--------------------------------------------------------------------------------
AGREEMENT
among
OLYMPIC RESOURCES LTD.
WEC ACQUISITION, INC.
and
WHITTIER ENERGY COMPANY
July 8, 2003
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TABLE OF CONTENTS
Page
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AGREEMENT.................................................................... 1
ARTICLE I -- THE MERGER...................................................... 1
1.1 The Merger.................................................. 1
1.2 Effective Time of the Merger................................ 2
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF WHITTIER...................... 2
2.1 Corporate Organization.......................................2
2.2 Qualification............................................... 2
2.3 Charter and Bylaws.......................................... 2
2.4 Capitalization.............................................. 3
2.5 Authority Relative to This Agreement........................ 3
2.6 Noncontravention............................................ 4
2.7 Governmental Approvals...................................... 4
2.8 Subsidiaries and Capital Stock.............................. 5
2.9 Financial Statements........................................ 5
2.10 Reserve Reports............................................. 5
2.11 Absence of Undisclosed Liabilities.......................... 6
2.12 Absence of Certain Changes.................................. 6
2.13 Tax Matters..................................................7
2.14 Compliance with Laws........................................ 7
2.15 Legal Proceedings........................................... 8
2.16 Title to Properties......................................... 8
2.17 Permits..................................................... 8
2.18 Agreements.................................................. 8
2.19 Environmental Matters.......................................10
2.20 Insurance...................................................12
2.21 Books and Records...........................................12
2.22 Illegal Payments............................................12
2.23 Brokerage Fees..............................................12
2.24 Offerings of Securities.....................................13
2.25 Representations and Warranties as of the Effective Time.....13
2.26 No Other Representations....................................13
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF OLYMPIC AND NEWCO............13
3.1 Corporate Organization......................................13
3.2 Qualification...............................................13
3.3 Charter and Bylaws..........................................14
3.4 Capitalization of Olympic...................................14
3.5 Authority Relative to This Agreement........................15
3.6 Noncontravention............................................15
3.7 Governmental Approvals......................................16
3.8 Subsidiaries and Capital Stock............................. 16
3.9 Financial Statements....................................... 16
3.10 Reserve Reports............................................ 17
3.11 SEC Filings.................................................17
3.12 Disclosure Documents....................................... 18
3.13 Absence of Undisclosed Liabilities......................... 18
3.14 Absence of Certain Changes................................. 18
3.15 Tax Matters................................................ 19
3.16 Compliance With Laws....................................... 19
3.17 Legal Proceedings.......................................... 19
3.18 Title to Properties........................................ 20
3.19 Permits.................................................... 20
3.20 Agreements................................................. 20
3.21 Employee Benefit Plans..................................... 22
3.22 Environmental Matters...................................... 23
3.23 Labor Relations............................................ 24
3.24 Employees.................................................. 25
3.25 Insurance.................................................. 25
3.26 Books and Records.......................................... 25
3.27 Illegal Payments........................................... 26
3.28 Offerings of Securities.................................... 26
3.29 Brokerage Fees............................................. 26
3.30 Disclosure................................................. 26
3.31 Representations and Warranties as of the Effective Time.... 27
ARTICLE IV - CONDUCT OF COMPANIES PENDING MERGER............................ 27
4.1 Conduct and Preservation of Business....................... 27
4.2 Financial Status and Reports............................... 27
4.3 Restrictions on Certain Actions............................ 27
ARTICLE V - ADDITIONAL AGREEMENTS........................................... 29
5.1 Access to Information; Confidentiality..................... 29
5.2 Appropriate Action; Consents; Filings...................... 30
5.3 Tax Treatment.............................................. 30
5.4 Notice of Litigation....................................... 30
5.5 Corporate Headquarters; Vancouver Office................... 31
5.6 Performance of Subsidiaries................................ 31
5.7 Amendment of Schedules..................................... 31
5.8 Further Assurances......................................... 31
5.9 Expenses................................................... 31
5.10 Break-up Fee............................................... 32
5.11 Exclusive Dealing.................................................. 32
5.12 Public Disclosure.......................................... 32
5.13 Registration Rights Agreement.............................. 32
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ARTICLE VI - CONDITIONS TO OBLIGATIONS OF WHITTIER.......................... 33
6.1 Representations and Warranties True.........................33
6.2 Covenants and Agreements Performed......................... 33
6.3 Opinions of Counsel to Olympic............................. 33
6.4 Olympic Fairness Opinion................................... 33
6.5 Release and Waiver......................................... 34
6.6 Legal Proceedings.......................................... 34
6.7 No Material Adverse Change................................. 34
6.8 Due Diligence.............................................. 34
6.9 Other Documents............................................ 34
ARTICLE VII - CONDITIONS TO OBLIGATIONS OF OLYMPIC AND NEWCO................ 35
7.1 Representations and Warranties True.........................36
7.2 Covenants and Agreements Performed......................... 36
7.3 Opinion of Counsel to Whittier............................. 36
7.4 Fairness Opinion........................................... 36
7.5 Legal Proceedings.......................................... 36
7.6 No Material Adverse Change................................. 36
7.7 Due Diligence...............................................36
7.8 Other Documents............................................ 36
ARTICLE VIII - TERMINATION, AMENDMENT, AND WAIVER........................... 37
8.1 Termination.................................................37
8.2 Effect of Termination; Limitations on Liability............ 37
8.3 Waiver..................................................... 38
8.4 Remedies Not Exclusive..................................... 38
ARTICLE IX - INDEMNIFICATION FOLLOWING EFFECTIVE TIME....................... 38
9.1 Survival....................................................38
9.2 Indemnification by Olympic and Newco....................... 39
9.3 Indemnification by Whittier................................ 39
9.4 Procedure for Indemnification.............................. 40
9.5 Escrow by Olympic Principals............................... 40
ARTICLE X - MISCELLANEOUS................................................... 41
10.1 Notices.................................................... 41
10.2 Entire Agreement........................................... 42
10.3 Binding Effect; Assignment; No Third Party Benefit......... 42
10.4 Severability............................................... 42
10.5 Governing Law.............................................. 42
10.6 Descriptive Headings....................................... 43
10.7 Gender..................................................... 43
10.8 References................................................. 43
10.9 Counterparts............................................... 43
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10.10 Injunctive Relief.......................................... 43
10.11 Consent to Jurisdiction.................................... 44
ARTICLE XI - DEFINITIONS.................................................... 44
11.1 Certain Defined Terms...................................... 44
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EXHIBIT AND SCHEDULE LIST
-------------------------
Exhibit A - Agreement and Plan of Merger
Exhibit B - Nevada Articles of Merger
Exhibit C - Wyoming Articles of Merger
Exhibit D - Contribution Agreement
Exhibit E - Articles of Amendment to Articles of Incorporation
of Olympic
Exhibit F - Opinion of Wyoming Special Counsel to Olympic
Exhibit G - Opinion of Counsel to Olympic
Exhibit H - Release and Waiver
Exhibit I - Escrow Agreement
Exhibit J - Consulting Agreement
Exhibit K - Opinion of Counsel to Whittier
Whittier Schedules
Schedule 2.2 - List of Jurisdictions
Schedule 2.6 - Noncontravention
Schedule 2.7 - Governmental Approvals
Schedule 2.8(a) - Subsidiaries and Capital Stock
Schedule 2.10(a) - Disposition of Oil and Gas Interests
Schedule 2.10(b) - Other Oil and Gas Interests
Schedule 2.11 - Liabilities
Schedule 2.12 - Absence of Certain Changes
Schedule 2.13 - Tax Matters
Schedule 2.14 - Compliance With Laws
Schedule 2.16 - Encumbrances
Schedule 2.17 - Permits
Schedule 2.18 - Agreements
Schedule 2.19(a) - Environmental Matters
Schedule 2.20 - Insurance Policies
Olympic Schedules
Schedule 3.2 - List of Jurisdictions
Schedule 3.4 - Capitalization
Schedule 3.6 - Noncontravention
Schedule 3.7 - Governmental Approvals
Schedule 3.8(a) - Subsidiaries and Capital Stock
Schedule 3.10(a) - Disposition of Oil and Gas Interests
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Schedule 3.10(b) - Other Oil and Gas Interests
Schedule 3.11 - SEC Filings
Schedule 3.13 - Liabilities
Schedule 3.14 - Certain Changes
Schedule 3.15 - Tax Matters
Schedule 3.16 - Compliance With Laws
Schedule 3.18 - Encumbrances
Schedule 3.19 - Permits
Schedule 3.20 - Agreements
Schedule 3.21(a) - Employee Benefit Plans
Schedule 3.21(b) - Retirement Plan Liabilities
Schedule 3.21(c) - Benefit Plan Liability
Schedule 3.21(d) - Changes to Benefit Plans
Schedule 3.22(a) - Environmental Matters
Schedule 3.23 - Collective Bargaining Agreements
Schedule 3.24 - Obligations to Employees
Schedule 3.25 - Insurance Policies
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AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of July 8, 2003, among Olympic
Resources Ltd., a Wyoming corporation ("Olympic"), WEC Acquisition, Inc., a
Wyoming corporation and a wholly owned subsidiary of Olympic ("Newco"), and
Whittier Energy Company, a Nevada corporation ("Whittier").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, upon the terms and subject to the conditions of this Agreement,
Newco will merge with and into Whittier (the "Merger") as a result of which the
shareholders of Whittier collectively will own 79,393,142 shares of the common
stock, no par value (the "Olympic Common Stock"), and 100,000 shares of the
Series A Convertible Preferred Stock, no par value (the "Olympic Preferred
Stock"), of Olympic;
WHEREAS, the Board of Directors of Whittier has determined that the Merger
is fair to, and in the best interests of, Whittier and its shareholders; has
approved and adopted this Agreement and the transactions contemplated herein;
and this Agreement and the transactions contemplated herein shall be submitted
to the shareholders of Whittier for their approval, as contemplated herein;
WHEREAS, the Board of Directors of Olympic has determined that the Merger
is in the best interests of Olympic and its shareholders and has approved and
adopted this Agreement and the transactions contemplated herein;
WHEREAS, the Board of Directors of Newco has determined that the Merger is
in the best interests of Newco and its shareholder and the Board of Directors of
Newco and Olympic, as the sole shareholder of Newco, have approved and adopted
this Agreement and the transactions contemplated herein;
WHEREAS, for Federal income tax purposes, it is intended that the Merger
qualify as a reorganization under the provisions of section 368(a) of the United
States Internal Revenue Code of 1986, as amended (the "Code") and that this
Agreement and the Annexes hereto shall constitute a "plan of reorganization" for
the purposes of section 368 of the Code;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Olympic, Newco, and Whittier hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with Chapters 78 and 92A of the Nevada Revised
Statutes and the Wyoming Business Corporation Act (the "WBCA"), at the Effective
Time (as defined in Section 1.2), Newco and Whittier shall effect a merger by
executing the Plan and Agreement of Merger (the "Plan") in substantially the
form attached hereto as Exhibit A, and by filing articles of merger or
consolidation, as appropriate (the "Articles of Merger"), each substantially in
the form attached hereto as Exhibits B and C, respectively, with the Secretary
of State of Nevada and the Secretary of State of Wyoming in such form as
required by, and executed in accordance with the relevant provisions of, Chapter
92A of the Nevada Revised Statutes and the WBCA. As a result of the Merger, the
separate corporate existence of Newco shall cease and Whittier shall continue as
the surviving corporation in the Merger (the "Surviving Corporation"). The name
of the Surviving Corporation shall be "Whittier Energy Company" or such other
name as the Board of Directors of the Surviving Corporation may select
subsequent to the Effective Time. Prior to the Merger, Olympic shall, pursuant
to the terms of the Contribution Agreement, a copy of which is attached as
Exhibit D hereto (the "Contribution Agreement"), issue and deliver to Newco
shares of Olympic Stock equivalent to the number of shares of Olympic Stock to
be transferred pursuant to the terms and provisions of the Plan.
1.2 Effective Time of the Merger. As promptly as practicable after the
approval hereof by the shareholders of Whittier, and the execution and delivery
of this Agreement by each of the parties hereto, but in no event after August
29, 2003, the parties hereto each shall cause the Merger to be consummated by
filing Articles of Merger with the Secretary of State of Nevada and the
Secretary of State of Wyoming in such form as required by, and executed in
accordance with the relevant provisions of, Chapter 92A of the Nevada Revised
Statutes and the WBCA, respectively. The Merger shall become effective at such
time as both of the Secretaries of States of Nevada and Wyoming shall be issued
certificates of merger with respect thereto (the "Effective Time").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF WHITTIER
------------------------------------------
Whittier hereby represents and warrants to Olympic and Newco as follows:
2.1 Corporate Organization. Whittier is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada and has all
requisite corporate power and corporate authority to own, lease, and operate its
properties and to carry on its business as now being conducted.
2.2 Qualification. Each of Whittier and its Subsidiaries is duly qualified
or licensed to do business as a foreign corporation and is in good standing in
each of the jurisdictions set forth on Schedule 2.2, which are all the
jurisdictions in which it owns, leases, or operates property or in which such
qualification or licensing is required for the conduct of its business, except
jurisdictions in which the failure to be so qualified or licensed would not,
individually or in the aggregate, have a Material Adverse Effect.
2.3 Charter and Bylaws. Whittier has delivered to Olympic accurate and
complete copies of the Articles of Incorporation and Bylaws of Whittier and its
Subsidiaries as currently in effect, and will deliver to Olympic not later than
five (5) days prior to the Effective Time (i) the stock records of Whittier and
its Subsidiaries, and (ii) the minutes of all meetings of the Boards of
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Directors and shareholders of Whittier and its Subsidiaries, any committees of
any such Boards, and all consents in lieu of such meetings. Such records,
minutes, and consents accurately reflect the stock ownership of Whittier and its
Subsidiaries and in all material respects all actions taken by the Boards and
shareholders of Whittier and its Subsidiaries and any committees of such Boards.
Neither Whittier nor its Subsidiaries is in violation of any provision of its
Articles of Incorporation or Bylaws, other than violations that, individually or
in the aggregate, do not and will not have a Material Adverse Effect.
2.4 Capitalization. The authorized capital stock of Whittier consists of
100,000 shares of the common stock of Whittier, no par value ("Whittier Common
Stock"), of which 100,000 shares are outstanding and no shares are held in
Whittier's treasury. All outstanding shares of capital stock of Whittier have
been validly issued and are fully paid and nonassessable, and no shares of
capital stock of Whittier are subject to, nor have any been issued in violation
of, preemptive or similar rights. All issuances, sales, and repurchases by
Whittier of shares of its capital stock have been effected in compliance with
all Applicable Laws, including without limitation applicable federal and state
securities laws. Except as set forth above in this Section, there are
outstanding (i) no shares of capital stock or other voting securities of
Whittier, (ii) no securities of Whittier convertible into or exchangeable for
shares of capital stock or other voting securities of Whittier, (iii) no options
or other rights to acquire from Whittier, and no obligation of Whittier to issue
or sell, any shares of capital stock or other voting securities of Whittier or
any securities of Whittier convertible into or exchangeable for such capital
stock or voting securities, and (iv) no equity equivalents, interests in the
ownership or earnings, or other similar rights of or with respect to Whittier.
There are no outstanding obligations of Whittier to repurchase, redeem, or
otherwise acquire any of the foregoing shares, securities, options, equity
equivalents, interests, or rights. Whittier is not a party to, and is not aware
of, any voting agreement, voting trust, or similar agreement or arrangement
relating to any class or series of its capital stock.
