SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT dated as of January 9, 1997 by and
among XCL Ltd., a Delaware corporation (the "Company"), and the
parties identified on the signature page hereof, such parties
being collectively referred to herein as the "Subscribers".
The Company and the Subscribers, each in reliance upon the
representations, warranties and covenants contained in this
Agreement, agree as follows with respect to the issuance and sale
by the Company and the purchase by the Subscribers of up to a
maximum aggregate amount of 22,000 shares ("Shares") of the
Company's unissued Series F, Cumulative Convertible Preferred
Stock, par value $1.00 per share, the designations, preferences
and rights appertaining to which are set forth in Exhibit "A"
annexed hereto (the "Series F Preferred Stock"), in the manner
provided in Section 1 hereof. Each Subscriber hereby irrevocably
subscribes for the number of Shares for the aggregate purchase
price determined in accordance with the provisions of Section 1
hereof. This Agreement is one of several counterparts being
executed by Subscribers each identical in all aspects except for
the identity of the Subscriber and amount of its subscription for
Shares. The execution, delivery and performance of this
Agreement by each Subscriber shall not create any partnership,
joint venture, agency or other similar relationship with the
Company or any other Subscriber purchasing Shares.
1. Sale and Purchase of Securities. This Agreement is
being executed and delivered in several counterparts in
connection with the offering by the Company (the "Offering") of a
maximum aggregate amount of 22,000 shares of Series F Preferred
Stock at one or more closings (each a "Closing") during the
period commencing with the date hereof and expiring on February
28, 1997, unless sooner terminated by the Company upon written
notice to Subscribers (the "Offering Period"). The Shares, the
shares of common stock, par value $.01 per share ("Common Stock")
issuable upon conversion of the Series F Preferred Stock in
accordance with its terms ("Conversion Stock") and additional
shares of Series F Preferred Stock issuable at the election of
the Company in lieu of cash dividends on the Series F Preferred
Stock ("Dividend Stock"), are sometimes hereinafter referred to
collectively as the "Securities". Subject to the terms and
conditions set forth herein, including, without limitation, the
Company's unilateral right exercisable in its sole and arbitrary
discretion to terminate the Offering at any time during the
Offering Period, upon countersigning this Agreement, the Company
agrees to sell to the Subscriber executing and delivering this
Agreement, and the Subscriber hereby irrevocably subscribes for,
the number of Shares specified on its signature page attached
hereto in exchange for the following (the "Purchase Price"):
(a) Cancellation of a Consulting Agreement between the
Company and Xxxxx Xxxxx entered into on July 10, 1996,
and release from obligations thereunder;
(b) Surrender by Xxxxx Xxxxx of 1,325,000 shares of
unregistered Common Stock and 2,466,875 warrants issued
in connection with the Consulting Agreement;
(c) Surrender by Xxxxx Xxxxx of rights to acquire
558,000 Units comprised of 558,000 shares of registered
Common Stock and 558,000 warrants pursuant to an
agreement dated August 1, 1996;
(d) Surrender by Xxxx Xxxxx of rights to acquire 600,000
Units comprised of 600,000 shares of registered Common
Stock and 600,000 warrants pursuant to an agreement
dated August 1, 1996;
(e) Surrender of registration rights with respect to
3,000,000 shares of Common Stock issued in a Unit
offering dated September 18, 1995;
(f) Cash in the amount of $106,625 tendered by Xxxxx
Xxxxx; and
(g) Cash in the amount of $112,500 tendered by Xxxx
Xxxxx.
2. Conditions. (a) The Subscribers' obligation to
purchase and pay for the Securities is subject to the
satisfaction, on or before the Closing Date, of the following
conditions, except to the extent waived by each Subscriber:
(i) Officer's Certificate. The representations and
warranties contained in Section 3 shall (except to the
extent of changes caused by transactions contemplated in or
expressly permitted by this Agreement) be true on and as of
the Closing Date with the same effect as though such
representations and warranties were originally made on and
as of such date; all agreements to be performed by the
Company hereunder on or before the Closing Date shall have
been duly performed; and the Company shall have delivered to
the Subscribers a certificate, signed by the President or a
Vice President and the Secretary or an Assistant Secretary
of the Company, dated such Closing Date, to such effect.
