EXHIBIT 9.1
STOCKHOLDER AGREEMENT
This Stockholder Agreement is entered into as of April 3, 1998 by and among
Pinnacle Oil International, Inc., a Nevada corporation (the "Company") and R.
Xxxx Xxxxxxx, a resident of Calgary, Alberta, Canada, and Xxxxxx Xxxxxxxxx, a
resident of Calgary, Alberta, Canada (the latter two parties referred to
individually as a "Controlling Stockholder" or collectively as the "Controlling
Stockholders"), and SFD Investment LLC, an Arkansas limited liability company
(the "Investor") (the latter three parties referred to individually as a
"Stockholder" or collectively as the "Stockholders").
Whereas, the Controlling Stockholders have agreed to certain voluntary
limitations upon their respective rights and obligations to transfer their
shares of capital stock of the Company; and
Whereas, the Investor has subscribed to its shares of capital stock of the
Company in reliance upon the agreements set forth herein.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the parties agree as follows.
1. Definitions. A glossary of the definitions of the capitalized terms
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used in this Agreement is set forth in Appendix A which is attached hereto and
incorporated herein.
2. Transfer and Assignment of Interests. Each Controlling Stockholder
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agrees that he shall not be entitled to Transfer all or any portion of the
Shares owned by him such Stockholder except as expressly provided in this
Agreement.
3. Tag-Along Right. If either Controlling Stockholder (a "Selling
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Stockholder") makes, or desires to accept, a bona fide offer (an "Offer") to
Transfer any of the Shares owned by him (the "Offered Shares"), the Selling
Stockholder shall provide the Investor with notice of such Offer within ten days
(the "Offer Notice"). The Offer Notice shall contain (a) the purchase price for
the Offered Shares; (b) all other material terms of the Offer; and (c) the name
of the offeror. The Investor shall have the right (but not the obligation) to
require the Selling Stockholder's proposed purchaser to purchase all of the
Investor' Shares on the same terms as set forth in the Offer. The election by
the Investor to participate in such sale shall be exercisable by giving notice
of the same to the Selling Stockholder and the Company within thirty days after
receipt of the Offer Notice. In the event that a prospective buyer refuses to
purchase the aggregate Shares held by the Investor and the Selling Stockholder,
the Investor shall have the right to sell a portion of its Shares pro rata to
the prospective buyer, and the Selling Stockholder shall be required to reduce
the number of its Shares to be sold. This right is personal to the Investor,
and is not assignable except to an affiliate of the Investor.
4. Determination of Shares. For purposes of this Agreement, the Shares
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owned by the Investor shall be determined as follows: (i) any shares of
preferred stock shall be treated as the number of shares of common stock into
which such shares are convertible, and (ii) any warrants that the Investor owns
entitling it to acquire shares of common stock of the Company shall be treated
as such underlying shares of common stock. With respect to (ii) of the
preceding sentence, the Investor shall be entitled to exercise any then existing
warrant in accordance with its terms prior to or simultaneously with giving the
notice required under section 3 above.
5. Permitted Transfers. The Shares of any Controlling Stockholder may be
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Transferred free of the restriction of this Agreement with respect to the
following Transfers: (i) to any spouse, parent, sibling, in-law, child or
grandchild of the Controlling Stockholder, to a trust for the benefit of the
Controlling Stockholder or such spouse,
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parent, sibling, in-law, child, or grandchild of the Controlling Stockholder,
(ii) to any affiliate of the Controlling Stockholders (including between the
Controlling Stockholders), (iii) in any transaction on the public market, (iv)
in any private transaction or series of private transactions, including
transactions pursuant to which the Controlling Stockholders to hypothecate,
encumber or secure any loan, and in connection with the foreclosure or
settlement of such loan transactions, pursuant to which Controlling Stockholders
Transfer less than twenty five percent (25%) of their aggregate Shares as of the
date of this Agreement.
6. Reasonable Restraint. Each Controlling Stockholder acknowledges and
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agrees that to the extent that their respective covenants hereunder could be
interpreted as a restraint upon alienation or transfer of their Shares, that
such restraint is reasonable and was specifically bargained for by the Investor
in making its decision to invest in the Company. The Company acknowledges the
covenants herein and agrees that it shall not recognize any transfer of any
interest in the Shares of either Controlling Stockholder that is not in strict
compliance with the terms of conditions of this Agreement.
7. Legend. Each Stockholder acknowledges that any certificate
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representing Shares shall bear a legend as follows:
The shares of stock represented by this certificate are subject to certain
restrictions upon transfer pursuant to a Stockholder's Agreement dated
April 3, 1998, and any holder hereof holds such shares subject to the
rights of the issuing corporation and other stockholders thereof. A copy of
the agreement is on file with the secretary of the corporation.
8. Representations and Warranties by Stockholders. Each Stockholder for
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itself and not for any other party, hereby represents and warrants to the
Company the following:
(a) Each Stockholder has the full legal right, power, and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated herein.
(b) The execution, delivery, and performance of this Agreement and
transactions contemplated hereby will not, with or without the giving of notice
or the passage of time, conflict with, result in a default or loss of rights
under, or result in the creation of any lien, charge, or encumbrance pursuant to
(i) any mortgage, deed of trust, license, agreement, indenture, order, judgment,
or decree to which such Stockholder is a party or by which, to the best of such
Stockholder's knowledge, such Stockholder or the Shares owned by such
Stockholder may be bound, or (ii) to the best of such Stockholder's knowledge,
any law, rule, or regulation applicable to such Stockholder.
(c) This Agreement constitutes the legal, valid, and binding obligation
of such Stockholder enforceable in accordance with its terms except as limited
by laws affecting the enforcement of creditors' rights generally and general
principles of equity.
9. Representations and Warranties of Company.
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(a) The Company has the full legal right, power, and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated herein.
(b) The execution, delivery, and performance of this Agreement and
transactions contemplated hereby will not, with or without the giving of notice
or the passage of time, conflict with, result in a default or loss of rights
under, or result in the creation of any lien, charge, or encumbrance pursuant to
(i) any mortgage, deed of trust, license, agreement, indenture, order, judgment,
or decree to which the Company is a party or by which, to the best of the
Company's knowledge, the Company or the Shares may be bound, or (ii) to the
best of the Company's knowledge any
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law, rule, or regulation applicable to the Company.
(c) This Agreement constitutes the legal, valid, and binding obligation
of the Company enforceable in accordance with its terms except as limited by
laws affecting the enforcement of creditors' rights generally and general
principles of equity.
10. Miscellaneous.
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(a) No Third-Party Beneficiaries. This Agreement shall not confer any
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rights or remedies upon any person other than the parties and their respective
successors and permitted assigns.
(b) Entire Agreement. This Agreement (including the documents referred
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to herein) constitutes the entire agreement among the parties and supersedes any
prior understandings, agreements, or representations by or among the parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(c) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(d) Headings. The section headings contained in this agreement are
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inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(e) Notices. All notices, requests, demands, claims, and other
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communications hereunder will be in writing. Any notice, request, demand,
claim, or communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Company: Pinnacle Oil International, Inc.
----------------- Attn.: R. Xxxx Xxxxxxx
000 0xx Xxxxxx, X.X., Xxxxx 000
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
Copy to: Xxxxxx Xxxxxx
------- Xxxxxx & Xxxxxxxx
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000-0000
If to any Controlling Stockholder: Pinnacle Oil International, Inc.
--------------------------------- Attn.: R. Xxxx Xxxxxxx
000 0xx Xxxxxx, X.X., Xxxxx 000
Xxxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
If to the Investor: SFD Investment LLC
------------------ 000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Copy to: Xxxxxxx Xxxxxx Jr.
-------
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000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
(f) Governing Law. This Agreement shall be governed by and construed in
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accordance with the domestic laws of the State of Nevada without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Nevada or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Nevada.
(g) Amendments and Waivers. No amendment of any provision of this
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Agreement shall be valid unless the same shall be in writing and signed by the
Company and the Stockholder against whom such amendment is sought to be
enforced. No waiver by any party or any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior of subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
(h) Severability. Any term or provision of this Agreement that is
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invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(i) Construction. The parties have participated jointly in the
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negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the prevision of the Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any party has breached any representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the party has not breached shall not
detract from or mitigate the fact that the party is in breach of the first
representation, warranty, or covenant.
(j) Incorporation of Exhibits and Schedules. The Exhibits identified in
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this Agreement are incorporated herein by reference and made a part hereof.
(k) Specific Performance. Each of the parties acknowledges and agrees
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that the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any remedy to which they may be entitled,
at law or in equity.
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*****
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on [as
of] the date first above written.
COMPANY: PINNACLE OIL INTERNATIONAL, INC.,
A Nevada corporation
By: /s/ R. Xxxx Xxxxxxx
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Title:
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CONTROLLING STOCKHOLDERS:
/s/ R. Xxxx Xxxxxxx
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R. XXXX XXXXXXX
_____________________________________
XXXXXX XXXXXXXXX
INVESTOR : SFD INVESTMENT LLC,
an Arkansas limited liability company
By: /s/ K. Xxxx Xxxxxx
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Title:
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APPENDIX A
"Capital Stock" shall have mean any shares of capital stock issued by the
Company.
"Offer" shall have the meaning set forth in Section 3.
"Offer Notice" shall have the meaning set forth in Section 3.
"Offered Shares" shall have the meaning set forth in Section 3.
"Selling Stockholder" shall have the meaning set forth in Section 3.
"Shares" shall mean any issued and outstanding shares of Capital Stock.
"Stockholder" and "Stockholders" shall have the meaning set forth in the
preface.
"Stockholder Consent" shall mean the consent to the Transfer by a
Stockholder of any shares of Capital Stock other than is strict conformance with
the terms of this Agreement, such consent to be effected by the holders of a
majority of each class of Capital Stock, excluding any Shares held by the
Stockholder seeking the consent.
"Transfer" shall mean the transfer, assignment, conveyance, sale,
encumbrance, or alienation in any way of shares of Capital Stock of the Company,
whether or not for value and whether or not made to another party to this
Agreement.
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