The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined
financial statements.
Unaudited Pro Forma Condensed Consolidated Combined Statement of Operations
for the twelve months ended December 31, 2015
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Magellan
|
|
|
|
|
|
|
|
|
|
|
|
|
Parallax
Historical
|
|
|
Historical
|
|
|
Exchange
Transaction
and Weald
ATA
|
|
|
|
|
|
Adjusted
Historical
|
|
|
Merger
Adjustments
|
|
|
|
|
|
Pro Forma
Combined
|
|
|
|
|
|
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,375
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
1,375
|
|
Revenue, related party
|
|
|
311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
1,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization, and accretion
|
|
|
|
|
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
106
|
|
Exploration
|
|
|
|
|
|
|
102
|
|
|
|
|
|
|
|
|
|
|
|
102
|
|
|
|
|
|
|
|
|
|
|
|
102
|
|
General and administrative
|
|
|
1,318
|
|
|
|
6,501
|
|
|
|
(174)
|
|
|
|
(j)
|
|
|
|
6,327
|
|
|
|
600
|
|
|
|
(g
|
)
|
|
|
8,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
|
(h
|
)
|
|
|
|
|
Loss on sale of assets
|
|
|
|
|
|
|
316
|
|
|
|
|
|
|
|
|
|
|
|
316
|
|
|
|
|
|
|
|
|
|
|
|
316
|
|
Other operating expenses
|
|
|
263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
1,581
|
|
|
|
7,025
|
|
|
|
(174)
|
|
|
|
|
|
|
|
6,851
|
|
|
|
650
|
|
|
|
|
|
|
|
9,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM OPERATIONS
|
|
|
105
|
|
|
|
(7,025)
|
|
|
|
174
|
|
|
|
|
|
|
|
(6,851)
|
|
|
|
(650)
|
|
|
|
|
|
|
|
(7,396)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
Amortization of deferred financing costs
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Loss on investment in securities
|
|
|
|
|
|
|
(15,231)
|
|
|
|
|
|
|
|
|
|
|
|
(15,231)
|
|
|
|
|
|
|
|
|
|
|
|
(15,231)
|
|
Fair value revision of contingent consideration payable
|
|
|
|
|
|
|
1,888
|
|
|
|
|
|
|
|
|
|
|
|
1,888
|
|
|
|
|
|
|
|
|
|
|
|
1,888
|
|
Other income
|
|
|
|
|
|
|
198
|
|
|
|
|
|
|
|
|
|
|
|
198
|
|
|
|
|
|
|
|
|
|
|
|
198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense), net
|
|
|
|
|
|
|
(13,141)
|
|
|
|
|
|
|
|
|
|
|
|
(13,141)
|
|
|
|
|
|
|
|
|
|
|
|
(13,141)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) BEFORE INCOME TAXES
|
|
|
105
|
|
|
|
(20,166)
|
|
|
|
174
|
|
|
|
|
|
|
|
(19,992)
|
|
|
|
(650)
|
|
|
|
|
|
|
|
(20,537)
|
|
INCOME TAX (EXPENSE) BENEFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
|
105
|
|
|
|
(20,166)
|
|
|
|
174
|
|
|
|
|
|
|
|
(19,992)
|
|
|
|
(650)
|
|
|
|
|
|
|
|
(20,537)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST IN SUBSIDIARY
|
|
|
|
|
|
|
265
|
|
|
|
(265)
|
|
|
|
(k
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PREFERRED STOCK:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
|
|
|
|
(1,794)
|
|
|
|
1,794
|
|
|
|
(l
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
|
$
|
105
|
|
|
$
|
(21,695)
|
|
|
$
|
1,703
|
|
|
|
|
|
|
$
|
(19,992)
|
|
|
$
|
(650)
|
|
|
|
|
|
|
$
|
(20,537)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
190,067
|
(e)
|
The accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined
financial statements.
H-7
Notes to the Unaudited Pro Forma Condensed Consolidated Combined
Financial Statements
1. Basis of Presentation
The unaudited pro forma condensed consolidated combined balance sheet as of September 30, 2016 is based on the unaudited consolidated
balance sheet of Magellan and the unaudited consolidated balance sheet of Tellurian Investments as adjusted to reflect the following items as though they had occurred on September 30, 2016:
|
|
|
GE Series A Preferred Stock
|
|
|
|
TOTAL Common Stock Investment
|
The unaudited pro forma condensed consolidated combined
statement of operations for the twelve months ended December 31, 2015 is based on Magellans historical books and records and the Predecessors audited consolidated statement of operations for such period, with adjustments made to
present such historical operations as if the Exchange Transaction and Weald ATA, the Merger and the TOTAL Common Stock Investment had occurred on January 1, 2015. The unaudited pro forma condensed consolidated combined statement of operations
for the nine months ended September 30, 2016 is based on Magellans and Tellurian Investments unaudited condensed consolidated statement of operations for such period and the Predecessors audited consolidated statement of
operations for the period from January 1, 2016 through April 9, 2016, with adjustments made to present such historical operations as if the Merger had occurred on January 1, 2015.
2. Pro Forma Adjustments
The following
adjustments were made in the preparation of the unaudited pro forma condensed consolidated combined balance sheet and unaudited pro forma condensed consolidated combined statements of operations:
(a)
|
Adjustments to reflect that Tellurian Investments issued 5,467,851 shares of $0.001 per share par value Series A Preferred Stock to GE Oil & Gas, Inc. for an aggregate purchase price of $25 million on
November 23, 2016. Transaction costs of $151 thousand were incurred in connection with the equity issuance, which have also been reflected as an adjustment in the unaudited pro forma condensed consolidated combined balance sheet. The
Preferred Stock is classified as an equity instrument, but Tellurian Investments is still completing its analysis to determine whether any unrelated embedded derivatives exist and may require bifurcation. In the event bifurcation of an embedded
derivative is required, Tellurian Investments will allocate proceeds from the issuance of the Preferred Stock equal to the value of the embedded derivative to a derivative liability, with the remainder of the proceeds being allocated to the shares
of Preferred Stock. The value of the embedded derivative will be reassessed at each reporting period, with the change in value being recorded in earnings. Tellurian Investments anticipates that any required recording of the bifurcated derivative
will be insignificant to the consolidated financial statements.
|
(b)
|
The fiscal year end of Magellan, which is June 30, has been conformed to the fiscal year end of Tellurian
Investments, which is December 31, for the purpose of presenting pro forma condensed consolidated combined financial statements, pursuant to Rule 11-02(c)(3) of Regulation S-X, because the two fiscal years are separated by more than 93 days. In
order to conform Magellans fiscal year end to that of Tellurian Investments, Magellans unaudited historical statements of operations
|
H-8
|
presented in the unaudited condensed consolidated combined pro forma financial statements have been derived from the accounting records of Magellan. No adjustments were required to conform
Magellans unaudited historical consolidated balance sheet as of September 30, 2016.
|
(c)
|
Unless otherwise noted, adjustments to reflect the elimination of Magellans total equity, the estimated value of consideration to be paid in the Merger and to adjust, where required, the historical book values of
Magellans assets and liabilities as of September 30, 2016 to the preliminary estimated fair value, in accordance with the acquisition method of accounting. The preliminary valuations were determined as of January 6, 2017 and, where
applicable, are based on the closing share price of Magellans common stock on that date. At Merger closing, the fair value of the consideration given and assets and liabilities acquired will be determined based on the underlying fair values as
of that date.
|
The estimated fair value of the consideration to be transferred, assets acquired, and liabilities assumed is
described below (in thousands):
|
|
|
|
|
Purchase Consideration:
|
|
|
|
|
Common stock
(1)
|
|
|
64,580
|
|
Stock options exercisable
(2)
|
|
|
3,284
|
|
Restricted stock
(3)
|
|
|
45
|
|
|
|
|
|
|
Net purchase consideration to be allocated
|
|
|
67,909
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Fair Value of Assets
Acquired
(4)
:
|
|
|
|
|
Cash
|
|
|
2,064
|
|
Securities available for sale
|
|
|
1,440
|
|
Other current assets
|
|
|
2,084
|
|
Unproved properties
|
|
|
12,500
|
|
Wells in progress
|
|
|
335
|
|
Land, buildings and equipment, net
|
|
|
78
|
|
Other long-term assets
|
|
|
19
|
|
|
|
|
|
|
Total assets acquired
|
|
|
18,520
|
|
|
|
|
|
|
Estimated Fair Value of Liabilities Assumed:
|
|
|
|
|
Accounts payable, accrued and other liabilities
|
|
|
4,378
|
|
Notes payable
|
|
|
104
|
|
|
|
|
|
|
Total liabilities assumed
|
|
|
4,482
|
|
|
|
|
|
|
|
|
|
|
|
Total net assets acquired
|
|
|
14,038
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill as a result of the Merger
|
|
|
53,871
|
|
|
|
|
|
|
|
(1)
|
5.9796 million shares of Magellan common stock were effectively transferred in connection with the Merger. Those shares were valued at $10.80 per share, which was Magellans closing share price on
January 6, 2017.
|
|
(2)
|
Magellans 0.43 million stock options were valued using the Black-Scholes model.
|
H-9
|
(3)
|
0.004 million restricted shares will vest as a result of the change-in-control event. Those restricted shares were valued at $10.80 per share, which was Magellans closing share price on January 6, 2017.
|
|
(4)
|
Includes a $26.8 million deferred tax asset, with an offsetting $26.8 million valuation allowance.
|
(d)
|
Adjustments to reflect approximately $1.44 million in employee severance and retention costs and $3.61 million in legal and advisory transaction fees directly related to the Merger that were not reflected in
the historical financial statements. $2.39 million of the legal and advisory costs are payable to Petrie in approximately 0.4 million shares as a success fee related to the Merger. As these costs are non-recurring in nature, they have only
been reflected within the pro forma balance sheet.
|
H-10
(e)
|
Adjustments to reflect the recapitalization of Magellan after giving effect to the TOTAL Common Stock Investment and upon closing of the Merger, after which, approximately 190.1 million shares of common stock with
a par value of $0.01 per share will be outstanding. In accordance with the acquisition method of accounting, Tellurian Investments existing common stock and capital in excess of par value, less the par value of the combined companys
common stock outstanding subsequent to the Merger (excluding shares attributable to the Petrie success fee) will be reclassified to capital in excess of par value of the combined company. The effects of the 0.4 million shares attributable to
the Petrie success fee have been adjusted for in footnote (d) above. Upon consummation of the Merger, 90,350 shares of Magellan common stock will be issued to the former owners of the membership interests in Nautilus Technical Group LLC
(Nautilus Technical) and Eastern Rider LLC (Eastern Rider) pursuant to the purchase and sale agreement, effective as of September 30, 2016, by and among Magellan and the former owners of the membership interests in
Nautilus Technical and Eastern Rider. Additionally, Tellurian Investments accumulated deficit and preferred stock will be carried forward to the accumulated deficit and preferred stock of the combined company subsequent to the Merger. A
reconciliation of the pro forma adjustment to capital in excess of par of the combined company is included below.
|
Calculation of adjustment to capital in excess of par to reclassify Tellurian Investments equity:
|
|
|
|
|
Tellurian Investments common stock
|
|
|
101
|
|
Tellurian Investments capital in excess of par
|
|
|
82,503
|
|
TOTAL Common Stock Investment
|
|
|
35
|
|
TOTAL Common Stock Investment capital in excess of par
|
|
|
206,797
|
|
|
|
|
|
|
Total Pro Forma Tellurian Investments common stock and capital in excess of par
|
|
|
289,436
|
|
|
|
|
|
|
Less par value of the combined companys shares outstanding subsequent to the Merger
|
|
|
(1,897)
|
|
|
|
|
|
|
Adjustment to capital in excess of par
|
|
|
287,539
|
|
|
|
|
|
|
A reconciliation of Magellan common shares outstanding as of September 30, 2016 to the combined
companys common stock outstanding following the Merger is included below.
|
|
|
|
|
Magellan common issued as of September 30, 2016
|
|
|
7,089
|
|
Less Shares of treasury stock
|
|
|
(1,209)
|
|
|
|
|
|
|
Magellan common stock outstanding as of September 30, 2016
|
|
|
5,880
|
|
Change in Magellan common stock outstanding between September 30, 2016 and November 9, 2016
|
|
|
0
|
|
|
|
|
|
|
Magellan common stock outstanding as of November 9, 2016, as reported in Magellans Form 10-Q for the three
months ended September 30, 2016
|
|
|
5,880
|
|
Magellan common stock to be issued to Tellurian Investments as a result of the Merger
1
|
|
|
183,587
|
|
Directors awards
|
|
|
100
|
|
Petrie success fee shares
|
|
|
410
|
|
Shares to former owners of Nautilus Technical and Eastern Rider
|
|
|
90
|
|
|
|
|
|
|
Total common stock of the combined company outstanding subsequent to the Merger
|
|
|
190,067
|
|
|
|
|
|
|
|
|
|
|
|
Total Tellurian Investments shares of common stock outstanding as of September 30, 2016
1
|
|
|
141,221
|
|
Exchange of each Tellurian Investments share of common stock outstanding as of September 30, 2016, for 1.3 shares
of Magellan common stock
|
|
|
1.3
|
|
|
|
|
|
|
Magellan common stock to be issued to Tellurian Investments as a result of the Merger
|
|
|
183,587
|
|
|
|
|
|
|
|
1
|
Reconciliation of Magellan common stock to be issued to Tellurian Investments, after giving effect to the TOTAL Common Stock Investment.
|
H-11
(f)
|
Adjustments to conform the financial statement presentation of Tellurian Investments to that of Magellan. Tellurian Investments operating expenses in the unaudited condensed consolidated combined statement of
operations for the nine months ended September 30, 2016 has been disaggregated and reclassified into the engineering expense and other operating expenses line items.
|
(g)
|
Adjustments to reflect the pro forma effect of an increase in compensation expense associated with the addition of three new directors. The addition of the new directors was directly attributable to the Merger.
|
(h)
|
Adjustments to reflect the incremental salary of an employee of Magellan that will be retained as an employee of the combined company as a direct result of the Merger.
|
(i)
|
Adjustments to reflect the contract entered into on December 19, 2016 for the sale by Tellurian Investments of 35,384,615 shares of common stock to TOTAL at the purchase price of $5.85 per share for proceeds of
$207 million. The deal is expected to close on January 3, 2017 subject to the satisfaction of customary closing conditions. Transaction costs of $168 thousand have been incurred in connection with the common stock investment, and these costs
have been reflected as an adjustment in the unaudited pro forma condensed consolidated combined balance sheet.
|
(j)
|
Adjustments to reflect the pro forma effect of the removal of accrued director fees for the One Stone directors, which were forgiven at the closing of the Exchange Transaction.
|
(k)
|
Adjustments to reflect the pro forma effect related to the Exchange Transaction of the elimination of the non-controlling interest in Utah CO2 LLC.
|
(l)
|
Adjustments to reflect the elimination of the preferred stock and related dividends related to the Exchange Transaction.
|
H-12
Annex A: Merger Agreement
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this
Agreement
), is entered into as of August 2, 2016, by and among Tellurian
Investments Inc., a Delaware corporation (
Tellurian
), Magellan Petroleum Corporation, a Delaware corporation (
Magellan
), and River Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned Subsidiary
of Magellan (
Merger Sub
). Each of Magellan, Tellurian, and Merger Sub are referred to herein as a
Party
and together as
Parties
. Certain terms used in this Agreement are defined in
Annex
1
.
RECITALS
WHEREAS, the Tellurian Board has determined that it is in the best interests of Tellurian and the Tellurian Stockholders, and has declared it
advisable, to enter into this Agreement with Magellan and Merger Sub providing for the merger (the
Merger
) of Merger Sub with and into Tellurian in accordance with the Delaware General Corporation Law (the
DGCL
), and the Tellurian Board has approved this Agreement, upon the terms and subject to the conditions set forth herein, and has, upon such terms and subject to such conditions, recommended that the Tellurian Stockholders vote
in favor of the approval of this Agreement and the Merger;
WHEREAS, the Tellurian Board has determined that it is in the best interests
of Tellurian, and has declared it advisable, to enter into this Agreement, and the Tellurian Board has approved this Agreement, upon the terms and subject to the conditions set forth herein, and has, upon such terms and subject to such conditions,
recommended that the Tellurian Stockholders vote in favor of the approval of this Agreement and the Merger;
WHEREAS, the Magellan Board
has determined that it is in the best interests of Magellan and the Magellan Stockholders, and has declared it advisable, to enter into this Agreement, and the Magellan Board has approved this Agreement, upon the terms and subject to the conditions
set forth herein, and has, upon such terms and subject to such conditions, recommended that the Magellan Stockholders vote in favor of the approval of this Agreement and the Merger;
WHEREAS, the board of directors of Merger Sub has unanimously approved and declared advisable this Agreement;
WHEREAS, Magellan, on its own behalf and as the sole stockholder of Merger Sub, has adopted this Agreement and approved the Merger and the
other transactions contemplated hereby; and
WHEREAS, Magellan, Merger Sub, and Tellurian wish to make certain representations,
warranties, covenants and agreements in connection with the Merger and to prescribe certain conditions to the Merger, as set forth herein.
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AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this
Agreement and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I
The Merger
Section
1.1
The Merger
. At the Effective Time, upon the terms and subject to satisfaction or valid waiver of the conditions set forth in this Agreement, and in accordance with the DGCL, Merger Sub shall be merged with and into
Tellurian. As a result of the Merger, the separate corporate existence of Merger Sub shall cease and Tellurian shall continue as the corporation surviving the Merger (the
Surviving Corporation
).
Section 1.2
Closing
. Upon the terms and subject to the conditions of this Agreement, the closing of the Merger
(the
Closing
) shall take place on a day that is a Business Day (a) at the offices of Magellan, no later than the second Business Day following the satisfaction of the conditions set forth in
ARTICLE VII
(other than
(i) those conditions that are waived in accordance with the terms of this Agreement by the Party or Parties for whose benefit such conditions exist and (ii) any such conditions that, by their terms, are not capable of being satisfied until
the Closing) or (b) at such other place, time and/or date as the Parties may otherwise agree;
provided, however
, that this Agreement may be terminated pursuant to and in accordance with
Section 7.1
such that the Parties shall not
be required to effect the Closing. The date upon which the Closing shall occur is referred to herein as the
Closing Date
.
Section 1.3
Effective Time
. Subject to the provisions of this Agreement, at the Closing, Magellan, Tellurian and
Merger Sub shall cause a certificate of merger (the
Certificate of Merger
) to be executed, acknowledged and filed with the Secretary of State of Delaware in accordance with the relevant provisions of the DGCL and shall make all
other filings or recordings required by the DGCL. The Merger will become effective at such time as the Certificate of Merger has been duly filed with the Secretary of State of Delaware or at such later date or time as may be agreed by Magellan
and Tellurian in writing and specified in the Certificate of Merger in accordance with the DGCL (the effective time of the Merger being hereinafter referred to as the
Effective Time
).
Section 1.4
Effect of the Merger
. At the Effective Time, the effect of the Merger shall be as provided in this
Agreement and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, at the Effective Time, all the property, rights, privileges, immunities, powers, franchises, licenses and authority of Tellurian and Merger
Sub shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions and duties of Tellurian and Merger Sub shall become the debts, liabilities, obligations, restrictions and duties of the Surviving Corporation.
Section 1.5
Certificate of Incorporation; Bylaws
. At the Effective Time, and pursuant to the Certificate of
Merger, Article Fourth of the certificate of incorporation of Tellurian, as in effect on the date hereof, shall be amended to reduce the number of authorized shares to five thousand (5000) shares of Common Stock, and, as so amended, shall be the
certificate of incorporation of the Surviving Corporation, until thereafter amended as provided therein and by applicable Law. At the Effective Time, the bylaws of Merger Sub in effect immediately prior to the Effective Time shall be the bylaws of
the Surviving Corporation, until thereafter amended as provided therein and by applicable Law.
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Section 1.6
Directors and Officers
. The directors of Tellurian
immediately prior to the Effective Time shall be the directors of the Surviving Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation. The officers of the Surviving Corporation
shall be designated by Tellurian prior to the Effective Time, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation.
Section 1.7
Directors and Officers of Magellan.
Prior to the Effective Time, Magellan shall take all necessary
corporate action to appoint, effective immediately after the Effective Time, (a) three (3) members of the current Tellurian Board and two (2) other persons designated by Tellurian and (b) the persons designated by Tellurian as officers of
Magellan.
ARTICLE II
Conversion of Securities; Exchange of Certificates
Section 2.1
Conversion of Securities
. At the Effective Time, by virtue of the Merger and without any action on
the part of Magellan, Merger Sub, Tellurian or any of their stockholders, the following shall occur:
(a)
Conversion Generally
. Each share of common stock of Tellurian, par value $0.001 per share
(
Tellurian Stock
), issued and outstanding immediately prior to the Effective Time (other than any shares of Tellurian Stock to be canceled pursuant to
Section 2.1(b)
), shall be converted into the right to receive 1.300 (the
Exchange Ratio
) shares of Magellan Stock (the
Magellan Shares
or the
Merger Consideration
). All shares of Tellurian Stock that have been converted into the right to receive the Merger
Consideration as provided in this
Section 2.1(a)
shall as of the Effective Time no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each Certificate and each Book-Entry Share which
immediately prior to the Effective Time represented such shares shall thereafter represent only the right to receive the Merger Consideration therefor in accordance with the terms of this Agreement. Certificates and Book-Entry Shares previously
representing shares of Tellurian Stock (other than any shares of Tellurian Stock to be canceled pursuant to
Section 2.1(b)
) shall be exchanged for the Merger Consideration, without interest, upon the surrender of such Certificates or
Book-Entry Shares in accordance with the provisions of
Section 2.3
.
(b)
Cancellation of Certain
Shares
. Each share of Tellurian Stock held (i) by Magellan, Merger Sub, any Subsidiary of Magellan or Merger Sub, (ii) in the treasury of Tellurian, or (iii) by any Subsidiary of Tellurian immediately prior to the Effective Time
shall be automatically canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor.
(c)
Merger Sub
. Each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and become one newly issued, fully paid and non-assessable share of common stock of the Surviving Corporation so that, after the Effective Time, Magellan shall be the holder of all of
the issued and outstanding shares of the Surviving Companys common stock.
(d)
Change in
Shares
.
If between the date of this Agreement and the Effective Time the outstanding shares of Tellurian Stock or Magellan Stock, or securities convertible or exchangeable into or exercisable for shares of Tellurian Stock or Magellan
Stock, shall have been changed into a different number of shares or a different class in accordance with this Agreement, by reason of any stock dividend (excluding, for the avoidance of doubt, cash dividends), subdivision, reclassification,
A-3
recapitalization, split, reverse split, combination, conversion, exchange of shares or any other similar transaction, the Exchange Ratio shall be correspondingly adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization, split, reverse split, combination, exchange of shares or other similar transaction.
Section 2.2
Treatment of Equity Compensation Awards
. Immediately prior to the Effective Time, each restricted
share of Tellurian Stock (the
Tellurian Restricted Stock
) granted and then outstanding under the Tellurian 2016 Omnibus Incentive Plan and any associated Restricted Stock Agreements and Notices of Grant shall, without any action
on the part of the holder thereof, Tellurian, Magellan or Merger Sub, be converted into 1.300 shares of comparable restricted stock of Magellan.
Section 2.3
Exchange of Certificates
.
(a)
Exchange Agent
. Prior to the Closing Date, Magellan shall appoint an exchange agent reasonably acceptable
to Tellurian (the
Exchange Agent
) for the purpose of exchanging shares of Tellurian Stock for Merger Consideration. Prior to the Effective Time, Magellan shall make available to the Exchange Agent, for the benefit of the holders
of shares of Tellurian Stock, shares of Magellan Stock and, if applicable, cash in an amount equal to the aggregate Merger Consideration to be paid pursuant to this
ARTICLE II
(the certificates representing the shares of Magellan Stock
comprising such aggregate Merger Consideration and, if applicable, cash in lieu of fractional shares, being referred to hereinafter as the
Stock Merger Exchange Fund
). The Exchange Agent shall, pursuant to irrevocable
instructions, deliver the Merger Consideration out of the Stock Merger Exchange Fund. The Stock Merger Exchange Fund shall not be used for any purpose other than as set forth in this Agreement.
(b)
Exchange Procedures
. Promptly following the Effective Time, the Exchange Agent shall mail to each holder of
record of a certificate or certificates which immediately prior to the Effective Time represented outstanding shares of Tellurian Stock (the
Certificates
) or of non-certificated shares of Tellurian Stock represented by book-entry
(
Book-Entry Shares
) (i) a letter of transmittal in form approved by Tellurian prior to the Effective Time, and (ii) instructions for use in effecting the surrender of Certificates (or affidavits of loss in lieu thereof)
or Book-Entry Shares in exchange for the Merger Consideration. Upon surrender of Certificates (or affidavits of loss and, if reasonably requested by Magellan, appropriate bonds in lieu thereof), or in the case of Book-Entry Shares, upon adherence to
the applicable procedures set forth in the letter of transmittal, for cancellation to the Exchange Agent together with such letter of transmittal, properly completed and duly executed in accordance with the instructions thereto, and such other
documents as may be reasonably required by the Exchange Agent or pursuant to such instructions, the holder of such Certificates or Book-Entry Shares shall be entitled to receive in exchange therefor the Merger Consideration, without interest,
allocable to such Certificates or Book-Entry Shares, and the Certificates or Book-Entry Shares so surrendered shall forthwith be canceled. In the event of a transfer of ownership of shares of Tellurian Stock which is not registered in the transfer
records of Tellurian, the Merger Consideration may be issued to a transferee if the Certificate representing such shares of Tellurian Stock is presented to the Exchange Agent (or in the case of Book-Entry Shares, upon adherence to the applicable
procedures set forth in the letter of transmittal), accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer Taxes have been paid. Until surrendered as contemplated by this
Section 2.3
, each Certificate and each Book-Entry Share shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration allocable to such Certificates or Book-Entry
Shares. No dividends or other distributions with respect to Magellan Stock issued in the Merger
A-4
having a record date after the Effective Time and payable to the holders of record thereof after the Effective Time will be paid to Persons entitled by reason of the Merger to receive Magellan
Stock until such Persons surrender their Certificates (or in the case of Book-Entry Shares, upon adherence to the applicable procedures set forth in the letter of transmittal) as provided in this
Section 2.3(b)
. Upon such surrender,
there shall be paid to the Person in whose name the Merger Consideration is issued any dividends or other distributions having a record date after the Effective Time and payable with respect to such Magellan Stock between the Effective Time and the
time of such surrender. After such surrender, at the appropriate payment date, there shall be paid to the Person in whose name the Merger Consideration is issued any dividends or other distributions on such Magellan Stock with a payment date after
such surrender which shall have a record date after the Effective Time. In no event shall the Persons entitled to receive such dividends or other distributions be entitled to receive interest on such dividends or other distributions.
(c)
Further Rights in Tellurian Stock
. All Merger Consideration paid in accordance with the terms hereof shall
be deemed to have been issued in full satisfaction of all rights pertaining to such shares of Tellurian Stock.
(d)
Termination of Stock Exchange Fund
. Any portion of the Stock Merger Exchange Fund (including any interest
received with respect thereto) which remains undistributed to the holders of Tellurian Stock on the day that is six months after the Effective Time shall be delivered to Magellan upon demand, and any holders of Tellurian Stock who have not
theretofore complied with this
ARTICLE II
shall thereafter look only to Magellan (subject to abandoned property, escheat or other similar Laws) for payment of the Merger Consideration, without any interest thereon.
(e)
No Liability
. Neither the Exchange Agent nor any of the Parties shall be liable to any holder of shares of
Tellurian Stock entitled to payment of the Merger Consideration under this
ARTICLE II
for any Merger Consideration (including any interest or cash in lieu of fractional shares) from the Stock Merger Exchange Fund properly delivered to a
public official pursuant to any abandoned property, escheat or similar Law. The Exchange Agent shall not be entitled to vote or exercise any rights of ownership with respect to the Magellan Stock held by it from time to time hereunder, except that
it shall receive and hold all dividends or other distributions paid or distributed with respect to such Magellan Stock for the account of the Persons entitled thereto.
(f)
Lost Certificates
. If any Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed in the form required by the Exchange Agent and, if reasonably required by Magellan, the posting by such Person of a bond, in such reasonable and customary
amount as Magellan may direct, as indemnity against any claim that may be made with respect to such lost, stolen or destroyed Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the applicable Merger
Consideration without any interest thereon.
(g)
Withholding
. Each of Magellan, the Surviving Corporation
and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Tellurian Stock such amounts as Magellan, the Surviving Corporation, or the Exchange Agent are
required to deduct and withhold under the Code, or any applicable provision of state, local or foreign Tax Law, with respect to the making of such payment. To the extent that amounts are so withheld by Magellan, the Surviving Corporation, or the
Exchange Agent and paid over to the applicable Governmental Authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Tellurian Stock in respect of whom such deduction and withholding
was made by Magellan, the Surviving Corporation or the Exchange Agent, as the case may be.
A-5
Section 2.4
Fractional Shares
. If a holder of shares of Tellurian
Stock is entitled to receive any fractional share of Magellan Stock based on application of the Exchange Ratio to the total number of shares of Tellurian Stock held by such holder immediately prior to the Effective Time, such holder will be entitled
to receive, at Tellurians option, either (i) such fractional share or (ii) cash in lieu of such fractional shares based on the closing price of Magellan Stock on Nasdaq on the trading day immediately preceding the Effective Time
multiplied by the Exchange Ratio.
Section 2.5
Stock Transfer Books
. At the Effective Time, the stock
transfer books of Tellurian shall be closed and thereafter there shall be no further registration of transfers of shares of Tellurian Stock outstanding on the records of Tellurian prior to the Effective Time. From and after the Effective Time, the
holders of Certificates and Book-Entry Shares shall cease to have any rights with respect to the shares of Tellurian Stock represented thereby except as otherwise provided herein or by Law. From and after the Effective Time, any Certificates
presented to the Exchange Agent, Magellan or the Surviving Corporation for transfer or any other reason shall be canceled and exchanged for the applicable Merger Consideration as provided in, and in accordance with, this
ARTICLE II
.
ARTICLE III
Representations
and Warranties of Magellan and Merger Sub
Except as disclosed in (i) the disclosure letter delivered by Magellan to Tellurian
(the
Magellan Disclosure Schedule
) prior to the execution of this Agreement (
provided
that disclosure in any section of the Magellan Disclosure Schedule shall be deemed to be disclosure with respect to any other Section of
this Agreement to the extent that it is reasonably apparent on the face of such disclosure that it is applicable to such other Section notwithstanding the omission of a reference or cross-reference thereto) and (ii) the SEC Filings (excluding
any disclosure set forth in any risk factor section, any disclosure in any section relating to forward-looking statements or any other statements that are predictive or primarily cautionary in nature other than, in each of the foregoing, any
historical facts included therein), Magellan represents and warrants to Tellurian that:
Section
3.1
Organization.
Magellan is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Magellan has full corporate power and authority to own, lease and operate its
properties and to carry on its business as presently conducted. Magellan is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which the conduct or nature of its business or the ownership, leasing,
holding or operating of its properties makes such qualification necessary, except such jurisdictions where the failure to be so qualified or in good standing, individually or in the aggregate, would not have a Material Adverse Effect on Magellan.
Magellan has made available to Tellurian accurate and complete copies of all Magellan Organizational Documents and the organizational documents of each Subsidiary of Magellan.
Section 3.2
Capitalization
.
(a) The authorized capital stock of Magellan consists of 300,000,000 shares of Magellan Stock and 50,000,000 shares of
preferred stock, par value $0.01 per share. All of the outstanding shares of Magellan Stock have been duly authorized and validly issued in accordance with the Certificate of Incorporation and are fully paid and non-assessable, and have been issued
in compliance with all applicable Laws and are not subject to any pre-emptive rights. As of the date hereof, there are 5,879,610 issued and outstanding shares of Magellan Stock and no preferred stock or other Securities issued or outstanding of
Magellan other than Magellan Stock. No bonds, debentures,
A-6
notes or other instruments or evidence of indebtedness having the right to vote (or convertible into, or exercisable or exchangeable for, securities having the right to vote) on any matters on
which the Magellan Stockholders may vote are issued or outstanding. As of August 2, 2016, there are issued and outstanding, unexercised options for the purchase of shares of 726,973 shares of Magellan Stock, issued pursuant to the Magellan 1998
Stock Incentive Plan or 2012 Omnibus Incentive Compensation Plan and associated award agreements. At Closing, any outstanding options held by Magellan employees, officers and directors shall be exercisable for such period of time as provided in the
award agreement and the Magellan 1998 Stock Incentive Plan or 2012 Omnibus Incentive Compensation Plan. At Closing, any and all contractual or similar obligations payable to Magellan directors from Magellan or its Affiliates, or otherwise owing to
such Magellan directors as a result of their past, present and future services as Magellan directors, shall have been released, save and except for: (i) 100,000 shares of Magellan Stock, which shall be issued to and divided among the Magellan
directors as of Closing and (ii) the total sum of $150,000, to be divided among the Magellan directors and payable in cash at Closing;
provided, however,
that such release shall not affect any right to indemnification and insurance as
provided in
Section 5.8
.
(b) Subject to receipt of the Magellan Stockholder Approval, the Magellan Shares
to be issued pursuant to this Agreement will be duly authorized and when issued and delivered pursuant to this Agreement in accordance with the terms hereof, will be validly issued, fully paid and non-assessable.
(c) There are no preemptive rights to purchase any shares of Magellan Stock or Securities of any Subsidiary of
Magellan. Except for the Magellan Shares to be issued pursuant to this Agreement or as set forth in
Section 3.2(c)
of the Magellan Disclosure Schedule, there are no outstanding options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of Magellan Stock or other Securities of Magellan or any Subsidiary of Magellan.
(d) Except as set forth in
Section 3.2(d)
of the Magellan Disclosure Schedule, Magellan does not own, directly
or indirectly, any capital stock, membership, interest, partnership interest, joint venture interest or other interest in any Person.
Section 3.3
Authority.
Subject to the receipt of the Magellan Stockholder Approval and assuming the accuracy of
the representations set forth in Section 4.24, (i) each of Magellan and Merger Sub has the full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; (ii) the execution,
delivery and performance by Magellan and Merger Sub of this Agreement, and the consummation by them of the transactions contemplated hereby, have been duly authorized, and no other corporate proceedings on the part of Magellan or Merger Sub are
necessary to authorize the execution, delivery and performance by Magellan and Merger Sub of this Agreement and the consummation of the transactions contemplated hereby; and (iii) this Agreement has been duly executed and delivered by Magellan
and Merger Sub and, assuming the due authorization, execution and delivery of the other Parties, constitutes, and each other agreement, instrument or document executed or to be executed by Magellan in connection with the transactions contemplated
hereby has been, or when executed will be, duly executed and delivered by Magellan and Merger Sub and, assuming the due authorization, execution and delivery of the other Parties, constitutes, or when executed and delivered will constitute, a valid
and legally binding obligation of Magellan and Merger Sub enforceable against Magellan and Merger Sub in accordance with their respective terms, except that such enforceability may be limited by (A) applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting creditors rights
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generally and (B) equitable principles that may limit the availability of certain equitable remedies (such as specific performance) in certain instances (collectively, Creditor
Rights). The Magellan Board, at a meeting duly called and held, has duly and unanimously adopted resolutions (A) approving this Agreement and the transactions contemplated hereby, (B) declaring this Agreement and the
transactions contemplated hereby advisable and (C) recommending that the Magellan Stockholders adopt this Agreement. As of the date of this Agreement, such resolutions have not been amended or withdrawn.
Section 3.4
Non-Contravention.
Except for the receipt of the Magellan Stockholder Approval and as otherwise
indicated in Section 3.4 of the Magellan Disclosure Schedule, the execution, delivery and performance by Magellan and Merger Sub of this Agreement and the consummation by Magellan and Merger Sub of the transactions contemplated hereby do not and
will not (i) conflict with or result in a violation of any provision of the Magellan Organizational Documents or the organizational documents of any Subsidiary of Magellan, (ii) materially conflict with or result in a material violation of
any provision of, or constitute (with or without the giving of notice or the passage of time or both) a material default under, or give rise (with or without the giving of notice or the passage of time or both) to any right of termination,
cancellation or acceleration under, any bond, debenture, note, mortgage, indenture, lease, contract, agreement or other instrument or obligation to which Magellan or any of its Subsidiaries is a party or by which Magellan, any of its Subsidiaries or
any of their properties may be bound, (iii) result in the creation or imposition of any material Encumbrance upon the properties of Magellan or any of its Subsidiaries, except for Permitted Encumbrances and Encumbrances set forth in Section 3.4
of the Magellan Disclosure Schedule or (iv) assuming compliance with the matters referred to in Section 3.6, violate, in any material respect, any applicable Law binding upon Magellan or any of its Subsidiaries.
Section 3.5
Subsidiaries.
Section 3.5
of the Magellan Disclosure Schedule sets forth a true and complete
list of each of Magellans Subsidiaries and each such Subsidiarys jurisdiction of incorporation or organization. Each Subsidiary of Magellan is an entity duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization to the extent such jurisdiction recognizes such concept, and has all requisite organizational power and authority and governmental authorizations necessary to own, operate, lease and otherwise hold its assets and to
carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each other jurisdiction specified in Section 3.5 of the Magellan Disclosure Schedule. Magellan, directly or (to the extent specified in Section
3.5 of the Magellan Disclosure Schedule) indirectly, owns 100% of the Securities of each Subsidiary of Magellan, free and clear of all Encumbrances.
Section 3.6
Governmental Approvals.
No material consent, approval, Order or authorization of, or declaration,
filing or registration with, any Governmental Authority is required to be obtained or made by Magellan or any Magellan Subsidiary in connection with the execution, delivery or performance by Magellan of this Agreement or the consummation by it of
the transactions contemplated hereby, other than (i) compliance with any applicable federal or state securities or takeover Laws, including the filing of a proxy statement with the SEC in connection with the Merger and Registration Statement
(the
Proxy/Prospectus
), as well as the filing of such other forms, notices and other documents as are required under federal securities and state blue sky Laws, (ii) the filing of the Certificate of Merger with the Office of
the Secretary of State of the State of Delaware and (iii) filings with Nasdaq.
Section 3.7
Financial
Statements.
Each of the financial statements (including any related notes thereto) contained in the SEC Filings (the
Magellan Financial Statements
) (i) complied as to
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form in all material respects with the published rules and regulations of the SEC with respect thereto as of their respective dates; (ii) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in the notes thereto and, in the case of unaudited interim financial statements, as may be permitted by the SEC for Quarterly Reports on Form 10-Q); and (iii) fairly
presented in all material respects the financial position of Magellan at the dates thereof and the results of Magellans operations and cash flows for the periods indicated therein, subject, in the case of unaudited interim financial
statements, to normal and year-end audit adjustments as permitted by GAAP and the applicable rules and regulations of the SEC.
Section
3.8
Absence of Undisclosed Liabilities.
Neither Magellan nor any of its Subsidiaries has any material liability or obligation of any nature (whether accrued, absolute, contingent, unliquidated or otherwise) that would
be required to be set forth on a balance sheet of Magellan prepared in accordance with GAAP, except (i) liabilities reflected in the latest unaudited interim financial statements of Magellan filed with the SEC on Form 10-Q for the quarter ended
March 31, 2016 (the
Magellan Interim Financial Statements
), (ii) liabilities which have arisen since the date of the Magellan Interim Financial Statements in the ordinary course of business (none of which is a material
liability for breach of contract, tort or infringement), (iii) liabilities arising under executory provisions of contracts entered into in the ordinary course of business (none of which is a material liability for breach of contract) and
(iv) liabilities disclosed in
Section 3.8
of the Magellan Disclosure Schedule. At the Effective Time, neither Magellan nor any of its Subsidiaries will have any short-term or long-term debt for borrowed money outstanding, except as
disclosed in
Section 3.8
of the Magellan Disclosure Schedule.
Section 3.9
Absence of Certain
Changes.
Except as disclosed in
Section 3.9
of the Magellan Disclosure Schedule, since the date of the Magellan Interim Financial Statements, (i) there has not been any change, event or condition that would reasonably be expected to
result in any Material Adverse Effect on Magellan or any of its Subsidiaries, (ii) the business of Magellan and its Subsidiaries has been conducted only in the ordinary course consistent with past practice, (iii) Magellan has not incurred
any material liability, engaged in any material transaction or entered into any material agreement outside the ordinary course of business consistent with past practice with respect to its business and assets, (iv) Magellan has not suffered any
Loss, damage, destruction or other casualty to any of its assets (whether or not covered by insurance) that would result in a Material Adverse Effect on Magellan, and (v) there has been no event, condition, action or effect that, if taken
during the period of time from the date of this Agreement through the Closing Date, would constitute a breach of
Section 5.2.
Section 3.10
Title to Properties; Encumbrances.
Section 3.10
of the Magellan Disclosure Schedule contains
a complete and accurate list of all material real property, leaseholds, or other interests therein owned by Magellan and any of its Subsidiaries. Magellan and any of its Subsidiaries own (with good and marketable title in the case of real property,
subject only to the matters permitted by the following sentence) all the properties and assets (whether real, personal, or mixed and whether tangible or intangible) that they purport to own located in the facilities owned or operated by Magellan and
any of its Subsidiaries or reflected as owned in the books and records of Magellan and any of its Subsidiaries, including all of the properties and assets reflected in the Magellan Balance Sheet and the Magellan Interim Balance Sheet (except for
assets held under capitalized leases disclosed or not required to be disclosed in
Section 3.10
of the Magellan Disclosure Schedule and personal property sold or otherwise disposed of since the date of the Magellan Balance Sheet and the
Magellan Interim Balance Sheet, as the case may be, in the ordinary course of business), and all of the properties and assets purchased or otherwise acquired by Magellan and any of its Subsidiaries since the date of the
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Magellan Balance Sheet (except for personal property acquired and sold since the date of the Magellan Balance Sheet in the ordinary course of business and consistent with past practice). All
material properties and assets reflected in the Magellan Balance Sheet and the Magellan Interim Balance Sheet are free and clear of all material Encumbrances and are not, in the case of real property, subject to any rights of way, building use
restrictions, exceptions, variances, reservations, or limitations of any nature except, with respect to all such properties and assets, (a) mortgages or security interests shown on the Magellan Balance Sheet or the Magellan Interim Balance
Sheet as securing specified liabilities or obligations, with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (b) mortgages or security interests incurred in connection with
the purchase of property or assets after the date of the Magellan Interim Balance Sheet (such mortgages and security interests being limited to the property or assets so acquired), with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists, (c) liens for current Taxes not yet due, and (d) with respect to real property, (i) minor imperfections of title, if any, none of which is substantial in amount, materially
detracts from the value or impairs the use of the property subject thereto, or impairs the operations of Magellan or any of its Subsidiaries, and (ii) zoning Laws and other land use restrictions that do not impair the present or anticipated use
of the property subject thereto. All buildings, plants, and structures owned by Magellan and any of its Subsidiaries lie wholly within the boundaries of the real property owned by Magellan and any of its Subsidiaries and do not encroach upon the
property of, or otherwise conflict with the property rights of, any other Person.
Section 3.11
Compliance with
Laws.
Except as disclosed in
Section 3.11
of the Magellan Disclosure Schedule, Magellan and its Subsidiaries have complied in all material respects with all applicable Laws, except Applicable Environmental Laws which are specifically
addressed in
Section 3.16
, relating to any aspect of the business of Magellan and its Subsidiaries. Except as disclosed in
Section 3.11
of the Magellan Disclosure Schedule, neither Magellan nor its Subsidiaries has received any written
notice from any Governmental Authority relating to any aspect of the business of Magellan or its Subsidiaries or alleging that Magellan or any of its Subsidiaries is not in compliance with or is in default or violation of any applicable Law, in each
case that would be material to Magellan. Magellan and its Subsidiaries have not been charged or, to the Knowledge of Magellan, threatened with, or under investigation with respect to, any material violation of any applicable Law relating to any
aspect of the business of Magellan or its Subsidiaries.
