EXHIBIT 10.1
EXECUTION ORIGINAL
STOCK PURCHASE AGREEMENT
Among
MAGNUM PETROLEUM, INC.
and
TRUST COMPANY OF THE WEST
and
TCW ASSET MANAGEMENT COMPANY,
in the capacities described herein,
TCW DEBT AND ROYALTY FUND IVB
and
TCW DEBT AND ROYALTY FUND IVC
Dated as of December 6, 1996
TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................... 2
SECTION 2. PURCHASE AND SALE OF SECURITIES................................. 5
2.1. Authorization and Issuance of 1996 Series A
Preferred Stock and Conversion Shares........................... 5
2.2. The Closing..................................................... 5
2.3. Purchase for Holder's Account................................... 6
2.4. Compliance...................................................... 6
2.5. Expenses........................................................ 6
2.6. Conversion Option............................................... 7
SECTION 3. WARRANTIES, REPRESENTATIONS AND COVENANTS OF THE COMPANY........ 8
3.1. Sale is Legal, etc. ............................................ 8
3.2. Governmental Consent............................................ 12
3.3. Private Offering................................................ 12
3.4. Litigation...................................................... 13
3.5. No Material Misstatements....................................... 13
3.6. Ownership of Subsidiaries....................................... 13
3.7. Material Adverse Change......................................... 13
SECTION 4. RESTRICTIONS ON TRANSFERABILITY; REGISTRATION RIGHTS............ 13
4.1. Restrictive Legend.............................................. 14
4.2. Notice of Proposed Transfers.................................... 14
4.3. Demand Registration............................................. 15
4.4. Piggy-Back Registration......................................... 18
4.5. Registration Procedures......................................... 19
4.6. Expenses; Limitations on Registration........................... 22
4.7. Indemnification................................................. 23
4.8. Termination of Restrictions..................................... 25
4.9. Rule 144........................................................ 25
SECTION 5. COVENANTS OF THE COMPANY........................................ 25
5.1. Delivery Expenses............................................... 25
5.2. Taxes........................................................... 26
5.3. Replacement of Instruments...................................... 26
5.4. Restrictions on Certain Actions................................. 26
5.5. Use of Proceeds................................................. 27
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5.6. Implementation of the Development Plan.......................... 27
5.7. Name Change..................................................... 27
SECTION 6. MISCELLANEOUS................................................... 27
6.1. Notices......................................................... 27
6.2. Survival........................................................ 28
6.3. Successors and Assigns.......................................... 28
6.4. Amendment and Waiver, etc. ..................................... 28
6.5. Duplicate Originals............................................. 29
6.6. Severability.................................................... 29
6.7. Governing Law................................................... 29
6.8. Specific Performance............................................ 29
6.9. Arbitration..................................................... 29
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TABLE OF EXHIBITS AND SCHEDULES
Exhibit A - Certificate of Designation
Exhibit B - Legal Opinion
Exhibit C - Shareholders Agreement
Exhibit D - Approved List of Engineering Consultants
Schedule A - List of Holders
Schedule B - List of Affiliates
Schedule 3.1.1 - Options and Warrants
Schedule 3.1.5 - Holders of Registration Rights
Schedule 3.6 - Ownership of Subsidiaries
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of December __, 1996 between Magnum
Petroleum, Inc., a Nevada corporation (the "COMPANY"), and Trust Company of the
West, a California trust company ("TRUSTCO"), as Trustee of the TCW Debt and
Royalty Fund IVA established pursuant to a Declaration of Trust executed
December 31, 1992 ("FUND IVA"); Trustco, in its capacities as Investment Manager
pursuant to the Investment Management Agreement dated as of June 6, 1988 between
General Xxxxx, Inc. and Trustco and as Custodian pursuant to the Custody
Agreement dated as of February 6, 1989 among General Xxxxx, Inc., Trustco and
State Street Bank and Trust Company, as trustee ("GENERAL XXXXX"); TCW Asset
Management Company, a California corporation ("TAMCO"), as Investment Manager
pursuant to the Investment Management and Custody Agreement dated as of June 1,
1993 among The Trustees of Columbia University in the City of New York, Tamco
and Trustco ("COLUMBIA"); Tamco, as Investment Manager pursuant to the
Investment Management Agreement dated as of March 1, 1993 between The Board of
Trustees of The Xxxxxx Xxxxxxxx Junior University and Tamco ("LSJU"); Tamco, as
Investment Manager under the Investment Management Agreement dated as of June 8,
1993 between the Xxxxxx Trusts Limited Partnership X, a Delaware limited
partnership (the "XXXXXX PARTNERSHIP X"), Xxxxxx Trust and Savings Bank, as
Custodian for the Xxxxxx Partnership X, and Tamco ("SPX"); Tamco, as Investment
Manager under the Investment Management Agreement dated as of June 8, 1993
between the Xxxx X. Xxxxxx Charitable Trusts Partnership, a Delaware limited
partnership (the "XXXXXX CHARITABLE PARTNERSHIP"), Xxxxxx Trust and Savings
Bank, as Custodian for the Xxxxxx Charitable Partnership, and Tamco ("SCP");
Tamco, as Investment Manager under the Investment Management Agreement dated as
of December 31, 1993 between Tamco and Delta Air Lines, Inc. ("DELTA"); Trust
Company of the West, as Custodian pursuant to the Investment Management and
Custody Agreement dated as of April 26, 1994 among The City and County
Employee's Retirement System of San Francisco, TCW Asset Management Company and
Trust Company of the West; and TCW Debt and Royalty Fund IVB, a California
Limited Partnership ("FUND IVB"); and TCW Debt
and Royalty Fund IVC, a California Limited Partnership ("FUND IVC") (Trustco,
in the capacities designated above; Tamco, in the capacities designated
above; Fund IVB and Fund IVC are hereinafter collectively referred to as "TCW").
TCW, on behalf of each of the parties set forth on SCHEDULE A hereto
(together with their successors and assigns, the "HOLDERS"), hereby subscribes
for an aggregate of one million shares of the Company's 1996 Series A
Convertible Preferred Stock, $.001 par value per share and a $10.00 stated value
per share (the "1996 SERIES A PREFERRED STOCK"), at a purchase price of $10.00
per share, with the rights, restrictions, preferences and privileges as stated
in the Certificate of Designation with respect to the Preferred Stock attached
hereto as EXHIBIT A (the "CERTIFICATE OF DESIGNATION") and as provided by law.
The 1996 Series A Preferred Stock is convertible into, redeemable for, and, at
the option of the holders of the 1996 Series A Preferred Stock, dividends
thereon may be payable in, shares of the Company's common stock, $.002 par
value per share (the "COMMON STOCK"), as stated in the Certificate of
Designation. Accordingly, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
As used herein, the following terms shall have the following meanings.
"AFFILIATE" shall mean, with respect to a specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person and, with respect to any fund
or trust, any Person which is a participant in or beneficiary of such fund or
trust. For purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. Notwithstanding the foregoing provisions of this
definition (i) in no event shall any Holder (or any Affiliate thereof) be deemed
to be an Affiliate of the Company and (ii) the
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Persons listed on SCHEDULE B shall be deemed to be Affiliates of the Company
for purposes of this Agreement.
"ARTICLES OF INCORPORATION" shall mean the Articles of Incorporation
of the Company, as in effect on the date hereof and as at any time amended or
otherwise modified.
"COMMISSION" shall mean the Securities and Exchange Commission or any
other similar or successor agency of the federal government administering the
Securities Act.
"CONTROLLING PERSON" shall have the meaning defined in SECTION 4.7.
"CONVERSION SHARES" shall mean the shares of Common Stock into which
the 1996 Series A Preferred Stock is convertible or converted, for which the
1996 Series A Preferred Stock is redeemed, and in which dividends on the 1996
Series A Preferred Stock are paid.
"DEVELOPMENT PLAN" shall mean the plan of development attached to the
Secretary's Certificate pursuant to SECTION 3.1.7(a), as approved by TCW and as
the same may be amended from time to time with the consent of TCW as provided in
the Certificate of Designation.
"DIVIDEND SHARES" shall mean the shares of Common Stock in which
dividends on the 1996 Series A Preferred Stock are paid.
"EXCLUDED REGISTRATION" shall mean any registration pursuant to
SECTION 4.3 hereof, any registration of debt securities under Form S-3, or any
comparable successor Form, or any registration of shares of Common Stock in an
aggregate amount not to exceed 5,750,000 shares issued and registered pursuant
to one or more underwritten public offerings after the Closing Date and on or
before June 30, 1997 at a price per share not less than $4.00 and/or the
exercise of the IPO Warrants (as defined in the Certificate of Designation) at a
price of $5.50 per share on or before November 12, 1998.
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"INDEMNITEE" and "INDEMNITOR" shall have the meanings defined in
SECTION 4.7.
"INDEPENDENT ENGINEER" shall mean Xxxxxxx, Xxxxx & Associates Inc. or
such other engineering consultant selected by the Company from those on TCW's
approved list, attached hereto as EXHIBIT D.
"INDEPENDENT ENGINEERING REPORT" shall mean the engineering report
prepared by the Independent Engineer evaluating the Reserves of the Company
described in Section 3.1.7(i).
"PERSON" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or agency or political subdivision thereof.
