PURCHASE AGREEMENT
BY AND AMONG
WESTSIDE ENERGY CORPORATION
SPINDRIFT PARTNERS, L.P.
SPINDRIFT INVESTORS (BERMUDA), L.P.
AND
KNIGHT ENERGY GROUP II, LLC
PURCHASE AGREEMENT
This PURCHASE AGREEMENT, dated as of November 9, 2007 (this "Agreement"),
is by and among Westside Energy Corporation, a Nevada corporation (the
"Company"), and Spindrift Partners, L.P., Spindrift Investors (Bermuda), L.P.,
and Knight Energy Group II, LLC (the "Purchasers" and individually each a
"Purchaser").
WHEREAS, the Company desires to sell 2,456,140 shares ("Subject Shares") of
common stock, par value $.01 per share, of the Company (the "Common Shares"), to
the Purchasers at $2.85 per share, and each Purchaser desires to purchase the
portion of the Subject Shares from the Company set forth opposite its name on
the signature page hereto, each in accordance with the provisions of this
Agreement; and
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 the Purchasers hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Action" against a Person means any lawsuit, action, proceeding,
investigation, mediation, arbitration or complaint, whether formal or informal,
by, before or otherwise involving any Governmental Authority, mediator or
arbitrator.
"Affiliate" means, with respect to a specified Person, any other Person, whether
now in existence or hereafter created or acquired, directly or indirectly
through one or more intermediaries, controlling, controlled by or under 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.
"Basic Documents" means, collectively, this Agreement, the Registration Rights
Agreement entered into as of the date hereof by the Company and the Purchasers,
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 Houston, Texas.
"Closing" shall have the meaning specified in Section 2.02.
"Closing Date" shall have the meaning specified in Section 2.02.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Commission" means the United States Securities and Exchange Commission.
"Company" shall have the meaning specified in the introductory paragraph.
"Company Financial Statements" shall have the meaning specified in Section 3.03.
"CompanyMaterial 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 but also affect other Persons who participate in or are
engaged in the lines of business in which the Company participate or are engaged
or (ii) the ability of the Company to carry out its business as of the date of
this Agreement.
"Company Organizational Documents" means, collectively, the Articles of
Incorporation filed by the Company with the Secretary of State of the State of
Nevada and the bylaws of the Company, both as amended to date.
"Disclosure Schedules" shall have the meaning specified in Article III.
"Environmental Laws" means all Laws relating to pollution or protection of human
health and safety, the environment or natural resources, including Laws relating
to releases or threatened releases of Hazardous Materials or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, transport
or handling of Hazardous Materials.
"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 the United States of
America 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 (or purports to, or is otherwise alleged
to, exercise 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 (or purports to, or is otherwise alleged to, exercise
valid jurisdiction), where applicable, the Company or any of its Property or the
Purchasers.
"Hazardous Materials" means all substances defined as Hazardous Substances,
Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances
Pollution Contingency Plan, 40 C.F.R. 300.5, or defined as such by, or
regulated as such under, any Environmental Law.
"Indebtedness" means, with respect to any Person, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) all indebtedness of such
Person evidenced by notes, debentures or similar instruments, (iii) all capital
lease obligations of such Person, (iv) all obligations of another, which are
secured by any Lien on property owned or acquired by such Person, (iv) all
obligations of such Person in respect of the deferred purchase price of assets,
services or securities (other than ordinary course trade accounts payable), (v)
all obligations of such Person under conditional sale, title, retention or
similar arrangements, (vi) all obligations of such Person, whether contingent or
matured, in respect of letters of credit issued for the account of such Person,
(vii) all obligations of such Person under obligations, whether contingent or
matured, of such Person with respect to bankers' acceptances, surety bonds or
other financial guarantees, interest rate swap agreements, interest rate cap
agreements or other agreements with respect to exposure to interest rates or
foreign exchange contracts, currency swap agreements or other agreements with
respect to currency values, (viii) all interest, premium, penalties and other
amounts owing in respect of the items described in the foregoing clauses (i)
through (vii) and (ix) all obligations of such Person under the guaranty of the
Indebtedness of any other Person.
"Indemnified Party" shall have the meaning specified in Section 7.01.
"Law" means any federal, state, 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.
"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.
"Property" means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
"Purchaser" shall have the meaning specified in the introductory paragraph.
"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.
"Subsidiary" means any entity in which the Company owns, directly or indirectly,
100% of the capital stock or other equity interests.