Section 3.12
Tax Matters.
(a) All material Tax Returns of Magellan and its Subsidiaries have been timely filed (taking into account applicable
extensions of time to file) with the appropriate Taxing Authority and all such Tax Returns are true, correct and complete in all material respects. All material Taxes due and owing by Magellan and its Subsidiaries have been paid and all such Taxes
incurred but not yet due and owing have either been paid or properly accrued on the books and records of Magellan in accordance with U.S. generally accepted accounting principles and on the books and records of its Subsidiaries in accordance with
generally accepted accounting principles in effect in the domicile of each Subsidiary.
(b) All material Taxes
required to be withheld or collected by Magellan and its Subsidiaries with respect to any employee, independent contractor, purchaser or other third party have been withheld or collected, and have been timely paid to the appropriate Taxing Authority
or properly accrued.
(c) There are no waivers or extensions of any statute of limitations currently in effect
with respect to Taxes of Magellan or any of its Subsidiaries. There are no actions, examinations or
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audits currently pending or, to Magellans Knowledge, threatened with respect to Magellan or any of its Subsidiaries in respect of any Tax. No issue has been raised by a Taxing Authority in
any prior action or examination of Magellan or any of its Subsidiaries which, by application of the same or similar principles, could reasonably be expected to result in a proposed deficiency for any subsequent taxable period. No claim has been made
in writing by any Governmental Authority in a jurisdiction where Magellan or any of its Subsidiaries does not file Tax Returns that Magellan or any of its Subsidiaries is, or may be, subject to taxation by that jurisdiction.
(d) There are no Encumbrances for Taxes on any of the assets of Magellan or any of its Subsidiaries. There are no
Encumbrances for Taxes, other than Encumbrances with respect to current period Taxes not yet due or payable, on any of the assets of Magellan or any of its Subsidiaries.
(e) None of Magellan or any of its Subsidiaries is a party to, or subject to, any Tax sharing or similar agreement,
Tax indemnity obligation or similar agreement, or other agreement or arrangement (whether or not written) with respect to Taxes that could affect the Tax liability of Magellan or any of its Subsidiaries. Magellan and its Subsidiaries have no
liability for Taxes of any other Person under Treasury Regulations Section 1.1502-6 (or similar provision of state, local or non-U.S. law) as a transferee or successor, by contract or otherwise.
(f) None of Magellan or any of its Subsidiaries is or has ever been a member of a group of corporations with which it
has filed (or been required to file) consolidated, combined or unitary Tax Returns.
(g) None of Magellan or any
of its Subsidiaries have participated in any listed transaction within the meaning of Treasury Regulations Section 1.6011-4(b). Neither Magellan nor Merger Sub knows of any fact or has taken or failed to take any action that
would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code. No state, federal or foreign net operating loss of Magellan or any of its Subsidiaries
determined as of the Effective Time is subject to limitation on its use pursuant to Section 382 of the Code or comparable provisions of state or foreign Law as a result of any ownership change within the meaning of
Section 382(g) of the Code or comparable provisions of any state or foreign Law occurring prior to the Effective Time.
Section
3.13
Legal Proceedings.
Except as set forth in
Section 3.13
of the Magellan Disclosure Schedule, there are no Proceedings pending or, to the Knowledge of Magellan, threatened against or involving Magellan, any of
its Subsidiaries or any of their respective properties or assets;
provided
,
however
, that Proceedings that are or will be covered by insurance in full (save and except any applicable deductibles), and where the amount claimed is within
policy limits, need not be listed on
Section 3.13
of the Magellan Disclosure Schedule.
Section
3.14
Brokerage Fees.
Neither Magellan nor any Affiliate has retained any financial advisor, broker, agent or finder or paid or agreed to pay any financial advisor, broker, agent or finder on account of this Agreement,
any transaction contemplated hereby or any other transaction, except as disclosed in
Section 3.14
of the Magellan Disclosure Schedule, which fee set forth on
Section 3.14
of the Magellan Disclosure Schedule shall be paid by Magellan on
or prior to the Effective Time.
Section 3.15
Permits.
Except with respect to Permits pertaining to
environmental matters covered by
Section 3.16
below,
Section 3.15
of the Magellan Disclosure Schedule sets forth a list of all material Permits necessary or required for the conduct of the business of Magellan and its Subsidiaries as
currently conducted. Each such Permit is in full force and effect in all material respects, and
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Magellan is in material compliance with its Permits. Neither Magellan nor its Subsidiaries have received any written notice from any Governmental Authority, and no Proceeding is pending or, to
the Knowledge of Magellan, threatened, with respect to any alleged failure by Magellan or its Subsidiaries to have any material Permit.
Section 3.16
Environmental Matters.
Except as disclosed in
Section 3.16
of the Magellan Disclosure
Schedule, (i) Magellan and its assets, real properties and operations are in compliance in all material respects with all applicable Laws pertaining to the environment, Hazardous Substances or Hazardous Wastes (
Applicable Environmental
Laws
), including but not limited to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (
CERCLA
), and the Resource Conservation and Recovery Act of 1976, as amended
(
RCRA
); (ii) Magellan has obtained all material environmental Permits required under Applicable Environmental Laws to operate the business of Magellan as currently operated; (iii) Magellan has not received any written
notice of any investigation or inquiry regarding the properties of Magellan from any Governmental Authority under any Applicable Environmental Law, and (iv) there are no Proceedings, Orders, decrees, writs, injunctions or judgments pending or
in effect, or, to the Knowledge of Magellan, threatened by a Governmental Authority or other third party against Magellan that allege a violation of or liability under any Applicable Environmental Law that remain pending or unresolved, and, to the
Knowledge of Magellan, there are no existing facts or circumstances that would reasonably be expected to give rise to any such Proceedings, Orders, decrees, writs, injunctions or judgments that would reasonably be expected to result in a Material
Adverse Effect on Magellan. Except as disclosed in
Section 3.16
of the Magellan Disclosure Schedule, to the Knowledge of Magellan, the properties of Magellan have not been used for Disposal of any Hazardous Substance such that such property
would be subject to any material remedial obligations under any Applicable Environmental Laws, and to the Knowledge of Magellan, no condition otherwise exists on any of the properties of Magellan such that such property would be subject to any
material remedial obligations under any Applicable Environmental Laws. The term
Hazardous Substance
as used herein shall have the meaning specified in CERCLA, and the terms
Hazardous Waste
and
Disposal
shall have the meanings specified in RCRA. All references to Magellan in this
Section 3.16
shall be deemed to include the Magellan Subsidiaries.
Section 3.17
Insurance.
Section 3.17
of the Magellan Disclosure Schedule contains a complete and correct
list of material insurance policies, as of the date of this Agreement, maintained by or on behalf of Magellan and its Subsidiaries.
Section 3.18
Employees.
Except as set forth in
Section 3.18
of the Magellan Disclosure Schedule, neither
Magellan nor any of its Subsidiaries are a party to, or bound by, any collective bargaining or other agreement with a labor organization. Except as set forth in Section 3.18 of the Magellan Disclosure Schedule, Magellan and its Subsidiaries are in
compliance in all material respects with all applicable Laws pertaining to employment and employment practices. There is no pending or, to the Knowledge of Magellan, threatened Proceeding against or involving Magellan or any of its Subsidiaries by
or before, and neither Magellan nor any of its Subsidiaries is subject to any judgment, Order, writ, injunction, or decree of or inquiry from, any Governmental Authority in connection with any former employee of Magellan or any of its Subsidiaries.
Section 3.18 of the Magellan Disclosure Schedule lists all employees of Magellan and its Subsidiaries as of the date hereof.
Section
3.19
Agreements, Contracts and Commitments.
(a)
Section 3.19
of the Magellan
Disclosure Schedule lists all Material Contracts of Magellan of Magellan and its Subsidiaries. Except as set forth in
Section 3.19
of the Magellan
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Disclosure Schedule and as contemplated hereby, Magellan is not a party to, as of the date hereof, (i) any collective bargaining agreements or any agreements that contain any severance pay
liabilities or obligations, (ii) any Employee Benefit Plans, (iii) any employment agreement, contract or commitment with an employee, or agreements to pay severance, (iv) any agreements between or among Magellan or one of its
Affiliates or with any Related Person of Magellan (other than agreements solely between or among Magellan and its wholly-owned Subsidiaries), (v) any agreement, indenture or other instrument for borrowed money and any agreement or other
instrument which contains restrictions with respect to payment of distributions in respect of Magellan Stock or any other outstanding Securities, (vi) any agreement, contract or commitment containing any covenant limiting the freedom of
Magellan to engage or compete in any line of business or with any Person or in any geographic area during any period of time, (vii) any agreement, contract or commitment relating to capital expenditures in excess of $50,000, (viii) any
agreement, contract or commitment relating to the acquisition, disposition or voting of assets or capital stock of any business enterprise, including Magellan and any of its Subsidiaries, (ix) any contract that requires Magellan to purchase its
total requirements of any product or service from a third party or that contains take or pay provisions or that contains calls on, or options to purchase, material quantities of Production, (x) any contract that provides for the
indemnification by Magellan of any Person or the assumption of any Tax, environmental or other liability of any Person, (xi) any broker, distributor, dealer, manufacturers representative, franchise, agency, sales promotion, market
research, marketing consulting and advertising contract to which Magellan is a party, (xii) except for contracts relating to trade receivables, any contract relating to indebtedness (including guarantees) of Magellan, (xiii) any contract
with any Governmental Authority to which Magellan is a party, (xiv) any contract to which Magellan is a party that provides for any joint venture, partnership or similar arrangement by Magellan, (xv) any agreement to sell, lease, farmout,
exchange or otherwise dispose of all or any part of the properties of Magellan from and after the Closing Date, but excluding rights of reassignment upon intent to abandon any asset included in the properties of Magellan and excluding sales, in the
ordinary course of Magellans business, of any obsolete inventory and equipment or Hydrocarbons, (xvi) any tax partnership agreement, (xvii) any agreement that constitutes a joint operating agreement, unit operating agreement,
unitization or pooling agreement, participation agreement, exploration agreement, development agreement, partnership agreement, joint venture agreement or similar agreement, (xviii) any agreement that provides for an irrevocable power of
attorney that will be in effect after the Closing Date or (xix) any agreement that constitutes a lease of real property. Magellan has made available to Tellurian accurate and complete copies of all written Material Contracts, including all
amendments thereto. All references to Magellan in this
Section 3.19
shall be deemed to include the Magellan Subsidiaries.
(b) Except as set forth in
Section 3.19
of the Magellan Disclosure Schedule, Magellan has not materially
breached any of the terms or conditions of any lease, contract, agreement, commitment, instrument or understanding (whether written or oral) set forth or required to be set forth in
Section 3.19
of the Magellan Disclosure Schedule. There is
not, under any Material Contract, any default or event which, with notice or lapse of time or both, would constitute a default on the part of any of the parties thereto, or any notice of termination, cancellation or material modification.
(c) Except to the extent the enforceability thereof may be limited by Creditor Rights, each of the Material Contracts
(i) constitutes the valid and binding obligation of Magellan or its Subsidiaries and constitutes the valid and binding obligation of the other parties thereto, (ii) is in full force and effect and (iii) immediately after the
consummation of the Merger, will continue to constitute a valid and binding obligation of Magellan or its Subsidiaries.
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Section 3.2
Benefit Plans.
(a)
Section 3.20
of the Magellan Disclosure Schedule sets forth a complete and accurate list of all Employee
Benefit Plans (i) that Magellan or its Subsidiaries or ERISA Affiliates sponsors or maintains with respect to its current or former employees, managers, directors of other service providers, (ii) to which Magellan or its Subsidiaries or
ERISA Affiliates contributes or has an obligation to contribute with respect to its current or former employees, managers, directors or other service providers, or (iii) with respect to which Magellan or its Subsidiaries or ERISA Affiliates may
otherwise have any liability, whether direct or indirect (including any such plan or other arrangement previously maintained by Magellan or its Subsidiaries) (each a
Magellan Benefit Plan
and collectively referred to as the
Magellan Benefit Plans
).
(b) With respect to each Magellan Benefit Plan, true, correct and
complete copies of the following documents, to the extent applicable, have been provided or made available to Tellurian: (i) all plans and related trust documents, and amendments thereto, and all funding arrangements and insurance contracts now
in effect; (ii) the two (2) most recent Forms 5500; (iii) the most recent IRS determination, advisory or opinion letter, if any; (iv) the two (2) most recent summary plan descriptions; (v) the most recent summaries
of material modifications; (vi) the two (2) most recent summary annual reports; (vii) nondiscrimination, coverage and any other applicable testing performed with respect to the two (2) most recent years, if any; (viii) the
two (2) most recent participant and fiduciary fee disclosure notices; (ix) the two (2) most recent summaries of benefits and coverage; (x) the most recent service agreements related to the plans administration; and
(xi) written descriptions of all non-written agreements relating to the Magellan Benefit Plans.
(c) No
Magellan Benefit Plan is a defined benefit plan within the meaning of Section 3(35) of ERISA, a multiemployer plan, as defined in Section 3(37) of ERISA, or a plan that is subject to the minimum funding standards of
Section 302 of ERISA or Section 412 of the Code, nor has either Magellan or any of its ERISA Affiliates ever sponsored, maintained, contributed to or been obligated to contribute to any such plan.
(d) There have been no prohibited transactions (described under Section 406 of ERISA or Section 4975(c) of
the Code) or breaches of fiduciary duty or any other breaches or violations of any Law applicable to any of the Magellan Benefit Plans, in any such case that would subject Magellan or its Subsidiaries or ERISA Affiliates to any material Taxes,
penalties or other liabilities. There are no investigations or audits of any Magellan Benefit Plan by any Governmental Authority currently pending and there have been no such investigations or audits that have been concluded that resulted in any
liability to Magellan, its Subsidiaries or its ERISA Affiliates that has not been fully discharged, and no Magellan Benefit Plan, or within the six (6) years prior to the Closing Date, has been is a participant in any amnesty, voluntary
compliance or similar program sponsored by any Governmental Authority.
(e) Each Magellan Benefit Plan has been
operated, in all material respects, in compliance with applicable Law and in accordance with its terms, and all reports, descriptions and filings required by the Code, ERISA or any government agency with respect to each Magellan Benefit Plan have,
in all material respects, been timely and completely filed or distributed. Magellan or its Subsidiaries have, in all material respects, timely made all contributions and other payments required by and due under the terms of each Magellan Benefit
Plan and applicable Law, including ERISA, and all benefits accrued under any unfunded Magellan Benefit Plan have been paid, accrued or otherwise adequately reserved to the extent required by, and in accordance with, GAAP.
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(f) Each Magellan Benefit Plan that is represented to be qualified under
Section 401(a) of the Code has a current favorable determination letter or is the adopter of a volume submitter or prototype document that has received a favorable advisory or opinion letter from the IRS, all subsequent interim amendments have
been made in a timely manner, and no such Magellan Benefit Plan has been amended or operated in a way that could reasonably be expected to adversely affect its qualified status or the tax-exempt status of its related trust. No Magellan Benefit Plan
that is represented to be qualified under Section 401(a) of the Code has been terminated or partially terminated during the preceding six (6) years, nor has Magellan discontinued contributions to any such plan, without notice to and approval by
the IRS, to the extent such notice to and approval by the IRS is required by applicable Law.
(g) There are no
pending Claims relating to any Magellan Benefit Plan (other than ordinary claims for benefits) and none are threatened.
(h) No Magellan Benefit Plan provides post-termination or retiree medical or retiree life insurance benefits to any
person for any reason, except as required under Section 4980B of the Code and subsequent guidance, and neither Magellan nor any of its Subsidiaries or ERISA Affiliates has any liability to provide post-termination or retiree medical or retiree
life insurance benefits to any person or, to Magellans Knowledge, ever represented, promised or contracted to any person (either individually or as part of a group) that any such person would be provided with such post-termination benefits,
except to the extent required under Section 4980B of the Code and subsequent guidance. Each Magellan Benefit Plan that is a group health plan within the meaning of Section 5000(b)(1) of the Code or similar state Law, is currently in
compliance with and has always complied with the applicable continuation requirements of Section 4980B of the Code (as well as its predecessor provision, Section 162(k) of the Code) and Section 601 through 608, inclusive, of ERISA or
similar state applicable Law, in each case in all material respects.
(i) Magellan and its Subsidiaries and its
ERISA Affiliates have not established or maintained, nor have any liability with respect to, any deferred compensation plan, program, or arrangement (including any nonqualified deferred compensation plan) that is not in compliance with
the applicable provisions of Section 409A of the Code and all applicable regulatory guidance (including, without limitation, proposed regulations, notices, rulings, and final regulations).
(j) Each Magellan Benefit Plan is amendable and terminable unilaterally by Magellan or its Subsidiaries or ERISA
Affiliates at any time without liability or expense (other than for benefits accrued through the date of termination or amendment and reasonable administrative expenses related thereto). The investment vehicles used to fund any Magellan Benefit
Plan may be changed at any time without incurring a sales charge, surrender fee or similar expense.
(k) Except as
set forth on
Section 3.20
of the Magellan Disclosure Schedule, neither the execution of this Agreement, the consummation of the Merger nor any of the transactions contemplated by this Agreement will (either alone or upon the occurrence of any
additional or subsequent events) (i) entitle any current or former director, employee, contractor or consultant of Magellan or any of its Subsidiaries or ERISA Affiliates to severance pay or any other payment; (ii) accelerate the time of
payment, funding, or vesting, or increase the amount of compensation due to any such individual, (iii) limit or restrict the right of Magellan or any of its Subsidiaries or ERISA Affiliates to merge, amend or terminate any Magellan Benefit
Plan, (iv) increase the amount payable or result in any other material obligation pursuant to any Magellan Benefit Plan, or (v) result in excess parachute payments within the meaning of Section 280G(b) of the Code.
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Section 3.21
Hedging.
Magellan and its Subsidiaries are not engaged
in any commodity or foreign exchange futures, option, hedging or derivatives transactions or arrangements in respect of which it has any future liability, nor is it a party to any price swaps, hedges, futures or similar instruments. Magellan and its
Subsidiaries are not bound by futures, hedge, swap, collar, put, call, floor, cap, option or other contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including
Hydrocarbons, securities or currencies.
Section 3.22
Regulatory Agencies.
Except as set forth in
Section
3.22
of the Magellan Disclosure Schedule, all filings heretofore made by Magellan and its Subsidiaries with all federal, state and local agencies or commissions were made in compliance with applicable Laws and the factual information contained
therein was true and correct, in each case in all material respects as of the respective dates of such filings. The right of Magellan and its Subsidiaries to receive payment pursuant to any tariff, rate schedule or similar instrument filed with or
subject to the jurisdiction of any Governmental Authority has not been suspended, and neither Magellan nor its Subsidiaries has received written notification questioning the validity of any such tariff, rate schedule or similar instrument that is
material to the operations of the properties of Magellan, taken as a whole, from any Governmental Authority or customer.
Section
3.23
Intellectual Property.
Magellan owns or has the right to use pursuant to a license, sublicense, agreement or otherwise all material patents, trademarks, copyrights, trade secrets, know-how and other items of
intellectual property (collectively, Intellectual Property) required in the operation of its business as presently conducted or planned to be conducted. No third party has asserted in writing delivered to Magellan or its Subsidiaries an
unresolved claim that Magellan or its Subsidiaries are infringing on the Intellectual Property of such third party, and to the Knowledge of Magellan, no third party is infringing on the Intellectual Property owned by Magellan or its Subsidiaries.
Section 3.24
SEC Filings.
Since July 1, 2012, Magellan has filed with or furnished to the SEC all SEC
Filings required to be filed or furnished under the Exchange Act or the Securities Act. At the time filed or furnished (or, in the case of registration statements, solely on the dates of effectiveness) (except to the extent amended by a subsequently
filed SEC Filing prior to the date hereof, in which case as of the date of such amendment), each SEC Filing as of the date filed (i) complied (or to the extent filed after the date hereof and prior to the Closing Date, will comply) in all
material respects with the applicable requirements of the Exchange Act and the Securities Act (as the case may be) and the Sarbanes-Oxley Act, and any rules and regulations promulgated thereunder applicable to the SEC Filing and (ii) did not
contain (or to the extent filed after the date hereof and prior to the Closing Date, will not 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 made, in light of the circumstances under which they were made, not misleading. As of the date hereof, there are no outstanding written comments from the SEC with respect to any SEC Filings.
Section 3.25
Certain Business Practices.
(a) To the Knowledge of Magellan, neither Magellan nor any Subsidiary has since January 1, 2010, directly or
indirectly, (i) made or authorized any contribution, payment or gift of funds or property to any official, employee or agent of any Governmental Authority of any jurisdiction or (ii) made any contribution to any candidate for public
office, in either case, where either the payment or the purpose of such contribution, payment or gift was, is or would be prohibited under any applicable Anti-Corruption Laws (as defined below) of any relevant jurisdiction covering a similar subject
matter as in effect on or prior to the Effective Time applicable to Magellan and the Subsidiaries
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and their respective operations, except as would not constitute a Material Adverse Effect. Magellan has instituted and maintained policies and procedures designed to ensure compliance with such
Laws.
(b) To the Knowledge of Magellan and except as would not constitute a Material Adverse Effect, none of
Magellan, any Subsidiary or any Affiliate of Magellan, nor any of their respective directors, officers, employees, agents or other Representatives, or anyone acting on behalf of Magellan or its Subsidiaries, is aware of or has taken, since
January 1, 2010, any action, directly or indirectly, that would result in a violation of: the FCPA; the Bribery Act; or any analogous anticorruption Laws applicable to Magellan, the Subsidiaries or Affiliates of Magellan, as applicable
(collectively,
Anti-Corruption Laws
), including, without limitation, offering, paying, promising to pay or authorizing the payment of money or anything of value to a foreign governmental official or any other Person while knowing
or having a reasonable belief that all or some portion of it would be given to a foreign governmental official and used for the purpose of (A) influencing any act or decision of a foreign governmental official or other Person, including a
decision to fail to perform official functions, (B) inducing any foreign governmental official or other Person to do or omit to do any act in violation of the lawful duty of such official, (C) securing any improper advantage, or
(D) inducing any foreign governmental official to use influence with any Governmental Authority in order to affect any act or decision of such Governmental Authority, in order to assist Magellan, any Subsidiary or any Affiliate of Magellan in
obtaining or retaining business with, or directing business to, any Person, in each case, in violation of any applicable Anti-Corruption Laws.
(c) No proceeding by or before any Governmental Authority involving Magellan, any Subsidiary or any Affiliate of
Magellan, or any of their directors, officers, employees, or agents, or anyone acting on behalf of Magellan or its Subsidiaries, with respect to any applicable Anti-Corruption Laws is pending or, to the Knowledge of Magellan, threatened. Since
January 1, 2010, no civil or criminal penalties have been imposed on Magellan, any Subsidiary or any Affiliate of Magellan with respect to violations of any applicable Anti-Corruption Law, except as have already been disclosed in the SEC
Filings, nor have any disclosures been submitted to any Governmental Authority with respect to violations of the FCPA, the Bribery Act or any other applicable Anti-Corruption Laws.
(d) Except as would not constitute a Material Adverse Effect, the operations of Magellan and the Subsidiaries are and
have been, since January 1, 2010, conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes
of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority (collectively, the
Money Laundering Laws
) and
no action, suit or proceeding by or before any Governmental Authority or any arbitrator involving Magellan or any Subsidiary with respect to the Money Laundering Laws is pending or, to the Knowledge of Magellan, threatened.
Section 3.26
Information Provided.
None of the information supplied or to be supplied by Magellan for inclusion
or incorporation by reference in (a) the Magellan registration statement on Form S-4 (the
Registration Statement
) will, at the time the Registration Statement is filed with the SEC and at the time it becomes effective
under the Securities Act, and (b) the Proxy/Prospectus will, at the date the Proxy/Prospectus is mailed to the Magellan Stockholders or Tellurian Stockholders or at the time of the meeting of the Magellan Stockholders or Tellurian Stockholders
to be held in connection with the Merger, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under
which they are made, not misleading. The portions of the Proxy/Prospectus
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supplied by Magellan will comply as to form in all material respects with the provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder. No representation or
warranty is made by Magellan with respect to statements made or incorporated by reference therein based on information regarding Tellurian incorporated by reference in the Proxy/Prospectus or supplied by Tellurian specifically for inclusion in the
Proxy/Prospectus.
Section 3.27
Magellan Fairness Opinion.
The Magellan Board has received the Magellan
Fairness Opinion as of or prior to the date hereof.
Section 3.28
Magellan Stockholder Approval.
The
Magellan Stockholder Approval is the only vote or approval required of the holders of any class or series of Magellan capital stock that shall be necessary to adopt this Agreement and to consummate the transactions contemplated hereby, including the
Merger.
Section 3.29
No Other Representations or Warranties.
Except for the representations and warranties
contained in this Agreement (as qualified by the Magellan Disclosure Schedule) and the SEC Filings, neither Magellan nor any other Person makes (and Tellurian agrees that it is not relying upon) any other express or implied representation or
warranty with respect to Magellan (including the value, condition or use of any asset) or the transactions contemplated by this Agreement, and Magellan disclaims any other representations or warranties not contained in this Agreement or the SEC
Filings, whether made by Magellan, any Affiliate of Magellan or any of their respective officers, directors, managers, employees or agents. Except for the representations and warranties contained in this Agreement (as qualified by the Magellan
Disclosure Schedule) and the SEC Filings, Magellan disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement or information made, communicated or furnished (orally or in writing) to Tellurian or any
of its Affiliates or any of its officers, directors, managers, employees or agents (including any opinion, information, projection or advice that may have been or may be provided to Tellurian by any director, officer, employee, agent, consultant or
representative of Magellan or any of its Affiliates). The disclosure of any matter or item in the Magellan Disclosure Schedule shall not be deemed to constitute an acknowledgment that any such matter is required to be disclosed or is material
or that such matter would or would reasonably be expected to result in a Material Adverse Effect on Magellan.
ARTICLE IV
Representations and Warranties of Tellurian
Except as disclosed in the disclosure letter delivered by Tellurian to Magellan (the
Tellurian Disclosure Schedule
) prior
to the execution of this Agreement (
provided
that disclosure in any section of the Tellurian Disclosure Schedule shall be deemed to be disclosure with respect to any other Section of this Agreement to the extent that it is reasonably apparent
on the face of such disclosure that it is applicable to such other Section notwithstanding the omission of a reference or cross-reference thereto), Tellurian represents and warrants to Magellan that:
Section 4.1
Organization.
Tellurian is a corporation, duly organized, validly existing and in good standing
under the Laws of the State of Delaware. Tellurian has full corporate power and authority to carry on its business as presently conducted. Tellurian is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction
in which the conduct or nature of its business or the ownership, leasing, holding or operating of its properties makes such qualification necessary, except such jurisdictions where the failure to be so qualified or in good standing, individually or
in the aggregate, would not have a Material Adverse Effect on Tellurian. Tellurian has made available to Magellan accurate and complete copies of all Tellurian Organizational Documents and the organizational documents of each Subsidiary of
Tellurian.
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Section 4.2
Capitalization.
(a) The authorized capital stock of Tellurian consists of 200,000,000 shares of Tellurian Stock, of which 93,631,000
shares are issued and outstanding and no shares are held in treasury as of the date hereof. All of the outstanding shares of Tellurian Stock have been duly authorized, are validly issued, fully paid, and nonassessable, and have been issued in
compliance with all applicable Laws and are not subject to any pre-emptive rights.
(b) There are no preemptive
rights to purchase any Securities of Tellurian or any Tellurian Subsidiary. Except as set forth in
Section 4.2
of the Tellurian Disclosure Schedule, there are no outstanding options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of Tellurian Stock or other Securities of Tellurian or any Subsidiary of Tellurian.
(c) Except as set forth in
Section 4.2
of the Tellurian Disclosure Schedule, Tellurian does not own, directly
or indirectly, any capital stock, membership, interest, partnership interest, joint venture interest or other interest in any Person.
Section 4.3
Authority.
Subject to the receipt of the Tellurian Stockholder Approval, Tellurian has full
corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by Tellurian of this Agreement, and the consummation of the transactions contemplated
hereby, have been duly authorized, and no other corporate proceedings on the part of Tellurian are necessary to authorize the execution, delivery and performance by Tellurian of this Agreement and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Tellurian and, assuming the due authorization, execution and delivery of the other Parties, constitutes, and each other agreement, instrument or document executed or to be executed by
Tellurian in connection with the transactions contemplated hereby has been, or when executed will be, duly executed and delivered by Tellurian and, assuming the due authorization, execution and delivery of the other Parties, constitutes, or when
executed and delivered will constitute, a valid and legally binding obligation of Tellurian enforceable against Tellurian in accordance with their respective terms, except that such enforceability may be limited by Creditor Rights.
Section 4.4
Non-Contravention.
Subject to the receipt of the Tellurian Stockholder Approval, the execution,
delivery and performance by Tellurian of this Agreement and the consummation by it of the transactions contemplated hereby, do not and will not (i) conflict with or result in a violation of any provision of the certificate of incorporation,
bylaws or other governing instruments of Tellurian or any of its Subsidiaries, (ii) conflict with or result in a violation of any provision of, or constitute (with or without the giving of notice or the passage of time or both) a default under,
or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancellation or acceleration under, any bond, debenture, note, mortgage, indenture, lease, contract, agreement or other instrument or
obligation to which Tellurian or any of its Subsidiaries is a party or by which Tellurian or any of its Subsidiaries may be bound, (iii) result in the creation or imposition of any Encumbrance upon any property of Tellurian or any of its
Subsidiaries except for Permitted Encumbrances and Encumbrances set forth in
Section 4.4
of the Tellurian Disclosure Schedule, or (iv) assuming compliance with the matters referred to in
Section 4.6
, violate any applicable Law
binding upon Tellurian or any of its Subsidiaries, except, in the case of clauses (ii), (iii) and (iv) above, for any such conflicts, violations, defaults, terminations, cancellations, accelerations or Encumbrances which would not, individually
or in the aggregate, have a Material Adverse Effect on Tellurian.
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Section 4.5
Subsidiaries. Section 4.5
of the Tellurian Disclosure
Schedule sets forth a true and complete list of each of Tellurians Subsidiaries and each such Subsidiarys jurisdiction of incorporation or organization. Each Subsidiary of Tellurian is an entity duly organized, validly existing and in
good standing under the Laws of its jurisdiction of organization to the extent such jurisdiction recognizes such concept, and has all requisite organizational power and authority and governmental authorizations necessary to own, operate, lease and
otherwise hold its assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each other jurisdiction in which it owns, operates, leases or otherwise holds assets, or conducts any business,
so as to require such qualification, except where the lack of such power, authority, authorization, license or qualification would not, individually or in the aggregate, have a Material Adverse Effect on Tellurian. Tellurian, directly or indirectly,
owns 100% of the Securities of each Subsidiary of Tellurian, free and clear of all Encumbrances.
Section
4.6
Governmental Approvals.
No material consent, approval, Order or authorization of, or declaration, filing or registration with, any Governmental Authority is required to be obtained or made by Tellurian or any
Tellurian Subsidiary in connection with the execution, delivery or performance by it of this Agreement or the consummation by it of the transactions contemplated hereby, other than (a) the filing of the Certificate of Merger with the Office of
the Secretary of State of the State of Delaware, and (b) any such consent, approval, Order, authorization, registration, filing, or permit the failure to obtain or make has not had and would not be reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Tellurian.
Section 4.7
Financial Statements.
Tellurian has
delivered to Magellan the unaudited consolidated balance sheet with assets, liabilities and stockholders equity of Tellurian as of June 30, 2016, and the consolidated statement of operations, consolidated statements of changes in
stockholders equity, and consolidated statements of cash flow for the six (6) months then ended (the
Unaudited Tellurian Financial Statements
. Prior to the Effective Time, Tellurian shall deliver to Magellan the audited
consolidated balance sheet of Tellurian Services, a Delaware limited liability company and the wholly-owned subsidiary of Tellurian, as of December 31, 2015, and the related audited statements of operations, stockholders equity and cash
flows for the year then ended, and the notes and schedules thereto (the
Audited Tellurian Financial Statements
, and together with the Unaudited Tellurian Financial Statements, the
Tellurian Financial
Statements
). The Tellurian Financial Statements (A) shall have been prepared from the books and records of Tellurian in conformity with GAAP applied on a basis consistent with preceding years throughout the periods involved, and
(B) accurately and fairly present in all material respects the consolidated financial position of Tellurian as of the respective dates thereof and its consolidated results of operations and cash flows for the periods then ended.
Section 4.8
Absence of Undisclosed Liabilities.
Neither Tellurian nor any of its Subsidiaries has any material
liability or obligation of any nature (whether accrued, absolute, contingent, unliquidated or otherwise) that would be required to be set forth on a balance sheet of Tellurian prepared in accordance with GAAP, except (i) liabilities reflected
in the Unaudited Tellurian Financial Statements, (ii) liabilities which have arisen since the date of the Unaudited Tellurian Financial Statements in the ordinary course of business (none of which is a material liability for breach of contract,
tort or infringement), (iii) liabilities arising under executory provisions of contracts entered into in the ordinary course of business (none of which is a material liability for breach of contract) and (iv) liabilities disclosed in
Section 4.8
of the Tellurian Disclosure Schedule.
Section 4.9
Absence of Certain Changes.
Except as
disclosed in
Section 4.9
of the Tellurian Disclosure Schedule, since the date of the Unaudited Tellurian Financial Statements, (i) there has not
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been any change, event or condition that would reasonably be expected to result in any Material Adverse Effect on Tellurian, (ii) the business of Tellurian has been conducted only in the
ordinary course consistent with past practice, (iii) Tellurian has not incurred any material liability, engaged in any material transaction or entered into any material agreement outside the ordinary course of business consistent with past
practice with respect to its business and assets, (iv) Tellurian has not suffered any Loss, damage, destruction or other casualty to any of its assets (whether or not covered by insurance) that would result in a Material Adverse Effect on
Tellurian, and (v) there has been no event, condition, action or effect that, if taken during the period of time from the date of this Agreement through the Closing Date, would constitute a breach of
Section 5.2
.
Section 4.10
Compliance with Laws.
Except as disclosed in
Section 4.10
of the Tellurian Disclosure
Schedule, to the Knowledge of Tellurian, Tellurian has complied in all material respects with all applicable Laws relating to any aspect of the business of Tellurian. Except as disclosed in
Section 4.10
of the Tellurian Disclosure Schedule,
Tellurian has not received any written notice from any Governmental Authority relating to any aspect of the business of Tellurian or alleging that Tellurian is not in compliance with or is in default or violation of any applicable Law. Tellurian has
not been charged or, to the Knowledge of Tellurian, threatened with, or under investigation with respect to, any material violation of any applicable Law relating to any aspect of the business of Tellurian.
Section 4.11
Tax Matters
.
(a) All material Tax Returns of Tellurian have been timely filed (taking into account applicable extensions of time to
file) with the appropriate Taxing Authority and all such Tax Returns are true, correct and complete in all material respects. All material Taxes due and owing by Tellurian have been paid and all such Taxes incurred but not yet due and owing have
either been paid or properly accrued on the books and records of Tellurian in accordance with U.S. generally accepted accounting principles.
(b) All material Taxes required to be withheld or collected by Tellurian with respect to any employee, independent
contractor, purchaser or other third party have been withheld or collected, and have been timely paid to the appropriate Taxing Authority or properly accrued.
(c) There are no waivers or extensions of any statute of limitations currently in effect with respect to Taxes of
Tellurian. There are no actions, examinations or audits currently pending or, to Tellurians Knowledge, threatened with respect to Tellurian in respect of any Tax. No issue has been raised by a Taxing Authority in any prior action or
examination of Tellurian which, by application of the same or similar principles, could reasonably be expected to result in a proposed deficiency for any subsequent taxable period. No claim has been made in writing by any Governmental Authority in a
jurisdiction where Tellurian does not file Tax Returns that Tellurian is, or may be, subject to taxation by that jurisdiction.
(d) There are no Encumbrances for Taxes on any of the assets of Tellurian. There are no Encumbrances for Taxes, other
than Encumbrances with respect to current period Taxes not yet due or payable, on any of the assets of Tellurian.
(e) Tellurian is not a party to, and Tellurian is not subject to, any Tax allocation, Tax sharing or similar
agreement, Tax indemnity obligation or similar agreement, or other agreement or arrangement (whether or not written) with respect to Taxes that could affect the Tax liability of Tellurian. Tellurian has no liability for Taxes of any other Person
under Treasury Regulations Section 1.1502-6 (or similar provision of state, local or non-U.S. law) as a transferee or successor, by contract or otherwise.
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(f) Tellurian has not participated in any listed transaction
within the meaning of Treasury Regulations Section 1.6011-4(b). Tellurian does not know of any fact or has taken or failed to take any action that would reasonably be expected to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
Section 4.12
Legal Proceedings.
Except as set forth
in
Section 4.12
of the Tellurian Disclosure Schedule, there are no Proceedings pending or, to the Knowledge of Tellurian, threatened against or involving Tellurian, any Subsidiary of Tellurian or any of their respective properties or assets;
provided
,
however
, that Proceedings that are or will be covered by insurance in full (save and except any applicable deductibles), and where the amount claimed is within policy limits, need not be listed on
Section 4.12
of the
Tellurian Disclosure Schedule.
Section 4.13
Brokerage Fees.
Tellurian has not retained any financial
advisor, broker, agent or finder or paid or agreed to pay any financial advisor, broker, agent or finder on account of this Agreement or any transaction contemplated hereby.
Section 4.14
Environmental Matters.
Except as disclosed in
Section 4.14
of the Tellurian Disclosure
Schedule, (i) Tellurian and its assets, real properties and operations are in compliance in all material respects with all Applicable Environmental Laws; (ii) Tellurian has obtained all material environmental Permits required under
Applicable Environmental Laws to operate the business of Tellurian as currently operated; (iii) Tellurian has not received any written notice of any investigation or inquiry regarding the properties of Tellurian from any Governmental Authority
under any Applicable Environmental Law, and (iv) there are no Proceedings, Orders, decrees, writs, injunctions or judgments pending or in effect, or, to the Knowledge of Tellurian, threatened by a Governmental Authority or other third party
against Tellurian that allege a violation of or liability under any Applicable Environmental Law that remain pending or unresolved, and, to the Knowledge of Tellurian, there are no existing facts or circumstances that would reasonably be expected to
give rise to any such Proceedings, Orders, decrees, writs, injunctions or judgments that would reasonably be expected to result in a Material Adverse Effect on Tellurian. Except as disclosed in
Section 4.14
of the Tellurian Disclosure
Schedule, to the Knowledge of Tellurian, the properties of Tellurian have not been used for Disposal of any Hazardous Substance such that such property would be subject to any material remedial obligations under any Applicable Environmental Laws,
and to the Knowledge of Tellurian, no condition otherwise exists on any of the properties of Tellurian such that such property would be subject to any material remedial obligations under any Applicable Environmental Laws. All references to Tellurian
in this
Section 4.14
shall be deemed to include the Tellurian Subsidiaries.
Section 4.15
Employees.
Except as set forth in
Section 4.15
of the Tellurian Disclosure Schedule, Tellurian is not a party to, or bound by, any collective bargaining or other agreement with a labor organization. Except as set forth in
Section 4.15
of the
Tellurian Disclosure Schedule, Tellurian is in compliance in all material respects with all applicable Laws pertaining to employment and employment practices. There is no pending or, to the Knowledge of Tellurian, threatened Proceeding against or
involving Tellurian by or before, and Tellurian is not subject to any judgment, Order, writ, injunction, or decree of or inquiry from, any Governmental Authority in connection with any former employee of Tellurian.
Section 4.16
Agreements, Contracts and Commitments.
(a)
Section 4.16
of the Tellurian Disclosure Schedule lists all Material Contracts of Tellurian. Except as set
forth in
Section 4.16
of the Tellurian Disclosure Schedule and as contemplated
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hereby, Tellurian is not a party to, as of the date hereof, (i) any collective bargaining agreements or any agreements that contain any severance pay liabilities or obligations,
(ii) any Employee Benefit Plans, (iii) any employment agreement, contract or commitment with an employee, or agreements to pay severance, (iv) any agreements between or among Tellurian or one of its Affiliates or with any Related
Person of Tellurian (other than agreements solely between or among Tellurian and its wholly owned Subsidiaries), (v) any agreement, indenture or other instrument for borrowed money and any agreement or other instrument which contains
restrictions with respect to payment of distributions in respect of any outstanding Securities, (vi) any agreement, contract or commitment containing any covenant limiting the freedom of Tellurian to engage or compete in any line of business or
with any Person or in any geographic area during any period of time, (vii) any agreement, contract or commitment relating to capital expenditures in excess of $50,000, (viii) any agreement, contract or commitment relating to the
acquisition, disposition or voting of assets or capital stock of any business enterprise, including Tellurian and any of its Subsidiaries, (ix) any contract that requires Tellurian to purchase its total requirements of any product or service
from a third party or that contains take or pay provisions, (x) any contract that provides for the indemnification by Tellurian of any Person or the assumption of any Tax, environmental or other liability of any Person,
(xi) any broker, distributor, dealer, manufacturers representative, franchise, agency, sales promotion, market research, marketing consulting and advertising contract to which Tellurian is a party, (xii) except for contracts relating
to trade receivables, any contract relating to indebtedness (including guarantees) of Tellurian, (xiii) any contract with any Governmental Authority to which Tellurian is a party, (xiv) any contract to which Tellurian is a party that
provides for any joint venture, partnership or similar arrangement by Tellurian, (xv) any tax partnership agreement, (xvi) any agreement that constitutes a joint operating agreement, unit operating agreement, unitization or pooling
agreement, participation agreement, exploration agreement, development agreement, partnership agreement, joint venture agreement or similar agreement, (xvii) any agreement that provides for an irrevocable power of attorney that will be in
effect after the Closing Date or (xviii) any agreement that constitutes a lease of real property. Tellurian has made available to Magellan accurate and complete copies of all written Material Contracts, including all amendments thereto. All
references to Tellurian in this
Section 4.16
shall be deemed to include the Tellurian Subsidiaries.
(b) Except as set forth in
Section 4.16(b)
of the Tellurian Disclosure Schedule, Tellurian has not materially
breached any of the terms or conditions of any Material Contract. There is not, to the Knowledge of Tellurian, under any Material Contract, any default or event which, with notice or lapse of time or both, would constitute a default on the part of
any of the parties thereto, or any notice of termination, cancellation or material modification.
(c) Except to
the extent the enforceability thereof may be limited by Creditor Rights, each of the Material Contracts (i) constitutes the valid and binding obligation of Tellurian and constitutes the valid and binding obligation of the other parties thereto,
(ii) is in full force and effect and (iii) immediately after the consummation of the Merger, will continue to constitute a valid and binding obligation of Tellurian.