"PIGGY BACK RIGHT" shall have the meaning defined in SECTION 4.3.
"PROVED DEVELOPED RESERVES" shall have the meaning set forth in the
Certificate of Designation.
"REDEMPTION SHARES" shall mean the shares of Common Stock for which
the 1996 Series A Preferred Stock is redeemed.
"REIMBURSABLE REGISTRATION" shall have the meaning defined in
SECTION 4.6.
"REQUISITE HOLDERS" shall mean the holders of 1996 Series A Preferred
Stock and Conversion Shares representing at least 70% of the Conversion Shares.
"RESERVES" shall have the meaning set forth in the Certificate of
Designation.
"RESTRICTED CERTIFICATE" shall mean a certificate for 1996 Series A
Preferred Stock or Conversion Shares bearing the restrictive legend set forth in
SECTION 4.1.
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"RESTRICTED SECURITIES" shall mean 1996 Series A Preferred Stock or
Conversion Shares evidenced by a Restricted Certificate. Notwithstanding any
provision of this Agreement, the Certificate of Designation or any other
agreement or document which may be construed otherwise, Dividend Shares or
Redemption Shares shall not be Restricted Securities.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SELLER" shall mean a holder of Restricted Securities for which the
Company shall be required to file a registration statement or which shall be
registered under the Securities Act at the request of such holder pursuant to
any of the provisions of SECTION 4. Neither the Company nor any Affiliate of
the Company shall be deemed a "Seller" for any purposes of this Agreement.
"TCW FUNDS" means TCW Debt and Royalty Fund IVA, a collective trust
fund formed under California law; Fund IVB; Fund IVC; Trustco, in its capacities
as Investment Manager pursuant to the Investment Management Agreement dated as
of June 6, 1988 between General Xxxxx, Inc. and Trustco and as Custodian
pursuant to the Custody Agreement dated as of February 6, 1989 among General
Xxxxx, Inc., Trustco and State Street Bank and Trust Company, as trustee; Tamco,
as Investment Manager under the Investment Management and Custody Agreement
dated as of June 1, 1993 among The Trustees of Columbia University in the City
of New York, TCW and Tamco; Tamco, as Investment Manager pursuant to the
Investment Management Agreement dated March 1, 1993 between The Board of
Trustees of The Xxxxxx Xxxxxxxx Junior University and Tamco; Tamco, as
Investment Manager under the Investment Management Agreement dated as of June 8,
1993 between the Xxxxxx Partnership X, Xxxxxx Trust and Savings Bank, as
Custodian for the Xxxxxx Partnership X, and Tamco; Tamco, as Investment Manager
under the Investment Management Agreement dated as of June 8, 1993 between the
Xxxxxx Charitable Partnership, Xxxxxx Trust and Savings Bank, as Custodian for
the Xxxxxx Charitable Partnership, and Tamco; and Tamco, as Investment Manager
under the Investment
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Management Agreement dated as of December 31, 1993 between Delta Air Lines,
Inc. and Tamco.
"TRANSACTION FEE" shall mean a transaction fee in an amount equal to
$62,500.
"TRANSFER" shall mean any sale, transfer or other disposition of any
Restricted Securities, or of any interest in any thereof, which would
constitute an offer or sale thereof within the meaning of the Securities Act.
"1993 SERIES B PREFERRED STOCK" shall mean the preferred stock of
the Company with a par value of $.001 per share, issued pursuant to a
Certificate of Designation filed with the Nevada Secretary of State on
January 25, 1993.
"1993 SERIES A PREFERRED STOCK" shall mean the preferred stock of
the Company with a par value of $.001 per share, issued pursuant to a
Certificate of Designation filed with the Nevada Secretary of State on May
21, 1993.
SECTION 2. PURCHASE AND SALE OF SECURITIES
2.1. AUTHORIZATION AND ISSUANCE OF 1996 SERIES A PREFERRED STOCK
AND CONVERSION SHARES. The Company has authorized for issuance the issue of
the 1996 Series A Preferred Stock in one or more certificates to the Holders
pursuant to this Agreement and the Certificate of Designation, and authorized
and reserved for issuance the issue of such number of Conversion Shares as
will permit the compliance by the Company with its obligations to issue
Conversion Shares pursuant to the Articles of Incorporation and the
Certificate of Designation.
2.2. THE CLOSING. Subject to the conditions set forth in SECTION
3.1.7, the Company hereby agrees to issue to each Holder, and each Holder
hereby agrees to purchase, the number of 1996 Series A Preferred Stock set
out opposite such Holder's name on SCHEDULE A attached hereto, at a purchase
price of $10.00 per share. The Company will deliver to each Holder a single
certificate for the 1996 Series A Preferred Stock, registered in the name of
such Holder, except that, if any such Holder shall
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notify the Company in writing prior to such issuance that it desires
certificates for 1996 Series A Preferred Stock to be issued in other
denominations or registered in the name or names of any Person or Persons
referred to in the proviso at the end of the first sentence of SECTION 4 or
any nominee or nominees for its or their benefit, then the certificates for
1996 Series A Preferred Stock shall be issued to such Holder in the
denominations and registered in the name or names specified in such notice.
Concurrently with the issuance of the 1996 Series A Preferred Stock, the
Company shall pay to TCW, in immediately available funds, the Transaction Fee.
2.3. PURCHASE FOR HOLDER'S ACCOUNT. Each Holder represents and
warrants to the Company that such Holder is purchasing and will purchase the
1996 Series A Preferred Stock, for its own account, with no present intention
of distributing or reselling the 1996 Series A Preferred Stock or the
Conversion Shares or any part thereof and that such Holder is prepared to
bear the economic risk of retaining the 1996 Series A Preferred Stock and the
Conversion Shares for an indefinite period, all without prejudice, however,
to the right of such Holder at any time, in accordance with this Agreement,
lawfully to sell or otherwise dispose of all or any part of the 1996 Series A
Preferred Stock or the Conversion Shares held by it. It is understood that,
in making the representations set forth in SECTION 3.1, 3.2 and 3.3, the
Company is relying, to the extent applicable, upon the representations and
warranties of each such Holder. Each Holder represents and warrants that it
is an accredited investor, as such term is defined in Rule 501 of Regulation
D promulgated under the Securities Act.
2.4. COMPLIANCE. Further in reliance upon the representations and
warranties of each Holder in SECTION 2.3, the Company has not registered the
1996 Series A Preferred Stock or the Conversion Shares under the Securities
Act and each Holder agrees that neither the 1996 Series A Preferred Stock nor
the Conversion Shares will be sold or offered for sale without registration
under said Act or the availability of an exemption therefrom or if said Act
is not applicable, all as more fully provided in SECTION 4, nor in violation
of any other law of the United States of America or any state.
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2.5. EXPENSES. Whether or not the 1996 Series A Preferred Stock is
sold to any Holder, the Company will pay all costs and expenses incurred by
the Holders (a) relating to the negotiation, execution and delivery of this
Agreement and the issuance of the 1996 Series A Preferred Stock (including,
without limitation, fees, office charges and expenses of counsel to the
Holders, Milbank, Tweed, Xxxxxx & XxXxxx and reasonable third party
engineering, outside accounting and other out-of-pocket costs), (b) provided
for in SECTIONS 4.6, 4.7, 5.1 and 5.2, (c) relating to printing the
instruments evidencing the 1996 Series A Preferred Stock or the Conversion
Shares, (d) expenses relating to any amendments, waivers or consents under
this Agreement and (e) incident to the enforcement by any Holder of, or the
protection or preservation of any right or remedy of any Holder under, this
Agreement, the Articles of Incorporation, the Certificate of Designation or
any other document or agreement furnished pursuant hereto or thereto or in
connection herewith or therewith (including, without limitation, fees and
expenses of counsel). The Company shall pay such costs and expenses, to the
extent then payable, on the date of issuance of the 1996 Series A Preferred
Stock or, with respect to those matters described in clauses (b), (c), (d)
