Exhibit
1
JOINT
FILING AGREEMENT
John
M. Gregory, Joan P. Gregory, Susan
Gregory, James M. Gregory, Joseph R. Gregory and SJ Strategic Investments
LLC, a
Tennessee limited liability company (the “Filing Persons”), hereby agree to file
jointly a Schedule 13D and any amendments thereto relating to the aggregate
ownership by each of the Filing Persons of any voting equity security of
a class
which is registered pursuant to Section 12 of the Securities Exchange act
of
1934, as amended, as required by Rule 13d-1 and Rule 13d-2 promulgated under
the
Securities Exchange Act of 1934. Each of the Filing Persons agrees
that the information set forth in such Schedule 13D and any amendments
thereto with respect to such Filing Person will be true, complete and correct
as
of the date of such Schedule 13D or such amendment, to the best of such Filing
Person’s knowledge and belief, after reasonable inquiry. Each of the
Filing Persons makes no representation as to the accuracy or adequacy of
the
information set forth in the Schedule 13D or any amendments thereto shall
become
inaccurate in any material respect or if said person learns of information
that
would require an amendment to the Schedule 13D.
IN
WITNESS WHEREOF, the undersigned
have set their hands this 2nd day of November, 2007.
/s/ John
M.
Gregory
John M. Gregory
/s/
Joan P.
Gregory
Joan P. Gregory
/s/
Susan Gregory
Susan Gregory
/s/
James M.
Gregory
James
M. Gregory
/s/
Joseph R.
Gregory
Joseph
R. Gregory
SJ
Strategic Investments
LLC
By:
/s/ John M.
Gregory
John
M. Gregory
Its: Managing
Member
EXHIBIT
2
STOCK
PURCHASE AGREEMENT
THIS
STOCK PURCHASE AGREEMENT (this
“Agreement”) is made and entered into this 2nd day of November, 2007 by and
between Joseph R. Gregory (the “Buyer”), and Royal
Holding Company, Inc., a Delaware corporation, located
at 300 Delaware Avenue, Suite 306, Wilmington, Delaware 19801 (the
“Seller”).
Statement
of Purpose
The
Seller desires to sell to the
Buyer, and the Buyer desires to buy from the Seller, 3,669,940 shares of
the
Common Stock, $.001 par value (the “Common Stock”), of Adams Golf, Inc., a
Delaware corporation (the “Company”), at a price of $1.90 per share, on the
terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the
Statement of Purpose and other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as
follows:
ARTICLE
I
PURCHASE
AND SALE OF SHARES
1.1 Purchase
and Sale of Common Stock. Subject to the terms and conditions of
this Agreement, the Buyer shall pay to the Seller Six Million, Nine Hundred
Seventy-Two Thousand, Eight Hundred Eighty-Six and 00/100 Dollars
($6,972,886.00) (the “Purchase Price”), and the Seller shall sell, assign,
transfer and deliver to the Buyer 3,669,940 shares of the Seller’s Common Stock,
(collectively, the “Shares”) at the Closing (as hereinafter
defined).
1.2 Closing. The
closing of the transactions contemplated hereunder (the “Closing”) shall occur
simultaneously with the execution of this document (the “Closing Date”) and
shall take place at 10:00 a.m., eastern daylight time on the Closing
Date. The Closing shall be held at Gregory Management Co., LLC, 620
Shelby Street, Bristol, Tennessee 37620 on the Closing
Date. At the Closing, the parties hereto will execute and deliver all
documents and instruments necessary to effect the transfers provided for
herein
and to evidence their respective compliance with the provisions of this
Agreement. At the Closing, the Seller shall deliver to the Buyer a
stock certificate and, accompanying stock power, for the Shares being
purchased. Buyer hereby acknowledges that stock certificate number AD
1026, with a duly executed stock power, shall be delivered to Buyer and provide
for 3,669,940 shares of Common Stock represented thereby of the total 3,682,073
shares of Common Stock represented thereby to be transferred to the Buyer
at the
Closing. At the Closing, the Buyer shall deliver the total Purchase
Price for such Shares being purchased by wire transfer of immediately available
funds to an account designated by the Seller.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
The
Seller hereby represents and
warrants to the Buyer, which representations and warranties will survive
Closing, as follows:
2.1 Organization
and Qualification. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. The Seller is duly qualified and in good standing as a
foreign corporation in each of the jurisdictions where such
qualification
is required by law, except where the failure to so qualify would not have
a
material adverse effect on the Seller.