2.5 Authority Relative to This Agreement. Whittier has full corporate power
and corporate authority to execute and deliver this Agreement and the Ancillary
Documents to which it is a party and, subject to the approval of this Agreement
by the shareholders of Whittier in accordance with Applicable Law and Whittier's
Articles of Incorporation, to consummate the transactions contemplated herein
and therein. The execution, delivery, and performance by Whittier of this
Agreement and the Ancillary Documents to which it is a party, and the
consummation by it of the transactions contemplated herein and therein, have
been duly authorized by the Board of Directors of Whittier, and no other
corporate proceedings (other than the approval of this Agreement by the
shareholders of Whittier in accordance with Applicable Law and Whittier's
Articles of Incorporation) on the part of Whittier are necessary to authorize
the execution, delivery, and performance by Whittier of this Agreement and such
Ancillary Documents and the consummation by it of the transactions contemplated
herein and therein. This Agreement has been duly executed and delivered by
Whittier and, assuming the due authorization, execution and delivery thereof by
Olympic and Newco, constitutes, and each Ancillary Document executed or to be
executed by Whittier has been, or when executed will be, duly executed and
delivered by Whittier and constitutes, or when executed and delivered will
constitute, a valid and legally binding obligation of Whittier enforceable
against Whittier in accordance with its respective terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, and similar laws affecting creditors' rights
3
generally and (ii) equitable principles which may limit the availability of
certain equitable remedies (such as specific performance) in certain instances.
On or prior to the date of this Agreement, the Board of Directors of Whittier
has determined to recommend approval of the Merger to the shareholders of
Whittier, and such determination is in effect as of the date hereof.
2.6 Noncontravention. The execution, delivery, and performance by Whittier
of this Agreement and the Ancillary Documents to which it is a party and the
consummation by it of the transactions contemplated herein and therein do not
and will not (i) conflict with or result in a violation of any provision of the
Articles of Incorporation or Bylaws of Whittier, (ii) conflict with or result in
a violation of any provision of, or constitute (with or without the giving of
notice or the passage of time or both) a default under, or give rise (with or
without the giving of notice or the passage of time or both) to any right of
termination, cancellation, or acceleration under, or require any consent,
approval, authorization, or waiver of, or notice to, any party to, any bond,
debenture, note, mortgage, indenture, lease, contract, agreement, or other
instrument or obligation to which Whittier is a party or by which Whittier or
any of its respective properties may be bound or any Permit held by Whittier,
(iii) result in the creation or imposition of any Encumbrance upon the
properties of Whittier, or (iv) assuming compliance with the matters referred to
in Section 2.7, violate any Applicable Law binding upon Whittier, except, in the
case of clauses (ii), (iii), and (iv) above, for any such conflicts, violations,
defaults, terminations, cancellations, accelerations, or Encumbrances which
would not, individually or in the aggregate, have a Material Adverse Effect, and
except, in the case of clause (ii) above, for (A) such consents, approvals,
authorizations, and waivers that have been obtained and are unconditional and in
full force and effect and such notices that have been duly given and (B) such
consents, approvals, authorizations, waivers, and notices that are disclosed on
Schedule 2.6.
2.7 Governmental Approvals. Except as set forth on Schedule 2.7, no
consent, approval, order, or authorization of, or declaration, filing, or
registration with, any Governmental Entity is required to be obtained or made by
Whittier or any of its Subsidiaries in connection with the execution, delivery,
or performance by Whittier of this Agreement and the Ancillary Documents to
which it is a party or the consummation by it of the transactions contemplated
herein or therein, other than (i) the filing by Whittier of Articles of Merger
with respect to the Merger with the Secretary of State of Nevada and issuance by
such Secretary of State of a certificate of merger in accordance with Chapter
72A of the Nevada Revised Statutes; (ii) compliance with any applicable
requirements of the HSR Act; (iii) compliance with any applicable requirements
of the Securities Act; (iv) compliance with any applicable requirements of the
Exchange Act; (v) compliance with any applicable requirements of the Trust
Indenture Act; (vi) compliance with any applicable state securities or takeover
laws; (vii) filings with Governmental Entities to occur in the ordinary course
following the consummation of the transactions contemplated herein; and (viii)
such consents, approvals, orders, or authorizations which, if not obtained, and
such declarations, filings, or registrations which, if not made, would not,
individually or in the aggregate, have a Material Adverse Effect.
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2.8 Subsidiaries and Capital Stock.
(a) Except as disclosed on Schedule 2.8(a), Whittier does not own, directly
or indirectly, any capital stock or other securities of any corporation or have
any direct or indirect equity or ownership interest in any other person. Also
disclosed on Schedule 2.8(a) is the jurisdiction of incorporation of each
Whittier Subsidiary and the authorized and outstanding capital stock or other
equity interests of each Whittier Subsidiary. Each Whittier Subsidiary is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. Each Whittier Subsidiary has all
requisite corporate power and corporate authority to own, lease, and operate its
properties and to carry on its business as now being conducted. No actions or
proceedings to dissolve any Whittier Subsidiary are pending, or, to the
knowledge of Whittier, threatened.
(b) All of the outstanding capital stock of each Whittier Subsidiary is
owned directly or indirectly by Whittier, free and clear of all Encumbrances.
All outstanding shares of capital stock of each Whittier Subsidiary have been
validly issued and are fully paid and nonassessable. No shares of capital stock
of any Whittier Subsidiary are subject to, nor have any been issued in violation
of, preemptive or similar rights.
2.9 Financial Statements. Whittier has delivered to Olympic accurate and
complete copies of Whittier's audited balance sheet (the "Whittier Balance
Sheet") as of December 31, 2002 (the "Whittier Balance Sheet Date"), and the
related audited statements of income, stockholders' equity, and cash flows for
the year then ended, and the notes and schedules thereto, together with the
unqualified reports thereon of Xxxxx Xxxxxxxxx Paulden XxXxxx Starbuck & Xxxxxx,
independent public accountants (the "Whittier Financial Statements"). The
Whittier Financial Statements (i) represent actual bona fide transactions, (ii)
have been prepared from the books and records of Whittier and its Subsidiaries
in conformity with generally accepted accounting principles in the USA ("US
GAAP") applied on a basis consistent with preceding years throughout the periods
involved, and (iii) accurately, completely, and fairly present in all material
respects the financial position of Whittier and its Subsidiaries as of the
respective dates thereof and its results of operations and cash flows for the
periods then ended. All financial projections, forecasts, and other
forward-looking information provided by Whittier to Olympic were, as of their
respective dates, prepared in good faith and on a basis that management of
Whittier believed to be reasonable.
2.10 Reserve Reports.
(a) Whittier has furnished Olympic with a copy of its reserve report
containing estimates of proved oil and gas reserves as of December 31, 2002, of
Whittier and its Subsidiaries (the "Whittier Reserve Report"). The factual,
non-interpretive data on which the Whittier Reserve Report was based was
accurate and complete at the time the Whittier Reserve Report was prepared in
all material respects and incorporates the following: (i) the interests owned by
Whittier and its Subsidiaries at the time the Whittier Reserve Report was
prepared, (ii) reasonable estimates for periods prior to the date provided of
the cost of operating the Whittier Oil and Gas Interests (as hereinafter
defined), (iii) historical production and cost data, (iv) all tests and
operations on Oil and Gas Interests of Whittier and its Subsidiaries, of which
Whittier was aware as of the date of the Whittier Reserve Report, (v) all
5
capital costs reasonably expected by Whittier at such time to be necessary to
operate and develop the Oil and Gas Interests described therein, and (vi)
reasonable good faith estimates, as of the time provided, of projected future
operating costs with respect to such Oil and Gas Interests. Whittier has
furnished XX Xxxx and Associates, Inc. all information necessary to produce the
Whittier Reserve Report that is complete and accurate in all material respects.
Set forth in Schedule 2.10(a) is a list of all material Oil and Gas Interests
that were included in the Whittier Reserve Report that have been disposed of
prior to the date hereof. For the purposes of this Agreement, "Oil and Gas
Interests" means direct and indirect interests in and rights with respect to
oil, gas, mineral, and related properties of any kind and nature, and rights
with respect to oil, gas, mineral, and related properties and assets of any kind
and nature, direct or indirect, including working, leasehold and mineral
interests and operating rights and royalties, overriding royalties, production
payments, net profit interests and other non-working interests and non-operating
assets; all interests in rights with respect to oil, condensate, gas, casinghead
gas and other liquid or gaseous hydrocarbons and other minerals or revenues
therefrom, all contracts in connection therewith and claims and rights thereto
(including all oil and gas leases, operating agreements, unitization and pooling
agreements and orders, division orders, transfer orders, mineral deeds, royalty
deeds, oil and gas sales, exchange and processing contracts and agreements, and
in each case, interests thereunder), surface interests, fee interests,
reversionary interests, reservations, and concessions; all easements, rights of
way, licenses, permits, leases, and other interests associated with, appurtenant
to, or necessary for the operation of any of the foregoing; and all interests in
equipment and machinery (including xxxxx, well equipment and machinery), oil and
gas production, gathering, transmission, treating, processing, and storage
facilities (including tanks, tank batteries, pipelines, and gathering systems),
pumps, water plants, electric plants, gasoline and gas processing plants,
refineries, and other tangible personal property and fixtures associated with,
appurtenant to, or necessary for the operation of any of the foregoing.
(b) Set forth in Schedule 2.10(b) is a list of all Oil and Gas Interests
that were not included in the Whittier Reserve Report or that have been acquired
by Whittier or any of its Subsidiaries since the date of that report.
2.11 Absence of Undisclosed Liabilities. Neither Whittier nor any
Subsidiary of Whittier has any liability or obligation (whether accrued,
absolute, contingent, unliquidated, or otherwise, whether or not known to
Whittier, and whether due or to become due), except (i) liabilities reflected on
the Whittier Balance Sheet, (ii) liabilities described in the notes accompanying
the Whittier Financial Statements dated as of December 31, 2002 (iii)
liabilities that have arisen since the date of the Whittier Balance Sheet in the
ordinary course of business (none of which is a material liability for breach of
contract, breach of warranty, tort, or infringement), (iv) liabilities arising
under executory contracts entered into in the ordinary course of business (none
of which is a material liability for breach of contract), (v) liabilities
specifically set forth on Schedule 2.11, and (vi) other liabilities which, in
the aggregate, are not material to Whittier and its Subsidiaries considered as a
whole.
2.12 Absence of Certain Changes. Except as disclosed on Schedule 2.12,
since the Whittier Balance Sheet Date, (i) there has not been any change,
development, or event, individually or in the aggregate, that has had, or might
reasonably be expected to have, a Material Adverse Effect; (ii) the business of
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Whittier and its Subsidiaries has been conducted only in the ordinary course
consistent with past practice; (iii) neither Whittier nor any of its
Subsidiaries has incurred any material liability, engaged in any material
transaction, or entered into any material agreement outside the ordinary course
of business consistent with past practice; (iv) neither Whittier nor any of its
Subsidiaries has suffered any material loss, damage, destruction, or other
casualty to any of its assets (whether or not covered by insurance); and (v)
Whittier has not taken any of the actions set forth in Section 4.3 except as
permitted thereunder.
2.13 Tax Matters. Except as disclosed on Schedule 2.13:
(a) Whittier has (and as of the Effective Time will have) duly filed all
federal, state, local, and foreign Tax Returns required to be filed by or with
respect to it with the IRS, or other applicable taxing authority, and no
extensions with respect to such Tax Returns have (or as of the Effective Time
will have) been requested or granted;
(b) Whittier has (and as of the Effective Time will have) paid, or
adequately reserved against in the Whittier Financial Statements, all Taxes due,
or claimed by any taxing authority to be due, from or with respect to it, except
Taxes that are being contested in good faith by appropriate legal proceedings
and for which adequate reserves have been set aside as disclosed on Schedule
2.13;
(c) there has been no issue raised or adjustment proposed (and none is
pending) by the IRS or any other taxing authority in connection with any of the
Tax Returns;
(d) Whittier has (and as of the Effective Time will have) made all deposits
required with respect to Taxes;
(e) the federal income Tax Returns of Whittier have not been audited by the
IRS or any other applicable taxing authority;
(f) no waiver or extension of any statute of limitations as to any federal,
state, local, or foreign Tax matter has been given by or requested from
Whittier; and
(g) Whittier has not filed a consent under Section 341(f) of the Code.
2.14 Compliance With Laws. Except as disclosed on Schedule 2.14, each of
Whittier and its Subsidiaries has complied in all material respects with all
Applicable Laws, except for noncompliance with such Applicable Laws which,
individually or in the aggregate, does not and will not have a Material Adverse
Effect. Neither Whittier nor any of its Subsidiaries has received any written
notice, which has not been dismissed or otherwise disposed of, that such person
has not so complied. Neither Whittier nor any of its Subsidiaries is charged or,
to the knowledge of Whittier, threatened with, or, to the knowledge of Whittier,
under investigation with respect to, any violation of any Applicable Law
relating to any aspect of the business of Whittier or any of its Subsidiaries,
other than violations which, individually or in the aggregate, do not and will
not have a Material Adverse Effect.
7
2.15 Legal Proceedings. There are no Proceedings pending or, to the
knowledge of Whittier, threatened against or involving Whittier or any of its
Subsidiaries (or any of its directors or officers in connection with the
business or affairs of Whittier or any of its Subsidiaries) or any properties or
rights of Whittier which, individually or in the aggregate, might reasonably be
expected to have a Material Adverse Effect. There are no Proceedings pending or,
to the knowledge of Whittier, threatened seeking to restrain, prohibit, or
obtain damages or other relief in connection with this Agreement or the
transactions contemplated herein.
2.16 Title to Properties. Each of Whittier and its Subsidiaries has good
and defensible title, and in the case of real property insurable title, to all
properties (real, personal, and mixed, tangible and intangible) it owns or
purports to own, including without limitation the properties reflected in its
books and records and in the Whittier Balance Sheet, other than those disposed
of after the date of such balance sheet in the ordinary course of business
consistent with past practice, free and clear of all Encumbrances, except as
disclosed on Schedule 2.16, and such imperfections or irregularities of title,
if any, as (A) are not substantial in character, amount, or extent and do not
materially detract from the value of the property subject thereto, (B) do not
materially interfere with either the present or intended use of such property,
and (C) do not, individually or in the aggregate, materially interfere with the
conduct of Whittier's normal operations.
2.17 Permits. Whittier and its Subsidiaries hold all Permits necessary or
required for the conduct of the business of Whittier and its Subsidiaries as
currently conducted. Each of such Permits is in full force and effect, Whittier
and its Subsidiaries are in compliance with all its obligations with respect
thereto, and, to the knowledge of Whittier, no event has occurred which permits,
or with or without the giving of notice or the passage of time or both would
permit, the revocation or termination of any thereof. Except as disclosed on
Schedule 2.17, no notice has been issued by any Governmental Entity and no
Proceeding is pending or, to the knowledge of Whittier, threatened with respect
to any alleged failure by Whittier or any of its Subsidiaries to have any
Permit.