Section 4.17
Benefit Plans. Section 4.17
of the Tellurian Disclosure Schedule sets forth a complete and accurate
list of all Employee Benefit Plans (a) that Tellurian sponsors or maintains with respect to its current or former employees, managers, directors of other service providers, (b) to which Tellurian contributes or has an obligation to
contribute with respect to its current or former employees, managers, directors or other service providers, or (c) with respect to which Tellurian may otherwise have any liability, whether direct or indirect (including any such plan or other
arrangement previously maintained by Tellurian) (each a
Tellurian Benefit Plan
and collectively referred to as the
Tellurian
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Benefit Plans
). With respect to each Tellurian Benefit Plan, true, correct and complete copies of the following documents, to the extent applicable, have been provided or made
available to Magellan: (i) all plans and related trust documents, and amendments thereto; (ii) the two (2) most recent Forms 5500; (iii) the most recent IRS determination, advisory or opinion letter, if any; (iv) the
two (2) most recent summary plan descriptions; (v) the most recent summaries of material modifications; (vi) the two (2) most recent summary annual reports; (vii) nondiscrimination, coverage and any other applicable testing
performed with respect to the two (2) most recent years, if any; (viii) the two (2) most recent participant and fiduciary fee disclosure notices; (ix) the two (2) most recent summaries of benefits and coverage; (x) the
most recent service agreements related to the plans administration; and (xi) written descriptions of all non-written agreements relating to the Tellurian Benefit Plans. No Tellurian Benefit Plan is a defined benefit plan
within the meaning of Section 3(35) of ERISA, a multiemployer plan, as defined in Section 3(37) of ERISA, or a plan that is subject to the minimum funding standards of Section 302 of ERISA or Section 412 of the Code,
nor has either Tellurian or any of its ERISA Affiliates ever sponsored, maintained, contributed to or been obligated to contribute to any such plan. There have been no prohibited transactions (described under Section 406 of ERISA or
Section 4975(c) of the Code) or breaches of fiduciary duty or any other breaches or violations of any Law applicable to any of the Tellurian Benefit Plans, in any such case that would subject Tellurian to any material Taxes, penalties or other
liabilities. There are no investigations or audits of any Tellurian Benefit Plan by any Governmental Authority currently pending and there have been no such investigations or audits that have been concluded that resulted in any liability to
Tellurian, its Subsidiaries or its ERISA Affiliates that has not been fully discharged. Each Tellurian Benefit Plan has been operated, in all material respects, in compliance with applicable Law and in accordance with its terms, and all reports,
descriptions and filings required by the Code, ERISA or any government agency with respect to each Tellurian Benefit Plan have, in all material respects, been timely and completely filed or distributed. Each Tellurian Benefit Plan that is
represented to be qualified under Section 401(a) of the Code has a current favorable determination letter or is the adopter of a volume submitter or prototype document that has received a favorable advisory or opinion letter from the IRS, all
subsequent interim amendments have been made in a timely manner, and no such Tellurian Benefit Plan has been amended or operated in a way that could reasonably be expected to adversely affect its qualified status or the tax-exempt status of its
related trust. No Tellurian Benefit Plan that is represented to be qualified under Section 401(a) of the Code has been terminated or partially terminated during the preceding six years, nor has Tellurian discontinued contributions to any such
plan, without notice to and approval by the IRS, to the extent such notice to and approval by the IRS is required by applicable Law. There are no pending Claims relating to any Tellurian Benefit Plan (other than ordinary claims for benefits) and
none are threatened. No Tellurian Benefit Plan provides retiree medical or retiree life insurance benefits, except as required under Section 4980B of the Code and subsequent guidance. Each Tellurian Benefit Plan that is a group health plan
within the meaning of Section 5000(b)(1) of the Code or similar state Law, is currently in compliance with an has always complied with the applicable continuation requirements of Section 4980B of the Code (as well as its predecessor
provision, Section 162(k) of the Code) and Section 601 through 608, inclusive, of ERISA or similar state applicable Law. Tellurian has not established or maintained, nor has any liability with respect to, any deferred compensation plan,
program, or arrangement (including any nonqualified deferred compensation plan) that is not in compliance with the applicable provisions of Section 409A of the Code. Each Tellurian Benefit Plan is amendable and terminable
unilaterally by Tellurian or its Subsidiaries at any time without liability or expense (other than for benefits accrued through the date of termination or amendment and reasonable administrative expenses related thereto). The investment
vehicles used to fund any Tellurian Benefit Plan may be changed at any time without incurring a sales charge, surrender fee or similar expense.
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Section 4.18
Hedging.
Tellurian is not engaged in any commodity or
foreign exchange futures, option, hedging or derivatives transactions or arrangements in respect of which it has any material future liability, nor is it a party to any price swaps, hedges, futures or similar instruments. Tellurian is not bound by
futures, hedge, swap, collar, put, call, floor, cap, option or other contracts that are intended to benefit from, relate to or reduce or eliminate the risk of fluctuations in the price of commodities, including Hydrocarbons, securities or
currencies.
Section 4.19
Regulatory Agencies.
Except as set forth in
Section 4.26
of the Tellurian
Disclosure Schedule, all filings heretofore made by Tellurian and its Subsidiaries with all federal, state and local agencies or commissions were made in compliance with applicable Laws and the factual information contained therein was true and
correct, in each case in all material respects as of the respective dates of such filings. The right of Tellurian and its Subsidiaries to receive payment pursuant to any tariff, rate schedule or similar instrument filed with or subject to the
jurisdiction of any Governmental Authority has not been suspended, and neither Tellurian nor its Subsidiaries has received written notification questioning the validity of any such tariff, rate schedule or similar instrument that is material to the
operations of the properties of Tellurian, taken as a whole, from any Governmental Authority or customer.
Section
4.20
Intellectual Property.
Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Tellurian, (a) Tellurian owns or has the right to use pursuant to a
license, sublicense, agreement or otherwise all material items of Intellectual Property required in the operation of its business as presently conducted or planned to be conducted; (b) no third party has asserted in writing delivered to
Tellurian or its Subsidiaries an unresolved claim that Tellurian or its Subsidiaries are infringing on the Intellectual Property of such third party; and (c) to the Knowledge of Tellurian, no third party is infringing on the Intellectual
Property owned by Tellurian or its Subsidiaries.
Section 4.21
Compliance with Securities Laws and Accuracy of
Disclosure.
Tellurian and its Subsidiaries have complied, in all material respects, with all applicable securities Laws in connection with the offering contemplated by its private placement memorandum dated June 14, 2016 (the
PPM) and any other offers or sales of their Securities since inception. The PPM did not 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 made, in light of the circumstances under which they were made, not misleading. The plan for the development of Tellurians business as set forth in the PPM is, in the good faith judgment of Tellurian, achievable, subject to the
risks and contingencies described in the PPM.
Section 4.22
Tellurian Stockholder Approval.
The Tellurian
Stockholder Approval is the only vote or approval required of the holders of any class or series of Tellurian capital stock that shall be necessary to adopt this Agreement and to consummate the transactions contemplated hereby, including the Merger.
Section 4.23
Independent Evaluation.
In entering into this Agreement, Tellurian acknowledges and affirms
that it has relied and will rely solely on the terms of this Agreement, the information in the SEC Filings and upon its independent analysis, evaluation and investigation of, and judgment with respect to, the business, economic, legal, Tax or other
consequences of this transaction, including its own estimate and appraisal of the extent and value of the Hydrocarbons associated with the properties of Magellan.
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Section 4.24
Ownership of Magellan Common Stock.
Neither Tellurian
nor any affiliate or associate (as such terms are used in Section 203 of the DGCL) of Tellurian, is, or was or became at any time during the last three years, an interested stockholder (as such term is
defined in Section 203 of the DGCL) of Magellan.
Section 4.25
Information Provided.
None of the
information supplied or to be supplied by Tellurian for inclusion or incorporation by reference in (a) the Registration Statement will, at the time the Registration Statement is filed with the SEC and at the time it becomes effective under the
Securities Act, and (b) the Proxy/Prospectus will, at the date the Proxy/Prospectus is mailed to the Magellan Stockholders and Tellurian Stockholders or at the time of the meeting of the Magellan Stockholders and Tellurian Stockholders to be
held in connection with the Merger, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
are made, not misleading. The portions of the Proxy/Prospectus supplied by Tellurian will comply as to form in all material respects with the provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder. No
representation or warranty is made by Tellurian with respect to statements made or incorporated by reference therein based on information regarding Magellan incorporated by reference in the Proxy/Prospectus or supplied by Magellan specifically for
inclusion in the Proxy/Prospectus.
Section 4.26
No Other Representations or Warranties.
Except for the
representations and warranties contained in this Agreement (as qualified by the Tellurian Disclosure Schedule), neither Tellurian nor any other Person makes (and Magellan agrees that it is not relying upon) any other express or implied
representation or warranty with respect to Tellurian (including the value, condition or use of any asset) or the transactions contemplated by this Agreement, and Tellurian disclaims any other representations or warranties not contained in this
Agreement, whether made by Tellurian, any Affiliate of Tellurian or any of their respective officers, directors, managers, employees or agents. Except for the representations and warranties contained in this Agreement (as qualified by the Tellurian
Disclosure Schedule), Tellurian disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement or information made, communicated or furnished (orally or in writing) to Magellan or any of its Affiliates
or any of its officers, directors, managers, employees or agents (including any opinion, information, projection or advice that may have been or may be provided to Magellan by any director, officer, employee, agent, consultant or representative of
Tellurian or any of its Affiliates). The disclosure of any matter or item in the Tellurian Disclosure Schedule shall not be deemed to constitute an acknowledgment that any such matter is required to be disclosed or is material or that such
matter would or would reasonably be expected to result in a Material Adverse Effect on Tellurian.
ARTICLE V
Additional Covenants and Agreements
Section 5.1
Preparation of the Proxy/Prospectus; Magellan Stockholder Meeting.
(a) As soon as reasonably practicable following the date of this Agreement, Magellan shall prepare and file with the
SEC a preliminary Proxy/Prospectus to obtain the Magellan Stockholder Approval and Tellurian Stockholder Approval. Magellan shall use its reasonable best efforts to have the Proxy/Prospectus cleared for use under the Exchange Act as promptly as
practicable after such filing. Magellan shall cause the Proxy/Prospectus to be mailed to the Magellan Stockholders as promptly as practicable after the clearance is received from the SEC. If at any time prior to the Closing Date any
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information relating to Magellan, Tellurian, or any of their respective Affiliates, directors or officers, is discovered by any Party that should be set forth in an amendment or supplement to the
Proxy/Prospectus so that it would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Party that
discovers such information shall promptly notify the other Parties, and Magellan shall promptly file an appropriate amendment or supplement describing such information with the SEC and, to the extent required by applicable Law, disseminate the same
to the Magellan Stockholders. Magellan shall promptly notify Tellurian of the receipt of any comments from the SEC or the staff of the SEC and of any request by the SEC or the staff of the SEC for amendments or supplements to the Proxy/Prospectus or
for additional information, and Magellan shall supply Tellurian with copies of all correspondence between it or any of its Representatives, on the one hand, and the SEC or the staff of the SEC, on the other hand, with respect to the Proxy/Prospectus
or the transactions contemplated hereby. Each of Magellan and Tellurian represents to the other that the information supplied or to be supplied by such Party for inclusion or incorporation by reference in the Proxy/Prospectus and any amendment or
supplement thereto will not, at the date of mailing to stockholders and at the time of the Magellan Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which such statement was made, not misleading.
(b) As promptly as reasonably practicable after the date of this Agreement, Magellan shall file with the SEC the
Registration Statement containing the Proxy/Prospectus. Magellan and Tellurian shall use all reasonable best efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing and to
keep the Registration Statement effective as long as necessary to consummate the Merger and the other transactions contemplated hereby. Magellan and Tellurian shall also take any action (other than qualifying to do business in any jurisdiction in
which it is not now so qualified or filing a general consent to service of process in any jurisdiction) required to be taken under any applicable state securities Laws in connection with the issuance of Magellan Shares in the Merger and
(i) Magellan shall furnish all information concerning Magellan and the holders of shares of Magellan capital stock, and (ii) Tellurian shall furnish all information concerning Tellurian and the holders of shares of Tellurian capital stock,
as may be reasonably requested in connection with any such action. Promptly after the effectiveness of the Registration Statement, Magellan shall cause the Proxy/Prospectus to be mailed to the Magellan Stockholders and Tellurian Stockholders, and if
necessary, after the definitive Proxy/Prospectus has been mailed, promptly circulate amended, supplemented or supplemental proxy materials and, if required in connection therewith, re-solicit proxies or written consents, as applicable. If at any
time prior to the Effective Time, the officers and directors of Magellan or Tellurian discover any statement which, in light of the circumstances under which it is made, is false or misleading with respect to a material fact or omits to state a
material fact necessary to make the statements made in the Proxy/Prospectus or Registration Statement not misleading, then such Party shall immediately notify each other Party of such misstatements or omissions. Magellan shall advise Tellurian, and
Tellurian shall advise Magellan, as applicable, promptly after it receives notice thereof, of the time when the Registration Statement becomes effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of
the qualification of the shares of Magellan Shares for offering or sale in any jurisdiction, or any request by the SEC for amendment of the Proxy/Prospectus or the Registration Statement or comments thereon and responses thereto or requests by the
SEC for additional information.
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(c) Subject to
Section 5.3
, Magellan shall, (i) as promptly
as practicable following the date of this Agreement, establish a record date for, duly call, give notice of, convene and hold the Magellan Stockholder Meeting and (ii) through the Magellan Board, recommend to the Magellan Stockholders that they
adopt this Agreement and approve the Merger pursuant to this Agreement (the
Magellan Board Recommendation
). Except to the extent there is an Adverse Recommendation Change, Magellan shall include in the Proxy/Prospectus a copy
of the Magellan Fairness Opinion and (subject to
Section 5.3
) the Magellan Board Recommendation. Notwithstanding anything in this Agreement to the contrary, Magellan may postpone or adjourn the Magellan Stockholder Meeting (A) after
consultation with Tellurian, and with Tellurians consent (not to be unreasonably withheld, conditioned or delayed), to solicit additional proxies for the purpose of obtaining the Magellan Stockholder Approval, (B) for the absence of
quorum, (C) to allow reasonable additional time for the filing and/or mailing of any supplemental or amended disclosure that Magellan has determined after consultation with outside legal counsel is necessary under applicable Law and for such
supplemental or amended disclosure to be disseminated and reviewed by the Magellan Stockholders prior to the Magellan Stockholder Meeting and (D) if Magellan has delivered any notice contemplated by
Section 5.3(c)
. Except to the
extent there is an Adverse Recommendation Change, each of Magellan and Tellurian shall use their respective reasonable best efforts to solicit their respective stockholders to obtain the Magellan Stockholder Approval and Tellurian Stockholder
Approval, respectively.
(d) Subject to
Section 5.3
, Tellurian shall, as promptly as practicable following
the date of this Agreement, establish a record date for, duly call, give notice of, convene and hold the Tellurian Stockholder Meeting. Notwithstanding anything in this Agreement to the contrary, Tellurian may postpone or adjourn the Tellurian
Stockholder Meeting to allow reasonable additional time for the filing and/or mailing of any supplemental or amended disclosure that Tellurian has determined after consultation with outside legal counsel is necessary under applicable Law and for
such supplemental or amended disclosure to be disseminated and reviewed by the Tellurian Stockholders prior to the Magellan Stockholder Meeting.
Section 5.2
Conduct of Business.
(a) Except (i) as expressly permitted by or set forth in this Agreement, (ii) as set forth in the Magellan
Disclosure Schedule or the Tellurian Disclosure Schedule, as applicable, (iii) as required by applicable Law or (iv) as agreed to in writing by the other Parties (which consent shall not be unreasonably withheld, delayed or conditioned),
during the period from the date of this Agreement until the Closing, Magellan shall conduct its business in the ordinary course of business consistent with past practice, and each of Magellan and Tellurian shall, and shall cause each of their
respective Subsidiaries to, (A) use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationships with it and retain the services of its present officers and
key employees, and (B) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all Material Contracts. Without limiting the generality of the foregoing, except (1) as
expressly permitted by or provided in this Agreement, (2) as set forth in the Magellan Disclosure Schedule or the Tellurian Disclosure Schedule, as applicable, (3) as required by applicable Law or (4) as agreed in writing by the
Parties, during the period from the date of this Agreement to the Closing, each of Magellan and Tellurian shall not, and shall not permit any of their respective Subsidiaries to:
(i) (A) issue, sell, grant, pledge, transfer, encumber, dispose of, accelerate the vesting of or
modify, as applicable, any of its Securities, or any Securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any
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Securities or any other agreements of any character to purchase or acquire any of its Securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe
for, any of the foregoing; (B) redeem, purchase or otherwise acquire any of its outstanding Securities, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any of its Securities;
(C) declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any Securities, or otherwise make any payments to its equityholders in their capacity as such; or (D) split, adjust, combine,
subdivide or reclassify any Securities;
(ii) incur, refinance or assume any indebtedness for
borrowed money (or modify any of the material terms of any such outstanding indebtedness) or guarantee any such indebtedness for borrowed money (or enter into a keep well or similar agreement with respect to such indebtedness) or issue
or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Magellan or Tellurian or any of their respective Subsidiaries;
(iii) sell, transfer, lease, farmout, exchange, convey, license or otherwise dispose of any of the
properties with a fair market value in excess of $50,000 in the aggregate, without consultation and consent of the other Parties, which consent shall not be unreasonably withheld, delayed or conditioned, except (1) pursuant to contracts in
force at the date of this Agreement and listed on the Magellan Disclosure Schedule or the Tellurian Disclosure Schedule, as applicable, correct and complete copies of which have been made available to the other Parties, (2) dispositions of
obsolete or worthless equipment which is replaced with equipment and materials of comparable or better value and utility, (3) transactions (including sales of oil, natural gas, natural gas liquids and other produced Hydrocarbons) in the
ordinary course of business consistent with past practice, (4) the sale of Central Petroleum shares currently held by Magellan for proceeds of up to $1,000,000;
(iv) make any capital expenditure or capital expenditures (which shall include, any investments by
contribution to capital, property transfers, purchase of Securities or otherwise) in excess of $50,000 in the aggregate for any fiscal year, without consultation and consent of the other Parties, which consent shall not be unreasonably withheld,
delayed or conditioned, except for any such capital expenditures set forth in
Section 5.2(a)(iv)
of the Magellan Disclosure Schedule or
Section 5.2(a)(iv)
of the Tellurian Disclosure Schedule, as applicable, or except as may be
reasonably required to conduct emergency operations, repairs or replacements on any well, pipeline, or other facility,
provided
that such expenditures shall not exceed $50,000 in the aggregate;
(v) directly or indirectly acquire (A) by merging or consolidating with, or by purchasing all of
or a substantial equity interest in, or by any other manner, any Person or division, business or equity interest of any Person, or (B) any assets that, in the aggregate, have a purchase price in excess of $50,000;
(vi) make any loans or advances to any Person (other than trade credit granted in the ordinary course
of business consistent with past practice);
(vii) (A) except in the ordinary course of
business consistent with past practice, enter into any contract or agreement that would be a Material Contract if in existence as of the date of this Agreement or (B) except in the ordinary course of business consistent
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with past practice, terminate or amend in any material respect any Material Contract, or (C) (1) waive any material rights under any Material Contract, (2) enter into or extend the
term or scope of any Material Contract that materially restricts that Party or any of its Subsidiaries from engaging in any line of business or in any geographic area or (3) enter into any Material Contract that would be breached by, or require
the consent of any third party in order to continue in full force following, consummation of the transactions contemplated hereby;
(viii) except as required by applicable Law, (A) change its fiscal year or any method of Tax
accounting, (B) make, change or revoke any material Tax election, (C) settle or compromise any material liability for Taxes, (D) file any material amended Tax Return, (E) surrender any right to claim a refund of Taxes;
(F) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment; or (G) take any other action outside of the ordinary course of business that would have the effect of increasing the Tax liability
of Magellan or Tellurian or any of their respective Subsidiaries;
(ix) make any changes in
financial accounting methods, principles or practices (or, with respect to Magellan, change an annual accounting period), except insofar as may be required by a change in GAAP or applicable Law;
(x) except as contemplated hereby, amend its certificate of incorporation, bylaws, or any other
organizational documents;
(xi) adopt a plan or agreement of complete or partial liquidation,
dissolution, restructuring, recapitalization, merger, consolidation or other reorganization;
(xii) fail to use commercially reasonable efforts to maintain, with financially responsible insurance
companies, insurance in such amounts and against such risks and losses as is maintained by it at present;
(xiii) except as provided under any agreement entered into prior to the date of this Agreement and
disclosed in the Magellan Disclosure Schedule or the Tellurian Disclosure Schedule, as applicable, pay, discharge, waive, settle or satisfy any Claim seeking damages or injunction or other equitable relief, that would, (A) require the payment
of monetary damages or (B) involve any injunctive or other non-monetary relief which, in either case, imposes material restrictions on the business operations of Magellan or Tellurian or any of their respective Subsidiaries, in each case,
without the consultation and consent of the other Parties, which consent shall not be unreasonably withheld, delayed or conditioned; or
(xiv) agree, in writing or otherwise, to take any of the foregoing actions, or take any action or
agree, in writing or otherwise, to take any action which would in any material respect impede or delay the ability of the Parties to satisfy any of the conditions to the transactions contemplated hereby, other than as permitted in
Section
5.3
.
Section 5.3
No Solicitation by Magellan, Etc.
(a) Except as otherwise permitted by this
Section 5.3
, Magellan shall not, and shall use its best efforts to
cause its directors, officers, employees, investment bankers, financial advisors, attorneys, accountants, agents and other representatives (collectively,
Representatives
) not to, directly or indirectly (i) solicit, initiate,
knowingly facilitate, knowingly encourage or knowingly induce any inquiries or any proposals that constitute the submission of an Alternative Proposal,
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(ii) furnish any confidential information or enter into any confidentiality agreement, merger agreement, letter of intent, agreement in principle, stock purchase agreement, asset purchase
agreement or exchange agreement, option agreement or other similar agreement relating to an Alternative Proposal (an
Acquisition Agreement
), or (iii) withdraw, modify or qualify, or propose publicly to withdraw, modify or
qualify, in a manner adverse to Tellurian, the Magellan Board Recommendation or publicly recommend the approval or adoption of, or publicly approve or adopt, or propose to publicly recommend, approve or adopt, any Alternative Proposal (the taking of
any action described in clause (iii) being referred to as an
Adverse Recommendation Change
).
(b) Notwithstanding anything to the contrary contained in
Section 5.3(a)
, if at any time prior to obtaining the
Magellan Stockholder Approval, (i) Magellan has received an Alternative Proposal that the Magellan Board believes is
bona fide
, (ii) the Magellan Board, after consultation with its financial advisors and outside legal counsel,
determines in good faith that such Alternative Proposal constitutes or could reasonably be expected to lead to or result in a Superior Proposal and (iii) such Alternative Proposal did not result from a material breach of this
Section
5.3
, then Magellan may (A) furnish information, including any non-public information, with respect to Magellan and its Subsidiaries to the Person making such Alternative Proposal, and (B) participate in discussions or negotiations
regarding such Alternative Proposal;
provided
that (x) Magellan shall not, and shall use reasonable best efforts to cause its Representatives not to, disclose any non-public information to such Person unless Magellan has, or first enters
into, a customary confidentiality agreement with such Person with confidentiality provisions that are not less restrictive to such Person than the provisions of the Confidentiality Agreement are to Tellurian and (y) Magellan shall provide to
Tellurian any non-public information with respect to Magellan and its Subsidiaries that was not previously provided or made available to Tellurian prior to or substantially concurrently with providing or making available such non-public information
to such other Person.
(c) In addition to the other obligations of Magellan set forth in this
Section 5.3
,
Magellan shall promptly advise Tellurian, orally and in writing, and in no event later than five (5) Business Days after receipt, if any proposal, offer, inquiry or other contact is received by, any information is requested from, or any
discussions or negotiations are sought to be initiated with, Magellan in respect of any Alternative Proposal, and shall, in any such notice to Tellurian, indicate the identity of the Person making such proposal, offer, inquiry or other contact and
the terms and conditions of any proposals or offers or the nature of any inquiries or contacts (and shall include with such notice copies of any written materials received from or on behalf of such Person relating to such proposal, offer, inquiry or
request), and thereafter shall promptly keep Tellurian reasonably informed of all material developments affecting the status and terms of any such proposals, offers, inquiries or requests (and Magellan shall promptly provide Tellurian with copies of
any additional written materials received by Magellan or that Magellan has delivered to any third party making an Alternative Proposal that relate to such proposals, offers, inquiries or requests) and of the status of any such discussions or
negotiations.
(d) Notwithstanding the foregoing, if Magellan receives a written Alternative Proposal that the
Magellan Board believes is
bona fide
and the Magellan Board, after consultation with its financial advisors and outside legal counsel, concludes that such Alternative Proposal constitutes a Superior Proposal, then the Magellan Board may, at
any time prior to obtaining the Magellan Stockholder Approval, if it determines in good faith, after consultation with outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable Law,
effect an Adverse Recommendation Change and/or enter into an Acquisition Agreement;
provided, however
, that Magellan shall not be entitled to exercise its right to make any Adverse
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Recommendation Change in response to a Superior Proposal or execute or enter into an Acquisition Agreement for a Superior Proposal until five (5) Business Days after Magellan provides
written notice to Tellurian (a
Magellan Notice
) advising Tellurian that the Magellan Board or a committee thereof has received a Superior Proposal, specifying the material terms and conditions of such Superior Proposal, and
identifying the Person or group making such Superior Proposal and, at the request of Tellurian, Magellan shall negotiate in good faith with Tellurian during such five (5) Business Day period, with respect to any alternative transaction
(including any modifications to the terms of this Agreement) that would allow the Magellan Board not to make such Adverse Recommendation Change consistent with its fiduciary duties (it being understood that any change in the financial or other
material terms of a Superior Proposal shall require a new Magellan Notice and a new five (5) Business Day period under this
Section 5.3(d)
); and
provided, further
, that Magellan shall not be entitled to exercise its right to make
any Adverse Recommendation Change in response to a Superior Proposal or execute or enter into an Acquisition Agreement for a Superior Proposal unless Magellan and its Representatives have complied with the provisions of
Section 5.3(a)
.
(e) For purposes of this Agreement:
(i)
Alternative Proposal
means any inquiry, proposal or offer from any Person or
group (as defined in Section 13(d) of the Exchange Act), other than Tellurian, relating to any (A) direct or indirect acquisition (whether in a single transaction or a series of related transactions) of beneficial ownership
(within the meaning of Section 13 under the Exchange Act) of twenty percent (20%) or more of any class of equity securities of Magellan, or (B) merger, consolidation, unit exchange, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Magellan that is structured to permit such Person or group to acquire beneficial ownership of at least twenty percent (20%) of the equity interests of Magellan; in each case, other than the
transactions contemplated hereby.
(ii)
Superior Proposal
means a
bona
fide
written Alternative Proposal, obtained after the date of this Agreement and not in breach of this
Section 5.3
, which is on terms and conditions which the Magellan Board determines in good faith, after consultation with its financial
advisors and outside legal counsel, taking into account all legal, financial, regulatory, timing and other aspects of the proposal, all conditions contained therein and the Person making the proposal, to be more favorable to the Magellan
Stockholders from a financial point of view than the transactions contemplated hereby (after giving effect to any adjustments to the terms and provisions of this Agreement committed to in writing by Tellurian in response to such Alternative
Proposal);
provided
, that, for purposes of this definition of
Superior Proposal
, the term
Alternative Proposal
shall have the meaning assigned to such term in
(i)
, except that the reference to
20% in the definition of Alternative Proposal shall be deemed to be a reference to 50%.
(f) Notwithstanding anything in this
Section 5.3
to the contrary, the Magellan Board may, at any time prior to
obtaining the Magellan Stockholder Approval, effect an Adverse Recommendation Change in response to an Intervening Event if the Magellan Board concludes in good faith, after consultation with outside counsel and its financial advisors, that the
failure to take such action would be inconsistent with its fiduciary duties under applicable Law;
provided, however
, that Magellan shall provide Tellurian with five (5) Business Days prior written notice advising Tellurian it
intends to effect an Adverse Recommendation Change and specifying, in reasonable detail, the reasons therefor (including the material facts and circumstances related to the applicable Intervening Event),
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and during such five (5) Business Day period, Magellan shall consider in good faith any proposal by Tellurian to amend the terms and conditions of this Agreement in a manner that would allow
the Magellan Board not to make such Adverse Recommendation Change consistent with its fiduciary duties. The term
Intervening Event
means, with respect to Magellan, a material event or circumstance that arises or occurs after the
date of this Agreement and was not, prior to the date of this Agreement, reasonably foreseeable by the Magellan Board;
provided, however
, that none of the items in subsections (i) (vii) set forth in the definition of Material
Adverse Effect shall be deemed to be an Intervening Event.
(g) Nothing contained in this Agreement shall
prevent Magellan or the Magellan Board from issuing a stop, look and listen communication pursuant to Rule 14d-9(f) under the Exchange Act or complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act or other
applicable Law with respect to an Alternative Proposal if the Magellan Board determines in good faith (after consultation with outside legal counsel) that the failure to take such action would be reasonably likely to be inconsistent with its
fiduciary duties under applicable Law;
provided
that any Adverse Recommendation Change may only be made in accordance with
Section 5.3(d)
and
(f)
. For the avoidance of doubt, a public statement that describes
Magellans receipt of an Alternative Proposal and the operation of this Agreement with respect thereto shall not be deemed an Adverse Recommendation Change.
Section 5.4
Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement (including
Section 5.3
and
Section 5.4(c)
),
each of Magellan and Tellurian shall cooperate with the other and use (and shall cause any of their respective Subsidiaries to use) its commercially reasonable efforts to (i) take, or cause to be taken, all actions, and do, or cause to be done,
all things, necessary, proper or advisable to cause the conditions to the Closing to be satisfied as promptly as practicable (and in any event no later than the Outside Date) and to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated hereby, including preparing and filing promptly and fully all documentation to effect all necessary filings, notifications, notices, petitions, statements, registrations, submissions of information,
applications and other documents (including any required or recommended filings under applicable Antitrust Laws), (ii) obtain promptly (and in any event no later than the Outside Date) all approvals, consents, clearances, expirations or
terminations of waiting periods, registrations, permits, authorizations and other confirmations from any Governmental Authority or third party necessary, proper or advisable to consummate the transactions contemplated hereby, (iii) defend any
lawsuits or other Proceedings challenging this Agreement or the consummation of the transactions contemplated hereby and (iv) obtain all necessary consents, approvals or waivers from third parties. For purposes of this Agreement,
Antitrust Laws
means the Sherman Act, the Clayton Act, the HSR Act, the Federal Trade Commission Act, and all other applicable Laws issued by a Governmental Authority that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade or lessening of competition.
(b) In
furtherance and not in limitation of the foregoing, each of Magellan and Tellurian shall use its commercially reasonable efforts to (i) take all action necessary to ensure that no state takeover statute or similar applicable Law is or becomes
applicable to any of the transactions contemplated hereby and (ii) if any state takeover statute or similar applicable Law becomes applicable to any of the transactions contemplated hereby, take all action necessary to ensure that such
transaction may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise minimize the effect of such applicable Law on the transaction.
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(c) Magellan and Tellurian (including by causing any of their respective
Subsidiaries) agree to use their reasonable best efforts to (i) resolve any objections that a Governmental Authority or other Person may assert under any Antitrust Law with respect to the transactions contemplated hereby, and (ii) avoid or
eliminate each and every impediment under any Antitrust Law that may be asserted by any Governmental Authority with respect to the transactions contemplated hereby, in each case, so as to enable the Closing to occur as promptly as practicable and in
any event no later than the Outside Date.
(d) On or prior to the fifth (5
th
) day prior to Closing, Magellan shall provide or make available to Tellurian or its Representatives (i) the organizational documents, including certificate of incorporation, bylaws, operating
agreement, partnership agreement, shareholders agreement, or other document governing interests of Magellan in any Person set forth on
Section 3.2(d)
of the Magellan Disclosure Schedule, (ii) copies of the deeds and other recorded instruments
by which Magellan and any of its Subsidiaries acquired real properties and interests set forth on
Section 3.10
of the Magellan Disclosure Schedule, and (iii) a list of any Employee Benefits Plans sponsored or maintained with respect to
Magellans current or former employees, managers, directors of other service providers which has not previously been set forth on
Section 3.20
of the Magellan Disclosure Schedule.
Section 5.5
Public Announcements.
The initial press release with respect to the execution of this Agreement
shall be prepared by Magellan and shall not be issued without Tellurians consent, which will not be unreasonably withheld or delayed. Thereafter, no Party shall issue or cause the publication of any press release or other public announcement
(except to the extent made in accordance with this Agreement) with respect to this Agreement or the transactions contemplated hereby without the prior consent of the other Parties (which consent shall not be unreasonably withheld or delayed), except
as may be required by applicable Law or by any applicable Nasdaq rules as determined in the good faith judgment of such Party (
provided
that such Party uses reasonable best efforts to afford the other Parties an opportunity to first review
the content of the proposed disclosure and provide reasonable comment regarding the same);
provided, however
, that Magellan shall not be required by this
Section 5.5
to consult with any other Party with respect to a public announcement
in connection with (i) the receipt and existence of an Alternative Proposal that the Magellan Board believes is
bona fide
, (ii) an Adverse Recommendation Change and (iii) matters related thereto, but nothing in this proviso
shall limit any obligation of Magellan under
Section 5.3(c)
to advise and inform Tellurian;
provided, further
, that each Party and its respective Affiliates may make statements that are consistent with statements made in previous press
releases, public disclosures or public statements made by Magellan or Tellurian in compliance with this
Section 5.5
.
Section
5.6
Access to Information;
Confidentiality Agreement. Upon reasonable notice and subject to applicable Laws relating to the exchange of information, each Party shall, and shall cause any of its respective Subsidiaries
to, afford to the other Parties and their Representatives reasonable access to, during normal business hours (and, with respect to books and records, the right to copy) all of its and any of its respective Subsidiaries properties, commitments,
books, contracts, records and correspondence (in each case, whether in physical or electronic form), officers, employees, accountants, counsel, financial advisors and other Representatives. Except for disclosures permitted by the terms of the
Confidentiality Agreement, each Party and its respective Representatives shall hold information received from any other Party pursuant to this Section 5.6 in confidence in accordance with the terms of the Confidentiality Agreement.
Section 5.7
Notification of Certain Matters.
Magellan shall give prompt notice to Tellurian, and Tellurian shall
give prompt notice to Magellan, of (a) any notice or other communication received
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by such Party from any Governmental Authority in connection with the transactions contemplated hereby or from any Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated hereby if the subject matter of such communication or the failure of such Party to obtain such consent is reasonably likely to be material to Tellurian or Magellan, as applicable, (b) any Claim
commenced or, to such Partys Knowledge, threatened against, relating to or involving or otherwise affecting such Party or any of its Subsidiaries and that relate to the transactions contemplated hereby, (c) the discovery of any fact or
circumstance that, or the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would result in the failure to be satisfied of any of the conditions to the Closing in
ARTICLE VI
and (d) any material failure
of such Party to comply with or satisfy any covenant or agreement to be complied with or satisfied by it hereby which would result in the failure to be satisfied of any of the conditions to the Closing in
ARTICLE VI
;
provided
that, in
the case of clauses (c) and (d), the failure to comply with this
Section 5.7
shall not result in the failure to be satisfied of any of the conditions to the Closing in
ARTICLE VI
, or give rise to any right to terminate this
Agreement under
ARTICLE VII
, if the underlying fact, circumstance, event or failure would not in and of itself give rise to such failure or right.
Section 5.8
Indemnification and Insurance.
(a) Without limiting any other rights that any Indemnified Person may have pursuant to any employment agreement or
indemnification agreement in effect on the date hereof or otherwise, each of which has been provided or made available to Tellurian prior to the date hereof, from the Effective Time and until the six-year anniversary of the Effective Time, Magellan
and the Surviving Corporation shall, jointly and severally, indemnify, defend and hold harmless each Person who is now, or has been at any time prior to the date of this Agreement or who becomes prior to the Effective Time, a director, officer or
employee of Magellan or any of its Subsidiaries or who acts as a fiduciary under any Magellan Benefit Plan or any of its Subsidiaries (the
Indemnified Persons
) against all losses, claims, damages, costs, fines, penalties, expenses
(including attorneys and other professionals fees and expenses), liabilities or judgments or amounts that are paid in settlement, of or incurred in connection with any threatened or actual Proceeding to which such Indemnified Person is a
party or is otherwise involved (including as a witness) based, in whole or in part, on or arising, in whole or in part, out of the fact that such Person is or was a director, officer or employee of Magellan or any of its Subsidiaries, a fiduciary
under any Magellan Benefit Plan or is or was serving at the request of Magellan or any of its Subsidiaries as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, Magellan Benefit
Plan, trust or other enterprise or by reason of anything done or not done by such Person in any such capacity, whether pertaining to any act or omission occurring or existing prior to, at or after the Effective Time and whether asserted or claimed
prior to, at or after the Effective Time (
Indemnified Liabilities
), including all Indemnified Liabilities based in whole or in part on, or arising in whole or in part out of, or pertaining to, this Agreement or the Merger, other
than to the extent such indemnification relates to a breach of this Agreement by Magellan or its Subsidiaries, in each case to the fullest extent permitted under applicable Law (and Tellurian and the Surviving Corporation shall, jointly and
severally, pay expenses incurred in connection therewith in advance of the final disposition of any such Proceeding to each Indemnified Person to the fullest extent permitted under applicable Law). Without limiting the foregoing, in the event
any such Proceeding is brought or threatened to be brought against any Indemnified Persons (whether arising before or after the Effective Time), (i) the Indemnified Persons may retain Magellans regularly engaged legal counsel or other
counsel satisfactory to them, and Tellurian and the Surviving Corporation shall pay all reasonable fees and expenses of such counsel for the Indemnified Persons as promptly as statements therefor are received, and (ii) Tellurian and the
Surviving Corporation shall use
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its best efforts to assist in the defense of any such matter. Any Indemnified Person wishing to claim indemnification or advancement of expenses under this
Section 5.8
, upon learning of
any such Proceeding, shall notify the Surviving Corporation (but the failure so to notify shall not relieve a party from any obligations that it may have under this
Section 5.8
except to the extent such failure materially prejudices such
partys position with respect to such claims). With respect to any determination of whether any Indemnified Person is entitled to indemnification by Magellan or Surviving Corporation under this
Section 5.8
, such Indemnified Person
shall have the right, as contemplated by the DGCL, to require that such determination be made by special, independent legal counsel selected by the Indemnified Person and approved by Tellurian or the Surviving Corporation, as applicable (which
approval shall not be unreasonably withheld or delayed), and who has not otherwise performed material services for Tellurian, Surviving Corporation or the Indemnified Person within the last three (3) years.
(b) Prior to or within 90 days following the Closing Date, Magellan shall purchase run-off director
and officer indemnification insurance to insure the existing officers and directors of Magellan for a period of six (6) years following the Closing Date in substantially the same amount as the director and officer indemnification insurance
policy in existence as of the date of this Agreement.
(c) The provisions of this
Section 5.8
are intended
to be for the benefit of, and shall be enforceable by, the Parties and each Person entitled to indemnification or insurance coverage or expense advancement pursuant to this
Section 5.8
, and its heirs and representatives.
Section 5.9
Fees and Expenses.
All fees and expenses incurred in connection with the transactions contemplated
hereby including all legal, accounting, financial advisory, consulting and all other fees and expenses of third parties incurred by a Party in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the
transactions contemplated hereby, shall be the obligation of the respective Party incurring such fees and expenses.
Section
5.10
Section 16 Matters
. Prior to the Closing Date, Magellan and Tellurian shall take all such steps as may be required (to the extent permitted under applicable Law) to cause any acquisitions of Magellan Stock
resulting from the transactions contemplated by this Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act, or will become subject to such reporting requirements with respect to Magellan,
to be exempt under Rule 16b-3 promulgated under the Exchange Act.
Section 5.11
Employee Benefits
. At
Closing, the benefits payable to Magellan employees as set forth in
Section 5.11
of the Magellan Disclosure Schedule shall be paid.
Section 5.12
Notice Required by Rule 14f-1 Under Exchange Act
. Any notice required under Rule 14f-1
under the Exchange Act concerning the changes in the composition of the Magellan Board as herein provided shall be made on a timely basis.
Section 5.13
Listing Application
. Magellan and Tellurian shall take all commercially reasonable actions
necessary to cause the Magellan Stock to be eligible for continued listing on Nasdaq following the Effective Time.
Section
5.14
Tax Treatment of the Merger
. For U.S. federal income tax purposes, the Parties intend that the Merger shall qualify as a reorganization within the meaning of Section 368(a) of the Code and the Treasury
Regulations promulgated thereunder, and this Agreement is intended to be, and is adopted as, a plan of reorganization for purposes of Sections 354 and 361 of the Code and within the meaning of Treasury Regulations
Sections 1.368-2(g) and 1.368-3(a).
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ARTICLE VI
Conditions Precedent
Section 6.1
Conditions to Each Partys Obligation to Effect the Merger.
The respective obligations of each
Party to effect the Merger shall be subject to the satisfaction (or waiver, if permissible under applicable Law) on or prior to the Closing Date of the following conditions:
(a)
Magellan Stockholder Approval
. The Magellan Stockholder Approval shall have been obtained in accordance
with Nasdaq rules and the Magellan Organizational Documents.
(b)
Tellurian Stockholder Approval
. The
Tellurian Stockholder Approval shall have been obtained in accordance with the Tellurian Organizational Documents.
(c)
No Injunctions or Restraints
. No applicable Law, injunction (whether preliminary or permanent), judgment or
ruling enacted, promulgated, issued, entered, amended or enforced by any Person (collectively,
Restraints
) shall be in effect enjoining, restraining, preventing or prohibiting consummation of the transactions contemplated hereby
or making the consummation of the transactions contemplated hereby illegal.
Section 6.2
Conditions to
Obligations of Magellan and Merger Sub to Effect the Merger
. The obligation of Magellan and Merger Sub to effect the Merger is further subject to the satisfaction (or waiver, if permissible under applicable Law) on or prior to the Closing Date
of the following conditions:
(a)
Representations and Warranties
. (i) The representations and
warranties of Tellurian contained in
Section 4.1
,
Section 4.2
, and
Section 4.3
shall be true and correct in all but
de minimis
respects, in each case both when made and at and as of the Closing Date, as if made at and as
of such time (except to the extent expressly made as of an earlier date, in which case as of such date); and (ii) all other representations and warranties of Tellurian set forth herein shall be true and correct both when made and at and as of
the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this clause (ii), where the failure of such representations and warranties to
be so true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth in any individual such representation or warranty) does not have, and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Tellurian. Magellan shall have received a certificate signed on behalf of Tellurian by an executive officer of Tellurian to such effect.
(b)
Performance of Obligations
. Tellurian shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Closing Date, and Magellan shall have received a certificate signed on behalf of Tellurian by an executive officer of Tellurian to such effect.
Section 6.3
Conditions to Obligations of Tellurian to Effect the Merger
. The obligation of Tellurian to effect
the Merger is further subject to the satisfaction (or waiver, if permissible under applicable Law) on or prior to the Closing Date of the following conditions:
(a)
Representations and Warranties
. (i) The representations and warranties of Magellan contained in
Section 3.1
,
Section 3.2
and
Section 3.3
shall be true and correct in all but
de minimis
respects, in each case both when made and at and as of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such date);
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and (ii) all other representations and warranties of Magellan set forth herein shall be true and correct both when made and at and as of the Closing Date, as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case as of such date), except, in the case of this clause (ii), where the failure of such representations and warranties to be so true and correct (without giving effect to
any limitation as to materiality or Material Adverse Effect set forth in any individual such representation or warranty) does not have, and could not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect on Magellan. Tellurian shall have received a certificate signed on behalf of Magellan by an executive officer of Magellan to such effect.
(b)
Performance of Obligations of Magellan
. Magellan shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to the Closing Date, and Tellurian shall have received a certificate signed on behalf of Magellan by an executive officer of Magellan to such effect.