2.2 Title. The
Seller owns all right, title, and interest in and to the Shares, free and
clear
of all liens, claims, charges, security interests, options, encumbrances,
or
restrictions whatsoever, except for restrictions imposed by applicable federal
and state securities laws.
2.3 Power
and Authority. The Seller has the right, power and capacity to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been approved by all
necessary corporate action by the Seller. This Agreement has been
duly and validly executed and delivered by the Seller, constitutes the legal,
valid and binding obligation of the Seller and is enforceable against it
in
accordance with its provisions, except to the extent limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors'
rights generally or by general principles of equity. The execution,
delivery and performance by the Seller of this Agreement and the consummation
of
the transactions contemplated hereby will not, with or without the giving
of
notice or the lapse of time, or both, (i) violate any agreement to which
the
Seller is a party or by which the Seller is bound, (ii) violate any provision
of
law, statute, rule or regulation to which the Seller is subject, (iii) violate
any order, judgment or decree applicable to the Seller, (iv) violate any
provision of the certificate of incorporation or bylaws of the Seller, as
each
may be amended, or (v) result in the imposition of any lien, claim, charge,
security interest, option, encumbrance, or other restriction on the
Shares.
2.4 No
Broker’s Fees. The Seller has not authorized any person to act as
broker, finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement.
2.5 Consents
and Approvals. No consent, approval, authorization of or
declaration, filing, registration, or similar action with any third party
or any
federal, state, county, local, foreign or other governmental, public or
regulatory agencies, authorities (including self-regulatory authorities),
courts, instrumentalities, commissions, boards or bodies (each, a “Regulatory
Authority”) having jurisdiction over the Seller is required in connection with
the execution, delivery, and performance by the Seller of this Agreement
or the
consummation of the transactions contemplated hereby.
2.7 Litigation. There
is no litigation, suit, proceeding, arbitration, or similar action pending
or
overtly threatened against the Seller in respect of the consummation of the
transactions contemplated hereby.
2.8 Exemption
from Securities Registration. The sale of the Shares to the Buyer
is exempt from the registration requirements of the Securities Act of 1933,
as
amended (the “Securities Act”).
2.9 Disclosure.
Subject to Section 3.3 of this Agreement, no representation or warranty by
the Seller contained herein, nor any document furnished or to be furnished
to
the Buyer by Seller in connection herewith or with the transactions contemplated
hereby contains any untrue statement of a material fact. The Seller
acknowledges that both the Seller and the Buyer have received from the Company
a
draft copy of the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2007.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE BUYER
The
Buyer hereby represents and
warrants to the Seller, which representations and warranties will survive
Closing, as follows:
3.1 Authorization. The
Buyer is at least 21 years of age, has adequate means of providing for all
of
his current and foreseeable needs and personal contingencies and has no need
for
liquidity in this investment. The Buyer has the right, power and
capacity to execute, deliver and perform this Agreement and to consummate
the
transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by the Buyer, constitutes the legal, valid
and
binding obligation of the Buyer and is enforceable against him in accordance
with its provisions, except to the extent limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally or by general principles of equity. The execution, delivery
and performance by the Buyer of this Agreement and the consummation of the
transactions contemplated hereby will not, with or without the giving of
notice
or the lapse of time, or both, (i) conflict with, violate, or result in a
breach
or acceleration of any of the terms or provisions of any agreement to which
the
Buyer is a party or by which the Buyer is bound, (ii) violate any provision
of
law, statute, rule or regulation to which the Buyer is subject or (iii) violate
any order, judgment or decree applicable to the Buyer.
3.2 “Big
Boy” Provision.