and (e) above thereafter from time to time upon demand by any Holder against
presentation, in each such case, of a statement thereof. The Company shall
also pay any fees or disbursements incurred by Xxxxxxx, Xxxxxxx & Co. or any
person other than a party engaged solely by TCW in connection with
identifying the Holders to whom the offers and sales of the shares of the
1996 Series A Preferred Stock were made.
2.6. CONVERSION OPTION. On or after the second anniversary of the
Closing Date, the Company shall have the option, at any time, to convert, in
whole but not in part, the 1996 Series A Preferred Stock, on the terms and
conditions set forth herein, to 8.75% convertible debentures of the Company
due 2008 (the "DEBENTURES") having an aggregate principal amount equal to the
Liquidation Value (as defined in the Certificate of Designation) of the 1996
Series A Preferred Stock, PROVIDED THAT all of the following conditions are
satisfied: (i) the Company shall have delivered to the Holders all necessary
approvals, subordination agreements and other documentation, in form and
substance satisfactory to TCW in its reasonable discretion,
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required in connection with such conversion (which will include such
provisions acceptable to TCW in its reasonable discretion, which will entitle
the holders of such Debentures to the same voting and other rights as if they
held the 1996 Series A Preferred Stock including without limitation the right
to vote as a separate class with respect to any plan of reorganization in a
bankruptcy or insolvency proceeding relating to the Company) and (ii) the
Holders shall have received an opinion of counsel to the Company (a) that
such conversion neither breaches nor violates any existing agreement to which
the Company is a party or any other obligation of the Company, (b) such
conversion shall not cause an adjustment in the conversion price, option
price or exercise price in any convertible security issued by the Company,
and (c) such other matters as TCW may reasonably request. In the event that
the Company exercises the option set forth in this SECTION 2.6 and the
Company had not received before June 30, 1997 at least $15,000,000 of net
cash proceeds from the issuance and sale by the Company of Common Stock which
was not issued and outstanding on the Closing Date, the Company shall redeem
annually on each of June 30, 2006, June 30, 2007 and June 30, 2008, one third
(1/3) of the original principal amount of the Debentures. The Debentures
shall be subject to redemption at the option of the Company by the issuance
of Freely Tradeable Common Stock (as defined in the Certificate of
Designation) in the manner and subject to the terms and conditions of a
conversion of the 1996 Series A Preferred Stock at the option of the Company
pursuant to Section 8.3 of the Certificate of Designation but otherwise the
Debentures shall not be redeemable at the option of the Company. The
Debentures shall be redeemed by the Company on June 30, 2008 at par value
with all unpaid and accrued interest. The Debentures shall bear interest at a
rate of 8.75% per annum, compounded quarterly, which interest payments shall
be payable quarterly on March 31, June 30, September 30 and December 31 of
each year commencing on the first of such date to occur immediately following
the conversion option set forth in this SECTION 2.6. Interest on the
Debentures shall be paid in cash; PROVIDED, HOWEVER, that if any such
interest payment is not paid on the penultimate Business Day of the month
after the quarterly payment date on which it is due (the "INTEREST PAYMENT
DATE"), the holders of the Debentures shall have the option to require the
Company to pay such accumulated interest in shares (whether
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whole or fractional) of Freely Tradeable Common Stock valued at the Cash
Equivalent Amount (as defined in the Certificate of Designation) for the
purposes of determining the number of shares (or fraction thereof) of Freely
Tradeable Common Stock to be issued.
SECTION 3. WARRANTIES, REPRESENTATIONS AND COVENANTS OF THE COMPANY
The Company hereby represents, warrants and covenants to each Holder
that as of the date of the Company's execution of this Agreement:
3.1. SALE IS LEGAL, ETC.
3.1.1. Upon the issuance of the 1996 Series A Preferred Stock under
this Agreement, the total number of shares of capital stock which the Company
has authority to issue is 60,000,000 shares, consisting of 50,000,000 shares
of Common Stock and 10,000,000 shares of Preferred Stock. The Company has
the power and authority and has taken all actions (corporate or other)
necessary to authorize it to enter into and perform its obligations and
undertakings under this Agreement. Immediately prior to the issuance of the
1996 Series A Preferred Stock under this Agreement, 13,708,327 shares of
Common Stock and 80,000 shares of 1993 Series A Preferred Stock will be
issued and outstanding. Upon the issuance of the 1996 Series A Preferred
Stock under this Agreement, the Company does not have outstanding any stock
or securities convertible into or exchangeable for any shares of capital
stock nor does it have outstanding any rights to subscribe for or to
purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or
claims of any character relating to, any capital stock or stock or securities
convertible into or exchangeable for any capital stock other than (i) the
1996 Series A Preferred Stock to be issued pursuant to this Agreement and
(ii) options and warrants to purchase an aggregate of 1,388,976 shares of
Common Stock as set forth on SCHEDULE 3.1.1 hereto.
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3.1.2. The 1996 Series A Preferred Stock will, when issued against
payment therefor in accordance with this Agreement, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and
charges.
3.1.3. The Company will at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, solely for the purpose
of the conversion of the 1996 Series A Preferred Stock, such number of
Conversion Shares issuable upon the conversion of all outstanding 1996 Series
A Preferred Stock. All Conversion Shares will, when issued, in accordance
with the provisions of the Articles of Incorporation and the Certificate of
Designation of the Company, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Company will
take all such actions as may be necessary to assure that all Conversion
Shares may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities
exchange or national market upon which the Conversion Shares may be listed.
3.1.4. None of the execution and delivery of this Agreement, or the
issue and sale of the 1996 Series A Preferred Stock and the Conversion
Shares, or the consummation of the transactions herein or therein
contemplated or compliance with the terms and provisions hereof and thereof
will conflict with or result in a breach of, or require any consent under,
the Articles of Incorporation of the Company, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency (other than filings which will be made by
the Company as required by applicable state securities laws), or any
agreement or instrument to which the Company is a party or by which it is
bound or to which it is subject, or constitute a default under any such
agreement or instrument, or result in the creation or imposition of any lien
upon any of the revenues or assets of the Company pursuant to the terms of
any such agreement or instrument.
3.1.5. There is not in effect on the date hereof any agreement by
the Company (other than this Agreement) pursuant to which any holders of
securities of the Company have a right to
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cause the Company to register such securities under the Securities Act other
than as set forth on SCHEDULE 3.1.5 hereto.
3.1.6. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Nevada and has the
corporate power and authority to execute and deliver this Agreement, the 1996
Series A Preferred Stock and the Conversion Shares and to perform the terms
hereof and thereof. The Company has taken all action necessary to authorize the
execution, delivery and performance of this Agreement, the issuance of the 1996
Series A Preferred Stock and the Conversion Shares. This Agreement has been
duly authorized and executed and constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors' rights generally.
3.1.7. As a condition to the obligations of the Holders hereunder and
prior to the issuance of the 1996 Series A Preferred Stock, the Company shall
have delivered to the Holders (in form and substance satisfactory to Holders
and their counsel):
(a) a certificate, dated the date hereof, of the Secretary or
an Assistant Secretary of the Company, (A) attaching a true and complete
copy of the resolutions of the Board of Directors of the Company, and of
all documents evidencing other necessary corporate or shareholder action
(in form and substance satisfactory to the Holders and to their counsel)
taken by the Company in connection with the matters contemplated by this
Agreement, (B) attaching a true and complete copy of the Articles of
Incorporation and by-laws of the Company and each of its subsidiaries, (C)
setting forth the incumbency of the officer or officers of the Company who
sign this Agreement, any document delivered by the Company pursuant hereto
and each certificate for the 1996 Series A Preferred Stock, including
therein a signature specimen of such officer or officers and (D) attaching
a true and complete copy of the Development Plan;
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(b) a certificates of good standing (including tax status, if
applicable) of the Company and each of its subsidiaries under the laws of
their respective states of incorporation and as foreign corporations in
every state in which they own property or conduct business;
(c) an opinion of Looper, Reed, Xxxx & XxXxxx Incorporated in
the form attached hereto as EXHIBIT B;
(d) a copy of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, which report shall contain audited
financial statements of the Company for such fiscal year prepared in
accordance with generally accepted accounting principles which fairly
present the information included therein, accompanied by an opinion of the
Company's certified public accountants;
(e) copies of the Company's Quarterly Report on Form 10-Q for
the fiscal quarter September 30, 1996, which reports may contain unaudited
financial statements of the Company for such fiscal quarter prepared in
accordance with generally accepted accounting principles which fairly
present the information included therein, certified by the Company's
chief financial officer;
(f) an opinion of Nevada counsel, which counsel shall be
recommended by the Company and approved by TCW, to the Company with respect
to the nature of any class rights (including class voting rights) of the
holders of the 1993 Series A Preferred Stock under Nevada law;
(g) copies of that certain Shareholder Agreement executed by
Xxxx X. Xxxxx, the Company and TCW in the form attached hereto as EXHIBIT C;
(h) a summary of the principal terms of the incentive stock
option plan to be adopted by the Board of Directors of the Company on or
before December 31, 1996;
(i) an Independent Engineering Report reflecting an NPV10 (as
defined in the Certificate of Designation but
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using unescalated twelve (12) month forward NYMEX strip pricing adjusted
for basis and xxxxxx) of at least sixty million dollars ($60,000,000) of
the Proved Developed Reserves attributable to the Company's oil and gas
properties;
(j) evidence satisfactory to TCW that all the 1993 Series B
Preferred Stock has been converted into Common Stock of the Company;
(k) a Phase 1 Environmental Audit acceptable to TCW of the
salt water disposal facility owned by Cushing Disposal, Inc., an Oklahoma
corporation and wholly owned subsidiary of the Company, together with
evidence satisfactory to TCW that (i) the Company has reasonably sufficient
liability and other insurance coverages with respect to such facility and
(ii) no material environmental liability could be imposed upon the Company
with respect to such salt water disposal facility; and
(l) such other documents and evidence relating to the matters
contemplated by this Agreement as the Holders or their counsel shall
reasonably require, including without limitation, evidence that the
Company has sufficient authorized and reserved shares of Common Stock on
the date hereof to meet the Company's obligations herein and in the
Certificate of Designation.
3.2 GOVERNMENTAL CONSENT. Other than filings required by applicable state
securities laws which shall be made by the Company, neither the nature of the
Company or of any its subsidiaries, or of any of their respective businesses or
properties, nor any relationship between the Company or any subsidiary and any
other Person, nor (except as expressly provided for in this Agreement) any
circumstance in connection with the offer, issue or sale of the 1996 Series A
Preferred Stock and Conversion Shares is such as to require consent, approval or
authorization of, or filing, registration or qualification with, any
governmental authority on the part of the Company as a condition to the
execution and delivery of this Agreement or the execution and filing of the
Certificate of
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Designation or any amendment of the Articles of Incorporation required in
connection with the authorization, offer, sale and/or issuance of the 1996
Series A Preferred Stock or the Conversion Shares.