(ii) Proceedings and Documents. All corporate and
other proceedings taken in connection with the transactions
contemplated by this Agreement, and all documents incident
thereto, shall be reasonably satisfactory in form and
substance to the Subscribers and the Subscribers shall have
received copies of all documents and records which the
Subscribers may reasonably request.
(b) The Company's obligation to issue and deliver the
Shares to the Subscribers on each Closing Date is subject to the
satisfaction, on or before such Closing Date, of the following
conditions, except to the extent waived by the Company:
(i) Subscriber's Representations and Warranties.
The representations and warranties contained in Section 4
shall (except to the extent of changes caused by
transactions contemplated in or expressly permitted by this
Agreement) be true on and as of the Closing Date with the
same effect as though such representations and warranties
were originally made on and as of such date and all
agreements to be performed by the Subscribers hereunder on
or before the Closing Date, shall have been duly performed.
(ii) Proceedings and Documents. All legal and other
proceedings taken in connection with the transactions
contemplated by this Agreement, and all documents incident
thereto, including, without limitation, the certificates
evidencing the shares of Common Stock, with duly executed
stock powers attached, comprising payment of a portion of
the Purchase Price, shall be reasonably satisfactory in form
and substance to the Company and its counsel, and the
Company shall have received copies of all documents and
records, which the Company or the Company's counsel may
reasonably request.
3. Representations and Warranties by the Company. The
Company hereby represents and warrants to the Subscribers that,
except as disclosed in the SEC Filings (as hereinafter defined):
(a) Organization and Good Standing. The Company
and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the
requisite corporate power and authority to carry on its
business as now being conducted and is not required to
qualify to do business as a foreign corporation in any other
jurisdiction where the failure so to qualify would have a
material adverse effect on the Company's and its
subsidiaries' business, financial condition or results of
operations, taken as a whole.
(b) Certificate of Incorporation and Bylaws. The
Company has heretofore or at the Initial Closing made
available to the Subscribers upon request a complete and
correct copy of the Certificate of Incorporation and the
Amended and Restated Bylaws, each as amended to date, of the
Company. Such Certificate of Incorporation and Bylaws, as
so amended, are in full force and effect. The Company is not
in violation of any of the provisions of its Certificate of
Incorporation, as so amended, or Restated and Amended
Bylaws.
(c) Capitalization. As of December 31, 1996, the
Company's authorized capital stock consists of 500,000,000
shares of Common Stock, of which 276.664,260 shares were
validly issued and outstanding and are fully paid and
nonassessable, and 2,400,000 shares of preferred stock, par
value $1.00 per share ("Preferred Stock"), to be issued in
series with such rights and preferences as the Board may
designate from time to time of which 577,803 shares
designated the Series A, Cumulative Convertible Preferred
Stock ("Series A Preferred"), 44,954 shares designated the
Series B, Cumulative Preferred Stock ("Series B Preferred")
and 46,654 shares designated the Series E, Cumulative
Convertible Preferred Stock ("Series E Preferred") are
validly issued and outstanding and are fully paid and
nonassessable.
(d) Corporate Authority. The Company has full
corporate power and authority to enter into this Agreement
and to sell the Shares and issue and deliver or cause to be
issued and delivered the Shares and to incur and perform the
obligations provided for herein or pursuant to the
provisions of the Series F Preferred Stock, all of which
will have been duly authorized by all necessary corporate or
other action of the Company. The execution, delivery and
performance of this Agreement, and the sale of the Shares
and the delivery by the Company of the Shares to the
Subscribers in the manner contemplated by this Agreement
does not violate any provision of any law of the United
States, or the Certificate of Incorporation, as amended, or
the Amended and Restated Bylaws of the Company, or any
agreement or instrument by which the Company, or any of its
properties are bound and will not result in the creation of
any encumbrance or charge upon any asset of the Company.