(c)
Resignation of Magellan Directors and Officers
. At Closing, all directors and officers of Magellan and each
Magellan Subsidiary shall resign except as otherwise contemplated pursuant to
Section 1.7
, and Antoine Lafargue shall have released any and all contractual or similar obligations payable to him from Magellan or its Affiliates, or
otherwise owing to him as a result of his services as an officer, director, agent or employee of the foregoing;
provided
,
however
, that such release shall not affect any right to indemnification and insurance as provided in
Section
5.8
, above; and
provided
,
further
, that the foregoing release shall be subject to receipt by Antoine Lafargue of an offer of employment by Magellan, effective as of the Effective Time, providing for terms and conditions
substantially similar to those set forth on
Section 6.3(c)
of the Tellurian Disclosure Schedule.
(d)
Effective Registration Statement
. The Registration Statement shall have been declared effective by the SEC
under the Securities Act and no stop order suspending the effectiveness of the Registration Statement may be in effect and no proceeding for such purpose may be pending before or threatened by the SEC.
(e)
Nasdaq Listing
. The Magellan Shares to be issued in the Merger or in connection with the Merger shall have
been approved for listing on Nasdaq, subject to official notice of issuance.
Section 6.4
Frustration of Closing
Conditions
. Neither Magellan, Merger Sub, nor Tellurian may rely on the failure of any condition set forth in
Section 6.1
,
Section 6.2
or
Section 6.3
, as the case may be, to be satisfied if such failure was caused by such
Partys failure to use its reasonable best efforts to consummate the Merger and the other transactions contemplated hereby, or other breach of or non-compliance with this Agreement.
ARTICLE VII
Termination
Section 7.1
Termination
. This Agreement may be terminated and the transactions contemplated hereby
abandoned at any time prior to the Closing:
(a) by the mutual written consent of the Magellan Board and the
Tellurian Board in a written instrument.
(b) by Magellan or Tellurian:
(i) if the Closing shall not have been consummated on or before December 31, 2016 (the
Outside Date
);
provided
, that the right to terminate this Agreement
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under this
Section 7.1(b)(i)
shall not be available to a Party if the inability to satisfy such condition was due to the failure of such Party to perform any of its obligations under this
Agreement;
(ii) if any Restraint having the effect set forth in
Section 6.1(b)
shall be in
effect and shall have become final and nonappealable;
provided, however
, that the right to terminate this Agreement under this
Section 7.1(b)(ii)
shall not be available to a Party if such Restraint was due to the failure of such Party
to perform any of its obligations under this Agreement;
(iii) if the Magellan Stockholder Meeting
shall have concluded and the Magellan Stockholder Approval shall not have been obtained; or
(iv) if the Tellurian Stockholder Meeting shall have concluded and the Tellurian Stockholder Approval
shall not have been obtained.
(c) by Tellurian:
(i) (A) if an Adverse Recommendation Change shall have occurred or Magellan failed to make the
Magellan Board Recommendation, in each case whether or not permitted by the terms hereof, or (B) if Magellan breached its obligations under
Section 5.3
in any material respect; or
(ii) if Magellan or Merger Sub shall have breached or failed to perform any of its representations,
warranties, covenants or agreements set forth in this Agreement (or if any of the representations or warranties of Magellan and Merger Sub set forth in this Agreement shall fail to be true), which breach or failure (A) would (if it occurred or
was continuing as of the Closing Date) give rise to the failure of a condition set forth in
Section 6.3(a)
or
Section 6.3(b)
and (B) is incapable of being cured, or is not cured, by Magellan or Merger Sub by the earlier of
thirty (30) days following receipt of written notice from Tellurian of such breach or failure or the Outside Date;
provided
that Tellurian shall not have the right to terminate this Agreement pursuant to this
Section 7.1(c)(ii)
if
Tellurian is then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement such as would result in any of the closing conditions set forth in
Section 6.2(a)
and
Section 6.2(b)
not being satisfied.
(d) by Magellan:
(i) at any time prior to receipt of the Magellan Stockholder Approval, in order to enter into a
binding written agreement with respect to a Superior Proposal,
provided
that Magellan shall have complied in all material respects with its obligations under
Section 5.3
; or
(ii) if Tellurian shall have breached or failed to perform any of its representations, warranties,
covenants or agreements set forth in this Agreement (or if any of the representations or warranties of Tellurian set forth in this Agreement shall fail to be true), which breach or failure (A) would (if it occurred or was continuing as of the
Closing Date) give rise to the failure of a condition set forth in
Section 6.2(a)
or
Section 6.2(b)
and (B) is incapable of being cured, or is not cured, by Tellurian, by the earlier of thirty (30) days following receipt of
written notice from Magellan of such breach or failure or the Outside
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Date;
provided
that Magellan shall not have the right to terminate this Agreement pursuant to this
Section 7.1(d)(ii)
if Magellan or Merger Sub is then in material breach of any of
its representations, warranties, covenants or agreements contained in this Agreement such as would result in any of the closing conditions set forth in
Section 6.3(a)
and
Section 6.3(b)
not being satisfied.
Section 7.2
Effect of Termination
. In the event of the termination of this Agreement as provided in
Section
7.1
, written notice thereof shall be given to the other Parties, specifying the provision or provisions of this Agreement pursuant to which such termination is made, and this Agreement shall forthwith become null and void (other than the
provisions in this
Section 7.2
(Effect of Termination),
Section 7.3
(Fees and Expenses), and the provisions in
ARTICLE VIII
, all of which shall survive termination of this Agreement), and there shall be no liability on the part
of Magellan, Tellurian or any of their respective Affiliates, directors and officers, as applicable, except that (a) Tellurian and/or Magellan may have liability as provided in
Section 7.3
and (b) no Party shall be relieved or
released from any liabilities or damages incurred or suffered by the other Parties arising out of fraud or any Willful Breach of any covenant or agreement contained in this Agreement. If more than one provision of
Section 7.1
is available to
a terminating Party in connection with a termination of this Agreement, the terminating Party may rely on any and/or all available provisions in
Section 7.1
for any such termination.
Section 7.3
Fees and Expenses.
(a) In the event that (i) an Alternative Proposal shall have been publicly proposed or publicly disclosed prior
to, and not withdrawn at the time of, the Magellan Stockholder Meeting (or, if the Magellan Stockholder Meeting shall not have occurred, prior to the termination of this Agreement pursuant to
Section 7.1(b)(i)
), or (ii) this Agreement is
terminated by Tellurian or Magellan pursuant to
Section 7.1(b)(i)
or
Section 7.1(b)(iii)
, and (iii) Magellan enters into a definitive agreement with respect to, or consummates, an Alternative Proposal within twelve (12)
months after the date this Agreement is terminated, then Magellan shall pay the Termination Fee to Tellurian upon the earlier of (A) the date of the execution of such definitive agreement by Magellan or (B) consummation of any such
transaction. For purposes of this
Section 7.3(a)
, the term
Alternative Proposal
shall have the meaning assigned to such term in
Section 5.3(e)(i)
, except that the references to 20% shall be deemed to be
references to 50%.
(b) In the event this Agreement is terminated by Tellurian pursuant to
Section
7.1(c)(i)
or
Section 7.1(c)(ii)
, or by Magellan pursuant to
Section 7.1(d)(i)
, Magellan shall pay to Tellurian, within two (2) Business Days after the date of termination, the Termination Fee.
(c) In the event that (i) this Agreement is terminated by Tellurian or Magellan pursuant to
Section
7.1(b)(iv)
or by Magellan pursuant to
Section 7.1(d)(ii)
or (ii) Tellurian does not use commercially reasonable efforts to secure the approval for listing of the Magellan Shares on the Nasdaq (thereby ensuring that the condition set
forth in
Section 6.3(e)
is met), then Tellurian shall pay to Magellan, within two (2) Business Days after the date of termination, the Reverse Termination Fee.
(d) Any payment of the Termination Fee or the Reverse Termination Fee shall be made in cash by wire transfer of
immediately available funds to an account designated in writing by Tellurian or Magellan, respectively.
(e) In
the event that (i) Magellan shall fail to pay the Termination Fee or (ii) Tellurian shall fail to pay the Reverse Termination Fee, in each case required pursuant to this
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Section 7.3
when due, such fee shall accrue interest for the period commencing on the date such fee became past due, at a rate equal to the legal rate of interest provided for in
Section 2301 of Title 6 of the Delaware Code. The Parties acknowledge that the provisions of this
Section 7.3
are an integral part of the transactions contemplated hereby and that, without these agreements, they would not enter into
this Agreement.
(f) The Parties agree that in the event that (i) Magellan pays the Termination Fee to
Tellurian or (ii) Tellurian pays the Reverse Termination Fee to Magellan, in each case the payor Party has no further liability to the payee Party of any kind in respect of this Agreement and the transactions contemplated hereby;
provided,
however
, that nothing in this Agreement shall release any Party from liability for Willful Breach or fraud), and in no event shall Magellan or Tellurian be required to pay the Termination Fee or Reverse Termination Fee on more than one occasion.
ARTICLE VIII
Miscellaneous
Section
8.1
No Survival, Etc
. Except as otherwise provided in this Agreement, the representations, warranties and agreements of each Party shall remain operative and in full force and effect regardless of any investigation made
by or on behalf of any other Parties, whether prior to or after the execution of this Agreement. The representations, warranties, covenants and agreements in this Agreement shall terminate at the Closing or, except as otherwise provided in
Section 7.2
, upon the termination of this Agreement pursuant to
Section 7.1
, as the case may be, except that the covenants and agreements set forth in
Section 5.8
and
Section 5.9
and any other agreement in this Agreement
that contemplates performance after the Closing shall survive the Closing, and those set forth in
Section
7.2
,
Section 7.3
, and this
ARTICLE VIII
shall survive termination of this Agreement. The Confidentiality Agreement
shall survive termination of this Agreement in accordance with its terms.
Section 8.2
Amendment or
Supplement
. At any time prior to the Closing, this Agreement may be amended or supplemented in any and all respects, whether before or after receipt of the Magellan Stockholder Approval or Tellurian Stockholder Approval, by written agreement of
the Parties, by action taken or authorized by their respective boards of directors, boards of managers or other governing bodies;
provided, however
, that following receipt of the Magellan Stockholder Approval or Tellurian Stockholder
Approval, there shall be no amendment or change to the provisions of this Agreement which by applicable Law would require further approval by the Magellan Stockholders or Tellurian Stockholders without such approval. This Agreement (including the
Magellan Disclosure Schedules and the Tellurian Disclosure Schedules) may not be amended except by an instrument in writing signed on behalf of each of the Parties.
Section 8.3
Extension of Time, Waiver, Etc
. At any time prior to the Closing, any Party may, subject to
applicable Law, (a) waive any inaccuracies in the representations and warranties of any other Party, (b) extend the time for the performance of any of the obligations or acts of any other Party or (c) waive compliance by any other
Party with any of the agreements contained herein or, except as otherwise provided herein, waive any of such Partys conditions. Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such Party. Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the Party granting such waiver in any other
respect or at any other time. Notwithstanding the foregoing, no failure or delay by any Party in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder.
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Section 8.4
Assignment
. Neither this Agreement nor any of the
rights, interests or obligations of the Parties hereunder shall be assigned, in whole or in part, by operation of law or otherwise, by any of the Parties without the prior written consent of the other Parties. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns. Any purported assignment not permitted under this
Section 8.4
shall be null and void.
Section 8.5
Counterparts
. This Agreement may be executed in counterparts (each of which shall be deemed to be an
original but all of which taken together shall constitute one and the same agreement) and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. A signed copy of this
Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
Section 8.6
Entire Agreement; No Third-Party Beneficiaries
. This Agreement, including the Annexes and Exhibits
hereto, the Magellan Disclosure Schedule, the Tellurian Disclosure Schedule, and the Confidentiality Agreement, (a) constitutes the entire agreement and understanding of the Parties, and supersedes all other prior agreements and understandings,
both written and oral, among the Parties with respect to the subject matter of this Agreement and thereof and (b) shall not confer upon any Person other than the Parties any rights (including third-party beneficiary rights or otherwise) or
remedies hereunder, except for, in the case of clause (b), the provisions of
Section 8.12
.
Section
8.7
Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be
governed by, and construed in accordance with, the Laws of the State of Delaware, applicable to contracts executed in and to be performed entirely within that state, without giving effect to any conflicts of law principles that would result in the
application of any applicable Law other than the Law of the State of Delaware.
(b) Each of the Parties
irrevocably agrees that any legal action or Proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations
arising hereunder brought by the other Parties or their successors or assigns, shall be brought and determined exclusively in Texas state or federal court in Harris County, Texas. Each of the Parties hereby irrevocably submits with regard to any
such action or Proceeding for itself and in respect of its or property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than the aforesaid courts. Each of the Parties hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or Proceeding with respect to
this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to serve in accordance with this
Section 8.7
, (ii) any claim that it or its property
is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such court (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise) and (iii) to the fullest extent permitted by the applicable Law, any claim that (x) the suit, action or Proceeding in such court is brought in an inconvenient forum, (y) the venue of such suit, action or Proceeding is
improper or (z) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
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(c) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
AND ENFORCEMENT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
Section 8.8
Specific
Enforcement.
(a) The Parties hereby agree that irreparable damage would occur and that the Parties would not
have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and it is accordingly agreed that the Parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and that the Parties shall be entitled to enforce specifically the terms and provisions of this Agreement, in each case, in accordance with this
Section 8.8
in Texas state or
federal court in Harris County, Texas, this being in addition to any other remedy to which any Party is entitled at law or in equity. Each of the Parties agrees that it will not oppose the granting of an injunction, and each Party agrees that it
will not oppose the granting of specific performance and other equitable relief as provided herein on the basis that (x) each Party has an adequate remedy at law or (y) an award of specific performance is not an appropriate remedy for any
reason at law or equity;
provided, however
, that the remedy provided hereunder is not available to Tellurian to remedy any action of Magellan in the proper exercise of its rights under
Section 5.3
. Each Party further agrees that
no Party shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this
Section 8.8
, and each Party irrevocably waives any right it may have to
require the obtaining, furnishing or posting of any such bond or similar instrument.
Section 8.9
Notices
.
All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given and received (a) when delivered by hand (with written confirmation of receipt);
(b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business
hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such
communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this
Section 8.9
):
If to Magellan or Merger Sub, to:
J. Thomas Wilson
Magellan
Petroleum Corporation
1775 Sherman Street, Suite 1950
Denver, Colorado 80203
Facsimile: 720.484.2382
E-mail: jtwilson@magellanpetroleum.com
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and
Antoine J. Lafargue
Magellan
Petroleum Corporation
1775 Sherman Street, Suite 1950
Denver, Colorado 80203
Facsimile: 720.484.2382
E-mail: alafargue@magellanpetroleum.com
with a copy (which shall not constitute notice) to:
John A. Elofson, Esq.
Davis
Graham & Stubbs LLP
1550 Seventeenth Street, Suite 500
Denver, Colorado 80202
Facsimile: 303.893.1379
E-mail: john.elofson@dgslaw.com
If to Tellurian, to:
Martin
Houston
Tellurian Investments Inc.
1201 Louisiana Street, Suite 3100
Houston, Texas 77002
Facsimile: 832.962.4055
with
a copy (which shall not constitute notice) to:
J. Wesley Dorman, Jr.
Gray Reed & McGraw, P.C.
1300 Post Oak Boulevard, Suite 2000
Houston, Texas 77056
Facsimile: 713.730.5937
E-mail: wdorman@grayreed.com
Section 8.10
Severability
. If any term or other provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, provisions and conditions of this Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the
fullest extent permitted by applicable Law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
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Section 8.11
Interpretation.
(a) When a reference is made in this Agreement to an Article, Section, Annex, Exhibit or Schedule, such reference
shall be to an Article of, a Section of, an Annex to, an Exhibit to or a Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without
limitation. When used in this Agreement, the words hereof, herein, hereby and hereunder and words of similar import shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. All references to days mean calendar
days unless otherwise provided. The word or shall be inclusive and not exclusive.
(b) The Parties
have participated jointly in the negotiation and drafting of this Agreement with the assistance of legal counsel and other advisors and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as
jointly drafted by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement or interim drafts of this Agreement.
Section 8.12
Non-Recourse
. No past, present or future director, officer, employee, incorporator, member,
partner, stockholder, agent, attorney, representative or affiliate of any Party or of any of its respective Affiliates shall have any liability (whether in contract or in tort) for any obligations or liabilities of such Party arising under, in
connection with or related to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby, in the absence of fraud;
provided, however
, that nothing in this
Section 8.12
shall limit any
liability of the Parties to this Agreement for breaches of the terms and conditions of this Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered as
of the date first written above.
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MAGELLAN PETROLEUM CORPORATION
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By:
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/s/ J. Thomas Wilson
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Title:
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President and Chief Executive Officer
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RIVER MERGER SUB, INC.
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By:
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/s/ Antoine Lafargue
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Name:
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Antoine Lafargue
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Title:
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President and Chief Executive Officer
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TELLURIAN INVESTMENTS INC.
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By:
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/s/ Martin Houston
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Name:
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Martin Houston
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[Signature Page to Agreement and Plan of Merger]
A-46
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this
Amendment
), is entered into as of November 23, 2016, by and
among Tellurian Investments Inc., a Delaware corporation (
Tellurian
), Magellan Petroleum Corporation, a Delaware corporation (
Magellan
), and River Merger Sub, Inc., a Delaware corporation and a direct,
wholly-owned Subsidiary of Magellan (
Merger Sub
).
RECITALS
WHEREAS, Tellurian, Magellan and Merger Sub are parties to that certain Agreement and Plan of Merger, entered into as of August 2, 2016 (as
amended, supplemented, amended and restated or otherwise modified from time to time, the
Merger Agreement
);
WHEREAS,
the Tellurian Board has determined that it is in the best interests of Tellurian and the Tellurian Stockholders, and has declared it advisable, to enter into this Amendment, and the Tellurian Board has approved this Amendment, upon the terms and
subject to the conditions set forth herein, and has, upon such terms and subject to such conditions, recommended that the Tellurian Stockholders vote in favor of the approval of the Merger Agreement, as amended by this Amendment;
WHEREAS, the Magellan Board has determined that it is in the best interests of Magellan and the Magellan Stockholders, and has declared it
advisable, to enter into this Amendment, and the Magellan Board has approved this Amendment, upon the terms and subject to the conditions set forth herein, and has, upon such terms and subject to such conditions, on its own behalf and as the sole
stockholder of Merger Sub, approved and adopted this Amendment;
WHEREAS, the board of directors of Merger Sub has unanimously approved
and declared advisable this Amendment; and
WHEREAS, Magellan, Merger Sub, and Tellurian desire to amend certain terms of the Merger
Agreement in accordance with
Section 8.2
of the Merger Agreement as set forth below;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants, representations and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, Tellurian,
Magellan and Merger Sub hereby agree as follows:
AGREEMENT
Section 1.
Definitions
. Capitalized terms used herein (including in the Recitals hereto) but not defined
herein shall have the meanings as given them in the Merger Agreement, unless the context otherwise requires.
Section
2.
Amendments to Merger Agreement
. Tellurian, Magellan and Merger Sub hereby amend the Merger Agreement as follows:
(a)
Section 1.5
of the Merger Agreement is hereby amended and restated in its entirety to the following:
Section 1.5
Certificate of Incorporation; Bylaws
. At the Effective Time, and
pursuant to the Certificate of Merger, the certificate of incorporation of Tellurian, as in
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effect on the date hereof, shall be amended and restated in substantially the form set forth on
Annex 2
hereto, and, as so amended and restated, shall be the certificate of incorporation
of the Surviving Corporation, until thereafter amended as provided therein and by applicable Law. At the Effective Time, the bylaws of Merger Sub in effect immediately prior to the Effective Time shall be the bylaws of the Surviving
Corporation, until thereafter amended as provided therein and by applicable Law. At the Effective Time, a certificate of designations of convertible preferred stock of Magellan, in substantially the form set forth on
Annex 3
hereto, shall be
the certificate of designations of convertible preferred stock of Magellan, until thereafter amended as provided therein and by applicable Law.
(b) Subpart (a) of the first sentence of
Section 1.7
of the Merger Agreement is hereby amended by replacing
three (3) with five (5).
(c)
Section 2.1(c)
of the Merger Agreement is hereby
amended and restated in its entirety to the following:
(c)
Merger Sub
. Each
share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become 21,881.2 newly issued, fully paid and non-assessable share of common stock of the
Surviving Corporation so that, after the Effective Time, Magellan shall be the holder of all of the issued and outstanding shares of the Surviving Companys common stock.
(d)
Section 2.1(d)
of the Merger Agreement is hereby amended by adding the following sentence to the end of
Section 2.1(d)
:
Notwithstanding the foregoing, the Parties agree that this
Section 2.1(d)
shall
not apply to the issuance of the Tellurian Preferred Stock.
(e) The second sentence of
Section
3.12(g)
of the Merger Agreement is hereby amended and restated in its entirety to the following:
Neither
Magellan nor Merger Sub knows of any fact or has taken or failed to take any action that would reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code or as an exchange
under Section 351 of the Code.
(f)
Section 4.2(a)
of the Merger Agreement is hereby amended and
restated in its entirety to the following:
(a) The authorized capital stock of Tellurian
consists of (i) 200,000,000 shares of Tellurian Stock, of which 109,406,000 shares are issued and outstanding as of November 23, 2016 and (ii) 5,467,851 shares of preferred stock, $0.001 par value per share (
Tellurian Preferred
Stock
), of which 5,467,851 shares are issued and outstanding as of November 23, 2016. No shares of Tellurian Stock or Tellurian Preferred Stock are held in treasury as of the date hereof. All of the outstanding shares of Tellurian
Stock and Tellurian Preferred Stock have been duly authorized, are validly issued, fully paid, and nonassessable, and have been issued in compliance with all applicable Laws and are not subject to any pre-emptive rights.
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(g)
Section 4.2(b)
of the Merger Agreement is hereby amended and
restated in its entirety to the following:
(b) There are no preemptive rights to purchase
any Securities of Tellurian or any Tellurian Subsidiary. Except for the conversion rights of the Tellurian Preferred Stock, as set forth in Tellurians amended and restated certificate of incorporation and except as set forth in
Section
4.2
of the Tellurian Disclosure Schedule, there are no outstanding options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of
Tellurian Stock or other Securities of Tellurian or any Subsidiary of Tellurian.
(h) The second sentence of
Section 4.11(f)
of the Merger Agreement is hereby amended and restated in its entirety to the following:
Tellurian does not know of any fact or has taken or failed to take any action that would reasonably be expected to
prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code or as an exchange under Section 351 of the Code.
(i) The prefatory language in
Section 5.2(a)
of the Merger Agreement is hereby amended and restated in its
entirety to the following:
(a) Except (i) as expressly permitted by or set forth in this
Agreement, (ii) as set forth in the Magellan Disclosure Schedule or the Tellurian Disclosure Schedule, as applicable, (iii) as required by applicable Law, (iv) as agreed to in writing by the other Parties (which consent shall not be unreasonably
withheld, delayed or conditioned), or (v) in connection with the transactions to be entered into and consummated by Magellan and Tellurian in connection with the issuance of Tellurian Preferred Stock, during the period from the date of this
Agreement until the Closing, Magellan shall conduct its business in the ordinary course of business consistent with past practice, and each of Magellan and Tellurian shall, and shall cause each of their respective Subsidiaries to, (A) use
commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationships with it and retain the services of its present officers and key employees, and (B) use commercially
reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all Material Contracts. Without limiting the generality of the foregoing, except (1) as expressly permitted by or provided in this Agreement, (2)
as set forth in the Magellan Disclosure Schedule or the Tellurian Disclosure Schedule, as applicable, (3) as required by applicable Law, (4) as agreed in writing by the Parties or (5) in connection with the transactions to be entered into and
consummated by Magellan and Tellurian in connection with the issuance of Tellurian Preferred Stock, during the period from the date of this Agreement to the Closing, each of Magellan and Tellurian shall not, and shall not permit any of their
respective Subsidiaries to:
(j)
Section 5.14
of the Merger Agreement is hereby amended and restated
in its entirety to the following:
Section 5.14
Tax Treatment of the Merger
. For
U.S. federal income tax purposes, the Parties intend that the Merger shall qualify as a reorganization within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder
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and/or as an exchange under Section 351 of the Code and the Treasury Regulations promulgated thereunder, and this Agreement is intended to be, and is adopted as, a plan of
reorganization for purposes of Sections 354 and 361 of the Code and within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3(a).
(k)
Section 7.1(b)(i)
of the Merger Agreement is hereby amended by replacing December 31, 2016
with January 31, 2017.
(l)
Annex 1
of the Merger Agreement is hereby amended by adding the
following definition in appropriate alphabetical order:
Tellurian Preferred Stock
is defined in
Section 4.2(a)
.
(m) The definition of Tellurian Stockholder Approval in
Annex 1
of
the Merger Agreement is hereby amended and restated in its entirety to the following:
Tellurian
Stockholder Approval
means the affirmative vote or consent in favor of (i) the Merger and the issuance of the Magellan Shares pursuant to this Agreement of at least a majority of the capital stock of Tellurian which are entitled to
vote on the Merger, and (ii) the amendment and restatement of the certificate of incorporation of Tellurian pursuant to
Section 1.5
, of at least a majority of the issued and outstanding shares of capital stock of Tellurian.
(n)
Section 3.2
of the Magellan Disclosure Schedule is hereby amended and restated in its entirety to be in the
form of
Exhibit A
to this Amendment.
(o)
Section 4.2
of the Tellurian Disclosure Schedule is hereby
amended and restated in its entirety to be in the form of
Exhibit B
to this Amendment.
(p)
Section
4.5
of the Tellurian Disclosure Schedule is hereby amended and restated in its entirety to be in the form of
Exhibit C
to this Amendment.
(q)
Section 4.9
of the Tellurian Disclosure Schedule is hereby amended and restated in its entirety to be in the
form of
Exhibit D
to this Amendment.
(r)
Section 4.16
of the Tellurian Disclosure Schedule is hereby
amended and restated in its entirety to be in the form of
Exhibit E
to this Amendment.
(s) The Merger
Agreement is hereby amended by adding a new
Annex 2
in the form of
Exhibit F
to this Amendment.
(t) The Merger Agreement is hereby amended by adding a new
Annex 3
in the form of
Exhibit G
to this
Amendment.
Section 3.
Confirmation of Merger Agreement
. Other than as expressly modified pursuant to
this Amendment, all of the terms, conditions and other provisions of the Merger Agreement are hereby ratified and confirmed and shall continue to be in full force and effect in accordance with their respective terms.
Section 4.
References
. All references to the Merger Agreement (including hereof,
herein, hereunder, hereby and this Agreement) shall refer to the Merger Agreement as amended by this Amendment. Notwithstanding the foregoing, references to the date of the Merger Agreement (as amended
hereby) and references in the Merger Agreement to the date hereof, the date of this Agreement and terms of similar import shall in all instances continue to refer to August 2, 2016.
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Section 5.
Counterparts
. This Amendment may be executed in
counterparts (each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement) and shall become effective when one or more counterparts have been signed by each of the Parties and delivered
to the other Parties. A signed copy of this Amendment delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Amendment.
Section 6.
Entire Agreement
. The provisions of
Article VIII
of the Merger Agreement shall apply to
this Amendment
mutatis mutandis
, and to the Merger Agreement as modified by this Amendment, taken together as a single agreement, reflecting the terms as modified hereby.
(Signature Page Follows)
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In WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed and delivered as
of the date first written above.
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MAGELLAN PETROLEUM CORPORATION
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By:
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/s/ Antoine J. Lafargue
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Name:
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Antoine J. Lafargue
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Title:
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President and Chief Executive Officer
|
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RIVER MERGER SUB, INC.
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By:
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/s/ Antoine J. Lafargue
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Name:
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Antoine J. Lafargue
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Title:
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President and Chief Executive Officer
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TELLURIAN INVESTMENTS INC.
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By:
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/s/ Meg A. Gentle
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Name:
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Meg A. Gentle
|
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Title:
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President and Chief Executive Officer
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[Signature Page to First Amendment to Agreement and Plan of Merger]
A-52
EXHIBIT F
Annex 2
Amended and
Restated Certificate of Incorporation of Tellurian
A-53
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TELLURIAN INVESTMENTS
INC.
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
Tellurian Investments Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the
State of Delaware (the
General Corporation Law
).
DOES HEREBY CERTIFY:
1. The name of the corporation is Tellurian Investments Inc., and that this corporation was originally converted from a
limited liability company to a corporation pursuant to the General Corporation Law on February 23, 2016 under the name Tellurian Investments Inc.
2. That the Board of Directors of this corporation duly adopted resolutions proposing to amend and restate the
Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit
the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows:
RESOLVED,
that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as follows:
FIRST: The
name of the corporation is Tellurian Investments Inc. (the
Corporation
)
SECOND: The registered office of
the Corporation in the State of Delaware is located at 1675 South State Street, Suite B, in the City of Dover, County of Kent, 19901. The name of the registered agent of the Corporation at such address is Capitol Services, Inc.
THIRD: The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful business, act or
activity for which corporations may be organized under the Delaware General Corporation Law. The Corporation will have perpetual existence. The private property of the stockholders shall not be subject to the payment of corporate debts to
any extent whatsoever.
FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue
is 205,467,851 shares, divided into two classes consisting of (i) 200,000,000 shares of common stock, par value of $0.001 per share (
Common Stock
) and (ii) 5,467,851 shares of preferred stock, par value of $0.001 per share
(
Preferred Stock
).
The following is a statement of the designations and the powers, privileges and rights, and
the qualifications, limitations or restrictions thereof in respect of the Series A Preferred Stock (which statement shall supersede any other provision of this Certificate of Incorporation or any other organizational document of the Corporation).
5,467,851 shares of the authorized and unissued Preferred Stock are hereby designated
Series A Preferred Stock
with the following rights, preferences, powers, privileges and restrictions, qualifications and limitations. Unless otherwise indicated, references to sections or subsections in this Article Fourth refer to sections and
subsections of this Article Fourth.
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1.
General
.
(a) The shares of such series shall be designated the Series A Preferred Stock (hereinafter referred to as the
Series A Preferred Stock
).
(b) Each share of Series A Preferred Stock shall be identical
in all respects with the other shares of Series A Preferred Stock.
(c) Shares of Series A Preferred Stock
redeemed or purchased by the Corporation or converted into Common Stock, or exchanged for Magellan securities, shall be cancelled and shall revert to authorized but unissued Preferred Stock, undesignated as to series.
(d) In any case where any dividend payment date or redemption date shall not be a Business Day, then (notwithstanding
any other provision of this Certificate of Incorporation) payment of dividends or redemption price need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the dividend payment
date or redemption date; provided, however, that no interest shall accrue on such amount of dividends or redemption price for the period from and after such dividend payment date or redemption date, as the case may be.
2.
Dividends
. So long as any shares of Series A Preferred Stock are outstanding:
(a) If the Magellan Merger Closing has not occurred, the Corporation shall neither pay nor declare any dividends, nor
make any redemptions or repurchases (except as permitted by
Section
4
and except ordinary course repurchases or deemed repurchases occurring in connection with the vesting or exercise of compensatory equity awards and
related tax withholding), in respect of Common Stock, Preferred Stock, Junior Stock or any other class of stock; and
(b) If the Magellan Merger Closing has occurred, (i) the Corporation shall neither pay nor declare any dividends, nor
make any redemptions or repurchases (except as permitted by
Section
4
and except ordinary course repurchases or deemed repurchases occurring in connection with the vesting or exercise of compensatory equity awards and
related tax withholding), in respect of Preferred Stock or Junior Stock, except that the Corporation shall be entitled to declare and pay dividends and make redemptions and repurchases in respect of Common Stock and (ii) the Corporation shall not
permit Magellan to declare or pay dividends, nor make any redemptions or repurchases, in respect of its equity interests.
3.
Liquidation
.
(a) In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or
involuntary, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of the Series A Preferred Stock shall be entitled to receive an amount in cash equal to $4.57218 per share of Series A Preferred
Stock (the
Liquidation Payment
) before any distribution is made to holders of shares of Common Stock, Junior Stock or Parity Stock upon any such liquidation, dissolution or winding up of the affairs of the
Corporation. If, upon any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the assets of the Corporation, or proceeds thereof, distributable among the holders of the then-outstanding
shares of Series A Preferred Stock are insufficient to pay the full amount of the Liquidation Payment in respect to all then-outstanding shares of Series A Preferred Stock, then all such assets and proceeds of the Corporation thus distributable
shall be distributed ratably in respect of the then-outstanding shares of Series A Preferred Stock.
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(b) Notice of any liquidation, dissolution or winding up of the affairs of
the Corporation, whether voluntary or involuntary, shall be given by mail, postage prepaid, not less than 30 days prior to the distribution or payment date stated therein, to each holder of record of Series A Preferred Stock appearing on the
stock books of the Corporation as of the date of such notice at the address of said holder shown therein. Such notice shall state a distribution or payment date, the amount of the Liquidation Payment and the place where the Liquidation Payment
shall be distributable or payable.
(c) For the purposes of this
Section
3
, neither the
voluntary sale, lease, conveyance, exchange or transfer of all or substantially all the property or assets of the Corporation (whether for cash, shares of stock, securities or other consideration), nor the consolidation or merger of the Corporation
with one or more other entities, shall be deemed to be a liquidation (complete or partial), dissolution or winding up of the affairs of the Corporation, unless such voluntary sale, lease, conveyance, exchange or transfer shall be in connection with
a plan of liquidation, dissolution or winding up of the affairs of the Corporation.
(d) After the payment in cash
to the holders of shares of the Series A Preferred Stock of the full amount of the Liquidation Payment with respect to outstanding shares of Series A Preferred Stock, the holders of outstanding shares of Series A Preferred Stock shall
have no right or claim, based on their ownership of shares of Series A Preferred Stock, to any of the remaining assets of the Corporation.
4.
Redemption
. The Series A Preferred Stock shall not be redeemable except as set forth in this
Section
4
.
(a) Subject to
Section
4(f)
, if the Magellan Merger
Closing has not occurred by December 31, 2017, then at any time on or after such date so long as at such time the Magellan Merger Agreement has been terminated in accordance with its terms, the Corporation, at its option, may redeem all (but
not less than all) of the outstanding shares of Series A Preferred Stock in accordance with this
Section
4
(a
Redemption
).
(b) The redemption price payable for each share of Series A Preferred Stock redeemed pursuant to a Redemption
shall be equal to $25,000,000 divided by the number of outstanding shares of Series A Preferred Stock, paid in cash.
(c) The Corporation shall give notice of any Redemption by mail, postage prepaid, not less than 30 days nor more than
60 days prior to the date fixed for such redemption, to each holder of record of the shares of Series A Preferred Stock to be redeemed appearing on the stock books of the Corporation as of the date of such notice at the address of said holder
shown therein. Such notice to any holder shall state the redemption date; the redemption price; and the place where the shares to be redeemed shall be presented and surrendered for payment of the redemption price therefor. Any notice which
is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the stockholder receives such notice, and failure duly to give such notice by mail, or any defect in such notice, to any holder of shares
of the Series A Preferred Stock to be redeemed shall not affect the validity of the proceedings for the redemption of any other shares of the Series A Preferred Stock.
(d) If notice of redemption of shares of Series A Preferred Stock to be redeemed on a redemption date shall have
been duly given, and if the Corporation deposits in cash the aggregate redemption price of such shares in an irrevocable trust with (i) a bank or trust company organized and in good standing under the laws of the United States of America or any
State thereof, doing business in
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the Borough of Manhattan, The City of New York and having capital and surplus of not less than $500,000,000 according to its last published statement of condition (a
Trust
) or (ii) another paying agent reasonably acceptable to the holder(s) of a majority of the outstanding shares of Series A Preferred Stock, in each case for the pro rata benefit of the holders of such shares prior to
such redemption date, then from and after the time of such deposit, and notwithstanding that any certificate representing any such shares shall not have been surrendered for cancellation, (1) the holders of such shares shall cease to be
stockholders with respect to such shares, (2) such shares shall no longer be deemed to be outstanding and shall no longer be transferable on the books of the Corporation and (3) such holders shall have no interest in or claim against the
Corporation with respect to such shares except only the right to receive from such bank, trust company or paying agent the funds so deposited, without interest, upon surrender of the certificates representing such shares on or after the date of such
deposit. Any funds so deposited by the Corporation in a Trust which shall not be required for the redemption of any shares of Series A Preferred Stock because of the conversion thereof shall be released from such Trust and repaid to the
Corporation forthwith. Any funds so deposited in a Trust and unclaimed at the end of two years from the date fixed for redemption shall, to the extent permitted by law, be repaid to the Corporation upon its request, after which the holders of
such shares shall look only to the Corporation for payment thereof.
(e) Any Redemption shall be effected only out
of funds legally available for such purpose.
(f) Upon any redemption of shares of Series A Preferred Stock,
the shares of Series A Preferred Stock so redeemed shall be cancelled and shall revert to authorized but unissued Preferred Stock, undesignated as to series, and the number of shares of Preferred Stock which the Corporation shall have authority
to issue shall not be decreased by such redemption.
(g) In the event that any shares of Series A Preferred
Stock shall be converted into Common Stock or exchanged for Magellan Common Stock prior to the close of business on the second Business Day prior to the date fixed for redemption, (i) the Corporation shall not be obligated nor have the right to
redeem such shares on such date and (ii) any funds which shall have been deposited for the payment of the applicable redemption price shall be returned to the Corporation.
5.
Conversion; Exchange
.
5.1.
While the Magellan Merger is Pending
. The holders of shares of Series A Preferred Stock shall have no
conversion or exchange rights except as set forth in this
Section 5
.
5.2.
If the Magellan Merger Does
Not Occur: Optional Conversion
. If the Magellan Merger Closing has not occurred and (a) the Magellan Merger Agreement has been terminated in accordance with its terms, (b) December 31, 2017 has passed, (c) any liquidation, dissolution or winding
up of the affairs of the Corporation occurs or (d) if the Corporation issues any Parity Stock during the 12 months after the Original Issue Date and the first date on which such Parity Stock is convertible into Common Stock has passed, then the
holders of shares of Series A Preferred Stock shall have the right, at their option, to convert all (but not less than all) such shares into shares of Common Stock at any time (or, in the case of a liquidation, dissolution or winding up of the
affairs of the Corporation, immediately prior thereto) on and subject to the following terms and conditions:
(a) Each share of Series A Preferred Stock shall be convertible into 0.76923 shares of Common Stock (herein called the
Conversion Ratio
). The Conversion Ratio shall be adjusted in certain instances as provided in
Section 5.2(d)
.
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(b) In order to convert shares of Series A Preferred Stock the holder
thereof shall surrender at the office of the Corporation the certificate(s) therefor, duly endorsed or assigned to the Corporation or in blank, and give written notice to the Corporation at such office that he elects to convert such shares. No
payment or adjustment shall be made upon any conversion on account of any dividends on the Common Stock other than as provided in
Section 5.2(d)
.
(c) Shares of Series A Preferred Stock shall be deemed to have been converted immediately prior to the close of
business on the day of surrender of the certificate(s) for such shares for conversion in accordance with the foregoing provisions, and at such time the rights of the holder of such shares as a holder thereof shall cease and from and after such time
the person entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such Common Stock. As promptly as practicable on or after the conversion date, the Corporation shall issue and
shall deliver at such office a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion, together with payment in lieu of any fraction of a share, as provided in
Section
5.6
,
to the person or persons entitled to receive the same.
(d) In the event the Corporation shall, at any time or from
time to time after the Original Issue Date while the shares of Series A Preferred Stock remain outstanding, effect a subdivision (by any stock split, stock dividend, dividend of options, warrants or other similar instruments, stock
reclassification or otherwise) of the outstanding shares of Common Stock into a greater number of shares of Common Stock (or other equity interests) or a spin-off or other distribution of indebtedness or other assets, then and in each such event the
Conversion Ratio in effect at the opening of business on the day after the date upon which such subdivision, spin-off or other distribution becomes effective shall be proportionately adjusted. Additionally, if the Corporation shall, at any time
or from time to time after the Original Issue Date while the shares of Series A Preferred Stock remain outstanding, effect a combination (by any reverse stock split or otherwise) of the outstanding shares of Common Stock or any repurchase of
any outstanding shares of Common Stock such that it results in a smaller number of shares of Common Stock (or other equity interests), then and in each such event the Conversion Ratio in effect at the opening of business on the day after the date
upon which such combination or repurchase becomes effective shall be proportionately adjusted. Additionally, if the Corporation issues any Parity Stock during the 12 months after the Original Issue Date, which Parity Stock is convertible into Common
Stock and has a conversion ratio therefor that is more favorable to the holder(s) of such Parity Stock than the Conversion Ratio, then the Conversion Ratio shall be automatically adjusted to be equal to such more favorable conversion ratio.
Additionally, if the Corporation issues any Parity Stock during the 12 months after the Original Issue Date, which Parity Stock is convertible into Common Stock and the issuance price (including original issuance discount and other similar fees) for
such Parity Stock (for purposes of this
Section 5.2(d)
, the
Parity Stock Issuance Price
) is less than $4.57218 per share (the
Series A Price
), then (to the extent not duplicative of any
adjustment made pursuant to the immediately preceding sentence) the Conversion Ratio shall be automatically adjusted by multiplying it by the quotient derived by dividing the Series A Price by the Parity Stock Issuance Price. (For example, on the
Original Issuance Date, the Conversion Ratio is 1 share of Series A Preferred Stock converts into 0.76923 shares of Common Stock; if the Corporation were to issue shares of Parity Stock at $2.28609 per share, then the Conversion Ratio would be
adjusted such that thereafter 1 share of Series A Preferred Stock would convert into 1.53846 shares of Common Stock.) Any adjustment under this
Section
5.2(d)
shall become effective immediately after the opening of business
on the day after the date upon which the applicable event becomes effective.
5.3.
If the Magellan Merger Does
Not Occur: Mandatory Conversion
. If the Magellan Merger Closing has not occurred and the Magellan Merger Agreement has been terminated in accordance with its terms, then on the sixth anniversary of the Original Issue Date all shares of
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Series A Preferred Stock then outstanding shall automatically convert into shares of Common Stock on and subject to the following terms and conditions:
(a) Each share of Series A Preferred Stock shall be convertible at the Conversion Ratio. The Conversion Ratio shall be
adjusted in certain instances as provided in
Section 5.2(d)
.
(b) The Corporation shall use commercially
reasonable efforts to give notice of such conversion to the holders of shares of Series A Preferred Stock at least 30 days before the conversion date. No payment or adjustment shall be made upon any conversion on account of any dividends on the
Common Stock.
(c) Shares of Series A Preferred Stock shall be deemed to have been converted immediately prior
to the close of business on the conversion date, and at such time the rights of the holder of such shares as a holder thereof shall cease and from and after such time the person entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder of such Common Stock. As promptly as practicable on or after the conversion date and after surrender of the certificate(s) representing the converted Series A Preferred Stock, the Corporation
shall issue and shall deliver to the holder of each such certificate one or more certificates for the number of full shares of Common Stock issuable upon such conversion, together with payment in lieu of any fraction of a share, as provided in
Section
5.6
, to the person or persons entitled to receive the same.
5.4.
If the
Magellan Merger Occurs: Optional Exchange
.
(a)
Optional Exchange Into Magellan Preferred Stock
. If the
Magellan Merger Closing has occurred, then the holders of shares of Series A Preferred Stock shall have the right, at their option, to exchange all (but not less than all) such shares for shares of Magellan Preferred Stock at any time on and subject
to the following terms and conditions:
(i) Each share of Series A Preferred Stock shall be
exchangeable for one share of Magellan Preferred Stock (herein called the
Preferred Stock Exchange Ratio
). The Preferred Stock Exchange Ratio shall be adjusted in certain instances as provided in
Section 5.4(a)(iv)
.
(ii) In order to exchange shares of Series A Preferred Stock the holder thereof shall surrender
at the office of the Corporation the certificate(s) therefor, duly endorsed or assigned to the Corporation or in blank, and give written notice to the Corporation at such office that he elects to exchange such shares.