3.3. PRIVATE OFFERING. Neither the Company nor any other Person
acting on behalf of the Company has offered any of the 1996 Series A Preferred
Stock or any similar securities of the Company for sale to, or solicited offers
to buy any thereof from, or otherwise approached or negotiated with respect
thereto with any prospective purchasers who are not accredited investors, as
defined in Rule 501 of Regulation D promulgated under the Securities Act. The
Company agrees that neither the Company nor anyone acting on its behalf has
offered or will offer the 1996 Series A Preferred Stock or any part thereof or
any similar securities for issue or sale to, or has solicited or will solicit
any offer to acquire any of the same from, anyone so as to bring the issuance
and sale of the 1996 Series A Preferred Stock within the provisions of Section 5
of the Securities Act. Based in part on the representations of the Holders set
forth herein, the offer, sale and issuance of the 1996 Series A Preferred Stock
in conformity with the terms of this Agreement are exempt from the registration
requirements of the Securities Act and any applicable state securities laws.
3.4. LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company that
questions the validity of this Agreement or the Company's right to enter into
this Agreement, or to consummate the transactions contemplated hereby or
which, if decided in a manner adverse to the Company, would have a material
adverse effect on the Company or on any of its subsidiaries.
3.5. NO MATERIAL MISSTATEMENTS. No representation, warranty, or
statement by Company in this Agreement or in any written statement or
certificate furnished or to be furnished to the Holders pursuant to this
Agreement contains any untrue statement of a material fact or, when taken
together, omits a material fact necessary to make the statements made herein or
therein not misleading.
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3.6. OWNERSHIP OF SUBSIDIARIES. The Company has good and marketable
title to all the outstanding stock of each of its subsidiaries, except Xxxxxx
Xxxxxxx International, a Wyoming limited liability company, as to which the
Company has good and marketable title to a member interest comprising 51% of all
member interests thereof, in each case, free and clear of all liens other than
as set forth on SCHEDULE 3.6 hereof. None of the Company's subsidiaries have
outstanding (i) any stock or securities convertible into or exchangeable for any
shares of capital stock or (ii) any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to any capital stock or stock or securities.
3.7. MATERIAL ADVERSE CHANGE. There has been no material adverse
change in the business, prospects or financial standing of the Company since
the filing of the Company's most recent Annual Report on Form 10-KSB or
Quarterly Report on Form 10-QSB.
SECTION 4. RESTRICTIONS ON TRANSFERABILITY; REGISTRATION RIGHTS
The Restricted Securities shall not be transferable except upon the
conditions specified in this SECTION 4; provided that, notwithstanding any other
provisions of this SECTION 4, each Holder (and each other Person mentioned below
in this clause) shall have the right to transfer any Restricted Securities to
any Affiliate, fund participant, trust beneficiary, or limited partner of such
Holder, any party to any investment management or other similar agreement with
Trustco or Tamco, any fund, foundation, trust or other Person for whose benefit
any such agreement with Trustco or Tamco relates or any trustee, custodian or
nominee of or for any such Person. Each such transferee shall be subject to the
same transfer restrictions imposed on the Holders by this Agreement. All rights
and obligations of the Holders set forth in this SECTION 4 will inure to the
benefit of and be binding upon any transferee of the Restricted Securities.
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4.1. RESTRICTIVE LEGEND. Unless and until otherwise permitted by this
SECTION 4, each certificate for 1996 Series A Preferred Stock issued under this
Agreement, each certificate for any 1996 Series A Preferred Stock issued to any
subsequent transferee of any such certificate, each certificate for any
Conversion Shares other than (i) Redemption Shares, (ii) Dividend Shares, (iii)
Conversion Shares issued upon the exercise by the Company of the conversion
rights granted pursuant to Section 8.3 of the Certificate of Designation and
(iv) each certificate for any Conversion Shares issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:
"The shares evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended, and may be reoffered and sold
only if registered pursuant to the provisions of said Securities Act or if
an exemption from registration is available."
4.2. NOTICE OF PROPOSED TRANSFERS. Prior to any transfer or attempted
transfer of any Restricted Securities not covered by the proviso contained in
the introductory paragraph to SECTION 4, the holder of such Restricted
Certificate shall give written notice to the Company of such holder's intention
to effect such transfer. Each such notice (i) shall describe the manner and
circumstances of the proposed transfer in sufficient detail, and (ii) shall be
accompanied (except in transactions in compliance with Rule 144) by either (A) a
written opinion of legal counsel who shall be reasonably satisfactory to the
Company (provided that, in the case of any holder which is a person or an entity
affiliated with the TCW Funds, Trustco or Tamco, any counsel which is a
director, officer or employee of any such Person, shall be satisfactory to the
Company) to the effect that the proposed transfer of the Restricted Securities
may be effected without registration under the Securities Act, or (B) a "no
action" letter from the Commission to the effect that the transfer of such
securities without registration will not result in a recommendation by the staff
of the Commission that enforcement action be taken with respect thereto,
whereupon the holder of such Restricted Securities shall be entitled to transfer
such Restricted Securities in accordance with the terms
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of the notice delivered by the holder to the Company. Each certificate
evidencing the Restricted Securities thus to be transferred (and each
certificate evidencing any untransferred balance of the Restricted Securities
evidenced by such Restricted Certificate) shall bear the restrictive legend
set forth in SECTION 4.1.
4.3. DEMAND REGISTRATION. Subject to the limitations contained in
SECTION 4.6, at any time and from time to time, the holders of at least 51% of
the outstanding 1996 Series A Preferred Stock and Conversion Shares may give
written notice to the Company (i) of their intention to convert all or part of
the 1996 Series A Preferred Stock held by them and to transfer the Conversion
Shares held or obtained by conversion of 1996 Series A Preferred Stock and (ii)
requesting the registration of said Conversion Shares, and thereupon, the
Company shall, as expeditiously as possible, effect the registration of such
Conversion Shares under the Securities Act. Such Sellers shall have the right
to select the managing underwriter or underwriters for the offering of such
Conversion Shares.
In the case of an underwritten public offering of Restricted
Securities to be so registered pursuant to a registration under this SECTION
4.3, if the managing underwriter advises in its opinion that (i) the inclusion
in such registration of some or all of such Common Stock requested to be
registered (including without limitation, securities to be included pursuant to
incidental or "piggyback" rights heretofore or hereafter granted by the Company
to other Persons) will cause the proceeds or price per share to the Sellers to
be reduced or (ii) that the number of securities to be registered at the request
of the Sellers pursuant to this SECTION 4.3 plus the number of securities sought
to be registered by such other Persons is too large a number to be reasonably
sold, then the number of securities to be included in such registration will be
reduced as set forth below:
(i) the number of shares of Common Stock sought to be registered
by the Company or any holders of Common Stock, other than the Conversion
Shares and the Other Shares (as defined below), shall be reduced pro rata
to the extent
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necessary to reduce the number of securities to be registered
to the number recommended by the managing underwriter (the "RECOMMENDED
NUMBER");
(ii) if the reduction provided for in clause (i) above does not
reduce the number of shares of Common Stock to be registered to the
Recommended Number, then the number of Other Shares sought to be registered
shall be reduced pro rata, in proportion to the number of shares of Common
Stock sought to be registered by the holders of such Other Shares, to the
extent necessary to reduce the number of shares of Common Stock to be
registered to the Recommended Number; and
(iii) if the reductions provided for in clauses (i) and (ii)
above do not reduce the number of shares of Common Stock to be registered
to the Recommended Number, then the number of Conversion Shares sought to
be registered shall be reduced pro rata, in proportion to the number of
shares of Common Stock sought to be registered by the holders of such
Common Stock, to the extent necessary to reduce the number of shares of
Common Stock to be registered to the Recommended Number;
PROVIDED, that in no event shall the holders of the Conversion Shares so
included in such registration be required to pay any expenses relating to such
registration, including, without limitation, all the expenses described in the
first paragraph of SECTION 4.6, which are related to the inclusion of any other
holders' Common Stock in the registration.
The Company shall have the right to include in any registration
pursuant to this SECTION 4.3, Common Stock held by its management which the
Company shall desire to have registered (collectively, "Other Stock"), PROVIDED,
that (i) such Other Stock shall not comprise more than ten (10) percent of
Conversion Shares included in the registration and (2) the managing underwriter
approves of the inclusion of such Other Stock in such registration as not having
an adverse impact on the price to be received by the holders of Conversion
Shares therein.
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The Company will not grant to any Person at any time on or after the
date hereof the right (a "PIGGYBACK RIGHT") to request the Company to register
any securities of the Company under the Securities Act by reason of the exercise
by any Holder of its rights under this SECTION 4.3 unless such Piggyback Right
provides that such securities shall not be registered and sold at the same time
if the managing underwriter for the respective Sellers believes that sale of
such securities would adversely affect the amount of, or price at which, the
respective Conversion Shares being registered under this SECTION 4.3 can be
sold.