This Agreement and the provisions of the Series F Preferred
Stock constitute valid and binding obligations of the
Company enforceable in accordance with their respective
terms, except to the extent that the indemnification
provisions hereof may be deemed void as a matter of public
policy in any proceeding commenced by the Commission (as
hereinafter defined) or otherwise.
(e) Governmental Consents. All consents,
authorizations and approvals (if any) of any governmental
agency or other regulatory body within the United States
required to be obtained by the Company for the execution and
delivery of this Agreement and the issuance and sale of the
Shares in the manner contemplated by this Agreement, and the
performance of its obligations assumed under the Shares have
been obtained and are in full force and effect.
(f) Series F Preferred Stock. An aggregate of
50,000 shares of Preferred Stock have been authorized as
"Series F Preferred Stock". The Shares, upon payment and
issue as provided for in this Agreement and the shares of
Dividend Stock, upon issuance as contemplated under the
Series F Preferred Stock, will be duly authorized, validly
issued, fully paid and nonassessable. An aggregate of 18,000
shares of Dividend Stock have been reserved for issuance as
dividends on the Shares.
(g) Common Stock. The Conversion Stock will,
following issuance in the manner provided for in the Series
F Preferred Stock, be duly authorized, validly issued, fully
paid and nonassessable. A total of 16,000,000 shares of
Common Stock have been reserved for issuance upon conversion
of the Series F Preferred Stock.
(h) Securities and Exchange Commission Filings. The
Company has filed all forms, reports and documents required
to be filed with the Securities and Exchange Commission
("Commission") since January 1, 1996 (the "SEC Filings").
The SEC Filings (i) were prepared in accordance with the
requirements of the Securities Act, or the Securities
Exchange Act, as the case may be, and (ii) did not at the
time they were filed contain any untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. None of the Company's
subsidiaries is required to file any forms, reports or other
documents with the Commission.
(i) Financial Statements. The consolidated balance
sheets of the Company and its consolidated subsidiaries as
at December 31, 1995 and September 30, 1996 and the related
consolidated statements of income and cash flows for the
fiscal periods ended on such dates, are complete and correct
in all material respects and have been prepared in
accordance with generally accepted accounting principles
consistently applied and each presents fairly the
consolidated financial position of the Company and its
consolidated subsidiaries on the dates specified or the
consolidated results of its and their operations for the
periods indicated in all material respects.
(j) Absence of Certain Material Changes and Events.
Except as disclosed in the SEC Filings and herein, since
September 30, 1996, there has been;
(i) no material adverse change in the
financial condition, assets, liabilities, results of
operations, or business of the Company and its
subsidiaries, taken as a whole, other than changes
disclosed in the SEC Filings, except that the Company
is currently suffering a significant working capital
shortage which, if not remedied, may have a material
adverse effect on the business and financial condition
of the Company;
(ii) no material damage, destruction or loss
(whether or not coveted by insurance) materially and
adversely affecting the properties or business of the
Company and its subsidiaries, taken as a whole; or
(iii) no labor trouble, or any other events or
condition of any character, materially and adversely
affecting the properties, business or prospects of the
Company and its subsidiaries, taken as a whole.
(k) Contracts. The Company is not in material
violation of or in material default under any material
contract or commitment to which it is a party or by which it
is bound.
(l) Litigation. There is no material litigation,
proceeding or investigation not fully covered by insurance
which is pending or, to the Company's knowledge, threatened
against or relating to the Company or any of its
subsidiaries or its or their properties or business, which,
if adversely decided, would have a material adverse effect
on the Company's and its subsidiaries' business or financial
condition, taken as a whole, or impair the Company's ability
to execute, deliver and perform this Agreement. Neither the
Company nor any of its subsidiaries nor any of their
properties is subject to any judgment, decree or order of
any court or any other governmental or administrative body
or agency which impairs the Company's ability to execute,
deliver and perform this Agreement in accordance with its
terms.
