EXHIBIT 10.14
SHARE REPURCHASE AGREEMENT
This Share Repurchase Agreement (this "Agreement") is dated as of July
31, 1997 by and between Xxxxxx Oil Corporation, a Delaware corporation ("SOCO")
and Patina Oil & Gas Corporation, a Delaware corporation ("Patina").
WHEREAS, SOCO owns beneficially and of record 14,000,000 shares (the
"Shares") of Common Stock of Patina ("Common Stock"), 2,000,000 of which are
designated Series A Common Stock;
WHEREAS, SOCO and Patina have entered into that certain Registration
Rights Agreement dated as of May 2, 1996 (the "Registration Rights Agreement"),
pursuant to which SOCO has certain rights to cause Patina, at its expense, to
register the sale of Shares by SOCO under the Securities Act of 1933, as amended
(the "Securities Act");
WHEREAS, SOCO desires, subject to the terms and conditions set forth in
this Agreement, to sell all of the Shares through a combination of: (i) an
underwritten secondary offering of a portion of the Shares by SOCO (the
"Offering") and (ii) a repurchase of any Shares not sold in the Offering by
Patina, which repurchase would be consummated simultaneously with the
consummation of the Offering (the "Repurchase");
WHEREAS, SOCO and Patina acknowledge that certain third parties may
have an interest in pursuing an acquisition of all or a portion of the capital
stock of Patina, and that it would be in the best interests of Patina and its
stockholders to permit those third parties ("Prospective Purchasers") to review
certain confidential information relating to Patina and its assets, liabilities
and operations, provided that such Prospective Purchasers execute a
confidentiality and standstill agreement mutually acceptable to SOCO and Patina;
WHEREAS, concurrently with the execution and delivery of this
Agreement, Patina and certain investors (the "Investors") have entered into a
Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which such
investors have agreed to acquire shares of 8.5% Convertible Preferred Stock (the
"New Preferred Stock"), of Patina on the terms and subject to the conditions set
forth therein;
WHEREAS, concurrently with the execution and delivery of this
Agreement, SOCO has granted options to the Investors (or, in certain instances,
affiliates thereof) to purchase an aggregate of 2,000,000 shares of Common Stock
pursuant to Stock Option Agreements with such optionees (the "Stock Option
Agreement");
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NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Demand Registration. Pursuant to Section 2(A) of the Registration
Rights Agreement, SOCO hereby requests registration of at least 5,000,000 Shares
and not more than 7,500,000 Shares (in each case, before giving effect to any
underwriter's overallotment option). Patina acknowledges that such request has
been made in accordance with the Registration Rights Agreement and satisfied the
requirements set forth in Section 2(A). Notwithstanding any provision in this
Agreement to the contrary, SOCO reserves the right, in its absolute and sole
discretion, to withdraw the Shares from the Offering at any time prior to the
Distribution Date (as defined below) by giving notice to Patina.
2. Repurchase.
(a) If the Offering is consummated, Patina hereby agrees to purchase
from SOCO, and SOCO agrees to sell to Patina, any Shares owned by SOCO at the
time of the consummation of the Offering (the "Closing") that are not sold by
SOCO to the underwriters at the Closing.
(b) Notwithstanding the foregoing, if the consummation of the Offering
and the Repurchase would result in a Qualifying Termination Event specified in
Section 2(a)(iv)(y) of the Stock Option Agreements, then Patina shall not
purchase any shares subject to the options granted in the Stock Option
Agreements unless and until any Shares underlying options granted under the
Stock Option Agreements have not been purchased upon exercise thereof, in which
case Patina shall purchase all such Shares on the second business day following
the expiration of such options.
(c) Any Shares required to be repurchased by Patina pursuant to this
Section 2 shall be repurchased for a purchase price equal to the public offering
price in the Offering less underwriters' discounts and commissions, in each case
as shown on the cover page of the final prospectus for the Offering, but without
any deduction for expenses (the "Net Offering Price").
(d) Notwithstanding the foregoing, upon the occurrence of a First
Reserve Funding Delay, then Patina shall not be required to purchase a number of
Shares equal to the First Reserve Shares until the "Fund VII Amount" (as defined
in the Stock Purchase Agreement) is funded by First Reserve Fund VII, Limited
Partnership ("First Reserve") and Patina shall pay as additional consideration
for the First Reserve Shares interest on the Fund VII Amount based upon the
Applicable Rate, with interest accruing from the Closing Date until the receipt
by SOCO of the Fund VII Amount.
