SECURITIES PURCHASE AGREEMENT BY AND AMONG INTEROIL CORPORATION AND THE PURCHASERS NAMED HEREIN
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS |
1 | |||
Section 1.1 Definitions |
1 | |||
Section 1.2 Accounting Procedures and Interpretation |
5 | |||
ARTICLE II. SALE AND PURCHASE |
6 | |||
Section 2.1 Initial Sale and Purchase |
6 | |||
Section 2.2 Subsequent Placement of Preferred Shares |
6 | |||
Section 2.3 Closings |
6 | |||
Section 2.4 Respective Obligations |
7 | |||
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
7 | |||
Section 3.1 Existence |
7 | |||
Section 3.2 Capitalization and Valid Issuance of the Purchased Preferred Shares |
8 | |||
Section 3.3 Company SEC Documents |
9 | |||
Section 3.4 No Material Adverse Change |
10 | |||
Section 3.5 Litigation |
10 | |||
Section 3.6 No Breach |
10 | |||
Section 3.7 Authority |
11 | |||
Section 3.8 Approvals |
11 | |||
Section 3.9 Investment Company Status |
11 | |||
Section 3.10 Offering |
11 | |||
Section 3.11 Resale of Securities |
12 | |||
Section 3.12 Certain Fees |
12 | |||
Section 3.13 No Side Agreements |
12 | |||
Section 3.14 Internal Accounting Controls |
12 | |||
Section 3.15 Preemptive Rights or Registration Rights |
12 | |||
Section 3.16 Insurance |
13 | |||
Section 3.17 Acknowledgment Regarding Purchase of the Purchased Preferred Shares |
13 | |||
Section 3.18 Anti-Takeover Laws |
13 | |||
Section 3.19 Compliance with Laws |
13 | |||
Section 3.20 Tax Matters |
14 | |||
Section 3.21 Title to Assets |
14 | |||
Section 3.22 Adverse Proceedings |
14 | |||
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER |
14 | |||
Section 4.1 Valid Existence |
15 | |||
Section 4.2 No Breach |
15 | |||
Section 4.3 Investment |
15 | |||
Section 4.4 Nature of Purchaser |
16 | |||
Section 4.5 Receipt of Information; Authorization |
16 | |||
Section 4.6 Restricted Securities |
16 | |||
Section 4.7 Certain Fees |
16 | |||
Section 4.8 Legend |
16 | |||
Section 4.9 No Side Agreements |
17 | |||
ARTICLE V. COVENANTS |
17 |
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Section 5.1 Subsequent Offerings |
17 | |||
Section 5.2 Purchaser Lock-Up |
18 | |||
Section 5.3 Taking of Necessary Action |
18 | |||
Section 5.4 Non-Disclosure; Interim Public Filings |
18 | |||
Section 5.5 Use of Proceeds |
19 | |||
Section 5.6 Reservation of Shares |
19 | |||
Section 5.7 Reporting Issuer Status |
19 | |||
Section 5.8 Stock Exchange Approval |
19 | |||
Section 5.9 Fees |
19 | |||
ARTICLE VI. CLOSING DELIVERIES |
20 | |||
Section 6.1 Company Deliveries |
20 | |||
Section 6.2 Purchaser Deliveries |
20 | |||
ARTICLE VII. INDEMNIFICATION, COSTS AND EXPENSES |
21 | |||
Section 7.1 Indemnification by the Company |
21 | |||
Section 7.2 Indemnification by the Purchasers |
21 | |||
Section 7.3 Indemnification Procedure |
21 | |||
ARTICLE VIII. MISCELLANEOUS |
22 | |||
Section 8.1 Interpretation |
22 | |||
Section 8.2 Survival of Provisions |
22 | |||
Section 8.3 No Waiver; Modifications in Writing |
23 | |||
Section 8.4 Binding Effect; Assignment |
23 | |||
Section 8.5 Aggregation of Purchased Preferred Shares |
24 | |||
Section 8.6 Confidentiality and Xxx-Xxxxxxxxxx |
00 | |||
Section 8.7 Communications |
24 | |||
Section 8.8 Removal of Legend |
25 | |||
Section 8.9 Entire Agreement |
25 | |||
Section 8.10 Governing Law |
26 | |||
Section 8.11 Jurisdiction |
26 | |||
Section 8.12 Jury Trial |
26 | |||
Section 8.13 Execution in Counterparts |
26 | |||
Section 8.14 Expenses |
26 | |||
Section 8.15 Recapitalization, Exchanges, Etc. |
26 | |||
Section 8.16 Obligations Limited to Parties to Agreement |
26 |
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This SECURITIES PURCHASE AGREEMENT, dated as of November 21, 2007 (this “Agreement”), is by
and among INTEROIL CORPORATION, a Yukon Territory corporation (the “Company”), and each of the
purchasers named in Schedule 2.1 attached hereto (individually, an “Initial Purchaser” and,
collectively, with any Subsequent Purchasers (as defined below) the “Purchasers”, each, a
“Purchaser”).
WHEREAS, the Company desires to sell an aggregate of approximately $30,000,000 of shares of
the Company’s Series A Preferred Shares (the “Preferred Shares”) with the relative rights,
preferences and limitations as set forth in Exhibit A to the Initial Purchasers, which
Preferred Shares shall be convertible into shares of the Company’s common stock, no par value per
share (as convertible, collectively, the “Underlying Shares”), and the Initial Purchasers desire to
purchase an aggregate of approximately $15,000,000 of Preferred Shares from the Company, each in
accordance with the provisions of this Agreement; and
WHEREAS, the Company will have the right to sell, upon the terms and conditions stated in this
Agreement, up to an additional $15,000,000 of Preferred Shares to additional Purchasers as set
forth in an amended Schedule 2.1; and
WHEREAS, the Company has agreed to provide the Purchasers with certain registration rights
with respect to the Underlying Shares pursuant to this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and each of the Purchasers, severally and not jointly, hereby agree as follows:
ARTICLE I.
DEFINITIONS
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated:
“6-K Filing” shall have the meaning specified in Section 5.4.
“Action” against a Person means any lawsuit, action, proceeding, investigation or complaint
before any Governmental Authority, mediator or arbitrator.
“Affiliate” means, with respect to a specified Person, any other Person, whether now in
existence or hereafter created, directly or indirectly controlling, controlled by or under direct
or indirect common control with such specified Person. For purposes of this definition, “control”
(including, with correlative meanings, “controlling”, “controlled by” and “under common control
with”) means the power to direct or cause the direction of the management and policies of such
Person, directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise.
“Agreement” shall have the meaning specified in the introductory paragraph.
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“Basic Documents” means, collectively, this Agreement, the Registration Rights Agreement, that
certain engagement letter between the Company and Stirling Partners (Bahamas) Limited dated as of
November 7, 2007, and any and all other agreements or instruments executed and delivered by the
Parties to evidence the execution, delivery and performance of this Agreement, and any amendments,
supplements, continuations or modifications thereto.
“Business Day” means any day other than a Saturday, a Sunday or a legal holiday for commercial
banks in New York, New York.
“Canadian Disclosure Documents” shall have the meaning specified in Section 3.3.
“Canadian Securities Laws” means, collectively, all applicable securities laws of each of the
provinces of Alberta, British Columbia and Ontario and the respective rules, regulations and
instruments under such laws together with applicable published policy statements, notices, orders
or rulings, if any, of the Canadian Securities Regulatory Authorities.
“Canadian Securities Regulatory Authorities” means, collectively, the Alberta Securities
Commission, the British Columbia Securities Commission and the Ontario Securities Commission and
any other Canadian regulatory authority having jurisdiction.
“Closing” shall have the meaning specified in Section 2.3.
“Closing Date” shall have the meaning specified in Section 2.3.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Commission” means the United States Securities and Exchange Commission.
“Commitment Amount” means the dollar amount set forth opposite each Purchaser’s name on
Schedule 2.1. For each Purchaser, the Commitment Amount shall be calculated by multiplying
the number of Preferred Shares to be purchased by such Purchaser by the Preferred Share Price.
“Common Shares” means the Common Shares of the Company representing equity interests therein.
“Company” shall have the meaning specified in the introductory paragraph.
“Company Financial Statements” shall have the meaning specified in Section 3.3.
“Company Material Adverse Effect” means any material and adverse effect on (i) the assets,
liabilities, financial condition, business, operations, prospects or affairs of the Company and its
Subsidiaries, taken as a whole, other than those occurring as a result of general economic or
financial conditions or any other developments that are not unique to and do not have a material
disproportionate impact on the Company and its Subsidiaries but also affect other Persons who
participate in or are engaged in the lines of business in which the Company and its Subsidiaries
participate or are engaged, (ii) the ability of the Company and its Subsidiaries, taken
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as a whole, to carry out their business as of the date of this Agreement or to meet their
obligations under the Basic Documents on a timely basis or (iii) the ability of the Company to
consummate the transactions under any Basic Document.
“Company Organizational Document” means, collectively, articles of continuance and by-laws of
the Company.
“Company Organizational Law” means the laws of the Business Corporations Act (Yukon).
“Company SEC Documents” shall have the meaning specified in Section 3.3.
“Equity Interests” means, collectively, the shares of capital stock of the Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and
the rules and regulations of the Commission promulgated thereunder.
“GAAP” means generally accepted accounting principles in Canada in effect from time to time.
“Governmental Authority” shall include the country, state, county, city and political
subdivisions in which any Person or such Person’s Property is located or that exercises valid
jurisdiction over any such Person or such Person’s Property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them and any monetary authorities that
exercise valid jurisdiction over any such Person or such Person’s Property. Unless otherwise
specified, all references to Governmental Authority herein shall mean a Governmental Authority
having jurisdiction over, where applicable, the Company, its Subsidiaries or any of their Property
or any of the Purchasers.
“Indemnified Party” shall have the meaning specified in Section 7.1.
“Indemnifying Party” shall have the meaning specified in Section 7.3.
“Initial Closing” shall have the meaning specified in Section 2.3.
“Initial Closing Date” shall have the meaning specified in Section 2.3.
“Initial Purchaser” shall have the meaning specified in the introductory paragraph.
“Law” means any federal, state, provincial, local or foreign order, writ, injunction,
judgment, settlement, award, decree, statute, law, rule or regulation.
“Lien” means any interest in Property securing an obligation owed to, or a claim by, a Person
other than the owner of the Property, whether such interest is based on the common law, statute or
contract, and whether such obligation or claim is fixed or contingent, and including the lien or
security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security purposes.
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“Lock-Up Date” means 45 days following the Initial Closing Date (with respect to the Initial
Purchasers) or 45 days following the Subsequent Closing Date (with respect to the Subsequent
Purchasers, if any).
“Xxxxxxx” shall have the meaning specified in Section 5.9.
“Party” or “Parties” means the Company and the Purchasers, individually or collectively,
as the case may be.
“Person” means any individual, corporation, company, voluntary association, partnership, joint
venture, trust, limited liability company, unincorporated organization or government or any agency,
instrumentality or political subdivision thereof, or any other form of entity.
“Preferred Shares” shall have the meaning specified in the Recitals.
“Preferred Share Price” shall have the meaning specified in Section 2.1(b).
“Property” means any interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible.
“Purchased Preferred Shares” means the Preferred Shares to be issued and sold to the
Purchasers pursuant to this Agreement (which shall include any Preferred Shares issued pursuant to
both the Initial Closing and the Subsequent Closing, if any).
“Purchase Price” means the aggregate of each Purchaser’s Commitment Amount.
“Purchaser” shall have the meaning specified in the introductory paragraph.
“Purchaser Material Adverse Effect” means any material and adverse effect on (i) the ability
of a Purchaser to meet its obligations under the Basic Documents on a timely basis or (ii) the
ability of a Purchaser to consummate the transactions under any Basic Document.
“Purchasers” shall have the meaning specified in the introductory paragraph.
“Registration Rights Agreement” means the Registration Rights Agreement, substantially in the
form of Exhibit B, to be entered into at the Closing, among the Company and the Purchasers.
“Representatives” of any Person means the Affiliates, control persons, officers, directors,
managers, employees, agents, counsel, investment bankers and other representatives of such Person.
“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules
and regulations of the Commission promulgated thereunder.
“Shareholders” means the holders of the Company’s Common Shares.
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“Stock Exchange” means the American Stock Exchange and the Toronto Stock Exchange.
“Subsequent Closing” shall have the meaning specified in Section 2.3.
“Subsequent Closing Date” shall have the meaning specified in Section 2.3.
“Subsequent Offer Period” shall have the meaning specified in Section 2.2.
“Subsequent Placement” shall have the meaning specified in Section 2.2.
“Subsequent Purchaser” shall have the meaning specified in Section 2.2.
“Subsidiary” means, as to any Person, (i) any corporation or other entity of which a majority
of the outstanding equity interest having by the terms thereof ordinary voting power to elect a
majority of the board of directors of such corporation or other entity (irrespective of whether or
not at the time any equity interest of any other class or classes of such corporation or other
entity shall have or might have voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such Person or one or more of its
Subsidiaries or (ii) any limited partnership in which such Person and its Subsidiaries own equity
interests entitling at a given time such Person and its Subsidiaries to a majority of the
distributions of such limited partnership if such limited partnership were to be liquidated at such
time.
“Tax” means any tax (including without limitation any income tax, franchise tax, capital gains
tax, gross receipts tax, license tax, value-added tax, surtax, excise tax, ad valorem tax, transfer
tax, stamp tax, sales tax, use tax, property tax, environmental tax, inventory tax, occupancy tax,
severance tax, withholding tax, payroll tax, employment tax, gift tax, estate tax or inheritance
tax), levy, assessment, tariff, impost, imposition, toll, duty (including any customs duty),
deficiency or fee, and any related charge or amount (including any fine, penalty or interest),
imposed, assessed or collected by or under the authority of any Governmental Authority or payable
pursuant to any tax-sharing agreement or pursuant to any other contract relating to the sharing or
payment of any such tax, levy, assessment, tariff, impost, imposition, toll, duty, deficiency or
fee.