ARTICLE II
SALE AND PURCHASE
Section 2.01. Sale and Purchase. On and subject to the terms and conditions
of this Agreement, and in reliance on the representations and warranties
set forth herein, at the Closing, the Company hereby agrees to issue and sell to
each Purchaser, and each Purchaser hereby agrees to purchase from the Company,
the number of Subject Shares set forth opposite such Purchaser's name on the
signature page hereto. On and subject to the terms and conditions of this
Agreement, each Purchaser agrees to pay the Company two dollars and eighty-five
cents ($2.85) (the "Purchase Price") for each Subject Share such Purchaser is
purchasing hereunder.
Section 2.02. Closing. The execution and delivery of the Basic Documents,
the payment by the Purchasers of the Purchase Price and execution and delivery
of all other instruments, agreements and other documents required by this
Agreement (the "Closing") shall take place within three business days of the
date the Company provides evidence to the Purchasers that the American Stock
Exchange ("AMEX") has approved the listing of the Subject Shares (the "Closing
Date"). If the AMEX has not approved the listing of the Subject Shares by
November 29, 2007, each Purchaser shall have the right to terminate all of its
obligations under this Agreement. If a Purchaser gives written notice of its
election to terminate its obligations under this Agreement because of the
failure to receive timely AMEX approval, all of such Purchaser's obligations and
the Company's obligations with respect to such Purchaser, in each case under
this Agreement, shall be terminated and of no further force and effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding sections of the disclosure
schedules delivered to the Purchasers by the Company simultaneously with the
execution and delivery of this Agreement (the "Disclosure Schedules"), the
Company represents and warrants to the Purchasers, on and as of the date of this
Agreement and on and as of the Closing Date, as follows:
Section 3.01. Existence. The Company and each of its Subsidiaries: (i) is a
corporation or limited liability company duly organized, validly existing
and in good standing under the Laws of the state of its organization; (ii) has
all requisite corporate or limited liability company 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
or as proposed to be 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 has not had and
would not reasonably be expected to have, individually or in the aggregate with
any other such failures, a Company Material Adverse Effect.
Section 3.02. Capitalization and Valid Issuance of Subject Shares.
(a) Section 3.02(a) of the Disclosure Schedules accurately sets forth all of
the issued and outstanding capital stock of the Company after giving effect
to the Closing. All of the issued and outstanding shares of such capital stock
have been duly authorized and validly issued in accordance with applicable Law
and the Company Organizational Documents and are fully paid and non-assessable
and have not be issued in violation of, and are not otherwise subject to, any
pre-emptive rights. All of the Subject Shares to be issued at the Closing will
have been duly authorized and validly issued in accordance with applicable Law
and the Company Organizational Documents and will be fully paid, non-assessable
and free of any Liens, and will not be issued in violation of any pre-emptive
rights, with no personal liability attaching to the ownership thereof.
(b) Other than as set forth in Section 3.02(a), neither the Company nor any
of its Subsidiaries has any agreements or stock incentive plans that contemplate
the issuance of capital stock (or securities convertible into or exchangeable
for capital stock). Neither the Company nor any of its Subsidiaries has any
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 stockholders may vote. Other than as set forth in Section 3.02(a), there
are no outstanding or authorized (i) options, warrants, preemptive rights,
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 capital stock in the Company or any
of its Subsidiaries or securities convertible into or exchangeable for such
capital stock, (ii) obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any capital stock in the Company or any
of its Subsidiaries or any such securities or agreements listed in clause (i) of
this sentence or (iii) voting trusts or similar agreements to which the Company
any of its Subsidiaries, or to the knowledge of the Company, to which any owner
of capital stock of the Company, is a party with respect to the voting of the
capital stock of the Company.
(c) Except as set forth in the SEC Documents or Section 3.02(c) of
the Disclosure Schedules, (i) the Company does not have any Subsidiaries, and,
does not own any capital stock of, assets comprising the business of,
obligations of, or any other interest (including any equity or partnership
interest) in, any person or entity; (ii) the Company owns, directly or
indirectly, all of the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, and all the issued and outstanding
shares of capital stock of each subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for
or purchase securities.
Section 3.03. SEC Documents.