2.18 Agreements.
(a) Set forth on Schedule 2.18 is a list of all the following agreements,
arrangements, and understandings (written or oral, formal or informal)
(collectively, for purposes of this Section, "agreements") to which Whittier or
any of its Subsidiaries is a party or by which Whittier or any such Subsidiary
or any of their respective properties is otherwise bound:
(i) collective bargaining agreements and similar agreements with
employees as a group;
(ii) employee benefit agreements, trusts, plans, funds, or other
arrangements of any nature, including those referred to in Section 4.3(e);
(iii) agreements with any current or former shareholder, director,
officer, employee, consultant, or advisor or any affiliate of any such
person;
8
(iv) agreements between or among Whittier and any of the
Subsidiaries;
(v) indentures, mortgages, security agreements, notes, loan or
credit agreements, or other agreements relating to the borrowing of money
by Whittier or any Subsidiary or to the direct or indirect guarantee or
assumption by Whittier or any Subsidiary of any obligation of others,
including any agreement that has the economic effect although not the legal
form of any of the foregoing;
(vi) agreements relating to the acquisition or disposition of
assets, other than those entered into in the ordinary course of business
consistent with past practice;
(vii) agreements relating to the acquisition or disposition of any
interest in any business enterprise;
(viii) agreements with respect to the lease of real or personal
property;
(ix) agreements concerning the management or operation of any real
property;
(x) broker, distributor, dealer, manufacturer's representative,
sales, agency, sales promotion, advertising, market research, marketing,
consulting, research and development, maintenance, service, and repair
agreements;
(xi) license, royalty, or other agreements relating to Intellectual
Property;
(xii) royalty, working interest, joint operating agreement, and any
other agreements relating to the Whittier Oil and Gas Interests;
(xiii) partnership, joint venture, and profit sharing agreements;
(xiv) agreements with any Governmental Entity;
(xv) agreements relating to the release or disposal of hazardous
material (as such term is defined in Section 2.19(b));
(xvi) agreements in the nature of a settlement or a conciliation
agreement arising out of any claim asserted by any other person;
(xvii) agreements containing any covenant limiting the freedom of
Whittier or any Subsidiary to engage in any line of business or compete
with any other person in any geographic area or during any period of time;
(xviii) powers of attorney granted by Whittier or any Subsidiary in
favor of any person;
9
(xix) agreements not made in the ordinary course of business; and
(xx) other agreements, whether or not made in the ordinary course of
business, that are material to the business, assets, results of operations,
condition (financial or otherwise), or prospects of Whittier. For the
purposes of this Section 2.18, a "material" agreement shall mean any
agreement that provides for aggregate payments or receipts in excess of
$100,000 during the course of a calendar year.
(b) Whittier has made available to Olympic accurate and complete copies of
the agreements listed on Schedule 2.18 and will provide physical copies of each
such agreement not later than five (5) days prior to the Effective Time. Each of
such agreements is a valid and binding agreement of the parties thereto
enforceable against them in accordance with its terms. No breach or default
exists with respect to any of such agreements, and no event has occurred which,
after the giving of notice or the passage of time or otherwise, will result in
any such breach or default.
(c) Neither Whittier nor any of its Subsidiaries has received notice of any
plan or intention of any other party to any agreement to exercise any right of
offset with respect to, or any right to cancel or terminate, any agreement, and
Whittier does not know of any fact or circumstance that would justify the
exercise by any such other party of such a right other than the automatic
termination of such agreement in accordance with its terms. Whittier does not
currently contemplate, or have reason to believe any other person currently
contemplates, any amendment or change to any agreement, which amendment or
change could have a Material Adverse Effect.
2.19 Environmental Matters.
(a) Except as disclosed in Schedule 2.19(a) and except for matters that in
the aggregate would not have a Material Adverse Effect:
(i) to the knowledge of Whittier, the properties, operations, and
activities of Whittier and its Subsidiaries comply with all Applicable
Environmental Laws (as defined below);
(ii) Whittier, its Subsidiaries and the properties, operations, and
activities of Whittier and its Subsidiaries are not subject to any existing,
pending, or, to the knowledge of Whittier, threatened Proceeding under, or to
any remedial obligations under, any Applicable Environmental Laws;
(iii) all Permits, if any, required to be obtained by Whittier or any
of its Subsidiaries under any Applicable Environmental Laws in connection with
any aspect of the business of Whittier or its Subsidiaries, including without
limitation those relating to the treatment, storage, disposal, or release of a
hazardous material (as defined below), have been duly obtained and are in full
force and effect, and Whittier and each of its Subsidiaries is in compliance
with the terms and conditions of all such Permits;
(iv) Each of Whittier and its Subsidiaries has satisfied and is
currently in compliance with all financial responsibility requirements
applicable to its operations and imposed by any Governmental Entity under any
Applicable Environmental Laws, and neither Whittier nor any of its Subsidiaries
has received any notice of noncompliance with any such financial responsibility
requirements;
10
(v) to the knowledge of Whittier, there are no physical or
environmental conditions existing on any property owned or leased by Whittier or
any of its Subsidiaries, or resulting from their respective operations or
activities, past or present, at any location, that would give rise to any
on-site or off-site remedial obligations under any Applicable Environmental
Laws;
(vi) to the knowledge of Whittier, since the effective date of the
relative requirements of Applicable Environmental Laws, all hazardous materials
generated by Whittier or any of its Subsidiaries, or used in connection with its
properties, operations, or activities have been transported only by carriers
authorized under Applicable Environmental Laws to transport such materials, and
have been disposed of only at treatment, storage, and disposal facilities
authorized under Applicable Environmental Laws to treat, store, or dispose of
such materials, and, to the knowledge of Whittier, such carriers and facilities
have been and are operating in compliance with such authorizations and are not
the subject of any existing, pending, or threatened Proceeding in connection
with any Applicable Environmental Laws;
(vii) there has been no exposure of any person or property to
hazardous materials, nor has there been any release of hazardous materials into
the environment, by Whittier, its Subsidiaries or in connection with their
properties, operations, or activities that could reasonably be expected to give
rise to any claim for damages or compensation; and
(viii) Whittier shall make available to Olympic all internal and
external environmental audits and studies and all correspondence on substantial
environmental matters in the possession of Whittier relating to any of the
current or former properties, operations, or activities of Whittier and its
Subsidiaries, provided that Whittier shall not be required to make available any
such audits, studies, or correspondence that may be subject to the
attorney-client privilege or similar privilege.
(b) For purposes of this Section, "Applicable Environmental Laws" means any
and all Applicable Laws pertaining to health, safety, or the environment in
effect in any and all jurisdictions in which Whittier or any of its Subsidiaries
has conducted operations or activities or owned or leased property, including,
without limitation, the Clear Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Rivers and Harbors Act of 1899, as amended, the Federal Water Pollution Control
Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking
Water Act, as amended, the Toxic Substances Control Act, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous
Materials Transportation Act, as amended, and other environmental conservation
or protection laws. For purposes of this Agreement, the term "hazardous
material" means (i) any substance which is listed or defined as a hazardous
substance, hazardous constituent, or solid waste pursuant to any Applicable
Environmental Laws and (ii) petroleum (including crude oil and any fraction
thereof), natural gas, and natural gas liquids.
11
(c) The representations and warranties contained in this Section would
continue to be true and correct following disclosure to the applicable
Governmental Entities of all relevant facts, conditions, and circumstances, if
any, pertaining to the properties, operations, and activities of Whittier and
its Subsidiaries.
2.20 Insurance. Set forth on Schedule 2.20 is a list and summary
description, including risks covered, premium amounts, term of policy, of all
policies of fire, liability, casualty, life, and other insurance owned or held
by each of Whittier and its Subsidiaries. Such policies are in full force and
effect, are sufficient to satisfy all material requirements of Applicable Laws
and any agreements, arrangements, or understandings to which Whittier or any of
its Subsidiaries is a party, and provide adequate insurance coverage for the
assets and operations of Whittier and its Subsidiaries. All premiums due and
payable with respect to such policies have been timely paid. No notice of
cancellation of, or indication of an intention not to renew, any such policy has
been received by Whittier or any of its Subsidiaries. No event has occurred nor
does any fact or condition exist which would render any of such policies void or
voidable or subject any of such policies to cancellation or termination. Each of
Whittier and its Subsidiaries has given timely notice to the appropriate
insurance carrier of all pending or threatened claims against it that are
insured. Schedule 2.20 also lists all pending and threatened insured claims. To
the knowledge of Whittier, the insurance companies providing the insurance
listed on Schedule 2.20 are solvent. During the past three years, no application
by Whittier or any of its Subsidiaries for insurance with respect to its assets
or operations has been denied for any reason. To the knowledge of Whittier,
adequate insurance coverage for the assets and operations of Whittier and its
Subsidiaries relating to their non-operated Oil and Gas Interests is provided
for.
2.21 Books and Records. All the books and records of Whittier and each of
its Subsidiaries, including all personnel files, employee data, and other
materials relating to employees, are substantially complete and correct in all
material respects, have been in all material respects maintained in accordance
with good business practice and all Applicable Laws, and, in the case of the
books of account, have been in all material respects prepared and maintained in
accordance with generally accepted accounting principles consistently applied.
Such books and records accurately and fairly reflect, in reasonable detail, all
material transactions, revenues, expenses, assets, and liabilities of Whittier
and each of its Subsidiaries.
2.22 Illegal Payments. To the knowledge of Whittier, neither Whittier nor
any of its Subsidiaries, or any director, officer, employee, or agent of such
person has, directly or indirectly, paid or delivered any fee, commission, or
other sum of money or item of property however characterized to any broker,
finder, agent, government official, or other person, in the United States or any
other country, in any manner related to the business or operations of Whittier
or any of its Subsidiaries, which Whittier or any such director, officer,
employee, or agent knows or has reason to believe to have been illegal under any
Applicable Law.
2.23 Brokerage Fees. Neither Whittier nor any of its affiliates has
retained any financial advisor, broker, agent, or finder or paid or agreed to
pay any financial advisor, broker, agent, or finder on account of this Agreement
or any transaction contemplated herein.
12
2.24 Offerings of Securities. All securities that have been offered or sold
by Whittier or any of its Subsidiaries during the six years prior to the date of
this Agreement have been offered and sold pursuant to valid exemptions from the
Securities Act and applicable state securities laws. To the knowledge of
Whittier, no private offering memorandum or other information furnished (whether
in writing or orally) to any offeree or purchaser of such securities, at the
time of delivery of such private offering memorandum or other information,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
2.25 Representations and Warranties as of the Effective Time. The
representations and warranties made in this Article II will be true and correct
in all material respects on and as of the Effective Time with the same force and
effect as if such representations and warranties had been made on and as of the
Effective Time, except that any such representations and warranties which
expressly relate only to an earlier date shall be true and correct as of the
Effective Time as of such earlier date.
2.26 No Other Representations. Except as and to the extent expressly set
forth in this Article II, Whittier makes no representations or warranties
whatsoever to Olympic or Newco and hereby disclaims all liability and
responsibility for any representation, warranty, statement, or information made,
communicated, or furnished (orally or in writing) to Olympic, Newco, or their
representatives (including without limitation any opinion, information,
projection, or advice that may have been or may be provided to Olympic and/or
Newco by any director, officer, employee, agent, consultant, or representative
of Whittier or any affiliate thereof).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF OLYMPIC AND NEWCO
Olympic and Newco hereby jointly and severally represent and warrant to
Whittier that:
3.1 Corporate Organization. Olympic is a corporation duly organized,
validly existing, and in good standing under the laws of the Wyoming and has all
requisite corporate power and corporate authority to own, lease, and operate its
properties and to carry on its business as now being conducted. No actions or
proceedings to dissolve Olympic are pending or, to the knowledge of Olympic,
threatened.
3.2 Qualification. Each of Olympic, Newco and the other Subsidiaries of
Olympic is duly qualified or licensed to do business as a foreign corporation
and is in good standing in each of the jurisdictions set forth on Schedule 3.2,
which are all the jurisdictions in which it owns, leases, or operates property
or in which such qualification or licensing is required for the conduct of its
business, except jurisdictions in which the failure to be so qualified or
licensed would not, individually or in the aggregate, have a Material Adverse
Effect.
13
3.3 Charter and Bylaws. Olympic has delivered to Whittier accurate and
complete copies of the Articles of Incorporation and Bylaws of Olympic and its
Subsidiaries as currently in effect, and will deliver to Whittier not later than
five (5) days prior to the Effective Time (i) the stock records of Olympic and
its Subsidiaries, and (ii) the minutes of all meetings of the Boards of
Directors and shareholders of Olympic and its Subsidiaries, any committees of
such Boards, and all consents in lieu of such meetings). Such records, minutes,
and consents accurately reflect the stock ownership of Olympic and its
Subsidiaries and in all material respects all actions taken by the Boards of
Olympic and shareholders and its Subsidiaries and any committees of such Board.
Neither Olympic nor its Subsidiaries is in violation of any provision of its
Articles of Incorporation or Bylaws, other than violations that, individually or
in the aggregate, do not and will not have a Material Adverse Effect.
3.4 Capitalization of Olympic.
(a) The authorized capital stock of Olympic consists of 100,000,000 shares
of Olympic Common Stock, of which, as of the date hereof, 15,069,378 shares are
outstanding and no shares are held in Olympic's treasury, and 1,000,000 shares
of Olympic Preferred Stock, of which, as of the date hereof, no shares are
outstanding and no shares are held in Olympic's treasury. The Board of Directors
of Olympic shall designate 100,000 shares of Olympic Preferred Stock as Olympic
Series A Convertible Preferred Stock, of which 100,000 shares will be issued and
contributed to Newco prior to the Effective Time. The Olympic Series A
Convertible Preferred Stock shall have the rights and preferences as set forth
in Exhibit E attached hereto. All outstanding shares of capital stock of Olympic
have been validly issued and are fully paid and nonassessable, and no shares of
capital stock of Olympic are subject to, nor have any been issued in violation
of, preemptive or similar rights. All issuances, sales, and repurchases by
Olympic of shares of its capital stock have been effected in compliance with all
Applicable Laws, including without limitation applicable Canadian and U.S.
federal, state and provincial securities laws. As of the date hereof, an
aggregate of 4,703,875 shares of Olympic Common Stock are reserved for issuance
and issuable upon the exercise of outstanding warrants and outstanding employee
stock options as well as stock options available to be granted under Olympic's
employee stock option plan. Except as set forth in this Section, there are (and
as of the Effective Time there will be) outstanding (i) no shares of capital
stock or other voting securities of Olympic, (ii) no securities of Olympic
convertible into or exchangeable for shares of capital stock or other voting
securities of Olympic, (iii) no options or other rights to acquire from Olympic,
and no obligation of Olympic to issue or sell, any shares of capital stock or
other voting securities of Olympic or any securities of Olympic convertible into
or exchangeable for such capital stock or voting securities, and (iv) no equity
equivalents, interests in the ownership or earnings, or other similar rights of
or with respect to Olympic. There are (and as of the Effective Time there will
be) no outstanding obligations of Olympic to repurchase, redeem, or otherwise
acquire any of the foregoing shares, securities, options, equity equivalents,
interests, or rights. Olympic is not a party to, and is not aware of, any voting
agreement, voting trust, or similar agreement or arrangement relating to any
class or series of its capital stock. Set forth on Schedule 3.4 is a list of all
holders of options, warrants, Olympic Preferred Stock, and any other securities
that are convertible into or exchangeable for shares of Olympic Common Stock,
including for each holder (i) the number and type of securities held, (ii) the
applicable exercise price or conversion ratio of such securities, and (iii) the
vesting percentage of such securities (if applicable).
14
(b) The authorized capital stock of Newco consists of 1,000 shares of
Common Stock, par value $1.00 per share, of which 1,000 shares are outstanding.
All the outstanding shares of capital stock of Newco are owned directly by
Olympic.
3.5 Authority Relative to This Agreement. Each of Olympic and Newco has
full corporate power and corporate authority to execute and deliver this
Agreement and the Ancillary Documents to which it is a party and, including
shareholder approval in the case of Newco, to consummate the transactions
contemplated herein and therein. The execution, delivery, and performance by
each of Olympic and Newco of this Agreement and the Ancillary Documents to which
it is a party, and the consummation by it of the transactions contemplated
herein and therein, have been duly authorized by the Boards of Directors of
Olympic and Newco, and no other corporate proceedings (other than the approval
of this Agreement by the shareholder of Newco in accordance with Applicable Law
and Newco's Articles of Incorporation) on the part of Newco are necessary to
authorize the execution, delivery, and performance by Newco and Olympic of this
Agreement and such Ancillary Documents and the consummation by it of the
transactions contemplated herein and therein. This Agreement has been duly
executed and delivered by each of Olympic and Newco and, assuming the due
authorization, execution and delivery thereof by Whittier, constitutes, and each
Ancillary Document executed or to be executed by Olympic, Newco or both, has
been, or when executed will be, duly executed and delivered by Olympic or Newco
and constitutes, or when executed and delivered will constitute, a valid and
legally binding obligation of Olympic and Newco enforceable against Olympic and
Newco in accordance with its respective terms, except that such enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting creditors' rights generally and (ii)
equitable principles which may limit the availability of certain equitable
remedies (such as specific performance) in certain instances. On or prior to the
date of this Agreement, the Board of Directors of Newco has determined to
recommend approval of the Merger to the shareholders of Newco, and such
determination is in effect as of the date hereof.