(a) The
Buyer hereby
acknowledges that the Seller may possess material, non-public information
about
the Company which is not known to the Buyer, including without limitation,
information received on a confidential basis (the “Information”), and that Buyer
wishes to proceed with the transactions contemplated hereby without disclosure
to Buyer of such Information by Seller. The Buyer also hereby
acknowledges and agrees that the Seller shall not have any obligation to
disclose any of such Information to the Buyer.
(b) The
Buyer further
acknowledges, agrees and represents that he has adequate information concerning
the business and financial condition of the Company to make an informed
decision regarding the purchase of the Seller’s Shares and has independently and
without reliance upon either the Seller or its agents
made
his own analysis and decision to purchase, or cause the purchase of, the
Seller’s Shares. The Buyer hereby waives, releases, acquits and forever
discharges, to the fullest extent permitted by law, any and all claims and
causes of action he has or may have as of the Closing Date against the Seller and/or its
respective
employees, representatives and agents (collectively, “Related Persons”),
relating either directly or indirectly or arising out of Seller not disclosing
Information, including, without limitation, any claims of detrimental reliance
on such non-disclosure of Information, the financial condition or prospects
of
the Company or the value of the Shares.
3.3 Exemption
from Securities Registration. The Buyer understands that the
Shares are not registered under the Securities Act, the Tennessee Securities
Act
of 1980, as amended (the “Tennessee Act”), or other applicable state securities
laws on the grounds that the sale provided for in this Agreement is exempt
from
registration under the Securities Act, the Tennessee Act and other applicable
state securities laws. The Buyer is acquiring the Shares for his own
account, for investment purposes only, and not with a view towards their
distribution within the meaning of Section 2(a)(11) of the Securities Act
in any
manner that would be in violation of the Securities Act. The Buyer
has had reasonable access to, and has had sufficient opportunity to carefully
review and analyze, all material information about the Company’s business,
financial condition, operations and value that the Buyer believes to be relevant
to his purchase of the Shares. The Buyer is an “accredited investor”
within the meaning of Securities and Exchange Commission Rule 501(a) and
is
sophisticated and experienced in evaluating the merits and risks involving
an
investment in the Company’s securities and the particulars of the purchase of
the Shares. The Buyer has the ability to bear the economic risks of
his purchase of the Shares and has been able to obtain all information and
to
ask and receive satisfactory answers to all questions required in making
an
informed decision regarding his investment from the Company. The
foregoing, however, does not limit or modify the representations and warranties
of the Seller in Section 2 of this Agreement or the right of the Buyer to
rely thereon.
3.4 Restrictions
on Resale. The Buyer understands that the Shares may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act and applicable state securities laws or an exemption therefrom, and that
in
the absence of an effective registration statement covering the Shares or
an
available exemption from registration under the Securities Act and applicable
state securities laws, the Shares must be held indefinitely.
3.5 No
Brokers’ Fees. The Buyer has not authorized any person to act as
broker, finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement.
3.6 Consents
and Approvals. No consent, approval, authorization of or
declaration, filing, registration or similar action with any third party
or any
Regulatory Authority having jurisdiction over the Buyer is required in
connection with the execution, delivery, and performance by the Buyer of
this
Agreement or the consummation of the transactions contemplated
hereby.
3.7 Litigation. There
is no litigation, suit, proceeding, arbitration, or similar action pending
or
overtly threatened, against the Buyer in respect of the consummation of the
transactions contemplated hereby.
ARTICLE
IV
ADDITIONAL
COVENANT OF THE PARTIES
The
Seller and the Buyer hereby covenant to and agree with one another that,
subject
to the terms and conditions herein provided, each will attempt reasonably
and in
good faith to take, or cause to be taken, all actions reasonably within their
control that are necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this
Agreement.
ARTICLE
V
CONDITIONS
TO THE SELLER’S OBLIGATIONS
The
obligation of the Seller to sell
the Shares at the Closing shall be subject to the satisfaction (or waiver
by the
Seller) at or prior to the Closing Date of each of the following
conditions:
5.1 Representations
and Warranties True at Closing Date. The Buyer’s representations
and warranties contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of such date. The Buyer shall have complied
with the covenants and agreements set forth herein to be performed by him
on or
before the Closing Date.