(a) Since December 31, 2005, the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Securities and Exchange Commission (the "SEC") pursuant to the reporting
requirements of the Exchange Act, and the rules and regulations promulgated
thereunder (collectively, the "SEC DOCUMENTS"). Each of the SEC Documents, as of
the respective dates thereof (or, if amended or superseded by a filing prior to
the Closing Date, then on the date of such filing), did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. Each SEC Document, as it may have been
subsequently amended by filings made by the Company with the SEC prior to the
date hereof, complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Document. The Company covenants that the Form 10-QSB for
the quarter ended September 30, 2007 will be timely filed on or before November
14, 2007 and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein, in
light of the circumstances in which they were made, not misleading.
(b) The Company's financial statements filed with the SEC for the
year ended December 31, 2006, and for all interim periods since such date (the
"CompanyFinancial Statements"), at the time filed with the SEC complied as to
form in all material respects with GAAP, and fairly present (subject in the case
of interim statements to normal, recurring and year-end 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.
(c) The Chief Executive Officer and the Chief Financial Officer of
the Company have signed, and the Company has furnished to the SEC, all
certifications required by Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002. Such certifications contain no qualifications or exceptions to the matters
certified therein and have not been modified or withdrawn; and neither the
Company nor any of its officers has received notice from any governmental entity
questioning or challenging the accuracy, completeness, form or manner of filing
or submission of such certifications. The Company is otherwise in compliance in
all material respects with all applicable effective provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations issued thereunder by
the SEC. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the SEC's rules and forms. The Company's certifying
officers have evaluated the effectiveness of the Company's disclosure controls
and procedures as of the end of the period covered by the Company's most
recently filed periodic report under the Exchange Act (such date, the
"Evaluation Date"). The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no changes in the Company's internal control over financial reporting (as
such term is defined in the Exchange Act) that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
Section 3.04. No Material Adverse Change. Since January 1, 2007, the
Company and each of its Subsidiaries has conducted its business in the ordinary
course, consistent with past practice, and there has been and is no (i)
occurrence, development, change, fact, circumstance or condition, that has had
or would reasonably be expected to have, individually or in the aggregate with
any other such occurrences, developments, changes, facts, circumstances or
conditions, 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 3.05. No Undisclosed Liabilities. Neither the Company nor any of
its Subsidiaries is subject to any liabilities, other than (i) as reflected in
the Company Financial Statements and (ii) liabilities incurred since the date of
the Company Financial Statements in the ordinary course of business consistent
with past practice.
Section 3.06. Litigation.
(a) Except as set forth in Section 3.06(a) of the Disclosure Schedules,
there is no Action pending or, to the knowledge of the Company, overtly
threatened against the Company, any of its Subsidiaries or any of their
respective officers, directors or Properties which (individually or in the
aggregate) has had or reasonably would be expected to have a Company Material
Adverse Effect or which challenges the validity of any of the Basic Documents.
(b) To the knowledge of the Company, no event has occurred nor does any
circumstance exist that is reasonably likely to give rise to, or serve as a
valid basis for, the commencement of any Action against or affecting the Company
or any of its Subsidiaries (i) in connection with its entering into the Basic
Documents to be executed and delivered by them or the consummation by them of
the transactions contemplated hereby or thereby, or the performance by them of
the obligations hereunder or thereunder or (ii) which (individually or in the
aggregate) has had or reasonably would be expected to have a Company Material
Adverse Effect or which challenges the validity of any of the Basic Documents.
(c) As of the date hereof, neither the Company nor any of its Subsidiaries
is a party to or bound by any decree, order, injunction, settlement agreement,
arbitration decision, award or any agreement entered into in any Action with
respect to or affecting the capital stock in the Company or the properties,
assets, personnel or business activities of the Company or any of its
Subsidiaries.
Section 3.07. No Breach. The execution, delivery and performance by the
Company of the Basic Documents 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 Company Organizational Documents,
(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 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.
Section 3.08. 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, and the consummation of the transactions contemplated thereby,
including the issuance of the Subject Shares, have been duly authorized by all
necessary action on its part; 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.
Section 3.09. Approvals. Other than the approval of listing of the Subject
Shares by the AMEX, 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.
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 Subject Shares pursuant to this Agreement are exempt from the
registration requirements of the Securities Act and the registration and
qualification requirements of all applicable securities laws of the states of
the United States, 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.
Section 3.11. Preemptive Rights. 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 of the Company.