4. Representations, Warranties and Agreements by the
Subscribers. Each Subscriber hereby severally represents and
warrants to and agrees with the Company as follows:
(a) Authority, etc. Each Subscriber who is an
individual has the legal capacity to enter into and perform
this Agreement and each Subscriber who is a corporation,
partnership, trust, association or other entity (an "Entity
Subscriber") is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation or organization, in either case, with full
legal power and authority to execute, deliver and perform
this Agreement in accordance with its terms. The execution,
delivery and performance of this Agreement and the
transactions contemplated hereby by the Entity Subscriber
has been duly authorized by all legal action required to be
taken on the part of the Entity Subscriber. This Agreement
constitutes the valid and binding obligation of each
Subscriber enforceable in accordance with its terms, except
to the extent that the indemnification provisions may be
deemed void as a matter of public policy in any proceeding
commenced by the Commission or otherwise. The execution,
delivery and performance of this Agreement by the Subscriber
will not violate or cause a breach, with or without notice
or the passage of time or both, of each Entity Subscriber's
Charter or other documents pursuant to which it was
incorporated or organized, any provision of any law,
domestic or foreign, to which the Subscriber is subject, or
any agreement or instrument by which the Subscriber, or any
of its properties are bound, and the Subscriber is not
currently insolvent nor will the acquisition of the Shares
in the manner contemplated herein render the Subscriber
insolvent. All consents, authorizations and approvals (if
any) required to be obtained in order to enable the
Subscriber to execute, deliver and perform this Agreement
have been duly obtained or shall be obtained on or prior to
the Closing Date. So long as the Subscriber continues to
hold the Shares, it shall, at its own expense, furnish to
the Company upon receipt of the written request therefor all
information as may be required to be disclosed under
applicable law regarding its ownership of the Company's
securities, including, without limitation, any information
that may be required to be disclosed pursuant to the
Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder. Any shares of Common
Stock which may be transferred to the Company in partial
payment of the Purchase Price shall be transferred free and
clear of all liens, charges and encumbrances of any kind
whatsoever ("Adverse Claims") and upon such transfer the
Company shall be a bona fide purchaser thereof for value and
the legal and beneficial owner of such shares free and clear
of all Adverse Claims.
(b) Due Diligence Inquiry. The Subscriber, together
with its own advisors, has conducted its own due diligence
examination of the Company's and its subsidiaries' assets,
business, financial condition, results of operations, and
prospects. The Subscriber is aware of the high degree of
risk attendant to an investment in the Shares, including,
without limitation, the Company's current working capital
shortage, the Company's recent history of limited revenues,
the Company's consideration of the sale of its domestic
producing and other oil and gas properties, the delays that
may be encountered in realizing upon the Company's
investment in the Xxxx Xxxx Block in the Bohai Bay in the
People's Republic of China, and the risks described in the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, and in the materials entitled
"Investment Considerations" previously furnished to the
Subscribers.
(c) Independent Investigation. The Subscriber has
carefully reviewed and relied solely upon the
representations and warranties of the Company contained
herein and upon the independent investigations made by it
and its representatives in making a decision to purchase the
Securities and has a full understanding and appreciation of
the risks inherent in such a highly speculative investment.
In connection with such investigation, the Subscriber and
its attorneys, accountants and other representatives and
advisers, if any, (i) have been given an opportunity to ask,
and have to the extent the Subscriber considered necessary,
asked questions of, and have received answers from, officers
of the Company concerning the terms of the Series F
Preferred Stock and the affairs of the Company and its
subsidiaries and (ii) have been given or afforded access to
all documents, records, books and additional information
which the Subscriber has requested regarding such matters.
