Exhibit 99.5
EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT (the "Exchange Agreement") is entered into as of
this day of December, 2003 (the "Effective Date") between XXXXXX
DRILLING COMPANY, a Delaware corporation (the "Company"), and JPMORGAN CHASE
BANK, a New York banking corporation (the "Exchange Agent").
RECITALS
A. This Exchange Agreement is entered into in connection with the offer by
the Company (the "Exchange Offer") to exchange $1,000 principal amount of its
9 5/8% Senior Notes due 2013 (the "Exchange Notes"), which have been registered
under the Securities Act of 1933, as amended, pursuant to a Registration
Statement on Form S-4 (File No. 333-110374), as may be amended (the
"Registration Statement"), filed with the Securities and Exchange Commission,
for each $1,000 principal amount of its outstanding 9 5/8% Senior Notes due 2013
(the "Old Notes" and, together with the Exchange Notes, the "Notes") tendered
pursuant to the terms and conditions set forth in the final prospectus dated
December , 2003 (the "Prospectus"), the related Letter of Transmittal (the
"Letter of Transmittal") and, if applicable, the Notice of Guaranteed Delivery
(the "Notice of Guaranteed Delivery") described in Section 2 below. Capitalized
terms used herein and not defined shall have the respective meanings ascribed to
them in the Prospectus or the Letter of Transmittal.
B. Holders (as hereinafter defined) may tender some or all of their Old
Notes in exchange for Exchange Notes (the "Exchange"), which Notes are issued
pursuant to that certain Indenture, dated as of October 10, 2003, by and between
the Company, the subsidiary guarantors named therein and JPMorgan Chase Bank, as
Trustee.
C. The Exchange Offer is expected to be commenced by the Company on or
about December , 2003. Unless sooner terminated by the Company, the Exchange
Offer shall expire at 5:00 p.m., New York City time, on January , 2004 or on
such later date and time to which the Company may, in its sole discretion,
extend the Exchange Offer (as may be extended, the "Expiration Date"). The
Company expressly reserves the right to extend the Exchange Offer from time to
time as provided in the Letter of Transmittal and may extend the Exchange Offer
by giving oral (confirmed in writing) or written notice to the Exchange Agent
before 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date.
D. The Company expressly reserves the right, in its sole discretion, to
amend or terminate the Exchange Offer, and not to accept for exchange any Old
Notes not theretofore accepted by the Company for exchange. The Company will
give oral (confirmed in writing) or written notice of any amendment, termination
or nonacceptance to the Exchange Agent as promptly as practicable.
AGREEMENTS
SECTION 1. Appointment of Exchange Agent. The Exchange Agent is hereby
appointed by the Company to serve as the exchange agent in connection with the
Exchange Offer and the Exchange Agent hereby accepts such appointment. By
accepting such appointment, the Exchange Agent hereby agrees: (a) to effect the
Exchange in accordance with the terms and conditions set forth in the Letter of
Transmittal and this Exchange Agreement; and (b) to act as agent for the holders
(individually, a "Holder" and collectively, the "Holders") of the Old Notes
identified in the register for the Old Notes in connection therewith.
SECTION 2. Delivery of Documents. The Company shall deliver the following
documents (collectively, the "Exchange Documents") to the Exchange Agent prior
to the commencement of the Exchange Offer:
(a) the Prospectus;
(b) the form of the Letter of Transmittal to be used by the Holders in
tendering Old Notes for surrender in connection with the Exchange Offer;
(c) the form of the Notice of Guaranteed Delivery to be used, if
applicable, by the Holders in tendering Old Notes for surrender in
connection with the Exchange Offer;
(d) the form of Letter to Registered Holders and Depository Trust
Company Participants; and
(e) the form of Letter to Clients.
Any inconsistency between this Exchange Agreement, on the one hand, and the
Exchange Documents (as they may be amended from time to time), on the other
hand, shall be resolved in favor of the Exchange Documents, except with respect
to the duties, liabilities and indemnification of the Exchange Agent, which
shall be controlled by this Exchange Agreement.
