, and acknowledged to me that such corporation executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal on the date in this certificate first above written.
_____________________________________
, Notary Public
My Commission expires:
_____________________________________
(Notary Seal)
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TRUST ACKNOWLEDGMENT
STATE OF ___________________ )
) SS.
COUNTY OF _________________ )
On this _____ day of _______________, 19 ___, before me, a Notary
Public in and for said State, duly commissioned and sworn, personally
appeared _______________________, personally known to me (or proved to me
on the basis of satisfactory evidence) to be a Trustee of the
_______________________________, Trust, and executed the within instrument,
on behalf of said Trust.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal on the date in this certificate first above written.
_____________________________________
, Notary Public
My Commission expires:
_____________________________________
(Notary Seal)
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OTHER ACKNOWLEDGMENT
STATE OF ___________________ )
) SS.
COUNTY OF _________________ )
On this _____ day of _______________, 19 ___, before me, a Notary
Public in and for said State, duly commissioned and sworn, personally
appeared _______________________, personally known to me (or proved to me
on the basis of satisfactory evidence) to be a
_______________________________, of ______________________________, and
executed the within instrument, on behalf of said
___________________________________.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal on the date in this certificate first above written.
_____________________________________
, Notary Public
My Commission expires:
_____________________________________
(Notary Seal)
-20-
INDIVIDUAL ACKNOWLEDGMENT
STATE OF ___________________ )
) SS.
COUNTY OF _________________ )
On this _____ day of _______________, 19 ___, before me, a Notary
Public in and for said State, duly commissioned and sworn, personally
appeared _______________________ and executed the within instrument, on his
or her own behalf.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal on the date in this certificate first above written.
_____________________________________
, Notary Public
My Commission expires:
_____________________________________
(Notary Seal)
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