In particular, the Subscriber has been given access to the
Certificate of Incorporation with all amendments thereto;
the Amended and Restated Bylaws of the Company; the material
contracts affecting the Company and its subsidiaries'
business; and the files and records maintained by the
Company with respect to its subsidiaries' producing
properties, undeveloped acreage, and other assets of the
Company and its subsidiaries.
(d) Unregistered Shares. The Subscriber recognizes
that the offer and sale by the Company to it of the Shares,
or the issuance of the Dividend or Conversion Stock have not
been and, except as hereinafter set forth in Section 5, will
not be registered under the Securities Act and, with the
exception of the Conversion Stock, the Exchange Act, and
have not been and will not be registered under any other
domestic or foreign securities laws (the Securities Act, the
Exchange Act and any such other applicable securities laws
are hereinafter collectively referred to herein as the
"Securities Laws") in reliance upon exemptions from the
registration requirements thereof; the Subscriber is
acquiring the Securities solely for its own account for
investment and not with a view to, or for offer or resale in
connection with, a distribution thereof in violation of any
Securities Laws. The Subscriber understands that the effect
of such representation and warranty is that the Securities
must be held indefinitely unless the sale or transfer
thereof is subsequently registered under applicable
Securities Laws or an exemption from such registration is
available at the time of the proposed sale or transfer
thereof. Except as hereinafter set forth in Section 5, the
Company is under no obligation either (i) to file a
registration statement under the Securities Act covering the
sale or transfer of the Securities or otherwise to register
the Securities for sale under applicable Securities Laws or
(ii) to register the Shares or the Dividend Stock under the
Exchange Act. The statements contained in this Section 4 are
true, correct and complete in all material respects and do
not omit any material fact necessary to make such statements
not misleading.
(1) Each of the Subscribers hereby represents
and warrants to the Company that:
(i) it has received a copy of the
Company's SEC Filings made in fiscal year 1996 and
to date in 1997;
(ii) it has such knowledge and experience
in financial and business matters as to be capable
of evaluating the merits and risks of an
investment in the Securities;
(iii) it is an "accredited investor" as
defined in Rule 501 of Regulation D under the
Securities Act; and
(iv) it understands that the Securities are
not being (and, except to the extent set forth in
Section 5 hereof, will not be) registered under
the Securities Laws; the Securities are being sold
to it in a transaction that is intended to qualify
for an exemption from the registration
requirements of the Securities Act, and, except to
the extent set forth in Section 5 hereof, will not
be registered under the Securities Laws and may
not be transferred unless the request for transfer
is accompanied by a written certification that
such Securities will not be resold in the United
States or to any U.S. person except in accordance
with applicable requirements of Rules 144 or 144A
promulgated under the Securities Act or in a
transaction which in the opinion of counsel,
reasonably satisfactory to the Company, does not
require registration under the Securities Laws;
and it also understands that the Securities may
not be transferred unless subsequently registered
under the Securities Laws, or sold in a
transaction which, in the opinion of counsel
reasonably satisfactory to the Company, does not
require registration under the Securities Laws.
(e) Transfer Conditions. Prior to any sale,
transfer or other disposition of any of the Subscriber's
Securities (so long as they have not been registered under
the Securities Act as contemplated in Section 5 hereof or
are otherwise freely transferable under the Securities
Laws), the Subscriber agrees to give at least three business
days prior written notice to the Company of its intention to
effect such transfer and to comply in all other respects
with this Section 4(e). Each such notice shall describe the
manner and circumstances of the proposed transfer in
sufficient detail to enable counsel to render the opinions
required herein, and, if requested by the Company, shall be
accompanied by an opinion of counsel acceptable to the
Company, addressed to the Company and satisfactory in form
and substance to the Company, stating that, in the opinion
of such counsel, such transfer will be a transaction exempt
from registration under the Securities Laws and that all
consents, approvals or authorizations to such transfer have
been obtained. Assuming the receipt by the Company of such
satisfactory opinion, the Subscriber shall thereupon be
entitled to transfer such shares in accordance with the
terms of the notice delivered by the Subscriber to the
Company. Each certificate or other document issued
representing the Securities shall bear an appropriate legend
suitably conformed, unless, in the opinion of the respective
counsel for the Subscriber and the Company, such legend is
not required in order to aid in assuring compliance with
applicable Securities Laws.