SECTION 3. Book-Entry Transfer Account. The Exchange Agent will, within
two business days after the date of the Prospectus, notify The Depository Trust
Company ("DTC") of the Exchange Offer with respect to the Old Notes. Any
financial institution that is a participant in DTC's systems may, until the
Expiration Date, make book-entry delivery of the Old Notes by causing DTC to
transfer such Old Notes to the Exchange Agent in accordance with DTC's Automated
Tender Offer Program ("ATOP").
SECTION 4. Mailing to Holders. The Company shall mail or cause to be
mailed by first class mail or overnight mail by a reputable courier to each
Holder of record one or more copies of each of the Exchange Documents on the day
that the Registration Statement has become effective under the Securities Act of
1933, as amended, or as soon thereafter as reasonably practicable. Thereafter,
at the request of a Holder, an entity acting on behalf of a Holder or a
participant in DTC's book-entry system, the Company shall mail or cause to be
mailed additional copies of any one or more of the Exchange Documents to such
Holder, entity or participant.
SECTION 5. Exchange Procedure.
(a) If the Old Notes are held through DTC's book-entry system, DTC
shall receive from each DTC participant in accordance with DTC's ATOP,
notice of a Holder's book-entry tender of its Old Notes for an equal
principal amount of Exchange Notes as provided in Section 3. Such
book-entry tender shall be in lieu of physical delivery by such Holders of
original Letters of Transmittal and certificates representing Old Notes;
provided, however, that by tendering Old Notes pursuant to DTC's ATOP, such
Holder agrees to be bound by the terms of the Letter of Transmittal as if
such Holder had signed and physically delivered such document to the
Exchange Agent.
(b) If the Old Notes are held other than through DTC, the Exchange
Agent shall receive the Old Notes being tendered, executed Letters of
Transmittal, executed Notices of Guaranteed Delivery (if applicable), and
any other documents required to be delivered in connection therewith, and
shall examine the Old Notes, executed Letters of Transmittal, any Notices
of Guaranteed Delivery and the other documents delivered or mailed to the
Exchange Agent to ascertain whether they appear to be properly completed
and executed in accordance with the instructions set forth in the Letter of
Transmittal.
Old Notes shall be considered properly tendered to the Exchange Agent only
if (i) tendered prior to the Expiration Date in the manner described in clause
(a) or (b) above and in accordance with the instructions set forth in the Letter
of Transmittal; (ii) the Company shall have provided its written notice of
acceptance for exchange of such Old Notes pursuant to clause (d) below; (iii)
such tenders of Old Notes have not been withdrawn in accordance with the terms
of the Exchange Offer; and (iv) if tender of such Old Notes is made pursuant to
the guaranteed delivery procedures contained in the Prospectus, the Old Notes
are received by the Exchange Agent within five (5) New York Stock Exchange
trading days after the Expiration Date.
In the event any Letter of Transmittal or other document has been
improperly completed or executed or is not in proper form for tender (as
required by the instructions stated in the Letter of Transmittal), or if some
other irregularity in connection with the tender (whether pursuant to DTC's ATOP
or otherwise) of any of the Old Notes exists, the Exchange Agent shall consult
with an Authorized Representative (as defined in Section 7 hereof) as to proper
action to take to correct such irregularity, except that no such consultation
shall be necessary with respect to any such irregularity that is of a routine
nature and that is cured by the appropriate party delivering to the Exchange
Agent the items necessary for cure pursuant to the Exchange Agent's
instructions. The Exchange Agent is authorized, and hereby agrees, to waive any
irregularity in connection with the tender of any of the Old Notes by any Holder
with the approval of an Authorized Representative.