(iii) Shares of Series A Preferred Stock shall be deemed to have been exchanged immediately prior to
the close of business on the day of surrender of the certificate(s) for such shares for exchange in accordance with the foregoing provisions, and at such time the rights of the holder of such shares as a holder thereof shall cease and from and after
such time the person entitled to receive the Magellan Preferred Stock issuable upon such exchange shall be treated for all purposes as the record holder of such Magellan Preferred Stock. As promptly as practicable on or after the exchange date, the
Corporation shall cause Magellan to issue and deliver at such office a certificate or certificates for the number of full shares of Magellan Preferred Stock issuable upon such exchange, together with payment in lieu of any fraction of a share, as
provided in
Section 5.6
, to the person or persons entitled to receive the same.
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(iv) In the event Magellan shall, at any time or from
time to time after the Original Issue Date while the shares of Series A Preferred Stock remain outstanding, effect a subdivision (by any stock split, stock dividend, dividend of options, warrants or other similar instruments, stock
reclassification or otherwise) of the outstanding shares of Magellan Preferred Stock into a greater number of shares of Magellan Preferred Stock (or other equity interests) or a spin-off or other distribution of indebtedness or other assets, then
and in each such event the Preferred Stock Exchange Ratio in effect at the opening of business on the day after the date upon which such subdivision, spin-off or other distribution becomes effective shall be proportionately
adjusted. Additionally, if Magellan shall, at any time or from time to time after the Original Issue Date while the shares of Series A Preferred Stock remain outstanding, effect a combination (by any reverse stock split or otherwise) of
the outstanding shares of Magellan Preferred Stock or any repurchase of any outstanding shares of Magellan Preferred Stock such that it results in a smaller number of shares of Magellan Preferred Stock (or other equity interests), then and in each
such event the Preferred Stock Exchange Ratio in effect at the opening of business on the day after the date upon which such combination or repurchase becomes effective shall be proportionately adjusted. Additionally, if the Corporation issues any
Parity Stock during the 12 months after the Original Issue Date, which Parity Stock is exchangeable for Magellan Preferred Stock and has an exchange ratio therefor that is more favorable to the holder(s) of such Parity Stock than the Preferred Stock
Exchange Ratio, then the Preferred Stock Exchange Ratio shall be automatically adjusted to be equal to such more favorable exchange ratio. Additionally, if the Corporation issues any Parity Stock during the 12 months after the Original Issue Date,
which Parity Stock is exchangeable for Magellan Preferred Stock and the issuance price (including original issuance discount and other similar fees) for such Parity Stock (for purposes of this
Section 5.4(a)(iv)
, the
Parity Stock
Issuance Price
) is less than the Series A Price, then (to the extent not duplicative of any adjustment made pursuant to the immediately preceding sentence) the Preferred Stock Exchange Ratio shall be automatically adjusted by
multiplying it by the quotient derived by dividing the Series A Price by the Parity Stock Issuance Price. (For example, on the Original Issuance Date, the Preferred Stock Exchange Ratio is 1 share of Series A Preferred Stock is exchangeable for 1
share of Magellan Preferred Stock; if the Corporation were to issue shares of Parity Stock at $2.28609 per share, then the Preferred Stock Exchange Ratio would be adjusted such that thereafter 1 share of Series A Preferred Stock would be
exchangeable for 2 shares of Magellan Preferred Stock.) Any adjustment under this
Section
5.4(a)(iv)
shall become effective immediately after the opening of business on the day after the date upon which the applicable event
becomes effective.
(v) Notwithstanding the foregoing provisions of this
Section 5.4(a)
,
neither the Corporation nor Magellan shall be required to effect any exchange pursuant to this
Section 5.4(a)
if to do so would be, in the good faith determination of the Board of Directors of Magellan, commercially unreasonable for the
Corporation and/or Magellan.
(b)
Optional Exchange Into Magellan Common Stock
. If the Magellan Merger
Closing has occurred, then the holders of shares of Series A Preferred Stock shall have the right, at their option, to exchange all (but not less than all) such shares for shares of Magellan Common Stock at any time (including immediately prior to
any liquidation, dissolution or winding up of the affairs of the Corporation) on and subject to the following terms and conditions:
(i) Each share of Series A Preferred Stock shall be exchangeable for one share of Magellan Common
Stock (herein called the
Common Stock Exchange Ratio
). The Common Stock Exchange Ratio shall be adjusted in certain instances as provided in
Section 5.4(b)(iv)
.
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(ii) In order to exchange shares of Series A Preferred
Stock the holder thereof shall surrender at the office of the Corporation the certificate(s) therefor, duly endorsed or assigned to the Corporation or in blank, and give written notice to the Corporation at such office that he elects to exchange
such shares.
(iii) Shares of Series A Preferred Stock shall be deemed to have been exchanged
immediately prior to the close of business on the day of surrender of the certificate(s) for such shares for exchange in accordance with the foregoing provisions, and at such time the rights of the holder of such shares as a holder thereof shall
cease and from and after such time the person entitled to receive the Magellan Common Stock issuable upon such exchange shall be treated for all purposes as the record holder of such Magellan Common Stock. As promptly as practicable on or after the
exchange date, the Corporation shall cause Magellan to issue and deliver at such office a certificate or certificates for the number of full shares of Magellan Common Stock issuable upon such exchange, together with payment in lieu of any fraction
of a share, as provided in
Section 5.6
, to the person or persons entitled to receive the same.
(iv) In the event Magellan shall, at any time or from time to time after the Original Issue Date while
the shares of Series A Preferred Stock remain outstanding, effect a subdivision (by any stock split, stock dividend, dividend of options, warrants or other similar instruments, stock reclassification or otherwise) of the outstanding shares of
Magellan Common Stock into a greater number of shares of Magellan Common Stock (or other equity interests) or a spin-off or other distribution of indebtedness or other assets, then and in each such event the Common Stock Exchange Ratio in effect at
the opening of business on the day after the date upon which such subdivision, spin-off or other distribution becomes effective shall be proportionately adjusted. Additionally, if Magellan shall, at any time or from time to time after the Original
Issue Date while the shares of Series A Preferred Stock remain outstanding, effect a combination (by any reverse stock split or otherwise) of the outstanding shares of Magellan Common Stock or any repurchase of any outstanding shares of
Magellan Common Stock such that it results in a smaller number of shares of Magellan Common Stock (or other equity interests), then and in each such event the Common Stock Exchange Ratio in effect at the opening of business on the day after the date
upon which such combination or repurchase becomes effective shall be proportionately adjusted. Additionally, if the Corporation issues any Parity Stock during the 12 months after the Original Issue Date, which Parity Stock is exchangeable for
Magellan Common Stock and has an exchange ratio therefor that is more favorable to the holder(s) of such Parity Stock than the Common Stock Exchange Ratio, then the Common Stock Exchange Ratio shall be automatically adjusted to be equal to such more
favorable exchange ratio. Additionally, if the Corporation issues any Parity Stock during the 12 months after the Original Issue Date, which Parity Stock is exchangeable for Magellan Common Stock and the issuance price (including original issuance
discount and other similar fees) for such Parity Stock (for purposes of this
Section 5.4(b)(iv)
, the
Parity Stock Issuance Price
) is less than the Series A Price, then (to the extent not duplicative of any adjustment
made pursuant to the immediately preceding sentence) the Common Stock Exchange Ratio shall be automatically adjusted by multiplying it by the quotient derived by dividing the Series A Price by the Parity Stock Issuance Price. (For example, on the
Original Issuance Date, the Common Stock Exchange Ratio is 1 share of Series A Preferred Stock is exchangeable for 1 share of Magellan Common Stock; if the Corporation were to issue shares of Parity Stock at $2.28609 per share, then the Common Stock
Exchange Ratio would be adjusted such that thereafter 1 share of Series A Preferred Stock would be exchangeable for 2
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shares of Magellan Common Stock.) Any adjustment under this
Section
5.4(b)(iv)
shall become effective immediately after the opening of business on the day after the date
upon which the applicable event becomes effective.
5.5.
If the Magellan Merger Occurs: Mandatory Exchange
.
If the Magellan Merger Closing has occurred, then on the sixth anniversary of the Original Issue Date all shares of Series A Preferred Stock then outstanding shall automatically be exchanged for shares of Magellan Common Stock on and subject to
the following terms and conditions:
(a) Each share of Series A Preferred Stock shall be exchangeable for one share
of Magellan Common Stock (herein called the
Exchange Ratio
). The Exchange Ratio shall be adjusted in certain instances as provided in
Section
5.5(d)
.
(b) The Corporation shall use commercially reasonable efforts to give notice of such conversion to the holders of
shares of Series A Preferred Stock at least 30 days before the exchange date.
(c) Shares of Series A
Preferred Stock shall be deemed to have been exchanged immediately prior to the close of business on the exchange date, and at such time the rights of the holder of such shares as a holder thereof shall cease and from and after such time the person
entitled to receive the Magellan Common Stock issuable upon such exchange shall be treated for all purposes as the record holder of such Magellan Common Stock. As promptly as practicable on or after the exchange date and after surrender of the
certificate(s) representing the converted Series A Preferred Stock, the Corporation shall cause Magellan to issue and deliver a certificate or certificates for the number of full shares of Magellan Common Stock issuable upon such exchange, together
with payment in lieu of any fraction of a share, as provided in
Section
5.6
, to the person or persons entitled to receive the same.
(d) In the event Magellan shall, at any time or from time to time after the Original Issue Date while the shares of
Series A Preferred Stock remain outstanding, effect a subdivision (by any stock split, stock dividend, dividend of options, warrants or other similar instruments, stock reclassification or otherwise) of the outstanding shares of Magellan Common
Stock into a greater number of shares of Magellan Common Stock (or other equity interests) or a spin-off or other distribution of indebtedness or other assets, then and in each such event the Exchange Ratio in effect at the opening of business on
the day after the date upon which such subdivision, spin-off or other distribution becomes effective shall be proportionately adjusted. Additionally, if Magellan shall, at any time or from time to time after the Original Issue Date while the shares
of Series A Preferred Stock remain outstanding, effect a combination (by any reverse stock split or otherwise) of the outstanding shares of Magellan Common Stock or any repurchase of any outstanding shares of Magellan Common Stock such that it
results in a smaller number of shares of Magellan Common Stock (or other equity interests), then and in each such event the Exchange Ratio in effect at the opening of business on the day after the date upon which such combination or repurchase
becomes effective shall be proportionately adjusted. Additionally, if the Corporation issues any Parity Stock during the 12 months after the Original Issue Date, which Parity Stock is exchangeable for Magellan Common Stock and has an exchange ratio
therefor that is more favorable to the holder(s) of such Parity Stock than the Exchange Ratio, then the Exchange Ratio shall be automatically adjusted to be equal to such more favorable exchange ratio. Additionally, if the Corporation issues any
Parity Stock during the 12 months after the Original Issue Date, which Parity Stock is exchangeable for Magellan Common Stock and the issuance price (including original issuance discount and other similar fees) for such Parity Stock (for purposes of
this
Section 5.5(d)
, the
Parity Stock Issuance Price
) is less than the Series A Price, then (to the extent not duplicative of any
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adjustment made pursuant to the immediately preceding sentence) the Exchange Ratio shall be automatically adjusted by multiplying it by the quotient derived by dividing the Series A Price by the
Parity Stock Issuance Price. (For example, on the Original Issuance Date, the Exchange Ratio is 1 share of Series A Preferred Stock is exchangeable for 1 share of Magellan Common Stock; if the Corporation were to issue shares of Parity Stock at
$2.28609 per share, then the Exchange Ratio would be adjusted such that thereafter 1 share of Series A Preferred Stock would be exchangeable for 2 shares of Magellan Common Stock.) Any adjustment under this
Section
5.5(d)
shall become effective immediately after the opening of business on the day after the date upon which the applicable event becomes effective.
5.6.
Fractional Interest
. Neither the Corporation nor Magellan shall be required upon the conversion or
exchange of any share of Series A Preferred Stock to issue any fractional shares, but may, in lieu of issuing any fractional share that would otherwise be issuable upon such conversion, pay a cash adjustment in respect of such fraction in an
amount equal to the $6.00 (as adjusted in accordance with the principles set forth above) multiplied by the number (or fraction) of shares of Series A Preferred Stock equal to such fraction on the date of such conversion. If more than one share of
Series A Preferred Stock shall be presented for conversion at the same time by the same holder, the number of full shares of Common Stock which shall be issuable upon such conversion thereof (or full shares of Magellan Preferred Stock or
Magellan Common Stock which shall be issuable upon such exchange therefor) shall be computed on the basis of the aggregate number of shares of Series A Preferred Stock so to be converted by such holder. The holders expressly waive their right
to receive any fraction of a share of Common Stock, Magellan Preferred Stock or Magellan Common Stock or a stock certificate representing a fraction of a share of Common Stock, Magellan Preferred Stock or Magellan Common Stock if such amount of cash
is paid in lieu thereof.
5.7.
Reservation and Authorization of Common Stock
. The Corporation covenants
that, so long as any shares of Series A Preferred stock remain outstanding, the Corporation will at all times reserve and keep available, from its authorized and unissued Common Stock solely for issuance and delivery upon the conversion of the
shares of Series A Preferred Stock and free of preemptive rights, such number of shares of Common Stock as from time to time shall be issuable upon the conversion in full of all outstanding shares of Series A Preferred Stock. The
Corporation further covenants that it shall, from time to time, take all steps necessary to increase the authorized number of shares of its Common Stock if at any time the authorized number of shares of Common Stock remaining unissued would
otherwise be insufficient to allow delivery of all the shares of Common Stock then deliverable upon the conversion in full of all outstanding shares of Series A Preferred Stock. The Corporation covenants that all shares of Common Stock issuable
upon conversion of the shares of Series A Preferred Stock will, upon issuance, be duly and validly issued, fully paid and nonassessable and will be free of restrictions on transfer (other than restrictions on transfer arising under federal and
state securities laws) and will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein). The Corporation shall take all such
actions as may be necessary to ensure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic stock exchange upon which shares of Common Stock may
be listed (except for official notice of issuance which shall be immediately delivered by the Corporation upon each such issuance). The Corporation covenants that the stock certificates issued to evidence any shares of Common Stock issued upon
conversion of shares of Series A Preferred Stock will comply with the Delaware General Corporation Law and any other applicable law.
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The Corporation hereby authorizes and directs its current and future transfer agents for the
Common Stock at all times to reserve stock certificates for such number of authorized shares as shall be requisite for such purpose. The transfer agent or agents for the Series A Preferred Stock are hereby authorized to requisition from time to
time from any such transfer agents for the Common Stock stock certificates required to honor outstanding shares of Series A Preferred Stock upon conversion thereof in accordance with the terms of this Certificate of Incorporation, and the
Corporation hereby authorizes and directs such transfer agents to comply with all such requests of the transfer agent or agents for the Series A Preferred Stock. The Corporation will supply such transfer agents with duly executed stock
certificates for such purposes.
5.8.
Reservation and Authorization of Magellan Preferred Stock and Magellan
Common Stock
. The Corporation covenants that, if the Magellan Merger Closing has occurred and so long as any shares of Series A Preferred Stock remain outstanding:
(a) The Corporation will cause Magellan at all times to reserve and keep available, from its authorized and unissued
Magellan Preferred Stock and Magellan Common Stock solely for issuance and delivery upon the exchange of the shares of Series A Preferred Stock and free of preemptive rights, such number of shares of Magellan Preferred Stock and Magellan Common
Stock as from time to time shall be issuable upon the conversion in full of all outstanding shares of Series A Preferred Stock;
(b) The Corporation shall cause Magellan, from time to time, to take all steps necessary to increase the authorized
number of shares of its Magellan Preferred Stock and Magellan Common Stock if at any time the authorized number of shares of Magellan Preferred Stock and Magellan Common Stock remaining unissued would otherwise be insufficient to allow delivery of
all the shares of Magellan Preferred Stock and Magellan Common Stock then deliverable upon the exchange of all outstanding shares of Series A Preferred Stock;
(c) All shares of Magellan Preferred Stock and Magellan Common Stock issuable upon exchange of the shares of
Series A Preferred Stock will, upon issuance, be duly and validly issued, fully paid and nonassessable and will be free of restrictions on transfer (other than restrictions on transfer arising under federal and state securities laws) and will
be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein);
(d) The stock certificates issued to evidence any shares of Magellan Preferred Stock and Magellan Common Stock issued
upon exchange of shares of Series A Preferred Stock will comply with the Delaware General Corporation Law and any other applicable law.
5.9.
Changes in Common Stock
. In case at any time or from time to time after the Original Issue Date while
the shares of Series A Preferred Stock remain outstanding, the Corporation shall be a party to or shall otherwise engage in any transaction or series of related transactions (other than the transactions contemplated by the Magellan Merger Agreement)
constituting a merger of the Corporation into, a consolidation of the Corporation with, a sale, lease, transfer, conveyance or other disposition (in one or a series of related transactions) of all or substantially all of the Corporations
assets to, or an acquisition of 50% or more of the voting interests in the Corporation by, any other Person (a
Non-Surviving Transaction
) then, as a condition to the consummation of such Non-Surviving Transaction, the
Corporation shall cause such other Person to make lawful provision as a part of the terms of such Non-Surviving Transaction whereby:
(a) so long as any share of Series A Preferred Stock remains outstanding, on such terms and subject to such
conditions substantially identical to the provisions set forth in this Certificate of
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Incorporation, each share of Series A Preferred Stock, upon the conversion thereof at any time on or after the consummation of such Non-Surviving Transaction, shall be convertible into, in
lieu of the Common Stock issuable upon such conversion prior to such consummation, only the securities or other property (
Substituted Property
) that would have been receivable upon such Non-Surviving Transaction by a holder
of the number of shares of Common Stock into which such share of Series A Preferred Stock was convertible immediately prior to such Non-Surviving Transaction, assuming such holder of Common Stock:
(i) is not a Person with which the Corporation consolidated or into which the Corporation merged or
which merged into the Corporation or to which such sale or transfer was made, as the case may be (
Constituent Person
), or an Affiliate of a Constituent Person; and
(ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such Non-Surviving Transaction (provided that if the kind or amount of securities, cash and other property receivable upon such Non-Surviving Transaction is not the same for each share of Common Stock held
immediately prior to such Non-Surviving Transaction by other than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised (
Non-Electing Share
), then, for
the purposes of this
Section
5.9
, the kind and amount of securities, cash and other property receivable upon such Non-Surviving Transaction by each Non-Electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-Electing Shares); and
(b) the rights, preferences, privileges and obligations
of such other Person and the holders of shares of Series A Preferred Stock in respect of Substituted Property shall be substantially identical to the rights, preferences, privileges and obligations of the Corporation and holders of shares of
Series A Preferred Stock in respect of Common Stock hereunder as set forth in this
Section
5
.
Such lawful provision shall
provide for adjustments which, for events subsequent to the effective date of such lawful provision, shall be substantially identical to the adjustments provided for elsewhere in this
Section
5
. The above provisions of this
Section 5.9
shall similarly apply to successive Non-Surviving Transactions.
5.10.
Statement on
Certificates
. Irrespective of any adjustment in the Conversion Ratio, Preferred Stock Exchange Ratio, Common Stock Exchange Ratio or Exchange Ratio or the amount or kind of shares into which the shares of Series A Preferred Stock are
convertible or exchangeable, certificates for shares of Series A Preferred Stock theretofore or thereafter issued may continue to express the same Conversion Ratio, Preferred Stock Exchange Ratio, Common Stock Exchange Ratio and/or Exchange
Ratio initially applicable or amount or kind of shares initially issuable upon conversion or exchange of the Series A Preferred Stock evidenced thereby (but the adjusted amount shall nonetheless be the determinative amount).
5.11.
No Voting or Dividend Rights
. Subject to the provisions of
Section 6
and except as may be
specifically provided for in this Article Fourth, until the conversion or exchange of any share of Series A Preferred Stock:
(i) no holder of any share of Series A Preferred Stock shall have or exercise any rights by
virtue hereof as a holder of Common Stock, including, without limitation, the right to vote or to receive dividends and other distributions as a holder of Common Stock or to receive notice of, or attend, meetings or any other proceedings of holders
of Common Stock;
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(ii) the consent of any such holder as a holder of Common
Stock shall not be required with respect to any action or proceeding of the Corporation;
(iii) no
such holder, by reason of the ownership or possession of a share of Series A Preferred Stock, shall have any right to receive any cash dividends, stock dividends, allotments or rights or other distributions paid, allotted or distributed or
distributable not in violation of
Section 2
to the holders of Common Stock prior to, or for which the relevant record date preceded, the date of the conversion of such share of Series A Preferred Stock; and
(iv) no such holder shall have any right not expressly conferred hereunder or by applicable law with
respect to the share of Series A Preferred Stock held by such holder.
5.12.
Payment of Taxes
. The
Corporation and Magellan shall pay any and all taxes (other than income taxes) that may be payable in respect of the issue or delivery of shares of Common Stock, Magellan Common Stock and Magellan Preferred Stock on conversion or exchange of shares
of Series A Preferred Stock pursuant hereto. Neither the Corporation nor Magellan shall impose any service charge in connection with any such conversion. Neither the Corporation nor Magellan shall be required, however, to pay any tax or other
charge imposed in respect of any transfer involved in the issue and delivery of any certificates for shares of Common Stock, Magellan Common Stock or Magellan Preferred Stock or payment of cash or other property to any recipient other than the
holder of the share of Series A Preferred Stock converted or exchanged, and in case of such transfer or payment, the transfer agent or agents for the Series A Preferred Stock and neither the Corporation nor Magellan shall be required to
issue or deliver any certificate or pay any cash until (a) such tax or charge has been paid or an amount sufficient for the payment thereof has been delivered to the transfer agent or agents for the Series A Preferred Stock or the
Corporation or Magellan or (b) it has been established to the Corporations satisfaction that any such tax or other charge that is or may become due has been paid. Notwithstanding anything to the contrary in this
Section 5.12
,
Magellan shall have no obligation with respect to this
Section 5.12
if the Magellan Merger Closing does not occur.
6.
Voting
.
(a) The holders of shares of Series A Preferred Stock shall have no voting rights whatsoever, except as otherwise
provided in this
Section 6
or as otherwise specifically required by law. As to matters upon which holders of shares of Series A Preferred Stock are entitled to vote as a class, the holders of Series A Preferred Stock shall be
entitled to one vote per share and such vote shall be by majority vote.
(b) Except as provided to the contrary in
the proviso to this sentence, each holder of outstanding shares of Series A Preferred Stock shall be entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to any and all matters
presented to the stockholders of the Corporation for their action or consideration (whether at a meeting of stockholders of the Corporation, by written action of stockholders in lieu of a meeting or otherwise), except as provided by law;
provided
,
however
, that, except as set forth in
Section 6(c)(vi)
, the shares of Series A Preferred Stock shall not be entitled to vote with respect to the Magellan Merger, the Magellan Merger Agreement, or any matter directly
relating to the Magellan Merger or the Magellan Merger Agreement. In any such vote, each share of Series A Preferred Stock shall be entitled to a number of votes equal to the number of shares of Common Stock into which such share is convertible
pursuant to
Section 5.2(b)
(regardless of whether such Series A Preferred Stock is then-convertible) as of the record date for such vote or written consent or, if there is no specified record date, as of the date
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of such vote or written consent. Each holder of outstanding shares of Series A Preferred Stock shall be entitled to notice of all stockholder meetings (or requests for written consent) in
accordance with the Corporations bylaws.
(c) So long as any shares of Series A Preferred Stock remain
outstanding, in addition to any other vote or consent of stockholders required by law or this Certificate of Incorporation, the Corporation shall not, directly or indirectly, without the affirmative vote at a meeting (or the written consent with or
without a meeting) of the holders of at least a majority of the number of shares of Series A Preferred Stock then outstanding:
(i) authorize or approve the issuance of any shares of, or of any security convertible into, or
convertible or exchangeable for shares of, Preferred Stock or shares of any other capital stock of the Corporation, which shares rank prior to shares of Series A Preferred Stock in the payment of dividends or in the distribution of assets upon
liquidation, dissolution or winding up of the affairs of the Corporation (or amend the terms of any existing shares to provide for such ranking);
(ii) authorize or approve the issuance of any shares of, or of any security convertible into, or
convertible or exchangeable for shares of, Parity Stock (or amend the terms of any existing shares to provide for such ranking) except such Parity Stock that is issued to Persons other than Affiliates, directors, officers, employees or consultants
of the Corporation;
(iii) amend, alter or repeal any of the provisions of this Certificate of
Incorporation so as to affect adversely the powers, designations, preferences and rights of the Series A Preferred Stock or the holders thereof or amend, alter or repeal any of the provisions of this Article Fourth; provided, however, that, for
the avoidance of doubt, the amendment of this Certificate of Incorporation so as to authorize or create, or to increase the authorized amount of, any Fully Junior Stock shall not be deemed to affect adversely the powers, designations, preferences
and rights of the Series A Preferred Stock or the holders thereof;
(iv) take any other
corporate action that adversely affects any of the rights, preferences or privileges of the Series A Preferred Stock; provided, however, that for the avoidance of doubt this
Section 6(c)(iv)
shall not refer to any commercial or business
decision made by the Corporation that may affect the value of the Series A Preferred Stock but does not change its rights, preferences or privileges (such as the incurrence of debt) or the issuance of Parity Stock permitted by
Section
6(c)(ii)
;
(v) engage in any business, act or activity other than any business related in any
manner to hydrocarbons or energy; or
(vi) modify, amend or waive any provision of the Magellan
Merger Agreement that alters the relative exchange ratio as between the shareholders of the Corporation and the shareholders of Magellan.
7.
Certain Definitions
.
As used herein with respect to the Series A Preferred Stock, the following terms shall have the following meanings:
Affiliate
of a Person means any other Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person. The term
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control (including the terms controlled by and under common control with) means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise .
Business Day
means a day except a Saturday or Sunday or other day on which the banks in the city of Houston, Texas
are authorized or required by applicable law to be closed.
Fully Junior Stock
means any Junior Stock over which
the Series A Preferred Stock has preference and priority in the payment of dividends and in the distribution of assets on any liquidation (complete or partial), dissolution or winding up of the affairs of the Corporation.
holder
of shares of Series A Preferred Stock shall mean the stockholder in whose name such Series A
Preferred Stock is registered in the stock books of the Corporation.
Junior Stock
means the Common Stock, par
value $0.01 per share, of the Corporation and any other class or series of shares of the Corporation or any of its subsidiaries hereafter authorized over which the Series A Preferred Stock has preference or priority in the payment of dividends
(including prohibiting any such dividends while any Series A Preferred Stock is outstanding) or in the distribution of assets on any liquidation (complete or partial), dissolution or winding up of the affairs of the Corporation or its subsidiaries.
Magellan
means Magellan Petroleum Corporation, a Delaware corporation.
Magellan Common Stock
means common stock of Magellan, par value $0.01 per share.
Magellan Merger
means the merger contemplated by the Magellan Merger Agreement.
Magellan Merger Agreement
means that certain merger agreement dated as of August 2, 2016 among the Corporation,
Magellan and River Merger Sub, Inc. (as amended, restated, supplemented and/or otherwise modified from time to time).
Magellan Merger Closing
means the closing of the transactions contemplated by the Magellan Merger Agreement,
including the Magellan Merger.
Magellan Preferred Stock
means Series B Preferred Stock of Magellan, par value
$0.01 per share, with terms, conditions, rights, preferences and privileges substantially identical to those of the Series A Preferred Stock (including that such Series B Preferred Stock of Magellan shall be senior to or pari passu with all other
shares) except (i) such shares are convertible on a one-for-one basis for shares of Magellan Common Stock (subject to similar adjustments as are set forth in this Certificate of Incorporation), (ii) such shares are not convertible into Common Stock
and (iii) such shares shall not be redeemable.
Original Issue Date
means the date on which shares of
Series A Preferred Stock are first originally issued under this Article Fourth.
Parity Stock
means any
class or series of shares of the Corporation (including Series A Preferred Stock) that have pari passu preference with the Series A Preferred Stock in the payment of dividends or in the distribution of assets on any liquidation (complete or
partial), dissolution or winding up of the affairs of the Corporation.
Person
means an individual, a
corporation, a limited liability company, a partnership, an association, a trust or any other entity.
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8.
No Other Rights
.
The shares of Series A Preferred Stock shall not have any powers, designations, preferences or relative, participating, optional, or other
special rights, nor shall there be any qualifications, limitations or restrictions or any powers, designations, preferences or rights of such shares, other than as set forth herein or in this Certificate of Incorporation or as may be provided by
law.
FIFTH: No holder of shares of stock of the Corporation shall have a preemptive right to purchase or subscribe for and receive
any shares of any class, or series thereof, of stock of the Corporation, whether now or hereafter authorized, or any warrants, option, bonds, debentures or other securities convertible into, exchangeable for or carrying any right to purchase any
shares of any class, or series thereof, of stock.
SIXTH: No stockholders of the Corporation shall have the right and power to
cumulate votes attributable to their shares for the election of directors.
SEVENTH: The business and affairs of this Corporation shall be
managed and conducted by a Board of Directors consisting of one or more members who need not be stockholders. The number of directors of the Corporation shall be fixed as specified or provided for in the bylaws of the Corporation.
EIGHTH: The Board of Directors shall have full power and authority to manage the Corporation and any and all of its assets, properties,
businesses, and affairs, including the right to elect such officers and assistant officers and to designate and appoint such agents and employees as the Board of Directors deems advisable and to allow them suitable compensation, and shall have any
and all additional powers and authority, not inconsistent with the express terms of this Certificate of Incorporation, that are expressly or impliedly granted to or invested in the Board of Directors by the statutes or laws of the State of Delaware,
as now in effect and as hereafter amended or modified. Election of directors need not be by written ballot, except and to the extent provided in the bylaws of the Corporation.
NINTH: Except as otherwise provided by statute, any action that might have been taken at a meeting of stockholders by a vote of the
stockholders may be taken with the written consent of stockholders owning (and by such written consent, voting) in the aggregate not less than the minimum percentage of the total number of shares that by statute, this Certificate of Incorporation,
the bylaws of the Corporation or an agreement of all of the stockholders are required to be voted with respect to such proposed corporate action;
provided
,
however
, that the written consent of a stockholder who would not have been
entitled to vote upon the action if a meeting were held shall not be counted; and
further provided
, that prompt notice shall be given to all stockholders of the taking of such corporate action without a meeting if less than unanimous written
consent of all stockholders who have been entitled to vote on the action if a meeting were held is obtained.
TENTH: In furtherance
of, and not in limitation of, the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend or repeal the bylaws of the Corporation or adopt new bylaws, without any action on the part of the stockholders;
provided
, however, that no such adoption, amendment, or repeal shall be valid with respect to bylaw provisions which have been adopted, amended, or repealed by the stockholders; and
further provided
, that bylaws adopted or amended by the
Board of Directors and any powers thereby conferred may be amended, altered, or repealed by the stockholders.
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ELEVENTH: Whenever a compromise or arrangement is proposed between this Corporation and its
creditors or any class of them, and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any
creditor or stockholders thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of §291 of the Delaware General Corporation Law or on the application of trustees in dissolution or of any
receiver or receivers appointed for this Corporation under the provisions of § 279 of the Delaware General Corporation Law order a meeting of the creditors or class of creditors; and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of
this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if
sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.
TWELFTH: To the fullest extent permitted by applicable law, a director or officer of the Corporation shall be entitled to
indemnification from the Corporation for any loss, damage, claim, legal proceeding or investigation (a
Loss
) (or any expenses or costs associated therewith (
Costs
)) incurred by such director or
officer by reason of any act or omission performed or omitted by such director or officer in good faith on behalf of the Corporation and in a manner reasonably believed to be within the scope of the authority conferred on such director or officer by
the Corporation or by Delaware law, except that (a) no director or officer shall be entitled to be indemnified in respect of any Loss or Costs incurred by such director or officer by reason of such director or officers willful misconduct
with respect to such acts or omissions and (b) no director or officer shall be entitled to be indemnified in respect of any Loss or Costs incurred by the director or officer for (i) such director or officers breach of his duty of
loyalty to the Corporation or its stockholders, (ii) such director or officers acts or omissions not in good faith or which involve intentional misconduct or knowing violations of law, or (iii) any transaction from which the director
or officer derived an improper personal benefit;
provided
,
however
, that any indemnity under this Article Twelfth shall be funded out of and to the extent of Corporation assets only (including any applicable insurance proceeds), and no
director or officer shall have personal liability on account thereof. In a manner determined appropriate by the Board of Directors, the Corporation shall advance Costs incurred by or on behalf of a director or officer in connection with any
Loss even before a final determination is made as to whether the director or officer is entitled to indemnification. The Corporation may enter into agreements with its directors or officers to provide for indemnification consistent with the
terms and conditions set forth in this Article Thirteenth. The Corporation may purchase and maintain director and officer liability insurance at appropriate levels of coverage as determined by the Board of Directors.
The Corporation may additionally indemnify any employee or agent of the Corporation to the fullest extent permitted by law.
THIRTEENTH: A director or officer of the Corporation shall not be liable to the Corporation or any other person or entity who has an
interest in the Corporation for a Loss or Costs incurred by reason of any act or omission performed or omitted by such director or officer in good faith on behalf of the Corporation, in a manner reasonably believed to be in the best interest of the
Corporation and in a manner reasonably believed to be within the scope of the authority conferred on such director or officer by the Corporation or by Delaware law, except that (a) a director or officer shall be liable for
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any such Loss and Costs incurred by reason of such director or officers willful misconduct, and (b) notwithstanding anything in this Certificate of Incorporation to the contrary, no
provision of this Certificate of Incorporation shall eliminate or limit the liability of a director or officer for (i) any breach of that persons duty of loyalty to the Corporation or the stockholders (which duty of loyalty shall be not
less than the duty of loyalty of a director of a Delaware corporation to such Corporation and its stockholders under Delaware law), (ii) acts or omissions not in good faith or which involve intentional misconduct or knowing violations of law,
or (iii) any transaction from which the director or officer derived an improper personal benefit.
FOURTEENTH: The Corporation
shall have the right, subject to any express provisions or restrictions contained in the Certificate of Incorporation, bylaws of the Corporation or written agreement of all of the stockholders of the Corporation, from time to time, to amend the
Certificate of Incorporation or any provisions thereof in any manner now or hereafter provided by law, and all rights and powers of any kind conferred upon a director or stockholder of the Corporation by the Certificate of Incorporation or any
amendment thereof are conferred subject to such right.
FIFTEENTH: The Corporation expressly elects not to be governed by §203
of the Delaware General Corporation Law.
* * *
3. The foregoing amendment and restatement was approved by the holders of the requisite number of shares of this
corporation in accordance with Section 228 of the General Corporation Law.
4. That this Amended and Restated
Certificate of Incorporation, which restates and integrates and further amends the provisions of this Corporations Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation has been executed by a
duly authorized officer of this corporation on this
23rd day of November, 2016.
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|
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Name:
|
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Meg A. Gentle
|
Title:
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President and Chief Executive Officer
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EXHIBIT G
Annex 3
Certificate of
Designations of Series B Convertible Preferred Stock of Magellan
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CERTIFICATE OF DESIGNATIONS OF
SERIES B CONVERTIBLE PREFERRED STOCK OF
MAGELLAN PETROLEUM CORPORATION
MAGELLAN PETROLEUM CORPORATION, a Delaware corporation (the
Corporation
), certifies that pursuant to the authority
contained in Article Fourth of its Restated Certificate of Incorporation, as amended from time to time prior to the date hereof (the
Certificate of Incorporation
), and in accordance with the provisions of Section 151
of the Delaware General Corporation Law, its Board of Directors duly approved and adopted on
[date]
the following resolution, which resolution remains in full force and effect on the date hereof:
WHEREAS, the Certificate of Incorporation authorizes the issuance of up to fifty million (50,000,000) shares of preferred
stock, par value $0.01 per share, of the Corporation (
Preferred Stock
) in one or more series, and expressly authorizes the Board of Directors, subject to limitations prescribed by law, to provide, out of the unissued shares
of Preferred Stock, for series of Preferred Stock, and, with respect to each such series, to establish and fix the number of shares to be included in such series of Preferred Stock and the designation, rights, preferences, powers, restrictions and
limitations of the shares of such series; and
WHEREAS, the Board of Directors desires to establish and fix the number of
shares to be included in a new series of Preferred Stock and the designation, rights, preferences and limitations of such new series.
NOW, THEREFORE, BE IT RESOLVED, that a series of Preferred Stock be, and hereby is, created, and that the number of shares
thereof, the voting powers thereof and the designations, preferences and relative, participating, optional and other special rights thereof and the qualifications, limitations and restrictions thereof be, and hereby are, as follows:
1.
General
.
(a) The shares of such series shall be designated the Series B Convertible Preferred Stock (hereinafter referred
to as the
Series
B Preferred Stock
).
(b) Each share of
Series B Preferred Stock shall be identical in all respects with the other shares of Series B Preferred Stock.
(c) Shares of Series B Preferred Stock converted into Common Stock shall be cancelled and shall revert to
authorized but unissued Preferred Stock, undesignated as to series.
(d) In any case where any dividend payment
date shall not be a Business Day, then (notwithstanding any other provision of this Certificate of Designations) payment of dividends need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect
as if made on the dividend payment date;
provided, however
, that no interest shall accrue on such amount of dividends for the period from and after such dividend payment date, as the case may be.
2.
Dividends
.
So
long as any shares of Series B Preferred Stock are outstanding, the Corporation shall neither pay nor declare any dividends, nor make any redemptions or repurchases (other than ordinary course
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repurchases or deemed repurchases occurring in connection with the vesting or exercise of compensatory equity awards and related tax withholding), in respect of its equity interests (including
Common Stock, Preferred Stock, Junior Stock and Parity Stock).
3.
Liquidation
.
(a) In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or
involuntary, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of the Series B Preferred Stock shall be entitled to receive an amount in cash equal to $4.57218 per share of Series B
Preferred Stock (the
Liquidation Payment
) before any distribution is made to holders of shares of Common Stock, Junior Stock or Parity Stock upon any such liquidation, dissolution or winding up of the affairs of the
Corporation. If, upon any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the assets of the Corporation, or proceeds thereof, distributable among the holders of the then-outstanding
shares of Series B Preferred Stock are insufficient to pay the full amount of the Liquidation Payment in respect to all then-outstanding shares of Series B Preferred Stock, then all such assets and proceeds of the Corporation thus
distributable shall be distributed ratably in respect of the then-outstanding shares of Series B Preferred Stock.
(b) Notice of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or
involuntary, shall be given by mail, postage prepaid, not less than 30 days prior to the distribution or payment date stated therein, to each holder of record of Series B Preferred Stock appearing on the stock books of the Corporation as of the
date of such notice at the address of said holder shown therein. Such notice shall state a distribution or payment date, the amount of the Liquidation Payment and the place where the Liquidation Payment shall be distributable or payable.
(c) For the purposes of this
Section 3
, neither the voluntary sale, lease, conveyance, exchange or transfer
of all or substantially all the property or assets of the Corporation (whether for cash, shares of stock, securities or other consideration), nor the consolidation or merger of the Corporation with one or more other entities, shall be deemed to be a
liquidation (complete or partial), dissolution or winding up of the affairs of the Corporation, unless such voluntary sale, lease, conveyance, exchange or transfer shall be in connection with a plan of liquidation, dissolution or winding up of the
affairs of the Corporation.
(d) After the payment in cash to the holders of shares of the Series B Preferred
Stock of the full amount of the Liquidation Payment with respect to outstanding shares of Series B Preferred Stock, the holders of outstanding shares of Series B Preferred Stock shall have no right or claim, based on their ownership of
shares of Series B Preferred Stock, to any of the remaining assets of the Corporation.
4.
Redemption
.
The Series B Preferred Stock shall not be redeemable.
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5.
Conversion
.
(a)
Optional Conversion
. The holders of shares of Series B Preferred Stock shall have the right, at
their option, to convert all (but not less than all) such shares into shares of Common Stock at any time (including immediately prior to any liquidation, dissolution or winding up of the affairs of the Corporation) on and subject to the following
terms and conditions:
(i) Each share of Series B Preferred Stock shall be convertible into one share of
Common Stock (herein called the
Conversion Ratio
). The Conversion Ratio shall be adjusted in certain instances as provided in
Section
5(a)(iv)
.
(ii) In order to convert shares of Series B Preferred Stock, the holder thereof shall surrender at the office of
the Corporation the certificate(s) therefor, duly endorsed or assigned to the Corporation or in blank, and give written notice to the Corporation at such office that he elects to convert such shares.
(iii) Shares of Series B Preferred Stock shall be deemed to have been converted immediately prior to the close of
business on the day of surrender of the certificate(s) for such shares for conversion in accordance with the foregoing provisions, and at such time the rights of the holder of such shares as a holder thereof shall cease and from and after such time
the person entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such Common Stock. As promptly as practicable on or after the conversion date, the Corporation shall issue
and deliver at such office a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion, together with payment in lieu of any fraction of a share, as provided in
Section
5(c)
, to
the person or persons entitled to receive the same.
(iv) In the event the Corporation shall, at any time or from
time to time after the Original Issue Date while the shares of Series B Preferred Stock remain outstanding, effect a subdivision (by any stock split, stock dividend, dividend of options, warrants or other similar instruments, stock
reclassification or otherwise) of the outstanding shares of Common Stock into a greater number of shares of Common Stock (or other equity interests) or a spin-off or other distribution of indebtedness or other assets, then and in each such event the
Conversion Ratio in effect at the opening of business on the day after the date upon which such subdivision, spin-off or other distribution becomes effective shall be proportionately adjusted. Additionally, if the Corporation shall, at any time
or from time to time after the Original Issue Date while the shares of Series B Preferred Stock remain outstanding, effect a combination (by any reverse stock split or otherwise) of the outstanding shares of Common Stock or any repurchase of
any outstanding shares of Common Stock such that it results in a smaller number of shares of Common Stock (or other equity interests) (other than ordinary course repurchases or deemed repurchases occurring in connection with the vesting or exercise
of compensatory equity awards and related tax withholding), then and in each such event the Conversion Ratio in effect at the opening of business on the day after the date upon which such combination or repurchase becomes effective shall be
proportionately adjusted. Additionally, if the Corporation issues any Parity Stock during the 12 months after the Original Issue Date, which Parity Stock is convertible into Common Stock and has a conversion ratio therefor that is more
favorable to the holder(s) of such Parity Stock than the Conversion Ratio, then the Conversion Ratio shall be automatically adjusted to be equal to such more favorable conversion ratio. Additionally, if the Corporation issues any Parity Stock during
the 12 months after the Original Issue Date, which Parity Stock is convertible into Common Stock and the issuance price (including original issuance discount and other similar fees) for such Parity Stock (for purposes of this
Section
5(a)(iv)
, the
Parity Stock
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Issuance Price
) is less than $4.57218 per share (the
Series B Price
), then (to the extent not duplicative of any adjustment made pursuant to the
immediately preceding sentence) the Conversion Ratio shall be automatically adjusted by multiplying it by the quotient derived by dividing the Series B Price by the Parity Stock Issuance Price. (For example, on the Original Issuance Date, the
Conversion Ratio is 1 share of Series B Preferred Stock convertible into 1 share of Common Stock; if the Corporation were to issue shares of Parity Stock at $2.28609 per share, then the Conversion Ratio would be adjusted such that thereafter 1 share
of Series B Preferred Stock would be convertible into 2 shares of Common Stock.) Any adjustment under this
Section
5(a)(iv)
shall become effective immediately after the opening of business on the day after the date upon
which the applicable event becomes effective.
(b)
Mandatory Conversion
. On the sixth anniversary of
the Original Issue Date, all shares of Series B Preferred Stock then outstanding shall automatically be converted into shares of Common Stock on and subject to the following terms and conditions:
(i) Each share of Series B Preferred Stock shall be convertible into Common Stock at the Conversion
Ratio. The Conversion Ratio shall be adjusted in certain instances as provided in
Section
5(a
)(
iv)
.