“Tax Return” means any return (including any information return), report, claim for refund,
statement, declaration, schedule, notice, notification, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any Governmental
Authority in connection with the determination, assessment, collection or payment of any Tax or in
connection with the administration, implementation or enforcement of or compliance with any legal
requirement relating to any Tax, and including any amendment thereof.
“Underlying Shares” shall have the meaning specified in the Recitals.
Section 1.2 Accounting Procedures and Interpretation. Unless otherwise specified in this
Agreement, all accounting terms used herein shall be interpreted, all determinations with respect
to accounting matters under this Agreement shall be made, and all financial statements
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and certificates and reports as to financial matters required to be furnished to the Purchasers
under this Agreement shall be prepared, in accordance with GAAP applied on a consistent basis
during the periods involved (except, in the case of unaudited statements) and in compliance as to
form in all material respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto.
ARTICLE II.
SALE AND PURCHASE
SALE AND PURCHASE
Section 2.1 Initial Sale and Purchase. Subject to the terms and conditions of this Agreement,
at the Initial Closing, the Company hereby agrees to issue and sell to each Initial Purchaser, and
each Initial Purchaser hereby agrees, severally and not jointly, to purchase from the Company, the
number of Purchased Preferred Shares set forth opposite its name on Schedule 2.1. Each
Initial Purchaser agrees to pay the Company the Commitment Amount as set forth in Schedule
2.1.
(a) Preferred Shares. The number of Purchased Preferred Shares to be issued and sold to each
Initial Purchaser is set forth opposite such Initial Purchaser’s name on Schedule 2.1. The
Purchased Preferred Shares shall be convertible into Common Shares at a conversion price of $28.97.
(b) Consideration. The amount per Preferred Share each Purchaser will pay to the Company to
purchase the Purchased Preferred Shares (the “Preferred Share Price”) shall be $28.97.
Section 2.2 Subsequent Placement of Preferred Shares. Within 14 days of the Initial Closing
Date (or, if such 14th day shall be a Saturday or Sunday or a holiday, on the next
Business Day thereafter)(the “Subsequent Offer Period”), the Company shall have the right to issue
and sell to additional purchasers (each, a “Subsequent Purchaser”, collectively, “Subsequent
Purchasers”; it being understood and agreed that the Initial Purchasers shall have no obligation to
participate in any Subsequent Placement (as defined below)), up to an aggregate of $15,000,000 of
Preferred Shares (the “Subsequent Placement”) at a price per share no lower than the Preferred
Share Price. Subject to the terms and conditions of this Agreement, in the event of a Subsequent
Closing, the Company hereby agrees to issue and sell to each Subsequent Purchaser, and each
Subsequent Purchaser hereby agrees, severally and not jointly, to purchase from the Company, the
number of Purchased Preferred Shares set forth opposite its name on an amended Schedule 2.1
of Purchasers (which amount for all Subsequent Purchasers in the aggregate shall not exceed
$15,000,000). Each Subsequent Purchaser shall execute a counterpart signature page to this
Agreement and the Registration Rights Agreement agreeing to be bound by the terms hereof and the
Company shall amend Schedule 2.1 of Purchasers to reflect such Subsequent Purchasers and
shall distribute such amended Schedule of Purchasers to each of the Initial Purchasers. In the
event of a Subsequent Closing, each Subsequent Purchaser agrees to pay the Company the Commitment
Amount as set forth in the amended Schedule 2.1.
Section 2.3 Closings. The execution and delivery of the Basic Documents, the delivery of
certificates representing the Purchased Preferred Shares for the Initial Purchasers, the payment by
each Initial Purchaser of its respective Commitment Amount and execution and
6
delivery of all other instruments, agreements and other documents required by this Agreement (the
“Initial Closing”) shall take place on the date hereof (the “Initial Closing Date”). The purchase
and sale of up to $15,000,000 of Preferred Shares to the Subsequent Purchasers shall take place at
a closing (the “Subsequent Closing”) at any time following the date hereof but not more than five
Business Days following the end of the Subsequent Offer Period (the “Subsequent Closing Date”). The
execution of this Agreement and the Registration Rights Agreement by each Subsequent Purchaser, the
delivery of certificates representing the Purchased Preferred Shares, the payment by each
Subsequent Purchaser of its respective Commitment Amount and the execution and delivery of all
other instruments, agreements and other documents required by this Agreement shall take place at
the Subsequent Closing. The Initial Closing and the Subsequent Closing collectively are referred to
in this Agreement as the “Closings” or as applicable, each, a “Closing.” The Initial Closing Date
and the Subsequent Closing Date collectively are referred to in this Agreement as the “Closing Date” or as applicable, each, a “Closing Date.”
Section 2.4 Respective Obligations. The respective obligations of each Purchaser under this
Agreement are several and not joint with the obligations of any other Purchaser, and no Purchaser
shall be responsible in any way for the performance of the obligations of any other Purchaser under
this Agreement. The failure or waiver of performance under this Agreement by any Purchaser, or on
its behalf, does not excuse performance by any other Purchaser. Nothing contained herein or in any
other Basic Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by any Basic Document. Except as
otherwise provided in this Agreement or the other Basic Documents, each Purchaser shall be entitled
to independently protect and enforce its rights, including the rights arising out of this Agreement
or out of the other Basic Documents, and it shall not be necessary for any other Purchaser to be
joined as an additional party in any proceeding for such purpose.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers, on and as of the date of this Agreement
and on and as of each Closing Date, as follows:
Section 3.1 Existence. The Company: (i) is a corporation duly continued, validly existing and
in good standing under the Laws of the Yukon Territory, Canada; (ii) has all requisite corporate
power and authority necessary to own its Properties and carry on its business as its business is
now being conducted; and (iii) is qualified to do business in all jurisdictions in which the nature
of the business conducted by it makes such qualifications necessary, except where failure so to
qualify would not reasonably be expected to have a Company Material Adverse Effect.
7
Section 3.2 Capitalization and Valid Issuance of the Purchased Preferred Shares.
(a) As of the date of this Agreement, and prior to the issuance and sale of the Purchased
Preferred Shares, the issued and outstanding Equity Interests of the Company consist of 30,354,248
Common Shares. All of the issued and outstanding Equity Interests have been duly authorized and
validly issued in accordance with applicable Law and the Company Organizational Document and are
fully paid (to the extent required by applicable Law and under the Company Organizational Document)
and non-assessable.
(b) Other than the Company’s long-term incentive plans, the Company has no equity compensation
plans that contemplate the issuance of Equity Interests (or securities convertible into or
exchangeable for Equity Interests). The Company has no outstanding indebtedness having the right to
vote (or convertible into or exchangeable for securities having the right to vote) on any matters
on which the Shareholders may vote. Except for Common Shares and options issued pursuant to the
Company’s long-term incentive plans, as contemplated by this Agreement or as are contained in the
Company Organizational Document, up to 3,306,667 Common Shares issuable upon conversion of indirect
participation interests, 337,252 Common Shares issuable on conversion of warrants, and up to 5,000
Common Shares upon conversion of certain rights held by Petroleum Independent and Exploration
Corporation in SP InterOil LDC, there are no outstanding or authorized (i) options, warrants,
subscriptions, calls or other rights, convertible securities, agreements, claims or commitments of
any character obligating the Company or any of its Subsidiaries to issue, transfer or sell any
equity interests in the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such equity interests, (ii) obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any equity interests in the Company or any of its
Subsidiaries or any such securities or agreements listed in clause (i) of this sentence or (iii)
stockholder agreements, voting trusts or similar agreements to which the Company or any of its
Subsidiaries is a party with respect to the voting of the equity interests of the Company or any of
its Subsidiaries.
(c) (i) Except as set forth on Schedule 3.2(c), all of the issued and outstanding
equity interests of each of the Company’s Subsidiaries are owned, directly or indirectly, by the
Company free and clear of any Liens (except for such restrictions as may exist under applicable
securities laws and except for such Liens as may be imposed under the Company’s or its
Subsidiaries’ credit facilities filed as exhibits to the Company SEC Documents), and all such
ownership interests have been duly authorized and validly issued and are fully paid (to the extent
required by applicable Law and the organizational documents of the Company’s Subsidiaries, as
applicable) and non-assessable (except as non-assessability may be affected by the organizational
documents of the Company’s Subsidiaries or any Laws of any other jurisdiction of organization of a
Subsidiary of the Company, as applicable) and free of preemptive rights, with no personal liability
attaching to the ownership thereof, and (ii) except as disclosed in the Company SEC Documents,
neither the Company nor any of its Subsidiaries owns any shares of capital stock or other
securities of, or interest in, any other Person, or is obligated to make any capital contribution
to or other investment in any other Person.
(d) The offer and sale of the Purchased Preferred Shares and the interests represented thereby
have been duly authorized by the Company pursuant to the Company Organizational Document prior to
the Closing and, when issued and delivered to the Purchasers
8
against payment therefor in accordance with the terms of this Agreement, will be validly issued,
fully paid (to the extent required by applicable Law and the Company Organizational Document) and
non-assessable and will be free of any and all Liens and restrictions on transfer, other than
restrictions on transfer under the Company Organizational Document, the Registration Rights
Agreement and applicable state and federal securities Laws and other than such Liens as are created
by the Purchasers.
(e) The Purchased Preferred Shares shall have those relative rights, preferences and
limitations as set forth in Exhibit A.
(f) The Underlying Shares upon conversion will be issued in compliance with all applicable
rules of the Stock Exchange. The Company has submitted to the American Stock Exchange an additional
listing application with respect to the Underlying Shares. The Underlying Shares have been approved
for listing by the American Stock Exchange. The Underlying Shares have been conditionally approved
for listing by the Toronto Stock Exchange and will be posted for trading on the Toronto Stock
Exchange upon satisfaction of the conditions of such conditional approval. The Company’s currently
outstanding Common Shares are quoted on the Stock Exchange and the Company has not received any
notice of delisting.
(g) The Underlying Shares shall have those rights, preferences, privileges and restrictions
governing the Common Shares as set forth in the Company Organizational Document.
(h) The Underlying Shares are duly authorized and reserved for issuance and, upon conversion
of the Purchased Preferred Shares in accordance with the terms thereof, such Underlying Shares will
be validly issued, fully paid and non-assessable, free and clear or any and all liens, claims and
encumbrances, except for transfer restrictions imposed by applicable securities laws.
(i) The Company is a “reporting issuer” (or its equivalent) in good standing in each of the
provinces of Alberta, British Columbia and Ontario within the meaning of applicable Canadian
Securities Laws in such provinces and is not in default of any requirements in relation thereto and
is in compliance, with the by-laws, rules and regulations of the Toronto Stock Exchange.
Section 3.3 Company SEC Documents. Since December 31, 2006, the Company has filed: (i) with
the Commission all forms, reports, schedules and statements required to be filed by it under the
Exchange Act or the Securities Act (all such documents filed on or prior to the date of this
Agreement, collectively, the “Company SEC Documents”); and (ii) with the Canadian Securities
Regulatory Authorities all documents and other information required to be filed by it in compliance
with applicable Canadian Securities Laws (all such documents filed on or prior to the date of this
Agreement, collectively, the “Canadian Disclosure Documents”). Except as set forth on Schedule
3.3, the Company SEC Documents and the Canadian Disclosure Documents, including any audited or
unaudited financial statements and any notes thereto or schedules included therein (the “Company
Financial Statements”), at the time filed (in the case of registration statements, solely on the
dates of effectiveness) (except to the extent corrected by a subsequently filed Company SEC
Document filed prior to the date of this Agreement) (i) did not
9
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, (ii) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case may be, (iii)
complied as to form in all material respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect thereto, (iv) were prepared in
accordance with GAAP applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and (v) fairly present (subject in the case of unaudited statements
to normal, recurring and year-end audit adjustments) in all material respects the consolidated
financial position and status of the business of the Company as of the dates thereof and the
consolidated results of its operations and cash flows for the periods then ended.
PriceWaterhouseCoopers, LLP is an independent registered public accounting firm with respect to the
Company and has not resigned or been dismissed as independent registered public accountants of the
Company as a result of or in connection with any disagreement with the Company on any matter of
accounting principles or practices, financial statement disclosure or auditing scope or procedures.
Section 3.4 No Material Adverse Change. Except as set forth in or contemplated by the Company
SEC Documents, since December 31, 2006, the Company and its Subsidiaries have conducted their
business in the ordinary course, consistent with past practice, and there has been no (i) change,
event or circumstance that has had or would reasonably be expected to have a Company Material
Adverse Effect, (ii) acquisition or disposition of any material asset by the Company or any of its
Subsidiaries or any contract or arrangement therefor, otherwise than for fair value in the ordinary
course of business, (iii) material change in the Company’s accounting principles, practices or
methods or (iv) incurrence of material indebtedness.
Section 3.5 Litigation. Except as set forth in the Company SEC Documents, there is no Action
pending or, to the knowledge of the Company, contemplated or threatened against the Company or any
of its Subsidiaries or any of their respective officers, directors or Properties, which
(individually or in the aggregate) reasonably would be expected to have a Company Material Adverse
Effect or which challenges the validity of this Agreement.
Section 3.6 No Breach. Except for notice requirements under that certain Credit Agreement by
and among the Company, as Borrower, Xxxxxxx Xxxxx Capital Corporation, as Lender, Administrative
Agent and Collateral Agent, and Pacific LNG Operations Limited, as Lender, dated as of May 4, 2006,
as amended (including that certain Amendment No. 1 to Credit Agreement, dated as of March 30,
2007), the execution, delivery and performance by the Company of the Basic Documents to which it is
a party and all other agreements and instruments in connection with the transactions contemplated
by the Basic Documents, and compliance by the Company with the terms and provisions hereof and
thereof, do not and will not (a) violate any provision of any Law, governmental permit,
determination or award having applicability to the Company or any of its Subsidiaries or any of
their respective Properties, (b) conflict with or result in a violation of any provision of any of
the organizational documents of the Company or any of its Subsidiaries, (c) require any consent,
approval or notice under or result in a violation or breach of or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under (i) any note, bond, mortgage, license, or loan or credit agreement to which
the Company or any of its Subsidiaries is a party or
10
by which the Company or any of its Subsidiaries or any of their respective Properties may be bound
or (ii) any other agreement, instrument or obligation, or (d) result in or require the creation or
imposition of any Lien upon or with respect to any of the Properties now owned or hereafter
acquired by the Company or any of its Subsidiaries, except in the cases of clauses (a), (c) and (d)
where such violation, default, breach, termination, cancellation, failure to receive consent or
approval, or acceleration with respect to the foregoing provisions of this Section 3.6
would not, individually or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect.
Section 3.7 Authority. The Company has all necessary corporate power and authority to execute,
deliver and perform its obligations under the Basic Documents to which it is a party and to
consummate the transactions contemplated thereby; the execution, delivery and performance by the
Company of each of the Basic Documents to which it is a party, and the consummation of the
transactions contemplated thereby, have been duly authorized by all necessary action on behalf of
the Company; and the Basic Documents constitute the legal, valid and binding obligations of the
Company, enforceable in accordance with their terms, except as such enforceability may be limited
by bankruptcy, insolvency, fraudulent transfer and similar Laws affecting creditors’ rights
generally or by general principles of equity, including principles of commercial reasonableness,
fair dealing and good faith. Except as contemplated by this Agreement, no approval by the
Shareholders is required as a result of the Company’s issuance and sale of the Purchased Preferred
Shares.
Section 3.8 Approvals. Except as contemplated by Section 3.2 (all of which approvals
described therein have been obtained on or prior to the date hereof other than as contemplated by
Section 3.2(f)), no authorization, consent, approval, waiver, license, qualification or
written exemption from, nor any filing, declaration, qualification or registration with, any
Governmental Authority or any other Person is required in connection with the execution, delivery
or performance by the Company of any of the Basic Documents to which it is a party; except where
the failure to receive such authorization, consent, approval, waiver, license, qualification or
written exemption or to make such filing, declaration, qualification or registration would not,
individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 3.9 Investment Company Status. The Company is not, and is not an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940, as amended.
Section 3.10 Offering. Assuming the accuracy of the representations and warranties of the
Purchasers contained in this Agreement, the sale and issuance of the Purchased Preferred Shares and
the Underlying Shares pursuant to this Agreement are exempt from the registration requirements of
the Securities Act, and all other U.S. federal and state securities laws, and neither the Company
nor any authorized Representative acting on its behalf has taken or will take any action hereafter
that would cause the loss of such exemption. The issue and sale of the Purchased Preferred Shares
and the Underlying Shares hereunder is exempt from any prospectus filing or delivery requirements
of Canadian Securities Laws, without the necessity of obtaining any order or ruling of any
securities regulatory authority, provided each purchaser is an
11
“accredited investor” as such term is defined in Section 1.1 of National Instrument 45-106 as
adopted by the Canadian Securities Administrators.
Section 3.11 Resale of Securities. The Underlying Shares will not be subject to any statutory
hold period under Canadian Securities Laws other than, in each such case, resale restrictions
including a restricted period of four months from the date of the issuance of the Underlying
Shares; and upon the expiry of such restricted period, no prospectus or other document will be
required to be filed, any proceeding taken or any approval, permit, consent or authorization
obtained by the holders of the Underlying Shares under Canadian Securities Laws in connection with
the resale of such Underlying Shares in Canada through registered dealers or brokers, and such
Underlying Shares shall be freely tradeable through the facilities of the Toronto Stock Exchange,
subject to the absence of any orders restricting trades in such Underlying Shares, compliance with
other resale restrictions and general restrictions applicable to holders thereof who are insiders
of, or persons in a special relationship with, the Company or who are “control persons” as
contemplated by Canadian Securities Laws.
Section 3.12 Certain Fees. Other than the fees set forth on Schedule 3.12, no fees or
commissions will be payable by the Company to brokers, finders or investment bankers with respect
to the sale of any of the Purchased Preferred Shares or the consummation of the transactions
contemplated by this Agreement. The Purchasers shall not be liable for any such fees or
commissions. The Company agrees that it will indemnify and hold harmless each of the Purchasers
from and against any and all claims, demands or liabilities for broker’s, finder’s, placement or
other similar fees or commissions incurred by the Company or alleged to have been incurred by the
Company in connection with the sale of the Purchased Preferred Shares or the consummation of the
transactions contemplated by this Agreement.
Section 3.13 No Side Agreements. Except for the confidentiality agreements entered into by and
between each of the Purchasers and the Company and the Basic Documents, there are no other
agreements by, among or between the Company or its Affiliates, on the one hand, and any of the
Purchasers or their Affiliates, on the other hand, with respect to the transactions contemplated
hereby nor promises or inducements for future transactions between or among any of such parties.
Section 3.14 Internal Accounting Controls. Except as disclosed in the Company SEC Documents,
the Company and its Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences. The
Company is not aware of any material failure of such internal accounting controls.
Section 3.15 Preemptive Rights or Registration Rights. Except (i) as set forth in the Company
Organizational Document, (ii) as provided in the Basic Documents (iii) for existing awards under
the Company’s long-term incentive plans, (iv) certain Common Shares issuable
12
pursuant to existing indirect participation interests, outstanding warrants, and certain conversion
rights held by Petroleum Independent and Exploration Corporation in SP InterOil LDC, and (v) those
items otherwise set forth on Schedule 3.15, there are no preemptive rights or other rights
to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any capital
stock or equity interests of the Company pursuant to any other agreement or instrument to which the
Company is a party or by which it may be bound. Neither the execution of this Agreement nor the
issuance of the Purchased Preferred Shares as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any securities of the Company, other than pursuant to
the Registration Rights Agreement.
Section 3.16 Insurance. The Company and its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks as the Company reasonably believes are
prudent and customary for its businesses. The Company does not have any reason to believe that it
or any Subsidiary will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business.
Section 3.17 Acknowledgment Regarding Purchase of the Purchased Preferred Shares. The Company
acknowledges and agrees that (i) each of the Purchasers is participating in the transactions
contemplated by this Agreement and the other Basic Documents at the Company’s request and the
Company has concluded that such participation is in the Company’s best interest and is consistent
with the Company’s objectives and (ii) each of the Purchasers is acting solely in the capacity of
an arm’s length purchaser. The Company further acknowledges that no Purchaser is acting or has
acted as an advisor, agent or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement or the other Basic Documents and any advice given by any Purchaser or any of its
respective Representatives in connection with this Agreement or the other Basic Documents is merely
incidental to the Purchasers’ purchase of the Purchased Preferred Shares. The Company further
represents to each Purchaser that the Company’s decision to enter into this Agreement has been
based solely on the independent evaluation of the transactions contemplated hereby by the Company
and its Representatives.
Section 3.18 Anti-Takeover Laws. The Company has taken all action required to be taken by it
in order to exempt the execution, delivery and performance of this Agreement and the other Basic
Documents and the issuance of the Purchased Preferred Shares from, and each of the foregoing is
hereby exempt from, the requirements of any “moratorium”, “control share”, “fair price”, “affiliate
transaction”, “business combination” or other anti-takeover Laws of any jurisdiction.
Section 3.19 Compliance with Laws. Neither the Company nor any of its Subsidiaries is in
violation of any judgment, decree or order or any Law applicable to the Company or its
Subsidiaries, except as would not, individually or in the aggregate, have a Company Material
Adverse Effect. The Company is otherwise in compliance with the Securities Act, the Exchange Act
and all other rules and regulations promulgated by the Commission and applicable to the Company,
including those under the Sarbanes Oxley Act of 2003, as amended. The Company and its Subsidiaries
possess all certificates, authorizations, licenses and permits issued by the appropriate regulatory
authorities necessary to conduct their respective businesses, except where the failure to possess
such certificates, authorizations or permits would not have, individually or
13
in the aggregate, a Company Material Adverse Effect, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or modification of any
such certificate, authorization, licenses or permit, except where such potential revocation or
modification would not have, individually or in the aggregate, a Company Material Adverse Effect.
None of the Company, any of its Subsidiaries or any director, officer, agent, employee or other
Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions
for, or on behalf of, the Company or any of its Subsidiaries: (i) directly or indirectly used any
Company funds for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee or to any foreign or domestic political parties or
campaigns from Company funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government
official or employee.
Section 3.20 Tax Matters. Company and each of its Subsidiaries has filed (or has had filed on
its behalf) all Tax Returns required by applicable law to be filed by it or them prior to or as of
the date hereof, and such Tax Returns were true, correct and complete. Each of the Company and its
Subsidiaries has paid (or has had paid on its behalf) or, where payment is not yet due, has
established in accordance with GAAP an adequate accrual for the payment of all Taxes due with
respect to any period ending prior to or as of the date hereof. There is no Tax deficiency which
has been asserted or threatened against the Company or any Subsidiary.
Section 3.21 Title to Assets. Company and its Subsidiaries have good and indefeasible title to
all real and personal property owned by them that is material to the business of the Company and
Subsidiaries taken as whole, free and clear of all encumbrances, other than those set forth in the
Company SEC Documents or that do not materially affect the value of such property or do not
materially interfere with the use thereof by the Company and/or its Subsidiaries in its ordinary
course of business. Any real or personal property held under lease by the Company or its
Subsidiaries is held under a valid and enforceable lease, and is in full force and effect in all
material respects.
Section 3.22 Adverse Proceedings. As of the date of this Agreement, and prior to the issuance
and sale of the Underlying Shares, no order, ruling or determination having the effect of ceasing
or suspending trading in any securities of the Company or prohibiting the sale of the Underlying
Shares or any of the Company’s issued securities being issued and no proceeding for such purpose is
pending or, to the knowledge of the Company, threatened by any securities regulatory authority or
stock exchange in Canada or the United States.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER
Each Purchaser, severally and not jointly, represents and warrants to the Company with respect
to itself, on and as of the date of this Agreement and on and as of each Closing Date, as follows:
14
Section 4.1 Valid Existence. Such Purchaser (i) is duly organized, validly existing and in
good standing under the Laws of its respective jurisdiction of organization and (ii) has all
requisite power, and has all material governmental licenses, authorizations, consents and
approvals, necessary to own its Properties and carry on its business as its business is now being
conducted, except where the failure to obtain such licenses, authorizations, consents and approvals
would not have and would not reasonably be expected to have a Purchaser Material Adverse Effect.
Section 4.2 No Breach. The execution, delivery and performance by such Purchaser of the Basic
Documents to which it is a party and all other agreements and instruments in connection with the
transactions contemplated by the Basic Documents to which it is a party, and compliance by such
Purchaser with the terms and provisions hereof and thereof and the purchase of the Purchased
Preferred Shares and the Underlying Shares by such Purchaser do not and will not (a) violate any
provision of any Law, governmental permit, determination or award having applicability to such
Purchaser or any of its Properties, (b) conflict with or result in a violation of any provision of
the organizational documents of such Purchaser or (c) require any consent (other than standard
internal consents), approval or notice under or result in a violation or breach of or constitute
(with or without due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under (i) any note, bond, mortgage, license, or loan or
credit agreement to which such Purchaser is a party or by which such Purchaser or any of its
Properties may be bound or (ii) any other such agreement, instrument or obligation, except in the
case of clauses (a) and (c) where such violation, default, breach, termination, cancellation,
failure to receive consent or approval, or acceleration with respect to the foregoing provisions of
this Section 4.2 would not, individually or in the aggregate, reasonably be expected to have a
Purchaser Material Adverse Effect.
Section 4.3 Investment. The Purchased Preferred Shares and the Underlying Shares are being
acquired for such Purchaser’s own account, or the accounts of clients for whom such Purchaser
exercises discretionary investment authority (all of whom such Purchaser represents and warrants
are “accredited investors” within the meaning of Rule 501 of Regulation D promulgated by the
Commission pursuant to the Securities Act) and is an “accredited investor” within the meaning of
paragraph (m) of the definition of “accredited investor” in Section 1.1 of National Instrument
45-106 as adopted by the Canadian Securities Administrators, not as a nominee or agent, and with no
present intention of distributing the Purchased Preferred Shares, the Underlying Shares or any part
thereof, and such Purchaser has no present intention of selling or granting any participation in or
otherwise distributing the same in any transaction in violation of the securities Laws of the
United States of America or any state, without prejudice, however, to such Purchaser’s right at all
times to sell or otherwise dispose of all or any part of the Purchased Preferred Shares or the
Underlying Shares under a registration statement under the Securities Act and applicable state
securities Laws or under an exemption from such registration available thereunder (including, if
available, Rule 144 under the Securities Act). If such Purchaser should in the future decide to
dispose of any of the Purchased Preferred Shares or the Underlying Shares, such Purchaser
understands and agrees (a) that it may do so only (i) in compliance with the Securities Act and
applicable state securities Law, as then in effect, or pursuant to an exemption therefrom or (ii)
in the manner contemplated by any registration statement pursuant to which such securities are
being offered, and (b) that stop-transfer instructions to that effect will be in effect with
respect to such securities.
15
Section 4.4 Nature of Purchaser. Such Purchaser represents and warrants to, and covenants and
agrees with, the Company that (a) it is an “accredited investor” within the meaning of Rule 501 of
Regulation D promulgated by the Commission pursuant to the Securities Act (b) it is an “accredited
investor” within the meaning of paragraph (m) of the definition of “accredited investor” in Section
1.1 of National Instrument 45-106 as adopted by the Canadian Securities Administrators and (c) by
reason of its business and financial experience it has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks
of the prospective investment in the Purchased Preferred Shares and the Underlying Shares, is able
to bear the economic risk of such investment and, at the present time, would be able to afford a
complete loss of such investment.
Section 4.5 Receipt of Information; Authorization. Such Purchaser acknowledges that it has (a)
had access to the Company SEC Documents and Canadian Disclosure Documents and (b) been provided a
reasonable opportunity to ask questions of and receive answers from Representatives of the Company
regarding the matters described therein.
Section 4.6 Restricted Securities. Such Purchaser understands that the Purchased Preferred
Shares and the Underlying Shares issuable upon conversion it is purchasing are characterized as
“restricted securities” under the federal securities Laws inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under such Laws and
applicable regulations such securities may be resold without registration under the Securities Act
only in certain limited circumstances. In this connection, such Purchaser represents that it is
knowledgeable with respect to Rule 144 under the Securities Act.
Section 4.7 Certain Fees. No fees or commissions will be payable by such Purchaser to brokers,
finders or investment bankers with respect to the sale of any of the Purchased Preferred Shares or
the Underlying Shares or the consummation of the transactions contemplated by this Agreement. The
Company will not be liable for any such fees or commissions. Such Purchaser agrees, severally and
not jointly with the other Purchasers, that it will indemnify and hold harmless the Company from
and against any and all claims, demands or liabilities for broker’s, finder’s, placement or other
similar fees or commissions incurred by such Purchaser or alleged to have been incurred by such
Purchaser in connection with the purchase of the Purchased Preferred Shares or the Underlying
Shares or the consummation of the transactions contemplated by this Agreement.
Section 4.8 Legend.
It is understood that the certificates evidencing the Purchased Preferred Shares and the
Underlying Shares issuable upon conversion initially will bear the following legends, provided
however, certificates evidencing the Purchased Preferred Shares shall not include the legend in
Section 4(c):
(a) “These securities have not been registered under the Securities Act of 1933, as amended.
These securities may not be sold, offered for sale, pledged (except in connection with a bona fide
margin account or other loan or financing arrangement secured by these securities) or hypothecated
in the absence of a registration statement in effect with respect to the securities under such Act
or pursuant to an exemption from registration thereunder and, in the case of a
16
transaction exempt from registration, unless sold pursuant to Rule 144 under such Act or the issuer
has received documentation reasonably satisfactory to it that such transaction does not require
registration under such Act.”
(b) “Unless permitted under securities legislation, the holder of this security must not trade
the security before [insert the date that is 4 months and a day after the distribution date].”
(c) “The securities represented by this certificate are listed on the Toronto Stock Exchange
(“TSX”); however, the said securities cannot be traded through the facilities of TSX since they are
not freely transferable, and consequently any certificate representing such securities is not “good
delivery” in settlement of transactions on TSX.”
For the avoidance of doubt, the Underlying Shares may be pledged in connection with a bona
fide margin account or other loan or financing arrangement secured by such Underlying Shares and
such pledge shall not be deemed to be a transfer, sale or assignment of such Underlying Shares, and
no buyer effecting such a pledge shall be required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement or any other Basic
Document.
Section 4.9 No Side Agreements. Except for the confidentiality agreements entered into by and
between such Purchaser and the Company and the Basic Documents, there are no other agreements by,
among or between the Company or its Affiliates, on the one hand, and such Purchaser or its
Affiliates, on the other hand, with respect to the transactions contemplated hereby nor promises or
inducements for future transactions between or among any of such parties.
ARTICLE V.
COVENANTS
COVENANTS
Section 5.1 Subsequent Offerings. Without the prior written consent of each Purchaser, from
the date of this Agreement until the Lock-Up Date, the Company shall not, and shall cause its
directors, officers and Affiliates not to, grant, issue or sell any Common Shares or other equity
or voting securities of the Company, any securities convertible into or exchangeable therefor or
take any other action that may result in the issuance of any of the foregoing, other than (i) the
issuance of the Purchased Preferred Shares and the Underlying Shares, (ii) the issuance of Common
Shares or options to purchase Common Shares or phantom Common Shares granted pursuant to the
Company’s existing long-term incentive plans, (iii) the issuance or sale of Common Shares issued or
sold in a registered public offering to finance future acquisitions that are accretive to cash flow
per Common Share (or the repayment of indebtedness incurred in connection with such accretive
acquisitions) at a price no less than 110% of the Preferred Share Price or in a private offering to
finance future acquisitions that are accretive to cash flow per Common Share (or the repayment of
indebtedness incurred in connection with such accretive acquisitions), (iv) the issuance of Common
Shares as purchase price consideration in connection with future acquisitions that are accretive to
cash flow per Common Share, (v) the issuance of 3,306,667 Common Shares upon conversion of indirect
participation interests,
17
(vi) the issuance of Common Shares upon conversion of outstanding warrants, (vii) the issuance of
Common Shares upon exercise of Petroleum Independent and Exploration Corporation’s conversion
rights in SP InterOil LDC, (viii) the issuance of 25,000 Common Shares to Enron Papua New Guinea
Limited (“EPNG”) pursuant to a stock purchase agreement by and between the Company, EPNG and Enron
Creditors Recovery Corp., (ix) any Preferred Shares issued and sold pursuant to a Subsequent
Placement, and the Common Shares into which such Preferred Shares may be convertible or which may
be issued in connection therewith, and (x) the issuance of up to $15,000,000 of Common Shares to
Clarion Finanz A.G., Asset Protection Fund Ltd. and/or any of their respective Affiliates, pursuant
to a purchase agreement (as amended) by and between the Company, Clarion Finanz A.G., Asset
Protection Fund Ltd. and Bank Xxx.
Xxxxxxxxx jr. & Cie. (Switzerland) (for the avoidance of doubt, the parties hereto acknowledge and
agree that such $15,000,000 of Common Shares shall be deemed a subsequent placement in addition to
the $10,000,000 of Common Shares issued to Asset Protection Fund Ltd. and Bank Xxx. Xxxxxxxxx jr. &
Cie. (Switzerland) prior to the date of this Agreement). Notwithstanding the foregoing, the Company
shall not, and shall cause its directors, officers and Affiliates not to, sell, offer for sale or
solicit offers to buy any security (as defined in the Securities Act) that would or would
reasonably be expected to be integrated with the sale of the Purchased Preferred Shares or the
Underlying Shares issuable upon conversion or that would require the registration under the
Securities Act of the sale of the Purchased Preferred Shares or the Underlying Shares to the
Purchasers.
Section 5.2 Purchaser Lock-Up. Without the prior written consent of the Company, each
Purchaser agrees that from and after the Closing it will not sell any of its Purchased Preferred
Shares or Underlying Shares issuable upon conversion prior to the Lock-Up Date; provided, however,
that each Purchaser may: transfer its Purchased Preferred Shares or Underlying Shares to an
Affiliate of such Purchaser or to any other Purchaser or an Affiliate of such other Purchaser
provided that such Affiliate agrees to the restrictions in this Section 5.2.
Section 5.3 Taking of Necessary Action. Each of the Parties hereto shall use its commercially
reasonable efforts promptly to take or cause to be taken all action and promptly to do or cause to
be done all things necessary, proper or advisable under applicable Law and regulations to
consummate and make effective the transactions contemplated by this Agreement. Without limiting the
foregoing, the Company and each Purchaser will, and the Company shall cause each of its
Subsidiaries to, use its commercially reasonable efforts to make all filings and obtain all
consents of Governmental Authorities that may be necessary or, in the reasonable opinion of the
Purchasers or the Company, as the case may be, advisable for the consummation of the transactions
contemplated by this Agreement and the other Basic Documents, including but not limited to the
Company filing of a Form D with the Securities and Exchange Commission within the time requirements
of Regulation D of the Securities Act of 1933 and all required state blue sky filings.
Section 5.4 Non-Disclosure; Interim Public Filings. Before 8:30 a.m., New York time, on the
first Business Day following the Closing Date, the Company shall issue a press release acceptable
to the Purchasers disclosing all material terms of the transactions contemplated hereby and any
material non-public information in possession of the Purchasers, and file a report on Form 6-K with
the Commission (the “6-K Filing”) describing the terms of the transactions contemplated by this
Agreement and the other Basic Documents and including
18
as exhibits to such report on Form 6-K this Agreement and the other Basic Documents, in the form
required by the Exchange Act. Thereafter, the Company shall timely file any filings and notices
required by the Commission, Canadian Securities Regulatory Authorities or applicable Law with
respect to the transactions contemplated hereby and provide copies thereof to the Purchasers
promptly after filing. Except with respect to the 6-K Filing and the press release referenced above
(a copy of which will be provided to the Purchasers for their review as early as practicable prior
to its filing), the Company shall, at least two Business Days prior to the filing or dissemination
of any disclosure required by this Section 5.4, provide a copy thereof to the Purchasers
for their review. The Company and the Purchasers shall consult with each other in issuing any press
releases or otherwise making public statements or filings and other communications with the
Commission, Canadian Securities Regulatory Authorities or any regulatory agency or the Stock
Exchange (or other exchange on which securities of the Company are listed or traded) with respect
to the transactions contemplated hereby, and neither Party shall issue any such press release or
otherwise make any such public statement, filing or other communication without the prior consent
of the other, except if such disclosure is required by Law, in which case the disclosing Party
shall promptly provide the other Party with prior notice of such public statement, filing or other
communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of
any Purchaser, or include the name of any Purchaser in any press release, without the prior written
consent of such Purchaser except to the extent the names of the Purchasers are included in this
Agreement as filed as an exhibit to the 6-K Filing and the press release referred to in the first
sentence above. The Company shall not, and shall cause each of its respective Representatives not
to, provide any Purchaser with any material non-public information regarding the Company from and
after the issuance of the above-referenced press release without the express written consent of
such Purchaser.
Section 5.5 Use of Proceeds. The Company shall use the collective proceeds from the sale of
the Purchased Preferred Shares to fund its drilling program and for general corporate purposes.
Section 5.6 Reservation of Shares. The Company shall at all times reserve and keep available
out of its authorized but unissued Common Shares, solely for the purpose of effecting the
conversion of the Purchased Preferred Shares, such number of its Common Shares as shall from time
to time be sufficient to effect the conversion of all the Purchased Preferred Shares.
Section 5.7 Reporting Issuer Status. The Company shall use its commercially reasonable efforts
to maintain its status as a reporting issuer not in default in British Columbia, Alberta, and
Ontario and to comply with its obligations thereunder for a period of four months plus one day from
the Closing Date.
Section 5.8 Stock Exchange Approval. The Company shall use its commercially reasonable efforts
to obtain in a timely manner the required final consents, approvals and authorizations of the Stock
Exchange for the issuance and listing of the Underlying Shares.
Section 5.9 Fees. The parties hereto acknowledge and agree that the only fee or commission
being paid to Xxxxxxx Xxxxx Commodities, Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
Xxxxxxx Xxxxx & Co., or any of their respective Affiliates (collectively, “Merrill”), in connection
to or resulting from the consummation of any of the transactions
19
contemplated under this Agreement, shall be 4.5% of the Purchase Price of any Purchased Preferred
Shares issued and sold (i) at the Initial Closing and (ii) to any Subsequent Purchaser that Merrill
itself places at the Subsequent Closing. If any Subsequent Purchaser participates in a Subsequent
Placement through the efforts of both Merrill and the Company, then the parties hereto acknowledge
and agree that the fees owed to Merrill shall be pro rated accordingly with the Company. If any
Subsequent Purchaser independently contacts the Company, then the parties hereto acknowledge and
agree that no fees shall be owed to Merrill with respect to any such Subsequent Purchaser.
ARTICLE VI.
CLOSING DELIVERIES
CLOSING DELIVERIES
Section 6.1 Company Deliveries. At each Closing, subject to the terms and conditions of this
Agreement, the Company shall have delivered, or caused to be delivered, to each applicable
Purchaser:
(a) the Purchased Preferred Shares by delivering certificates (bearing the legend set forth
in Section 4.8) evidencing such Purchased Preferred Shares at the Closing, all free and
clear of any Liens, encumbrances or interests of any other party;
(b) the Registration Rights Agreement in substantially the form of Exhibit B, which shall have
been duly executed by the Company;
(c) a certificate of the Secretary of the Company, dated as of the applicable Closing Date, as
to certain matters;
(d) a certificate dated as of a recent date with respect to the due organization and good
standing in the Yukon Territory, Canada of the Company;
(e) a copy of the letter of the Toronto Stock Exchange that grants conditional acceptance of
the issuance and listing of the Underlying Shares;
(f) a legal opinion of counsel to the Company, in form and substance reasonably satisfactory
to the Purchasers; and
(g) a receipt, dated the applicable Closing Date, executed by the Company and delivered to
each applicable Purchaser certifying that the Company has received the Purchase Price with respect
to the Purchased Preferred Shares issued and sold to each such Purchaser.
Section 6.2 Purchaser Deliveries. At each Closing, subject to the terms and conditions of this
Agreement, each applicable Purchaser shall have delivered, or caused to be delivered, to the
Company:
(a) payment to the Company of such Purchaser’s Commitment Amount by wire transfer(s) of
immediately available funds to the account set forth in Schedule 6.2(a);
(b) the Registration Rights Agreement in substantially the form of Exhibit B, which
shall have been duly executed by each Purchaser; and
20
(c) in the event of a Subsequent Placement, signature pages binding each Purchaser to this
Agreement with an amended Schedule 2.1.
ARTICLE VII.
INDEMNIFICATION, COSTS AND EXPENSES
INDEMNIFICATION, COSTS AND EXPENSES
Section 7.1 Indemnification by the Company. The Company agrees to indemnify each Purchaser and
its Representatives from, and hold each of them harmless against, any and all actions, suits,
proceedings (including any investigations, litigation or inquiries), demands and causes of action,
and, in connection therewith, and promptly upon demand, pay and reimburse each of them for all
costs, losses, liabilities, damages or expenses of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel and all other reasonable expenses incurred in
connection with investigating, defending or preparing to defend any such matter that may be
incurred by them or asserted against or involve any of them as a result of, arising out of or in
any way related to (i) any actual or proposed use by the Company of the proceeds of any sale of the
Purchased Preferred Shares or (ii) the breach of any of the representations, warranties or
covenants of the Company contained herein.
Section 7.2 Indemnification by the Purchasers. The Purchasers, severally but not jointly,
agree to indemnify the Company and its Representatives from, and hold each of them harmless
against, any and all actions, suits, proceedings (including any investigations, litigation or
inquiries), demands and causes of action, and, in connection therewith, and promptly upon demand,
pay and reimburse each of them for all costs, losses, liabilities, damages or expenses of any kind
or nature whatsoever, including the reasonable fees and disbursements of counsel and all other
reasonable expenses incurred in connection with investigating, defending or preparing to defend any
such matter that may be incurred by them or asserted against or involve any of them as a result of,
arising out of or in any way related to the breach of any of the representations, warranties or
covenants of the Purchasers contained herein.
Section 7.3 Indemnification Procedure. Promptly after any party seeking reimbursement (the
“Indemnified Party”) has received notice of any indemnifiable claim hereunder or the commencement
of any action or proceeding by a third party, which the Indemnified Party believes in good faith is
an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor
hereunder (the “Indemnifying Party”) written notice of such claim or the commencement of such
action or proceeding, but failure to so notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the
extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall
state the nature and the basis of such claim to the extent then known. The Indemnifying Party shall
have the right to defend and settle, at its own expense and by its own counsel, (such counsel
reasonably acceptable to the Indemnified Party), any such matter as long as the Indemnifying Party
pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or
settle, it shall promptly notify the Indemnified Party of its intention to do so, and the
Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially
reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall
include furnishing the Indemnifying Party with any books, records and other information reasonably
requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such
cooperation of the Indemnified Party shall be at
21
the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party
of its intention to undertake to defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable
for any additional legal expenses incurred by the Indemnified Party in connection with any defense
or settlement of such asserted liability; provided, however, that the Indemnified Party shall be
entitled (i) at its expense, to participate in the defense of such asserted liability and the
negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume
the defense or (B) if the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and counsel to the Indemnified Party shall have concluded that there may be
reasonable defenses available to the Indemnified Party that are different from or in addition to
those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably
may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party
shall have the right to select a separate counsel with consent of the Indemnifying Party and to
assume such legal defense and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such participation to be
reimbursed by the Indemnifying Party as incurred. Notwithstanding any other provision of this
Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the
Indemnified Party (which consent shall not be unreasonably withheld), unless the settlement thereof
imposes no liability or obligation on, involves no admission of wrongdoing or malfeasance by, and
includes a complete release from liability of, the Indemnified Party.
ARTICLE VIII.
MISCELLANEOUS
MISCELLANEOUS
Section 8.1 Interpretation. Article, Section, Schedule and Exhibit references are to this
Agreement, unless otherwise specified. All references to instruments, documents, contracts and
agreements are references to such instruments, documents, contracts and agreements as the same may
be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The
word “including” shall mean “including but not limited to”. Whenever the Company has an obligation
under the Basic Documents, the expense of complying with such obligation shall be an expense of the
Company unless otherwise specified. Whenever any determination, consent or approval is to be made
or given by a Purchaser under this Agreement, such action shall be in such Purchaser’s sole
discretion unless otherwise specified. If any provision in the Basic Documents is held to be
illegal, invalid, not binding or unenforceable, such provision shall be fully severable and the
Basic Documents shall be construed and enforced as if such illegal, invalid, not binding or
unenforceable provision had never comprised a part of the Basic Documents, and the remaining
provisions shall remain in full force and effect. The Basic Documents have been reviewed and
negotiated by sophisticated parties with access to legal counsel and shall not be construed against
the drafter.
Section 8.2 Survival of Provisions. The representations and warranties and indemnification
obligations of the parties set forth in this Agreement shall survive the execution and delivery of
this Agreement indefinitely. The covenants made in this Agreement or any other Basic Document shall
survive the closing of the transactions described herein and remain operative and in full force and
effect regardless of acceptance of any of the Purchased Preferred Shares and payment therefor and
repayment, conversion, exercise or repurchase thereof.
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Section 8.3 No Waiver; Modifications in Writing.
(a) Delay. No failure or delay on the part of any Party in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or the exercise of any
right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of
any remedies that may be available to a Party at law or in equity or otherwise.
(b) Specific Waiver. Except as otherwise provided in this Agreement or the Registration Rights
Agreement, no amendment, waiver, consent, modification or termination of any provision of this
Agreement or any other Basic Document shall be effective unless signed by each of the Parties or
each of the original signatories thereto affected by such amendment, waiver, consent, modification
or termination. Any amendment, supplement or modification of or to any provision of this Agreement
or any other Basic Document, any waiver of any provision of this Agreement or any other Basic
Document and any consent to any departure by the Company from the terms of any provision of this
Agreement or any other Basic Document shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically required by this
Agreement, no notice to or demand on any Party in any case shall entitle any Party to any other or
further notice or demand in similar or other circumstances.
Section 8.4 Binding Effect; Assignment.
(a) Binding Effect. This Agreement shall be binding upon the Company, each Purchaser, and
their respective successors and permitted assigns. Except as expressly provided in this Agreement,
this Agreement shall not be construed so as to confer any right or benefit upon any Person other
than the Parties to this Agreement and as provided in Article VII, and their respective successors
and permitted assigns.
(b) Assignment of Purchased Preferred Shares. All or any portion of a Purchaser’s Purchased
Preferred Shares purchased pursuant to this Agreement may be sold, assigned or pledged by such
Purchaser, subject to compliance with applicable securities Laws, Section 5.2 and the Registration
Rights Agreement.
(c) Assignment of Rights. Each Purchaser may assign all or any portion of its rights and
obligations under this Agreement without the consent of the Company (i) to any Affiliate of such
Purchaser or (ii) in connection with a total return swap or similar transaction with respect to the
Purchased Preferred Shares purchased by such Purchaser, and in each case the assignee shall be
deemed to be a Purchaser hereunder with respect to such assigned rights or obligations and shall
agree to be bound by the provisions of this Agreement. Except as expressly permitted by this
Section 8.4(c), such rights and obligations may not otherwise be transferred except with
the prior written consent of the Company (which consent shall not be unreasonably withheld), in
which case the assignee shall be deemed to be a Purchaser hereunder with respect to such assigned
rights or obligations and shall agree to be bound by the provisions of this Agreement.
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Section 8.5 Aggregation of Purchased Preferred Shares. All Purchased Preferred Shares held or
acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose
of determining the availability of any rights under this Agreement.
Section 8.6 Confidentiality and Non-Disclosure. Notwithstanding anything herein to the
contrary, each Purchaser that has executed a confidentiality agreement in favor of the Company
shall continue to be bound by such confidentiality agreement in accordance with the terms thereof
until the Company discloses on Form 6-K with the Commission the transactions contemplated hereby.
Section 8.7 Communications. All notices and demands provided for hereunder shall be in writing
and shall be given by regular mail, registered or certified mail, return receipt requested,
facsimile, air courier guaranteeing overnight delivery, electronic mail or personal delivery to the
following addresses:
If to the Company:
InterOil Corporation
XX Xxx 0000
Xxxxxx XXX 0000, Xxxxxxxxx
Telephone: x00 0 0000 0000
Facsimile: x00 0 0000 0000
Email: xxxx.xxxxxxx@xxxxxxxx.xxx and xxxx.xxxxxx@xxxxxxxx.xxx
XX Xxx 0000
Xxxxxx XXX 0000, Xxxxxxxxx
Telephone: x00 0 0000 0000
Facsimile: x00 0 0000 0000
Email: xxxx.xxxxxxx@xxxxxxxx.xxx and xxxx.xxxxxx@xxxxxxxx.xxx
with a copy to:
Xxxxxx and Xxxxx, LLP
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx and Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 and (000) 000-0000
Email: xxx.xxxxx@xxxxxxxxxxx.xxx and xxxx.xxxxxx@xxxxxxxxxxx.xxx
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx and Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 and (000) 000-0000
Email: xxx.xxxxx@xxxxxxxxxxx.xxx and xxxx.xxxxxx@xxxxxxxxxxx.xxx
If to the Purchasers:
Xxxxxxx Xxxxx Commodities, Inc.
00 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxxxxxx_Xxxxxx@xx.xxx
00 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxxxxxx_Xxxxxx@xx.xxx
with copies to:
Xxxxxxx Xxxxx Commodity Partners, LP
24
00 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxxx_Xxxxx0@xx.xxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxxx_Xxxxx0@xx.xxx
Xxxxx Lord Xxxxxxx & Xxxxxxx LLP
JPMorgan Chase Tower
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxxxxx.xxx
JPMorgan Chase Tower
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxxxxx.xxx
or to such other address as the Company or such Purchaser may designate in writing. All notices and
communications shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; upon actual receipt if sent by registered or certified mail, return receipt
requested, or regular mail, if mailed; when receipt acknowledged, if sent via facsimile; and upon
actual receipt when delivered to an air courier guaranteeing overnight delivery or via electronic
mail.
Section 8.8 Removal of Legend. The Company shall remove the legend described in Section
4.8(a) from the certificates evidencing the Purchased Preferred Shares or Underlying Shares
issuable upon conversion at the request of a Purchaser submitting to the Company such certificates,
together with such other documentation as may be reasonably requested by the Company or required by
its transfer agent, unless the Company, with the advice of counsel, reasonably determines that such
removal is inappropriate; provided that no opinion of counsel shall be required in the event a
Purchaser is effecting a sale of such Purchased Preferred Shares or Underlying Shares pursuant to
Rule 144 under the Securities Act or an effective registration statement. The Company shall
cooperate with such Purchaser to effect removal of such legend. The legend described in Section
4.8(a) shall be removed and the Company shall issue a certificate without such legend to the
holder of Purchased Preferred Shares or Underlying Shares upon which it is stamped, if, unless
otherwise required by state securities Laws, (i) such Purchased Preferred Shares or Underlying
Shares are sold pursuant to an effective Registration Statement, (ii) in connection with a sale,
assignment or other transfer, such holder provides the Company with an opinion of a law firm
reasonably acceptable to the Company (with any law firm set forth under Section 8.7 being
deemed acceptable), in a generally acceptable form, to the effect that such sale, assignment or
transfer of such Purchased Preferred Shares or Underlying Shares may be made without registration
under the applicable requirements of the Securities Act, or (iii) such holder provides the Company
with reasonable assurance that such Purchased Preferred Shares or Underlying Shares can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A under the Securities Act.
Section 8.9 Entire Agreement. This Agreement and the other Basic Documents are intended by the
Parties as a final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the Parties hereto and thereto in respect of the
subject matter contained herein and therein. There are no restrictions, promises,
25
warranties or undertakings, other than those set forth or referred to herein or therein with
respect to the rights granted by the Company or a Purchaser set forth herein or therein. This
Agreement and the other Basic Documents supersede all prior agreements and understandings between
the Parties with respect to such subject matter.
Section 8.10 Governing Law. This Agreement will be construed in accordance with and governed
by the Laws of the State of New York without regard to principles of conflicts of Laws.
Section 8.11 Jurisdiction. Each of the Company and the Purchasers (i) hereby irrevocably
submits to the exclusive jurisdiction of the United States District Court, the New York State
courts and other courts of the United States sitting in the Borough of Manhattan, New York County,
New York State for the purposes of any suit, action or proceeding arising out of or relating to
this Agreement and (ii) hereby waives, and agrees not to assert in any such suit action or
proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the
suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. The Company and each of the Purchasers consent to process being
served in any such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in this paragraph
shall affect or limit any right to serve process in any other manner permitted by law.
Section 8.12 Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY.
Section 8.13 Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by different Parties hereto in separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 8.14 Expenses. If any action at law or equity is necessary to enforce or interpret the
terms of the Basic Documents, the prevailing Party shall be entitled to reasonable attorney’s fees,
costs and necessary disbursements in addition to any other relief to which such Party may be
entitled.
Section 8.15 Recapitalization, Exchanges, Etc. The provisions of this Agreement shall apply to
the full extent set forth herein with respect to any and all equity interests of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise)
that may be issued in respect of, in exchange for or in substitution of, the Purchased Preferred
Shares or the Underlying Shares, and shall be appropriately adjusted for combinations, share
splits, recapitalizations and the like occurring after the date of this Agreement.
Section 8.16 Obligations Limited to Parties to Agreement. Each of the parties hereto
covenants, agrees and acknowledges that no Person other than the Purchasers (and their permitted
assignees) shall have any obligation hereunder and that, notwithstanding that one or more of the
Purchasers may be a corporation, partnership or limited liability company, no
26
recourse under this Agreement or the other Basic Documents or under any documents or instruments
delivered in connection herewith or therewith shall be had against any former, current or future
director, officer, employee, agent, general or limited partner, manager, member, stockholder or
Affiliate of any of the Purchasers or any former, current or future director, officer, employee,
agent, general or limited partner, manager, member, stockholder or Affiliate of any of the
foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or
by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current
or future director, officer, employee, agent, general or limited partner, manager, member,
stockholder or Affiliate of any of the Purchasers or any former, current or future director,
officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of
any of the foregoing, as such, for any obligations of the Purchasers under this Agreement or the
other Basic Documents or any documents or instruments delivered in connection herewith or therewith
or for any claim based on, in respect of or by reason of such obligation or its creation.
27
IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first
above written.
INTEROIL CORPORATION | ||||
By: | “Xxxx X. Xxxxxxx” | |||
Name: | Xxxx X. Xxxxxxx | |||
Title: | Chief Executive Officer |
Signature Page to Securities Purchase Agreement
XXXXXXX XXXXX COMMODITIES, INC. | ||||
By: | “Xxxxx Xxxxxxxxx” | |||
Name: | Xxxxx Xxxxxxxxx | |||
Title: | Managing Director |
Signature Page to Securities Purchase Agreement
Schedule 2.1
PURCHASERS AND COMMITMENT AMOUNTS
Number of Preferred | ||||
Purchaser | Shares | Commitment Amount | ||
XXXXXXX XXXXX
COMMODITIES, INC. |
517,777 | $14,999,999.69 | ||
TOTAL |
517,777 | $14,999,999.69 |
Schedule 2.1
Exhibit A
Relative Rights, Preferences and Limitations of the Preferred Shares
[ATTACHED]
Exhibit B
Form of Registration Rights Agreement
[ATTACHED]
FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT
This First Amendment to Securities Purchase Agreement (this “First Amendment”) is entered into
and made effective on December 4, 2007, by and among INTEROIL
CORPORATION (the “Company”), and XXXXXXX XXXXX COMMODITIES, INC.
(“Purchaser”). The Company and Purchaser are sometimes hereinafter referred to individually as a
“party” and collectively as the “parties”.
RECITALS
WHEREAS, the Company and Purchaser are parties to that certain Securities Purchase Agreement,
dated as of November 21, 2007 (the “Agreement”);
WHEREAS, Section 8.3(b) of the Agreement provides that it may be amended or modified only by
a written instrument executed by the Company and the Purchaser; and
WHEREAS, the Company and the Purchaser desire to amend certain provisions of the Agreement
with respect to the Subsequent Offer Period (as defined in the Agreement) in accordance with the
terms and conditions set forth in this First Amendment; and
NOW THEREFORE, for and in consideration of the mutual benefits derived and to be derived from
the Agreement, as amended by this First Amendment, by each party hereto, the Company and Purchaser
hereby agree as follows:
AGREEMENT
1. Capitalized terms used but not defined herein shall have the same meanings given to such
terms in the Agreement.
2. The first part of the first sentence of Section 2.2 which defines
Subsequent Offer Period is hereby deleted and replaced by the following in its entirety:
“From the date of this Agreement through December 31, 2007 (the “Subsequent Offer Period”),”
3. Except as expressly modified by this First Amendment, the Agreement remains unchanged and
in full force and effect. Nothing herein, any other correspondence, or any oral communications
between the parties hereto should be construed to be a waiver, modification or release of any other
rights or obligations thereunder. This First Amendment shall be interpreted, construed and enforced
as an integral part of the Agreement.
4. This First Amendment may be executed in any number of counterparts, each of which shall be
an original, and all of which together shall constitute one instrument.
5. This First Amendment and the Agreement as amended hereby shall be binding upon and shall
inure to the benefit of each party to the First Amendment and the Agreement and their respective
successors and assigns.
6. A facsimile or electronic copy of a duly executed counterpart to this First
Amendment shall be sufficient to evidence the binding agreement of each party hereto to the terms
herein.
[Signature page follows]
2
IN WITNESS WHEREOF, the parties hereto execute this First Amendment, effective as of the date
first above written.
INTEROIL CORPORATION | ||||
By: | “Xxxx X. Xxxxxxx” | |||
Name: | Xxxx X. Xxxxxxx | |||
Title: | Chief Executive Officer |
XXXXXXX XXXXX COMMODITIES, INC. | ||||
By: | “Xxx Xxxxx” | |||
Name: | Xxx Xxxxx | |||
Title: | President |
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is entered into as of November 21, 2007,
between INTEROIL CORPORATION, a Yukon Territory corporation (the “Company”) and the Purchasers set
forth on the signature pages hereto (each, a “Purchaser” and collectively, the “Purchasers”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Securities Purchase Agreement, dated on or about the date
hereof, by and between the Company and the purchasers signatory thereto (the “Purchase Agreement”),
the Company has agreed to sell and issue to the Purchasers, and the Purchasers have agreed,
severally and not jointly, to purchase from the Company, an aggregate of up to $30,000,000 of the
Company’s Series A preferred stock (“Purchased Preferred Shares”), subject to the terms and
conditions set forth therein; and
WHEREAS, the terms of the Purchased Preferred Shares provide that they will be convertible
into shares (the “Underlying Shares”) of the common stock, no par value (the “Common Stock”) of the
Company; and
WHEREAS, the Company has agreed to provide the registration and other rights set forth in this
Agreement with respect to the Purchased Preferred Shares and the Underlying Shares for the benefit
of the Purchasers under the Purchase Agreement; and
WHEREAS, pursuant to the terms and conditions of the Purchase Agreement, it is a closing
deliverable of the Company and each Purchaser to duly execute this Agreement;
NOW, THEREFORE, in consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in the Purchase Agreement and this Agreement, the Company and
each Purchaser, severally and not jointly, agree as follows:
1. Certain Definitions. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following respective meanings:
“Business Days” shall mean any day other than a Saturday, Sunday or a day on which commercial
banks in the City of New York or are authorized or required by law or executive order to remain
closed.
“Closing” and “Closing Date” shall mean the Closing and the Closing Date with respect to the
purchase of the Purchased Preferred Shares as defined in the Purchase Agreement.
“Commission” or “SEC” shall mean the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
“Common Shares” shall mean shares of the Common Stock of the Company.
“Holder” and “Holders” shall include the Purchaser and any transferee or transferees of
Registrable Securities which have not ceased to be Registrable Securities to whom the registration
rights conferred by this Agreement have been transferred in compliance with this Agreement, the
Purchase Agreement and all applicable federal and state securities laws.
“1934 Act” shall mean the Securities Exchange Act of 1934, as amended.
“Person” shall mean any natural person, corporation, partnership, trust, organization,
association, limited liability company, governmental authority, business or other entity.
“Purchased Preferred Shares” shall have the meaning set forth in the recitals.
The terms “register,” “registered” and “registration” shall refer to a registration effected
by preparing and filing a registration statement in compliance with the rules and regulations
applicable in the Province of Ontario, Canada and in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness
of such registration statement by such authorities.
“Registrable Securities” shall mean: (i) the Underlying Shares issued or issuable to each
Holder upon conversion of the Purchased Preferred Shares; (ii) securities issued or issuable upon
any stock split, stock dividend, recapitalization, exchange or similar event or in connection with
any other applicable anti-dilution provisions with respect to the Purchased Preferred Shares or the
Underlying Shares; (iii) any Common Shares issued as Liquidated Damages pursuant to the terms and
conditions of this Agreement; (iv) the Purchased Preferred Shares; and (v) any other security
issued as a dividend or other distribution with respect to, in exchange for or in replacement of
the securities referred to in the preceding clauses, except that any such Purchased Preferred
Shares, Underlying Shares or other securities shall cease to be Registrable Securities when (x)
they have been sold to the public or (y) they may be sold by the Holder thereof under Rule 144(k)
(or any similar provision then in force) under the Securities Act.
“Registration Expenses” shall mean all expenses to be incurred by the Company in connection
with each Holder’s registration rights under this Agreement (such amount not to exceed $10,000 in
the aggregate for each registration), including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company, and blue sky fees and
expenses, and the expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which shall be paid in any
event by the Company).
“Registration Statement” shall have the meaning set forth in Section 2(a) herein.
“Registration Statement/Prospectus” shall have the meaning set forth in Section 2(a) herein.
“Regulation D” shall mean Regulation D as promulgated pursuant to the Securities Act, and as
subsequently amended from time to time.
“Rule 144(k)” means Rule 144(k) under Securities Act, or any successor rule.
“Securities Act” or “Act” shall mean the Securities Act of 1933, as amended.
2
“Selling Expenses” shall mean all underwriting discounts, selling commissions and transfer
taxes applicable to the sale of Registrable Securities and all fees and disbursements of counsel
for Holders.
“Selling Holder” shall mean a Holder who is selling Registrable Securities pursuant to a
registration statement.
2. Registration Requirements. The Company shall use its commercially reasonable efforts to
effect the registration of the resale of the Registrable Securities (including, without limitation,
the execution of an undertaking to file post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and under the rules and regulations applicable in the
Province of Ontario) as would permit or facilitate the resale of all the Registrable Securities in
the manner (including manner of sale) and in all states, territories and possessions of the United
States reasonably requested by the Holder. The Company shall also use its commercially reasonable
efforts to qualify the resale of the Registerable Securities by prospectus under the Securities
laws of the Province of Ontario. Such commercially reasonable efforts by the Company shall include,
without limitation, the following:
(a) The Company shall, as expeditiously as possible after the Closing Date:
(i) But in any event within 60 days of the Closing, prepare and file (x) a registration
statement with the Commission pursuant to the rules and regulations applicable in the home
jurisdiction of the Company and Rule 467 and Rule 408 under the Securities Act on Form F-10, F-1 or
S-1 or any corresponding successor forms that may be available under the Securities Act (or in the
event that the Company is ineligible to use such forms, such other appropriate form as the Company
is eligible to use under the Securities Act) covering resales by the Holders as selling
stockholders (not underwriters) of the Registrable Securities and no other securities (the
“Registration Statement”) and (y) prior to or contemporaneously with the filing of the Registration
Statement, file with the Ontario Securities Commission a preliminary Canadian prospectus (the
“Canadian Prospectus” and, collectively referred to with the Registration Statement as the
“Registration Statement/Prospectus”) covering resales of the same securities as those covered by
the Registration Statement under the securities laws of the Province of Ontario. The number of
shares of Common Stock initially included in such Registration Statement/Prospectus shall be no
less than the sum of the number of Underlying Shares that are then issuable upon conversion of the
Purchased Preferred Shares assuming full conversion, at the then applicable conversion price for
the Purchased Preferred Shares, which shall initially be no less than 125% of the Registrable
Securities. Thereafter the Company shall use its commercially reasonable efforts to cause such
Registration Statement/Prospectus and other filings to be declared effective as soon as possible,
and in any event prior to 120 days following the Closing Date (the “Effectiveness Deadline”).
Without limiting the foregoing, the Company will promptly respond to all comments, inquiries and
requests of the Ontario Securities Commission and the SEC, and shall file
and obtain a receipt for the final Canadian Prospectus and shall cause the Registration
Statement to become effective at the earliest possible date. The Company shall provide
3
the Holders reasonable opportunity to review any such Registration Statement/Prospectus or
amendment or supplement thereto prior to filing.
(ii) Prepare and file with the Ontario Securities Commission and the SEC such amendments and
supplements to such Registration Statement/Prospectus and the prospectuses used in connection with
such Registration Statement/Prospectus as may be necessary to comply with the provisions of the Act
with respect to the disposition of all securities covered by such Registration Statement/Prospectus
and notify the Holders of the filing and effectiveness of such Registration Statement/Prospectus
and any amendments or supplements.
(iii) Furnish to each Holder PDF copies of a current prospectus conforming with the
requirements of the Act, copies of the Registration Statement/Prospectus, any amendment or
supplement thereto and any documents incorporated by reference therein and such other documents in
order to facilitate the disposition of Registrable Securities owned by such Holder.
(iv) Register and qualify the securities covered by such Registration Statement/Prospectus
under the securities or “Blue Sky” laws of all domestic jurisdictions, to the extent required;
provided that the Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in any such states or
jurisdictions.
(v) Notify each Holder immediately of the happening of any event (but not the substance or
details of any such events unless specifically requested by a Holder) as a result of which the
prospectus (including any supplements thereto or thereof) included in such Registration
Statement/Prospectus, as then in effect, includes an untrue statement of material fact or omits to
state a material fact required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and use its commercially reasonable efforts
to promptly update and/or correct such prospectus.
(vi) Notify each Holder immediately of the issuance by the Ontario Securities Commission and
the Commission or any state securities commission or agency of any stop order (or equivalent
action) suspending the effectiveness of the Registration Statement/Prospectus or the threat or
initiation of any proceedings for that purpose. The Company shall use its commercially reasonable
efforts to prevent the issuance of any stop order (or equivalent action) and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible time.
(vii) List the Registrable Securities covered by such Registration Statement/Prospectus with
all securities exchange(s) and/or markets on which the Common Stock is then listed, including,
without limitation, the American Stock Exchange, and prepare and file any required filings with the
Toronto Stock Exchange.
Notwithstanding anything to the contrary in this Agreement, the Company shall not be required to
file or maintain the effectiveness of a Canadian Prospectus following such time as the
4
Registrable Securities are freely tradable by the Holders without qualification by prospectus under
the securities laws of the Province of Ontario. Notwithstanding anything in this Agreement to the
contrary, in the event that the proposed resale by any Holder of Registrable Securities is deemed
by the Commission to be a primary offering by the Company, the Company shall, consistent with the
registration requirements set forth in this Section 2 and elsewhere in this Agreement, file a
registration statement with the Commission on an appropriate form registering the sale of such
Registrable Securities, with the Holder thereof identified as an underwriter, and the Company shall
cooperate fully with such Holder in establishing such Holder’s due diligence defense related to
such registration statement and take all other actions reasonably required by Holder in connection
with such registration.
(b) Set forth below in this Section 2(b) are (I) events that may arise that the Purchaser
considers will interfere with the full enjoyment of their rights under this Agreement and the
Purchase Agreement (the “Interfering Events”), and (II) certain remedies applicable in each of
these events.
Paragraphs (i) through (iii) of this Section 2(b) describe the Interfering Events and provide
a remedy to the Purchaser if an Interfering Event occurs.
Paragraph (iv) provides, inter alia, that the Purchaser has the right to specific performance.
Paragraph (v) provides, inter alia, a limitation on the maximum amount of Liquidated Damages
payable by the Company to each Holder.
The preceding paragraphs in this Section 2(b) are meant to serve only as an introduction to
this Section 2(b), are for convenience only, and are not to be considered in applying, construing
or interpreting this Section 2(b).
(i) Delay in Effectiveness of Registration Statement/Prospectus.
(A) In the event that such Registration Statement/Prospectus has not been
declared effective by the Effectiveness Deadline or, subject to the delay rights in
Section 2(b)(ii), any Registration Statement/Prospectus required by this Agreement
has been declared effective but thereafter ceases to be effective or ceases to be
usable in connection with resales of Registrable Securities (each such event, a
“Registration Default”), then each Holder (except for any Holder of Registrable
Securities that the Company could exclude from registration under Section 9) shall
be entitled to a payment with respect to the Purchased Preferred Shares of each
such Holder, as liquidated damages and not as a penalty, of 0.25% of such Holder’s Commitment Amount for the first 30-day period immediately
following the occurrence of any such Registration Default, such percentage to be
increased by an additional 0.25% for each subsequent 30-day period until all
Registration Defaults have been cured, up to a maximum of 1.00% of the Commitment
Amount per 30-day period (the “Liquidated Damages”). The Liquidated Damages payable
pursuant to the immediately preceding sentence shall accrue daily and be payable
within ten Business Days of the end of each
5
such 30-day period. Any Liquidated Damages shall be paid to each Holder in cash or
immediately available funds; provided however, if the Company certifies that it is unable
to pay any Liquidated Damages in cash or immediately available funds because such payment
would result in a breach under any of the Company’s or its Subsidiaries’ credit facilities
or other indebtedness filed as exhibits to the Company SEC Documents, then the Company may
pay the Liquidated Damages in kind in the form of the issuance of additional Common Shares.
Upon any issuance of Common Shares as Liquidated Damages, the Company shall promptly
prepare and file an amendment to the Registration Statement/Prospectus prior to its
effectiveness adding such Common Shares to such Registration Statement/Prospectus as
additional Registrable Securities. The determination of the number of Common Shares to be
issued as Liquidated Damages shall be equal to the amount of Liquidated Damages divided by
the volume weighted average closing price of the Common Shares on the American Stock
Exchange for the ten trading days immediately preceding the date on which the Liquidated
Damages payment is due, less a discount of 2%. The payment of Liquidated Damages to a
Holder shall cease at such time as the Registrable Securities of such Holder become
eligible for resale under Rule 144(k) under the Securities Act (or any similar provision
then in force) under the Securities Act.
(B) Notwithstanding the foregoing, there shall be excluded from the calculation of the
number of days that the Registration Statement/Prospectus has not been declared effective
the delays which are solely attributable to delays in the Holder providing information
required for the Registration Statement/Prospectus.
(C) If the Company is unable to cause a Registration Statement/Prospectus to go
effective within the time periods provided under this Agreement as a result of an
acquisition, merger, reorganization, disposition or other similar transaction, then the
Company may request a waiver of the Liquidated Damages, which may be granted or withheld by
the consent of the Holders of the Purchased Preferred Shares in their sole discretion. A
Holder’s rights under this section shall terminate upon the earlier of (i) when all such
Registrable Securities are sold by such Holder, and (ii) when such Registrable Securities
become eligible for resale under Rule 144(k) (or any similar provision then in force) under
the Securities Act.
(ii) Delay Rights. Notwithstanding anything to the contrary contained herein, the Company may,
upon written notice to any Selling Holder whose Registrable Securities are included in the
Registration Statement/Prospectus, suspend such Selling Holder’s use of any prospectus that is a
part of the Registration Statement/Prospectus (in which event the Selling Holder shall discontinue
sales of the Registrable Securities pursuant to the Registration Statement/Prospectus, but such
Selling Holder may settle any such sales of Registrable Securities) if (i) the Company is pursuing
an acquisition, merger, reorganization, disposition or other similar transaction and the Company
determines in good faith that the Company’s ability to pursue or consummate such a transaction
would be materially adversely affected by any required disclosure of such
6
transaction in the Registration Statement/Prospectus or (ii) the Company is otherwise in possession
of material non-public information the disclosure of which at such time, in the good faith judgment
of the Company, would materially adversely affect the Company; provided, however, in no event shall
the Selling Holders be suspended for a period that exceeds an aggregate of 30 days in any 90-day
period or 90 days in any 365-day period (“Grace Suspension Period”). Upon disclosure of such
information or the termination of the condition described above, the Company shall provide prompt
notice to the Selling Holders whose Registrable Securities are included in the Registration
Statement/Prospectus, shall promptly terminate any suspension of sales it has put into effect and
shall take such other actions to permit registered sales of Registrable Securities as contemplated
in this Agreement. The Company shall not owe any Liquidated Damages during any Grace Suspension
Period.
(iii) No Listing; Suspension of Class of Shares
(A) In the event that the Company fails, refuses or for any other reason is unable to
cause the Registrable Securities covered by the Registration Statement/Prospectus to be
listed (subject to issuance) with the Stock Exchange (as defined in the Purchase
Agreement), the New York Stock Exchange or the Nasdaq Stock Exchange, LLC (collectively,
“Approved Markets”) at all times during the period (“Listing Period”) from the date
(“Effectiveness Commencement Date”) which is the earlier of the effectiveness of the
Registration Statement/Prospectus and the 150th day following the Closing Date until such
time as the registration period specified in Section 5 terminates, then the Company shall
owe the Holders an amount equal to the Liquidated Damages on a pro rata basis for the
foregoing designated time period.
(B) In the event that shares of Common Shares of the Company are not listed on an
Approved Market at all times following the Closing Date, or are otherwise suspended from
trading and remain unlisted or suspended for three consecutive days, until the registration
period specified in Section 5 terminates, then the Company shall owe the Holders an amount
equal to the Liquidated Damages, following (x) the date on which the suspension period
exceeded the permitted period under Section 2(b)(ii) or (y) the day after the Registration
Statement/Prospectus ceased to be effective or failed to be useable for its intended
purposes, as liquidated damages and not as penalty. For purposes of this Section
2(b)(iii)(B), a suspension shall be deemed lifted on the date that notice that the
suspension has been lifted is delivered to the Holders.
(iv) Cumulative Remedies. The Liquidated Damages provided for above are in addition to and not
in lieu or limitation of any other rights the Holders may have at law, in equity or under the terms
of the Purchase Agreement and this Agreement, including without limitation, the right to monetary
contract damages and specific performance.
(v) Maximum Liquidated Damages. Notwithstanding anything to the contrary in this Agreement,
the aggregate amount of the Liquidated Damages payable by the
7
Company under this Agreement to each Holder shall not exceed 10% of the Commitment Amount
with respect to such Holder.
(c) If the Holder(s) intend to distribute the Registrable Securities by means of an
underwriting, the Holder(s) shall so advise the Company. Any such underwriting may only be
administered by nationally or regionally recognized investment bankers reasonably satisfactory to
the Company.
(d) The Company shall enter into such customary agreements for secondary offerings (including
a customary underwriting agreement with the underwriter or underwriters, if any) and take all such
other reasonable actions reasonably requested by the Holders in connection with any underwritten
offering or when the Ontario Securities Commission or the SEC has required that the Holders be
identified as underwriters in the Registration Statement/Prospectus in order to expedite or
facilitate the disposition of such Registrable Securities and in such connection:
(i) make such representations and warranties to the Holders and
the underwriter or underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in secondary offerings;
(ii) cause to be delivered to the sellers of Registrable
Securities and the underwriter or underwriters, if any, opinions of
independent counsel to the Company, on and dated as of the effective day (or
in the case of an underwritten offering, dated the date of delivery of any
Registrable Securities sold pursuant thereto) of the Registration
Statement/Prospectus, and within ninety (90) days following the end of each
fiscal year thereafter, which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Holders and the
underwriter(s), if any, and their counsel and covering such matters that are
customarily given to underwriters in underwritten offerings, addressed to the
Holders and each underwriter, if any;
(iii) cause to be delivered, immediately prior to the effectiveness of the
Registration Statement/Prospectus (and, in the case of an underwritten offering, at the
time of delivery of any Registrable Securities sold pursuant thereto), and at the beginning
of each fiscal year following a year during which the Company’s independent certified
public accountants shall have reviewed any of the Company’s books or records, a “comfort”
letter from the Company’s independent certified public accountants addressed to each
underwriter (including the Holders, if the Ontario Securities Commission or the SEC has
required them to be identified as underwriters in the Registration Statement), if any, to
the extent requested by such underwriters, stating that such accountants are independent
public accountants within the meaning of the Securities Act and the applicable published rules and regulations thereunder, and otherwise in customary form and
covering such financial and accounting matters as are customarily covered by letters of the
independent certified public accountants delivered in connection with secondary offerings;
such accountants shall have undertaken in each such letter to update the same during each
such fiscal year in which such books or records are being reviewed so that each such letter
shall remain current, correct and complete throughout such fiscal year; and each such
letter and update thereof, if any, shall be reasonably satisfactory to such underwriters;
8
(iv) if an underwriting agreement is entered into, the same shall include customary
indemnification and contribution provisions to and from the underwriters and procedures for
secondary underwritten offerings; and
(v) deliver such documents and certificates as may be reasonably requested by the
Holders of the Registrable Securities being sold or the managing underwriter or
underwriters, if any, to evidence compliance with clause (i) above and with any customary
conditions contained in the underwriting agreement, if any.
(e) The Company shall make available for inspection by the Holders, representative(s) of all
the Holders together, any underwriter participating in any disposition pursuant to a Registration
Statement/Prospectus, and any attorney or accountant retained by any Holder or underwriter, all
financial and other records customary for purposes of the Holders’ due diligence examination of the
Company and review of any Registration Statement/Prospectus, all publicly filed documents filed
subsequent to the Closing, pertinent corporate documents and properties of the Company, and cause
the Company’s officers, directors and employees to supply all information reasonably requested by
any such representative, underwriter, attorney or accountant in connection with such Registration
Statement/Prospectus, provided that such parties agree to keep such information confidential.
Notwithstanding the foregoing, the foregoing right shall not extend to any Holder (i) who is not a
financial investor or entity or (ii) who, itself or through any affiliate, has any strategic
business interest that would reasonably be expected to be in conflict with any business of the
Company or its Subsidiaries.
(f) Subject to Section 2(b) above and to clause (i) below, the Company may suspend the use of
any prospectus used in connection with the Registration Statement/Prospectus only in the event, and
for such period of time as such a suspension is required by the rules and regulations of the
Commission. The Company will use commercially reasonable efforts to cause such suspension to
terminate at the earliest possible date.
(g) If the Holders become entitled, pursuant to an event described in clause (ii) through (iv)
of the definition of Registrable Securities, to receive any securities in respect of Registrable
Securities that were already included in a Registration Statement/Prospectus, subsequent to the
date such Registration Statement/Prospectus is declared effective, and the Company is unable under
the securities laws to add such securities to the then effective Registration Statement/Prospectus,
the Company shall promptly file, in accordance with the procedures set forth herein, an additional
Registration Statement/Prospectus with respect to such newly Registrable Securities. The Company
shall use its commercially reasonable efforts to (i) cause any such additional Registration
Statement/Prospectus, when filed, to become effective under the Securities Act, and (ii) keep such
additional Registration Statement/Prospectus effective during the period described in Section 5
below and cause such Registration Statement/Prospectus to become effective within 60 days of the
date on which the need to file the Registration Statement/Prospectus arose. All of the registration
rights and remedies under this Agreement shall apply to the registration of the resale of such new Registrable Securities,
including without limitation the provisions providing for liquidated payments contained herein.
(h) The Company shall prepare and file with the Ontario Securities Commission and the SEC such
amendments (including post-effective amendments) and supplements to a
9
Registration Statement/Prospectus and the prospectus used in connection with such Registration
Statement/Prospectus, which prospectus supplement is to be filed pursuant to the rules and
regulations applicable in the home jurisdiction of the Company and the Securities Act, as may be
necessary to keep such Registration Statement/Prospectus effective at all times during the
Registration Period (as defined below), and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities of the Company covered
by such Registration Statement/Prospectus. In the case of amendments and supplements to a
Registration Statement/Prospectus which are required to be filed pursuant to this Agreement
(including pursuant to this Section 2) by reason of the Company filing a periodic report (whether
on an applicable form of the Ontario Securities Commission or on Form 20-F, Form 40-F, or Form 6-K
or any analogous or successor form under the 1934 Act), the Company shall have incorporated such
report by reference into such Registration Statement/Prospectus, if applicable, or shall have filed
such amendments or supplements with the Ontario Securities Commission and the SEC on the same day
on which the continuous disclosure document or periodic report which created the requirement for
the Company to amend or supplement such Registration Statement/Prospectus is filed.
(i) Each Holder agrees by its acquisition of the Registrable Securities that, upon receipt of
a notice from the Company of the occurrence of any event of the kind described in Sections 2(a)(v)
or 2(a)(vi), such Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement/Prospectus until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement/Prospectus contemplated by Section
2(h), or until it is advised in writing (the “Advice”) by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement/Prospectus. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
(j) If requested by a Holder, the Company shall (i) as soon as practicable incorporate in a
prospectus supplement or post-effective amendment such information as a Holder reasonably requests
to be included therein relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; (ii) as soon as practicable make all required
filings of such prospectus supplement or post-effective amendment after being notified of the
matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as
soon as practicable, supplement or make amendments to any Registration Statement/Prospectus if
reasonably requested by a Holder holding any Registrable Securities.
3. Expenses of Registration. All Registration Expenses in connection with any registration,
qualification or compliance with registration pursuant to this Agreement shall be borne by the
Company, and all Selling Expenses of a Holder shall be borne by such Holder.
4. Registration. The Company shall use its commercially reasonable efforts to remain qualified
for registration on Form F-10, X-0, X-0, or any comparable or
successor form or forms, or in the event that the Company is ineligible to use such form, such
appropriate form as the Company
10
is eligible to use under the Securities Act provided that the Company shall maintain the
effectiveness of the Registration Statement/Prospectus then in effect until such time as a
Registration Statement covering the Registrable Securities has been declared effective by the SEC.
5. Registration Period. In the case of the registration effected by the Company pursuant to
this Agreement, the Company shall keep such registration effective until the earlier of (a) the
date on which all the Holders have completed the sales or distribution described in the
Registration Statement/Prospectus relating thereto or, (b) until all Registrable Securities may be
sold by the Holders under Rule 144(k) (or similar provisions then in effect) (the “Registration
Period”). Subject to Section 8 below, this Agreement shall be terminated automatically without
further action by any party hereto upon the expiration of the Registration Period.
6. Indemnification.
(a) Company Indemnity. The Company will indemnify and hold harmless each Holder, each of its
officers, directors, agents, shareholders, members and partners, and each person controlling each
of the foregoing, within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each person who controls,
within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder,
any underwriter, against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, or any violation by the
Company of the Securities Act, any applicable Canadian securities laws or any state securities law
or, any rule or regulation thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, qualification or compliance, and
will reimburse each Holder, each of its officers, directors, agents, shareholders, members and
partners, and each person controlling each of the foregoing, each such underwriter and each person
who controls any such underwriter, for any reasonable documented legal fees and any other expenses
reasonably incurred in connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such case to a Holder to
the extent that any such claim, loss, damage, liability or expense arises out of or is based (i) on
any untrue statement or omission based upon written information furnished to the Company by such
Holder or the underwriter (if any) therefor and stated to be specifically for use therein or (ii)
the failure of a Holder to deliver at or prior to the written confirmation of sale, the most recent
prospectus, as amended or supplemented. The indemnity agreement contained in this Section 6(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent will not be
unreasonably withheld).
(b) Holder Indemnity. Each Holder will, severally and not jointly, if Registrable Securities
held by it are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify and hold harmless the Company, each of its directors,
11
officers, agents and partners, and each underwriter, if any, of the Company’s securities covered by
such a registration statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act and the rules and regulations thereunder, each other
Holder (if any), and each of their officers, directors and partners, and each person controlling
such other Holder(s) against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statement therein not misleading in light of the
circumstances under which they were made, and will reimburse the Company and such other Holder(s)
and their directors, officers and partners, underwriters or control persons for any reasonable
documented legal fees or any other expenses reasonably incurred in connection with investigating
and defending any such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished to the Company by
such Holder and stated to be specifically for use therein, and provided that the maximum amount for
which such Holder shall be liable under this indemnity shall not exceed the net proceeds received
by such Holder from the sale of the Registrable Securities pursuant to the registration statement
in question. The indemnity agreement contained in this Section 6(b) shall not apply to amounts paid
in settlement of any such claims, losses, damages or liabilities if such settlement is effected
without the consent of such Holder (which consent shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under this Section 6 (the “Indemnified
Party”) shall give notice to the party required to provide indemnification (the “Indemnifying
Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such
claim in any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who
shall conduct the defense of such claim or any litigation resulting therefrom, and the Indemnified
Party may participate in such defense at its own expense, and provided further that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 6 except to the extent that the Indemnifying Party is materially
and adversely affected by such failure to provide notice. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified Party (which
consent shall not be unreasonable withheld), consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such non-privileged information regarding itself
or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with the defense of such claim and litigation resulting
therefrom.
7. Contribution. If the indemnification provided for in Section 6 herein is unavailable to
the Indemnified Parties in respect of any losses, claims, damages or liabilities referred to herein
(other than by reason of the exceptions provided therein), then each such Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount
12
paid or payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and any Holder on the other, in such proportion
as is appropriate to reflect the relative fault of the Company and of such Holder in connection
with the statements or omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to contribute under this Section 7
exceed the amount that such Indemnifying Party would have been obligated to pay by way of
indemnification if the indemnification provided for under Section 6(a) or 6(b) hereof had been
available under the circumstances.
The Company and the Holders agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the Holders or the
underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraphs shall be deemed to
include, subject to the limitations set forth above, any reasonable documented legal fees or other
expenses reasonably incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this section, no Holder or
underwriter shall be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net proceeds received by such Holder from the sale of Registrable
Securities pursuant to the registration statement in question or (ii) in the case of an
underwriter, the total price at which the Registrable Securities purchased by it and distributed to
the public were offered to the public exceeds, in any such case, the amount of any damages that
such Holder or underwriter has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
8. Survival. The indemnity and contribution agreements contained in Sections 6 and 7 and the
representations and warranties of the Company referred to in Section 2(d)(i) shall remain operative
and in full force and effect regardless of (i) any termination of this Agreement or the Purchase
Agreement or any underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation of the sale or
successive resales of the Registrable Securities.
9. Information by Holders. Each Holder shall promptly furnish to the Company such information
regarding such Holder and the distribution and/or sale proposed by such Holder as the Company may
from time to time reasonably request in writing in connection with any registration, qualification
or compliance referred to in this Agreement or the Purchase Agreement, and the Company may exclude
from such
registration the Registrable Securities of any Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request.
13
The intended method or methods of disposition and/or sale of such securities as so provided by such
Purchaser shall be included without alteration in the Registration Statement/Prospectus covering
the Registrable Securities and shall not be changed without written consent of such Holder. Each
Holder agrees that, other than ordinary course brokerage arrangements, in the event it enters into
any arrangement with a broker dealer for the sale of any Registrable Securities through a block
trade, special offering, exchange distribution or secondary distribution or a purchase by a broker
or dealer, such Holder shall promptly deliver to the Company in writing all applicable information
required in order for the Company to be able to timely file a supplement to the Prospectus pursuant
to the applicable rules and regulations of the Company’s home jurisdiction or Rule 424(b) under the
Securities Act, as applicable, to the extent that such supplement is legally required. Such
information shall include a description of (i) the name of such Holder and of the participating
broker dealer(s), (ii) the number of Registrable Securities involved, (iii) the price at which such
Registrable Securities were or are to be sold, and (iv) the commissions paid or to be paid or
discounts or concessions allowed or to be allowed to such broker dealer(s), where applicable.
10. Replacement Certificates. The certificate(s) representing the Registrable Securities held
by any Purchaser (or then Holder) may be exchanged by such Purchaser (or such Holder) at any time
and from time to time for certificates with different denominations representing an equal aggregate
number of Registerable Securities, as reasonably requested by such Purchaser (or such Holder) upon
surrendering the same. No service charge will be made for such registration or exchange. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any certificates representing a Registrable Security and, in the case of loss, theft
or destruction, of indemnity reasonably satisfactory to it, or upon surrender and cancellation of
such certificate if mutilated, the Company will make and deliver a new certificate of like tenor
and dated as of such cancellation at no charge to the holder.
11. Transfer or Assignment. Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties and their successors and assigns. The rights
granted to the Purchaser by the Company under this Agreement to cause the Company to register
Registrable Securities may be transferred or assigned (in whole or in part) to any transferee or
assignee of any Registrable Securities, and all other rights granted to the Purchaser by the
Company hereunder may be transferred or assigned to any transferee or assignee of any Registrable
Securities; provided in each case that the Company must be given written notice by the Purchaser at
the time of or within a reasonable time after said transfer or assignment, stating the name and
address of said transferee or assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned; and provided further that the transferee or
assignee of such rights agrees in writing to be bound by the registration provisions of this
Agreement.
12. Reports Under The 1934 Act. With a view to making available to the Holders the benefits of
Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC
that may at any time permit the Holders to sell securities of the Company to the public without
registration (“Rule 144”), no later than the Effectiveness Deadline the Company agrees to:
(a) cause there to be “current public information” available for the Company as such term is
used in Rule 144 following the earlier of 90 days following the listing on an Approved Market and
90 days following the Effectiveness Date;
14
(b) file with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the 1934 Act so long as the Company remains subject to such
requirements and the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and
(c) furnish to each Holder so long as such Holder owns Registrable Securities, promptly upon
request, (i) a written statement by the Company, if true, that it has complied with the reporting
requirements of Rule 144, the Securities Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to permit the Holders to
sell such securities pursuant to Rule 144 without registration.
13. Miscellaneous.
(a) Remedies. The Company and the Purchaser acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by law or equity.
(b) Jurisdiction. Each of the Company and the Holders (i) hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court, the New York State courts and other
courts of the United States sitting in the Borough of Manhattan, New York County, New York State
for the purposes of any suit, action or proceeding arising out of or relating to this Agreement and
(ii) hereby waives, and agrees not to assert in any such suit action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding
is brought in an inconvenient forum or that the venue of the suit, action or proceeding is
improper. The Company and each of the Holders consent to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or limit any right to
serve process in any other manner permitted by law.
(c) Notices. Any notice or other communication required or permitted to be given hereunder
shall be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses for such communications shall
be:
15
to the Company:
InterOil Corporation
XX Xxx 0000
Xxxxxx XXX 0000, Xxxxxxxxx
Telephone: x0 00 0000 0000
Facsimile: x0 00 0000 0000
Email: xxxx.xxxxxxx@xxxxxxxx.xxx and xxxx.xxxxxx@xxxxxxxx.xxx
XX Xxx 0000
Xxxxxx XXX 0000, Xxxxxxxxx
Telephone: x0 00 0000 0000
Facsimile: x0 00 0000 0000
Email: xxxx.xxxxxxx@xxxxxxxx.xxx and xxxx.xxxxxx@xxxxxxxx.xxx
with a copy to:
Xxxxxx and Xxxxx, LLP
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx and Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 and (000) 000-0000
Email: xxx.xxxxx@xxxxxxxxxxx.xxx and xxxx.xxxxxx@xxxxxxxxxxx.xxx
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx and Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 and (000) 000-0000
Email: xxx.xxxxx@xxxxxxxxxxx.xxx and xxxx.xxxxxx@xxxxxxxxxxx.xxx
If to the Purchasers/Holders:
Xxxxxxx Xxxxx Commodities, Inc.
00 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxxxxxx_Xxxxxx@xx.xxx
00 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxxxxxx_Xxxxxx@xx.xxx
with a copy to:
Xxxxxxx Xxxxx Commodity Partners, LP
00 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxxx_Xxxxx0@xx.xxx
00 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email: Xxxxx_Xxxxx0@xx.xxx
Xxxxx Lord Xxxxxxx & Xxxxxxx LLP
JPMorgan Chase Tower
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxxxxx.xxx
JPMorgan Chase Tower
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Email: xxxxxx@xxxxxxxxxxxx.xxx
16
or to such other address and/or facsimile number and/or to the attention of such other person as
the recipient party has specified by written notice given to each other party five days prior to
the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or electronically generated
by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii)
above, respectively.
Any party hereto may from time to time change its address for notices by giving at least five days
written notice of such changed address to the other parties hereto.
(d) Waivers. No waiver by any party of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any other provision, condition or requirement hereof, nor shall any delay or omission of any
party to exercise any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
(e) Execution in Counterpart. This Agreement may be executed in two or more counterparts, all
of which shall be considered one and the same agreement, it being understood that all parties need
not sign the same counterpart.
(f) Signatures. Facsimile signatures shall be valid and binding on each party submitting the
same.
(g) Entire Agreement; Amendment. This Agreement, together with the Purchase Agreement and the
agreements and documents contemplated hereby and thereby, collectively contain the entire
understanding and agreement of the parties. Provisions of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and Holders who then
hold at least two-thirds of the Registrable Securities. Any amendment or waiver effected in
accordance with this Section 14(g) shall be binding upon each Holder and the Company. No such
amendment shall be effective to the extent that it applies to less than all of the Holders of the
Registrable Securities. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
(h) Governing Law. This Agreement and the validity and performance of the terms hereof shall
be governed by and construed in accordance with the laws of the State of New York applicable to
contracts executed and to be performed entirely within such state.
(i) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY.
(j) Titles. The titles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
17
(k) No Strict Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of strict construction
will be applied against any party.
[Signature Page Follows]
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.
INTEROIL CORPORATION
By: “Xxxx X. Xxxxxxx”
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
XXXXXXX XXXXX COMMODITIES, INC.
By: “Xxxxx Xxxxxxxxx”
Name: Xxxxx Xxxxxxxxx
Title: Managing Director
Name: Xxxxx Xxxxxxxxx
Title: Managing Director