AMENDMENT NO. 3 TO RIGHTS AGREEMENT OF TXCO RESOURCES INC. (F/K/A THE EXPLORATION COMPANY OF DELAWARE, INC.) A Delaware corporation
AMENDMENT
NO. 3 TO
OF
(F/K/A
THE EXPLORATION COMPANY OF DELAWARE, INC.)
A
Delaware corporation
This
Amendment No. 3 to Rights Agreement (the “Amendment”)
is
made and entered into as of the 3rd day of March, 2008, by and between TXCO
Resources Inc. (f/k/a The Exploration Company of Delaware, Inc.), a Delaware
corporation (the “Company”),
and
American Stock Transfer & Trust Company (the “Rights
Agent”).
This
Amendment is intended to modify the Rights Agreement, dated June 29, 2000,
between the Company and Fleet National Bank, as Rights Agent (the “Rights
Agreement”).
American Stock Transfer & Trust Company has succeeded to the rights and
obligations of Fleet National Bank as Rights Agent under the Rights Agreement.
Defined terms not otherwise defined in this Amendment shall have the meanings
given to them in the Rights Agreement.
RECITALS:
A. Pursuant
to the terms of that certain Securities Purchase Agreement (the “Purchase
Agreement”)
dated
on or about February 28, 2008 by and among the Company and the investors listed
on the Schedule of Buyers attached thereto (the “Buyers”),
the
Company is proposing to raise additional capital through the issuance and sale
to the Buyers of convertible preferred stock of the Company, designated as
Series E Convertible Preferred Stock (such issuance and sale, the “Preferred
Stock Financing”)
and to
exchange of the Buyers shares of Series C Convertible Preferred Stock of the
Company for shares of Series D Convertible Preferred Stock of the Company (such
exchange, the “Exchange”
and
together with the Preferred Stock Financing, the “Transaction”).
B. As
a
condition to consummating the Transaction, the Company and its Board of
Directors are required to take all necessary action in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision which is or could become applicable to any Buyer as
a
result of the transactions contemplated by the Purchase Agreement.
C. The
Board
of Directors of the Company has determined that it is in the best interests
of
the Company to amend the Rights Agreement accordingly.
In
consideration of the foregoing, and of the covenants and agreements set forth
below, the parties agree as follows:
1. Section
7(g) of the Rights Agreement is hereby amended to shall read in its entirety
as
follows:
“(g) Notwithstanding
anything in this Agreement to the contrary, (1) no investor purchasing or
exchanging securities pursuant to that certain Securities Purchase Agreement,
dated on or about February 28, 2008 (the “2008 Purchase Agreement”), by and
among the Company and the investors listed on the Schedule of Buyers attached
thereto, shall become an “Acquiring Person” solely as a result of the
transactions contemplated by the 2008 Purchase Agreement or the Transaction
Documents (as defined therein) and (2) no Rights shall be exercisable under
this
Agreement if the Company otherwise determines that such exercise would directly
or indirectly violate, or otherwise conflict with, the Company’s obligations
pursuant to the Transaction Documents.”
2.Miscellaneous.
(a) Except
as
herein modified and amended, all the terms and conditions of the Rights
Agreement shall remain in full force and effect.
(b) This
Amendment shall be governed by the laws of the State of Delaware, without regard
to the choice of law or conflict of law principles thereof that direct the
application of the laws of a different state.
(c) This
Amendment may be executed in one or more counterparts, all of which shall be
considered one and the same agreement.
* * * * *
*
2
EXECUTED
as of the date first above written.
|
|
a
Delaware corporation
|
||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇, President
|
|||
|
|
AMERICAN
STOCK TRANSFER & TRUST
COMPANY
|
||
|
|
as
Rights Agent
|
||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
|
Name:
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
|
Title:
|
Vice President | |
3