(ii) The Corporation shall use commercially reasonable efforts to give notice of such conversion to the holders of
shares of Series B Preferred Stock at least 30 days before the conversion date.
(iii) Shares of
Series B Preferred Stock shall be deemed to have been converted immediately prior to the close of business on the conversion date, and at such time the rights of the holder of such shares as a holder thereof shall cease and from and after such
time the person entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such Common Stock. As promptly as practicable on or after the conversion date and after surrender of
the certificate(s) representing the converted Series B Preferred Stock, the Corporation shall issue and deliver a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion, together with payment in
lieu of any fraction of a share, as provided in
Section
5(c)
, to the person or persons entitled to receive the same.
(c)
Fractional Interest
. The Corporation shall not be required upon the conversion of any share of
Series B Preferred Stock to issue any fractional shares, but may, in lieu of issuing any fractional share that would otherwise be issuable upon such conversion, pay a cash adjustment in respect of such fraction in an amount equal to the Series
B Price (as adjusted in accordance with the principles set forth above) multiplied by the number (or fraction) of shares of Series B Preferred Stock equal to such fraction on the date of such conversion. If more than one share of
Series B Preferred Stock shall be presented for conversion at the same time by the same holder, the number of full shares of Common Stock which shall be issuable upon such conversion thereof shall be computed on the basis of the aggregate
number of shares of Series B Preferred Stock so to be converted by such holder. The holders expressly waive their right to receive any fraction of a share of Common Stock or a stock certificate representing a fraction of a share of Common
Stock if such amount of cash is paid in lieu thereof.
(d)
Reservation and Authorization of Common
Stock
. The Corporation covenants that, so long as any shares of Series B Preferred Stock remain outstanding:
(i) The Corporation will at all times reserve and keep available, from its authorized and unissued Common Stock solely
for issuance and delivery upon the conversion of the shares of
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Series B Preferred Stock and free of preemptive rights, such number of shares of Common Stock as from time to time shall be issuable upon the conversion in full of all outstanding shares of
Series B Preferred Stock;
(ii) The Corporation shall, from time to time, take all steps necessary to
increase the authorized number of shares of its Common Stock if at any time the authorized number of shares of Common Stock remaining unissued would otherwise be insufficient to allow delivery of all the shares of Common Stock then deliverable upon
the conversion of all outstanding shares of Series B Preferred Stock;
(iii) All shares of Common Stock
issuable upon conversion of the shares of Series B Preferred Stock will, upon issuance, be duly and validly issued, fully paid and nonassessable and will be free of restrictions on transfer (other than restrictions on transfer arising under
federal and state securities laws) and will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein);
(iv) The Corporation shall take all such actions as may be necessary to ensure that all such shares of Common Stock
may be so issued without violation of any law or governmental regulation applicable to it or any requirements of any domestic stock exchange upon which shares of Common Stock may be listed;
(v) The stock certificates issued to evidence any shares of Common Stock issued upon conversion of shares of
Series B Preferred Stock will comply with the Delaware General Corporation Law and any other applicable law.
The Corporation hereby
authorizes and directs its current and future transfer agents for the Common Stock at all times to reserve stock certificates for such number of authorized shares as shall be requisite for such purpose. The transfer agent or agents for the
Series B Preferred Stock are hereby authorized to requisition from time to time from any such transfer agents for the Common Stock stock certificates required to honor outstanding shares of Series B Preferred Stock upon conversion thereof in
accordance with the terms of this Certificate of Designations, and the Corporation hereby authorizes and directs such transfer agents to comply with all such requests of the transfer agent or agents for the Series B Preferred Stock. The
Corporation will supply such transfer agents with duly executed stock certificates for such purposes.
(e)
Changes in Common Stock
. In case at any time or from time to time after the Original Issue Date while
the shares of Series B Preferred Stock remain outstanding, the Corporation shall be a party to or shall otherwise engage in any transaction or series of related transactions constituting a merger of the Corporation into, a consolidation of the
Corporation with, a sale, lease, transfer, conveyance or other disposition (in one or a series of related transactions) of all or substantially all of the Corporations assets to, or an acquisition of 50% or more of the voting interests in the
Corporation by, any other Person (a
Non-Surviving Transaction
) then, as a condition to the consummation of such Non-Surviving Transaction, the Corporation shall cause such other Person to make lawful provision as a part of
the terms of such Non-Surviving Transaction whereby:
(i) so long as any share of Series B Preferred Stock
remains outstanding, on such terms and subject to such conditions substantially identical to the provisions set forth in this Certificate of Designations, each share of Series B Preferred Stock, upon the conversion thereof at any time on or
after the consummation of such Non-Surviving Transaction, shall be convertible into, in lieu of the Common Stock issuable upon such conversion prior to such consummation, only the securities or other property (
Substituted
Property
) that would have been receivable upon such Non-Surviving
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Transaction by a holder of the number of shares of Common Stock into which such share of Series B Preferred Stock was convertible immediately prior to such Non-Surviving Transaction,
assuming such holder of Common Stock:
(A) is not a Person with which the Corporation consolidated
or into which the Corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be (
Constituent Person
), or an Affiliate of a Constituent Person; and
(B) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such Non-Surviving Transaction (provided that if the kind or amount of securities, cash and other property receivable upon such Non-Surviving Transaction is not the same for each share of Common Stock held
immediately prior to such Non-Surviving Transaction by other than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised (
Non-Electing Share
), then, for
the purposes of this
Section
5(e)
, the kind and amount of securities, cash and other property receivable upon such Non-Surviving Transaction by each Non-Electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-Electing Shares); and
(ii) the rights, preferences, privileges and
obligations of such other Person and the holders of shares of Series B Preferred Stock in respect of Substituted Property shall be substantially identical to the rights, preferences, privileges and obligations of the Corporation and holders of
shares of Series B Preferred Stock in respect of Common Stock hereunder as set forth in this
Section
5
.
Such lawful provision shall provide for adjustments which, for events subsequent to the effective date of such lawful provision, shall be
substantially identical to the adjustments provided for elsewhere in this
Section
5
. The above provisions of this
Section
5(e)
shall similarly apply to successive Non-Surviving Transactions.
(f)
Statement on Certificates
. Irrespective of any adjustment in the Conversion Ratio or the amount or
kind of shares into which the shares of Series B Preferred Stock are convertible, certificates for shares of Series B Preferred Stock theretofore or thereafter issued may continue to express the same Conversion Ratio initially applicable
or amount or kind of shares initially issuable upon conversion of the Series B Preferred Stock evidenced thereby (but the adjusted amount shall nonetheless be the determinative amount).
(g)
No Voting or Dividend Rights
. Subject to the provisions of
Section 6
and except as may be
specifically provided for herein, until the conversion of any share of Series B Preferred Stock:
(i) no
holder of any share of Series B Preferred Stock shall have or exercise any rights by virtue hereof as a holder of Common Stock, including, without limitation, the right to vote or to receive dividends and other distributions as a holder of
Common Stock or to receive notice of, or attend, meetings or any other proceedings of holders of Common Stock;
(ii) the consent of any such holder as a holder of Common Stock shall not be required with respect to any action or
proceeding of the Corporation;
(iii) no such holder, by reason of the ownership or possession of a share of
Series B Preferred Stock, shall have any right to receive any cash dividends, stock dividends, allotments or rights or other distributions paid, allotted or distributed or distributable to the holders of Common Stock prior to, or for which the
relevant record date preceded, the date of the conversion of such share of Series B Preferred Stock (for the avoidance of doubt, this
Section 5(g)
shall not be deemed to modify
Section 2
); and
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(iv) no such holder shall have any right not expressly conferred
hereunder or by applicable law with respect to the share of Series B Preferred Stock held by such holder.
(h)
Payment of Taxes
. The Corporation shall pay any and all taxes (other than income taxes) that may be
payable in respect of the issue or delivery of shares of Common Stock on conversion of shares of Series B Preferred Stock pursuant hereto. The Corporation shall not impose any service charge in connection with any such conversion. The
Corporation shall not be required, however, to pay any tax or other charge imposed in respect of any transfer involved in the issue and delivery of any certificates for shares of Common Stock or payment of cash or other property to any recipient
other than the holder of the share of Series B Preferred Stock converted, and in case of such transfer or payment, the Transfer Agent for the Series B Preferred Stock and the Corporation shall not be required to issue or deliver any
certificate or pay any cash until (a) such tax or charge has been paid or an amount sufficient for the payment thereof has been delivered to the Transfer Agent for the Series B Preferred Stock or the Corporation or (b) it has been
established to the Corporations satisfaction that any such tax or other charge that is or may become due has been paid.
6.
Voting
.
(a) The holders of shares of Series B Preferred Stock shall have no voting rights whatsoever, except as otherwise
provided in this
Section 6
or as otherwise specifically required by law. As to matters upon which holders of shares of Series B Preferred Stock are entitled to vote as a class, the holders of Series B Preferred Stock shall
be entitled to one vote per share and such vote shall be by majority vote.
(b) Each holder of outstanding shares
of Series B Preferred Stock shall be entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Corporation for their action
or consideration (whether at a meeting of stockholders of the Corporation, by written action of stockholders in lieu of a meeting or otherwise), except as provided by law. In any such vote, each share of Series B Preferred Stock shall be
entitled to a number of votes equal to the number of shares of Common Stock into which such share is convertible pursuant to
Section
5(b)
as of the record date for such vote or written consent or, if there is no specified
record date, as of the date of such vote or written consent. Each holder of outstanding shares of Series B Preferred Stock shall be entitled to notice of all stockholder meetings (or requests for written consent) in accordance with the
Corporations bylaws.
(c) So long as any shares of Series B Preferred Stock remain outstanding, in
addition to any other vote or consent of stockholders required by law or the Certificate of Incorporation, the Corporation shall not, directly or indirectly, without the affirmative vote at a meeting (or the written consent with or without a
meeting) of the holders of at least a majority of the number of shares of Series B Preferred Stock then outstanding:
(i) authorize or approve the issuance of any shares of, or of any security convertible into, or convertible or
exchangeable for shares of, shares of any capital stock of the Corporation that rank prior to shares of Series B Preferred Stock in the payment of dividends or in the distribution of assets upon liquidation, dissolution or winding up of the
affairs of the Corporation (or amend the terms of any existing shares to provide for such ranking);
(ii) authorize or approve the issuance of any shares of, or of any security convertible into, or convertible or
exchangeable for shares of, Parity Stock (or amend the terms of any existing shares to provide for such ranking) except such Parity Stock that is issued to Persons other than Affiliates, directors, officers, employees or consultants of the
Corporation;
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(iii) amend, alter or repeal any of the provisions of the Certificate of
Incorporation so as to affect adversely the powers, designations, preferences and rights of the Series B Preferred Stock or the holders thereof or amend, alter or repeal any of the provisions of this Certificate of Designations;
provided,
however
, that, for the avoidance of doubt, an amendment of the Certificate of Incorporation or this Certificate of Designations to authorize or create, or to increase the authorized amount of, any Fully Junior Stock shall not be deemed to affect
adversely the powers, designations, preferences and rights of the Series B Preferred Stock or the holders thereof;
(iv) take any other corporate action that adversely affects any of the rights, preferences or privileges of the
Series B Preferred Stock;
provided, however
, that for the avoidance of doubt this
Section
6(c)(iv)
shall not refer to any commercial or business decision made by the Corporation that may affect the value of the
Series B Preferred Stock but does not change its rights, preferences or privileges (such as the incurrence of debt) or the issuance of Parity Stock permitted by
Section 6(c)(ii)
; or
(v) engage in any business, act or activity other than any business related in any manner to hydrocarbons or energy.
For the avoidance of doubt, nothing herein shall limit the ability of the Corporation to issue Common Stock.
7.
Uncertificated
Shares; Certificated Shares
.
(a)
Uncertificated Shares
.
(i)
Legends
. Until such time as the Series B Preferred Stock and Common Stock issued upon the conversion
of Series B Preferred Stock, as applicable, have been sold pursuant to an effective registration statement under the Securities Act, or the Series B Preferred Stock or Common Stock issued upon the conversion of Series B Preferred Stock, as
applicable, are eligible for resale pursuant to Rule 144 promulgated under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate issued with respect to a
share of Series B Preferred Stock or any Common Stock issued upon the conversion of Series B Preferred Stock shall bear a legend in substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
SECURITIES
ACT
), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR
(2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM
REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.
(ii)
Removal of Legend
. In connection with a sale of the Series B Preferred Stock or Common Stock issued
upon the conversion of Series B Preferred Stock, as applicable, in reliance on Rule 144 promulgated under the Securities Act, the applicable holder or its broker shall deliver to the
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Corporation a broker representation letter providing to the Corporation any information the Corporation deems necessary to determine that such sale is made in compliance with Rule 144 promulgated
under the Securities Act, including, as may be appropriate, a certification that such holder is not an affiliate of the Corporation (as defined in Rule 144 promulgated under the Securities Act) and a certification as to the length of time the
applicable equity interests have been held. Upon receipt of such representation letter, the Corporation shall promptly remove the restrictive legend, and the Corporation shall bear all costs associated with the removal of such legend. At such
time as the Series B Preferred Stock and Common Stock issued upon the conversion of Series B Preferred Stock, as applicable, have been sold pursuant to an effective registration statement under the Securities Act or have been held by the
applicable holder for more than one year where the holder is not, and has not been in the preceding three months, an affiliate of the Corporation (as defined in Rule 144 promulgated under the Securities Act), if the restrictive legend is still in
place, the Corporation agrees, upon request of such holder, to take all steps necessary to promptly effect the removal of such legend, and the Corporation shall bear all costs associated with such removal of such legend. The Corporation shall
cooperate with the applicable holder to effect the removal of such legend at any time such legend is no longer appropriate.
(b)
Certificates Representing Shares of Series
B Preferred Stock
.
(i)
Form and Dating
. Certificates representing shares of Series B Preferred Stock and the Transfer
Agents certificate of authentication shall be substantially in the form set forth in
Exhibit
A
, which is hereby incorporated in and expressly made a part of this Certificate of Designations. The Series B
Preferred Stock certificate may have notations, legends or endorsements required by law, stock exchange rules, agreements to which the Corporation is subject, if any, or usage, provided that any such notation, legend or endorsement is in a form
acceptable to the Corporation. Each Series B Preferred Stock certificate shall be dated the date of its authentication.
(ii)
Execution and Authentication
. Two (2) Officers shall sign each Series B Preferred Stock
certificate for the Corporation by manual or facsimile signature.
(A) If an Officer whose
signature is on a Series B Preferred Stock certificate no longer holds that office at the time the Transfer Agent authenticates the Series B Preferred Stock certificate, the Series B Preferred Stock certificate shall be valid
nevertheless.
(B) A Series B Preferred Stock certificate shall not be valid until an
authorized signatory of the Transfer Agent manually signs the certificate of authentication on the Series B Preferred Stock certificate. The signature shall be conclusive evidence that the Series B Preferred Stock certificate has been
authenticated under this Certificate of Designations.
(C) The Transfer Agent shall authenticate
and deliver certificates for shares of Series B Preferred Stock for original issue upon a written order of the Corporation signed by two (2) Officers of the Corporation. Such order shall specify the number of shares of Series B
Preferred Stock to be authenticated and the date on which the original issue of the Series B Preferred Stock is to be authenticated.
(D) The Transfer Agent may appoint an authenticating agent reasonably acceptable to the Corporation to
authenticate the certificates for the Series B Preferred Stock. Unless limited by the terms of such appointment, an authenticating agent may authenticate certificates for the Series B Preferred Stock whenever the Transfer Agent may do
so. Each reference in this Certificate of Designations to authentication by the Transfer Agent
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includes authentication by such agent. An authenticating agent has the same rights as the Transfer Agent or agent for service of notices and demands.
(iii)
Transfer
. When certificates representing shares of Series B Preferred Stock is presented to the
Transfer Agent with a request to register the transfer of such shares, the Transfer Agent shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met;
provided, however
, that such
shares being surrendered for transfer:
(A) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Corporation and the Transfer Agent, duly executed by the holder thereof or its attorney duly authorized in writing; and
(B) are being transferred pursuant to subclause (1) or (2) below, and are accompanied by the
following additional information and documents, as applicable:
(1) if such certificates are
being delivered to the Transfer Agent by a holder for registration in the name of such holder, without transfer, a certification from such holder to that effect in substantially the form of
Exhibit
B
hereto; or
(2) if such certificates are being transferred to the Corporation or to a qualified
institutional buyer in accordance with Rule 144A under the Securities Act or pursuant to another exemption from registration under the Securities Act, (i) a certification to that effect (in substantially the form of
Exhibit
B
hereto) and (ii) if the Corporation so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in
Section
7(a)(i)
.
(iv)
Replacement Certificates
. If any of the Series B
Preferred Stock certificates shall be mutilated, lost, stolen or destroyed, the Corporation shall issue, in exchange and in substitution for and upon cancellation of the mutilated Series B Preferred Stock certificate, or in lieu of and
substitution for the Series B Preferred Stock certificate lost, stolen or destroyed, a new Series B Preferred Stock certificate of like tenor and representing an equivalent amount of shares of Series B Preferred Stock, but only upon
receipt of evidence of such loss, theft or destruction of such Series B Preferred Stock certificate and indemnity, if requested, satisfactory to the Corporation and the Transfer Agent.
(v)
Cancellation
. In the event the Corporation shall purchase or otherwise acquire certificates
representing shares of Series B Preferred Stock, the same shall thereupon be delivered to the Transfer Agent for cancellation. The Transfer Agent and no one else shall cancel and destroy all Series B Preferred Stock certificates
surrendered for transfer, exchange, replacement or cancellation and deliver a certificate of such destruction to the Corporation unless the Corporation directs the Transfer Agent to deliver canceled Series B Preferred Stock certificates to the
Corporation. The Corporation may not issue new Series B Preferred Stock certificates to replace Series B Preferred Stock certificates to the extent they evidence Series B Preferred Stock which the Corporation has purchased or
otherwise acquired.
(c)
Record Holders
. Prior to due presentment for registration of transfer of any
shares of Series B Preferred Stock, the Transfer Agent and the Corporation may deem and treat the Person in whose name such shares are registered as the absolute owner of such Series B Preferred Stock, and neither the Transfer Agent nor
the Corporation shall be affected by notice to the contrary.
(d)
No Obligation of the Transfer
Agent
. The Transfer Agent shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Certificate of Designations or under applicable law with respect to any
transfer of any interest in any Series B Preferred Stock other than to require delivery of such certificates and other documentation or
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evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Certificate of Designations, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
8.
Certain Definitions
.
As used herein with respect to the Series B Preferred Stock, the following terms shall have the following meanings:
Affiliate
of a Person means any other Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person. The term control (including the terms controlled by and under common control with) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
Board of Directors
shall mean the Board of Directors of the Corporation or, with respect to any action to be taken
by the Board of Directors, any committee of the Board of Directors duly authorized to take such action.
Business
Day
means a day except a Saturday or Sunday or other day on which the banks in the city of Houston, Texas are authorized or required by applicable law to be closed.
Common Stock
means common stock of the Corporation, par value $0.01 per share.
Fully Junior Stock
means any Junior Stock over which the Series B Preferred Stock has preference and priority
in the payment of dividends and in the distribution of assets on any liquidation (complete or partial), dissolution or winding up of the affairs of the Corporation.
holder
of shares of Series B Preferred Stock means the stockholder in whose name such Series B Preferred
Stock is registered in the stock books of the Corporation.
Junior Stock
means the Common Stock and any other
class or series of shares of the Corporation or any of its subsidiaries hereafter authorized over which the Series B Preferred Stock has preference or priority in the payment of dividends (including prohibiting any such dividends while any
Series B Preferred Stock is outstanding) or in the distribution of assets on any liquidation (complete or partial), dissolution or winding up of the affairs of the Corporation or its subsidiaries.
Officer
means the Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice
President, the Treasurer, the Secretary or any Assistant Secretary of the Corporation.
Original Issue Date
means November 23, 2016.
Parity Stock
means any class or series of shares of the Corporation (including
Series B Preferred Stock) that have pari passu preference with the Series B Preferred Stock in the payment of dividends or in the distribution of assets on any liquidation (complete or partial), dissolution or winding up of the affairs of
the Corporation.
Person
means an individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity.
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Securities Act
means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
Transfer Agent
means Broadridge Corporate Issuer Solutions, Inc.,
acting as the Corporations duly appointed transfer agent, registrar, conversion agent and dividend disbursing agent for the Series B Preferred Stock. The Corporation may, in its sole discretion, remove the Transfer Agent with
ten (10) days prior notice to the Transfer Agent;
provided
that the Corporation shall appoint as its successor a nationally recognized Transfer Agent who shall accept such appointment prior to the effectiveness of such removal.
9.
No Other Rights
.
The shares of Series B Preferred Stock shall not have any powers, designations, preferences or relative, participating, optional, or
other special rights, nor shall there be any qualifications, limitations or restrictions or any powers, designations, preferences or rights of such shares, other than as set forth herein or in the Certificate of Incorporation or as may be provided
by law.
[
Signature page follows
.]
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations to be signed and
attested this day of , .
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MAGELLAN PETROLEUM CORPORATION
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By:
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Name:
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Title:
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[S
IGNATURE
P
AGE
TO
C
ERTIFICATE
OF
D
ESIGNATIONS
OF
S
ERIES
B C
ONVERTIBLE
P
REFERRED
S
TOCK
OF
M
AGELLAN
P
ETROLEUM
C
ORPORATION
]
A-86
EXHIBIT A
FORM OF SERIES B CONVERTIBLE PREFERRED STOCK
FACE OF SECURITY
THE SECURITIES
EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
SECURITIES ACT
), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION
DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.
A-87
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Certificate Number
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[●] Shares of
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[●]
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Series B Convertible Preferred Stock
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Series B Convertible Preferred Stock
of
MAGELLAN PETROLEUM
CORPORATION
MAGELLAN PETROLEUM CORPORATION, a Delaware corporation (the
Corporation
), hereby certifies that
[●] (the
Holder
) is the registered owner of [●] fully paid and non-assessable shares of preferred stock, par value $0.01 per share, of the Corporation designated as the Series B Convertible Preferred Stock
(the
Series
B Preferred Stock
). The shares of Series B Preferred Stock are transferable on the books and records of the Transfer Agent, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for transfer. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series B Preferred Stock represented hereby are issued
and shall in all respects be subject to the provisions of the Certificate of Designations dated
[date]
, as the same may be amended from time to time (the
Certificate of Designations
). Capitalized terms used herein
but not defined shall have the meaning given them in the Certificate of Designations. The Corporation will provide a copy of the Certificate of Designations to a Holder without charge upon written request to the Corporation at its principal place of
business.
Reference is hereby made to select provisions of the Series B Preferred Stock set forth on the reverse hereof, and to the
Certificate of Designations, which select provisions and the Certificate of Designations shall for all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the Certificate of Designations and is entitled to the benefits thereunder.
Unless the Transfer Agents Certificate of Authentication hereon has been properly executed, these shares of Series B Preferred
Stock shall not be entitled to any benefit under the Certificate of Designations or be valid or obligatory for any purpose.
IN WITNESS
WHEREOF, the Corporation has executed this certificate this [●] day of [●], 20[●].
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MAGELLAN PETROLEUM CORPORATION
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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TRANSFER AGENTS CERTIFICATE OF AUTHENTICATION
These are shares of the Series B Preferred Stock referred to in the within-mentioned Certificate of Designations.
Dated:
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[●], as Transfer Agent,
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By:
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Authorized Signatory
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REVERSE OF SECURITY
The shares of Series B Preferred Stock shall be convertible into the Corporations Common Stock upon the satisfaction of the
conditions and in the manner and according to the terms set forth in the Certificate of Designations.
The Corporation will furnish
without charge to each holder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock and the qualifications, limitations or restrictions of such preferences and/or
rights.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Series B Preferred Stock evidenced hereby to:
(Insert assignees social
security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints:
agent to transfer the shares of
Series B Preferred Stock evidenced hereby on the books of the Transfer Agent. The agent may substitute another to act for him or her.
(Sign exactly as your name appears on the other side of this Series B Preferred
Stock Certificate)
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Signature must be guaranteed by an eligible guarantor institution that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements
include membership or participation in the Securities Transfer Agents Medallion Program (STAMP) or such other signature guarantee program as may be determined by the Transfer Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF PREFERRED STOCK
Re:
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Series B Convertible Preferred Stock (the
Series
B Preferred Stock
) of Magellan Petroleum Corporation (the
Corporation
)
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This Certificate relates to [●] shares of Series B Preferred Stock held by [●] (the
Transferor
).
The Transferor has requested the Transfer Agent by written order to exchange or register the
transfer of Series B Preferred Stock.
In connection with such request and in respect of such Series B Preferred Stock, the
Transferor does hereby certify that the Transferor is familiar with the Certificate of Designations relating to the above-captioned Series B Preferred Stock and that the transfer of this Series B Preferred Stock does not require
registration under the Securities Act of 1933, as amended (the
Securities Act
), because */:
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☐
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such Series B Preferred Stock is being acquired for the Transferors own account without transfer;
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☐
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such Series B Preferred Stock is being transferred to the Corporation; or
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☐
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such Series B Preferred Stock is being transferred to a qualified institutional buyer (as defined in Rule 144A under the Securities Act), in reliance on Rule 144A.
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Such Series B Preferred Stock is being transferred in reliance on and in compliance with another exemption from the registration
requirements of the Securities Act (and based on an opinion of counsel if the Corporation so requests).
Date:
*/
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Please check applicable box.
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A-92
SECOND AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this
Amendment
) is entered into as of December 19, 2016, by and
among Tellurian Investments Inc., a Delaware corporation (
Tellurian
), Magellan Petroleum Corporation, a Delaware corporation (
Magellan
), and River Merger Sub, Inc., a Delaware corporation and a direct,
wholly-owned Subsidiary of Magellan (
Merger Sub
).
RECITALS
WHEREAS, Tellurian, Magellan and Merger Sub are parties to that certain Agreement and Plan of Merger entered into as of August 2, 2016,
as amended on November 23, 2016 (as further amended, supplemented, amended and restated or otherwise modified from time to time, the
Merger Agreement
);
WHEREAS, the Tellurian Board has determined that it is in the best interests of Tellurian and the Tellurian Stockholders, and has declared it
advisable, to enter into this Amendment, and the Tellurian Board has approved this Amendment, upon the terms and subject to the conditions set forth herein, and has, upon such terms and subject to such conditions, recommended that the Tellurian
Stockholders vote in favor of the approval of the Merger Agreement, as amended by this Amendment;
WHEREAS, the Magellan Board has
determined that it is in the best interests of Magellan and the Magellan Stockholders, and has declared it advisable, to enter into this Amendment, and the Magellan Board has approved this Amendment, upon the terms and subject to the conditions set
forth herein, and has, upon such terms and subject to such conditions, on its own behalf and as the sole stockholder of Merger Sub, approved and adopted this Amendment;
WHEREAS, the board of directors of Merger Sub has unanimously approved and declared advisable this Amendment; and
WHEREAS, Magellan, Merger Sub, and Tellurian desire to amend certain terms of the Merger Agreement in accordance with
Section
8.2
of the Merger Agreement as set forth below.
NOW, THEREFORE, in consideration of the promises and
the mutual covenants, representations and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, Tellurian, Magellan and
Merger Sub hereby agree as follows:
AGREEMENT
Section 1.
Definitions
. Capitalized terms used herein (including in the Recitals hereto) but not defined herein shall have the
meanings as given them in the Merger Agreement, unless the context otherwise requires.
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Section 2.
Amendments to Merger Agreement
. Tellurian, Magellan and Merger Sub hereby
amend the Merger Agreement as follows:
(a)
Section
1.7
of the Merger Agreement is hereby amended and restated
in its entirety to the following:
Section 1.7
Directors and Officers of Magellan
. Prior to the
Effective Time, Magellan shall take all necessary corporate action to appoint, effective immediately after the Effective Time, (a) seven (7) members of the current Tellurian Board as members of the Magellan Board, (b) one (1)
other person designated by Total as a member of the Magellan Board, subject to the closing of the Total Transaction, and (c) the persons designated by Tellurian as officers of Magellan.
(b)
Section
4.2(a)
of the Merger Agreement is hereby amended and restated in its entirety to the following:
(a) The authorized capital stock of Tellurian consists of (i) 200,000,000 shares of Tellurian Stock, of which, as
of December 19, 2016, 109,609,000 shares are issued and outstanding and 35,384,615 shares (the
Total Shares
) are reserved for issuance to Total and will be issued to Total at the closing of the Total Transaction, and
(ii) 5,467,851 shares of preferred stock, $0.001 par value per share (
Tellurian Preferred Stock
), of which 5,467,851 shares are issued and outstanding as of December 19, 2016. No shares of Tellurian Stock or Tellurian
Preferred Stock are held in treasury as of the date hereof. All of the outstanding shares of Tellurian Stock and Tellurian Preferred Stock have been duly authorized, are validly issued, fully paid, and nonassessable, and have been issued in
compliance with all applicable Laws and are not subject to any
pre-emptive
rights. Upon the closing of the Total Transaction, the Total Shares (i) will be duly authorized, validly issued, fully paid, and
nonassessable, and have been issued in compliance with all applicable Laws and (ii) will be issued with certain preemptive rights as further described in the Common SPA.
(c) The first sentence of
Section
4.2(b)
of the Merger Agreement is hereby amended and restated in its entirety to
the following:
Except for the preemptive rights further described in the Common SPA, there are no preemptive rights
to purchase any Securities of Tellurian or any Tellurian Subsidiary.
(d) The prefatory language in
Section 5.2(a)
of the
Merger Agreement is hereby amended and restated in its entirety to the following:
(a) Except (i) as expressly
permitted by or set forth in this Agreement, (ii) as set forth in the Magellan Disclosure Schedule or the Tellurian Disclosure Schedule, as applicable, (iii) as required by applicable Law, (iv) as agreed to in writing by the other
Parties (which consent shall not be unreasonably withheld, delayed or conditioned), (v) in connection with the transactions to be entered into and consummated by Magellan and Tellurian in connection with the issuance of Tellurian Preferred
Stock, or (vi) in connection with the Total Transaction, during the period from the date of this Agreement until the Closing, Magellan shall conduct its business in the ordinary course of business consistent with past practice, and each of
Magellan and Tellurian shall, and shall cause each of their respective Subsidiaries to, (A) use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationships
with it and retain the
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services of its present officers and key employees, and (B) use commercially reasonable efforts to comply in all material respects with all applicable Laws and the requirements of all
Material Contracts. Without limiting the generality of the foregoing, except (1) as expressly permitted by or provided in this Agreement, (2) as set forth in the Magellan Disclosure Schedule or the Tellurian Disclosure Schedule, as
applicable, (3) as required by applicable Law, (4) as agreed in writing by the Parties, (5) in connection with the transactions to be entered into and consummated by Magellan and Tellurian in connection with the issuance of Tellurian
Preferred Stock or (6) in connection with the Total Transaction, during the period from the date of this Agreement to the Closing, each of Magellan and Tellurian shall not, and shall not permit any of their respective Subsidiaries to:
(e)
Section
7.1(b)(i)
of the Merger Agreement is hereby amended by replacing January 31, 2017
with February 28, 2017.
(f)
Annex
1
of the Merger Agreement is hereby amended by adding the
following definition in appropriate alphabetical order:
Common SPA
is defined in the definition
of the term Total Transaction.
Total
means Total Delaware, Inc., a Delaware
corporation.
Total Shares
is defined in
Section
4.2(a)
.
Total Transaction
means the sale of 35,384,615 shares of Tellurian Stock to Total pursuant to
that certain Common Stock Purchase Agreement, dated December 19, 2016, between Tellurian and Total (the
Common SPA
), and any other transactions contemplated thereby.
(g)
Section
4.2
of the Tellurian Disclosure Schedule is hereby amended and restated in its entirety to be in the
form of
Exhibit
A
to this Amendment.
(h)
Section
4.5
of the Tellurian Disclosure
Schedule is hereby amended and restated in its entirety to be in the form of
Exhibit
B
to this Amendment.
(i)
Section
4.9
of the Tellurian Disclosure Schedule is hereby amended and restated in its entirety to be in the form of
Exhibit
C
to this Amendment.
Section 3.
Confirmation of Merger Agreement
. Other than as expressly modified pursuant to this Amendment, all of the terms,
conditions and other provisions of the Merger Agreement are hereby ratified and confirmed and shall continue to be in full force and effect in accordance with their respective terms.
Section 4.
References
. All references to the Merger Agreement (including hereof, herein,
hereunder, hereby and this Agreement) shall refer to the Merger Agreement as amended by this Amendment. Notwithstanding the foregoing, references to the date of the Merger Agreement (as amended hereby) and
references in the Merger Agreement to the date hereof, the date of this Agreement and terms of similar import shall in all instances continue to refer to August 2, 2016.
Section 5.
Counterparts
. This Amendment may be executed in counterparts (each of which shall be deemed to be an original but all
of which taken together shall constitute one and the same agreement) and shall become effective when one or more counterparts have been signed by each of the
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Parties and delivered to the other Parties. A signed copy of this Amendment delivered by facsimile,
e-mail
or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy of this Amendment.
Section 6.
Entire
Agreement
. The provisions of
Article
VIII
of the Merger Agreement shall apply to this Amendment
mutatis mutandis
, and to the Merger Agreement as modified by this Amendment, taken together as a single agreement,
reflecting the terms as modified hereby.
(
Signature Page Follows
)
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In WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed and delivered as
of the date first written above.
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MAGELLAN PETROLEUM CORPORATION
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By:
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/s/ Antoine J. Lafargue
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Name:
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Antoine J. Lafargue
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Title:
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President and Chief Executive Officer
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RIVER MERGER SUB, INC.
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By:
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/s/ Antoine J. Lafargue
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Name:
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Antoine J. Lafargue
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Title:
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President and Chief Executive Officer
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TELLURIAN INVESTMENTS INC.
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By:
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/s/ Meg A. Gentle
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Name:
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Meg A. Gentle
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Title:
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President and Chief Executive Officer
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[Signature Page to Second Amendment to
Agreement and Plan of Merger]
A-97
Annex B: Petrie Partners Securities, LLC Fairness Opinion
August 2, 2016
The Board of Directors
Magellan Petroleum Corporation
1775 Sherman Street, Suite
1950
Denver, CO 80203
Members of the Board of Directors:
Magellan Petroleum Corporation, a Delaware corporation (
Magellan
, or the
Parent
), Magellan Merger Sub Inc., a
Delaware corporation and a direct, wholly-owned subsidiary of Parent (
Merger Sub
), and Tellurian Investments Inc., a Delaware corporation (
Tellurian
or the
Company
), propose to enter into an
Agreement and Plan of Merger, dated August 2, 2016 (the
Merger Agreement
), pursuant to which (i) Merger Sub shall merge with and into the Company and the separate corporate existence of Merger Sub shall cease, and (ii) the Company
shall be the surviving corporation and a wholly-owned subsidiary of the Parent (including, without limitation, the other actions contemplated by the Merger Agreement, the
Merger
). By virtue of the Merger, each share of common
stock, par value $0.001 per share, of the Company (the
Company Common Stock
) issued and outstanding immediately prior to the Effective Time, as defined in the Merger Agreement (other than Treasury Shares, as defined in the Merger
Agreement, which shall be canceled for no consideration), shall be converted into the right to receive 1.300 shares of common stock, par value $0.01 per share, of the Parent (
Parent Common Stock
), subject to certain adjustments
and limitations specified in the Merger Agreement (such fraction of a share of Parent Common Stock, the
Exchange Ratio
).
You have
requested our opinion as to whether the Exchange Ratio is fair, from a financial point of view, to Magellan.
In arriving at our opinion, we have, among
other things:
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1.
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reviewed certain publicly available information relating to Magellan, including (i) Annual Reports on Form 10-K and related audited financial statements of Magellan for the fiscal year ended June 30, 2015, and (ii) the
Quarterly Reports on Form 10-Q for Magellan and related unaudited financial statements for the fiscal quarter ended March 31, 2016;
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2.
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reviewed the Tellurian Confidential Offering Memorandum and related unaudited financial statements for the period ended June 30, 2016;
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3.
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reviewed certain non-public operating data relating to Magellan and Tellurian prepared and furnished to Petrie by the respective management team and staff of Magellan and of Tellurian;
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4.
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reviewed certain non-public financial and operating projections relating to Tellurian prepared and furnished to Petrie on July 27, 2016 by the management team and staff of Tellurian
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5.
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discussed current operations, financial positioning and future prospects of Magellan and Tellurian with the respective management team of Magellan and of Tellurian;
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6.
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reviewed historical market prices and trading history of Magellan common stock;
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7.
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Compared the financial terms of the Transaction with the financial terms of similar transactions we have deemed relevant;
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8.
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participated in certain discussions and negotiations among the representatives of Magellan and its legal advisors and Tellurian and its legal advisors;
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9.
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reviewed a draft of the Agreement dated July 28, 2016; and
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10.
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reviewed such other financial studies and analyses and performed such other investigations and have taken into account such other matters as we have deemed necessary and appropriate.
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In rendering our opinion (this
Opinion
), upon the advice of the management team of Magellan and of Tellurian, we have assumed and relied
upon, without assuming any responsibility or liability for or independently verifying the accuracy or completeness of, the information publicly available and the information supplied or otherwise made available to us by Magellan and Tellurian. We
have further relied upon the assurances of representatives of the management of Magellan and Tellurian that they are unaware of any material facts that would make the information provided to us incomplete or misleading in any material respect. With
respect to projected financial and operating data, we have assumed, upon the advice of Magellan and Tellurian, that such data have been prepared in a manner consistent with historical financial and operating data and reasonably prepared on bases
reflecting the best currently available estimates and good faith judgments of the management team and staff of Magellan and of Tellurian relating to the future financial and operational performance of Magellan and Tellurian, respectively. We express
no view as to any projected financial and operating data relating to Magellan or Tellurian or the assumptions on which they are based. We have not made an independent evaluation or appraisal of the assets or liabilities of Magellan or Tellurian, nor
have we been furnished with any such evaluations or appraisals, nor have we evaluated the solvency or fair value of Magellan or Tellurian under any state or federal laws relating to bankruptcy, insolvency or similar matters. Furthermore, we have
undertaken no independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which Magellan or Tellurian is a party or may be subject, or of any governmental
investigation of any possible un-asserted claims or other contingent liabilities to which Magellan or Tellurian is a party or may be subject. With your consent, this Opinion makes no assumption concerning, and therefore does not consider, the
potential effects of any such litigation, claims or investigations or possible assertions of claims, outcomes or damages arising out of any such matters. In addition, we have not assumed any obligation to conduct, nor have we conducted, any physical
inspection of the properties or facilities of Magellan or Tellurian.
B-2
For purposes of rendering this Opinion, we have assumed, in all respects material to our analysis, that the
representations and warranties of each party contained in the Merger Agreement are true and correct, that each party will perform all of the covenants and agreements required to be performed by it under the Merger Agreement, that all conditions to
consummation of the Merger will be satisfied without material waiver modification thereof, and that the Merger will be consummated in a timely manner in accordance with the terms described in the Merger Agreement, without any amendments or
modifications thereto or any adjustment to the Exchange Ratio (through offset, reduction, indemnity claims, post-closing purchase price adjustments or otherwise). We have further assumed, upon the advice of Magellan, that all governmental,
regulatory or other consents, approvals or releases necessary for the consummation of the Merger will be obtained without any material delay, limitation, restriction or condition that would have an adverse effect on Magellan or Tellurian or on the
consummation of the Merger or that would materially reduce the benefits of the Merger to Magellan.
This Opinion relates solely to the fairness, from a
financial point of view, of the Exchange Ratio to Magellan. We do not express any view on, and this Opinion does not address, the fairness of the proposed Merger to, or any consideration received in connection therewith by, any creditors,
shareholders, or other constituencies of Magellan, or the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Magellan, or any class of such persons. We have assumed that any
modification to the structure of the Merger will not vary in any material respect from what has been assumed in our analysis. Our advisory services and this Opinion are provided for the information and benefit of the Board of Directors of Magellan
in connection with its consideration of the transactions contemplated by the Merger Agreement, and this Opinion does not constitute a recommendation to any holder of Magellan Common Stock as to how such holder should vote with respect to any of the
transactions contemplated by the Merger Agreement. The issuance of this Opinion has been approved by the Opinion Committee of Petrie Partners Securities, LLC. This Opinion does not address the relative merits of the Merger as compared to any
alternative business transaction or strategic alternative that might be available to Magellan, nor does it address the underlying business decision of Magellan to engage in the Merger. We have not been asked to consider, and this Opinion does not
address, the tax consequences of the Merger to Magellan or any particular stockholder of Magellan, or the prices at which Magellan Common Stock will actually trade at any time, including following the announcement or consummation of the Merger. We
are not rendering any legal, accounting, tax or regulatory advice and understand that Magellan is relying on other advisors as to legal, accounting, tax and regulatory matters in connection with the Merger.
As you are aware, we are acting as financial advisor to Magellan pursuant to an engagement letter between Magellan and Petrie Partners, LLC, dated June 29,
2015, as supplemented and modified by letter, dated as of March 14, 2016, which was assigned to us by Petrie Partners, LLC (the
Engagement Letter
), and we will receive a cash fee from Magellan for our services upon the rendering
of this Opinion regardless of the conclusions expressed herein. Magellan has also agreed to reimburse our expenses and we will be entitled to receive a success fee, payable in shares of Parent Common Stock, if the Merger is consummated. In
B-3
addition, Magellan has agreed to indemnify us for certain liabilities possibly arising out of our engagement. During 2015 and 2016, certain of our affiliates provided financial advisory services
to Magellan, and received fees from Magellan in connection with an exchange transaction involving Magellan and One Stone Holdings II LP. Also in 2016, certain of our affiliates provided financial advisory services to Tellurian, and received
fees from Tellurian in connection with a private placement of equity securities by Tellurian (the
Private Placement
). Several of our principals are beneficial owners of an aggregate of approximately 1,550,000 shares of
Tellurian common stock (representing 1.7% of the Company Common Stock currently outstanding), the beneficial interests in which were acquired in connection with the Private Placement. On March 24, one of our principals, Michael Bock, was appointed
to, and currently serves on, the board of directors of Tellurian. Otherwise, during the two-year period prior to the date hereof, no material relationship existed between us and our affiliates, on the one hand, and Magellan or Tellurian and their
applicable affiliates, on the other hand, pursuant to which we or any of our affiliates received compensation as a result of such relationship. We may provide financial or other services to Magellan and Tellurian in the future and in connection with
any such services we may receive customary compensation. Furthermore, in the ordinary course of business, we or our affiliates may trade in the debt or equity securities of Magellan or Tellurian for our own account and, accordingly, may at any time
hold long or short positions in such securities.
This Opinion is rendered on the basis of conditions in the securities markets and the oil and gas
markets as they exist and can be evaluated on the date hereof and the conditions and prospects, financial and otherwise, of Magellan and Tellurian as they have been represented to us as of the date hereof or as they were reflected in the materials
and discussions described above. It is understood that subsequent developments may affect this Opinion and that we do not have any obligation to update, revise or reaffirm this Opinion.
This Opinion may not be disclosed, quoted, referred to or communicated (in whole or in part) to any third party for any purpose whatsoever except with our
prior written approval, except Magellan may describe and reproduce this Opinion (but only in full) in any document that is required to be filed with the U.S. Securities and Exchange Commission and required to be mailed by Magellan to its
stockholders relating to the Exchange;
provided
all references to us or this Opinion in any such document and the description or inclusion of this Opinion shall be subject to our prior written approval with respect to form and substance,
which approval shall not be unreasonably withheld or delayed. This Opinion is being rendered on the condition that it is subject to the Engagement Letter, including the Standard Terms and Conditions attached thereto. Based upon and subject to the
foregoing, it is our opinion that, as of the date hereof, the Exchange Ratio is fair, from a financial point of view, to Magellan.