3.6 Noncontravention. The execution, delivery, and performance by Olympic
and Newco of this Agreement and the Ancillary Documents to which either is a
party and the consummation by them of the transactions contemplated herein and
therein do not and will not (i) conflict with or result in a violation of any
provision of the Articles of Incorporation or Bylaws of Olympic or Newco, (ii)
conflict with or result in a violation of any provision of, or constitute (with
or without the giving of notice or the passage of time or both) a default under,
or give rise (with or without the giving of notice or the passage of time or
both) to any right of termination, cancellation, or acceleration under, or
require any consent, approval, authorization, or waiver of, or notice to, any
party to, any material bond, debenture, note, mortgage, indenture, lease,
contract, agreement, or other instrument or obligation to which Olympic or Newco
is a party or by which Olympic or Newco or any of their respective properties
may be bound or any material Permit held by Olympic or Newco, (iii) result in
the creation or imposition of any Encumbrance upon the properties of Olympic or
Newco, or (iv) assuming compliance with the matters referred to in Section 3.7,
violate any Applicable Law binding upon Olympic or Newco, except, in the case of
clauses (ii), (iii), and (iv) above, for any such conflicts, violations,
defaults, terminations, cancellations, accelerations, or Encumbrances which
would not, individually or in the aggregate, have a Material Adverse Effect, and
15
except, in the case of clause (ii) above, for (A) such consents, approvals,
authorizations, and waivers that have been obtained and are unconditional and in
full force and effect and such notices that have been duly given and (B) such
consents, approvals, authorizations, waivers, and notices that are disclosed on
Schedule 3.6.
3.7 Governmental Approvals. Except as set forth on Schedule 3.7, no
consent, approval, order, or authorization of, or declaration, filing, or
registration with, any Governmental Entity is required to be obtained or made by
Olympic, Newco or any other Subsidiary of Olympic in connection with the
execution, delivery, or performance of this Agreement and the Ancillary
Documents to which either of them is a party or the consummation by them of the
transactions contemplated herein or therein, other than (i) the filing by Newco
of Articles of Merger with respect to the Merger with the Secretary of State of
Wyoming and issuance by such Secretary of State of a certificate of merger in
accordance with the WBCA; (ii) compliance with any applicable requirements of
the Securities Act; (iii) compliance with any applicable requirements of the
Exchange Act; (iv) compliance with any applicable requirements of the Trust
Indenture Act; (v) compliance with any applicable provincial or state securities
or takeover laws; (vi) as set forth on Schedule 3.7; (vii) filings with
Governmental Entities to occur in the ordinary course following the consummation
of the transactions contemplated herein; and (viii) such consents, approvals,
orders, or authorizations which, if not obtained, and such declarations,
filings, or registrations which, if not made, would not, individually or in the
aggregate, have a Material Adverse Effect.
3.8 Subsidiaries and Capital Stock.
(a) Except as disclosed on Schedule 3.8(a), Olympic does not own, directly
or indirectly, any capital stock or other securities of any corporation or have
any direct or indirect equity or ownership interest in any other person. Also
disclosed on Schedule 3.8(a) is the jurisdiction of incorporation of each
Olympic Subsidiary and the authorized and outstanding capital stock or other
equity interests of each Olympic Subsidiary. Each Olympic Subsidiary is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. Each Olympic Subsidiary has all
requisite corporate power and corporate authority to own, lease, and operate its
properties and to carry on its business as now being conducted. No actions or
proceedings to dissolve any Olympic Subsidiary are pending or, to the knowledge
of Olympic, threatened.
(b) All of the outstanding capital stock of each Olympic Subsidiary is
owned directly or indirectly by Olympic, free and clear of all Encumbrances. All
outstanding shares of capital stock of each Olympic Subsidiary have been validly
issued and are fully paid and nonassessable. No shares of capital stock of any
Olympic Subsidiary are subject to, nor have any been issued in violation of,
preemptive or similar rights.
3.9 Financial Statements. Olympic has delivered to Whittier accurate and
complete copies of Olympic's audited balance sheet (the "Olympic Balance Sheet")
as of February 28, 2003 (the "Olympic Balance Sheet Date"), and the related
audited statements of income, stockholders' equity, and cash flows for the year
then ended, and the notes and schedules thereto, together with the unqualified
reports thereon of X. X. Xxxx LLP, independent public accountants (the "Olympic
16
Financial Statements"). The Olympic Financial Statements (i) represent actual
bona fide transactions, (ii) have been prepared from the books and records of
Olympic and its Subsidiaries in conformity with US GAAP applied on a basis
consistent with preceding years throughout the periods involved, and (iii)
accurately, completely, and fairly present in all material respects the
financial position of Olympic and its Subsidiaries as of the respective dates
thereof and their results of operations and cash flows for the periods then
ended. All financial projections, forecasts, and other forward-looking
information provided by Olympic to Whittier were, as of their respective dates,
prepared in good faith and on a basis that management of Olympic believed to be
reasonable.
3.10 Reserve Reports.
(a) Olympic has furnished Whittier with a copy of its reserve report
containing estimates of proved oil and gas reserves as of February 28, 2003, of
Olympic and its Subsidiaries (the "Olympic Reserve Report"). The factual,
non-interpretive data on which the Olympic Reserve Report was based was accurate
and complete at the time the Olympic Reserve Report was prepared in all material
respects and incorporates the following: (i) the interests owned by Olympic and
its Subsidiaries at the time the Olympic Reserve Report was prepared, (ii)
reasonable estimates for periods prior to the date provided of the cost of
operating the Olympic Oil and Gas Interests (as hereinafter defined), (iii)
historical production and cost data, (iv) all tests and operations on the Oil
and Gas Interests of Olympic and its Subsidiaries, of which Olympic was aware as
of the date of the Olympic Reserve Report, (v) all capital costs reasonably
expected by Olympic at such time to be necessary to operate and develop the Oil
and Gas Interests described therein, and (vi) reasonable good faith estimates,
as of the time provided, of projected future operating costs with respect to
such Oil and Gas Interests. Olympic has furnished its reserve engineer(s) all
information necessary to produce an Olympic Reserve Report that is complete and
accurate in all material respects. Set forth in Schedule 3.10(a) is a list of
all material Oil and Gas Interests that were included in the Olympic Reserve
Report that have been disposed of prior to the date hereof.
(b) Set forth on Schedule 3.10(b) is a list of all Oil and Gas Interests
that were not included in the Olympic Reserve Report or that have been acquired
by Olympic or any of its Subsidiaries since the date of that report.
3.11 SEC Filings. Olympic has filed with the Securities and Exchange
Commission all forms, reports, schedules, statements, and other documents
required to be filed by it during the two years prior to the date hereof under
the Securities Act, the Exchange Act, and all other federal securities laws.
Olympic has filed with each of the British Columbia Securities Commission and
the TSX Venture Exchange all forms, reports, schedules, statements, and other
documents required to be filed by it during the past six years from the date
hereof under all applicable Canadian and provincial securities laws. All forms,
reports, schedules, statements, and other documents (including all amendments
thereto) filed by Olympic with the Securities and Exchange Commission since such
date are herein collectively referred to as the "SEC Filings" and all forms,
reports, schedules, statements, and other documents (including all amendments
thereto) filed by Olympic with the British Columbia Securities Commission, the
TSX Venture Exchange, or both, since such date are herein collectively referred
to as the "BCSC Filings." Set forth on Schedule 3.11 is a list of all the SEC
Filings filed by Olympic with the Securities and Exchange Commission and BCSC
Filings filed by Olympic with the British Columbia Securities Commission, the
17
TSX Venture Exchange, or both. Olympic has delivered to Whittier accurate and
complete copies of all the SEC Filings and BCSC Filings listed on Schedule 3.11
that were filed as a paper submission. Each of the SEC Filings and BCSC Filings,
at the time filed, complied in all material respects with all applicable
requirements of applicable Canadian and U.S. securities laws. None of the SEC
Filings or BCSC Filings, including, without limitation, any financial statements
or schedules included therein, at the time filed, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements contained therein, in light
of the circumstances under which they were made, not misleading. Except as
disclosed on Schedule 3.11, all SEC Filings and BCSC Filings were filed timely
with the Securities and Exchange Commission and the British Columbia Securities
Commission and/or the TSX Venture Exchange, respectively.
3.12 Disclosure Documents. None of the information relating to Olympic,
this Agreement, or the transactions contemplated in this Agreement that has been
or is to be supplied by Olympic for inclusion in, or has been or is to be
incorporated by reference from Securities and Exchange Commission filings of
Olympic in any documents to be provided to shareholders of Whittier in
connection with their vote on the Merger, or filed with any regulatory authority
by Olympic in connection with the transactions contemplated in this Agreement,
at the respective time such document is mailed to such shareholders, or filed or
becomes effective, or at the Effective Time, as the case may be, will be false
or misleading with respect to any material fact, or will omit to state any
material fact necessary in order to make the statements therein not misleading.
All documents required to be provided or filed by Olympic in connection with the
Merger will comply as to form in all material respects with the applicable
requirements of the statutes, rules, and regulations pursuant to which they are
filed.
3.13 Absence of Undisclosed Liabilities. Neither Olympic, Newco or any
other Subsidiary of Olympic has any liability or obligation (whether accrued,
absolute, contingent, unliquidated, or otherwise, whether or not known to
Olympic, and whether due or to become due), except (i) liabilities reflected on
the Olympic Balance Sheet, (ii) liabilities described in the notes accompanying
the Olympic Financial Statements dated as of February 28, 2003 (iii) liabilities
that have arisen since the date of the Olympic Balance Sheet in the ordinary
course of business (none of which is a material liability for breach of
contract, breach of warranty, tort, or infringement), (iv) liabilities arising
under executory contracts entered into in the ordinary course of business (none
of which is a material liability for breach of contract), (v) liabilities
specifically set forth on Schedule 3.13, and (vi) other liabilities which, in
the aggregate, are not material to Olympic.
3.14 Absence of Certain Changes. Except as disclosed on Schedule 3.14,
since the Olympic Balance Sheet Date (i) there has not been any change,
development, or event, individually or in the aggregate, that has had, or might
reasonably be expected to have, a Material Adverse Effect; (ii) the business of
Olympic and its Subsidiaries has been conducted only in the ordinary course
consistent with past practice; (iii) neither Olympic nor its Subsidiaries has
incurred any material liability, engaged in any material transaction, or entered
into any material agreement outside the ordinary course of business consistent
with past practice; (iv) neither Olympic nor its Subsidiaries has suffered any
material loss, damage, destruction, or other casualty to any of its assets
(whether or not covered by insurance); and (v) Olympic has not taken any of the
actions set forth in Section 4.3 except as permitted thereunder.
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3.15 Tax Matters. Except as disclosed on Schedule 3.15:
(a) Olympic has (and as of the Effective Time will have) duly filed all
federal, state, local, and foreign Tax Returns required to be filed by or with
respect to it with the IRS, Canada Customs and Revenue Agency, or other
applicable taxing authority, and no extensions with respect to such Tax Returns
have (or as of the Effective Time will have) been requested or granted;
(b) Olympic has (and as of the Effective Time will have) paid, or
adequately reserved against in the Olympic Financial Statements, all Taxes due,
or claimed by any taxing authority to be due, from or with respect to it, except
Taxes that are being contested in good faith by appropriate legal proceedings
and for which adequate reserves have been set aside as disclosed on Schedule
3.15(b);
(c) there has been no issue raised or adjustment proposed (and none is
pending) by the IRS or any other taxing authority in connection with any of the
Tax Returns;
(d) Olympic has (and as of the Effective Time will have) made all deposits
required with respect to Taxes;
(e) the income Tax Returns of Olympic have not been audited by the IRS,
Canada Customs and Revenue Agency, or other applicable taxing authority;
(f) no waiver or extension of any statute of limitations as to any federal,
state, local, or foreign Tax matter has been given by or requested from Olympic;
and
(g) Olympic has not filed a consent under Section 341(f) of the Code.
3.16 Compliance With Laws. Except as disclosed on Schedule 3.16, each of
Olympic and its Subsidiaries has complied in all material respects with all
Applicable Laws, except for noncompliance with such Applicable Laws which,
individually or in the aggregate, does not and will not have a Material Adverse
Effect. Neither Olympic not any of its Subsidiaries has received any written
notice, which has not been dismissed or otherwise disposed of, that such person
has not so complied. Neither Olympic nor any of its Subsidiaries is charged or,
to the knowledge of Olympic, threatened with, or, to the knowledge of Olympic,
under investigation with respect to, any violation of any Applicable Law
relating to any aspect of the business of Olympic or any of its Subsidiaries,
other than violations which, individually or in the aggregate, do not and will
not have a Material Adverse Effect.
3.17 Legal Proceedings. There are no Proceedings pending or, to the
knowledge of Olympic, threatened against or involving Olympic or any of its
Subsidiaries (or any of its directors or officers in connection with the
business or affairs of Olympic or any of its Subsidiaries) or any properties or
rights of Olympic which, individually or in the aggregate, might reasonably be
expected to have a Material Adverse Effect. There are no Proceedings pending or,
19
to the knowledge of Olympic, threatened seeking to restrain, prohibit, or obtain
damages or other relief in connection with this Agreement or the transactions
contemplated herein.
3.18 Title to Properties. Each of Olympic and its Subsidiaries has good and
defensible title, and in the case of real property insurable title, to all
properties (real, personal, and mixed, tangible and intangible) it owns or
purports to own, including without limitation the properties reflected in its
books and records and in the Olympic Balance Sheet, other than those disposed of
after the date of such balance sheet in the ordinary course of business
consistent with past practice, free and clear of all Encumbrances, except as
disclosed on Schedule 3.18, and such imperfections or irregularities of title,
if any, as (A) are not substantial in character, amount, or extent and do not
materially detract from the value of the property subject thereto, (B) do not
materially interfere with either the present or intended use of such property,
and (C) do not, individually or in the aggregate, materially interfere with the
conduct of Olympic's normal operations.
3.19 Permits. Olympic and its Subsidiaries hold all Permits necessary or
required for the conduct of the business of Olympic as currently conducted. Each
of such Permits is in full force and effect, Olympic and its Subsidiaries are in
compliance with all its obligations with respect thereto, and, to the knowledge
of Olympic, no event has occurred which permits, or with or without the giving
of notice or the passage of time or both would permit, the revocation or
termination of any thereof. Except as disclosed on Schedule 3.19, no notice has
been issued by any Governmental Entity and no Proceeding is pending or, to the
knowledge of Olympic, threatened with respect to any alleged failure by Olympic
or any of its Subsidiaries to have any Permit.