5.2 Purchase
Price. The Buyer shall have tendered payment to the Seller of the
Purchase Price for the Shares being purchased.
5.3 Litigation. No
litigation, suit, proceeding, arbitration, or similar action shall be pending
or
overtly threatened against the Buyer before any court or other Regulatory
Authority which, in the reasonable opinion of counsel for the Seller, could
result in the restraint or prohibition of any such party, or the obtaining
of
damages or other relief from any such party, in connection with this Agreement
or the consummation of the transactions contemplated hereby.
5.4 Required
Approvals and Consents. All necessary approvals and consents for
the transactions provided for hereunder shall have been obtained.
ARTICLE
VI
CONDITIONS
TO THE BUYER’S OBLIGATIONS
The
obligations of the Buyer to be
performed hereunder shall be subject to the satisfaction (or waiver by the
Buyer) on or before the Closing Date of each of the following
conditions:
6.1 Representations
and Warranties True at Closing Date. The representations and
warranties of the Seller contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date with the same force
and
effect as though made on and as of such date. The Seller shall have complied
with the covenants and agreements set forth herein to be performed by it
on or
before the Closing Date.
6.2 Litigation. No
litigation, suit, proceeding, arbitration, or similar action shall be pending
or
overtly threatened against the Seller before any court or other Regulatory
Authority which, in the reasonable opinion of counsel for the Buyer, could
result in the restraint or prohibition of any such party, or the obtaining
of
damages or other relief from any such party, in connection with this Agreement
or the consummation of the transactions contemplated hereby.
6.3 No
Claim Regarding Ownership of Shares. There shall not have been
made or threatened by any person any claim asserting that such person (a)
is the
holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any of the Shares, or any other voting, equity,
or
ownership interest in the Shares, or (b) is entitled to all or any portion
of
the Purchase Price payable for the Shares.
6.4 Required
Approvals and Consents. All necessary approvals and consents for
the transactions provided for hereunder shall have been obtained.
6.5 Absence
of Bankruptcy. There shall be no bankruptcy proceeding, or
proceeding for the appointment of a receiver, trustee or custodian, pending
with
respect to the Seller or the Company.
6.6 Delivery
of Shares. The Seller shall have delivered the Shares to the
Buyer, and accompanying duly executed stock power, in form and substance
reasonably satisfactory to the Buyer and its legal counsel.
6.7 Board
Resignations. The Seller shall have delivered to the Company, and
shall have provided copies to the Buyer of, letters of resignation of Paul
F.
Brown, Jr. and Stephen R. Patchin representing their resignations from the
Company’s board of directors and any committees thereof, contemporaneously with
the Closing.
ARTICLE
VII
INDEMNIFICATION
7.1 Indemnification.
(a) Except
as otherwise provided, Seller agrees to indemnify and reimburse the Buyer,
its
successors and assigns, and their respective officers, managers, members,
employees, agents and other related persons (the “Buyer Protected Parties”) for
any and all liabilities, damages (including fines, penalties and civil or
criminal judgments or settlements), costs (including court costs) and expenses
(including reasonable attorneys’ fees and disbursements) (collectively, “Loss”
or “Losses”) incurred directly as a result of any breach of any representation,
warranty, covenant or agreement made by the Seller in this Agreement
.
(b) The
Buyer agrees to indemnify and reimburse the Seller, its successors and assigns,
and their respective officers, managers, members, employees, agents and
other related persons (the “Seller Protected Parties", and together with the
Buyer Protected Parties, the "Protected Parties”) for any and all Losses
incurred directly as a result of any breach of any representation, warranty,
covenant or agreement made by the Buyer in this Agreement.