The Company agrees (a) not to effect any public or private sale or
distribution of its equity securities, including a sale pursuant to Regulation D
under the Securities Act but excluding (i) a sale or distribution which the
Company is obligated to make pursuant to an acquisition or other agreement in
effect as of the date the holders of the 1996 Series A Preferred Stock or
Conversion Shares give notice under the first sentence of this SECTION 4.3, (ii)
the issuance of not more than 100,000 shares of Common Stock per calendar
quarter in connection with the Company's acquisition of (A) mineral leases, (B)
gas gathering systems, (C) pipelines, (D) producing and non-producing oil and
gas properties, and (E) other similar oil and gas assets (which shall not be
made during the 10-day period prior to, and during the 20-day period beginning
on, the closing date described below), and (iii) the issuance of shares of
Common Stock either (A) pursuant to the warrants and options listed on Schedule
3.1.1 in connection with the exercise thereof or (B) pursuant to one or more
underwritten public offerings after the Closing Date and on or before June 30,
1997 at a price per share less than the Conversion Price but not less than $4.00
and/or the exercise of the IPO Warrants (as defined in the Certificate of
Designation) at a price of $5.50 per share on or before November 12, 1998,
PROVIDED, THAT in the aggregate such shares shall not exceed 5,750,000 shares of
Common Stock, during the 10-day period prior to, and during the 120-day period
beginning on, the closing date of an underwritten offering made pursuant to a
registration statement filed pursuant to this SECTION 4.3 and (b) to cause each
holder of its privately placed equity securities purchased from the Company at
any time on or after the date of this
- 20 -
Agreement to agree not to effect any public sale or distribution of any such
securities during such period, including a sale pursuant to Rule 144 under
the Securities Act (except as part of such underwritten registration, if
permitted).
Except pursuant to a registration statement filed pursuant to this
SECTION 4.3, each Holder agrees not to effect any public sale or distribution,
including a sale pursuant to Rule 144 or 144A under the Securities Act, of any
Restricted Securities during the 10-day period prior to, and during the 120-day
period beginning on, the closing date of an underwritten offering made pursuant
to a registration statement filed pursuant to this SECTION 4.3.
The Company recognizes that money damages may be inadequate to
compensate Holders for a breach by the Company of its obligations under this
SECTION 4.3, and the Company agrees that in the event of such a breach the
Holders may apply for an injunction of specific performance or the granting of
such other equitable remedies as may be awarded pursuant to the arbitration
described in SECTION 6.9 below or by a court of competent jurisdiction after the
arbitration in SECTION 6.9 below in order to afford Holders the benefits of this
SECTION 4.3 and that the Company shall not object to such application, entry of
such injunction or granting of such other equitable remedies on the grounds that
money damages will be sufficient to compensate the Holders.
4.4. PIGGY-BACK REGISTRATION. Subject to the limitations contained
in SECTION 4.6, if the Company at any time proposes to register any of its
securities under the Securities Act on Form X-0, X-0 or S-3 or the equivalent
(other than an Excluded Registration), whether of its own accord or at the
request of any holder or holders of such securities, it will each such time
give written notice to all holders of outstanding 1996 Series A Preferred
Stock and Conversion Shares of its intention so to do.
Upon the written request of a holder or holders of any such 1996
Series A Preferred Stock and Conversion Shares given within 30 days after
receipt of any such notice (stating the
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intended method of disposition of such securities by the prospective Seller
or Sellers), the Company will use its best efforts to cause all Conversion
Shares, the holders of which shall have so requested registration thereof, to
be registered under the Securities Act, all to the extent requisite to permit
the sale or other disposition (in accordance with the intended methods
thereof as aforesaid) by the prospective Seller or Sellers of the Conversion
Shares so registered; PROVIDED, HOWEVER, the Company may elect not to file a
registration statement pursuant to this SECTION 4.4 or may withdraw any
registration statement filed pursuant to this SECTION 4.4 at any time prior
to the effective date thereof. In the case of an underwritten public equity
offering by the Company, each Seller shall, if requested by the managing
underwriter, agree not to sell publicly any equity securities of the Company
held by such Seller (other than the Conversion Shares so registered) for a
period of up to 120 days following the effective date of the registration
statement relating to such offering.
If the managing underwriter for the respective offering advises that
the inclusion in such registration of some or all of the Conversion Shares
sought to be registered by the Seller in its opinion will cause the proceeds or
price per unit the Company or the requesting or demanding holder of securities
will derive from such registration to be reduced or that the number of
securities to be registered at the instance of the Company or such requesting or
demanding holder plus the number of securities sought to be registered by the
Sellers is too large a number to be reasonably sold, then the number of
securities to be included in such registration will be reduced as set forth
below:
(i) the number of shares of Common Stock sought to be registered
by any holders of Common Stock, other than the Conversion Shares, shall be
reduced pro rata to the extent necessary to reduce the number of securities
to be registered to the Recommended Number;
(ii) if the reduction provided for in clause (i) above does not
reduce the number of securities to be registered to the Recommended Number,
then the number of shares of the Common Stock sought to be issued and
- 22 -
registered on account of the Company shall be reduced to the extent
necessary to reduce the number of shares of Common Stock to be registered
to the Recommended Number; and
(iii) if the reduction provided for in clauses (i) and (ii)
above does not reduce the number of shares of Common Stock to be registered
to the Recommended Number, then the number of Conversion Shares sought to
be registered shall be reduced pro rata, in proportion to the number of
Conversion Shares sought to be registered by the holders thereof, to the
extent necessary to reduce the number of shares of Common Stock to be
registered to the Recommended Number.
The Company will not grant to any Person at any time on or after the
date hereof the right to request the Company to register any securities of the
Company under the Securities Act unless such right provides that such securities
shall not be registered and sold at the same time if the managing underwriter
for the respective sellers believes that sale of such securities would adversely
affect the amount of, or price at which, the respective Conversion Shares being
registered under this Section 4.4 can be sold.
4.5. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of this SECTION 4 to use its best efforts to
effect the registration of any of the Conversion Shares under the Securities
Act, the Company will (except as otherwise provided in this Agreement), as
expeditiously as possible:
(a) cooperate with any underwriters for, and the Sellers of,
such Conversion Shares, and will enter into a usual and customary
underwriting agreement with respect thereto and take all such other
reasonable actions as are necessary or advisable to permit, expedite and
facilitate the disposition of such Conversion Shares in the manner
contemplated by the related registration statement in each case to the same
extent as if all the securities then being offered were for the account of
the Company and the Company will provide to any Seller of Conversion
Shares, any
- 23 -
underwriter participating in any distribution thereof pursuant to
a registration statement, and any attorney, accountant or other agent
retained by any Seller or underwriter, reasonable access to appropriate
Company officers and employees to answer questions and to supply
information reasonably requested by any such Seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(b) furnish or cause to be furnished to each Seller of Conversion
Shares covered by such registration statement, addressed to such Sellers, a
copy of the opinion of counsel for the Company, and a copy of the "comfort"
letter signed by the independent public accountants who have certified the
Company's financial statements included in the registration statement,
delivered on the closing date to the underwriters of such Conversion Shares;
(c) prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective; and prepare and file
with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration statement
whenever the Seller or Sellers of such securities shall desire to sell or
otherwise dispose of the same; PROVIDED that no such registration
statement will be filed by the Company until counsel for the Sellers of
securities included therein shall have had a reasonable opportunity to
review the same and to exercise their rights under clause (a) above with
respect thereto and no amendment to any such registration statement naming
such Sellers as selling shareholders shall be filed with the Commission
until such Sellers shall have had at least seven days to review such
registration statement as originally filed and theretofore amended, to
exercise their rights under clause (a) above and
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to approve or disapprove any portion of such registration statement
describing or referring to such Sellers;
(d) furnish to each Seller such numbers of copies of a summary
prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as such Seller may reasonably request in order to facilitate the
public sale or other disposition of the securities owned by such Seller;
(e) use its best efforts to register or qualify the securities
covered by such registration statement under such other securities or blue
sky laws of such jurisdictions as each Seller shall request, and do any and
all other acts and things which may be necessary or advisable to enable
such Seller to consummate the public sale or other disposition in such
jurisdictions of the securities owned by such Seller, except that the
Company shall not for any such purpose be required to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified or to file therein any general consent to service;
(f) in the event of the issuance of any stop order suspending
the effectiveness of any registration statement or of any order suspending
or preventing the use of any prospectus or suspending the qualification of
any Conversion Shares for sale in any jurisdiction, use its best efforts
promptly to obtain its withdrawal;
(g) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission;
(h) make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months, beginning with the first fiscal quarter beginning
after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act; and
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(i) list such securities on any securities exchange on which
any stock of the Company is then listed, if the listing of such securities
is then permitted under the rules of such exchange;
PROVIDED, HOWEVER, that notwithstanding any other provision of this SECTION 4,
the Company shall not be required to maintain the effectiveness of any
registration statement for a period in excess of two years (plus any period
during which the effectiveness of such registration has been suspended) except
that from time to time after a transfer of Conversion Shares pursuant to a
registration statement the Company will file all reports required to be filed by
it under the Securities Act and the Securities Exchange Act of 1934, as amended,
and the rules and regulations adopted by the Commission thereunder, and will
take such further action as any holder or holders of Conversion Shares may
reasonably request, all to the extent required to enable such holders to sell
Conversion Shares pursuant to Rule 144 and Rule 144A promulgated under the
Securities Act (or any successor thereto). Upon written request, the Company
will deliver to such holders a written statement as to whether it has complied
with such requirements.