Determination of all questions as to any irregularity or the proper
completion, execution or delivery of any documents or instruments required in
connection with the Exchange Offer shall be made by the Company, in its sole
discretion, and such determination shall be final and binding. The Company shall
have the absolute right to determine whether to reject any or all of the
tendered Old Notes not in proper form or to waive any irregularities or
conditions, and the Company's interpretation of the Letter of Transmittal (and,
if applicable, Notice of Guaranteed Delivery) and any other Exchange Documents
shall be final and binding. Notwithstanding anything to the contrary herein, no
Old Note may be accepted for
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exchange until the Company shall have given the Exchange Agent written notice of
its acceptance for exchange of such Old Note.
(c) The Exchange Agent shall provide by facsimile or electronic
transmission or telephone, as provided in Section 13, to such person or
persons as the Company may request, reports as and when tender activity
occurs up to and including the Expiration Date as to the aggregate
principal amount of Old Notes which have been tendered pursuant to the
Exchange Offer and the items received by the Exchange Agent pursuant to the
Exchange Offer and this Exchange Agreement, separately reporting and giving
cumulative totals as to items properly received and items improperly
received. In addition, the Exchange Agent will also inform, and cooperate
in making available to, the Company or any such other person or persons
upon oral request made from time to time prior to or on the Expiration Date
of such other information as it or he or she reasonably requests. Such
cooperation shall include, without limitation, the granting by the Exchange
Agent to the Company and such person or persons as the Company may request
of access to those persons on the Exchange Agent's staff who are
responsible for receiving tenders in order to ensure that immediately prior
to the Expiration Date the Company shall have received information in
sufficient detail to enable it to decide whether to extend the Exchange
Offer. If and to the extent that Old Notes are duly tendered pursuant to
the exchange procedures described above in this Section 5 and the Letter of
Transmittal, the Exchange Agent shall request the Company to accept such
Old Notes for exchange and to issue the Exchange Notes to which such
Holders are entitled. Such request shall be substantially in the form of
Exhibit A hereto.
(d) The Company, upon receipt of the request described in the
immediately preceding clause (c) from the Exchange Agent, shall (i) provide
written notice to the Exchange Agent of whether the Company accepts such
Old Notes for exchange and (ii) if so, issue the Exchange Notes to which
such Holders are entitled and deliver the same to the Trustee for
authentication. JPMorgan Chase Bank, acting in its capacity as Trustee
under the Indenture, shall promptly cancel the Old Notes being exchanged
for such Exchange Notes, authenticate such Exchange Notes and deliver such
authenticated Exchange Notes to the appropriate parties, or, in the case of
a global Exchange Note registered in the name of a nominee of DTC, retain
such global Exchange Note as the custodian for DTC pursuant to the
Indenture.
(e) If the Company does not accept for exchange all or part of the Old
Notes tendered, the Exchange Offer is terminated, Old Notes are tendered
but properly withdrawn or partial tenders are made, the Exchange Agent
shall promptly return certificates for unexchanged Old Notes (or affect
appropriate book-entry transfer) to the persons who deposited them (or
affected such book-entry transfer) or, to the extent required, the Exchange
Agent shall submit to the Company a request for reissuance to, or upon the
order of, the tendering Holder of certificates for the unexchanged Old
Notes. The Company shall return such certificates to the Exchange Agent for
distribution to the appropriate Holders of the Old Notes.
(f) The Exchange Agent may (but shall have no obligation to) take any
and all other actions it deems necessary or appropriate as the Exchange
Agent in connection with the Exchange Offer and under the customs and
practices normally applied to such transactions and arrangements; provided
however, that it is understood and agreed that the Exchange Agent shall
have no duty or obligation in its capacity as Exchange Agent except for
those specifically contemplated herein.
SECTION 6. Document Retention. The Letters of Transmittal (and, if
applicable, Notices of Guaranteed Delivery), book-entry confirmations, and any
other tender documents and the Old Notes shall be recorded by the Exchange Agent
as to the date and time of receipt and shall be preserved and retained by the
Exchange Agent until delivered to the Company or otherwise disposed of in
accordance with the Company's instructions or the provisions of this Exchange
Agreement. Upon the termination of this Exchange Agreement pursuant to Section
14 or upon the instruction of the Company, the Exchange Agent shall promptly
forward to the Company any certificates for Old Notes, funds or property then
held by the Exchange Agent in such capacity.