7.2 Notice
of Claim. A Protected Party shall promptly notify the Seller or
Buyer, as applicable, in writing of any claim for recovery, specifying in
reasonable detail the nature and date of the Loss, and, if known, the amount,
or
an estimate of the amount, of the liability arising therefrom. The
Protected Party shall provide to the Seller or Buyer, as applicable, as promptly
as practicable thereafter information and documentation reasonably requested
by
the Seller or Buyer, as applicable, to support and verify the claim
asserted, provided that
the failure to give such prompt notice shall not affect the Seller's or
Buyer's, as applicable, obligation to indemnify a Protected Party absent
a
showing of actual prejudice to the Seller or Buyer, as
applicable. The Seller and Buyer, as applicable, shall promptly and
fully reimburse the Protected Party to the fullest extent of the Loss following
receipt of such claim, but in no event more than thirty (30) days from the
receipt thereof, time being of the essence.
ARTICLE
VIII
MISCELLANEOUS
8.1 Notices. Any
notice, request, instruction or other document to be given hereunder by any
party hereto to any other party hereto shall be in writing and delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid:
if
to the Seller
to: Paul
F. Brown, Jr.
Vice
President-Finance
Royal
Oil
& Gas Corporation
P.O.
Box
809
One
Indian Springs Road
Indiana,
PA 15701
With
copies to:
Thomas
M. Thompson
Buchanan
Ingersoll & Rooney
PC
One
Oxford Centre
301
Grant Street, 20th
Floor
Pittsburgh,
PA 15219-1410
if
to the Buyer
to: Michael
S. McKinney
General
Counsel
Gregory
Management Co.,
LLC
620
Shelby Street
Bristol, TN 37620
or
at
such other address for a party as shall be specified by like
notice. Any notice which is delivered personally in the manner
provided herein shall be deemed to have been duly given to the party to
whom it
or he is directed upon actual receipt by such party (or its agent for notices
hereunder).
8.2 Further
Cooperation. From and after the Closing, the parties will each
take all such action and deliver all such documents as shall be reasonably
necessary or appropriate to confirm and vest title to the Shares in the Buyer
and otherwise to enable the Buyer to enjoy the benefits contemplated by this
Agreement.
8.3 Entire
Agreement. This Agreement constitutes the sole understanding of
the parties with respect to the subject matter hereof. No amendment,
modification or alteration of the terms or provisions of this Agreement shall
be
binding unless the same shall be in writing and duly executed by the parties
hereto.
8.4 Waiver. Any
of the terms or conditions of this Agreement may be waived in writing at
any
time by the party which is entitled to the benefits thereof. No
waiver of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not
similar).
8.5 Expenses. The
Seller and the Buyer shall each pay all costs and expenses incurred by it
or him
or on its or his behalf in connection with this Agreement and the transactions
contemplated hereby, including fees and expenses of its own financial
consultants, accountants and counsel.
8.6 Governing
Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware without giving effect to its
conflicts of law principles.
8.7 Attorneys’
Fees. In the event a party fails to perform, does not fully
perform or otherwise breaches its obligations under this Agreement, the
breaching party shall pay the reasonable attorneys’ fees, costs and expenses of
the non-breaching party resulting from such breach or failure.
8.8 No
Third-Party Beneficiaries. With the exception of the parties to
this Agreement, there shall exist no right of any person other than the Company
to claim a beneficial interest in this Agreement or any rights occurring
by
virtue of this Agreement.
8.9 Successors
and Assigns. The terms, conditions and obligations of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. Neither the Seller nor
the Buyer may assign its or his rights, duties or obligations hereunder or
any
part thereof to any other person or entity without the prior written consent
of
the other party hereto.
8.10 Severability. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
8.11 Headings. The
headings of the Sections and paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement
or
to affect the construction hereof.
8.12 Construction. Words
of inclusion shall not be construed as terms of limitation herein, so that
references to “included” matters shall be regarded as nonexclusive,
noncharacterizing illustrations. The parties hereto acknowledge and
agree that (i) each party hereto and its counsel have reviewed the terms
and
provisions of this Agreement and have contributed to its revision, (ii) the
normal rule of construction, to the effect that any ambiguities are resolved
against the drafting party, shall not be employed in the interpretation of
it,
and (iii) the terms and provisions of this Agreement shall be constructed
fairly
as to all parties hereto and not in favor or against any party, regardless
of
which party was generally responsible for the preparation of this
Agreement.