Section 3.12. Compliance. Neither the Company nor any of its subsidiaries
has materially violated or is in material violation of any judgment, decree or
order or any Law applicable to the Company. The Company is not in violation or
default of any provisions of the Certificate of Incorporation or the Bylaws and
none of the Company's Subsidiaries is in violation nor default of any provisions
of their respective organizational documents. The Company and each of its
Subsidiaries possess all material certificates, authorizations and permits
issued by the appropriate regulatory authorities necessary to conduct its
business, and neither the Company nor any of its Subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit and to the knowledge of the Company there
is no basis for any of the foregoing. The Company has fulfilled and performed
all of its material obligations with respect to the such certificates,
authorizations and permits, and no event has occurred that allows, or after
notice or lapse of time would allow, the revocation, termination, modification
or other impairment of the rights of the Company under any such certificate,
authorization or permit. Neither the Company nor any of its Subsidiaries is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), except as does
not, individually or in the aggregate, have or reasonably be expected to result
in a 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) 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 from Company
funds; (iii) violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977; 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 3.13. Environmental Matters. The Company (i) is in compliance in
all material respects with any and all Environmental Laws; (ii) has received
all permits, licenses, certifications, franchises, clearances or other approvals
required of it under applicable Environmental Laws, to conduct its business to
date as described in the Exchange Act Documents; and (iii) is in compliance in
all material respects with all terms and conditions of any such permit, license
certification, franchise, clearance or approval, except where such noncompliance
with Environmental Laws, failure to receive required permits, licenses,
certifications, franchises, clearances or other approvals or failure to comply
with the terms and conditions of such permits, licenses, certifications,
franchises, clearances or approvals would not, individually or in the aggregate,
have a Material Adverse Effect. The Company is not presently subject to any
costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up and any
potential liabilities to third parties) that would, individually or in the
aggregate, have a Material Adverse Effect. To the Company's knowledge, there
are no pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, Liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company. To the Company's knowledge, there are no events or
circumstances that would reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the Company, or any
of its predecessors in interest, relating to hazardous materials or any
Environmental Laws. To the Company's knowledge, no property that is or has been
owned, leased or occupied by the Company has been designated as a Superfund Site
pursuant to the Comprehensive Environmental Response, Compensation of Liability
Act of 1980, as amended ("CERCLA"), or otherwise designated as a contaminated
site under applicable state or local law under circumstances that would be
reasonably likely to have a Material Adverse Effect, and the Company has not
been named as a "potentially responsible party" under CERCLA.
Section 3.14 Full Disclosure. No statement contained in this Agreement
contains any untrue statement of a material fact regarding or relating to the
Company or omits to state any material fact regarding or relating to the Company
that is necessary, in light of the circumstances under which it was made, in
order to avoid statements herein being misleading.
Section 3.15 Intellectual Property.
(a) Except as set forth in Section 3.15 of the Disclosure Schedules, the
Company and each of its Subsidiaries owns or possesses sufficient rights to use
all patents, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names, copyrights, information and other proprietary rights
and processes (collectively, "INTELLECTUAL PROPERTY"), which are necessary to
conduct its or their respective businesses as currently conducted and as
described in the SEC Documents free and clear of all Liens, except where the
failure to own or possess free and clear of all Liens claims would not
reasonably be expected to result, either individually or in the aggregate, in a
Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries has received any written
notice of, nor has knowledge of, any infringement of or conflict with rights of
others with respect to any Intellectual Property and neither the Company nor any
of its Subsidiaries has knowledge of any infringement, misappropriation or other
violation of any Intellectual Property by any third party, which, in either
case, either individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to have a Material
Adverse Effect.
(c) To the Company's knowledge, none of the patent rights owned or licensed
by the Company or any of its Subsidiaries are unenforceable or invalid.
Section 3.16. Registration Rights. Except as provided in the Registration
Rights Agreement and except as set forth in Section 3.16 of the Disclosure
Schedules, the Company is not currently subject to any agreement providing any
person or entity any rights (including piggyback registration rights) to have
any securities of the Company registered with the SEC or registered or qualified
with any other governmental authority.
Section 3.17. Title to Property and Assets. Except as set forth in Section
3.17 of the Disclosure Schedules, the properties and assets of the Company and
its Subsidiaries are owned by the Company and its Subsidiaries free and clear of
all Liens except as (i) described in the SEC Documents, (ii) would not,
individually or in the aggregate, materially affect the value of such property
or materially interfere with the use made or to be made of such property by
them, or (iii) would not, individually or in the aggregate, reasonably be likely
to have a Company Material Adverse Effect. The Company, in accordance with
normal industry practice, has timely paid all royalties, rentals or other
payments due under all of the leases, subleases and options to acquire leases
material to the business of the Company (the "Subject Leases"), except for those
payments which are subject to a bona fide dispute and which will not result in
grounds for cancellation of any Subject Lease. The Company, in accordance with
normal industry practice, has taken all customary action to cause the Subject
Leases to be in full force and effect, except where the failure to do so would
not, individually or in the aggregate, reasonably be likely to have a Company
Material Adverse Effect.