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Very truly yours,
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PETRIE PARTNERS SECURITIES, LLC
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By:
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/s/ Jon C. Hughes
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B-4
Annex C: Magellan Petroleum Corporation 2016 Omnibus Incentive
Compensation Plan
MAGELLAN PETROLEUM CORPORATION
2016 OMNIBUS INCENTIVE COMPENSATION PLAN
Effective as of January [●], 2017
SECTION
1 PURPOSES
The purposes of the Magellan Petroleum Corporation 2016 Omnibus Incentive Compensation Plan (the
Plan) are to promote the interests of Magellan Petroleum Corporation, a Delaware corporation (the Company), and its stockholders by strengthening its ability to attract, retain, and motivate Employees, members of the Board,
and Consultants of the Company and any Subsidiary by furnishing suitable recognition of their performance, ability, and experience, to align their interests and efforts to the long-term interests of the Companys stockholders, and to provide
them with a direct incentive to achieve the Companys strategic and financial goals. In furtherance of these purposes, the Plan provides for the grant of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, Incentive Awards, Cash Awards, and Other Stock-Based Awards to Participants in accordance with the terms and conditions set forth below.
SECTION 2 DEFINITIONS
Unless otherwise required by the context, the following terms when used in the Plan shall have the meanings set forth in this Section 2:
Any person that directly or indirectly controls, is controlled by or is
under common control with the Company. The term control (including, with correlative meaning, the terms controlled by and under common control with), as applied to any person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting or other securities, by contract or otherwise.
Any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit,
Performance Share, Performance Unit, Incentive Award, Cash Award, or Other Stock-Based Award, in each case payable in Common Stock and/or in cash as may be designated by the Plan Administrator.
C-1
The written agreement setting forth the terms, conditions, rights, and
duties applicable to an Award granted under the Plan. All Award Agreements shall be deemed to incorporate the provisions of the Plan. An Award Agreement need not be identical to other Award Agreements either in form or substance. The Plan
Administrator may, in its discretion, provide for the use of electronic, internet, or other non-paper Award Agreements, and provide that execution of an Award Agreement may be evidenced by any appropriate form of electronic signature or affirmative
email or other electronic response attached to or logically associated with such Award Agreement, which is executed or adopted by a party with an indication of the intention by such party to execute or adopt such Award Agreement for purposes of
execution thereof.
The non-discretionary compensation agreed to be paid from Employer
to a Participant. In the case of an Employee, Base Compensation shall include such Employees base salary and shall not include any bonus or other discretionary incentive compensation. In the case of a Consultant, Base Compensation shall
include non-discretionary compensation described in any consulting, service or similar agreement between Employer and Consultant. In the case of a Director, Base Compensation shall include such Directors annual fee for service as a Director,
but shall not include any bonus or other discretionary incentive compensation.
The person or persons designated by the Participant pursuant to Section
7.3(f) or Section 19.8 of this Plan to whom payments are to be paid pursuant to the terms of the Plan in the event of the Participants death.
The Board of Directors of the Company.
As defined in Section 13.1 of this Plan.
Cause shall have the meaning ascribed thereto in any Award
Agreement, or in any employment, consulting, change of control severance, or similar service agreement between a Participant and an Employer, or, in the absence of such agreement, a termination of a Participants employment with the Company and
its Subsidiaries resulting from (a) continued and substantial substandard performance of reasonably assigned work or other service duties that has not been cured to the Employers satisfaction; (b) intentional and substantial workplace
misconduct; (c) material or repeated violation of the Employers policies, including, without limitation, the Employers Standards of Conduct or other applicable code of ethics and/or business conduct; (d) fraud or other
dishonesty against the Employer; (e)
C-2
engagement in conduct that the Participant knows or should know is materially injurious to the business or reputation of the Employer; (f) falsifying Employer or Participant records (including an
employment or similar application); (g) unauthorized use of Employer equipment or confidential information of an Employer or third party who has entrusted such information to the Employer; or (h) conviction of a felony or crime involving moral
turpitude. With respect to a Consultant, Cause shall also include a breach by the Consultant of the applicable consulting or similar service agreement. Whether a Participant has been terminated for Cause will be determined by the Board in its sole
discretion with respect to a Section 16 Insider, and, with respect to all other Participants, by the Companys Chief Executive Officer in his or her sole discretion.
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9.
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Change in Capitalization
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Any increase or reduction in the number of shares of Common
Stock, any change (including, without limitation, in the case of a spin-off, dividend, or other distribution in respect of shares, a change in value) in the shares of Common Stock, or any exchange of shares of Common Stock for a
different number or kind of shares of Common Stock or other securities of the Company or another corporation, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, spin-off, split-up, issuance of warrants,
rights, or debentures, stock dividend, stock split or reverse stock split, extraordinary cash dividend, property dividend, combination, or exchange of shares, change in corporate structure, or otherwise.
The occurrence of any of the following after the Effective Date:
(a) any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
Person) acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of Common Stock of the Company (the Outstanding Company
Common Stock) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities); provided, however,
that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (1) any acquisition directly from the Company or its affiliates, (2) any acquisition by the Company, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (4) any acquisition pursuant to a transaction which complies with clauses (A), (B), and (C) of Section 2.10(c) of this Plan,
below; or
(b) individuals who, as of the Effective Date, constitute the Board (the Incumbent Board)
cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Companys stockholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding,
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for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;
(c) or consummation by the Company of a reorganization, merger, or consolidation, or sale or other disposition of all
or substantially all of the assets of the Company, or the acquisition of assets of another entity (a Business Combination), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of Common Stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no person (excluding any employee benefit plan (or related
trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of Common Stock of the entity resulting from such Business
Combination or the combined voting power of the then outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of
directors (or equivalent governing authority) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(d) approval by the stockholders of the Company of a complete liquidation or dissolution
of the Company.
Notwithstanding the foregoing, with respect to an Award that is (i) subject to Section 409A and (ii) a Change of Control
would accelerate the timing of payment thereunder, the term Change of Control shall, to the extent necessary to comply with Section 409A as determined by the CNG Committee, mean:
(i) A change in the ownership of the Company which will occur on the date that any one
person, or more than one person acting as a group within the meaning of Section 409A, acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Company. However, if any one person or more than one person acting as a group, is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the
stock of the Company, the acquisition of additional stock by the same person or persons will not be
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considered a change in the ownership of the Company (or to cause a change in the effective control of the Company within the meaning of subsection (ii)
below). Further, an increase of the effective percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an
acquisition of stock for purposes of this paragraph; provided, that the following acquisitions of Company stock will not constitute a Change of Control: (A) any acquisition by any employee benefit plan (or related trust) sponsored or maintained
by the Company or an Affiliate, (B) any acquisition directly from the Company or (C) any acquisition by the Company. This subsection (i) applies only when there is a transfer of the stock of the Company (or issuance of stock) and stock in the
Company remains outstanding after the transaction.
(ii) A change in the effective control of
the Company which will occur on the date that either:
(A) any one person, or more than one
person acting as a group within the meaning of Section 409A, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing
thirty percent (30%) or more of the total voting power of the stock of the Company (not considering stock owned by such person or group prior to such twelve (12) month period)(i.e., such person or group must acquire within a twelve (12) month period
stock possessing thirty percent (30%) of the total voting power of the stock of the Company) except for (1) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate, (2) any acquisition
directly from the Company or (3) any acquisition by the Company; or
(B) a majority of the members
of the Board are replaced during any twelve (12) month period by directors or managers whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.
For purposes of a change in the effective control of the Company, if any one person, or more than one person acting as a group, is
considered to effectively control the Company within the meaning of this subsection (ii), the acquisition of additional control of the Company by the same person or persons is not considered a change in the effective control of the
Company, or to cause a change in the ownership of the Company within the meaning of subsection (i) above.
(iii) A change in the ownership of a substantial portion of the Companys assets which
will occur on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets of the Company
that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market
value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such
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assets. Any transfer of assets to an entity that is controlled by the shareholders of the Company immediately after the transfer, as provided in guidance issued pursuant to Section 409A, will not
constitute a Change of Control.
For purposes of this definition, the provisions of Section 318(a) of the Code regarding the constructive
ownership of stock will apply directly or by analogy to determine ownership; provided, that, ownership interests underlying unvested options (including options exercisable for an ownership interest that is not substantially vested) will not be
treated as owned by the individual who holds the option.
The Compensation, Nominating and Governance Committee of the Board.
The U.S. Internal Revenue Code of 1986, as amended and in effect from time to
time, and the temporary or final regulations of the Secretary of the U.S. Treasury adopted pursuant to the Code.
The Common Stock of the Company, $0.01 par value per share, or such other
class of shares or other securities as may be applicable pursuant to the provisions of Section 5 of this Plan.
As defined in Section 1 of this Plan.
Any consultant, agent, advisor, or independent contractor who renders
services to the Company or any Subsidiary and who is a natural person and otherwise qualifies as a consultant under the applicable rules of the U.S. Securities and Exchange Commission for registration of Common Stock on a Form S-8 Registration
Statement.
With respect to any grant of an Award, a Participant who the Plan
Administrator deems is or may become for any year a covered employee as defined in Section 162(m).
Any individual who is a member of the Board of Directors of the Company or of
any Subsidiary.
That the Participant has experienced a permanent and total
disability within the meaning of Section 22(e)(3) of the Code. The determination of whether a Participant has
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experienced a Disability shall be determined under procedures established by the CNG Committee. Notwithstanding the foregoing, in any circumstance or transaction in which compensation payable
pursuant to this Plan or an Award Agreement would be subject to the tax under Section 409A if the foregoing definition of Disability were to apply, then Disability means (i) the inability of the Participant to
engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months or
(ii) the receipt of income replacements by the Participant, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve
(12) months, for a period of not less than three (3) months under the Companys or applicable Affiliates accident and health plan.
The effective date of the Plan is January [], 2017, the date on
which it was approved by the stockholders of the Company.
Any officer or other employee of the Company or of any Subsidiary. An
Employee on a leave of absence for such periods and purposes conforming to the personnel policy of the Company may be considered still in the employ of the Company or a Subsidiary for purposes of eligibility for participation in this Plan.
As to any Participant on any date, the Company or a Subsidiary that employs
or retains the Participant on such date.
The U.S. Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
As of any given date, the closing sales price at which Common Stock
is sold on such date as reported by the NASDAQ Stock Market or any other national securities exchange or comparable service the Plan Administrator may determine is reliable for such date, or if no Common Stock was traded on such date, on the
next preceding day on which Common Stock was so traded. If the Fair Market Value of the Common Stock cannot be determined pursuant to the preceding provisions, the Fair Market Value of the Common Stock shall be determined by the Plan
Administrator in such a manner as it deems appropriate, consistent with the requirements of Section 409A.
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Unless otherwise provided in any Award Agreement, or in any employment,
consulting, change of control severance, or similar service agreement between a Participant and an Employer, the term Good Reason shall mean the occurrence of any of the following events or conditions:
(a) a material diminution in such Participants status, authority, position, titles, duties, or
responsibilities (including reporting responsibilities) with the Employer, excluding (i) an isolated, unsubstantial, and inadvertent action by the Employer not taken in bad faith and which is remedied by the Employer promptly after receipt of
notice thereof given by such Participant, and (ii) any removal or failure to reappoint such Participant to any such position in connection with the termination of such Participants services for Cause;
(b) any reduction in such Participants Base Compensation or any failure to pay such Participant any base
compensation or benefit to which such Participant is entitled;
(c) the Employers requiring such Participant
to be based at any place outside a thirty-five (35) mile radius from such Participants location of employment or service, except for (i) reasonably required travel for the Employers business, or (ii) with respect to a Participant
required to be based at a project site; or
(d) any other action or inaction that constitutes a material breach by
the Employer of any employment, consulting, change of control severance, or similar service agreement between Participant and an Employer.
Notwithstanding the foregoing, a termination by the Participant shall not constitute termination for Good Reason unless the Participant shall
first have delivered to the Company, not later than ninety (90) days after the occurrence of an event deemed to give rise to a right to terminate for Good Reason, written notice setting forth with specificity the occurrence of such event, and there
shall have passed a reasonable time (not less than thirty (30) days) within which the Company may take action to correct, rescind or otherwise substantially reverse the occurrence supporting termination for Good Reason as identified by the
Participant . Participant must terminate employment within sixty (60) days following the expiration of such cure period for the termination to be on account of Good Reason.
A percentage of base salary, a fixed dollar amount, or other measure
of compensation which Participants are eligible to receive, in cash and/or other Awards under the Plan, at the end of a Performance Period if certain performance measures are achieved.
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26.
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Incentive Stock Option
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An Option intended to meet the requirements of an
incentive stock option as defined in Section 422 of the Code, as in effect at the time of grant of such Option, or any statutory provision that may hereafter replace such section.
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The maximum grants set forth in Section 5.2 of this Plan.
An Option which is not intended to meet the requirements of an
incentive stock option as defined in Section 422 of the Code.
An Incentive Stock Option or a Nonqualified Option.
The price per share of Common Stock at which an Option is exercisable.
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31.
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Other Stock-Based Award
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As defined in Section 13.2 of this Plan.
An eligible Employee, Director, or a Consultant to whom an Award or Awards
are granted under the Plan as set forth in Section 4 of this Plan.
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The Plan Administrator may grant Awards subject to one or more
Performance Goals set forth in the table below (collectively the Performance Goals) to any Participant, including, without limitation, to any Covered Employee. As to any such Awards, the Plan Administrator shall establish one or more of
the Performance Goals for each Performance Period in writing. Each Performance Goal selected for a particular Performance Period shall include any one or more of the following, either individually, alternatively, or in any combination, applied to
either the Company as a whole or to a Subsidiary or a business unit of the Company or any Subsidiary, either individually, alternatively, or in any combination, and measured either annually or cumulatively over a period of time, on an absolute basis
or relative to the pre-established target, to previous years results, or to a designated comparison group, in each case as specified by the Plan Administrator:
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Financial Goals:
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Earnings
Revenues
Debt level
Cost reduction targets
Interest-sensitivity gap levels
EBITDAX or adjusted EBITAX
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Earnings per share
Cash flow from operations
Equity ratios
Capital expended
Weighted average cost of capital
Return on assets
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Net income
Free cash flow
Expenses
Working capital
Operating or profit margin
Return on equity or capital employed
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Operating Goals:
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Engineering milestones
Construction milestones
Regulatory milestones
Execution of engineering, procurement and construction agreements
Completion of regulatory filings
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Receipt of and compliance with regulatory approvals
Receipt of a commitment of financing or refinancing
Closing of financing or refinancing
Reaching Final Investment Decision
Execution of commercial agreements
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Completion of construction milestones
Achievement of safety standards
Operating efficiency
Production targets
Fuel usage
Cost of production
Management of risk
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Corporate and Other Goals:
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Total stockholder return
Asset quality levels
Investments
Satisfactory internal or external audits
Achievement of balance sheet or income statement objectives
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Market share
Assets
Asset sale targets
Value of assets
Employee retention/attrition rates
Improvements of financial ratings
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Charge-offs
Non-performing assets
Fair market value of common stock
Regulatory compliance
Safety targets
Economic value added
MMBTU growth per net debt adjusted share
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To the extent permitted by Section 162(m) with regard to pre-established performance goals, the Plan
Administrator may adjust the Performance Goals to include or exclude any of the following events that occurs during the relevant period: (i) extraordinary charges, (ii) gains or losses on the disposition of business units, (iii) losses from
discontinued operations, (iv) the effect of changes in tax laws, accounting principles, or other laws or regulations affecting reported results, (v) any reorganization or restructuring transactions, (vi) extraordinary nonrecurring items as described
in Accounting Principles Board Opinion No. 30 and/or in managements discussion and analysis of financial condition and results of operations
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appearing in the Companys Annual Report on Form 10-K for the applicable year, (vii) significant acquisitions or divestitures, and (viii) other unplanned special charges such as
restructuring expenses, acquisitions, acquisition expenses, including expenses related to goodwill and other intangible assets, stock offerings, stock repurchases, and loan loss provisions. To the extent such inclusions or exclusions affect Awards
to Covered Employees, they shall be prescribed in a form that meets the requirements of Section 162(m) for deductibility
In establishing
Performance Goals with respect to Covered Employees, the Plan Administrator shall ensure such Performance Goals (i) are established no later than the end of the first 90 days of the Performance Period (or such other time as may be required or
permitted for performance-based compensation under Section 162(m), if applicable), and (ii) satisfy all other applicable requirements imposed by Section 162(m), including the requirement that such Performance Goals be stated in terms of
an objective formula or standard, and the Plan Administrator may not in any event increase the amount of compensation payable to a Covered Employee upon the satisfaction of any Performance Goal. Prior to the payment of any
performance-based compensation within the meaning of Section 162(m), the Plan Administrator shall certify in writing (which shall be satisfied upon the Plan Administrators approval of preambles and resolutions regarding such
performance results and payout and without condition with respect to any subsequent approval of the minutes of the meeting relating to such certification) the extent to which the applicable Performance Goals were, in fact, achieved and the amounts
to be paid, vested, or delivered as a result thereof; provided, that the Plan Administrator may reduce, but not increase, such amount.
That period of time during which Performance Goals are evaluated to
determine the vesting, granting, or payout of Awards under the Plan, as the Plan Administrator may determine, provided that the period is no longer than ten (10) years.
An Award granted under the Plan representing the right to receive a
number of shares of Common Stock for each Performance Share granted, as the Plan Administrator may determine.
An Award granted under the Plan representing the right to receive a
payment (either in cash or Common Stock) equal to the value of a Performance Unit, as the Plan Administrator may determine.
As defined in Section 7.3(f) of this Plan.
As defined in Section 1 of this Plan.
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The CNG Committee or other committee of the Board appointed and
authorized pursuant to Section 3.1 of this Plan to administer the Plan.
The Companys 1998 Stock Incentive Plan, and the Companys 2012
Omnibus Incentive Compensation Plan, in each case as amended.
Common Stock granted under the Plan that is subject to the
requirements of Section 10 of this Plan and such other restrictions as the Plan Administrator deems appropriate. References to Restricted Stock in this Plan shall include Restricted Stock awarded in conjunction with Incentive Awards pursuant to
Section 12 of this Plan, unless the context otherwise requires.
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42.
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Restricted Stock Units
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An Award granted under the Plan representing a right to receive
a payment (either in cash or Common Stock) equal to the value of a share of Common Stock.
As defined in Sections 10.2 and 11.2 of this Plan, as applicable.
Rule 16b-3 of the General Rules and Regulations under the Exchange Act.
Any person who is selected by the Plan Administrator to receive an
Award pursuant to the Plan and who is or is reasonably expected to become subject to the requirements of Section 16 of the Exchange Act, and the rules and regulations promulgated thereunder.
Section 162(m) of the Code.
Section 409A of the Code.
The U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
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49.
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Stock Appreciation Right
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Any right granted under Section 8 of this Plan.
An entity that is designated by the Plan Administrator as a subsidiary for
purposes of the Plan and that is a corporation, partnership, joint venture, limited liability company, limited liability partnership, or other entity in which the Company owns directly or indirectly, fifty percent (50%) or more of the voting power
or profit interests, or as to which the Company or one of its affiliates serves as general or managing partner or in a similar capacity. Notwithstanding the foregoing, for purposes of Options intended to qualify as Incentive Stock Options, the term
Subsidiary shall mean a corporation (or other entity treated as a corporation for tax purposes) in which the Company directly or indirectly holds fifty percent (50%) or more of the voting power, or a limited liability company owned by
the Company that is treated as a disregarded entity for federal income tax purposes.
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51.
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Termination of Service
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(a) As to an Employee, the time when
the employee-employer relationship between an Employee and the Company or any Employer is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, Disability, or retirement, but excluding terminations
where the Employee simultaneously commences or remains in employment or service with the Company or any Employer.
(b) As to a Consultant, the time when the engagement of a Participant as a Consultant to the Company or any Employer
is terminated for any reason, with or without Cause, including, without limitation, by resignation, discharge, death, or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with
the Company or any Employer.
(c) As to a Director, the time when the engagement of a Director as a Director to
the Company is terminated for any reason, with or without Cause, including, without limitation, by resignation, discharge, death, or retirement, but excluding terminations where the Director simultaneously is re-appointed to the board, or otherwise
commences or remains as a Director of the Company.
(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 409A as determined by the CNG Committee, a termination of service means a separation from service (within the meaning of Section 409A).
SECTION 3 ADMINISTRATION
(a) The Plan Administrator shall be the CNG
Committee, or any other duly authorized committee of the Board (comprised of two or more members of the Board) that is
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appointed by the Board to administer the Plan. The Plan Administrator (including each individual who is a member thereof) shall be constituted at all times so as to (i) be independent
as such term is defined pursuant to the rules of any stock exchange on which the Common Stock may then be listed, and (ii) meet the non-employee director standards of Rule 16b-3 and the outside director requirements of Section 162(m), so long as any
of the Companys equity securities are registered pursuant to Section 12(b) or 12(g) of the Exchange Act.
(b) The Plan Administrator may designate appropriate Employees or other agents of the Company to handle the day-to-day
administrative matters of the Plan.
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2.
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Authority of Plan Administrator
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Subject to the express terms and conditions set forth
herein, the Plan Administrator shall have the authority and power from time to time to:
(a) select the
Participants to whom Awards shall be granted under the Plan and the number of shares or amount of cash subject to such Awards, and prescribe the terms and conditions (which need not be identical) of each such Award, including, in the case of Options
and Stock Appreciation Rights, the Option Price, vesting schedule, and duration;
(b) set the terms and conditions
of any Award consistent with the terms of the Plan (which may be based on Performance Goals or other performance measures as the Plan Administrator shall determine), and make any amendments, modifications, or adjustments to such Awards as are
permitted by the Plan;
(c) construe and interpret the Plan and the Awards granted hereunder, and establish,
amend, and revoke rules and regulations for the administration of the Plan, including, without limitation, correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any Award Agreement, in the manner and to
the extent it shall deem necessary or advisable, including so that the Plan and the operation of the Plan comply with Rule 16b-3 and the Code, to the extent applicable, and other applicable laws, and otherwise to make the Plan fully effective;
(d) exercise its discretion with respect to the powers and rights granted to it as set forth in the Plan; and
(e) generally exercise such powers and perform such acts as are deemed necessary or advisable to promote the best
interests of the Company with respect to the Plan.
All decisions and determinations by the Plan Administrator in the exercise of the
above authority and powers shall be final, binding, and conclusive upon the Company, a Subsidiary, the Participants, and all other persons having or claiming any interest therein. The Plan Administrator shall cause the Company, at the Companys
expense, to take any action related to the Plan which may be necessary to comply with the provisions of any U.S. federal, state, or foreign law, or any regulations issued thereunder, which the Plan Administrator determines are intended to be
complied with. All Awards and any administrative action taken
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by the Plan Administrator shall be in conformity with all applicable U.S. federal, state, and local laws and shall not discriminate on the basis of gender, race, color, religion, national origin,
citizenship, age, disability, marital or veterans status, or any other legally protected categories.
Notwithstanding the foregoing,
the Plan Administrator shall not be entitled to exercise any discretion otherwise authorized hereunder with respect to any Awards held by Covered Employees if the ability to exercise such discretion or the exercise of such discretion itself would
cause the compensation attributable to such Awards to fail to qualify as performance-based compensation under Section 162(m), and the Awards were intended to so qualify.
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3.
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Indemnification of Plan Administrator
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Each member of any committee acting as Plan
Administrator, while serving as such, shall be entitled, in good faith, to rely or act upon any advice of the Companys independent auditors, counsel, or consultants hired by the committee, or other agents assisting in the administration of the
Plan. The Plan Administrator and any Employee of the Company acting at the direction or on behalf of the Company shall not be personally liable for any action or determination taken or made, or not taken or made, in good faith with respect to the
Plan, and shall, to the extent permitted by law, be fully indemnified and protected under the Companys charter or by-laws with respect to any such action or determination.
SECTION 4 ELIGIBILITY
To
be eligible to be a Participant, an individual must be an Employee (other than an Employee who is a member of a unit subject to collective bargaining), or a Consultant to an Employer, or a Director, as of the date on which the Plan
Administrator grants to such individual an Award under the Plan. Each grant of an Award under the Plan shall be evidenced by an Award Agreement.
SECTION
5 SHARES AVAILABLE FOR THE PLAN
(a)
Share Authorization
Subject to adjustment as provided in Section 5.3 of this Plan, the maximum number of shares of Common Stock available for grant to
Participants under this Plan on or after the Effective Date shall be 40,000,000 shares of Common Stock, plus any remaining authorized shares of Common Stock available under the Prior Plans (and not subject to outstanding awards under the Prior
Plans), immediately before the Effective Date, upon which this Plan shall replace the Prior Plans and no further awards shall be made under the Prior Plans. The authorized shares of Common Stock from the Prior Plans is subject to adjustment after
the Effective Date as set forth in subsection (b) below.
(b)
Share Usage
Shares of Common Stock covered by an Award shall only be counted as used to the extent they are actually issued. Any shares of Common Stock
related to Awards which
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terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such shares of Common Stock, or are settled in cash in lieu of shares of Common Stock, shall be available
again for grant under this Plan. In addition, any shares of Common Stock related to grants or awards made under the Prior Plans that after the Effective Date may lapse, expire, terminate, or are cancelled or surrendered to the Company, without
having been exercised in full, shall become available for grant under this Plan. Such shares of Common Stock related to an Award under this Plan shall increase the share authorization by one (1) share of Common Stock. However, the full number of
Stock Appreciation Rights granted that are to be settled by the issuance of shares of Common Stock shall be counted against the number of shares of Common Stock available for Awards under the Plan, regardless of the number of shares of Common Stock
actually issued upon settlement of such Stock Appreciation Rights. In addition, the full number of Incentive Stock Options granted shall be counted against the number of Incentive Stock Options that may be awarded under the Plan, regardless of the
number of shares of Common Stock actually issued upon exercise of such Incentive Stock Options. The shares of Common Stock available for issuance under this Plan may be authorized and unissued shares of Common Stock or treasury shares of Common
Stock.
Subject to adjustment as provided in Section 5.3 of this Plan,
unless and until the Plan Administrator determines that an Award to a Covered Employee shall not be designed to qualify as performance-based compensation under Section 162(m), the following limitations shall apply to grants of Awards to
Covered Employees under the Plan: the maximum aggregate grant with respect to shares of Common Stock that a Participant may receive in any one calendar year shall be 10,000,000 shares of Common Stock, or with respect to a grant of cash, the
maximum aggregate award that a Participant may receive in any one calendar year shall be equal to the value of 10,000,000 shares of Common Stock (as of the time of settlement).
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3.
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Adjustments in Authorized Shares
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(a) In the event of a Change
in Capitalization that is not also a Change of Control, the Plan Administrator shall make such proportionate adjustments, if any, as it determines are appropriate and equitable, and to the extent such an action does not conflict with the General
Corporation Law of the State of Delaware or other applicable laws or securities exchange rules, to (i) the maximum number and class of shares of Common Stock or other stock or securities with respect to which Awards may be granted under the Plan,
(ii) the maximum number and class of shares of Common Stock or other stock or securities that may be issued upon exercise of Nonqualified Options, Incentive Stock Options, and Stock Appreciation Rights, (iii) the Maximum Grants, (iv) the number and
class of shares of Common Stock or other stock or securities which are subject to outstanding Awards granted under the Plan and the Option Price or exercise price therefore, if applicable, and (v) the Performance Goals; provided, however, that in
the case of an equity restructuring (as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718), the Board shall make an equitable or appropriate adjustment to outstanding Awards to reflect
such equity restructuring. Any such adjustment shall be final, binding, and conclusive on all persons claiming any right or interest under the Plan.
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(b) Any such adjustment in the shares of Common Stock or other stock or
securities (i) subject to outstanding Incentive Stock Options (including any adjustments in the exercise price) shall be made in such manner as not to constitute a modification as defined by Section 424(h)(3) of the Code, and only to the extent
otherwise permitted by Sections 422 and 424 of the Code, or (ii) subject to outstanding Awards that are intended to qualify as performance-based compensation under Section 162(m) shall be made in such a manner as not to adversely affect the
treatment of the Awards as performance-based compensation.
(c) If, by reason of a Change in Capitalization that
is not also a Change of Control, a Participant shall be entitled to, or shall be entitled to exercise an Option or Stock Appreciation Right with respect to, new, additional, or different shares of stock or securities of the Company or any other
entity, such new, additional, or different shares shall thereupon be subject to all of the conditions, restrictions, and performance criteria which were applicable to the shares of Common Stock that such shares replaced or to the Option or Stock
Appreciation Right, as the case may be, prior to such Change in Capitalization.
(d) No adjustments made under
this Section 5.3 of this Plan shall be made with respect to a Participants Award if such adjustment would result in adverse taxation to such Participant under Section 409A.
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4.
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Effect of Certain Transactions
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Following (a) the liquidation or dissolution of the
Company or (b) a merger or consolidation of the Company (a Transaction), (i) each outstanding Award shall be treated as provided for in the agreement entered into in connection with the Transaction (which treatment may be different as
among different types of Awards and different holders thereof) or (ii) if not so provided in such agreement, each Participant shall be entitled to receive in respect of each share of Common Stock subject to any outstanding Awards, upon exercise of
any Option or Stock Appreciation Right or payment or transfer in respect of any other Award, the same number and kind of stock, securities, cash, property, or other consideration that each holder of a share of Common Stock was entitled to receive in
the Transaction in respect of a share of Common Stock; provided, however, that such stock, securities, cash, property, or other consideration shall remain subject to all of the conditions, restrictions, and performance criteria which were applicable
to Awards prior to such Transaction, but giving effect to any applicable provision of this Plan or any Award Agreement if the Transaction is a Change of Control. Without limiting the generality of the foregoing, the treatment of outstanding Options
and Stock Appreciation Rights pursuant to clause (i) of this Section 5.4 in connection with a Transaction in which the consideration paid or distributed to the Companys stockholders is not entirely securities of the acquiring or resulting
entity may include the cancellation of outstanding Options and Stock Appreciation Rights upon consummation of the Transaction provided either (x) the holders of affected Options and Stock Appreciation Rights have been given a period of at least
fifteen (15) days prior to the date of the consummation of the Transaction to exercise the Options and Stock Appreciation Rights (whether or not they were otherwise exercisable) or (y) the holders of the affected Options and Stock Appreciation
Rights are paid (in cash or cash equivalents) in respect of each share of Common Stock covered by the Options or Stock Appreciation Rights being cancelled an amount equal to the
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excess, if any, of the per share price paid or distributed to stockholders in the Transaction (the value of any non-cash consideration to be determined by the Plan Administrator in its sole
discretion) over the exercise price thereof. For clarification and avoidance of doubt, (1) the cancellation of Options and Stock Appreciation Rights pursuant to clause (y) of the preceding sentence may be effected notwithstanding anything to the
contrary contained in this Plan or any Award Agreement and (2) if the amount determined pursuant to clause (y) of the preceding sentence is zero or less, the affected Options and Stock Appreciation Rights may be cancelled without any payment
therefor. The treatment of any Award as provided in this Section 5.4 shall be conclusively presumed to be appropriate for purposes of Section 5.3 of this Plan.
SECTION 6 AWARD AGREEMENTS
Upon a determination by the Plan Administrator that an Award is to be granted to a Participant pursuant to Section 7, 8, 9, 10, 11, 12, or 13
of this Plan, an Award Agreement shall be provided to such Participant as soon as practicable specifying, without limitation, the terms, conditions, rights, and duties related thereto, including terms requiring forfeiture of Awards in the event of a
Termination of Service by the Participant, and terms relating to Clawback/Forfeiture Events under Section 19.1 of this Plan. Each Award Agreement shall be subject to the terms and conditions of the Plan.
SECTION 7 STOCK OPTIONS
Options may be granted to eligible Participants in such number, and
at such times during the term of the Plan, as the Plan Administrator shall determine. The Plan Administrator may grant an Option or provide for the grant of an Option, either from time to time in the discretion of the Plan Administrator or
automatically upon the occurrence of specified events, including, without limitation, the achievement of Performance Goals or other performance measures, or the satisfaction of an event or condition within the control of the recipient of the Option
or within the control of others. The granting of an Option shall take place when the Plan Administrator by resolution, written consent, or other appropriate action determines to grant such an Option to a particular Participant at the Option
Price. Each Option granted under the Plan shall be identified in the Award Agreement as either an Incentive Stock Option or a Nonqualified Option (or if no such identification is made, then it shall be a Nonqualified Option). No Incentive Stock
Option shall be granted to any Participant who is not an Employee of the Company or any subsidiary corporation of the Company (as defined in Section 424(f) of the Code).
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2.
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Special Provisions Applicable to Incentive Stock Options
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Each provision of the Plan
and each Incentive Stock Option granted thereunder shall be construed so that each such Option shall qualify as an Incentive Stock Option, and any provision thereof that cannot be so construed shall be disregarded, unless the Employee agrees
otherwise. Incentive Stock Options, in addition to complying with the other provisions of the Plan relating to Options generally, shall be subject to the following conditions:
(a)
Ten Percent (10%) Stockholders
An Employee must not, immediately before an Incentive Stock Option is granted to him or her, own stock representing more than ten percent (10%)
of the voting power or value of all classes of stock of the Company or of a Subsidiary. This requirement is waived if (i) the Option Price of the Incentive Stock Option to be granted is at least one hundred ten percent (110%) of the Fair Market
Value of the stock subject to the Option, determined at the time the Option is granted, and (ii) the Option is not exercisable more than five (5) years from the date the Option is granted.
(b)
Annual Limitation
To the extent that the aggregate Fair Market Value (determined at the time of the grant of the Option) of the stock with respect to which
Incentive Stock Options are exercisable for the first time by the Employee during any calendar year exceeds One Hundred Thousand Dollars ($100,000), such Options shall be treated as Nonqualified Options. In applying the limitation in the preceding
sentence in the case of multiple Option grants, unless otherwise required by applicable law, Options which were intended to be Incentive Stock Options shall be treated as Nonqualified Options according to the order in which they were granted such
that the most recently granted Options are first treated as Nonqualified Options.
(c)
Additional Terms
Any other terms and conditions which the Plan Administrator determines, upon advice of counsel, must be imposed for the Option to be an
Incentive Stock Option.
(d)
Notice of Disqualifying Disposition
If an Employee makes any disposition of shares of Common Stock issued pursuant to an Incentive Stock Option under the circumstances described
in Section 421(b) of the Code (relating to disqualifying dispositions), the Employee shall notify the Company of such disposition within twenty (20) days thereof.
Except as otherwise provided in the Award Agreement and Section 7.2
of this Plan, all Incentive Stock Options and Nonqualified Options under the Plan shall be granted subject to the following terms and conditions:
(a)
Option Price
The Option Price shall be determined by the Plan Administrator in any reasonable manner, but shall not be less than the Fair Market Value of
the Common Stock on the date the
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Option is granted, except in the case of Options that are granted in assumption of, or in substitution for, outstanding awards previously granted by (i) a company acquired by the Company or a
Subsidiary, or (ii) a company with which the Company or a Subsidiary combines.
(b)
Duration of Options
Options shall be exercisable at such time and under such conditions as set forth in the Award Agreement, but in no event shall any Option
(whether a Nonqualified Option or an Incentive Stock Option) be exercisable later than the tenth (10th) anniversary of the date of its grant.
(c)
Exercise of Options
Common Stock covered by an Option may be purchased at one time or in such installments over the option period as may be provided in the Award
Agreement. Any Common Stock not purchased on an applicable installment date may be purchased thereafter at any time prior to the expiration of the Option in accordance with its terms. To the extent that the right to purchase Common Stock has accrued
thereunder, an Option may be exercised from time to time by notice to the Company setting forth the amount of Common Stock with respect to which the Option is being exercised.
(d)
Payment
The purchase price of Common Stock purchased under Options shall be paid in full to the Company upon the exercise of the Option, by delivery of
consideration equal to the product of the Option Price and the Common Stock purchased (the Purchase Price). The Purchase Price of Common Stock acquired pursuant to the exercise of an Option shall be paid, to the extent permitted by
applicable laws and regulations (including, without limitation, U.S. federal tax and securities laws and regulations, and applicable state corporate law), and as determined by the Plan Administrator in its sole discretion, by any combination of the
methods of payment set forth below. The Plan Administrator shall have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods), and to grant Options that
require the consent of the Company to utilize a particular method of payment. The permitted methods of payment are as follows:
(i) by cash, check, bank draft, or money order payable to the Company;
(ii) pursuant to a broker-assisted cashless exercise program developed under Regulation T as promulgated by the U.S.
Federal Reserve Board that, prior to the issuance of the Common Stock subject to the Option, results in delivery of a properly executed exercise notice together with irrevocable instructions to a broker approved by the Company to promptly deliver to
the Company sufficient proceeds from the sale of Common Stock to pay the aggregate Purchase Price;
(iii) by
delivery to the Company (either by actual delivery or attestation presenting satisfactory proof of beneficial ownership of such Common Stock) of shares of Common Stock already owned by the Participant, with the Fair Market Value of such Common Stock
as delivered to be determined as of the day of exercise;
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(iv) by a net exercise arrangement pursuant to which the
Company will reduce the number of shares of Common Stock issued upon exercise by the largest whole number of shares with a Fair Market Value (determined as of the same day as the exercise of the Option) that does not exceed the aggregate Purchase
Price; provided, however, that the Company shall accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate Purchase Price not satisfied by such reduction in the number of whole shares of Common Stock
to be issued; provided, further, that shares of Common Stock will no longer be outstanding under an Option and will not be exercisable thereafter to the extent that (A) shares are used to pay the Purchase Price pursuant to the net
exercise, (B) are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or
(v) in any other form of legal consideration that may be acceptable to the Plan Administrator in its sole discretion
and permissible under applicable laws and regulations.
A Participant shall have none of the rights of a stockholder with respect to
shares of Common Stock subject to an Option until the shares of Common Stock are issued to the Participant upon exercise of the Option.
(e)
Restrictions
The Plan Administrator shall determine and reflect in the Award Agreement, with respect to each Option, the nature and extent of the
restrictions, if any, to be imposed on the Common Stock which may be purchased thereunder, including, without limitation, restrictions on the transferability of such Common Stock acquired through the exercise of such Options for such periods as the
Plan Administrator may determine. In addition, to the extent permitted by applicable laws and regulations, the Plan Administrator may require that a Participant who wants to effectuate a cashless exercise of Options be required to sell the Common
Stock acquired in the associated exercise to the Company, or in the open market through the use of a broker selected by the Company, at such price and on such terms as the Plan Administrator may determine at the time of grant, or otherwise. Without
limiting the foregoing, the Plan Administrator may impose such restrictions, conditions, or limitations as it determines appropriate as to the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of
any Common Stock issued as a result of the exercise of an Option, including, without limitation, (i) restrictions under an insider trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by one or more
Participants, and (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers.
(f)
Transferability of Options
Notwithstanding Section 19.2 of this Plan and only if allowed by the Plan Administrator in its discretion, Nonqualified Options may be
transferred to a Participants immediate family members, directly or indirectly or by means of a trust, corporate entity, partnership or other legal entity (with a person who thus acquires such Nonqualified Options by such transfer, a
Permitted Transferee). A transfer of a Nonqualified Option may only be
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effected by the Company at the request of the Participant and shall become effective upon the Permitted Transferee agreeing to such terms as the Plan Administrator may require and only
when recorded in the Companys record of outstanding Options. In the event an Option is transferred as contemplated hereby, the Option may not be subsequently transferred by the Permitted Transferee, except for a transfer back to the
Participant or by will or the laws of descent and distribution. A transferred Option may be exercised by a Permitted Transferee to the same extent as, and subject to the same terms and conditions as, the Participant (except as otherwise provided
herein), as if no transfer had taken place. As used herein, immediate family member shall mean, with respect to any person, such persons child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son- in-law, daughter-in-law, brother-in-law, and sister-in-law, and shall include adoptive relationships. In the event of exercise of a transferred Option by a Permitted Transferee, any amounts due to (or to be withheld by) the
Company upon exercise of the Option shall be delivered by (or withheld from amounts due to) the Participant, the Participants estate, or the Permitted Transferee, in the reasonable discretion of the Company.
In addition, to the extent permitted by applicable law and Rule 16b-3, the Plan Administrator may permit a recipient of a Nonqualified Option
to designate in writing during the Participants lifetime a Beneficiary to receive and exercise the Participants Nonqualified Options in the event of such Participants death.
(g)
Purchase for Investment
The Plan Administrator shall have the right to require that each Participant or other person who shall exercise an Option under the Plan, and
each person into whose name the Common Stock shall be issued pursuant to the exercise of an Option, represent and agree that any and all Common Stock purchased pursuant to such Option is being purchased for investment only and not with a view
to the distribution or resale thereof, and that such Common Stock will not be sold except in accordance with such restrictions or limitations as may be set forth in the Option or by the Plan Administrator. This Section 7.3(g) shall be
inoperative during any period of time when the Company has obtained all necessary or advisable approvals from governmental agencies and has completed all necessary or advisable registrations or other qualifications of the Common Stock as to which
Options may from time to time be granted, as contemplated in Section 17 of this Plan.
(h)
Death of
Optionholder
Unless otherwise provided in an Award Agreement, in the event a Participants Termination of Service as a result of
the Participants death, then the Option may be exercised (to the extent the Participant was entitled to exercise such Option as of the date of death) by the Participants estate, by a person who acquired the right to exercise the Option
by bequest or inheritance or by a person designated to exercise the Option upon the Participants death, but only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the expiration of the term of
such Option as set forth in the Award Agreement. If, after the Participants death, the Option is not exercised within the time specified herein or in the Award Agreement, the Option shall immediately cease to be exercisable and terminate for
no consideration.
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(i)
Repricing
The Plan Administrator in its discretion may, with the consent of an Option holder, cancel an outstanding Option in exchange for the grant of a
new Option with an exercise price no less than the Fair Market Value of the Common Stock on the date of grant.
SECTION 8 STOCK
APPRECIATION RIGHTS
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1.
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Grant of Stock Appreciation Rights
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Stock Appreciation Rights may be granted to
Participants in such number, and at such times during the term of the Plan, as the Plan Administrator shall determine. The Plan Administrator may grant a Stock Appreciation Right or provide for the grant of a Stock Appreciation Right, either from
time to time in the discretion of the Plan Administrator or automatically upon the occurrence of specified events, including, without limitation, the achievement of Performance Goals or other performance measures, or the satisfaction of an event or
condition within the control of the recipient of the Stock Appreciation Right or within the control of others. The granting of a Stock Appreciation Right shall take place when the Plan Administrator by resolution, written consent, or other
appropriate action determines to grant such a Stock Appreciation Right to a particular Participant at a particular price. A Stock Appreciation Right may be granted freestanding or in tandem or in combination with any other Award under the Plan.
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2.
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Exercise of Stock Appreciation Rights
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A Stock Appreciation Right may be exercised upon
such terms and conditions and for such term as the Plan Administrator shall determine; provided, however, no Stock Appreciation Right shall be exercisable later than the tenth (10th) anniversary of the date of its grant. Upon exercise of a Stock
Appreciation Right, a Participant shall be entitled to receive Common Stock, or the cash equivalent, with an aggregate Fair Market Value determined by multiplying (i) the difference between the Fair Market Value of a share of Common Stock on
the date of exercise of the Stock Appreciation Right over the price determined by the Plan Administrator on the date of grant (which price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant, except
in the case of Stock Appreciation Rights that are granted in assumption of, or in substitution for, outstanding awards previously granted by (x) a company acquired by the Company or a Subsidiary, or (y) a company with which the Company or a
Subsidiary combines) times (ii) the number of shares of Common Stock with respect to which the Stock Appreciation Right is exercised. The value of any fractional shares shall be paid in cash.