8.13
References. Whenever reference is made
in this Agreement to any Article or Section, such reference shall be deemed
to
apply to the specified Article or Section of this Agreement.
8.14 Counterparts;
Facsimile. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument. Facsimile
copies of signatures hereto or e-mail of a PDF file containing a copy of
an
executed agreement (or signature page thereto) shall be deemed as effective
as
originals.
[signatures
on following page]
IN
WITNESS WHEREOF, each of the parties
hereto has caused this Agreement to be executed by as of the day and year
first
above written.
|
“SELLER”
ROYAL
HOLDING COMPANY, INC.
By: /s/ Paul
F. Brown,
Jr.
Name: Paul
F. Brown, Jr.
Title: Vice
President of Finance/Treasurer
|
“BUYER”
/s/_Joseph
R. Gregory________________
Joseph
R. Gregory
|
Exhibit
3
STOCK
PURCHASE AGREEMENT
THIS
STOCK PURCHASE AGREEMENT (this
“Agreement”) is made and entered into this 2nd day of November, 2007 by and
between SJ Strategic Investments, LLC, a Tennessee limited
liability company, located at 340 Martin Luther King, Jr. Boulevard, Suite
200,
Bristol, Tennessee 37620 (the “Buyer”), and Royal Holding
Company, Inc., a Delaware corporation, located at 300
Delaware Avenue, Suite 306, Wilmington, Delaware 19801 (the
“Seller”).
Statement
of Purpose
The
Seller desires to sell to the
Buyer, and the Buyer desires to buy from the Seller, 2,704,571 shares of
the
Common Stock, $.001 par value (the “Common Stock”), of Adams Golf, Inc., a
Delaware corporation (the “Company”), at a price of $1.90 per share, on the
terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the
Statement of Purpose and other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as
follows:
ARTICLE
I
PURCHASE
AND SALE OF SHARES
1.1 Purchase
and Sale of Common Stock. Subject to the terms and conditions of
this Agreement, the Buyer shall pay to the Seller Five Million, One Hundred
Thirty-Eight Thousand, Six Hundred Eighty-Four and 90/100 Dollars
($5,138,684.90) (the “Purchase Price”), and the Seller shall sell, assign,
transfer and deliver to the Buyer 2,704,571 shares of the Seller’s Common Stock
(collectively, the “Shares”) at the Closing (as hereinafter
defined).
1.2 Closing. The
closing of the transactions contemplated hereunder (the “Closing”) shall occur
simultaneously with the execution of this document (the “Closing Date”) and
shall take place at 10:00 a.m., eastern daylight time on the Closing
Date. The Closing shall be held at Gregory Management Co., LLC, 620
Shelby Street, Bristol, Tennessee 37620 on the Closing
Date. At the Closing, the parties hereto will execute and deliver all
documents and instruments necessary to effect the transfers provided for
herein
and to evidence their respective compliance with the provisions of this
Agreement. At the Closing, the Seller shall deliver to the Buyer
stock certificates, and accompanying stock powers, for the Shares being
purchased. With respect to stock certificate number AD 1026, Buyer
hereby acknowledges that the related stock power shall provide 12,133 shares
of
Common Stock represented thereby of the total 3,682,073 shares of Common
Stock
represented thereby to be transferred to Buyer at Closing. With
respect to stock certificate number AD 1130, Buyer hereby acknowledges that
the
related stock power shall provide 2,692,438 shares of Common Stock represented
thereby to be transferred to Buyer at Closing. At the Closing, the
Buyer shall deliver the total Purchase Price for such Shares being purchased
by
wire transfer of immediately available funds to an account designated by
the
Seller.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
The
Seller hereby represents and
warrants to the Buyer, which representations and warranties will survive
Closing, as follows:
2.1 Organization
and Qualification. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. The Seller is duly qualified and in good standing as a
foreign corporation in each of the jurisdictions where such qualification
is
required by law, except where the failure to so qualify would not have a
material adverse effect on the Seller.
2.2 Title. The
Seller owns all right, title, and interest in and to the Shares, free and
clear
of all liens, claims, charges, security interests, options, encumbrances,
or
restrictions whatsoever, except for restrictions imposed by applicable federal
and state securities laws.