The Subscriber agrees that it will not sell, transfer
or otherwise dispose of any of the Securities except upon
compliance with Sections 4(d), 4(e), 4(f) and 4(g) hereof.
(f) Limit on Resales During Registration. The
Subscriber agrees not to sell any Registered Stock (as
defined in Section 5) during the period from the date it
receives notice of the filing of any registration statement
by the Company through the 180th day after the effective
date of such registration statement, to the public pursuant
to Rules 144 or 144A under the Securities Act or otherwise,
without the prior receipt of the written consent of the
Company; provided, however, that such restriction shall not
be applicable to the Subscriber unless the registration
statement relates to an underwritten public offering of the
Company's securities.
(g) Restrictive Legends and Stop Order. In
addition to any specific restrictive legends that may be
required by applicable Securities Laws or agreements to
which the Subscriber may be a party, each Subscriber agrees
to be bound by a restrictive legend which may be placed on
the certificates representing the Securities. The Subscriber
understands and agrees that the Company may place and
instruct any transfer agent for the Securities to place a
stop transfer notation in the stock records in respect of
the certificates representing the Securities, provided that
such securities may be transferred upon compliance with the
provisions of this Section 4. The Subscriber acknowledges
and agrees that the Company is and will be relying upon the
truth and accuracy of the foregoing representations and
warranties in offering and selling the Shares and issuing
the Securities to the Subscriber without first registering
them under applicable Securities Laws.
5. Registration. (a) If at any time after the Closing
the Company proposes to register any of its Common Stock under
the Securities Act for sale to the public (such sale being
hereinafter referred to as a "Public Offering"), except with
respect to registration statements on Forms X-0, X-0 or their
then equivalents, each such time it will give written notice to
the Subscribers of its intention so to do. Upon the written
request of a Subscriber, received by the Company within 30 days
after the giving of any such notice by the Company, to include in
such Public Offering any of its Conversion Stock (which request
shall state the intended method of disposition thereof), the
Company will use its best efforts to cause the Conversion Stock
to be included in the securities to be sold in such Public
Offering, all to the extent requisite to permit the sale or other
disposition by such Subscriber (in accordance with its written
request) of such Conversion Stock. If the Public Offering is an
underwritten public offering and the managing underwriter
determines in good faith and advises in writing that the number
of shares of Common Stock which the Company proposes to offer
under such registration statement, together with the number of
shares of Conversion Stock and other shares of Common Stock
requested to be included in such registration statement by the
holders of securities having registration rights similar to those
of this Section 5(a), exceeds the number of shares of equity
securities it is advisable to offer and sell at such time, then
the number of shares to be sold by the Company, the Subscribers
and such other shareholders after such reduction shall be
allocated among the Company, the Subscribers and such other
shareholders such that the Company shall have the right to have
offered no less than 75% of the original number of shares
proposed or requested by the Company to be registered.
Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section
5(a) without thereby incurring any liability to the Subscribers.
(b) As a condition to the inclusion of shares of
Registered Stock in any registration statement, the Subscribers
will furnish to the Company such information with respect to them
and their plan of distribution of such shares as is required to
be disclosed in the registration statement (and the prospectus
and all amendments thereto included therein) by the applicable
rules, regulations and guidelines of the Commission.
(c) The Company and the Subscribers agree to enter into
a written agreement with the managing underwriter in such form
and containing such provisions as are customary in the securities
business for such an arrangement between such underwriter and
companies of the Company's size and investment stature and their
shareholders.