3.20 Agreements.
(a) Set forth on Schedule 3.20 is a list of all the following agreements,
arrangements, and understandings (written or oral, formal or informal)
(collectively, for purposes of this Section, "agreements") to which Olympic or
any Subsidiary is a party or by which Olympic or any Subsidiary or any of their
respective properties is otherwise bound:
(i) collective bargaining agreements and similar agreements with
employees as a group;
(ii) employee benefit agreements, trusts, plans, funds, or other
arrangements of any nature, including those referred to in Section 4.3(e);
(iii) agreements with any current or former shareholder, director,
officer, employee, consultant, or advisor or any affiliate of any such
person;
(iv) agreements between or among Olympic and any of the Subsidiaries;
(v) indentures, mortgages, security agreements, notes, loan or
credit agreements, or other agreements relating to the borrowing of money
by Olympic or any Subsidiary or to the direct or indirect guarantee or
assumption by Olympic or any Subsidiary of any obligation of others,
including any agreement that has the economic effect although not the legal
form of any of the foregoing;
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(vi) agreements relating to the acquisition or disposition of
assets, other than those entered into in the ordinary course of business
consistent with past practice;
(vii) agreements relating to the acquisition or disposition of any
interest in any business enterprise;
(viii) agreements with respect to the lease of real or personal
property;
(ix) agreements concerning the management or operation of any real
property;
(x) broker, distributor, dealer, manufacturer's representative,
sales, agency, sales promotion, advertising, market research, marketing,
consulting, research and development, maintenance, service, and repair
agreements;
(xi) license, royalty, or other agreements relating to Intellectual
Property;
(xii) royalty, working interest, joint operating agreement, and any
other agreements relating to the Olympic Oil and Gas Interests;
(xiii) partnership, joint venture, and profit sharing agreements;
(xiv) agreements with any Governmental Entity;
(xv) agreements relating to the release or disposal of hazardous
material (as such term is defined in Section 3.22(b));
(xvi) agreements in the nature of a settlement or a conciliation
agreement arising out of any claim asserted by any other person;
(xvii) agreements containing any covenant limiting the freedom of
Olympic or any Subsidiary to engage in any line of business or compete with
any other person in any geographic area or during any period of time;
(xviii) powers of attorney granted by Olympic or any Subsidiary in
favor of any person; and
(xix) other agreements, whether or not made in the ordinary course of
business, that are material to the business, assets, results of operations,
condition (financial or otherwise), or prospects of Olympic. For the
purposes of this Section 3.20, a "material" agreement shall mean any
agreement that provides for aggregate payments or receipts in excess of
$25,000 during the course of a calendar year.
21
(b) Olympic has made available to Whittier accurate and complete copies of
the agreements listed on Schedule 3.20 and will provide physical copies of each
such agreement not later than five (5) days prior to the Effective Time. Each of
such agreements is a valid and binding agreement of the parties thereto
enforceable against them in accordance with its terms. No breach or default
exists with respect to any of such agreements, and no event has occurred which,
after the giving of notice or the passage of time or otherwise, will result in
any such breach or default.
(c) Neither Olympic nor any of its Subsidiaries has received notice of any
plan or intention of any other party to any agreement to exercise any right of
offset with respect to, or any right to cancel or terminate, any agreement, and
Olympic does not know of any fact or circumstance that would justify the
exercise by any such other party of such a right other than the automatic
termination of such agreement in accordance with its terms. Olympic does not
currently contemplate, or have reason to believe any other person currently
contemplates, any amendment or change to any agreement, which amendment or
change could have a Material Adverse Effect.
3.21 Employee Benefit Plans.
(a) Set forth on Schedule 3.21(a) is a list of each employment, severance,
or other similar contract, arrangement, or policy and each plan or arrangement
(written or oral) providing for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits, deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation rights,
or other forms of incentive compensation or post-retirement insurance,
compensation, or benefits which (i) is entered into, maintained, or contributed
to, as the case may be, by Olympic or any affiliate of Olympic, and (ii) covers
any employee or former employee of Olympic or any affiliate of Olympic or under
which Olympic or any affiliate of Olympic has any liability. Such contracts,
plans, and arrangements as are described in the preceding sentence are referred
to for purposes of this Section as the "Benefit Plans". Each Benefit Plan has
been maintained in substantial compliance with its terms and with the
requirements prescribed by Applicable Laws.
(b) Set forth on Schedule 3.21(b) are all liabilities and obligations
(whether accrued, absolute, contingent, unliquidated, or otherwise), of Olympic
and its Subsidiaries relating to any Benefit Plan of Olympic or its
Subsidiaries, including but not limited to employee retirement, severance or
similar post-employment arrangements.
(c) Except as disclosed on Schedule 3.21(c), none of the employees of
Olympic or any of its Subsidiaries may cause Olympic or any of its Subsidiaries
to maintain their respective Benefit Plans in compliance with the requirements
prescribed by ERISA or any other Applicable Law of the United States, Canada, or
of the states, provinces or municipalities located therein.
(d) Except as disclosed on Schedule 3.21(d), there has been no amendment,
written interpretation, or announcement (whether or not written) by Olympic or
any affiliate of Olympic of or relating to, or change in employee participation
or coverage under, any Benefit Plan that would increase materially the expense
of maintaining such Benefit Plan above the level of the expense incurred in
respect thereof for the fiscal year ended February 28, 2003.
22
3.22 Environmental Matters.
(a) Except as disclosed in Schedule 3.22(a) and except for matters that in
the aggregate would not have a Material Adverse Effect:
(i) to the knowledge of Olympic, the properties, operations, and
activities of Olympic and its Subsidiaries comply with all Applicable
Environmental Laws (as defined below);
(ii) Olympic, its Subsidiaries and the properties, operations, and
activities of Olympic and its Subsidiaries are not subject to any existing,
pending, or, to the knowledge of Olympic, threatened Proceeding under, or to any
remedial obligations under, any Applicable Environmental Laws;
(iii) all Permits, if any, required to be obtained by Olympic or any of
its Subsidiaries under any Applicable Environmental Laws in connection with any
aspect of the business of Olympic or its Subsidiaries, including without
limitation those relating to the treatment, storage, disposal, or release of a
hazardous material (as defined in clause (b) below), have been duly obtained and
are in full force and effect, and Olympic and each of its Subsidiaries is in
compliance with the terms and conditions of all such Permits;
(iv) Each of Olympic and its Subsidiaries has satisfied and is
currently in compliance with all financial responsibility requirements
applicable to its operations and imposed by any Governmental Entity under any
Applicable Environmental Laws, and neither Olympic nor any of its Subsidiaries
has received any notice of noncompliance with any such financial responsibility
requirements;
(v) to the knowledge of Olympic, there are no physical or environmental
conditions existing on any property owned or leased by Olympic or any of its
Subsidiaries, or resulting from their respective operations or activities, past
or present, at any location, that would give rise to any on-site or off-site
remedial obligations under any Applicable Environmental Laws;
(vi) to the knowledge of Olympic, since the effective date of the
relative requirements of Applicable Environmental Laws, all hazardous materials
generated by Olympic or any of its Subsidiaries, or used in connection with its
properties, operations, or activities have been transported only by carriers
authorized under Applicable Environmental Laws to transport such materials, and
have been disposed of only at treatment, storage, and disposal facilities
authorized under Applicable Environmental Laws to treat, store, or dispose of
such materials, and, to the knowledge of Olympic, such carriers and facilities
have been and are operating in compliance with such authorizations and are not
the subject of any existing, pending, or threatened Proceeding in connection
with any Applicable Environmental Laws;
(vii) there has been no exposure of any person or property to hazardous
materials, nor has there been any release of hazardous materials into the
environment, by Olympic, its Subsidiaries or in connection with their
properties, operations, or activities that could reasonably be expected to give
rise to any claim for damages or compensation; and
23
(viii) Olympic shall make available to Whittier all internal and
external environmental audits and studies and all correspondence on substantial
environmental matters in the possession of Olympic relating to any of the
current or former properties, operations, or activities of Olympic and its
Subsidiaries, provided that Olympic shall not be required to make available any
such audits, studies, or correspondence that may be subject to the
attorney-client privilege or similar privilege.
(b) For purposes of this Section, "Applicable Environmental Laws" means any
and all Applicable Laws pertaining to health, safety, or the environment in
effect in any and all jurisdictions in which Olympic or any of its Subsidiaries
has conducted operations or activities or owned or leased property, including,
without limitation, the Clear Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Rivers and Harbors Act of 1899, as amended, the Federal Water Pollution Control
Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976, as amended, the Safe Drinking
Water Act, as amended, the Toxic Substances Control Act, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous
Materials Transportation Act, as amended, and other environmental conservation
or protection laws. For purposes of this Agreement, the term "hazardous
material" means (i) any substance which is listed or defined as a hazardous
substance, hazardous constituent, or solid waste pursuant to any Applicable
Environmental Laws and (ii) petroleum (including crude oil and any fraction
thereof), natural gas, and natural gas liquids.
(c) The representations and warranties contained in this Section would
continue to be true and correct following disclosure to the applicable
Governmental Entities of all relevant facts, conditions, and circumstances, if
any, pertaining to the properties, operations, and activities of Olympic and its
Subsidiaries.
3.23 Labor Relations.
(a) Except as disclosed on Schedule 3.23, (i) there are no collective
bargaining agreements or other labor union contracts applicable to any employees
to or by which Olympic is a party or is bound, no such agreement or contract has
been requested by an employee or group of employees of Olympic; (ii) no
employees of Olympic are represented by any labor organization, collective
bargaining representative, or group of employees; (iii) Olympic is not obligated
to bargain collectively with respect to wages, hours, and other terms and
conditions of employment with any recognized or certified labor organization,
collective bargaining representative, or group of employees; and (iv) Olympic is
not aware of any strikes, work stoppages, work slowdowns, or lockouts or any
threats thereof by or with respect to any of its employees, and since February
28, 2003, there have been no labor disputes, strikes, work stoppages, work
slowdowns, lockouts, or similar matters involving any such employees.
(b) Olympic is in compliance in all material respects with all Applicable
Laws pertaining to employment and employment practices and wages, hours, and
other terms and conditions of employment in respect of its employees and has no
24
accrued liability for any arrears of wages or any Taxes or penalties for failure
to comply with any thereof. Olympic is not engaged in any unfair labor practices
or unlawful employment practices. There is no pending or, to the knowledge of
Olympic, threatened Proceeding against or involving Olympic by or before, and
Olympic is not subject to any judgment, order, writ, injunction, or decree of or
inquiry from, any Governmental Entity in connection with any current, former, or
prospective employee of Olympic.
(c) Olympic believes that relations with the employees of Olympic are
satisfactory.
3.24 Employees. Except as disclosed on Schedule 3.24, no severance payment,
stay-on or incentive payment, or similar obligation will be owed by Olympic to
any of its directors, officers, or employees upon consummation of, or as a
result of, the Merger or the transactions contemplated in this Agreement, nor
will any such director, officer, or employee be entitled to severance payments
or other benefits as a result of the Merger or the transactions contemplated in
this Agreement in the event of the subsequent termination of his or her
employment. Prior to the Effective Time Olympic shall cause its Stock Option
Plan for employees, directors, officers and consultants to be amended to provide
that all options thereunder shall not expire on the 90th day following the
resignation or termination of any such person's relationship with Olympic, but
rather, instead, shall expire upon the earlier of (i) the original date of
expiration of such option or (ii) the second anniversary of the Effective Time.
Olympic shall include on Schedule 3.24 the proposed form of amendment to
accomplish this change.
3.25 Insurance. Set forth on Schedule 3.25 is a list and summary
description, including risks covered, premium amounts, term of policy, of all
policies of fire, liability, casualty, life, and other insurance owned or held
by each of Olympic and its Subsidiaries. Such policies are in full force and
effect, are sufficient to satisfy all material requirements of Applicable Laws
and any agreements, arrangements, or understandings to which Olympic or any of
its Subsidiaries is a party, and provide adequate insurance coverage for the
assets and operations of Olympic and its Subsidiaries. All premiums due and
payable with respect to such policies have been timely paid. No notice of
cancellation of, or indication of an intention not to renew, any such policy has
been received by Olympic or any of its Subsidiaries. No event has occurred nor
does any fact or condition exist which would render any of such policies void or
voidable or subject any of such policies to cancellation or termination. Each of
Olympic and its Subsidiaries has given timely notice to the appropriate
insurance carrier of all pending or threatened claims against it that are
insured. Schedule 3.25 also lists all pending and threatened insured claims. To
the knowledge of Olympic, the insurance companies providing the insurance listed
on Schedule 3.25 are solvent. During the past three years, no application by
Olympic or any of its Subsidiaries for insurance with respect to its assets or
operations has been denied for any reason. To the knowledge of Olympic, adequate
insurance coverage for the assets and operations of Olympic and its Subsidiaries
relating to their non-operated Oil and Gas Interests is provided for.
3.26 Books and Records. All the books and records of Olympic and each of
its Subsidiaries, including all personnel files, employee data, and other
materials relating to employees, are substantially complete and correct in all
material respects, have been in all material respects maintained in accordance
with good business practice and all Applicable Laws, and, in the case of the
25
books of account, have been in all material respects prepared and maintained in
accordance with generally accepted accounting principles consistently applied.
Such books and records accurately and fairly reflect, in reasonable detail, all
material transactions, revenues, expenses, assets, and liabilities of Olympic
and each of its Subsidiaries.
3.27 Illegal Payments. To the knowledge of Olympic, none of Olympic, any of
its Subsidiaries, or any director, officer, employee, or agent of such person
has, directly or indirectly, paid or delivered any fee, commission, or other sum
of money or item of property however characterized to any broker, finder, agent,
government official, or other person, in the United States or any other country,
in any manner related to the business or operations of Olympic or any of its
Subsidiaries, which Olympic or any such director, officer, employee, or agent
knows or has reason to believe to have been illegal under any Applicable Law.
3.28 Offerings of Securities. All securities that have been offered or sold
by Olympic or any of its Subsidiaries during the six years prior to the date of
this Agreement have been registered pursuant to the Securities Act and
applicable foreign or state securities laws or were offered and sold pursuant to
valid exemptions therefrom. No registration statement, prospectus, private
offering memorandum, or other information furnished (whether in writing or
orally) to any offeree or purchaser of such securities, at the time such
registration statement became effective (in the case of a registered offering)
or at the time of delivery of such registration statement, prospectus, private
offering memorandum, or other information, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements contained therein, in light
of the circumstances under which they were made, not misleading. To the extent
that any such securities were registered under the Securities Act or foreign
securities exchange, the applicable registration statements and prospectuses
filed with the Securities and Exchange Commission or such foreign securities
exchange, at the time each such registration statement became effective, and at
all times when delivery of a prospectus was required pursuant to the Securities
Act or foreign securities law, complied in all material respects with the
requirements of such applicable securities laws and the rules and regulations
thereunder.
3.29 Brokerage Fees. Neither Olympic nor any of its affiliates has retained
any financial advisor, broker, agent, or finder or paid or agreed to pay any
financial advisor, broker, agent, or finder on account of this Agreement or any
transaction contemplated herein except that X. X. Xxxxxx & Company has been
retained as Olympic's financial advisor in connection with the transactions
contemplated herein pursuant to that certain Consulting Agreement between
Olympic and X. X. Xxxxxx & Company, dated February 7, 2003, an accurate and
complete copy of which has been delivered to Whittier. Olympic shall indemnify
and hold harmless Whittier from and against any and all losses, claims, damages,
and liabilities (including legal and other expenses reasonably incurred in
connection with investigating or defending any claims or actions) with respect
to any finder's fee, brokerage commission, or similar payment in connection with
any transaction contemplated herein asserted by any person on the basis of any
act or statement made or alleged to have been made by Olympic or any of its
affiliates.
3.30 Disclosure. No representation or warranty made by Olympic in this
Agreement, and no statement of Olympic contained in any document, certificate,
or other writing furnished or to be furnished by Olympic pursuant hereto or in
26
connection herewith, contains or will contain, at the time of delivery, any
untrue statement of a material fact or omits or will omit, at the time of
delivery, to state any material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they are made, not
misleading. Olympic knows of no matter that has not been disclosed to Whittier
pursuant to this Agreement that has or, so far as Olympic can now reasonably
foresee, will have a Material Adverse Effect. Olympic has made available to
Whittier accurate and complete copies of all agreements, documents, and other
writings referred to or listed in this Article III or any Schedule hereto.
3.31 Representations and Warranties as of the Effective Time. The
representations and warranties made in this Article III will be true and correct
on and as of the Effective Time with the same force and effect as if such
representations and warranties had been made on and as of the Effective Time,
except that any such representations and warranties which expressly relate only
to an earlier date shall be true and correct on the Effective Time as of such
earlier date.
ARTICLE IV
CONDUCT OF COMPANIES PENDING MERGER
Whittier and Olympic each hereby covenants and agrees as follows:
4.1 Conduct and Preservation of Business. Except as expressly provided in
this Agreement, during the period from the date hereof to the Effective Time,
each of Whittier, Olympic and their Subsidiaries (i) shall conduct its
operations according to its ordinary course of business consistent with past
practice and in compliance with all Applicable Laws; (ii) shall each use its
reasonable best efforts to preserve, maintain, and protect its properties; and
(iii) shall each use its reasonable best efforts to preserve intact its business
organization, to keep available the services of its officers and employees, and
to maintain existing relationships with licensors, licensees, suppliers,
contractors, distributors, customers, and others having business relationships
with it.
4.2 Financial Status and Reports. Olympic promptly shall deliver to
Whittier copies of all additional SEC Filings filed by Olympic with the
Securities and Exchange Commission between the date hereof and the Effective
Time. Each party hereto promptly shall deliver to the other party or parties
copies of all unaudited financial statements prepared for distribution or
dissemination to executive management of such company.
4.3 Restrictions on Certain Actions. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement and the
transactions contemplated herein, prior to the Effective Time, neither Whittier,
on the one hand, nor Olympic or Newco on the other shall, or cause any of their
respective Subsidiaries to, without the prior written consent of the other party
or parties:
(a) amend its charter or bylaws;
(b) (i) issue, sell, or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to purchase,
or otherwise) any shares of its capital stock of any class or any other
27
securities or equity equivalents other than the issuance of Common Stock upon
the exercise of Options outstanding on the date hereof in accordance with their
present terms; (ii) issue or grant any warrants, commitments, subscriptions,
rights to purchase, or any other derivative securities; or (iii) amend in any
material respect any of the terms of any such securities outstanding as of the
date hereof;
(c) (i) split, combine, or reclassify any shares of its capital stock;
(ii) declare, set aside, or pay any dividend or other distribution (whether in
cash, stock, or property or any combination thereof) in respect of its capital
stock; (iii) repurchase, redeem, or otherwise acquire any of its securities; or
(iv) adopt a plan of complete or partial liquidation or resolutions providing
for or authorizing a liquidation, dissolution, merger, consolidation,
restructuring, recapitalization, or other reorganization of itself;
(d) (i) except in the ordinary course of business consistent with past
practice, create, incur, guarantee, or assume any indebtedness for borrowed
money or otherwise become liable or responsible for the obligations of any other
person; (ii) make any loans, advances, or capital contributions to, or
investments in, any other person (other than to wholly owned subsidiaries and
customary loans or advances to employees in amounts not material to the maker of
such loan or advance); (iii) pledge or otherwise encumber shares of its capital
stock; or (iv) except in the ordinary course of business consistent with past
practice, mortgage or pledge any of its material assets, tangible or intangible,
or create or suffer to exist any lien thereupon;
(e) (i) enter into, adopt, or (except as may be required by law) amend
or terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase, pension, retirement, deferred compensation,
employment, severance, or other employee benefit agreement, trust, plan, fund,
or other arrangement for the benefit or welfare of any director, officer, or
employee; (ii) except for normal increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not result in a
material increase in benefits or compensation expense to it, increase in any
manner the compensation or fringe benefits of any director, officer, or
employee; or (iii) pay to any director, officer, or employee any benefit not
required by any employee benefit agreement, trust, plan, fund, or other
arrangement as in effect on the date hereof;
(f) acquire, sell, lease, transfer, or otherwise dispose of, directly
or indirectly, any assets outside the ordinary course of business consistent
with past practice or any assets that in the aggregate are material to it;
(g) acquire (by merger, consolidation, or acquisition of stock or
assets or otherwise) any corporation, partnership, or other business
organization or division thereof;
(h) make any capital expenditure or expenditures which, individually,
is in excess of $25,000 or, in the aggregate, are in excess of $75,000;
28
(i) amend any Tax Return or make any tax election or settle or
compromise any federal, state, local, or foreign tax liability material to it;
(j) pay, discharge, or satisfy any claims, liabilities, or obligations
(whether accrued, absolute, contingent, unliquidated, or otherwise, and whether
asserted or unasserted), other than the payment, discharge, or satisfaction in
the ordinary course of business consistent with past practice, or in accordance
with their terms, of liabilities reflected or reserved against in the financial
statements in the ordinary course of business consistent with past practice;
(k) enter into any lease, contract, agreement, commitment, arrangement,
or transaction outside the ordinary course of business consistent with past
practice;
(l) amend, modify, or change in any material respect any existing
lease, contract, or agreement, other than in the ordinary course of business
consistent with past practice;
(m) waive, release, grant, or transfer any rights of value, other than
in the ordinary course of business consistent with past practice;
(n) hire or lay off any of its employees;
(o) change any of its banking or safe deposit arrangements;
(p) change any of the accounting principles or practices used by it;
(q) take any action which would or might make any of its
representations or warranties contained in this Agreement untrue or inaccurate
as of any time from the date of this Agreement to the Effective Time or would or
might result in any of the conditions set forth in this Agreement not being
satisfied; or
(r) authorize or propose, or agree in writing or otherwise to take, any
of the actions described in this Section.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Access to Information; Confidentiality. Subject to Applicable Law,
between the date hereof and the Effective Time, each of the parties hereto (i)
shall give the other party or parties hereto and their respective authorized
representatives reasonable access, during regular business hours, to all
employees, all plants, offices, warehouses, and other facilities, and all books
and records, including work papers and other materials prepared by independent
public accountants, (ii) shall permit such other party or parties hereto and
their respective authorized representatives to make such inspections as they may
reasonably require, and (iii) shall cause its officers to furnish the other
29
party or parties hereto and their respective authorized representatives with
such financial and operating data and other information with respect to it as
such other party or parties hereto may from time to time reasonably request;
provided, however, that no investigation pursuant to this Section shall affect
any representation or warranty of any other party hereto contained in this
Agreement or in any agreement, instrument, or document delivered pursuant hereto
or in connection herewith; and provided further that the party granting such
access shall have the right to have a representative present at all times of any
such inspections, interviews, and examinations conducted at or on its offices or
other facilities or properties. Olympic and Newco shall hold in confidence all
such information on the terms and subject to the conditions contained in the
letter of intent dated April 25, 2003 from Whittier to Olympic (the "Letter of
Intent").
5.2 Appropriate Action; Consents; Filings.
(a) Whittier shall take all action necessary in accordance with Applicable
Law of the State of Nevada and its Articles of Incorporation and Bylaws to duly
call, give notice of, convene, and hold a special meeting of its shareholders
(the "Whittier Special Meeting") as promptly as practicable after the date
hereof to consider and vote upon the adoption and approval of this Agreement and
the Merger. The shareholder vote required for the adoption and approval of this
Agreement and the Merger shall be the vote required by Chapter 92A of the Nevada
Revised Statutes and its Articles of Incorporation. The Board of Directors
Whittier shall (i) recommend to its shareholders that they vote in favor of the
adoption and approval of this Agreement and the Merger, and (ii) take all other
action reasonably necessary to secure a vote of its shareholders in favor of
such adoption and approval.
(b) Whittier, Olympic and Newco each shall use its best efforts to (i)
take, or cause to be taken, all appropriate action, and do, or cause to be done,
all things necessary, proper or advisable under Applicable Law or otherwise to
consummate and make effective the transactions contemplated in this Agreement,
(ii) obtain from any Governmental Entities any consents, licenses, permits,
waivers, approvals, authorizations or orders required to be obtained or made by
Whittier or Olympic in connection with the consummation of the transactions
contemplated herein, including, without limitation, the Merger, (iii) prepare
and deliver all disclosure documents and make all necessary filings, and
thereafter make any other required submissions, with respect to this Agreement
and the Merger required under (A) the Securities Act and the Exchange Act and
the rules and regulations thereunder (in the case of Olympic), and any other
applicable federal or state securities laws and (B) any other Applicable Law.
Whittier, Olympic and Newco shall furnish all information required for any
disclosure document, application or other filing to be made pursuant to the
rules and regulations of any Applicable Law in connection with the transactions
contemplated in this Agreement.
5.3 Tax Treatment. Each of Whittier and Olympic shall use its best efforts
to cause the Merger to qualify, and will not take any actions which could
prevent the Merger from qualifying, as a reorganization under the provisions of
section 368(a) of the Code.
5.4 Notice of Litigation. Until the Effective Time, (i) Olympic, upon
learning of the same, shall promptly notify Whittier of any Proceeding which is
commenced or threatened against Olympic or Newco and which affects this
Agreement or the transactions contemplated herein and (ii) Whittier, upon
30
learning of the same, shall promptly notify Olympic of any Proceeding which is
commenced or threatened against Whittier and which affects this Agreement or the
transactions contemplated herein.
5.5 Corporate Headquarters; Vancouver Office. It is the intention of the
parties hereto that Olympic shall, promptly following the Effective Time,
establish its corporate headquarters in Houston, Texas, USA; provided, however,
that Olympic shall maintain an office in Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx for
a period of not less than six (6) months after the Effective Time.
5.6 Performance of Subsidiaries. Each party hereto shall cause their
respective Subsidiaries to comply with all its obligations hereunder and,
subject to the terms and conditions hereof, to consummate the Merger as
contemplated herein.
5.7 Amendment of Schedules. Each party hereto agrees that, with respect to
the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until the Effective Time to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Schedules. For all purposes of this Agreement, including without limitation for
purposes of determining whether the conditions set forth in Sections 6.1 and 7.1
have been fulfilled, the Schedules hereto shall be deemed to include only that
information contained therein on the date of this Agreement and shall be deemed
to exclude all information contained in any supplement or amendment thereto;
provided, however, that if the Effective Time shall occur, then all matters
disclosed pursuant to any such supplement or amendment at or prior to the
Effective Time shall be waived and no party shall be entitled to make a claim
thereon pursuant to the terms of this Agreement.
5.8 Further Assurances. At and after the Effective Time, the directors and
officers of Whittier, or the Surviving Corporation, shall be authorized to
execute and deliver, in the name and on behalf of Whittier or Newco, any deeds,
bills of sale, assignments, or assurances, and to take and do, in the name and
on behalf of Whittier or Newco, any other actions and things, to vest, perfect,
or confirm of record or otherwise in the Surviving Corporation any and all
right, title, and interest in, to, and under any of the rights, properties, or
assets of Whittier or Newco acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger and otherwise to
carry out the intent and purpose of this Agreement.
5.9 Expenses. Except as otherwise expressly provided in this Agreement, all
fees and expenses, including fees and expenses of counsel, financial advisors,
and accountants, incurred in connection with this Agreement and the transactions
contemplated herein shall be paid by the party incurring such fee or expense,
whether or not the Effective Time shall have occurred; provided, however, that
the parties hereto recognize the existence of that certain Consulting Agreement
with X. X. Xxxxxx & Company and hereby agree that any amounts owing thereunder
shall be paid by the Surviving Corporation subsequent to the Effective Time (if
the Effective Time shall occur). Notwithstanding anything contained herein to
the contrary, Whittier shall pay all fees and expenses (up to a maximum of
$40,000) relating to the Olympic Fairness Opinion (as hereinafter defined);
provided, however, that Whittier shall not be obligated to pay such fees and
31
expenses relating to the Olympic Fairness Opinion if Olympic breaches any
material provision of this Agreement or commits an act of fraud in connection
with this Agreement or the transactions contemplated herein.
5.10 Breakup Fee. In the event a party hereto terminates the transactions
contemplated herein without good cause, the parties hereto agree that such
noncomplying party (x) shall reimburse the other complying party, within 15
business days after written demand, for such party's out-of-pocket expenses and
fees (including, without limitation, fees and expenses of legal counsel,
accountants, financial and other advisors) and (y) shall pay to the complying
party, within 15 business days after written demand, the amount of $40,000;
provided, however, that the total of such reimbursement (including such $40,000)
payable pursuant to this Section 5.10 shall not exceed in the aggregate $60,000
(which aggregate shall include expenses and fees which such noncomplying party
is obligated to pay pursuant to Section 5.9 hereof). All amounts shall be paid
in immediately available funds. The parties agree that it is impossible to
determine with any reasonable accuracy the amount of prospective damages
resulting from a party's failure to consummate the Merger hereunder and agree
that the damages set forth above are reasonable, and not a penalty, based upon
the facts and circumstances of the parties at the time of entering into this
Agreement and with due regard to future expectations.
5.11 Exclusive Dealing. Until the Effective Time, each of Whittier, Olympic
and Newco will not, directly or indirectly, through any officer, director,
agent, or otherwise, (i) solicit, initiate, or negotiate with, directly or
indirectly, or encourage submission of inquiries, proposals, or offers from, any
third party relating to the disposition of the assets, business or any
securities of such corporation, or any part thereof (other than transactions in
the ordinary course or transactions which have been initiated by a party prior
to the date hereof, which in either case will not make inadvisable or
impracticable the consummation of the transactions contemplated herein) or (ii)
subject to fiduciary obligations under applicable law as advised in writing by
counsel, participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, the disposition of the assets,
business or any securities of such corporation or any part thereof (except as
contemplated in clause (i) above), and none of Whittier, Olympic or Newco will
unilaterally terminate the transactions contemplated herein without good cause.
Each of Whittier, Olympic and Newco hereby agrees to disclose immediately to the
other the receipt of any offer of a third party for the sale or other
disposition of such corporation
5.12 Public Disclosure. Before the Effective Time, neither Whittier nor
Olympic, nor any of their Subsidiaries, shall make any public release of
information regarding the matters contemplated herein except (i) that press
releases in agreed form shall be issued by Whittier and Olympic as promptly as
is practicable after the execution of this Agreement, (ii) that Whittier and
Olympic may each continue such communications with employees, customers,
suppliers, franchisees, lenders, lessors, shareholders, and other particular
groups as may be legally required or necessary or appropriate and not
inconsistent with the best interests of the other party or the prompt
consummation of the transactions contemplated in this letter, and (iii) as
required by Applicable Law.
5.13 Registration Rights Agreement. Olympic, the holders of Olympic options
and warrants set forth on Schedule 3.4, and Whittier, on behalf of its
shareholders, shall enter into a registration rights agreement (the
32
"Registration Agreement") at (and subject to the occurrence of) the Effective
Time, pursuant to which Olympic shall agree that, in the event Olympic shall
register shares of Olympic Common Stock under the Securities Act, it shall also
register all or a portion of the Olympic Common Stock held by the Whittier
shareholders and the parties to such Registration Agreement, on the terms and
subject to the conditions set forth therein. The Registration Agreement shall
include such terms and conditions as are appropriate and customary for a merger
of the kind contemplated herein.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF WHITTIER
The obligations of Whittier to consummate the transactions contemplated in
this Agreement shall be subject to the fulfillment on or prior to the Effective
Time of each of the following conditions:
6.1 Representations and Warranties True. All the representations and
warranties of Olympic and Newco contained in this Agreement, and in any
agreement, instrument, or document delivered pursuant hereto or in connection
herewith on or prior to the Effective Time, shall be true and correct in all
material respects on and as of the Effective Time as if made on and as of such
date, except as affected by transactions permitted by this Agreement and except
to the extent that any such representation or warranty is made as of a specified
date, in which case such representation or warranty shall have been true and
correct in all material respects as of such specified date.
6.2 Covenants and Agreements Performed. Olympic and Newco shall have
performed and complied with all covenants and agreements required by this
Agreement to be performed or complied with by them on or prior to the Effective
Time.
6.3 Opinions of Counsel to Olympic.
(a) Whittier shall have received from Hirst & Applegate, P.C., Wyoming
legal counsel to Olympic, a legal opinion to the effect that a vote of the
shareholders of Olympic is not required pursuant to the laws of the State of
Wyoming in order to approve the Merger or the transactions herein contemplated,
substantially in the form of Exhibit F attached hereto.
(b) Whittier shall have received an opinion of Xxxxxx Xxxxxx, legal counsel
to Olympic, dated the Effective Time, in the form of Exhibit G attached hereto.
6.4 Olympic Fairness Opinion. The Board of Directors of Olympic shall have
received a written opinion (the "Olympic Fairness Opinion"), in form and
substance reasonably satisfactory to the Board, of Howard, Frazier, Xxxxxx &
Xxxxxxx, or another recognized securities evaluation firm, dated on or prior to
the Effective Date, to the effect that the consideration to be received by the
shareholders of Olympic pursuant to the Merger is fair, from a financial point
of view, to such shareholders, and such opinion shall not have been amended or
withdrawn.
33
6.5 Release and Waiver. Whittier shall have received from Olympic, who
shall have obtained from each employee and consultant of Olympic and its
Subsidiaries, an executed copy of the Release and Waiver, substantially in the
form of Exhibit H attached hereto.
6.6 Legal Proceedings. No Proceeding shall, on the Effective Time, be
pending or threatened seeking to restrain, prohibit, or obtain damages or other
relief in connection with this Agreement or the consummation of the transactions
contemplated herein.
6.7 No Material Adverse Change. Since the date of this Agreement, there
shall not have been any material adverse change in the business, assets, results
of operations, condition (financial or otherwise), or prospects of Olympic.
6.8 Due Diligence. The due diligence conducted by Whittier and its
representatives in connection with the proposed transactions contemplated herein
shall not have caused Whittier or its representatives to become aware of any
facts relating to the business, assets, results of operations, condition
(financial or otherwise), or prospects of Olympic or Newco that, in the good
faith judgment of Whittier, make it inadvisable for Whittier to proceed with the
consummation of the transactions contemplated herein.
6.9 Other Documents. Whittier shall have received the certificates,
instruments, and documents listed below:
(a) A copy of the resolutions approved and adopted by the Board of
Directors of Olympic authorizing the execution, delivery, and performance by
Olympic of this Agreement, certified by the secretary or an assistant secretary
of Olympic.
(b) Copies of the resolutions of the Board of Directors of Newco, and those
of Olympic, as the sole shareholder of Newco, authorizing the execution,
delivery, and performance by Newco of this Agreement, certified by the secretary
or an assistant secretary of Newco.
(c) Certificates from the Secretary of State of Wyoming dated not more than
30 days prior to the Effective Time, as to the legal existence and good
standing, respectively, of Olympic and Newco, for the purposes of merger under
the laws of the State of Wyoming, and a telegram dated the Effective Time from
the Secretary of State of Wyoming as to the good standing of Olympic under the
laws of such state.
(d) A certified copy of the Articles of Incorporation of Newco as filed
with the Office of the Secretary of State of Wyoming.
(e) A certified copy of the Articles of Amendment to the Articles of
Incorporation of Olympic, in the form of Exhibit E attached hereto, as filed
with the Office of the Secretary of State of Wyoming.
(f) A copy of the Olympic Stock Option Plan for employees, directors,
officers and consultants as amended to provide that all options thereunder shall
not expire on the 90th day following the resignation or termination of any such
34
person's relationship with Olympic, but rather, instead, shall expire upon the
earlier of (i) the original date of expiration of such option, or (ii) the
second anniversary of the Effective Time.
(g) The minute books, stock records, and corporate seal of Olympic,
certified as complete and correct as of the Effective Time by the secretary or
an assistant secretary of Olympic.
(h) All Olympic's books and records, including without limitation minute
books, corporate charter, bylaws, stock records, bank account records,
accounting records, computer records, and all contracts with third parties.
(i) The written resignations from the Board of Directors of Olympic of Xx.
Xxxxxxx Xxxxxxxx, Xxxx Xxxxxxx and Xxxxxxx Xxxxxxxxx, such resignations to be
effective at the Effective Time.
(j) The written resignations as an officer of Olympic of each of Xxxxx
Xxxxxxx (as President and Chief Executive Officer), Xxxxxxx Xxxxxxxxx, Xxx
Xxxxxxx and Xxxxxxx Xxxx, such resignations to be effective at the Effective
Time.
(k) A copy of the resolutions approved and adopted by the Board of
Directors of Olympic, to be effective at the Effective Time, appointing up to
seven individuals to the Board, including up to five members nominated by
Whittier, as well as Xxxxx Xxxxxxx and Xxxx Xxxxxx, the latter two for a term of
six months.
(l) An executed copy of the escrow agreement by and among Xxxxx Xxxxxxx,
Xxxxxxx Xxxxxxxxx, Olympic and Whittier, dated as of the Effective Time and
substantially in the form attached hereto as Exhibit I (the "Escrow Agreement").
(m) An executed copy of the consulting agreement by and between Xxxxx
Xxxxxxx and Olympic, substantially in the form attached hereto as Exhibit J (the
"Xxxxxxx Consulting Agreement").
(n) An executed copy of the Registration Agreement.
(o) Such other certificates, instruments, and documents as may be
reasonably requested by Whittier to carry out the intent and purposes of this
Agreement.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF OLYMPIC AND NEWCO
The obligations of Olympic and Newco to consummate the transactions
contemplated in this Agreement shall be subject to the fulfillment on or prior
to the Effective Time of each of the following conditions:
35
7.1 Representations and Warranties True. All the representations and
warranties of Whittier contained in this Agreement, and in any agreement,
instrument, or document delivered pursuant hereto or in connection herewith on
or prior to the Effective Time, shall be true and correct in all material
respects on and as of the Effective Time as if made on and as of such date,
except as affected by transactions permitted by this Agreement and except to the
extent that any such representation or warranty is made as of a specified date,
in which case such representation or warranty shall have been true and correct
in all material respects as of such specified date.
7.2 Covenants and Agreements Performed. Whittier shall have performed and
complied with all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Effective Time.
7.3 Opinion of Counsel to Whittier. Olympic shall have received an opinion
of Xxxxxxxx & Knight LLP, legal counsel to Whittier, dated as of the Effective
Time, in the form of Exhibit K attached hereto.
7.4 Fairness Opinion. The Board of Directors of Olympic shall have received
a written opinion, in form and substance reasonably satisfactory to the Board,
of Howard, Frazier, Xxxxxx & Xxxxxxx, or another recognized securities
evaluation firm, dated on or prior to the Effective Date, to the effect that the
consideration to be received by the shareholders of Olympic pursuant to the
Merger is fair, from a financial point of view, to such shareholders, and such
opinion shall not have been amended or withdrawn.
7.5 Legal Proceedings. No Proceeding shall, immediately prior to the
Effective Time, be pending or threatened seeking to restrain, prohibit, or
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated herein.
7.6 No Material Adverse Change. Since the date of this Agreement, there
shall not have been any material adverse change in the business, assets, results
of operations, condition (financial or otherwise), or prospects of Whittier.
7.7 Due Diligence. The due diligence conducted by Olympic and its
representatives in connection with the proposed transactions contemplated herein
shall not have caused Olympic or its representatives to become aware of any
facts relating to the business, assets, results of operations, condition
(financial or otherwise), or prospects of Whittier that, in the good faith
judgment of Olympic, make it inadvisable for Olympic to proceed with the
consummation of the transactions contemplated herein.
7.8 Other Documents. Olympic shall have received the certificates,
instruments, and documents listed below:
(a) A copy of the resolutions approved and adopted by the Board of
Directors and the shareholders of Whittier authorizing the execution,
delivery, and performance by Whittier of this Agreement, certified by the
secretary or an assistant secretary of Whittier.
36
(b) Certificates from the Secretary of State of Nevada, each dated not
more than 30 days prior to the Effective Time, as to the legal existence
and good standing, respectively, of Whittier under the laws of such state,
and a telegram dated the Effective Time from the Secretary of State of such
state as to the legal existence and good standing of Whittier under the
laws of such state.
(c) An executed copy of the Registration Agreement.
(d) Such other certificates, instruments, and documents as may be
reasonably requested by Olympic to carry out the intent and purposes of
this Agreement.
ARTICLE VIII
TERMINATION, AMENDMENT, AND WAIVER
8.1 Termination. This Agreement may be terminated and the transactions
contemplated herein abandoned at any time prior to the Effective Time in the
following manner:
(a) by mutual written consent of Whittier and Olympic; or
(b) by Whittier, if, immediately prior to the Effective Time, any of the
conditions set forth in Article VI shall not have been satisfied and shall not
have been waived by Whittier; or
(c) by Olympic, if, immediately prior to the Effective Time, any of the
conditions set forth in Article VII shall not have been satisfied and shall not
have been waived by Olympic; or
(d) by either Whittier or Olympic, if the Effective Time shall not have
occurred on or before August 29, 2003, unless such failure to close shall be due
to a breach of this Agreement by the party seeking to terminate this Agreement
pursuant to this clause (d).
8.2 Effect of Termination; Limitations on Liability. In the event of the
termination of this Agreement pursuant to Section 8.1 by Olympic, on the one
hand, or Whittier, on the other, written notice thereof shall forthwith be given
to the other party specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall become void and have no effect,
and there shall be no liability hereunder on the part of Olympic, Newco, or
Whittier or any of their respective Subsidiaries, directors, officers,
employees, stockholders, or representatives, except that the agreements
contained in this Section and in Sections 5.1, 5.9, 5.10. 5.11. 5.12, 10.1, 10.5
and 10.11 shall survive the termination hereof. In the event a party hereto
terminates this Agreement otherwise than in accordance with Section 8.1 and
without good cause, each of Whittier and Olympic agrees that such non-complying
party shall pay to the complying party, within 15 business days after written
demand, the amount of (x) $40,000 plus (y) such complying party's actual and
reasonable out-of-pocket expenses and fees incurred specifically and directly as
a result of the transactions herein contemplated (including, without limitation,
fees and expenses of legal counsel, accountants, financial and other advisors;
provided, however, that the total of such reimbursement payable pursuant to
37
clauses (x) and (y) of this Section 8.2 shall not exceed in the aggregate
$60,000; and provided further that, in the case of payments by Whittier such
$60,000 limitation on liability shall take into account and include all expenses
and fees which Whittier may be obligated to pay to Olympic pursuant to Section
5.9 hereof, including fees relating to the Olympic Fairness Opinion up to a
maximum of $40,000. All amounts shall be paid in immediately available funds.
The parties agree that it is impossible to determine with any reasonable
accuracy the amount of prospective damages resulting from a party's termination
of this Agreement and agree that the damages set forth above are reasonable, and
not a penalty, based upon the facts and circumstances of the parties at the time
of entering into this Agreement and with due regard to future expectations.
8.3 Waiver. Each of Whittier, on the one hand, and Olympic and Newco, on
the other, may (i) waive any inaccuracies in the representations and warranties
of the other contained herein or in any document, certificate, or writing
delivered pursuant hereto or (ii) waive compliance by the other with any of the
other's agreements or fulfillment of any conditions to its own obligations
contained herein. Any agreement on the part of a party hereto to any such waiver
shall be valid only if set forth in an instrument in writing signed by or on
behalf of such party. No failure or delay by a party hereto in exercising any
right, power, or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege.
8.4 Remedies Exclusive. The rights and remedies herein provided shall be
exclusive of any rights or remedies provided by law. The rights and remedies of
any party based upon, arising out of, or otherwise in respect of any inaccuracy
in or breach of any representation, warranty, covenant, or agreement contained
in this Agreement shall in no way be limited by the fact that the act, omission,
occurrence, or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant, or agreement contained in this Agreement (or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
ARTICLE IX
INDEMNIFICATION FOLLOWING EFFECTIVE TIME
9.1 Survival.
(a) The representations and warranties of the parties hereto contained in
this Agreement or in any certificate, instrument, or document delivered pursuant
hereto shall survive the Effective Time, regardless of any investigation made by
or on behalf of any party, until the first anniversary of the Effective Time
(such anniversary, the "Survival Date"). From and after the Survival Date, no
party hereto or any shareholder, director, officer, employee, or affiliate of
such party shall be under any liability whatsoever pursuant to this Article IX
with respect to any such representation or warranty, except with respect to
matters as to which notice has been received in accordance with Section 9.1(b).
38
(b) No party hereto shall have any indemnification obligation pursuant to
this Article IX in respect of any representation or warranty unless before the
Survival Date it shall have received from the party seeking indemnification
written notice of the existence of the claim for or in respect of which
indemnification in respect of such representation or warranty is sought. Such
notice shall set forth with reasonable specificity (i) the basis under this
Agreement, and the facts that otherwise form the basis, of such claim, (ii) an
estimate of the amount of such claim (which estimate shall not be conclusive of
the final amount of such claim) and an explanation of the calculation of such
estimate, including a statement of any significant assumptions employed therein,
and (iii) the date on and manner in which the party delivering such notice
became aware of the existence of such claim ; provided, however, that any notice
which the party seeking indemnification delivers to the indemnifying party prior
to the Survival Date which notifies the indemnifying party of the existence of a
claim and, notwithstanding the failure of such notice to meet the requirements
set forth in clauses (i), (ii), and (iii) above, does not materially prejudice
the indemnifying party's ability to defend such claim, shall be deemed to have
met the requirement of delivery of notice prior to the Survival Date for the
purpose of preserving the indemnified party's right to indemnification pursuant
to this Article IX.
(c) The provisions of this Section shall have no effect upon any other
obligation of the parties hereto under this Agreement, whether to be performed
before, at, or after the Effective Time.
9.2 Indemnification by Olympic. Subject to the terms and conditions of this
Article IX, Olympic shall indemnify, defend, and hold harmless Whittier from and
against any and all claims, actions, causes of action, demands, assessments,
losses, damages, liabilities, judgments, settlements, penalties, costs, and
expenses (including reasonable attorneys' fees and expenses), of any nature
whatsoever (collectively, "Damages"), asserted against, resulting to, imposed
upon, or incurred by Whittier or its successors, directly or indirectly,
following the Effective Time, by reason of or resulting from any breach by
Olympic or Newco of any of its representations and warranties contained in this
Agreement or in any certificate, instrument, or Ancillary Document delivered
pursuant hereto (collectively, "Whittier Claims"). Neither Olympic nor Newco
shall be entitled to any contribution or reimbursement from Whittier with
respect to payments made by Olympic, Newco, or both, under this Article IX. For
purposes solely of the liability of Olympic or Newco (but without any reduction
or diminishment of the obligations or liability of Xxxxxxx or Forseille under
the Escrow Agreement), the parties agree that such indemnification obligations
of Olympic and Newco pursuant to this Section 9.2 shall apply only to the extent
that the aggregate Damages incurred in connection with any Whittier Claim or
Claims exceeds One Hundred Thousand Dollars ($100,000.00).
9.3 Indemnification by Whittier. Subject to the terms and conditions of
this Article IX, Whittier shall indemnify, defend, and hold harmless Olympic and
Newco from and against any and all claims, actions, causes of action, demands,
assessments, losses, damages, liabilities, judgments, settlements, penalties,
costs, and expenses (including reasonable attorneys' fees and expenses), of any
nature whatsoever (collectively, "Damages"), asserted against, resulting to,
imposed upon, or incurred by Olympic or Newco, directly or indirectly, following
the Effective Time, by reason of or resulting from any breach by Whittier of any
of its representations and warranties contained in this Agreement or in any
certificate, instrument, or Ancillary Document delivered pursuant hereto
39
(collectively, "Olympic Claims"). Whittier shall not be entitled to any
contribution or reimbursement from Olympic or Newco with respect to payments
made by Whittier under this Article IX. The parties agree that such
indemnification obligations of Whittier pursuant to this Section 9.3 shall apply
only to the extent that the aggregate Damages incurred in connection with any
Olympic Claim or Claims exceeds One Hundred Thousand Dollars ($100,000.00).
9.4 Procedure for Indemnification. Promptly after receipt by an indemnified
party under Section 9.2 or 9.3 of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such Section, give written notice to the indemnifying
party of the commencement thereof, but the failure so to notify the indemnifying
party shall not relieve it of any liability that it may have to any indemnified
party except to the extent the indemnifying party demonstrates that the defense
of such action is prejudiced therein. In case any such action shall be brought
against an indemnified party and it shall give written notice to the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it may wish, to assume
the defense thereof with counsel reasonably satisfactory to such indemnified
party. If the indemnifying party elects to assume the defense of such action,
the indemnified party shall have the right to employ separate counsel at its own
expense and to participate in the defense thereof. If the indemnifying party
elects not to assume (or fails to assume) the defense of such action, the
indemnified party shall be entitled to assume the defense of such action with
counsel of its own choice, at the expense of the indemnifying party. If the
action is asserted against both the indemnifying party and the indemnified party
and there is a conflict of interests which renders it inappropriate for the same
counsel to represent both the indemnifying party and the indemnified party, the
indemnifying party shall be responsible for paying for separate counsel for the
indemnified party; provided, however, that if there is more than one indemnified
party, the indemnifying party shall not be responsible for paying for more than
one separate firm of attorneys to represent the indemnified parties, regardless
of the number of indemnified parties. If the indemnifying party elects to assume
the defense of such action, (a) no compromise or settlement thereof may be
effected by the indemnifying party without the indemnified party's written
consent (which shall not be unreasonably withheld) unless the sole relief
provided is monetary damages that are paid in full by the indemnifying party and
(b) the indemnifying party shall have no liability with respect to any
compromise or settlement thereof effected without its written consent (which
shall not be unreasonably withheld).
9.5 Escrow by Olympic Principals.
(a) In this regard, to secure the indemnity obligations of Olympic and
Newco under this Article IX, each of Xxxxx Xxxxxxx and Xxxxxxx Xxxxxxxxx shall,
at the Effective Time, cause to be deposited with Olympic, as escrow agent, the
Escrow Options and Escrow Warrants pursuant to the provisions of the Escrow
Agreement attached hereto as Exhibit I.
(b) The Escrow Options and Escrow Warrants, any underlying Olympic Common
Stock issued pursuant to the exercise thereof, and all proceeds from the sale or
transfer of such underlying Olympic Common Stock, shall be held in escrow until
the Survival Date in accordance with the following terms and conditions:
40
(i) The Escrow Options and Escrow Warrants, any underlying Olympic
Common Stock issued pursuant to the exercise thereof, and all proceeds from
the sale or transfer of such underlying Olympic Common Stock shall be held
by the escrow agent in a separate account and disbursed only in accordance
with the provisions of the Escrow Agreement.
(ii) All Escrow Options, Escrow Warrants, any underlying Olympic
Common Stock issued pursuant to the exercise thereof, and all proceeds from
the sale or transfer of such underlying Olympic Common Stock, for which
claims have been made by Whittier for matters as to which Whittier is
entitled to be indemnified under this Article IX shall be transferred to
Whittier (for the benefit of its former shareholders at the Effective
Time), unless either of Xxxxx Xxxxxxx or Xxxxxxx Xxxxxxxxx makes a good
faith objection to any such claim within twenty (20) days after notice
thereof from Whittier.
(iii) If a claim is objected to, the dispute shall be resolved by
Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxxxx (or either of them) and Olympic, or by
arbitration or other mutually satisfactory means, within ninety (90) days
after the claim is made. Upon resolution, the appropriate number of Escrow
Options, Escrow Warrants, any underlying Olympic Common Stock issued
pursuant to the exercise thereof, and all proceeds from the sale or
transfer of such underlying Olympic Common Stock, due Whittier shall be
transferred thereto.
(c) Until immediately after the Effective Time, neither Xxxxx Xxxxxxx nor
Xxxxxxx Xxxxxxxxx may sell, assign, transfer, gift, bequest, encumber, or
otherwise dispose of any derivative securities (including options, warrants
convertible securities) of Olympic that are directly held by him.
ARTICLE X
MISCELLANEOUS
10.1 Notices. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by any party hereto shall be
in writing and shall be deemed to have been duly given or made if (i) delivered
personally, (ii) transmitted by first class registered or certified mail,
postage prepaid, return receipt requested, (iii) sent by prepaid overnight
courier service, or (iv) sent by telecopy or facsimile transmission, answer back
requested, to the parties at the following addresses (or at such other addresses
as shall be specified by the parties by like notice):
If to Olympic or Newco:
Olympic Resources Ltd.
000 - 000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxx, President
Telefax: (000) 000-0000
41
with a copy to:
Xxxxxx Xxxxxx
Barristers & Solicitors
2550 - 000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxx or Xxxxxxx Xxxxxxx
Telefax: (000) 000-0000
If to Whittier:
Whittier Energy Company
0000 Xx Xxxxxx Xxxx
Xxxxxxxx, XX 00000 XXX
Attention: Xxxxx Xxxxxx, Vice President
Telefax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 XXX
Attention: Xxxxxx Xxxxxx
Telefax: (000) 000-0000
Such notices, requests, demands, and other communications shall be effective (i)
if delivered personally or sent by courier service, upon actual receipt by the
intended recipient, (ii) if mailed, upon the earlier of five days after deposit
in the mail or the date of delivery as shown by the return receipt therefor, or
(iii) if sent by telecopy or facsimile transmission, when the answer back is
received.
10.2 Entire Agreement. This Agreement, together with the Schedules,
Exhibits, Annexes, and other writings referred to herein or delivered pursuant
hereto, constitute the entire agreement between the parties hereto with respect
to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
10.3 Binding Effect; Assignment; No Third Party Benefit. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, that neither
this Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned by any of the parties hereto (by operation of law or otherwise)
42
without the prior written consent of the other parties, except that (i) Newco
may assign to Olympic or any other direct or indirect wholly owned subsidiary of
Olympic any of Newco's rights, interests, or obligations hereunder and (ii)
Olympic may assign to any corporation hereafter organized as parent or holding
company of Olympic any of Olympic's rights, interests, or obligations hereunder,
in each instance upon notice to Whittier. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any person other than Olympic,
Newco, and Whittier any rights, benefits, or remedies of any nature whatsoever
under or by reason of this Agreement.
10.4 Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by Applicable Law.
10.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
10.6 Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only, do not constitute a part of this Agreement, and
shall not affect in any manner the meaning or interpretation of this Agreement.
10.7 Gender. Pronouns in masculine, feminine, and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
10.8 References. All references in this Agreement to Articles, Sections,
and other subdivisions refer to the Articles, Sections, and other subdivisions
of this Agreement unless expressly provided otherwise. The words "this
Agreement", "herein", "hereof", "hereby", "hereunder", and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. Whenever the words "include", "includes", and
"including" are used in this Agreement, such words shall be deemed to be
followed by the words "without limitation". Each reference herein to a Schedule,
Exhibit, or Annex refers to the item identified separately in writing by the
parties hereto as the described Schedule, Exhibit, or Annex to this Agreement.
All Schedules, Exhibits, and Annexes are hereby incorporated in and made a part
of this Agreement as if set forth in full herein.
10.9 Counterparts. This Agreement may be executed by the parties hereto in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same agreement. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all, the parties hereto.
10.10 Injunctive Relief. The parties hereto acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
43
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement, and shall be entitled to enforce specifically the provisions of this
Agreement, in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which the parties may be
entitled under this Agreement or at law or in equity.
10.11 Consent to Jurisdiction.
(a) The parties hereto hereby irrevocably submit to the jurisdiction of the
courts of the State of Nevada and the federal courts of the United States of
America located in the State of Nevada, and appropriate appellate courts
therefrom, over any dispute arising out of or relating to this Agreement or any
of the transactions contemplated herein and each party hereby irrevocably agrees
that all claims in respect of such dispute or proceeding may be heard and
determined in such court. The parties hereby irrevocably waive, to the fullest
extent permitted by Applicable Law, any objection which they may now or
hereafter have to the laying of venue of any dispute arising out of or relating
to this Agreement or any of the transactions contemplated herein brought in such
court or any defense of inconvenient forum for the maintenance of such dispute.
Each of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. This consent to jurisdiction is being given solely for purposes
of this Agreement and is not intended to, and shall not, confer consent to
jurisdiction with respect to any other dispute in which a party to this
Agreement may become involved.
(b) Each of the parties hereto hereby consents to process being served by
any party to this Agreement in any suit, action, or proceeding of the nature
specified in subsection (a) above by the mailing of a copy thereof in the manner
specified by the provisions of Section 10.1.
ARTICLE XI
DEFINITIONS
11.1 Certain Defined Terms. As used in this Agreement, each of the
following terms has the meaning given it below:
"affiliate" has the meaning specified in Rule 12b-2 promulgated under
the Exchange Act.
"Ancillary Documents" means each agreement, instrument, and document
(other than this Agreement) executed or to be executed by Whittier,
Olympic, or Newco in connection with the transactions contemplated in this
Agreement, including without limitation the Agreement and Plan of Merger.
"Applicable Law" means any statute, law, rule, or regulation or any
judgment, order, writ, injunction, or decree of any Governmental Entity to
which a specified person or property is subject.
44
"Articles of Merger" shall have the meaning set forth in Section 1.1.
"BCSC Filings" shall have the meaning set forth in Section 3.11.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect as of the Effective Time.
"Contribution Agreement" shall have the meaning set forth in Section
1.1.
"Damages" shall have the meaning set forth in Section 9.2.
"Effective Time" shall have the meaning set forth in Section 1.2.
"Encumbrances" means liens, charges, pledges, options, mortgages,
deeds of trust, security interests, claims, restrictions (whether on
voting, sale, transfer, disposition, or otherwise), easements, and other
encumbrances of every type and description, whether imposed by law,
agreement, understanding, or otherwise.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agreement" means that certain Escrow Agreement by and among
Olympic, the Escrow Agent, Xxxxx Xxxxxxx and Xxxxxxx Xxxxxxxxx, dated as of
the Effective Time and attached hereto as Exhibit I.
"Escrow Options" means all options (and any other convertible
securities that are not the Escrow Warrants) to purchase Olympic Common
Stock that are directly held by Xxxxx Xxxxxxx and/or Xxxxxxx Xxxxxxxxx as
of the Effective Time (or thereafter), pursuant to the provisions of the
Escrow Agreement.
"Escrow Warrants" means (i) that certain Warrant issued to Xxxxx
Xxxxxxx to purchase 450,000 shares of Olympic Common Stock, dated as of the
Effective Time, and (ii) all other warrants to purchase shares of Olympic
Common Stock that are directly held by Xxxxx Xxxxxxx and/or Xxxxxxx
Xxxxxxxxx as of the Effective Time (or thereafter), pursuant to the
provisions of the Escrow Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Governmental Entity" means any court or tribunal in any jurisdiction
(domestic or foreign) or any federal, state, provincial, municipal, or
other governmental body, agency, authority, department, commission, board,
bureau, or instrumentality (domestic or foreign).
"Intellectual Property" means patents, trademarks, service marks,
trade names, service names, brand names, copyrights, trade secrets,
know-how, technology, inventions, computer software (including
45
documentation and object and source codes), and similar rights, and all
registrations, applications, licenses, and rights with respect to any of
the foregoing.
"IRS" means the Internal Revenue Service.
"knowledge" of a specified person (or similar references to a person's
knowledge) means that the only information to be attributed to such person
is information actually known to (a) such person in the case of an
individual or (b) in the case of a corporation or other entity, an
executive officer or employee who devoted substantive attention to matters
of such nature during the ordinary course of his employment by such person.
"Letter of Intent" shall have the meaning set forth in Section 5.1.
"Material Adverse Effect" means any change, development, or effect
(individually or in the aggregate) which is, or is reasonably likely to be,
materially adverse (i) to the business, assets, results of operations,
condition (financial or otherwise), or prospects of the applicable party
hereto and its Subsidiaries (considered as a whole) or (ii) to the ability
of such party or its Subsidiaries to perform on a timely basis any material
obligation under this Agreement or any agreement, instrument, or document
entered into or delivered in connection herewith.
"Merger" shall have the meaning set forth in the preamble to this
Agreement.
"Newco" means WEC Acquisition, Inc., a Wyoming corporation and a
wholly owned subsidiary of Olympic.
"Olympic" means Olympic Resources Ltd., a Wyoming corporation.
"Olympic Balance Sheet" shall have the meaning set forth in Section
3.9.
"Olympic Balance Sheet Date" shall have the meaning set forth in
Section 3.9.
"Olympic Claims" shall have the meaning set forth in Section 9.3.
"Olympic Common Stock" shall have the meaning set forth in the
preamble to this Agreement.
"Olympic Fairness Opinion" shall have the meaning set forth in Section
6.4.
"Olympic Financial Statements" shall have the meaning set forth in
Section 3.9.
"Olympic Preferred Stock" shall have the meaning set forth in the
preamble to this Agreement.
"Olympic Reserve Report" shall have the meaning set forth in Section
3.10(a).
46
"Permits" means licenses, permits, franchises, consents, approvals,
variances, exemptions, and other authorizations of or from Governmental
Entities.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, enterprise,
unincorporated organization, or Governmental Entity.
"Plan" shall have the meaning set forth in Section 1.1.
"Xxxxxxx Consulting Agreement" shall have the meaning set forth in
Section 6.9(m).
"Proceedings" means all proceedings, actions, claims, suits,
investigations, and inquiries by or before any arbitrator or Governmental
Entity.
"reasonable best efforts" means, whenever used with reference to a
party's obligation, an obligation of such party to use every reasonable
commercial effort, but shall not be interpreted to require such party to
take any action or refrain from taking any action that would be materially
burdensome to such party or to amend this Agreement or any agreement
contemplated herein or to forego or waive any of its rights hereunder or
thereunder.
"Registration Agreement" shall have the meaning set forth in Section
5.13.
"SEC Filings" shall have the meaning set forth in Section 3.11.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are owned, directly
or indirectly, by the applicable party hereto.
"Survival Date" shall have the meaning set forth in Section 9.1(a).
"Taxes" means any income taxes or similar assessments or any sales,
excise, occupation, use, ad valorem, property, production, severance,
transportation, employment, payroll, franchise, or other tax imposed by any
United States federal, state, or local (or any foreign or provincial)
taxing authority, including any interest, penalties, or additions
attributable thereto.
"Tax Return" means any return or report, including any related or
supporting information, with respect to Taxes.
"US GAAP" shall have the meaning set forth in Section 2.9.
"WBCA" shall have the meaning set forth in Section 1.1.
47
"Whittier" means Whittier Energy Company, a Nevada corporation.
"Whittier Balance Sheet" shall have the meaning set forth in Section
2.9.
"Whittier Balance Sheet Date" shall have the meaning set forth in
Section 2.9.
"Whittier Claims" shall have the meaning set forth in Section 9.2.
"Whittier Common Stock" shall have the meaning set forth in Section
2.4.
"Whittier Financial Statements" shall have the meaning set forth in
Section 2.9.
"Whittier Reserve Report" shall have the meaning set forth in Section
2.10.
"Whittier Special Meeting" shall have the meaning set forth in Section
5.2(a).
48
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representative thereunto duly authorized, all as
of the day and year first above written.
OLYMPIC RESOURCES, LTD.
By /s/ Xxxxx Xxxxxxx
--------------------
Xxxxx Xxxxxxx, President
WEC ACQUISITION, INC.
By /s/ Xxxxx Xxxxxxx
--------------------
Xxxxx Xxxxxxx, President
WHITTIER ENERGY COMPANY
By /s/ Xxxxx Xxxxxx
-------------------
Xxxxx Xxxxxx, Vice President
Each of the undersigned has caused this Agreement to be executed with
respect to Section 9.5 hereof, as of the day and year first above written.
/s/ Xxxxx Xxxxxxx
-----------------
Xxxxx Xxxxxxx, Individually
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxxxx, Individually
49