Section 3.18. Other Agreements. The participation, joint development, joint
operating, farm-out and other agreements relating to rights of the Company with
respect to the ownership, lease or operation of oil and natural gas properties
or the exploration for, development of, or production of oil and natural gas
reserves thereon, constitute valid and binding agreements of the Company that
are parties thereto and, to the knowledge of the Company, of the other parties
thereto, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general equitable principles.
Section 3.19. Investment Company. The Company does not conduct, and does not
intend to conduct, its business in a manner in which it would become, an
"investment company" as defined in Section 3(a) of the Investment Company Act of
1940, as amended, and the rules and regulations promulgated thereunder.
Section 3.20. Taxes. Except as set forth in Section 3.20 of the Disclosure
Schedules, the Company and each of its Subsidiaries has filed or has valid
extensions of the time to file all necessary federal, state, and foreign income
and franchise tax returns due prior to the date hereof and has paid or accrued
all taxes shown as due thereon, and the Company has no knowledge of any material
tax deficiency that has been or might be asserted or threatened against it or
any of its Subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly, represents and warrants to the
Company on and as of the date of this Agreement and on and as of the Closing
Date, as follows:
Section 4.01. Authority. Such Purchaser 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 such Purchaser of each
of the Basic Documents, and the consummation of the transactions contemplated
thereby, have been duly authorized by all necessary action on its part; and the
Basic Documents constitute the legal, valid and binding obligations of such
Purchaser, 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.
Section 4.02. NoBreach. 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 Subject Shares
by such Purchaser do not and will not violate any provision of any Law,
governmental permit, determination or award having applicability to such
Purchaser or any of its Properties.
Section 4.03. Investment. The Subject Shares are being acquired for such
Purchaser's own account, not as a nominee or agent, and with no present
intention of distributing the Subject 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, in each case
without prejudice, however, to such Purchaser's right at all times to sell or
otherwise dispose of all or any part of the Subject Shares under a registration
statement under the Securities Act and applicable state securities Laws or under
an exemption from such registration available thereunder. If such Purchaser
should in the future decide to dispose of any of the Subject Shares, such
Purchaser understands and agrees 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.
Section 4.04. 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 and (b) 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 Subject 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 4.05. Legend. It is understood that any certificates evidencing the
Subject Shares initially will bear the following legend: "These securities have
not been registered under the Securities Act of 1933, as amended. These
securities may not be sold, offered for sale, pledged or hypothecated in the
absence of a registration statement in effect with respect to the securities
under such Act or the issuer has received documentation reasonably satisfactory
to it that such transaction does not require registration under such Act."
ARTICLE V
COVENANTS
Section 5.01. 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, including the filing
of an additional listing application with the AMEX with respect to the Subject
Shares and diligently pursuing the approval of such application.
Section 5.02. Tax Information. The Company shall cooperate with the
Purchasers and provide the Purchasers with any reasonably requested tax
information related to its ownership of the Subject Shares.
ARTICLE VI
CLOSING DELIVERIES
Section 6.01. Company Deliveries. At the Closing, subject to the terms and
conditions of this Agreement, the Company shall have delivered, or caused to be
delivered, to the Purchasers certificates representing the Subject Shares.
Section 6.02. Purchaser Deliveries. At the Closing, subject to the terms
and conditions of this Agreement, the Purchasers shall have delivered, or caused
to be delivered, to the Company payment of the Purchase Price by wire transfer
of immediately available funds to an account designated in writing (including
via email) by the Company.
Section 6.03. Registration Rights Agreement. At the Closing, the Purchasers
and the Company shall enter into a registration rights agreement covering the
Subject Shares on mutually acceptable terms.
Section 6.04. Legal Opinion. The Purchasers shall have received an
opinion on behalf of the Company, dated as of the closing date, from counsel to
the Company reasonably acceptable to the Purchasers, in the form attached hereto
as Exhibit B.