SECTION 7. Instructions. The Exchange Agent may rely and act on any
instructions from any Authorized Representative with respect to all matters
pertaining to this Exchange Agreement and the transactions contemplated hereby.
"Authorized Representative" is hereby defined as the Chairman of the Board, the
President and Chief Executive Officer, any Senior Vice President, any Vice
President, the Corporate Controller and the Treasurer, and legal counsel to, the
Company, or any other person designated in writing by the Company.
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Any instructions given to the Exchange Agent orally by any Authorized
Representative shall be confirmed in writing (including by facsimile
transmission) by such Authorized Representative as soon as practicable. The
foregoing notwithstanding, the Exchange Agent shall not be liable or responsible
and shall be fully authorized and protected from acting, or failing to act, in
accordance with any oral instructions that do not conform with the written
confirmation received in accordance with this section after such action or
omission.
SECTION 8. Payment for Services Rendered and Expenses. For services
rendered as the Exchange Agent hereunder, the Exchange Agent shall be entitled
to compensation as set forth in Exhibit B hereto. The Exchange Agent will
present the Company with an invoice for payment promptly after termination of
this Exchange Agreement as provided in Section 14. The Company shall make
payment promptly after receipt of the invoice.
SECTION 9. Exculpation. The Exchange Agent shall:
(a) have no obligation to expend its own funds with respect to the
Exchange Offer or any of its duties hereunder or to otherwise make payment
with respect to any tendered Old Note or any Exchange Note distributed
hereunder;
(b) have no duties or obligations other than those specifically
contemplated herein, or as may subsequently be agreed to in writing by the
Exchange Agent and the Company;
(c) not be required to make and shall make no representations as to
and shall have no responsibilities regarding the determination of the
validity, sufficiency, value or genuineness of any Old Note tendered in the
Exchange Offer (other than verification of the principal amounts reflected
on the Old Notes tendered to the Exchange Agent in connection with the
Exchange Offer) and will not be required to make and shall not make any
representations as to the validity, value or genuineness of the
transactions contemplated by the Exchange Offer or in the Exchange
Documents or as to the accuracy or otherwise as to any of the terms of the
Exchange Documents;
(d) not be obligated to take any legal action hereunder that might in
the Exchange Agent's reasonable judgment involve any expenses or liability,
unless the Exchange Agent has been furnished with reasonable indemnity
therefor from the Company;
(e) not be liable for any lost profits, lost savings or other special,
exemplary or consequential damages;
(f) conclusively rely on, and act upon, any instrument, opinion,
notice, certificate, letter, facsimile transmission, telegram or other
document delivered to the Exchange Agent in accordance with this Exchange
Agreement or the Letter of Transmittal and reasonably and in good faith
believed by it to be genuine and to have been signed by the proper party or
parties;
(g) conclusively rely on and shall be fully protected by the Company
in acting in accordance with the written or oral instructions of any
Authorized Representative with respect to any matter relating to the
Exchange Agent's actions specifically covered by this Exchange Agreement;
and
(h) be permitted to consult with counsel satisfactory to the Exchange
Agent and the written advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by the Exchange Agent hereunder and under any of the
Exchange Documents in good faith and in accordance with such written advice
or opinion of such counsel.