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3.
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Special Provisions Applicable to Stock Appreciation Rights
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Stock Appreciation Rights
are subject to the following restrictions:
(a) A Stock Appreciation Right granted in tandem with any other Award
under the Plan shall be exercisable at such time or times as the Award to which it relates shall be exercisable, or at such other times as the Plan Administrator may determine.
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(b) The right of a Participant to exercise a Stock Appreciation Right
granted in tandem with any other Award under the Plan shall be canceled if and to the extent the related Award is exercised or canceled. To the extent that a Stock Appreciation Right is exercised, the related Award shall be deemed to have been
surrendered unexercised and canceled.
(c) A holder of Stock Appreciation Rights shall have none of the rights of
a stockholder with respect to the Common Stock subject thereto until the Common Stock, if any, is issued to such holder pursuant to such holders exercise of such rights.
(d) The acquisition of Common Stock pursuant to the exercise of a Stock Appreciation Right shall be subject to the
same restrictions as would apply to the acquisition of Common Stock acquired upon exercise of an Option, as set forth in Section 7.3 of this Plan.
The Plan Administrator in its discretion may, with the consent of the
holder, cancel an outstanding Stock Appreciation Right in exchange for the grant of a new Stock Appreciation Right with a base price no less than the Fair Market Value of the Common Stock on the date of grant.
SECTION 9 PERFORMANCE SHARES AND PERFORMANCE UNITS
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1.
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Grant of Performance Shares and Performance Units
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Subject to the limitations in
Section 5.2 of this Plan, Performance Shares or Performance Units may be granted to Participants at any time and from time to time as the Plan Administrator shall determine. The Plan Administrator shall have complete discretion in determining the
number of Performance Shares or Performance Units granted to each Participant and the terms and conditions thereof. Performance Shares and Performance Units may be granted alone or in combination with any other Award under the Plan.
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2.
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Value of Performance Shares and Performance Units
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The Plan Administrator shall
establish Performance Goals for any specified Performance Periods. In no event shall a Performance Period be less than one (1) year with respect to grants of Performance Shares or Performance Units. Prior to each grant of Performance Shares or
Performance Units, the Plan Administrator shall establish an initial amount of Common Stock for each Performance Share and an initial value for each Performance Unit granted to each Participant for that Performance Period. Prior to each grant of
Performance Shares or Performance Units, the Plan Administrator also shall set the Performance Goals that will be used to determine the extent to which the Participant receives Common Stock for the Performance Shares or payment of the value of the
Performance Units awarded for such Performance Period. With respect to each such Performance Goal utilized during a Performance Period, the Plan Administrator may assign percentages or other relative values to various levels of performance which
shall be applied to determine the extent to which the Participant shall receive a payout of the number of Performance Shares or value of Performance Units awarded.
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3.
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Payment of Performance Shares and Performance Units
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After a Performance Period has
ended, the holder of a Performance Share or Performance Unit shall be entitled to receive the value thereof as determined by the Plan Administrator. The Plan Administrator shall make this determination by first determining the extent to which the
Performance Goals set pursuant to Section 9.2 of this Plan have been met. The Plan Administrator shall then determine the applicable percentage or other relative value to be applied to, and will apply such percentage or other relative value to, the
number of Performance Shares or value of Performance Units to determine the payout to be received by the Participant. In addition, with respect to Performance Shares and Performance Units granted to each Participant, no payout shall be made
hereunder except upon written certification by the Plan Administrator that the applicable Performance Goals have been satisfied to a particular extent.
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4.
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Form and Timing of Payment
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The payment described in Section 9.3 of this Plan shall be
made in Common Stock, or in cash, or partly in Common Stock and partly in cash, at the discretion of the Plan Administrator and set forth in the Award Agreement. The value of any fractional shares shall be paid in cash. Payment shall be made in a
lump sum or installments as prescribed by the Award Agreement, as applicable, and consistent with Section 409A. If Common Stock is to be converted into an amount of cash on any date, or if an amount of cash is to be converted into Common Stock on
any date, such conversion shall be done at the then-current Fair Market Value of the Common Stock on such date.
The Plan Administrator may provide that Performance Shares or
Performance Units awarded under the Plan shall be entitled to an amount per Performance Share or Performance Unit equal in value to the cash dividend, if any, paid per share of Common Stock on issued and outstanding shares, on the dividend payment
dates (Dividend Payment Date) occurring during the period between the date on which the Performance Shares or Performance Units are granted to the Participant and the date on which such Performance Shares or Performance Units are
settled, cancelled, forfeited, waived, surrendered, or terminated under the Plan. Such paid amounts, called dividend equivalents, shall be accrued and paid in cash and/or Common Stock (including reinvestment in additional shares of
Common Stock) and paid at such time as the Performance Share or Performance Unit to which it relates vests and settles as the Plan Administrator shall determine. The number of shares of Common Stock to be issued and/or reinvested shall be determined
based on the Fair Market Value on the Dividend Payment Date. In the event the dividend equivalents are deferred, they shall be payable in accordance with the requirements of Section 409A.
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SECTION 10 RESTRICTED STOCK
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1.
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Grant of Restricted Stock
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Subject to the limitations in Section 5.2 of this Plan,
Restricted Stock may be granted to Participants in such number and at such times during the term of the Plan as the Plan Administrator shall determine. The Plan Administrator may grant Restricted Stock or provide for the grant of Restricted Stock,
either from time to time in the discretion of the Plan Administrator or automatically upon the occurrence of specified events.
Except as permitted by the Plan Administrator and specified in the
Award Agreement, during a period following the date of grant, as determined by the Plan Administrator, which in no event shall be less than one (1) year with respect to Restricted Stock subject to restrictions based upon time and one (1) year with
respect to Restricted Stock subject to restrictions based upon the achievement of specific Performance Goals or other performance measures (the Restriction Period), the Restricted Stock shall be subject to Section 19.2 of this Plan.
During the Restriction Period, the Plan Administrator shall evidence the restrictions on the shares of Restricted Stock in such a manner as it determines is appropriate (including, without limitation, (i) by means of appropriate legends on
certificates for shares of Restricted Stock that have been certificated, and (ii) by means of appropriate stop-transfer orders for shares of Restricted Stock credited to book-entry accounts).
The Plan Administrator shall impose such other restrictions on
Restricted Stock granted pursuant to the Plan as it may deem advisable, including Performance Goals or other performance measures. The Plan Administrator may require, under such terms and conditions as it deems appropriate or desirable, that the
certificates for Restricted Stock delivered under the Plan may be held in custody by a bank or other institution, or that the Company may itself hold such shares in custody, until the Restriction Period expires or until restrictions thereon
otherwise lapse, and may require, as a condition of any issuance of Restricted Stock, that the Participant shall have delivered a stock power endorsed in blank relating to the shares of Restricted Stock.
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4.
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Voting Rights; Dividends and Other Distributions
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A Participant receiving a grant of
Restricted Stock shall be recorded as a stockholder of the Company with respect to such Restricted Stock. Except as otherwise provided under the terms of the Plan or an Award Agreement, a Participant who receives a grant of Restricted Stock shall
have the rights of a stockholder with respect to such shares (except as provided in the restrictions on transferability), including the right to vote the shares and receive dividends and other distributions paid with respect to the underlying shares
of Common Stock. The Award Agreement may provide that any cash dividend paid on a share of Common Stock subject to the Restricted Stock be (i) paid in cash on or about the Dividend Payment Date; (ii) accrued and paid at such time as the
Restricted Stock to which it relates vests and settles; (iii)
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paid in Common Stock on or about the Dividend Payment Date; (iv) accrued and/or reinvested in additional shares of Common Stock and paid at such time as the Restricted Stock to which it relates
vests and settles; or (v) in any combination thereof. The number of shares of Common Stock to be issued and/or reinvested shall be determined based on the Fair Market Value on the Dividend Payment Date. In the event the dividends are deferred, they
shall be payable in accordance with the requirements of Section 409A.
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5.
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Issuance of Shares; Settlement of Awards; Forfeiture
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When the restrictions imposed by
Section 10.2 of this Plan expire or otherwise lapse with respect to one or more shares of Restricted Stock, the Participant shall be obligated to return to the Company any certificate representing shares of Restricted Stock (if applicable), and the
Company shall deliver to the Participant one (1) share of Common Stock (which may be delivered in book-entry or certificated form) in satisfaction of each share of Restricted Stock, which shares so delivered shall not contain any legend. The
delivery of shares pursuant to this Section 10.5 of this Plan shall be subject to any required share withholding to satisfy tax withholding obligations pursuant to Section 19.10 of this Plan. Any fractional shares subject to such Restricted Stock
shall be paid to the Participant in cash. To the extent that the restrictions imposed by Section 10.2 of this Plan do not expire or otherwise lapse during or upon the end of the Restriction Period with respect to one or more shares of Restricted
Stock pursuant to the terms and conditions thereof, such shares of Restricted Stock shall be forfeited to the Company, and the Participant shall be obligated to return to the Company for cancellation any certificate(s) representing shares of such
Restricted Stock (if applicable).
SECTION 11 RESTRICTED STOCK UNITS
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1.
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Grant of Restricted Stock Units
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Subject to the limitations in Section 5.2 of this
Plan, Restricted Stock Units may be granted to Participants in such number and at such times during the term of the Plan as the Plan Administrator shall determine. The Plan Administrator may grant Restricted Stock Units or provide for the grant of
Restricted Stock Units, either from time to time in the discretion of the Plan Administrator or automatically upon the occurrence of specified events.
Except as permitted by the Plan Administrator and specified in the
Award Agreement, during a period following the date of grant, as determined by the Plan Administrator, which in no event shall be less than one (1) year with respect to Restricted Stock Units subject to restrictions based upon time and one (1) year
with respect to Restricted Stock Units subject to restrictions based upon the achievement of specific Performance Goals or other performance measures (the Restriction Period), the Restricted Stock Units shall be subject to Section 19.2
of this Plan.
The Plan Administrator shall impose such other restrictions on
Restricted Stock Units granted pursuant to the Plan as it may deem advisable, including the requirement that certain
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pre-established Performance Goals be met. A Participant receiving a grant of Restricted Stock Units shall not be recorded as a stockholder of the Company with respect to shares of Common Stock
that may be issued in settlement of such Restricted Stock Units, and shall not acquire any rights of a stockholder with respect thereto, unless or until the Participant is issued shares of Common Stock in settlement of such Restricted Stock Units.
The Award Agreement may provide that Restricted Stock Units
awarded under the Plan shall be entitled to an amount per Restricted Stock Unit equal in value to the cash dividend, if any, paid per share of Common Stock on issued and outstanding shares, on the Dividend Payment Dates occurring during the
period between the date on which the Restricted Stock Units are granted to the Participant and the date on which such Restricted Stock Units are settled, cancelled, forfeited, waived, surrendered, or terminated under the Plan. Such paid amounts,
called dividend equivalents, shall be (i) paid in cash on or about the Dividend Payment Date or accrued and paid at such time as the Restricted Stock Unit to which it relates vests and settles, (ii) paid in Common Stock on or about the
Dividend Payment Date or accrued and/or reinvested in additional shares of Common Stock and paid at such time as the Restricted Stock Units to which it relates vests and settles, or (iii) paid in any combination thereof of cash or Common Stock. The
number of shares of Common Stock to be issued and/or reinvested shall be determined based on the Fair Market Value on the Dividend Payment Date. In the event the dividend equivalents are deferred, they shall be payable in accordance with the
requirements of Section 409A.
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5.
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Issuance of Shares; Settlement of Awards; Forfeiture
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When the restrictions imposed by
Section 11.2 of this Plan expire or otherwise lapse with respect to one or more Restricted Stock Units, Restricted Stock Units shall be settled (i) in cash, or (ii) by the delivery
to the Participant of the number of shares of Common Stock equal to the number of the Participants Restricted Stock Units that are vested, or any combination thereof,
as the Plan Administrator shall determine and is in accordance with Section 409A. The delivery of shares pursuant to this Section 11.5 shall be subject to any required share withholding to satisfy tax withholding obligations pursuant to Section
19.10 of this Plan. Any fractional shares subject to such Restricted Stock Units shall be paid to the Participant in cash. To the extent that the restrictions imposed by Section 11.2 of this Plan do not expire or otherwise lapse during or upon the
end of the Restriction Period with respect to one or more Restricted Stock Units pursuant to the terms and conditions thereof, such Restricted Stock Units shall be forfeited and cancelled.
SECTION 12 INCENTIVE AWARDS
Prior to the beginning of each Performance Period, or not later than
ninety (90) days following the commencement of the relevant fiscal year (or such other time as may be required or permitted for performance-based compensation under Section 162(m), if
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applicable), the Plan Administrator shall establish Performance Goals or other performance measures which must be achieved for any Participant to receive an Incentive Award for that
Performance Period. The Performance Goals or other performance measures may be based on any combination of corporate and business unit Performance Goals or other performance measures. The Plan Administrator may also establish one or more
Company-wide Performance Goals or other performance measures which must be achieved for any Participant to receive an Incentive Award for that Performance Period. Such Performance Goals or other performance measures may include a threshold level of
performance below which no Incentive Award shall be earned, target levels of performance at which specific Incentive Awards will be earned, and a maximum level of performance at which the maximum level of Incentive Awards will be earned. Each
Incentive Award shall specify the amount of cash and the amount of any other Awards subject to such Incentive Award.
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2.
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Performance Goal Certification
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An Incentive Award shall become payable to the extent
provided herein and in the related Award Agreement in the event that the Plan Administrator certifies in writing prior to payment of the Incentive Award that the Performance Goals or other performance measures selected for a particular Performance
Period have been attained. In no event will an Incentive Award be payable under this Plan if the threshold level of performance set for each Performance Goal or other performance measure for the applicable Performance Period is not attained.
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3.
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Participants Performance
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A Participants individual performance must be
satisfactory as determined by the Plan Administrator, regardless of the Companys performance and the attainment of Performance Goals or other performance measures, before he or she may be paid an Incentive Award. In evaluating a
Participants performance, the Plan Administrator shall consider the Performance Goals or other performance measures, the Participants responsibilities and accomplishments, and such other factors as it deems appropriate.
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4.
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Required Payment of Incentive Awards
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The Plan Administrator shall make a
determination, as soon as administratively possible after the information that is necessary to make such a determination is available for a particular Performance Period, whether the Performance Goals or other performance measures for the
Performance Period have been achieved, the amount of the Incentive Award for each Participant, and whether the Incentive Award shall be paid in cash and/or other Awards under the Plan. The Plan Administrator shall certify the foregoing
determinations in writing as provided in Section 2.33 of this Plan. In the absence of an election by the Participant pursuant to Section 14 of this Plan, the Incentive Award shall be paid as soon as practicable, but in no event later than
March 15 following the end of the calendar year in which the foregoing determinations have been made.
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SECTION 13 CASH AWARDS AND OTHER STOCK-BASED AWARDS
Subject to the terms and provisions of this Plan, the Plan
Administrator, at any time and from time to time, may grant cash awards to Participants in such amounts and upon such terms, including the achievement of Performance Goals or other specific performance measures, as the Plan Administrator may
determine (each, a Cash Award).
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2.
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Other Stock-Based Awards
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The Plan Administrator may grant other types of equity-based
or equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted shares of Common Stock, Awards in lieu of obligations to pay cash or deliver other property, or Common Stock) in such
amounts and subject to such terms and conditions, as the Plan Administrator shall determine (each an Other Stock-Based Award). Such Other Stock-Based Awards may involve the transfer of Common Stock to Participants, or payment in cash or
otherwise of amounts based on or valued in whole or in part by reference to the value of Common Stock.
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3.
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Value of Cash Awards and Other Stock-Based Awards
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Each Cash Award granted pursuant to
this Section 13 shall specify a payment amount or payment range as determined by the Plan Administrator. Each Other Stock-Based Award shall be expressed in terms of Common Stock or units based on Common Stock, as determined by the Plan
Administrator. The Plan Administrator may establish performance measures applicable to such Awards in its discretion. If the Plan Administrator exercises its discretion to establish performance measures, the number and/or value of such cash awards
or Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which the performance measures are met.
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4.
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Payment of Cash Awards and Other Stock-Based Awards
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Payment, if any, with respect to a
Cash Award or an Other Stock-Based Award shall be made in accordance with the terms of the Award, in cash or Common Stock as the Plan Administrator determines, and in accordance with Section 409A so as not to be treated as payment made pursuant to a
nonqualified deferred compensation plan. The value of any fractional shares shall be paid in cash.
SECTION 14 DEFERRAL ELECTIONS
The Plan Administrator may, in its sole discretion, and to the extent permitted by applicable law (including, without limitation, Section
409A), permit Employees to defer Awards under the Plan. Any such deferrals shall be subject to such terms, conditions, and procedures that the Company may establish from time to time in its sole discretion and consistent with the advance and
subsequent deferral election requirements of Section 409A.
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SECTION 15 TERMINATION OF SERVICE
The Award Agreement applicable to each Award shall set forth the effect of a
Termination of Service upon such Award; provided, however, that, except in the event of death or Disability, and unless explicitly provided herein or set forth otherwise in an Award Agreement or as determined by the Plan Administrator, (i) all of a
Participants unvested and/or unexercisable Awards shall automatically be forfeited upon a Termination of Service for any reason, and, except as provided in Section 7.3(h), as to Awards consisting of Options or Stock Appreciation Rights, the
Participant shall be permitted to exercise the vested portion of the Option or Stock Appreciation Right for at least three (3) months following termination of his or her employment, and (ii) all of a Participants unvested Awards shall
automatically be forfeited upon Termination of Service for Cause or without Good Reason. Provisions relating to the effect of a Termination of Service upon an Award shall be determined in the sole discretion of the Plan Administrator, and need not
be uniform among all Awards or among all Participants. Unless the Plan Administrator determines otherwise in accordance with Section 409A of the Code, the transfer of employment of a Participant as between the Company and a Subsidiary shall not
constitute a Termination of Service. The Plan Administrator shall have the discretion to determine the effect, if any, that a sale or other disposition of an Employer will have on the Participants Awards.
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2.
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Termination of Service without Cause or with Good Reason
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In the event of a
Participants Termination of Service by the Company without Cause, or by the Participant for Good Reason:
(a) Any Options and Stock Appreciation Rights outstanding which are not then exercisable and vested, shall become
fully exercisable and vested.
(b) The restrictions applicable to any Restricted Stock or Restricted Stock Unit
Award which are not performance based shall lapse, and such Restricted Stock or Restricted Stock Unit shall become free of all restrictions and become fully vested and transferable.
(c) The restrictions applicable to any Performance Share or Performance Unit Award and any performance-based
Restricted Stock or Restricted Stock Unit Award granted pursuant to Sections 9, 10, or 11 of this Plan shall become free of all restrictions and become fully vested and transferable.
(d) Any restrictions applicable to Cash Awards and Other Stock-Based Awards shall immediately lapse and become payable
within twenty (20) days following the Termination of Service.
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SECTION 16 EFFECT OF A CHANGE OF CONTROL
Notwithstanding any other provision of the Plan to the contrary and unless otherwise provided in any applicable Award Agreement, or any
applicable employment, consulting, change of control severance, or similar service agreement between a Participant and an Employer, in the event of a Change of Control:
(a) Any Options and Stock Appreciation Rights outstanding which are not then exercisable and vested, shall become
fully exercisable and vested.
(b) The restrictions applicable to any Restricted Stock or Restricted Stock Unit
Award which are not performance based shall lapse, and such Restricted Stock or Restricted Stock Unit shall become free of all restrictions and become fully vested and transferable.
(c) The restrictions applicable to any Performance Share or Performance Unit Award and any performance-based
Restricted Stock or Restricted Stock Unit Award granted pursuant to Sections 9, 10, or 11 of this Plan shall become free of all restrictions and become fully vested and transferable.
(d) Any restrictions applicable to Cash Awards and Other Stock-Based Awards shall immediately lapse and become payable
within twenty (20) days following the Change of Control.
In addition to the Plan Administrators authority set forth in Sections 5.3
of this Plan, in order to maintain the Participants rights in the event of any Change of Control, the Plan Administrator, as constituted before such Change of Control, is hereby authorized, and has sole discretion, as to any Award, either at
the time such Award is made hereunder or any time thereafter, to take any one or more of the following actions: (i) provide for the purchase of any such Award for an amount of cash equal to the amount that could have been attained upon the exercise
of such Award or realization of the Participants rights had such Award been currently exercisable or payable, as long as such purchase does not result in taxation to the Participant under Section 409A; or (ii) cause any such Award then
outstanding to be assumed, or new rights substituted therefor, by the acquiring or surviving entity after such Change of Control. The Plan Administrator may, in its discretion, include such further provisions and limitations in any Award Agreement
as it may deem equitable and in the best interests of the Company.
SECTION 17 REGULATORY APPROVALS AND LISTING
The Company shall not be required to issue any certificate or create a book-entry account for shares of Common Stock under the Plan prior to:
(a) obtaining any approval or ruling from the U.S. Securities and Exchange Commission, the Internal Revenue
Service, or any other governmental agency which the Company, in its sole discretion, shall determine to be necessary or advisable;
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(b) listing of such shares on any stock exchange on which the Common
Stock may then be listed; and
(c) completing any registration or other qualification of such shares under any
federal or state laws, rulings, or regulations of any governmental body which the Company, in its sole discretion, shall determine to be necessary or advisable.
All certificates, or book-entry accounts, for shares of Common Stock delivered under the Plan shall also be subject to such stop-transfer
orders and other restrictions as the Plan Administrator may deem advisable under the rules, regulations, and other requirements of the U.S. Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any
applicable federal or state securities laws, and the Plan Administrator may cause a legend or legends to be placed on any such certificates, or notations on such book-entry accounts, to make appropriate reference to such restrictions. The
foregoing provisions of this paragraph shall not be effective if and to the extent that the shares of Common Stock delivered under the Plan are covered by an effective and current registration statement under the Securities Act of 1933, as amended,
and if and so long as the Plan Administrator determines that application of such provisions are no longer required or desirable. In making such determination, the Plan Administrator may rely upon an opinion of counsel for the Company. Without
limiting the foregoing, the Plan Administrator may impose such restrictions, conditions, or limitations as it determines to be appropriate as to the timing and manner of any resales by a Participant or other subsequent transfers by a Participant of
any shares of Common Stock issued under this Plan, including, without limitation, (i) restrictions under an insider trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by one or more Participants, and
(iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers.
SECTION 18 TREATMENT UPON
DEATH OR DISABILITY
Except as otherwise provided in an Award Agreement or any special Plan document governing an Award or any employment,
consulting, change of control severance, or similar service agreement between a Participant and an Employer, upon a Termination of Service by reason of death or Disability:
(a) All of such Participants outstanding Options and Stock Appreciation Rights shall become fully exerciseable,
and shall thereafter remain exercisable for a period of one (1) year or until the earlier expiration of the original term of the Option or Stock Appreciation Right
(b) All time-based vesting restrictions on the Participants outstanding Awards shall lapse as of the date of such
termination; and
(c) The payout opportunities attainable under all of that Participants outstanding
performance-based Awards shall be determined as provided in the Award Agreement or any special Plan document governing the Award, or any employment, consulting, change of control severance, or similar service agreement with Participant.
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To the extent that this Section 18 causes Stock Options to exceed the dollar limitation set forth
in Section 422(b) of the Code, the excess Options shall be deemed Nonqualified Options.
SECTION 19 GENERAL PROVISIONS
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1.
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Clawback/Forfeiture Events
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(a) If required by Company policy,
by the Sarbanes-Oxley Act of 2002, and/or by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or other applicable laws, each Participants Award shall be conditioned on repayment or forfeiture in accordance with such
applicable laws, Company policy, and any relevant provisions in the related Award Agreement.
(b) The Plan
Administrator may specify in an Award Agreement or otherwise that a Participants rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, without limitation, termination of employment for Cause, violation of material policies that may apply to the
Participant, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company or a Subsidiary.
Unless otherwise provided in the Plan and permitted by law,
including but not limited to the Code, the right of a Participant or Beneficiary to the payment of any Award granted under the Plan, and the rights and privileges conferred thereby, shall not be subject to execution, attachment, or similar
process, and may not be transferred, assigned, pledged, or hypothecated in any manner (whether by operation of law or otherwise), other than by will or by the applicable laws of descent and distribution, unless the Participant has received the Plan
Administrators prior written consent. Except as otherwise provided for under the Plan, if any Participant attempts to transfer, assign, pledge, hypothecate, or otherwise dispose of any Award under the Plan, or of any right or privilege
conferred thereby, contrary to the provisions of the Plan or such Award, or suffers the sale or levy or any attachment or similar process upon the rights or privileges conferred thereby, all affected Awards held by such Participant shall be
immediately forfeited.
Nothing contained in the Plan, or in any Award granted pursuant
to the Plan, shall confer upon any Participant any right to continue in the employ of, or as a Consultant for, the Company or a Subsidiary, nor interfere in any way with the right of the Company or a Subsidiary to terminate the employment or
service of such Participant at any time with or without assigning any reason therefor, except to the extent expressly provided otherwise in a written agreement between the Participant and the Company or any Employer.
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Unless determined otherwise by the Plan Administrator or required
by contractual obligations, the grant, vesting, or payment of Awards under the Plan shall not be considered as part of a Participants salary or used for the calculation of any other pay, allowance, pension, or other benefit, unless otherwise
permitted by other benefit plans provided by the Company or a Subsidiary, or required by law or by contractual obligations of the Company or a Subsidiary.
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5.
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Leaves of Absence and Change in Status
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Leaves of absence for such periods and purposes
conforming to the personnel policy of the Company, or of a Subsidiary, as applicable, shall not be deemed a Termination of Service, unless a Participant commences a leave of absence from which he or she is not expected to return to active employment
or service with the Company or a Subsidiary. The foregoing notwithstanding, with respect to Incentive Stock Options, employment shall not be deemed to continue beyond the first ninety (90) days of such leave unless the Participants
reemployment rights are guaranteed by statute or contract. With respect to any Participant who, after the date an Award is granted under this Plan, ceases to be employed by or provide services to the Company or a Subsidiary on a full-time basis but
continues to be employed or provide services on a part-time basis, the Plan Administrator may make appropriate adjustments, as determined in its sole discretion, as to the number of shares issuable under, the vesting schedule of, or the amount
payable under any unvested Awards held by such Participant.
In the event a Participant is transferred from the Company to a Subsidiary,
or vice versa, or is promoted or given different responsibilities, Awards granted to the Participant prior to such date shall not be affected by such event.
Any amounts (deferred or otherwise) to be paid to Participants
pursuant to the Plan are unfunded obligations. Neither the Company nor any Subsidiary is required to segregate any monies from its general funds, to create any trusts, or to make any special deposits with respect to this obligation. The Plan
Administrator, in its sole discretion, may direct the Company to share with a Subsidiary the costs of a portion of the Incentive Awards paid to Participants who are executives of those companies. Beneficial ownership of any investments, including
trust investments which the Company may make to fulfill this obligation, shall at all times remain in the Company. Any investments and the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or a
fiduciary relationship between the Plan Administrator, the Company, or any Subsidiary, and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participants Beneficiary or the Participants
creditors in any assets of the Company or a Subsidiary whatsoever. The Participants shall have no claim against the Company for any changes in the value of any assets which may be invested or reinvested by the Company with respect to the Plan.
C-35
The designation of a Beneficiary shall be on a form provided by the
Company, executed by the Participant (with the consent of the Participants spouse, if required by the Company for reasons of community property or otherwise), and delivered to a designated representative of the Company. The Company may, in its
discretion, utilize an electronic process for Beneficiary designations. A Participant may change his or her Beneficiary designation at any time. A designation by a Participant under any predecessor plans shall remain in effect under the Plan, unless
such designation is revoked or changed under the Plan. In the event that a Participant becomes divorced, a Beneficiary designation under this Plan or a predecessor plan in favor of his or her divorced spouse shall become void as of the
effective date of the divorce, unless the Participant re-designates the former spouse as his or her Beneficiary following the effective date of the divorce. If no Beneficiary is designated, if the designation is ineffective, or if the Beneficiary
dies before the balance of a Participants benefit is paid, the balance shall be paid to the Participants spouse, or if there is no surviving spouse, to the Participants estate. Notwithstanding the foregoing, however, a
Participants Beneficiary shall be determined under applicable state law if such state law does not recognize Beneficiary designations under plans of this sort and is not preempted by laws which recognize the provisions of this Section 19.8. In
the event that the Plan Administrator determines that two or more claims are made by claimed Beneficiaries against the Plan for an Award, the Plan Administrator may initiate an interpleader action in a court of competent jurisdiction to resolve the
controversy.
In the event that an Award has vested, its restrictions have lapsed, or it has been exercised and the underlying shares of
Common Stock relating to such award have been transferred to a brokerage account, it is the responsibility of the Participant to establish and maintain beneficiary designations with that broker.
The Plan, all Award Agreements and all corporate law matters with
respect to the Company shall be governed by the General Corporation Law of the State of Delaware.
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10.
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Satisfaction of Tax Obligations
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Appropriate provision shall be made for all taxes
required to be withheld in connection with the grant, vesting, exercise, or other taxable event with respect to Awards under the applicable laws and regulations of any governmental authority, whether federal, state, or local and whether domestic or
foreign, including, without limitation, the required withholding of a sufficient amount of Common Stock otherwise issuable to a Participant to satisfy such required tax withholding obligations. To the extent provided by the Plan Administrator, a
Participant is permitted to deliver Common Stock (including shares acquired pursuant to the exercise of an Option or Stock Appreciation Right other than the Option or Stock Appreciation Right currently being exercised, to the extent permitted by
applicable regulations) for payment of withholding taxes on the exercise of an Option or Stock Appreciation Right, upon the grant or vesting of Restricted Stock or Restricted Stock Units, or
C-36
upon the payout of Performance Shares, Performance Units, or Incentive Awards. Common Stock may be required to be withheld from the shares issuable to the Participant upon the exercise of an
Option or Stock Appreciation Right, upon the vesting of Restricted Stock or Restricted Stock Units, or upon the payout of Performance Shares or Performance Units, to satisfy such required tax withholding obligations. The Fair Market Value of Common
Stock as delivered pursuant to this Section 19.10 shall be determined as of the day of such delivery, and shall be calculated in accordance with Section 2.23 of this Plan.
Any Participant who makes an election under Section 83(b) of the Code shall, within ten (10) days of making such election, notify the Company
in writing of such election and shall provide the Company or such Participants Employer with a copy of such election form filed with the U.S. Internal Revenue Service.
A Participant is solely responsible for obtaining, or failing to obtain, tax advice with respect to participation in the Plan prior to the
Participants (i) entering into any transaction under or with respect to the Plan, (ii) designating or choosing the times of distributions under the Plan, (iii) the making of any elections applicable to the Participant in connection with any
Award under the Plan, including, without limitation, an election under Section 83(b) of the Code, or (iv) disposing of any Common Stock issued under the Plan.
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11.
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Participants in Foreign Jurisdictions
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The Plan Administrator shall have the authority
to adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of any countries in which the Company or any Subsidiary may operate, to ensure the viability of the benefits from Awards
granted to Participants employed in such countries, to meet the requirements of applicable foreign laws that permit the Plan to operate in a qualified or tax-efficient manner, to comply with applicable foreign laws, and to meet the objectives
of the Plan; provided, however, that no such action taken pursuant to this Section shall result in a material revision of the Plan under applicable securities exchange corporate governance rules.
SECTION 20 REGULATORY COMPLIANCE
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1.
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Rule 16b-3 and Section 162(m)
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The Companys intention is that, so long as any of
the Companys equity securities are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, the Plan shall comply in all respects with the rules of any exchange on which the Common Stock is traded and with Rule 16b-3. In addition, it
is the Companys intention that, as to Covered Employees, unless otherwise indicated in an Award Agreement, Options, Stock Appreciation Rights, Performance Shares, Performance Units, and Incentive Awards shall be designed to qualify as
performance-based compensation under Section 162(m). If any Plan provision is determined not to be in compliance with the foregoing intentions, that provision shall be deemed modified as necessary to meet the requirements of any such exchange, Rule
16b-3, and Section 162(m).
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The Plan is intended to be administered, operated, and construed in
compliance with Section 409A and any regulations or other guidance issued thereunder. Notwithstanding this or any other provision of the Plan to the contrary, the Board or the Plan Administrator may amend the Plan in any manner, or take any other
action, that either of them determines, in its sole discretion, is necessary, appropriate, or advisable to cause the Plan to either be exempt from, or comply with Section 409A and any regulations or other guidance issued thereunder. Any such action,
once taken, shall be deemed to be effective from the earliest date necessary and applicable to avoid a violation of Section 409A, and shall be final, binding, and conclusive on all Participants and other individuals having or claiming any right or
interest under the Plan.
Notwithstanding the provisions of the Plan or any Award Agreement, if a Participant is a specified
employee upon his or her separation from service (within the meaning of such terms in Section 409A under such definitions and procedures as established by the Company in accordance with Section 409A), any portion of a payment,
settlement, or other distribution made upon such a separation from service that would cause the acceleration of, or an addition to, any taxes pursuant to Section 409A will not commence or be paid until a date that is six (6) months and
one (1) day following the applicable separation from service. Any payments, settlements, or other distributions that are delayed pursuant to this Section 20.2 following the applicable separation from service shall be
accumulated and paid to the Participant in a lump sum without interest on the first business day immediately following the required delay period.
SECTION
21 ESTABLISHMENT AND TERM OF PLAN
The Plan was adopted by the Board on September 26, 2016, and is subject to
approval by the Companys stockholders. If approved by the stockholders, this Plan will replace the Prior Plans, and no further Awards will be made under the Prior Plans. This Plan shall become effective on the Effective Date, and shall remain
in effect for a period of ten (10) years after the Effective Date. After this Plan is terminated, no future Awards may be granted pursuant to the Plan, but Awards previously granted shall remain outstanding in accordance with their applicable terms
and conditions and this Plans terms and conditions.
SECTION 22 AMENDMENT, TERMINATION, OR DISCONTINUANCE OF THE PLAN
Subject to approval of the Board with respect to amendments that are
required by law or regulation or stock exchange rules to be submitted to the stockholders of the Company for approval, the Board or the CNG Committee may from time to time make such amendments to the Plan as it may deem proper and in the best
interests of the Company, including, without limitation, any amendment necessary to ensure that the Company may obtain any regulatory approval referred to in Section 17 of this Plan; provided, however, that (i) to the extent required by applicable
law, regulation, or stock exchange rule, stockholder approval shall be
C-38
required, and (ii) except as otherwise provided in the Plan, no change in any Award previously granted under the Plan may be made without the consent of the Participant if such change would
impair the right of the Participant under the Award to acquire or retain Common Stock or cash that the Participant may have acquired as a result of the Plan.
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2.
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Termination or Suspension of Plan
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The Board or CNG Committee may at any time suspend
the operation of or terminate the Plan with respect to any Common Stock or rights which are not at that time subject to any Award outstanding under the Plan.
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3.
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Section 162(m) Approval
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If so determined by the Plan Administrator, the provisions of
the Plan relating to Performance Goals and Awards that are intended to constitute performance-based compensation under Section 162(m) shall be disclosed to, and reapproved by, the Companys stockholders no later than the
first stockholder meeting that occurs in the fifth year following the year in which the Effective Date occurs (or at any such other time as may be required or allowed by Section 162(m)) in order for Awards that are intended to constitute
performance-based compensation under Section 162(m) granted after such time to be exempt from the deduction limitations of Section 162(m).
* *
* * *
[Signature page follows]
C-39
IN WITNESS WHEREOF, the Company has caused this 2016 Omnibus Incentive Compensation Plan to be
executed effective as of January [], 2017.
MAGELLAN PETROLEUM CORPORATION
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By:
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Antoine J. Lafargue
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President and Chief Executive Officer
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C-40
ANNEX D: SECTION 262 OF THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE
§ 262 Appraisal rights [For application of this section, see 79 Del. Laws, c. 72, § 22, 79 Del. Laws, c. 122,
§ 12 and 80 Del. Laws, c. 265, § 18]
(a)
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Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such
shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to
§ 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholders shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this
section, the word stockholder means a holder of record of stock in a corporation; the words stock and share mean and include what is ordinarily meant by those words; and the words depository receipt
mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.
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(b)
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Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected
pursuant to § 251(g) of this title and, subject to paragraph (b)(3) of this section, § 251(h) of this title), § 252, § 254, § 255, § 256, § 257, § 258,
§ 263 or § 264 of this title:
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(1)
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Provided, however, that, except as expressly provided in § 363(b) of this title, no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the agreement of merger or consolidation, were either: (i) listed on a national
securities exchange or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for
its approval the vote of the stockholders of the surviving corporation as provided in § 251(f) of this title.
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(2)
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Notwithstanding paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are
required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263 and 264 of this title to accept for such stock anything except:
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a.
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Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
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b.
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Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or
consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders;
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D-1
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c.
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Cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or
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d.
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Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a., b. and c. of this section.
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(3)
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In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under §§ 251(h), 253 or 267 of this title is not owned by the parent immediately prior to the merger,
appraisal rights shall be available for the shares of the subsidiary Delaware corporation.
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(4)
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In the event of an amendment to a corporations certificate of incorporation contemplated by § 363(a) of this title, appraisal rights shall be available as contemplated by § 363(b) of this
title, and the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as practicable, with the word amendment substituted for the words merger or
consolidation, and the word corporation substituted for the words constituent corporation and/or surviving or resulting corporation.
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(c)
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Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its
certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision,
the provisions of this section, including those set forth in subsections (d), (e), and (g) of this section, shall apply as nearly as is practicable.
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(d)
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Appraisal rights shall be perfected as follows:
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(1)
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If a proposed merger or consolidation for which appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice
in accordance with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal of such
stockholders shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholders shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholders shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection and has not voted
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D-2
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in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
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(2)
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If the merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or § 267 of this title, then either a constituent corporation before the effective date of the
merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the
merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and, if 1 of the constituent corporations
is a nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice or, in the case of a merger approved pursuant to § 251(h) of this title, within the later of the consummation of the
offer contemplated by § 251(h) of this title and 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holders shares. Such demand will be sufficient if
it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holders shares. If such notice did not notify stockholders of the effective date of the merger or
consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that
are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided,
however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant to § 251(h) of this title, later than the later of the consummation of the offer
contemplated by § 251(h) of this title and 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holders
shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date
the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date,
the record date shall be the close of business on the day next preceding the day on which the notice is given.
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(e)
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Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a
determination of the
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value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not
commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholders demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the
effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the
merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of
holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholders written request for such a statement is received by the surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock
held either in a voting trust or by a nominee on behalf of such person may, in such persons own name, file a petition or request from the corporation the statement described in this subsection.
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(f)
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Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be
given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.
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(g)
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At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply
with such direction, the Court may dismiss the proceedings as to such stockholder. If immediately before the merger or consolidation the shares of the class or series of stock of the constituent corporation as to which appraisal rights are available
were listed on a national securities exchange, the Court shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares entitled to appraisal exceeds 1% of the
outstanding shares of the class or series eligible for appraisal, (2) the value of the consideration provided in the merger or consolidation for such total number of shares exceeds $1 million, or (3) the merger was approved pursuant
to § 253 or § 267 of this title.
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(h)
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After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing
appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with interest, if any, to
be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, and except as provided in
this subsection, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from
time to time during the period between the effective date of the merger and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving corporation may pay to each stockholder entitled to appraisal
an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Court, and (2) interest
theretofore accrued, unless paid at that time. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the
appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has
submitted such stockholders certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this
section.
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(i)
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The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Courts decree may be
enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state.
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(j)
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The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares
entitled to an appraisal.
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(k)
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From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal
rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal of such stockholders demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or
consolidation as
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provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the
foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this
provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholders demand for appraisal and to accept the terms offered upon the merger
or consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section.
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(l)
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The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
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D-6
C/O Broadridge Corporate Issuer Solutions
PO Box 1342
Brentwood, NY 11717
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VOTE BY INTERNET - www.proxyvote.com
Use
the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the
cut-off
date or meeting date. Have your proxy card in hand when
you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone
to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the
cut-off
date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes
Way, Edgewood, NY 11717.
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TO VOTE, MARK
BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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The Board of Directors recommends you vote FOR the following:
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For
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Against
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Abstain
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1
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Approval of the issuance of common stock of Magellan
Petroleum Corporation (Magellan) contemplated by the Agreement and Plan of Merger, dated as of August 2, 2016, by and among Magellan, Tellurian Investments Inc., a Delaware corporation, and River Merger Sub, Inc., a Delaware
corporation, as amended on each of November 23, 2016 and December 19, 2016.
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☐
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☐
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☐
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For
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Against
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Abstain
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5
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Ratification of the appointment of EKS&H LLLP as the
independent registered public accounting firm of Magellan for the fiscal year ending June 30, 2017.
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☐
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NOTE:
If no choice is indicated, this proxy shall be
determined to grant authority to vote FOR Proposals 1,2,3,4, and 5.
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2.
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Approval of the Magellan Petroleum Corporation 2016 Omnibus Incentive
Compensation Plan (the Magellan 2016 Plan), including the material terms of the performance goals set forth in the Magellan 2016 Plan for purposes of Section 162(m) of the Internal Revenue Code.
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3
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Approval, on a
non-binding
advisory basis, of the compensation that may become payable to Magellans named executive officers in connection with the merger.
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☐
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☐
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4
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Approval of the adjournment of the Magellan special meeting
to a later date or dates.
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator or other fiduciary,
please give full title as such. Joint owners should each sign personally. All holders must sign. If you are signing on behalf of a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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Important Notice Regarding the Availability of Proxy Materials for the Magellan Special Meeting:
The
Notice and Joint Proxy Statement/Prospectus are available at
www.proxyvote.com
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MAGELLAN PETROLEUM CORPORATION
Special Meeting of Stockholders
February 9, 2017 10:00 AM
This proxy is solicited by the Board of Directors
KNOW ALL BY THESE PRESENTS, that the undersigned holder of common stock of MAGELLAN PETROLEUM CORPORATION, a Delaware corporation (the Company),
does hereby constitute and appoint Antoine J. Lafargue and Reynold Bundgard, or any one of them, as proxies, with full power to act without the other and with full power of substitution, to vote the said shares of stock at the Special Meeting of
Stockholders of Magellan to be held on February 9, 2017, at 10:00 a.m. local time in the Lobby Conference Room of the Denver Financial Center, located at 1775 Sherman Street, Denver, Colorado 80203, and at any adjourned or postponed meeting or
meetings thereof, held for the same purposes, in the following manner:
UNLESS
DIRECTED TO THE CONTRARY BY SPECIFICATION IN THE SPACES PROVIDED, THE SAID INDIVIDUALS ARE HEREBY AUTHORIZED AND EMPOWERED BY THE UNDERSIGNED TO VOTE ON PROPOSALS 1, 2, 3, 4, and 5 AS LISTED ON THE REVERSE SIDE AND ARE GIVEN DISCRETIONARY AUTHORITY
TO VOTE ON ANY OTHER MATTERS UPON WHICH THE UNDERSIGNED IS ENTITLED TO VOTE, AND WHICH MAY PROPERLY COME BEFORE SAID MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
This proxy must be signed exactly as the name appears herein. Executors, administrators, trustees, etc. should give full title as such. If you are signing on
behalf of a corporation, please sign in the full corporate name as a duly authorized officer, giving full title as such. If you are signing on behalf of a partnership, please sign in partnership name by an authorized person.
RETURN OF PROXIES
WE URGE EACH MAGELLAN STOCKHOLDER WHO IS UNABLE TO ATTEND
THE MAGELLAN SPECIAL MEETING TO VOTE BY PROMPTLY SIGNING, DATING AND RETURNING THE ACCOMPANYING PROXY IN THE REPLY ENVELOPE ENCLOSED.
Continued and to be signed on reverse side
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