4.6. EXPENSES; LIMITATIONS ON REGISTRATION. All expenses incident
to the Company's performance of its obligations in connection with any
registration of the Sellers' Conversion Shares under this Agreement
including, without limitation, printing expenses, fees and disbursements of
counsel for the Company, fees of the National Association of Securities
Dealers, Inc. in connection with its review of any offering contemplated in
any registration statement and expenses of any special audits and independent
engineering reports to which the Company shall agree or which shall be
necessary to comply with governmental requirements in connection with any
such registration shall be paid by the Company. In connection with each
Reimbursable Registration (as defined below in this SECTION 4.6), the Company
shall pay (i) all registration and filing fees for the Sellers' Conversion
Shares under Federal and State securities laws, (ii) expenses of complying
with the securities or blue sky laws of any jurisdictions pursuant to SECTION
4.5(e), and (iii) fees and expenses of not more than one special counsel for
the Seller or
- 26 -
Sellers but shall not be obligated to pay underwriter's discount or
commissions with respect to the Conversion Shares. In connection with any
registration of any Conversion Shares which is not a Reimbursable
Registration, all expenses of the kind specified in the preceding sentence
shall be borne by the respective Seller or Sellers in such proportions as
they may agree.
It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this SECTION 4 in respect of the Conversion Shares
which are to be registered at the request of any prospective Seller that (i)
subject to the immediately preceding paragraph, the Company shall have received
an undertaking satisfactory to it from such prospective Seller to pay, or have
deducted from the proceeds from the sale of Conversion Shares pursuant to a
registration, all expenses to be incurred by or for the account of and required
to be paid by such Seller, and (ii) such prospective Seller shall furnish to the
Company such information regarding the securities held by such Seller and the
intended method of disposition thereof as the Company shall reasonably request
and as shall be required in connection with the action to be taken by the
Company.
The Holders of 1996 Series A Preferred Stock and Conversion Shares
shall be entitled to an aggregate of two effective registrations pursuant to
requests made under SECTION 4.3; PROVIDED, that any registration request made by
the requisite number of Holders, as set forth in the first paragraph of SECTION
4.3, which request shall be withdrawn (other than by reason of the Company's
failure to perform its obligations hereunder or a material adverse change in its
financial position or business) by the holders of at least 75% of the shares
evidenced or covered by the Conversion Shares sought to be registered, after the
respective registration statement shall have become effective, shall be treated
as an "effective" registration for purposes hereof. Each registration which
either uses up one of the two registration rights granted in the preceding
sentence or is filed pursuant to a request subsequently withdrawn for any of the
reasons set forth in the final parenthetical clause of the preceding sentence
and each "piggy-
- 27 -
back" registration pursuant to SECTION 4.4 shall be deemed a "Reimbursable
Registration."
The Company agrees that it will not file a registration statement
under the Securities Act, either for securities held by any of the Company's
security holders other than holders of 1996 Series A Preferred Stock and
Conversion Shares or for securities newly issued by the Company, until 30
days after the effective date of any registration statement filed pursuant to
the request of a Seller or Sellers made under SECTION 4.3.
4.7. INDEMNIFICATION.
4.7.1. In the event of any registration of any of its securities
under the Securities Act pursuant to this SECTION 4, the Company shall
indemnify and hold harmless the Seller of such Conversion Shares, such
Seller's directors and officers, and each other person, if any, who controls
such Seller within the meaning of the Securities Act (a "CONTROLLING
PERSON"), against any losses, claims, damages or liabilities, joint or
several, to which such Seller or any such director or officer or Controlling
Person may become subject under the Securities Act or any other statute or at
common law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any alleged
untrue statement of any material fact contained, on the effective date
thereof, in any registration statement under which such securities were
registered under the Securities Act, or in any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto,
or (ii) any alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and shall reimburse such Seller or such director, officer or Controlling
Person for any legal or any other expenses reasonably incurred by such Seller
or such director, officer or Controlling Person in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any alleged untrue statement or alleged omission made in such
registration statement, preliminary prospectus,
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prospectus, or amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by such Seller specifically for use therein. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Seller or such director, officer or Controlling Person, and
shall survive the transfer of such securities by such Seller.
4.7.2. Each holder of any Conversion Shares shall, by acceptance
thereof, indemnify and hold harmless the Company, its directors and officers
and each other person, if any, who controls the Company against any losses,
claims, damages or liabilities, joint or several, to which the Company or any
such director or officer or any such person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon (i) any untrue statement or omission of any material fact
contained, on the effective date thereof, in any registration statement under
which securities were registered under the Securities Act, or in any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or (ii) any omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent that such untrue statement or omission was contained in written
information furnished to the Company through an instrument duly executed by
such holder specifically for use therein, and shall reimburse the Company or
such director, officer or other person for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
loss, claim, damage, liability or action.
4.7.3. INDEMNIFICATION similar to that specified in SUBSECTIONS
4.7.1 and 4.7.2 shall be given by the Company and each holder of any
Conversion Shares (with such modifications as shall be appropriate) to any
underwriter with respect to any required registration or other qualification
of any Conversion Shares under any Federal or state law or regulation of
governmental authority. The indemnity and expense reimbursements obligations
of the Company and the Holders under SUBSECTIONS
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4.7.1 and 4.7.2 shall be in addition to any liability the Company and the
Holders may otherwise have.
4.7.4. Each Person (an "INDEMNITOR") who under the preceding
provisions of this SECTION 4.7 agrees to indemnify another Person (an
"INDEMNITEE") shall have the right, subject to the provisions hereto, to
designate counsel (acceptable to the Indemnitee) to defend any case or
proceeding against the Indemnitee arising in respect of any claim of
liability for which such INDEMNIFICATION may be claimed, to the end that
duplication of legal expense may be minimized; provided that, if the
Indemnitee notifies the Indemnitor that the former has been advised by its
counsel that any single counsel in such case or proceeding would have a
conflict of interest in representing both the Indemnitor and the Indemnitee,
the Indemnitee may designate its own counsel in such case or proceeding and,
to the extent so provided above in this SECTION 4.7, shall be entitled to be
reimbursed for its legal expenses reasonably incurred in connection with
defending itself in such case or proceeding.
4.8. TERMINATION OF RESTRICTIONS. Notwithstanding the foregoing
provisions of this SECTION 4, the restrictions imposed by this SECTION 4 upon
the transferability of the Restricted Securities shall cease and terminate as
to any particular Restricted Security when such Restricted Security shall
have been effectively registered under the Securities Act and sold by the
holder thereof in accordance with such registration or sold under Rule 144 or
144A promulgated by the Commission. Whenever the restrictions imposed by
this SECTION 4 shall terminate as to any Restricted Certificate, as
hereinabove provided, the holder thereof shall be entitled to receive from
the Company, without expense, a new certificate not bearing the restrictive
legend otherwise required to be borne thereby.
4.9. RULE 144. At all times, in order to permit the holders of
1996 Series A Preferred Stock and Conversion Shares to sell the same, if they
so desire, pursuant to Rule 144 or 144A promulgated by the Commission (or any
successor to such rule), the Company will comply with all rules and
regulations of the Commission applicable in connection with use of Rule 144
and 144A (or any successor rules thereto), including the provision of
- 30 -
information concerning the Company and the timely filing of all reports with
the Commission in order to enable such holders, if they so elect, to utilize
Rule 144 or 144A, and the Company will cause any restrictive legends to be
removed and any transfer restrictions to be rescinded with respect to any
sale of 1996 Series A Preferred Stock or Conversion Shares which is exempt
from registration under the Securities Act pursuant to Rule 144 or 144A.
SECTION 5. COVENANTS OF THE COMPANY
5.1. DELIVERY EXPENSES. If any Holder surrenders any certificate
for 1996 Series A Preferred Stock or Conversion Shares to the Company or a
transfer agent of the Company for exchange for instruments of other
denominations or registered in another name or names, the Company will,
subject to the provisions of SECTION 4, cause such new instruments to be
issued and will pay the cost of delivering to or from the office of the
Holder from or to the Company or its transfer agent, duly insured, the
surrendered instrument and any new instruments issued in substitution or
replacement for the surrendered instrument.
5.2. TAXES. The Company will pay all taxes (other than Federal,
State or local income taxes) which may be payable in connection with the
execution and delivery of this Agreement or the issuance and sale of the 1996
Series A Preferred Stock and Conversion Shares hereunder or in connection
with any modification of the 1996 Series A Preferred Stock or Conversion
Shares and will save the Holders harmless without limitation as to time
against any and all liabilities with respect to or resulting from any delay
in paying, or omission to pay such taxes. The obligations of the Company
under this SECTION 5.2 shall survive any redemption, repurchase or
acquisition of 1996 Series A Preferred Stock or Conversion Shares by the
Company and the termination of this Agreement.
5.3. REPLACEMENT OF INSTRUMENTS. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of
- 31 -
any certificate or instrument evidencing any 1996 Series A Preferred Stock or
Conversion Shares, and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that, if the owner of the same is a
commercial bank or an institutional lender or investor, its own agreement
of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company, at its expense, will execute, register and deliver, in lieu
thereof, a new certificate or instrument for (or covering the purchase of) an
equal number of shares of 1996 Series A Preferred Stock or Conversion Shares.
5.4. RESTRICTIONS ON CERTAIN ACTIONS. From and after the date
hereof to the day immediately following the issuance of 1996 Series A
Preferred Stock hereunder the Company will not:
(a) pay or declare any dividend payable in shares of its
common stock or take any other action which, if taken after the date of
such issuance, would result under the terms of the Preferred Stock in a
change in the number of Conversion Shares into which the 1996 Series A
Preferred Stock may be converted; or
(b) make any amendment to the Articles of Incorporation of the
Company, or file any resolution of the board of directors with the Nevada
Secretary of State containing any provisions, which would materially and
adversely affect or otherwise impair the rights of the holders of the 1996
Series A Preferred Stock.
5.5. USE OF PROCEEDS. The Company shall use the proceeds of the
sale of the 1996 Series A Preferred Stock as follows:
(a) development of proved undeveloped properties, including but
not limited to, installation of water floods
- 32 -
and development drilling in the Panoma Field in accordance with the
Development Plan; and
(b) working capital or reduction of any outstanding debt
obligations of the Company under its existing credit facilities with Xxxxx
Fargo Bank (Texas) National Association, as agent for the Banks extending
credit to the Company.
5.6. IMPLEMENTATION OF THE DEVELOPMENT PLAN. The Company shall take
all action necessary to commence and implement the Development Plan not later
than the time periods set forth therein.
5.7. NAME CHANGE. The Company has advised TCW that it intends to
change its name to Magnum Hunter Resources, Inc. Promptly after the filing
thereof, the Company shall deliver to the Holders true and correct copies of
all documents effecting or evidencing the name change of the Company to
Magnum Hunter Resources, Inc. under the laws of the State of Nevada and shall
concurrently therewith reissue to the Holders the certificates for the 1996
Series A Preferred Stock with the changed name of the Company.
SECTION 6. MISCELLANEOUS
6.1. NOTICES.
6.1.1. All communications under this Agreement shall be in writing
and shall be mailed by first class mail, postage prepaid:
(a) if to any party hereto at its address for notices
specified beneath its name on the signature page hereof, or at such other
address as it may have furnished in writing to each other party hereto and
all other holders of 1996 Series A Preferred Stock and Conversion Shares at
the time outstanding, or
(b) if to any other Person who is the registered holder of any
1996 Series A Preferred Stock or Conversion
- 33 -
Shares, to the address for the purpose of such holder as it appears in the
stock ledger of the Company.
6.1.2. Any notice shall be deemed to have been duly given when
delivered by hand, if personally delivered, and if sent by mail, two Business
Days after being deposited in the mail, postage prepaid.
6.2. SURVIVAL. All warranties, representations and covenants made
by the Company herein or in any certificate or other instrument delivered by
it or on its behalf under this Agreement shall be considered to have been
relied upon by the Holders and shall survive the issuance of the 1996 Series
A Preferred Stock regardless of any investigation made by or on behalf of the
Holders. All statements in any such certificate or other instrument so
delivered shall constitute representations and warranties by the Company
hereunder.
All representations, warranties and covenants made by the Holders
herein shall be considered to have been relied upon by the Company and shall
survive the issuance to the Holders of the 1996 Series A Preferred Stock
regardless of any investigation made by the Company or on its behalf.
The provisions of SECTION 4 hereof shall survive the issuance to the
Holders of the 1996 Series A Preferred Stock and the Conversion Shares.
6.3. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, this Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties whether so expressed or not.
6.4. AMENDMENT AND WAIVER, ETC. This Agreement may be amended, and
the observance of any term of this Agreement may be waived, but only with the
written consent of the Requisite Holders. No failure or delay on the part of
the Holders in exercising any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or
- 34 -
remedy. The remedies provided for herein are cumulative and are not
exclusive of any remedies that may be available to the Holders at law or in
equity or otherwise. No waiver of or consent to any departure by the Company
from any provision of this Agreement shall be effective unless signed in
writing by the Holders.
6.5. DUPLICATE ORIGINALS. Two or more duplicate originals of this
Agreement may be signed by the parties, each of which shall be an original but
all of which together shall constitute one and the same instrument.
6.6. SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
6.7. GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the law of the State of California.
6.8. SPECIFIC PERFORMANCE. The Company acknowledges that the Holders
have no adequate remedy at law for breaches by the Company of its obligations
hereunder or under the Articles of Incorporation, and accordingly the Company
irrevocably agrees that the Holders shall be entitled to the remedy of specific
performance granted pursuant to SECTION 6.9 below, and waives any right the
Company may have to object to such remedy.
6.9. ARBITRATION. THE PARTIES AGREE THAT IF ANY DISPUTE SHOULD ARISE
UNDER THE TERMS AND PROVISIONS OF THIS AGREEMENT, EACH PARTY WAIVES ANY RIGHT TO
COMMENCE LEGAL ACTION OR ARBITRATION OTHER THAN AS PROVIDED UNDER THE TERMS OF
THIS AGREEMENT, AND THIS AGREEMENT SHALL PROVIDE THE SOLE AND EXCLUSIVE REMEDY
FOR RESOLUTION OF DISPUTES.
(a) THE DETERMINATION OF THE ARBITRATOR WILL BE FINAL AND BINDING
UPON EACH PARTY AND EACH PARTY SPECIFICALLY WAIVES ANY RIGHT TO CLAIM THAT THE
ARBITRATOR HAS EXCEEDED THE SCOPE OF
- 35 -
THE ARBITRATION, HAS DISREGARDED EVIDENCE OR PRINCIPLES OF LAW, AND FURTHER
WAIVES ANY RIGHT TO DISCLAIM THE QUALIFICATION OR FUNCTION OF THE ARBITRATOR
IN ANY MANNER OR FASHION.
(b) APPOINTMENT OF THE ARBITRATOR SHALL BE MADE BY MUTUAL AGREEMENT
OF THE PARTIES. IF THE PARTIES CANNOT AGREE UPON THE IDENTIFICATION OF THE
ARBITRATOR WITHIN THIRTY (30) DAYS FROM THE MAILING OF THE OBJECTION, A PETITION
FOR APPOINTMENT OF ARBITRATOR SHALL BE FILED WITH THE SUPERIOR COURT OF THE
COUNTY OF LOS ANGELES, CALIFORNIA. THE ARBITRATION SHALL BE HELD IN LOS
ANGELES, CALIFORNIA PURSUANT TO THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION AND TITLE 9 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE
(SECTION 1280 ET SEQ.) INCLUDING WITHOUT LIMITATION PROVISIONS OF CALIFORNIA
CODE OF CIVIL PROCEDURE SECTION 1283.05 WHICH IS HEREBY INCORPORATED HEREIN BY
REFERENCE.
(c) THE ARBITRATOR'S FEES AND FEES AND COSTS OF PETITIONING FOR THE
APPOINTMENT OF THE ARBITRATOR SHALL BE PAID BY THE COMPANY. THE ARBITRATOR UPON
RENDERING ITS AWARD SHALL DETERMINE THE PARTY THAT PREVAILED BASED UPON WRITTEN
STATEMENTS MADE BY EACH PARTY AT THE COMMENCEMENT OF THE ARBITRATION AS TO THE
POSITION OF THE PARTIES AND THEIR ALTERNATIVES FOR SETTLING THE MATTER. A
STATEMENT OF A PROPOSED SETTLEMENT SHALL NOT BE BINDING UPON ANY PARTY AND SHALL
NOT BE CONSIDERED AS EVIDENCE BY THE ARBITRATOR EXCEPT TO THE EXTENT THAT THE
ARBITRATOR UPON MAKING ITS SOLE AND INDEPENDENT DETERMINATION SHALL DETERMINE
THE PARTY WHICH PREVAILED BASED UPON THE PROPOSALS FOR SETTLEMENT OF THE MATTER
MADE BY EACH PARTY AND SHALL DETERMINE THAT THE NON-PREVAILING PARTY SHALL PAY
SOME OR ALL OF THE COSTS OF ARBITRATION INCLUDING ANY COSTS INCURRED BY THE
ARBITRATOR AND IN EMPLOYING EXPERTS TO ADVISE THE ARBITRATOR IN REGARD TO
SPECIFIC SUBJECTS OR QUESTIONS. THE ARBITRATOR MAY FURTHER AWARD THE COST OF
ATTORNEYS' FEES OR EXPERT WITNESSES CONSULTED OR EMPLOYED IN THE PREPARATION OR
PRESENTATION OF EVIDENCE TO THE ARBITRATOR BY THE PREVAILING PARTY IF, IN THE
ARBITRATOR'S DETERMINATION, THE POSITION OF THE NONPREVAILING PARTY WAS NOT
REASONABLY TAKEN OR MAINTAINED OR WAS BASED UPON A FAILURE TO PROPERLY EXCHANGE
OR COMMUNICATE INFORMATION WITH THE PREVAILING PARTY IN REGARD TO THE SUBJECT
SUBMITTED TO ARBITRATION.
- 36 -
(d) THE ARBITRATOR'S DETERMINATION MAY FURTHER PROVIDE FOR
PROSPECTIVE ENFORCEMENT AND DIRECTIONS FOR THE PARTIES TO COMPLY WITH INCLUDING
WITHOUT LIMITATION PERMANENT INJUNCTIVE RELIEF. UNDER SUCH CIRCUMSTANCES, THE
ARBITRATOR'S AWARD SHALL BE BINDING UPON THE PARTIES AND SHALL BE UNDERTAKEN AND
PERFORMED BY EACH OF THE PARTIES UNTIL SUCH TIME AS THE ARBITRATOR'S DIRECTIONS
TO THE PARTY SHALL LAPSE BY THEIR TERM, OR THE ARBITRATOR SHALL NOTIFY THE
PARTIES THAT THOSE TERMS ARE NO LONGER IN FORCE OR EFFECT OR SHALL MODIFY THOSE
TERMS.
- 37 -
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Stock Purchase Agreement as of the date first above written.
MAGNUM PETROLEUM, INC.,
a Nevada corporation
By:
----------------------------
Xxxx X. Xxxxx
President
Address for Notices:
000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
TRUST COMPANY OF THE WEST, a California
trust company, as Trustee of TCW Debt and
Royalty Fund IVA
By:
----------------------------
Xxxxxx X. Xxxxxxxxxx
Managing Director
By:
----------------------------
Xxxx XxxXxxxx
Vice President
- 38 -
TRUST COMPANY OF THE WEST, a California trust
company, in its capacities as Investment Manager
pursuant to the Investment Management Agreement
dated as of June 6, 1988 between General Xxxxx,
Inc. and the Trust Company of the West and as
Custodian pursuant to the Custody Agreement dated
as of February 6, 1989 among General Xxxxx, Inc.,
the Trust Company of the West and State Street
Bank and Trust Company, as trustee
By:
----------------------------
Xxxxxx X. Xxxxxxxxxx
Managing Director
By:
----------------------------
Xxxx XxxXxxxx
Vice President
- 39 -
TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager pursuant to the
Investment Management and Custody Agreement dated
as of June 1, 1993 with The Trustees of Columbia
University in the City of New York and Trust
Company of the West
By:
----------------------------
Xxxxxx X. Xxxxxxxxx
Managing Director
By:
----------------------------
Xxxx XxxXxxxx
Vice President
TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager pursuant to the
Investment Management Agreement dated as of
March 1, 1993 with The Board of Trustees of the
Xxxxxx Xxxxxxxx Junior University
By:
----------------------------
Xxxxxx X. Xxxxxxxxxx
Managing Director
By:
----------------------------
Xxxx XxxXxxxx
Vice President
- 40 -
TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager under the
Investment Management Agreement dated as of
June 8, 1993 between the Xxxxxx Trusts Limited
Partnership X, Xxxxxx Trust and Savings Bank and
TCW Asset Management Company
By:
----------------------------
Xxxxxx X. Xxxxxxxxxx
Managing Director
By:
----------------------------
Xxxx XxxXxxxx
Vice President
TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager under the
Investment Management Agreement dated as of
June 8, 1993, between the Xxxx X. Xxxxxx
Charitable Trusts Partnership, Xxxxxx Trust and
Savings Bank and TCW Asset Management Company
By:
----------------------------
Xxxxxx X. Xxxxxxxxxx
Managing Director
By:
----------------------------
Xxxx XxxXxxxx
Vice President
- 41 -
TCW ASSET MANAGEMENT COMPANY, a California
corporation, as Investment Manager under the
Investment Management Agreement dated as of
December 31, 1993 with Delta Air Lines, Inc.
By:
----------------------------
Xxxxxx X. Xxxxxxxxxx
Managing Director
By:
----------------------------
Xxxx XxxXxxxx
Vice President
TCW DEBT AND ROYALTY FUND IVB, A CALIFORNIA
LIMITED PARTNERSHIP
By: TCW Asset Management Company,
a California corporation,
General Partner
By:
---------------------------------
Xxxxxx X. Xxxxxxxxxx
Managing Director
By:
---------------------------------
Xxxx XxxXxxxx
Vice President
- 42 -
TCW DEBT AND ROYALTY FUND IVC, A CALIFORNIA
LIMITED PARTNERSHIP
By: TCW Asset Management Company,
a California corporation,
General Partner
By:
---------------------------------
Xxxxxx X. Xxxxxxxxxx
Managing Director
By:
---------------------------------
Xxxx XxxXxxxx
Vice President
TRUST COMPANY OF THE WEST, as Custodian pursuant
to the Investment Management and Custody Agreement
dated as of April 26, 1994 among The City and
County Employee's Retirement System of San
Francisco, TCW Asset Management Company and Trust
Company of the West
By:
---------------------------------
Xxxxxx X. Xxxxxxxxxx
Managing Director
By:
---------------------------------
Xxxx XxxXxxxx
Vice President
- 43 -
Address for Notices:
000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
- 44 -
Exhibit A
Certificate of Designation
- 45 -
Exhibit B
Legal Opinion
- 46 -
Exhibit C
Shareholders Agreement
- 47 -
Exhibit D
Approved List
1. Xxxxxxx, Xxxxx & Associates Inc.
2. Xxxxx Xxxxx Company Petroleum Engineers
3. Netherland, Xxxxxx & Associates Inc.
4. Xxxxxx Xxxxxxxxx & Assoc.
5. XxXxxxxx and XxxXxxxxxxx
- 48 -
SCHEDULE A
SERIES A
CONVERTIBLE
PREFERRED NUMBER
HOLDER AND TAX I.D. NUMBER OF SHARES
-------------------------- ----------------
TRUST COMPANY OF THE WEST, as Trustee of 37,484
the TCW Debt and Royalty Fund IVA
established pursuant to a Declaration of
Trust executed December 31, 1992 (00-0000000)
TRUST COMPANY OF THE WEST, as Custodian pursuant 36,301
to the Investment Management and Custody Agreement
dated as of June 1, 1993 among The Trustees of Columbia
University in the City of New York, TCW Asset Management
Company and Trust Company of the West (00-0000000)
TRUST COMPANY OF THE WEST, as Custodial Agent for 100,144
TCW DEBT AND ROYALTY FUND IVB, A CALIFORNIA LIMITED
PARTNERSHIP (00-0000000)
TRUST COMPANY OF THE WEST, as Custodial Agent for 48,512
TCW DEBT AND ROYALTY FUND IVC, A CALIFORNIA LIMITED
PARTNERSHIP (00-0000000)
THE CHASE MANHATTAN BANK, as Custodian for The 115,676
Trustees of The Xxxxxx Xxxxxxxx Junior University
(00-0000000)
XXXXXX TRUST AND SAVINGS BANK, as Custodian pursuant 81,248
to the Custody Agreement dated as of June 8, 1993
between Xxxxxx Trust and Savings Bank and the Xxxxxx
Trusts Limited Partnership X (00-0000000)
XXXXXX TRUST AND SAVINGS BANK, as Custodian pursuant 32,498
to the Custody Agreement dated as of June 8, 1993 between
Xxxxxx Trust and Savings Bank and the Xxxx X. Xxxxxx
Charitable Trusts Partnership (00-0000000)
- 49 -
SERIES A
CONVERTIBLE
PREFERRED NUMBER
HOLDER AND TAX I.D. NUMBER OF SHARES
-------------------------- ----------------
TRUST COMPANY OF THE WEST, as Custodian pursuant 16,395
to the Investment Management and Custody Agreement dated
as of April 26, 1994 among The City and County Employee's
Retirement System of San Francisco, TCW Asset Management
Company and Trust Company of the West (00-0000000)
TRUST COMPANY OF THE WEST, in its capacities as Investment 500,000
Manager pursuant to the Investment Management Agreement
dated as of June 6, 1988 with General Xxxxx, Inc. and as
Custodian pursuant to the Custody Agreement dated as of
February 6, 1989 with General Xxxxx, Inc. and State Street
Bank and Trust Company, as trustee (00-0000000)
XXXXXX TRUST AND SAVINGS BANK, as Trustee under the master 31,742
trust agreement, Delta Master Trust, dated as of May 27,
1982 with Delta Air Lines, Inc. (00-0000000)
Total: ---------
1,000,000
The Company shall pay dividends in cash by wire transfer in immediately
available funds as follows (or as otherwise directed by TCW or any Holder):
FOR ALL HOLDERS EXCEPT TCW-GENERAL XXXXX
Sanwa Bank California
1977 Saturn
Xxxxxxxx Xxxx, XX 00000
Trust Operations
- 50 -
Attn: Xxxxxxx XxXxxxxx
ABA#000000000
Account # 40010-30
TCW Debt & Royalty Funds IV - Magnum
FOR TCW-GENERAL XXXXX
Sanwa Bank California
1977 Saturn
Xxxxxxxx Xxxx, XX 00000
Trust Operations
Attn: Xxxxxxx XxXxxxxx
ABA # 000000000
Account #400-0587
X. XXXXX EQUITY O&G - Magnum
- 51 -
Schedule B
List of Affiliates
[to be provided by the Company]
- 52 -
Schedule 3.1.1
Options and Warrants
[to be provided by the Company]
- 53 -
Schedule 3.1.5
Holders of Registration Rights
[to be provided by the Company]
- 54 -
SCHEDULE 3.6
TITLE EXCEPTIONS
[TO BE PROVIDED BY THE COMPANY]
- 55 -