(i) The term "Applicable Rate" shall mean an interest rate per
annum equal to (A) 1% plus (B) an interest rate per annum shown on page
3750 of the Dow Xxxxx & Company Telerate screen or any successor page
as the composite offered rate for London interbank deposits with a
period equal to one month as shown under the heading "USD", as
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of 11:00 A.M. (London time) on the day of the Closing; provided that
the applicable rate determined pursuant to this definition shall be
rounded to the nearest whole multiple of 1/16 of 1% per annum, if such
rate is not such a multiple.
(ii) A "First Reserve Funding Delay" shall occur if First
Reserve shall not have delivered funds to Patina at the Closing but
instead shall have delivered to Patina an irrevocable, unconditional
commitment to fund the Fund VII Amount within ten business days after
delivery of the Notice of Issuance in accordance with the Stock
Purchase Agreement.
(iii) The term "First Reserve Shares" shall mean the maximum
number of whole shares of Common Stock that can be purchased with the
First Reserve Amount at a purchase price equal to the Net Offering
Price.
(iv) The term "Notice of Issuance" shall have the meaning set
forth in the Stock Purchase Agreement.
(e) If and to the extent that the underwriters in the Offering do not
exercise any overallotment option (the "Overallotment Option") granted to them
by SOCO in such a manner that such exercise can be consummated at the Closing,
then Patina agrees to repurchase any Shares that remain subject to the
Overallotment Option, but Patina shall acquire such Shares subject to such
Overallotment Option.
(f) Patina represents and warrants that it has sufficient surplus under
the Delaware General Corporation Law in order to effect the Repurchase and
agrees that it will not take any action that would cause it to cease to have
sufficient surplus for such purpose.
3. Conditions to the Obligations of the Parties.
(a) The obligations of both parties to consummate the transactions
contemplated hereby shall be subject to the satisfaction or waiver of the
following conditions:
(i) The registration statement in connection with the Offering
shall have become effective under the Securities Act, and no stop order
shall have been issued in connection therewith; and
(ii) Patina shall have received sufficient funds from the sale
by Patina of capital stock and/or borrowings under Patina's existing
credit facility to pay the full purchase price under the Repurchase;
provided, however, that the occurrence of a First Reserve Funding Delay
shall be deemed receipt of the Fund VII Amount for purposes of this
clause (ii).
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(b) In addition to the conditions set forth in Section 3(a), the
obligations of SOCO to consummate the transactions contemplated hereby shall be
subject to the satisfaction or waiver of the following conditions:
(i) The representations and warranties of Patina contained
herein shall be made again as of the Closing, and such representations
and warranties shall be true and correct in all material respects as of
the date hereof and the Closing, and Patina shall have provided SOCO
with an officer's certificate to such effect;
(ii) Patina shall have materially complied with its covenants
to be complied with under this Agreement and the Registration Rights
Agreement prior to the Closing, and Patina shall have provided SOCO
with an officer's certificate to such effect;
(iii) The Net Offering Price in the Offering shall not be
less than $7.0875 per Share;
(iv) The Offering shall have been consummated with respect to
at least 5 million Shares on or prior to the earlier of (A) the
termination of the Offering Period (as defined below) and (B) 90 days
after the date hereof;
(v) Documents in form reasonable acceptable to SOCO
terminating the Business Opportunity Agreement (the "Business
Opportunity Agreement") and the Corporate Services Agreement (the
"Corporate Services Agreement"), each of which is between SOCO and
Patina and each of which is dated as of May 2, 1996, shall have been
executed and delivered by Patina, effective as of the Closing; and
(vi) A Transition Agreement in such form as shall be mutually
agreeable to SOCO and Patina in their reasonable judgment shall have
been executed by Patina (the "Transition Agreement"), effective as of
the Closing.
(c) In addition to the conditions set forth in Section 3(a), the
obligations of Patina to consummate the transactions contemplated hereby shall
be subject to the satisfaction or waiver of the following conditions:
(i) SOCO shall have complied with its covenants to be complied
with under this Agreement and the Registration Rights Agreement prior
to the Closing, and SOCO shall have provided Patina with an officer's
certificate to such effect;
(ii) Xxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx shall have
tendered their resignations as directors of Patina, effective as of
the Closing;
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(iii) Documents in form reasonable acceptable to Patina
terminating the Business Opportunity Agreement and the Corporate
Services Agreement shall have been executed and delivered by SOCO,
effective as of the Closing; and
(iv) The Transition Agreement shall have been executed and
delivered by SOCO, effective as of the Closing.
4. Expenses.
(a) The following terms shall have the following respective
definitions:
(i) "Sale Transaction" shall mean an acquisition (by tender
offer, exchange offer, merger, consolidation, share exchange or
otherwise) by a third party of Patina (or its shares or assets) in
which such third party acquires, directly or indirectly, at least a
majority of the combined voting power of the outstanding capital stock
of Patina.
(ii) "Company Sale Transaction" shall mean a Sale Transaction
that is (A) approved by the Independent Committee (as defined in the
Confidentiality and Standstill Agreement described below) or (B) in
which the holders of a majority of the Common Stock (excluding any
shares beneficially owned by SOCO or any subsidiary thereof) sell or
otherwise transfer their shares pursuant to such Sale Transaction.
(iii) "SOCO Sale Transaction" shall mean a Sale Transaction
other than a Company Sale Transaction.
(iv) "Applicable Period" shall mean the period beginning on
the date hereof and ending 12 months following any termination of the
this Agreement or withdrawal of shares from the Offering (whichever is
earlier); provided, however, that with respect to any Sale Transaction
involving an acquiror that does not visit Patina's data room after July
1, 1997 and prior to the Distribution Date, the term Applicable Period
shall mean the period beginning on the date hereof and ending six
months following any termination of this Agreement or withdrawal of
shares from the Offering (whichever is earlier).
(b) If (i) the Offering is not consummated for any reason and (ii) a
SOCO Sale Transaction is consummated prior to the end of the Applicable Period,
then SOCO shall pay Patina a non-accountable expense reimbursement of $2
million.
(c) If (i) the Offering is not consummated for any reason and (ii) a
Company Sale Transaction is consummated prior to the end of the Applicable
Period, then SOCO shall not be obligated to pay any of Patina's costs or
expenses and Patina shall be solely responsible therefor.
(d) If (i) the Offering is not consummated for any reason and (ii)
neither a SOCO Sale Transaction nor a Company Sale Transaction is consummated
prior to the end of the Applicable
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Period, then SOCO shall pay Patina a non-accountable expense reimbursement of
$500,000; provided, however, that no such reimbursement shall be required if any
of the conditions set forth in Section 3(b)(i) or 3(b)(ii) shall not have been
satisfied.
(e) If the Offering and Repurchase are consummated, then SOCO shall not
be obligated to pay any of Patina's costs or expenses and Patina shall be solely
responsible therefor.
(f) Except as otherwise expressly provided in this Agreement or the
Registration Rights Agreement, each party shall be responsible for its expenses
in connection with the transactions contemplated by this Agreement.
5. Taking of Necessary Action; Cooperation and Exchange of Information.
(a) Each of the parties hereto agrees to use all reasonable efforts
promptly to take or cause all action and promptly to do or cause to be done all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, SOCO agrees to vote in favor
of any matter submitted to Patina's stockholders by Patina that is required by
law or applicable securities exchange regulation to be approved by Patina's
stockholders in order to consummate the transactions contemplated by the Stock
Purchase Agreement. Notwithstanding the foregoing provisions of this paragraph
(a), SOCO's obligations under this paragraph (a) shall be subject to the
provisions of the final sentence of Section 1 hereof and the parties acknowledge
that SOCO may continue to pursue the sale of all or part of its Shares to one or
more Prospective Purchasers.
(b) Patina agrees that it will not issue directly or indirectly issue
any equity securities of Patina or any subsidiary of Patina or any securities
exercisable for or convertible into any such equity securities, or agree to do
so, unless the consummation of the issuance thereof is conditioned upon the
occurrence of the sale by SOCO of all shares of Common Stock held by SOCO prior
to or simultaneously with such issuance. Patina will promptly provide SOCO with
true and complete copies of any agreements entered into by Patina in connection
with the foregoing, and shall not amend or waive any covenant or condition
contained in any such agreement in a manner that is inconsistent with the
provisions of this paragraph (b). Notwithstanding the foregoing, Patina may
issue equity securities as consideration in acquisition transactions so long as
the aggregate fair market value of any equity securities so issued does not
exceed $10 million. For purposes of this paragraph (b) the fair market value of
Common Stock shall be the closing price on the New York Stock Exchange on the
trading day immediately preceding the consummation of the applicable acquisition
transaction and for any other equity security shall be determined by in good
faith by the Board of Directors of Patina.
(c) Patina and SOCO agree to (and to use all reasonable efforts to
cause their respective officers, directors, employees, underwriters and advisors
to) cooperate with each other in connection with the Offering, the Repurchase
and the investigation of Patina by Prospective Purchasers, and to
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promptly disclose to each other any material developments in connection with
such activities. Patina agrees that it will conduct its business in the ordinary
course of business, consistent with past practice. Except in the ordinary course
of business, neither Patina nor any of its officers, directors, employees,
underwriters or advisors will contact any of the Prospective Purchasers without
reasonable advance notice to SOCO. Furthermore, Patina agrees that neither it
nor any of its officers, directors, employees, underwriters or advisors will
enter into any material acquisition transaction or discuss any such transaction
with any Prospective Purchaser or any other third party, without reasonable
advance notice to SOCO.
(d) Patina hereby represents and covenants to SOCO that any proxy
statement distributed by Patina to its stockholders in connection with the
transactions contemplated hereby and any related proxy soliciting material (and
any amendments or supplements thereto), on the date filed with the Securities
and Exchange Commission on the date mailed to Patina's stockholders, and on the
date of any related stockholder meeting, will comply in all material respects
with all applicable requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided, however, that
no representation or covenant is given in this paragraph (d) with respect to
information furnished in writing by SOCO for use by Patina in any such proxy
statement or proxy soliciting materials.
6. Confidentiality and Standstill Agreement.
(a) SOCO hereby agrees that prior to any Prospective Purchaser's being
given access to any confidential information regarding Patina or its assets,
liabilities or operations, such Prospective Purchaser must execute a
Confidentiality and Standstill Agreement substantially in the form attached
hereto as Appendix I, and Patina agrees that any significant, substantive
modifications to the form of any such agreement will be submitted to SOCO for
its approval prior to the execution thereof by a Prospective Purchaser. For
purposes of this Agreement, a change to the Confidentiality and Standstill
Agreement that adversely affects SOCO's rights shall be deemed, without
limitation, a "significant, substantive modification." Furthermore, Patina will
not enter into an amendment to any such agreement without the prior consent of
SOCO.
(b) SOCO agrees it will not take any action one of the intended
consequences of which is to permit any Prospective Purchaser to enjoy a right
denied to such Prospective Purchaser in its Confidentiality and Standstill
Agreement or avoid an obligation or restriction set forth in such agreement.
(c) SOCO hereby agrees that for a 30-day period (the "Offering Period")
commencing on the date that a preliminary prospectus relating to the Offering is
broadly distributed to prospective offerees in the Offering (the "Distribution
Date"), SOCO and its affiliates will (i) cease all discussions and contacts with
any Prospective Purchasers (regardless of whether previously contacted by SOCO)
with respect to the acquisition of securities or assets of Patina, (ii) not take
any
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action with respect to, or in pursuit of, the acquisition of securities or
assets of Patina by any third party, and (iii) not resume any such activities
prior to the end of the Offering Period. Patina will give SOCO at least seven
calendar days' notice of the expected Distribution Date (which will not be prior
to the date that is 45 days after the date hereof) and in no event shall the
restrictions set forth in this paragraph commence until seven days after the
most recent such notice to SOCO by Patina.
7. Amendments. This Agreement may be amended or modified upon the
written consent thereto of Patina and SOCO.
8. Termination. This Agreement may be terminated upon by SOCO upon the
failure of any condition set forth in Section 3(a) or 3(b) upon five business
days notice to Patina. This Agreement may be terminated upon by Patina upon the
failure of any condition set forth in Section 3(a) or 3(c) upon five business
days notice to SOCO.
9. Assignments. This Agreement shall be binding on and inure to the
benefit of the respective successors and assigns of the parties hereto.
10.Entire Agreement; Governing Law. This Agreement constitutes the
entire agreement of the parties relating to the subject matter hereof and all
prior or contemporaneous written or oral agreements are merged herein. This
Agreement shall be governed by the laws of the State of Delaware.
11. Notices. Any notice, request, instruction, correspondence or
other document to be given hereunder by either party to the other (herein
collectively called "Notice") shall be in writing and delivered personally or
mailed, postage prepaid, or by telegram or telecopier, as follows:
If to SOCO:
Xxxxxx Oil Corporation
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Phone: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: General Counsel
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With a copy to:
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: J. Xxxx Xxxxx, Esq.
If to Patina:
Patina Oil & Gas Corporation
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Phone: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to:
Xxxxxx X. Xxxxxxx
Chairman of Patina Oil & Gas Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Telecopy No.: (000) 000-0000
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. Any party may change any address
to which Notice is to be given to it by giving Notice as provided above of such
change of address.
12.Counterparts. This Agreement may be executed in multiple
counterparts, each of which taken together shall constitute one and the same
instrument.
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13. References to Other Agreements. To the extent that this Agreement
refers to any other agreement, or any provision thereof, such reference shall be
deemed to be to such agreement or provision in the form initially executed by
the parties thereto (regardless of whether such agreement or provision is
amended) unless and to the extent that (a) such amendment does not adversely
affect the non-signing party or (b) the non-signing party consents in writing to
such amendment.
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IN WITNESS WHEREOF, SOCO and Patina have caused this Agreement to be
signed by their respective officers thereunto duly authorized.
XXXXXX OIL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Chairman
PATINA OIL & GAS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
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