(d) (i) The Company will indemnify and hold harmless the
Subscribers and each other person, if any who controls the
Subscribers within the meaning of the Securities Act or the
Exchange Act from and against any and all losses, claims,
damages, liabilities and legal and other expenses including costs
of investigation caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration
statement under which the Registered Stock was registered under
the Securities Act, any prospectus or preliminary prospectus
contained therein or any amendment, post-effective amendment or
supplement thereto, or caused by 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, in light
of the circumstances then existing, except insofar as such
losses, claims, damages, liabilities or expenses are caused by
any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to the Subscribers
and furnished to the Company in writing by the Subscribers
expressly for use therein.
(ii) It shall be a condition to the obligation of the
Company to effect a registration of the Registered Stock under
the Securities Act pursuant hereto, that the Subscribers jointly
and severally indemnify and hold harmless the Company and, in
connection with an underwritten public offering, each underwriter
and each person, if any, who controls the Company or the
underwriter, within the meaning of the Securities Act or the
Exchange Act, to the same extent as the indemnity from the
Company in the foregoing paragraph, but only with reference to
information relating to the Subscribers furnished to the Company
or the underwriter in writing by the Subscribers expressly for
use in the registration statement, any prospectus or preliminary
prospectus contained therein or any amendment, post-effective
amendment or supplement thereto.
(iii) In case any claim shall be made or any proceeding
(including any governmental investigation) shall be instituted
involving any indemnified Party in respect of which indemnity may
be sought pursuant to this Section 5(d), such indemnified party
shall promptly notify the indemnifying party in writing of the
same; provided that failure to notify the indemnifying party
shall not relieve it from any liability it may have to an
indemnified party otherwise than under this Section 5(d). The
indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party
to represent the indemnified party in such proceeding and shall
pay the fees and disbursements of such counsel. In any such
proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and disbursements of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party shall have failed to retain counsel for the
indemnified party as aforesaid, (ii) the indemnifying party and
such indemnified party shall have mutually agreed to the
retention of such counsel or (iii) representation of such
indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to differing interests between
such indemnified party and any other party represented by such
counsel in such proceeding; provided that the Company shall not
be liable for the fees and disbursements of more than one
additional counsel for all indemnified parties. The indemnifying
party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
(e) The registration of the Conversion Stock as
herein provided shall be at the expense of the Company except
that Subscribers shall bear the cost of any underwriters
discounts, fees and expenses attributable to their shares of such
Stock and the fees and expenses of any legal counsel and
accountants, if any, retained by the Subscribers.
6. Survival of Representations and Warranties. The
representations and warranties of the parties hereto set forth in
this Agreement or in any certificate or other document or
instrument furnished by or on behalf of any party hereto in
connection with the transactions contemplated hereby, which shall
be deemed to be effective as of the date made, shall survive the
execution, delivery and termination of this Agreement and the
consummation of the transactions contemplated hereby and shall
terminate effective on the first anniversary of the last Closing
Date to occur hereunder.
7. Notices. Any notice, claim, request, demand or other
communication required or permitted to be given under this
Agreement shall be given in writing and shall be deemed to have
been duly given if delivered or mailed, first class postage
prepaid, or sent by facsimile (with a copy mailed promptly
thereafter by first class mail, postage prepaid), to the party
for whom intended at the following addresses:
If to the Subscribers: The addresses set forth on the
signature page hereof.
If to the Company: 000 Xxx Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxx, Esq.
Executive Vice President
Facsimile Number (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number (000) 000-0000
or at such other address, as to any party, as such party shall
specify by like notice to the other parties.
8. Entire Agreement, etc. This Agreement together with
the Exhibit hereto sets forth the entire understanding and
agreement between the Company and the Subscribers pertaining to
the subject mailer of this Agreement and the Exhibit superseding
any and all prior agreements, proposals, understandings and
arrangements between the parties hereto, all of which shall be
deemed terminated, cancelled and of no further force and effect.