Section 6.05. American Stock Exchange. The Company shall provide evidence to
the Purchasers that the Subject Shares have been approved for listing on the
AMEX.
Section 6.06. Credit Agreement Letter. Knight Energy Group II, LLC shall have
received a written notice from Spindrift Partners, L.P., that, to its knowledge,
the Company is not in default under the Credit Agreement dated as of March 23,
2007, by and among Westside Energy Production Company, L.P., Westside Energy
Operating Company, L.P., the Company, Spindrift Partners, L.P., as
Administrative Agent, and the Lenders party thereto.
ARTICLE VII
INDEMNIFICATION, COSTS AND EXPENSES
Section 7.01. Indemnification bythe Company. The Company shall indemnify,
defend and hold harmless each Purchaser and its Representatives, their
respective predecessors and successors, and their respective stockholders,
partners, members, trustees and Representatives (collectively, "Indemnified
Parties") from and against, any and all claims, liabilities, obligations,
losses, fines, penalties, costs, interests, amounts paid in settlement of
claims, Actions, suits, proceedings (including any investigations, litigation or
inquiries), demands, causes of action and damages, whether absolute,
accrued, conditional or otherwise and whether or not involving a third party
claim, 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:
(a) any inaccuracy in or breach of any of the representations or warranties
made by the Company herein or in any of the Basic Documents;
(b) any breach or nonperformance by the Company of any of the covenants,
obligations or other agreements of the Company contained herein or in any of the
Basic Documents; or
(c) any legal action brought by a shareholder of the Company other than the
Purchasers or by any governmental authority as a result of the transaction
contemplated by this Agreement
ARTICLE VIII
MISCELLANEOUS
Section 8.01. 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". 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.
Section 8.02. Survival of Provisions. All representations and warranties of
the Company contained in this Agreement, including any schedules made a part
hereof, and any covenants or other agreements the performance of which are
specified to occur on or prior to the Closing, shall survive for a period of two
years following the Closing Date; provided, however, that claims asserted in
writing by any Indemnified Party with reasonable specificity prior to the
expiration of the applicable indemnification period shall not thereafter be
barred by the expiration of the applicable indemnification period. Any covenant
or other agreement contained herein, any portion of the performance of which may
or is specified to occur after the Closing, including without limitation Section
7.01 of this Agreement, shall survive the Closing hereunder and remain in full
force and effect indefinitely.
Section 8.03. 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. 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.
Section 8.04. Binding Effect. This Agreement shall be binding upon the
Company, the Purchasers, 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.
Section 8.05. 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:
(a) If to the Company:
Westside Energy Corporation
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Attention: ▇▇▇▇▇▇▇ ▇. Manner
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ and ▇▇▇▇▇, LLP
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Attention: ▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Purchaser, to the address shown on the signature page:
or to such other address as the Company or any 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 8.06. 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,
warranties or undertakings, other than those set forth or referred to herein or
therein with respect to the rights granted by the Company or the Purchasers 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 8.07. Governing Law. This Agreement will be construed in accordance
with and governed by the Laws of the State of Texas without regard to principles
of conflicts of Laws.
Section 8.08. 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 8.09. Expenses. All costs and expenses incurred by the parties
hereto in connection with the consummation of the transactions contemplated
hereby shall be borne solely and entirely by the party which has incurred such
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 8.10. Announcements. No party hereto shall make any public
announcement or similar publicity of the transactions contemplated by this
Agreement, or identify any Purchaser without first obtaining the prior written
consent of the other party; provided that nothing contained herein shall
prohibit any party hereto from making any public announcement if such party
determines in good faith, on the advice of legal counsel, that such public
disclosure is required by applicable law so long as such party consults with the
other party, prior to making such disclosure.
IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of
the date first above written.
WESTSIDE ENERGY CORPORATION
By:___________________
Name:_________________
Title:__________________
PURCHASERS: ADDRESS: NO. OF SHARES:
SPINDRIFT PARTNERS, L.P.
By: Wellington Management Company, LLP, as investment adviser
c/o Wellington Management Company, LLP
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By:___________________
Name:_________________
Attn: Legal Services/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:__________________ 576,857
SPINDRIFT INVESTORS (BERMUDA), L.P.
By: Wellington Management Company, LLP, as investment adviser
Wellington Management Company, LLP
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By:___________________
Name:_________________
Attn: Legal Services/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:__________________ 686,300
KNIGHT ENERGY GROUP II, LLC
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By:___________________
Name:_________________
Title:__________________