SECTION 10. Liability of Exchange Agent; Indemnification. The Exchange
Agent and its officers, directors, employees, agents, subsidiaries and
affiliates shall not be liable for any action taken or suffered by the Exchange
Agent or such agent of the Exchange Agent reasonably and in good faith in
accordance with the Exchange Offer, this Exchange Agreement, the Exchange
Documents or the instructions of any Authorized Representative, other than any
liability arising out of the negligence, willful misconduct or bad faith of the
Exchange Agent or such other persons or entities. The Company hereby covenants
and agrees to indemnify and hold the Exchange Agent and its officers, directors,
employees, agents, subsidiaries and affiliates harmless from and against any
fees, costs, expenses (including reasonable expenses of legal counsel), losses,
liabilities, claims or damages (collectively the "Indemnified Liabilities"),
which without negligence, willful misconduct or bad faith on its part or the
part of any other such persons or entities, may be paid, incurred or suffered by
it, or to which it may become subject, in any such case by reason of or as a
result of the preparation of this Exchange Agreement, the review and
administration of any other Exchange Documents or the administration or
performance of the Exchange Agent's duties hereunder or under any Exchange
Document, or by reason of or as a result of the Exchange Agent's compliance with
the instructions set forth herein or with any written or oral instruction
delivered to it in accordance with the terms hereof, or as a result of defending
itself against any claim or liability resulting from its
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actions as Exchange Agent hereunder or under any of the Exchange Documents,
including any claim against the Exchange Agent by any Holder, beneficial owner
or other person or entity. To the extent any indemnity contained herein is
contrary to or unenforceable under applicable law, the Company hereby agrees to
contribute to the Exchange Agent the maximum amount of the Indemnified
Liabilities permitted under applicable law. The Exchange Agent shall be entitled
to participate at its own expense in the defense of any such action, proceeding,
suit or claim.
In no case shall the Company be liable under this indemnity with respect to
any claim against the Exchange Agent or any other indemnified person or entity
unless the Company shall be notified by the Exchange Agent, by letter or by
facsimile confirmed by letter, of the assertion of a claim against the Exchange
Agent or any other indemnified person or entity or any other action commenced
against the Exchange Agent or any other indemnified person or entity, promptly
after the Exchange Agent or any other indemnified person or entity shall have
become aware of such assertion or received notice of commencement of such
action. The Company shall be entitled to participate at its own expense in the
defense of any such claim or other action, and, if the Company so elects, the
Company shall assume the defense of any pending or threatened suit brought to
enforce any such claim. In the event that the Company shall assume the defense
of any such suit, the Company shall not be liable for any subsequently incurred
fees and expenses of any counsel retained by the Exchange Agent or any other
indemnified person or entity so long as the Company shall retain counsel
reasonably satisfactory to the Exchange Agent to defend such suit, and so long
as the Exchange Agent has not determined, in the Exchange Agent's reasonable
judgment, based upon the advice of counsel, that a conflict of interest exists
between the Exchange Agent and the Company. Notwithstanding anything herein to
the contrary, the Exchange Agent shall not enter into any settlement or other
compromise with respect to any losses, liabilities, costs or expenses for which
the Exchange Agent or any other indemnified party is seeking indemnification
hereunder without the prior written consent of the Company, which shall not be
unreasonably withheld or delayed.
SECTION 11. No Set-Off. The Exchange Agent hereby expressly waives any
lien, encumbrance or right of set-off whatsoever that the Exchange Agent may
have with respect to any funds deposited with the Exchange Agent for the payment
of transfer taxes for compensation owed to the Exchange Agent hereunder.
SECTION 12. Governing Law; Successors and Assigns. This Exchange
Agreement shall be construed and enforced in accordance with the laws of the
State of New York without regard to conflicts of laws principles that would
result in the application of the laws of another state. This Exchange Agreement
shall be binding upon and inure solely to the benefit of each party hereto and
nothing in this Exchange Agreement, express or implied, is intended to or shall
confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Exchange Agreement. Without limitation of
the foregoing, the parties hereto expressly agree that no holder of Old Notes or
Exchange Notes shall have any right, benefit or remedy of any nature whatsoever
under, or by reason of, this Exchange Agreement. Neither party may assign its
rights or obligations hereunder without the prior written consent of the other
party hereto, which consent shall not be unreasonably withheld or delayed.
SECTION 13. Notices. Unless otherwise provided herein, all reports,
notices and other communications required or permitted to be given hereunder
shall be in writing, shall be effective only upon receipt by the party
addressed, and shall be delivered by hand, overnight delivery, first-class mail,
postage prepaid, electronic means or facsimile as follows:
IF TO THE COMPANY:
Xxxxxx Drilling Company
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to (which copy shall not constitute notice):
Bracewell & Xxxxxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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IF TO THE EXCHANGE AGENT:
JPMorgan Chase Bank
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SECTION 14. Termination. Unless terminated earlier by mutual agreement of
the parties hereto or unless the Exchange Agent or the Company has not fully and
completely performed its respective obligations under this Exchange Agreement,
this Exchange Agreement shall automatically terminate 30 days after the
Expiration Date. Notwithstanding the foregoing, Sections 8, 10 and 11 and this
Section 14 shall survive such termination. Notwithstanding Section 1 hereof, in
the event the Exchange Offer is terminated by the Company, this Exchange
Agreement shall also terminate, provided that the Company shall reimburse the
Exchange Agent for all Additional Expenses set forth on Exhibit B hereto
incurred by the Exchange Agent in connection with this Exchange Agreement and/or
the Exchange Documents, and Section 10 and this Section 14 shall survive the
termination of this Exchange Agreement. Upon the termination of this Exchange
Agreement, except as provided in this Section 14, this Exchange Agreement shall
be of no further force and effect, without liability of any of the parties
hereto, provided, however, that nothing herein shall relieve a party from
liability for any breach prior to such termination. The Exchange Agent shall
promptly forward any Letters of Transmittal, Old Notes and other related
documents received by the Exchange Agent after the date of termination to the
Company.
SECTION 15. Entire Agreement; Amendment. This Exchange Agreement
represents the complete and final agreement between the parties with respect to
its subject matter and may not be amended or waived, in whole or in part, except
by an instrument in writing signed by each of the parties.
SECTION 16. Counterparts. This Exchange Agreement may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Exchange Agreement.
SECTION 17. Severability. In case any provision of this Exchange
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
[SIGNATURE PAGE FOLLOWS]
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XXXXXX DRILLING COMPANY
By:
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Name:
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Title:
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JPMORGAN CHASE BANK,
as Exchange Agent
By:
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Name: --------------------------------------------------------------------------
Title:
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[SIGNATURE PAGE TO EXCHANGE AGREEMENT]
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EXHIBIT A
EXCHANGE REQUEST
[DATE]
Re: Xxxxxx Drilling Company ("Company") exchange of its outstanding 9 5/8%
Senior Notes due 2013 (the "Old Notes") for 9 5/8% Senior Notes due 2013
that have been registered under the Securities Act of 1933 (the "Exchange
Notes") as contemplated in the Prospectus dated December , 2003.
Pursuant to the Exchange Agreement dated as of December , 2003, we have
received tenders of Old Notes and other necessary documents, representing
$ aggregate principal amount of the Old Notes, and we hereby request
the Company to accept such tendered Old Notes and to issue Exchange Notes in
like principal amount to such Holders as follows:
Please notify us of acceptance and issue the Exchange Notes.
All documents received by the Exchange Agent which are related to the
tender of such Old Notes are available for inspection at 0000 Xxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxx, Xxxxx 00000.
Upon completion of this exchange, the aggregate principal amount of Old
Notes outstanding will be $ .
Very truly yours,
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EXHIBIT B
EXCHANGE AGENT FEES
$5,000.00. For those duties specified in this Exchange Agreement.
Additional time spent on duties not anticipated above will be billed at
$175.00 per hour. The Exchange Agent shall consult with an Authorized
Representative prior to spending additional time on duties not anticipated
above.
ADDITIONAL EXPENSES
Out-of-pocket expenses are in addition to fees quoted above. This includes,
but is not limited to, reasonable legal fees and expenses, wire charges,
printing costs, overnight delivery charges, postage, long distance telephone
charges and any travel costs.
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