No prior or contemporaneous understanding or agreement shall
alter or constitute a waiver of any term, condition, obligation,
covenant, representation or warranty contained in this Agreement,
nor shall any assignment, waiver, understanding or agreement
purportedly assigning this Agreement or amending or waiving any
provision hereof be effective unless and until it shall be
reduced to writing and signed by the parties hereto. This
Agreement may be executed in counterparts with each counterpart
being deemed an original and all such counterparts being deemed
as one single instrument, The headings in this Agreement have
been inserted for convenience of reference only and shall not
affect the interpretation or enforcement of any provision hereof.
9. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK FOR ALL PURPOSES WITHOUT REGARD TO ITS PRINCIPLES OF
CONFLICTS OF LAW.
10. Submission to Jurisdiction. Each Subscriber
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any
legal action or proceeding relating to this Agreement to
which it is a party, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive
general jurisdiction of the Courts of the State of New York,
the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding
may be brought in such courts and waives any objection that
it may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) agrees that service of process in any such
action or proceeding may be effected by respectively
delivering or mailing a copy thereof by personal delivery or
by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the Subscriber
addressed in the manner set forth in Section 7 hereof or at
such other address of which the Company shall have been
notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the
right to effect service of process in any other manner
permitted by law or shall limit the right to xxx in any
other jurisdiction.
11. Termination. The Company may terminate this
Agreement by notice to the Subscribers at any time prior to
February 28, 1997. Any termination of this Agreement pursuant to
this Section 11 shall be without cost, expense or liability of
any party.
12. Special State Securities Laws Notices.
Prospective Purchasers in California must review the
following information required by the Commissioner of
Corporations and be aware of its contents:
"The sale of the securities which
are the subject of this agreement
has not been qualified with the
Commissioner of Corporations of the
State of California and the
issuance of such securities or the
payment or receipt of any part of
the consideration therefor prior to
such qualification is unlawful,
unless the sale of the securities
is exempt from the qualification by
Section 25100, 25102, or 25105 of
the California Corporations Code.
The rights of all parties to this
agreement are expressly conditioned
upon such qualification being
obtained, unless the sale is so
exempt."
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective on the 28th day of February, 1997.
XCL LTD.
By:_______________________________
Title:______________________________
The undersigned hereby subscribes for 18,448 Shares.
THE SUBSCRIBER:
______________________________
XXXXX XXXXX
Tax ID No.:______________________
Phone No.:_______________________
Facsimile No.:_____________________
The undersigned hereby subscribes for 1,731 Shares.
THE SUBSCRIBER:
______________________________
XXXX XXXXX
Tax ID No.:______________________
Phone No.:_______________________
Facsimile No.:_____________________
ACKNOWLEDGMENT OF INDIVIDUAL SUBSCRIBER
On this _____ day of ____________, 1997, before me, the
undersigned authority, duly commissioned and qualified,
personally came and appeared Xxxxx Xxxxx residing at [full
address] __________________________________________, to me
personally known, who, being by me duly sworn, declared and
acknowledged before me that he/she knew the contents of the
foregoing Agreement and did execute the foregoing Agreement in
his/her capacity as a Subscriber, for the purposes therein
expressed, as his/her free act and deed.
____________________________
Appearer (signature)
_____________________________
Notary Public
Name: [print]__________________________
My commission expires:
ACKNOWLEDGMENT OF INDIVIDUAL SUBSCRIBER
On this _____ day of ____________, 1997, before me, the
undersigned authority, duly commissioned and qualified,
personally came and appeared Xxxx Xxxxx residing at [full
address] __________________________________________, to me
personally known, who, being by me duly sworn, declared and
acknowledged before me that he/she knew the contents of the
foregoing Agreement and did execute the foregoing Agreement in
his/her capacity as a Subscriber, for the purposes therein
expressed, as his/her free act and deed.
____________________________
Appearer (signature)
_____________________________
Notary Public
Name: [print]__________________________
My commission expires:
