Exhibit 10.51
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement"), dated as of the acceptance date
set forth below, by and between Harken Energy Corporation, a Delaware
corporation, with headquarters located at 000 XxxxXxxx Xxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 (the "Company"), and Costa Brava Partners III whose
address is 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("Costa Brava") and Xxxx X.
Xxxxxxxx, an individual whose address is 00 Xxxxx Xxxx, Xxxxxx, XX 00000
("Xxxxxxxx") (Costa Brava and Xxxxxxxx hereinafter collectively referred to as
the "Noteholders").
W I T N E S S E T H:
WHEREAS, the undersigned Noteholders hereby offer, upon the terms and
subject to the limitations and conditions contained in this Agreement, to
exchange 5% Senior Convertible Notes Due May 26, 2003 issued by the Company and
held by the Noteholder (the "Exchange Notes") in the combined and outstanding
principal amount of TWO MILLION THREE HUNDRED THOUSAND DOLLARS ($2,300,000) (the
"Exchange Notes Principal") in return for a cash payment as described
hereinafter and Promissory Notes as set forth in the form of Promissory Notes in
Exhibits "A" and "B" attached and incorporated herein by reference for all
purposes; and
WHEREAS, the Company wishes to accept such offer to exchange the Exchange
Notes for the cash and Promissory Note described herein subject to the
conditions of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. TERMS OF THE EXCHANGE: Upon the terms and subject to the limitations and
conditions set forth in this Agreement, the undersigned Noteholders hereby offer
to exchange, and the Company hereby accepts for exchange, the Exchange Notes.
1.1 The Company agrees to provide:
(a). a cash payment payable to Costa Brava on or before May 30, 2003
in the amount of EIGHT HUNDRED FIVE THOUSAND DOLLARS ($805,000) (35% of the
Exchange Notes Principal); and
(b). a Promissory Note payable to Xxxxxxxx in the principal sum of SIX
HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($637,500) pursuant to the
terms and conditions as set forth in Exhibit "A" hereto.
(c). a Promissory Note payable to Costa Brava in the principal sum of
THREE HUNDRED NINETY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($397,500) pursuant to
the terms and conditions as set forth in Exhibit "B" hereto.
1.2 The Noteholders agree to deliver the Exchange Notes to the Company or
its designee within 5
1
(five) business days or less following the execution of this Agreement. Costa
Brava further agrees to provide to the Company the wire instructions for the
cash payment portion of the exchange no later than 3 business days before
payment is due by the Company.
2. NOTEHOLDERS REPRESENTATIONS AND WARRANTIES: The Noteholders represent and
warrant to, and covenant and agree with, the Company as follows:
2.1 Xxxxxxxx is the legal owner and holder of SEVEN HUNDRED FIFTY THOUSAND
DOLLARS ($750,000) face amount of the Exchange Notes and will deliver said
Exchange Notes free and clear of all liens, claims, encumbrances, and security
interests;
2.2 Costa Brava is the legal owner and holder of ONE MILLION FIVE HUNDRED
FIFTY THOUSAND DOLLARS ($1,550,000) face amount of the Exchange Notes and will
deliver said Exchange Notes free and clear of all liens, claims, encumbrances,
and security interests.
2.3 The Noteholders have all necessary power and authority to execute and
deliver this Agreement and to consummate the transaction contemplated herein;
2.4 The Noteholders are in compliance with any and all U. S. securities
laws as such laws might apply to the Exchange Notes, and participation by the
Noteholder in the transactions contemplated herein does not and will not violate
such securities laws;
2.5 The Noteholders are acquiring the Promissory Notes for their own
account for investment only and not with a view towards the public sale or
distribution thereof;
2.6 This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Noteholders and is a valid and binding agreement of
the Noteholders enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally.
3. COMPANY REPRESENTATIONS AND WARRANTIES: The Company represents and warrants
to the Noteholder that:
3.1 The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is qualified to do
business in the State of Texas. The Company has full power and authority to
enter into this Agreement and consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, and this Agreement
is a valid and binding obligation of the Company enforceable in accordance with
its terms.
3.2 This Agreement, when signed and delivered by Noteholders to the
Company and then accepted by the Company, shall have been duly and validly
authorized, executed and delivered on behalf of the Company and shall be a valid
and binding agreement of the Company enforceable in accordance with its terms,
subject as to enforceability to general principles of equity and to bankruptcy
or other laws affecting the enforcement of creditors' rights generally.
2
3.3 The Company is not aware of any authorization, approval or consent of
any governmental body which is required to be obtained by the Company for the
issuance of the Promissory Notes to the Noteholder as contemplated by this
Agreement.
4. ADDITIONAL COMPANY COVENANTS
4.1 In connection with the Promissory Notes to be provided pursuant to the
terms of this Agreement, the Company agrees, so long as any payment obligation
under the Promissory Notes remains outstanding, to comply with the Section 10.10
"Limitation on Other Indebtedness" and Section 10.11 "Limitation on Liens" as
set out in that certain Trust Indenture executed by the Company on May 28, 1998
in connection with the Exchange Notes (the "Trust Indenture"). Said Sections
10.10 and 10.11 of the Trust Indenture hereby are incorporated by reference for
the limited purpose of this paragraph 4.
4.2 The Company agrees that the obligations under this Agreement and
respective Promissory Notes shall hold the same status as more fully set out in
Section 14.01 "Seniority of Notes" of the Trust Indenture with respect to the
Indebtedness (as defined in the Trust Indenture) and Subordinated Obligations
(as defined in the Trust Indenture). Said Section 14.01 and definitions for
Indebtedness and Subordinated Obligations of the Trust Indenture hereby are
incorporated by reference for the limited purpose of this paragraph 4.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO EXCHANGE
The Noteholders understand that the Company's obligation to complete the
exchange of the Exchange Notes pursuant to this Agreement is conditioned upon:
5.1 The receipt and acceptance in its sole and absolute discretion by the
Company of this Exchange Agreement from the Noteholders as evidenced solely by
the execution and delivery to Noteholders of this Agreement by the Company;
5.2 Timely delivery by the Noteholders of the Exchange Notes in accordance
with this Agreement, and
5.3 The accuracy on the Acceptance Date of the representations and
warranties of the Noteholder contained in this Agreement.
6. CONDITIONS TO THE NOTEHOLDERS' OBLIGATION TO EXCHANGE
The Company understands that the Noteholders' obligation to accept the
Promissory Notes and the cash consideration is conditioned upon:
6.1 Delivery by the Company to the Note holder of this Agreement duly
executed by the Company in acceptance thereof; and
3
6.2 The accuracy on the acceptance date of the representations and
warranties of the Company contained in this Agreement and the performance by the
Company on or before the acceptance date of all covenants and agreements of the
Company required to be performed on or before such acceptance date.
7. INDEMNITY: The Noteholders and Company acknowledge that X.X. Xxxxxxx,
LLC ('MJW") is serving as intermediary in bringing together noteholders signing
this Agreement and the Company. Noteholder and Company agree that the
responsibilities of MJW shall be limited solely to facilitating this Agreement
and that that MJW shall have no responsibility for ensuring compliance of
Noteholder or the Company with any or all legal or regulatory requirements that
may apply to either of them relating to this transaction. Noteholder and Company
each agree to hold MJW and its affiliates, agents and employees harmless against
any claim relating to a failure of either Noteholder or Company or any of their
respective affiliates, agents or employees to fulfill any legal or regulatory
requirement relating to this transaction. Further, Company hereby agrees to
indemnify MJW and its affiliates, agents and employees against any liability
that any of them may incur relating to this transaction (including but not
limited to reasonable attorney's fees) as a result of the failure of Company or
any of its respective affiliates, agents or employees to fulfill any legal or
regulatory requirement relating to this transaction.
8. GOVERNING LAW; MISCELLANEOUS.
8.1 This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York without regard to its conflict of law rules.
8.2 A facsimile transmission of this signed agreement shall be legal and
binding on all parties hereto.
8.3 The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction.
8.4 This Agreement may be amended only by an instrument in writing signed
by the party to be charged with enforcement.
9. ENTIRE UNDERSTANDING. This Agreement (including the attachments hereto)
constitutes the entire understanding of the parties hereto with respect to the
subject matter hereof and supersedes any and all prior agreements, whether
written or oral. This Agreement may be amended only in a written document duly
executed by both parties hereto.
10. NOTICES. Any notice to be given by the Company hereunder shall be deemed
served if faxed to Noteholder at facsimile number 000-000-0000 with a telephone
confirmation from Noteholder of receipt or if delivered to the Noteholder at its
address set out in this Agreement. Any notice to be given by Noteholder
4
hereunder shall be given by Noteholder and shall be deemed served if faxed to
the Company at facsimile number (000) 000-0000 (Attention Xxxxx Xxxxxxxx) with a
telephone confirmation from the Company of receipt or if delivered to the
Company at its address set out in this Agreement.
11. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument. Either
party may enter into this Agreement by executing any such counterpart.
IN WITNESS whereof, this Agreement has been entered into as of the day and year
first above written.
COSTA BRAVA PARTNERS III
By:
---------------------------------
Title:
---------------------------------
NOTEHOLDER'S
IRS TAXPAYER NO.: 00-0000000
----------
XXXX X. XXXXXXXX
By:
----------------------------------
Title:
----------------------------------
NOTEHOLDER'S
IRS TAXPAYER NO.: ###-##-####
-----------
This Agreement has been accepted by the Company as of the date set forth below
(the "Acceptance Date").
HARKEN ENERGY CORPORATION
By:
------------------------------------
Xxxx X. Xxxxxxxx
Title: Vice President and CFO
Date of Acceptance by the Company: May 26, 2003
5
EXHIBIT "A"
-----------
PROMISSORY NOTE
$637,500 April 1, 2003
FOR VALUE RECEIVED, Harken Energy Corporation (hereafter "Maker"), promises to
pay to the order of Xxxx X. Xxxxxxxx (the "Holder") the principal sum of SIX
HUNDRED THIRTY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($637,500) together with
interest on the unpaid principal from the date hereof at an annual rate of 10%
for the ensuing interest bearing period. An initial installment of principal in
the amount of THREE HUNDRED FIFTY FOUR THOUSAND ONE HUNDRED SIXTY SEVEN DOLLARS
($354,167) together with accrued interest shall be payable on or before October
31, 2003. A second and final installment of principal in the amount of TWO
HUNDRED EIGHTY THREE THOUSAND THREE HUNDRED THIRTY THREE DOLLARS ($283,333)
together with accrued interest shall be payable not later than April 30, 2004.
All installments of principal and interest shall be payable at such place as may
hereafter be designated by the Holder.
Upon the occurrence of any one or more of the following events, the entire
principal balance remaining unpaid hereon together with all the interest accrued
thereon shall forthwith become due and payable at the option of the Holder
exercised by written notice:
(a) a default in the payment of all or any part of any installment of
principal or interest when and as the same shall become due and
payable provided, however, that Holder shall first provide notice in
writing to Maker of said default and allow Maker a period of no less
than twenty (20) business days to cure the default; or
(b) a receiver, trustee or similar official shall be appointed for the
Maker or of the whole or any part of its property or any proceeding
seeking the adjudication of the Maker as insolvent or seeking the
liquidation, reorganization, adjustment or composition of the Maker's
debts under any law relating to bankruptcy, insolvency or
reorganization by or against the Maker and such appointment or
proceeding continues undismissed or unvacated for a period of sixty
(60) days; or
(c) a breach by the Maker of any of the covenants set out in Section 4 of
the Exchange Agreement.
This Promissory Note is delivered in the State of New York and shall be
construed and enforced in accordance with, and governed by, the laws of the
State of New York without application of the conflict of laws provisions or
principles thereof. All persons and entities in any manner obligated under this
Promissory Note hereby consent to the jurisdiction of any federal or state court
within the State of New York having proper venue and also consent to service of
process by any means authorized by federal or New York law.
HARKEN ENERGY CORPORATION
By:
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President and CFO
EXHIBIT "B"
-----------
6
PROMISSORY NOTE
$397,500 April 1, 2003
FOR VALUE RECEIVED, Harken Energy Corporation (hereafter "Maker"), promises to
pay to the order of Costa Brava Partners III (the "Holder") the principal sum of
THREE HUNDRED NINETY SEVEN THOUSAND FIVE HUNDRED DOLLARS ($397,500) together
with interest on the unpaid principal from the date hereof at an annual rate of
10% for the ensuing interest bearing period. An initial installment of principal
in the amount of TWO HUNDRED TWENTY THOUSAND EIGHT HUNDRED THIRTY THREE DOLLARS
($220,833) together with accrued interest shall be payable on or before October
31, 2003. A second and final installment of principal in the amount of ONE
HUNDRED SEVENTY SIX THOUSAND SIX HUNDRED SIXTY SEVEN DOLLARS ($176,667) together
with accrued interest shall be payable not later than April 30, 2004. All
installments of principal and interest shall be payable at such place as may
hereafter be designated by the Holder.
Upon the occurrence of any one or more of the following events, the entire
principal balance remaining unpaid hereon together with all the interest accrued
thereon shall forthwith become due and payable at the option of the Holder
exercised by written notice:
(c) a default in the payment of all or any part of any installment of
principal or interest when and as the same shall become due and
payable provided, however, that Holder shall first provide notice in
writing to Maker of said default and allow Maker a period of no less
than twenty (20) business days to cure the default; or
(d) a receiver, trustee or similar official shall be appointed for the
Maker or of the whole or any part of its property or any proceeding
seeking the adjudication of the Maker as insolvent or seeking the
liquidation, reorganization, adjustment or composition of the Maker's
debts under any law relating to bankruptcy, insolvency or
reorganization by or against the Maker and such appointment or
proceeding continues undismissed or unvacated for a period of sixty
(60) days; or
(c) a breach by the Maker of any of the covenants set out in Section 4 of
the Exchange Agreement.
This Promissory Note is delivered in the State of New York and shall be
construed and enforced in accordance with, and governed by, the laws of the
State of New York without application of the conflict of laws provisions or
principles thereof. All persons and entities in any manner obligated under this
Promissory Note hereby consent to the jurisdiction of any federal or state court
within the State of New York having proper venue and also consent to service of
process by any means authorized by federal or New York law.
HARKEN ENERGY CORPORATION
By:
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President and CFO
7
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement"), dated as of the acceptance date
set forth below, by and between Harken Energy Corporation, a Delaware
corporation, with headquarters located at 000 XxxxXxxx Xxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 (the "Company"), and Xxxxxxx X. Xxxx and Xxxxx X.
Xxxx, JTWROS, individuals whose address is 00 Xxxx Xxxxx Xxxxx, Xxxxxxxxx, XX
00000-0000 (the "Noteholder").
W I T N E S S E T H:
WHEREAS, the undersigned Noteholder hereby offers, upon the terms and
subject to the limitations and conditions contained in this Agreement, to
exchange 5% Senior Convertible Notes Due May 26, 2003 issued by the Company and
held by the Noteholder (the "Exchange Notes") in the combined and outstanding
principal amount of ONE HUNDRED THOUSAND DOLLARS ($100,000) (the "Exchange Notes
Principal") in return for a cash payment as described hereinafter and a
Promissory Note as set forth in the form of Promissory Note in Exhibit "A"
attached and incorporated herein by reference for all purposes; and
WHEREAS, the Company wishes to accept such offer to exchange the Exchange
Notes for the cash and Promissory Note described herein subject to the
conditions of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. TERMS OF THE EXCHANGE: Upon the terms and subject to the limitations and
conditions set forth in this Agreement, the undersigned Noteholder hereby offers
to exchange, and the Company hereby accepts for exchange, the Exchange Notes.
1.1 The Company agrees to provide to the Noteholder:
(a). a cash payment payable on or before May 30, 2003 in an amount of
THIRTY FIVE THOUSAND DOLLARS ($35,000) (35% of the Exchange Notes Principal);
and
(b). a Promissory Note in a principal sum of FORTY FIVE THOUSAND
DOLLARS ($45,000) (45% of the Exchange Notes Principal) pursuant to the terms
and conditions as set forth in Exhibit "A" hereto.
1.2 Noteholder agrees to deliver the Exchange Notes to the Company or its
designee within 5 (five) business days or less following the execution of this
Agreement. Noteholder further agrees to provide to the Company the wire
instructions for the cash payment portion of the exchange no later than 3
business days before payment is due by the Company.
1
2. NOTEHOLDER REPRESENTATIONS AND WARRANTIES: The Noteholder represents and
warrants to, and covenants and agrees with, the Company as follows:
2.1 The Noteholder is the legal owner and holder of the Exchange Notes and
will deliver the Exchange Notes free and clear of all liens, claims
encumbrances, and security interests;
2.2 The Noteholder has all necessary power and authority to execute and
deliver this Agreement and to consummate the transaction contemplated herein;
2.3 The Noteholder is in compliance with any and all U. S. securities laws
as such laws might apply to the Exchange Notes, and participation by the
Noteholder in the transactions contemplated herein does not and will not violate
such securities laws;
2.4 The Noteholder is acquiring the Promissory Notes for its own account
for investment only and not with a view towards the public sale or distribution
thereof;
2.5 This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Noteholder and is a valid and binding agreement of
the Noteholder enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally.
3. COMPANY REPRESENTATIONS AND WARRANTIES: The Company represents and warrants
to the Noteholder that:
3.1 The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is qualified to do
business in the State of Texas. The Company has full power and authority to
enter into this Agreement and consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, and this Agreement
is a valid and binding obligation of the Company enforceable in accordance with
its terms.
3.2 This Agreement, when signed and delivered by Noteholder to the Company
and then accepted by the Company, shall have been duly and validly authorized,
executed and delivered on behalf of the Company and shall be a valid and binding
agreement of the Company enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally.
3.3 The Company is not aware of any authorization, approval or consent of
any governmental body which is required to be obtained by the Company for the
issuance of the Promissory Notes to the Noteholder as contemplated by this
Agreement.
2
4. ADDITIONAL COMPANY COVENANTS
4.1 In connection with the Promissory Note to be provided pursuant to the
terms of this Agreement, the Company agrees, so long as any payment obligation
under the Promissory Note remains outstanding, to comply with the Section 10.10
"Limitation on Other Indebtedness" and Section 10.11 "Limitation on Liens" as
set out in that certain Trust Indenture executed by the Company on May 28, 1998
in connection with the Exchange Notes (the "Trust Indenture"). Said Sections
10.10 and 10.11 of the Trust Indenture hereby are incorporated by reference for
the limited purpose of this paragraph 4.
4.2 The Company agrees that the obligations under this Agreement and
respective Promissory Note shall hold the same status as more fully set out in
Section 14.01 "Seniority of Notes" of the Trust Indenture with respect to the
Indebtedness (as defined in the Trust Indenture) and Subordinated Obligations
(as defined in the Trust Indenture). Said Section 14.01 and definitions for
Indebtedness and Subordinated Obligations of the Trust Indenture hereby are
incorporated by reference for the limited purpose of this paragraph 4.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO EXCHANGE
The Noteholder understands that the Company's obligation to complete the
exchange of the Exchange Notes pursuant to this Agreement is conditioned upon:
5.2 The receipt and acceptance in its sole and absolute discretion by the
Company of this Exchange Agreement from the Noteholder as evidenced solely by
the execution and delivery to Noteholder of this Agreement by the Company;
5.2 Timely delivery by the Noteholder of the Exchange Notes in accordance
with this Agreement, and
5.3 The accuracy on the Acceptance Date of the representations and
warranties of the Noteholder contained in this Agreement.
6. CONDITIONS TO THE NOTEHOLDER'S OBLIGATION TO EXCHANGE
The Company understands that the Noteholder's obligation to accept the
Promissory Notes and the cash consideration is conditioned upon:
6.1 Delivery by the Company to the Note holder of this Agreement duly
executed by the Company in acceptance thereof; and
6.2 The accuracy on the acceptance date of the representations and
warranties of the Company contained in this Agreement and the performance by the
Company on or before the acceptance date of all covenants and agreements of the
Company required to be performed on or before such acceptance date.
3
7. INDEMNITY: Noteholder and Company acknowledge that X.X. Xxxxxxx, LLC (
'MJW") is serving as intermediary in bringing together noteholders signing this
Agreement and the Company. Noteholder and Company agree that the
responsibilities of MJW shall be limited solely to facilitating this Agreement
and that that MJW shall have no responsibility for ensuring compliance of
Noteholder or the Company with any or all legal or regulatory requirements that
may apply to either of them relating to this transaction. Noteholder and Company
each agree to hold MJW and its affiliates, agents and employees harmless against
any claim relating to a failure of either Noteholder or Company or any of their
respective affiliates, agents or employees to fulfill any legal or regulatory
requirement relating to this transaction. Further, Company hereby agrees to
indemnify MJW and its affiliates, agents and employees against any liability
that any of them may incur relating to this transaction (including but not
limited to reasonable attorney's fees) as a result of the failure of Company or
any of its respective affiliates, agents or employees to fulfill any legal or
regulatory requirement relating to this transaction.
8. GOVERNING LAW; MISCELLANEOUS.
8.1 This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York without regard to its conflict of law rules.
8.2 A facsimile transmission of this signed agreement shall be legal and
binding on all parties hereto.
8.3 The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction.
8.4 This Agreement may be amended only by an instrument in writing signed
by the party to be charged with enforcement.
9. ENTIRE UNDERSTANDING. This Agreement (including the attachments hereto)
constitutes the entire understanding of the parties hereto with respect to the
subject matter hereof and supersedes any and all prior agreements, whether
written or oral. This Agreement may be amended only in a written document duly
executed by both parties hereto.
10. NOTICES. Any notice to be given by the Company hereunder shall be deemed
served if faxed to Noteholder at facsimile number 000-000-0000 with a telephone
confirmation from Noteholder of receipt or if delivered to the Noteholder at its
address set out in this Agreement. Any notice to be given by Noteholder
hereunder shall be given by Noteholder and shall be deemed served if faxed to
the Company at facsimile number (000) 000-0000 (Attention Xxxxx Xxxxxxxx) with a
telephone confirmation from the Company of receipt or if delivered to the
Company at its address set out in this Agreement.
4
11. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument. Either
party may enter into this Agreement by executing any such counterpart.
IN WITNESS whereof, this Agreement has been entered into as of the day and year
first above written.
XXXXXXX X. XXXX AND XXXXX X. XXXX, JTWROS
By:
----------------------------------
Title:
----------------------------------
NOTEHOLDER'S
IRS TAXPAYER NO.: ###-##-####
-------------
This Agreement has been accepted by the Company as of the date set forth below
(the "Acceptance Date").
HARKEN ENERGY CORPORATION
By:
-------------------------------
Xxxx X. Xxxxxxxx
Title: Vice President and CFO
Date of Acceptance by the Company: May 26, 2003
5
EXHIBIT "A"
-----------
PROMISSORY NOTE
$45,000 April 1, 2003
FOR VALUE RECEIVED, Harken Energy Corporation (hereafter "Maker"), promises to
pay to the order of Xxxxxxx X. Xxxx and Xxxxx X. Xxxx, JTWROS (the "Holder") the
principal sum of FORTY FIVE THOUSAND DOLLARS ($45,000) together with interest on
the unpaid principal from the date hereof at an annual rate of 10% for the
ensuing interest bearing period. An initial installment of principal in the
amount of TWENTY FIVE THOUSAND DOLLARS ($25,000) together with accrued interest
shall be payable on or before October 31, 2003. A second and final installment
of principal in the amount of TWENTY THOUSAND DOLLARS ($20,000) together with
accrued interest shall be payable not later than April 30, 2004. All
installments of principal and interest shall be payable at such place as may
hereafter be designated by the Holder.
Upon the occurrence of any one or more of the following events, the entire
principal balance remaining unpaid hereon together with all the interest accrued
thereon shall forthwith become due and payable at the option of the Holder
exercised by written notice:
(a) a default in the payment of all or any part of any installment of
principal or interest when and as the same shall become due and
payable provided, however, that Holder shall first provide notice in
writing to Maker of said default and allow Maker a period of no less
than twenty (20) business days to cure the default; or
(b) a receiver, trustee or similar official shall be appointed for the
Maker or of the whole or any part of its property or any proceeding
seeking the adjudication of the Maker as insolvent or seeking the
liquidation, reorganization, adjustment or composition of the Maker's
debts under any law relating to bankruptcy, insolvency or
reorganization by or against the Maker and such appointment or
proceeding continues undismissed or unvacated for a period of sixty
(60) days; or
(c) a breach by the Maker of any of the covenants set out in Section 4 of
the Exchange Agreement.
This Promissory Note is delivered in the State of New York and shall be
construed and enforced in accordance with, and governed by, the laws of the
State of New York without application of the conflict of laws provisions or
principles thereof. All persons and entities in any manner obligated under this
Promissory Note hereby consent to the jurisdiction of any federal or state court
within the State of New York having proper venue and also consent to service of
process by any means authorized by federal or New York law.
HARKEN ENERGY CORPORATION
By:
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President and CFO
6
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement"), dated as of the acceptance date
set forth below, by and between Harken Energy Corporation, a Delaware
corporation, with headquarters located at 000 XxxxXxxx Xxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 (the "Company"), and Xxxxx Xxxxxxx, an individual
whose address is 0000 Xxxx Xxxxxxxx Xx., Xxxxxxxx, XX 00000 (the "Noteholder").
W I T N E S S E T H:
WHEREAS, the undersigned Noteholder hereby offers, upon the terms and
subject to the limitations and conditions contained in this Agreement, to
exchange 5% Senior Convertible Notes Due May 26, 2003 issued by the Company and
held by the Noteholder (the "Exchange Notes") in the combined and outstanding
principal amount of TWO HUNDRED THOUSAND DOLLARS ($200,000) (the "Exchange Notes
Principal") in return for a cash payment as described hereinafter and a
Promissory Note as set forth in the form of Promissory Note in Exhibit "A"
attached and incorporated herein by reference for all purposes; and
WHEREAS, the Company wishes to accept such offer to exchange the Exchange
Notes for the cash and Promissory Note described herein subject to the
conditions of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. TERMS OF THE EXCHANGE: Upon the terms and subject to the limitations and
conditions set forth in this Agreement, the undersigned Noteholder hereby offers
to exchange, and the Company hereby accepts for exchange, the Exchange Notes.
1.1 The Company agrees to provide to the Noteholder:
(a). a cash payment payable on or before May 30, 2003 in an amount of
SEVENTY THOUSAND DOLLARS ($70,000) (35% of the Exchange Notes Principal); and
(b). a Promissory Note in a principal sum of NINETY THOUSAND DOLLARS
($90,000) (45% of the Exchange Notes Principal) pursuant to the terms and
conditions as set forth in Exhibit "A" hereto.
1.2 Noteholder agrees to deliver the Exchange Notes to the Company or its
designee within 5 (five) business days or less following the execution of this
Agreement. Noteholder further agrees to provide to the Company the wire
instructions for the cash payment portion of the exchange no later than 3
business days before payment is due by the Company.
1
2. NOTEHOLDER REPRESENTATIONS AND WARRANTIES: The Noteholder represents and
warrants to, and covenants and agrees with, the Company as follows:
2.1 The Noteholder is the legal owner and holder of the Exchange Notes and
will deliver the Exchange Notes free and clear of all liens, claims
encumbrances, and security interests;
2.2 The Noteholder has all necessary power and authority to execute and
deliver this Agreement and to consummate the transaction contemplated herein;
2.3 The Noteholder is in compliance with any and all U. S. securities laws
as such laws might apply to the Exchange Notes, and participation by the
Noteholder in the transactions contemplated herein does not and will not violate
such securities laws;
2.4 The Noteholder is acquiring the Promissory Notes for its own account
for investment only and not with a view towards the public sale or distribution
thereof;
2.5 This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Noteholder and is a valid and binding agreement of
the Noteholder enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally.
3. COMPANY REPRESENTATIONS AND WARRANTIES: The Company represents and warrants
to the Noteholder that:
3.1 The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is qualified to do
business in the State of Texas. The Company has full power and authority to
enter into this Agreement and consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, and this Agreement
is a valid and binding obligation of the Company enforceable in accordance with
its terms.
3.2 This Agreement, when signed and delivered by Noteholder to the Company
and then accepted by the Company, shall have been duly and validly authorized,
executed and delivered on behalf of the Company and shall be a valid and binding
agreement of the Company enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy or other laws
-affecting the enforcement of creditors' rights generally.
3.3 The Company is not aware of any authorization, approval or consent of
any governmental body which is required to be obtained by the Company for the
issuance of the Promissory Notes to the Noteholder as contemplated by this
Agreement.
2
4. ADDITIONAL COMPANY COVENANTS
4.1 In connection with the Promissory Note to be provided pursuant to the
terms of this Agreement, the Company agrees, so long as any payment obligation
under the Promissory Note remains outstanding, to comply with the Section 10.10
"Limitation on Other Indebtedness" and Section 10.11 "Limitation on Liens" as
set out in that certain Trust Indenture executed by the Company on May 28, 1998
in connection with the Exchange Notes (the "Trust Indenture"). Said Sections
10.10 and 10.11 of the Trust Indenture hereby are incorporated by reference for
the limited purpose of this paragraph 4.
4.2 The Company agrees that the obligations under this Agreement and
respective Promissory Note shall hold the same status as more fully set out in
Section 14.01 "Seniority of Notes" of the Trust Indenture with respect to the
Indebtedness (as defined in the Trust Indenture) and Subordinated Obligations
(as defined in the Trust Indenture). Said Section 14.01 and definitions for
Indebtedness and Subordinated Obligations of the Trust Indenture hereby are
incorporated by reference for the limited purpose of this paragraph 4.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO EXCHANGE
The Noteholder understands that the Company's obligation to complete the
exchange of the Exchange Notes pursuant to this Agreement is conditioned upon:
5.1 The receipt and acceptance in its sole and absolute discretion by the
Company of this Exchange Agreement from the Noteholder as evidenced solely by
the execution and delivery to Noteholder of this Agreement by the Company;
5.2 Timely delivery by the Noteholder of the Exchange Notes in accordance
with this Agreement, and
5.3 The accuracy on the Acceptance Date of the representations and
warranties of the Noteholder contained in this Agreement.
6. CONDITIONS TO THE NOTEHOLDER'S OBLIGATION TO EXCHANGE
The Company understands that the Noteholder's obligation to accept the
Promissory Notes and the cash consideration is conditioned upon:
6.1 Delivery by the Company to the Note holder of this Agreement duly
executed by the Company in acceptance thereof; and
6.2 The accuracy on the acceptance date of the representations and
warranties of the Company contained in this Agreement and the performance by the
Company on or before the acceptance date of all covenants and agreements of the
Company required to be performed on or before such acceptance date.
3
7. INDEMNITY: Noteholder and Company acknowledge that X.X. Xxxxxxx, LLC
( 'MJW") is serving as intermediary in bringing together noteholders signing
this Agreement and the Company. Noteholder and Company agree that the
responsibilities of MJW shall be limited solely to facilitating this Agreement
and that that MJW shall have no responsibility for ensuring compliance of
Noteholder or the Company with any or all legal or regulatory requirements that
may apply to either of them relating to this transaction. Noteholder and Company
each agree to hold MJW and its affiliates, agents and employees harmless against
any claim relating to a failure of either Noteholder or Company or any of their
respective affiliates, agents or employees to fulfill any legal or regulatory
requirement relating to this transaction. Further, Company hereby agrees to
indemnify MJW and its affiliates, agents and employees against any liability
that any of them may incur relating to this transaction (including but not
limited to reasonable attorney's fees) as a result of the failure of Company or
any of its respective affiliates, agents or employees to fulfill any legal or
regulatory requirement relating to this transaction.
8. GOVERNING LAW; MISCELLANEOUS.
8.1 This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York without regard to its conflict of law rules.
8.2 A facsimile transmission of this signed agreement shall be legal and
binding on all parties hereto.
8.3 The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction.
8.4 This Agreement may be amended only by an instrument in writing signed
by the party to be charged with enforcement.
9. ENTIRE UNDERSTANDING. This Agreement (including the attachments hereto)
constitutes the entire understanding of the parties hereto with respect to the
subject matter hereof and supersedes any and all prior agreements, whether
written or oral. This Agreement may be amended only in a written document duly
executed by both parties hereto.
10. NOTICES. Any notice to be given by the Company hereunder shall be deemed
served if faxed to Noteholder at facsimile number 000-000-0000 with a telephone
confirmation from Noteholder of receipt or if delivered to the Noteholder at its
address set out in this Agreement. Any notice to be given by Noteholder
hereunder shall be given by Noteholder and shall be deemed served if faxed to
the Company at facsimile number (000) 000-0000 (Attention Xxxxx Xxxxxxxx) with a
telephone confirmation from the Company of receipt or if delivered to the
Company at its address set out in this Agreement.
4
11. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument. Either
party may enter into this Agreement by executing any such counterpart.
IN WITNESS whereof, this Agreement has been entered into as of the day and year
first above written.
XXXXX XXXXXXX
By:
-------------------------------
Title:
----------------------------
NOTEHOLDER'S
IRS TAXPAYER NO.: ###-##-####
-----------
This Agreement has been accepted by the Company as of the date set forth below
(the "Acceptance Date").
HARKEN ENERGY CORPORATION
By:
---------------------
Xxxx X. Xxxxxxxx
Title: Vice President & CFO
Date of Acceptance by the Company: May 26, 2003
5
EXHIBIT "A"
-----------
PROMISSORY NOTE
$90,000 April 1, 2003
FOR VALUE RECEIVED, Harken Energy Corporation (hereafter "Maker"), promises to
pay to the order of Xxxxx Xxxxxxx(the "Holder") the principal sum of NINETY
THOUSAND DOLLARS ($90,000) together with interest on the unpaid principal from
the date hereof at an annual rate of 10% for the ensuing interest bearing
period. An initial installment of principal in the amount of FIFTY THOUSAND
DOLLARS ($50,000) together with accrued interest shall be payable on or before
October 31, 2003. A second and final installment of principal in the amount of
FORTY THOUSAND DOLLARS ($40,000) together with accrued interest shall be payable
not later than April 30, 2004. All installments of principal and interest shall
be payable at such place as may hereafter be designated by the Holder.
Upon the occurrence of any one or more of the following events, the entire
principal balance remaining unpaid hereon together with all the interest accrued
thereon shall forthwith become due and payable at the option of the Holder
exercised by written notice:
(a) a default in the payment of all or any part of any installment of
principal or interest when and as the same shall become due and
payable provided, however, that Holder shall first provide notice in
writing to Maker of said default and allow Maker a period of no less
than twenty (20) business days to cure the default; or
(b) a receiver, trustee or similar official shall be appointed for the
Maker or of the whole or any part of its property or any proceeding
seeking the adjudication of the Maker as insolvent or seeking the
liquidation, reorganization, adjustment or composition of the Maker's
debts under any law relating to bankruptcy, insolvency or
reorganization by or against the Maker and such appointment or
proceeding continues undismissed or unvacated for a period of sixty
(60) days; or
(c) a breach by the Maker of any of the covenants set out in Section 4 of
the Exchange Agreement.
This Promissory Note is delivered in the State of New York and shall be
construed and enforced in accordance with, and governed by, the laws of the
State of New York without application of the conflict of laws provisions or
principles thereof. All persons and entities in any manner obligated under this
Promissory Note hereby consent to the jurisdiction of any federal or state court
within the State of New York having proper venue and also consent to service of
process by any means authorized by federal or New York law.
HARKEN ENERGY CORPORATION
By:
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President & CFO
6
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement"), dated as of the acceptance date
set forth below, by and between Harken Energy Corporation, a Delaware
corporation, with headquarters located at 000 XxxxXxxx Xxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000 (the "Company"), and Kirr Xxxxxxx & Co. Employee
Profit Sharing Plan, an Employee Profit Sharing Plan whose address is FBO Xxxxx
X. Xxxxxxx, X.X. Xxx 0000, Xxxxxxxx, XX 00000 (the "Noteholder").
W I T N E S S E T H:
WHEREAS, the undersigned Noteholder hereby offers, upon the terms and
subject to the limitations and conditions contained in this Agreement, to
exchange 5% Senior Convertible Notes Due May 26, 2003 issued by the Company and
held by the Noteholder (the "Exchange Notes") in the combined and outstanding
principal amount of FOUR HUNDRED NINETY THOUSAND DOLLARS ($490,000) (the
"Exchange Notes Principal") in return for a cash payment as described
hereinafter and a Promissory Note as set forth in the form of Promissory Note in
Exhibit "A" attached and incorporated herein by reference for all purposes; and
WHEREAS, the Company wishes to accept such offer to exchange the Exchange
Notes for the cash and Promissory Note described herein subject to the
conditions of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. TERMS OF THE EXCHANGE: Upon the terms and subject to the limitations and
conditions set forth in this Agreement, the undersigned Noteholder hereby offers
to exchange, and the Company hereby accepts for exchange, the Exchange Notes.
1.1 The Company agrees to provide to the Noteholder:
(a). a cash payment payable on or before May 30, 2003 in an amount of
ONE HUNDRED SEVENTY ONE THOUSAND FIVE HUNDRED DOLLARS ($171,500) (35% of the
Exchange Notes Principal); and
(b). a Promissory Note in a principal sum of TWO HUNDRED TWENTY
THOUSAND FIVE HUNDRED DOLLARS ($220,500) (45% of the Exchange Notes Principal)
pursuant to the terms and conditions as set forth in Exhibit "A" hereto.
1.2 Noteholder agrees to deliver the Exchange Notes to the Company or its
designee within 5 (five) business days or less following the execution of this
Agreement. Noteholder further agrees to provide to the Company the wire
instructions for the cash payment portion of the exchange no later than 3
business days before payment is due by the Company.
1
2. NOTEHOLDER REPRESENTATIONS AND WARRANTIES: The Noteholder represents and
warrants to, and covenants and agrees with, the Company as follows:
2.1 The Noteholder is the legal owner and holder of the Exchange Notes and
will deliver the Exchange Notes free and clear of all liens, claims
encumbrances, and security interests;
2.2 The Noteholder has all necessary power and authority to execute and
deliver this Agreement and to consummate the transaction contemplated herein;
2.3 The Noteholder is in compliance with any and all U. S. securities laws
as such laws might apply to the Exchange Notes, and participation by the
Noteholder in the transactions contemplated herein does not and will not violate
such securities laws;
2.4 The Noteholder is acquiring the Promissory Notes for its own account
for investment only and not with a view towards the public sale or distribution
thereof;
2.5 This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Noteholder and is a valid and binding agreement of
the Noteholder enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally.
3. COMPANY REPRESENTATIONS AND WARRANTIES: The Company represents and warrants
to the Noteholder that:
3.1 The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is qualified to do
business in the State of Texas. The Company has full power and authority to
enter into this Agreement and consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, and this Agreement
is a valid and binding obligation of the Company enforceable in accordance with
its terms.
3.2 This Agreement, when signed and delivered by Noteholder to the Company
and then accepted by the Company, shall have been duly and validly authorized,
executed and delivered on behalf of the Company and shall be a valid and binding
agreement of the Company enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally.
3.3 The Company is not aware of any authorization, approval or consent of
any governmental body which is required to be obtained by the Company for the
issuance of the Promissory Notes to the Noteholder as contemplated by this
Agreement.
2
4. ADDITIONAL COMPANY COVENANTS
4.1 In connection with the Promissory Note to be provided pursuant to the
terms of this Agreement, the Company agrees, so long as any payment obligation
under the Promissory Note remains outstanding, to comply with the Section 10.10
"Limitation on Other Indebtedness" and Section 10.11 "Limitation on Liens" as
set out in that certain Trust Indenture executed by the Company on May 28, 1998
in connection with the Exchange Notes (the "Trust Indenture"). Said Sections
10.10 and 10.11 of the Trust Indenture hereby are incorporated by reference for
the limited purpose of this paragraph 4.
4.2 The Company agrees that the obligations under this Agreement and
respective Promissory Note shall hold the same status as more fully set out in
Section 14.01 "Seniority of Notes" of the Trust Indenture with respect to the
Indebtedness (as defined in the Trust Indenture) and Subordinated Obligations
(as defined in the Trust Indenture). Said Section 14.01 and definitions for
Indebtedness and Subordinated Obligations of the Trust Indenture hereby are
incorporated by reference for the limited purpose of this paragraph 4.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO EXCHANGE
The Noteholder understands that the Company's obligation to complete the
exchange of the Exchange Notes pursuant to this Agreement is conditioned upon:
5.2 The receipt and acceptance in its sole and absolute discretion by the
Company of this Exchange Agreement from the Noteholder as evidenced solely by
the execution and delivery to Noteholder of this Agreement by the Company;
5.2 Timely delivery by the Noteholder of the Exchange Notes in accordance
with this Agreement, and
5.3 The accuracy on the Acceptance Date of the representations and
warranties of the Noteholder contained in this Agreement.
6. CONDITIONS TO THE NOTEHOLDER'S OBLIGATION TO EXCHANGE
The Company understands that the Noteholder's obligation to accept the
Promissory Notes and the cash consideration is conditioned upon:
6.1 Delivery by the Company to the Note holder of this Agreement duly
executed by the Company in acceptance thereof; and
6.2 The accuracy on the acceptance date of the representations and
warranties of the Company contained in this Agreement and the performance by the
Company on or before the acceptance date of all covenants and agreements of the
Company required to be performed on or before such acceptance date.
3
7. INDEMNITY: Noteholder and Company acknowledge that X.X. Xxxxxxx, LLC
( 'MJW") is serving as intermediary in bringing together noteholders signing
this Agreement and the Company. Noteholder and Company agree that the
responsibilities of MJW shall be limited solely to facilitating this Agreement
and that that MJW shall have no responsibility for ensuring compliance of
Noteholder or the Company with any or all legal or regulatory requirements that
may apply to either of them relating to this transaction. Noteholder and Company
each agree to hold MJW and its affiliates, agents and employees harmless against
any claim relating to a failure of either Noteholder or Company or any of their
respective affiliates, agents or employees to fulfill any legal or regulatory
requirement relating to this transaction. Further, Company hereby agrees to
indemnify MJW and its affiliates, agents and employees against any liability
that any of them may incur relating to this transaction (including but not
limited to reasonable attorney's fees) as a result of the failure of Company or
any of its respective affiliates, agents or employees to fulfill any legal or
regulatory requirement relating to this transaction.
8. GOVERNING LAW; MISCELLANEOUS.
8.1 This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York without regard to its conflict of law rules.
8.2 A facsimile transmission of this signed agreement shall be legal and
binding on all parties hereto.
8.3 The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction.
8.4 This Agreement may be amended only by an instrument in writing signed
by the party to be charged with enforcement.
9. ENTIRE UNDERSTANDING. This Agreement (including the attachments hereto)
constitutes the entire understanding of the parties hereto with respect to the
subject matter hereof and supersedes any and all prior agreements, whether
written or oral. This Agreement may be amended only in a written document duly
executed by both parties hereto.
10. NOTICES. Any notice to be given by the Company hereunder shall be deemed
served if faxed to Noteholder at facsimile number 000-000-0000 with a telephone
confirmation from Noteholder of receipt or if delivered to the Noteholder at its
address set out in this Agreement. Any notice to be given by Noteholder
hereunder shall be given by Noteholder and shall be deemed served if faxed to
the Company at facsimile number (000) 000-0000 (Attention Xxxxx Xxxxxxxx) with a
telephone confirmation from the Company of receipt or if delivered to the
Company at its address set out in this Agreement.
4
11. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument. Either
party may enter into this Agreement by executing any such counterpart.
IN WITNESS whereof, this Agreement has been entered into as of the day and year
first above written.
KIRR XXXXXXX & CO. EMPLOYEE PROFIT SHARING PLAN
By:
-------------------------------
Title:
----------------------------
NOTEHOLDER'S
IRS TAXPAYER NO.: 00-0000000
----------
This Agreement has been accepted by the Company as of the date set forth below
(the "Acceptance Date").
HARKEN ENERGY CORPORATION
By:
---------------------------
Xxxx X. Xxxxxxxx
Title: Vice President and CFO
Date of Acceptance by the Company: May 26, 2003
5
EXHIBIT "A"
-----------
PROMISSORY NOTE
$220,500 April 1, 2003
FOR VALUE RECEIVED, Harken Energy Corporation (hereafter "Maker"), promises to
pay to the order of Kirr Xxxxxxx & Co. Employee Profit Sharing Plan (the
"Holder") the principal sum of TWO HUNDRED TWENTY THOUSAND FIVE HUNDRED DOLLARS
($220,500) together with interest on the unpaid principal from the date hereof
at an annual rate of 10% for the ensuing interest bearing period. An initial
installment of principal in the amount of ONE HUNDRED TWENTY TWO THOUSAND FIVE
HUNDRED DOLLARS ($122,500) together with accrued interest shall be payable on or
before October 31, 2003. A second and final installment of principal in the
amount of NINETY EIGHT THOUSAND DOLLARS ($98,000) together with accrued interest
shall be payable not later than April 30, 2004. All installments of principal
and interest shall be payable at such place as may hereafter be designated by
the Holder.
Upon the occurrence of any one or more of the following events, the entire
principal balance remaining unpaid hereon together with all the interest accrued
thereon shall forthwith become due and payable at the option of the Holder
exercised by written notice:
(a) a default in the payment of all or any part of any installment of
principal or interest when and as the same shall become due and
payable provided, however, that Holder shall first provide notice in
writing to Maker of said default and allow Maker a period of no less
than twenty (20) business days to cure the default; or
(b) a receiver, trustee or similar official shall be appointed for the
Maker or of the whole or any part of its property or any proceeding
seeking the adjudication of the Maker as insolvent or seeking the
liquidation, reorganization, adjustment or composition of the Maker's
debts under any law relating to bankruptcy, insolvency or
reorganization by or against the Maker and such appointment or
proceeding continues undismissed or unvacated for a period of sixty
(60) days; or
(c) a breach by the Maker of any of the covenants set out in Section 4 of
the Exchange Agreement.
This Promissory Note is delivered in the State of New York and shall be
construed and enforced in accordance with, and governed by, the laws of the
State of New York without application of the conflict of laws provisions or
principles thereof. All persons and entities in any manner obligated under this
Promissory Note hereby consent to the jurisdiction of any federal or state court
within the State of New York having proper venue and also consent to service of
process by any means authorized by federal or New York law.
HARKEN ENERGY CORPORATION
By:
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President & CFO
6