2.3 Power
and Authority. The Seller has the right, power and capacity to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been approved by all
necessary corporate action by the Seller. This Agreement has been
duly and validly executed and delivered by the Seller, constitutes the legal,
valid and binding obligation of the Seller and is enforceable against it
in
accordance with its provisions, except to the extent limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors'
rights generally or by general principles of equity. The execution,
delivery and performance by the Seller of this Agreement and the consummation
of
the transactions contemplated hereby will not, with or without the giving
of
notice or the lapse of time, or both, (i) violate any agreement to which
the
Seller is a party or by which the Seller is bound, (ii) violate any provision
of
law, statute, rule or regulation to which the Seller is subject, (iii) violate
any order, judgment or decree applicable to the Seller, (iv) violate any
provision of the certificate of incorporation or bylaws of the Seller, as
each
may be amended, or (v) result in the imposition of any lien, claim, charge,
security interest, option, encumbrance, or other restriction on the
Shares.
2.4 No
Broker’s Fees. The Seller has not authorized any person to act as
broker, finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement.
2.5 Consents
and Approvals. No consent, approval, authorization of or
declaration, filing, registration, or similar action with any third party
or any
federal, state, county, local, foreign or other governmental, public or
regulatory agencies, authorities (including self-regulatory authorities),
courts, instrumentalities, commissions, boards or bodies (each, a “Regulatory
Authority”) having jurisdiction over the Seller is required in connection with
the execution, delivery, and performance by the Seller of this Agreement
or the
consummation of the transactions contemplated hereby.
2.7 Litigation. There
is no litigation, suit, proceeding, arbitration, or similar action pending
or
overtly threatened against the Seller in respect of the consummation of the
transactions contemplated hereby.
2.8 Exemption
from Securities Registration. The sale of the Shares to the Buyer
is exempt from the registration requirements of the Securities Act of 1933,
as
amended (the “Securities Act”).
2.9 Disclosure.
Subject to Section 3.3 of this Agreement, no representation or warranty by
the Seller contained herein, nor any document furnished or to be furnished
to
the Buyer by Seller in connection herewith or with the transactions contemplated
hereby contains any untrue statement of a material fact. The Seller
acknowledges that both the Seller and the Buyer have received from the Company
a
draft copy of the Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2007.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE BUYER
The
Buyer hereby represents and
warrants to the Seller, which representations and warranties will survive
Closing, as follows:
3.1 Organization
and Qualification. The Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State
of
Tennessee. The Buyer is duly qualified and in good standing as a
foreign corporation in each of the jurisdictions where such qualification
is
required by law, except where the failure to so qualify would not have a
material adverse effect on the Buyer.
3.2 Power
and Authority. The Buyer has the right, power and capacity to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been approved by all
necessary limited liability company action by the Buyer. This
Agreement has been duly and validly executed and delivered by the Buyer,
constitutes the legal, valid and binding obligation of the Buyer and is
enforceable against it in accordance with its provisions, except to the extent
limited by bankruptcy, insolvency, reorganization, moratorium, or similar
laws
affecting creditors' rights generally or by general principles of
equity. The execution, delivery and performance by the Buyer of this
Agreement and the consummation of the transactions contemplated hereby will
not,
with or without the giving of notice or the lapse of time, or both, (i) conflict
with, violate, or result in a breach or acceleration of any of the terms
or
provisions of any agreement to which the Buyer is a party or by which the
Buyer
is bound, (ii) violate any provision of law, statute, rule or regulation
to
which the Buyer is subject, (iii) violate any order, judgment or decree
applicable to the Buyer, or (iv) violate any provision of the articles or
organization or limited liability company agreement of the Buyer, as each
may be
amended.
3.3 “Big
Boy” Provision.
(a) The
Buyer hereby
acknowledges that the Seller may possess material, non-public information
about
the Company which is not known to the Buyer, including without limitation,
information received on a confidential basis (the “Information”), and that Buyer
wishes to proceed with the transactions contemplated hereby without disclosure
to Buyer of such Information by Seller. The Buyer also hereby
acknowledges and agrees that the Seller shall not have any obligation to
disclose any of such Information to the Buyer.
(b) The
Buyer further
acknowledges, agrees and represents that it has adequate information concerning
the business and financial condition of the Company to make an informed
decision regarding the purchase of the Seller’s Shares and has independently and
without reliance upon either the Seller or its agents
made
its own analysis and decision to purchase, or cause the purchase of, the
Seller’s Shares. The Buyer hereby waives, releases, acquits and forever
discharges, to the fullest extent permitted by law, any and all claims and
causes of action it has or may have as of the Closing Date against the Seller and/or its
respective
employees, representatives and agents (collectively, “Related Persons”),
relating either directly or indirectly or arising out of Seller not disclosing
Information, including, without limitation, any claims of detrimental reliance
on such non-disclosure of Information, the financial condition or prospects
of
the Company or the value of the Shares.
3.4 Exemption
from Securities Registration. The Buyer understands that the
Shares are not registered under the Securities Act, the Tennessee Securities
Act
of 1980, as amended (the “Tennessee Act”), or other applicable state securities
laws on the grounds that the sale provided for in this Agreement is exempt
from
registration under the Securities Act, the Tennessee Act and other applicable
state securities laws. The Buyer is acquiring the Shares for its own
account, for investment purposes only, and not with a view towards their
distribution within the meaning of Section 2(a)(11) of the Securities Act
in any
manner that would be in violation of the Securities Act. The Buyer
has had reasonable access to, and has had sufficient opportunity to carefully
review and analyze, all material information about the Company’s business,
financial condition, operations and value that the Buyer believes to be relevant
to its purchase of the Shares. The Buyer is an “accredited investor”
within the meaning of Securities and Exchange Commission Rule 501(a) and
is
sophisticated and experienced in evaluating the merits and risks involving
an
investment in the Company’s securities and the particulars of the purchase of
the Shares. The Buyer has the ability to bear the economic risks of
its purchase of the Shares and has been able to obtain all information and
to
ask and receive satisfactory answers to all questions required in making
an
informed decision regarding its investment from the Company. The
foregoing, however, does not limit or modify the representations and warranties
of the Seller in Section 2 of this Agreement or the right of the Buyer to
rely thereon.
3.5 Restrictions
on Resale. The Buyer understands that the Shares may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act and applicable state securities laws or an exemption therefrom, and that
in
the absence of an effective registration statement covering the Shares or
an
available exemption from registration under the Securities Act and applicable
state securities laws, the Shares must be held indefinitely.
3.6 No
Brokers’ Fees. The Buyer has not authorized any person to act as
broker, finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement.
3.7 Consents
and Approvals. No consent, approval, authorization of or
declaration, filing, registration or similar action with any third party
or any
Regulatory Authority having jurisdiction over the Buyer is required in
connection with the execution, delivery, and performance by the Buyer of
this
Agreement or the consummation of the transactions contemplated
hereby.
3.8 Litigation. There
is no litigation, suit, proceeding, arbitration, or similar action pending
or
overtly threatened, against the Buyer in respect of the consummation of the
transactions contemplated hereby.
ARTICLE
IV
ADDITIONAL
COVENANT OF THE PARTIES
The
Seller and the Buyer hereby covenant to and agree with one another that,
subject
to the terms and conditions herein provided, each will attempt reasonably
and in
good faith to take, or cause to be taken, all actions reasonably within their
control that are necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this
Agreement.
ARTICLE
V
CONDITIONS
TO THE SELLER’S OBLIGATIONS
The
obligation of the Seller to sell
the Shares at the Closing shall be subject to the satisfaction (or waiver
by the
Seller) at or prior to the Closing Date of each of the following
conditions:
5.1 Representations
and Warranties True at Closing Date. The Buyer’s representations
and warranties contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though made on and as of such date. The Buyer shall have complied
with the covenants and agreements set forth herein to be performed by it
on or
before the Closing Date.
5.2 Purchase
Price. The Buyer shall have tendered payment to the Seller of the
Purchase Price for the Shares being purchased.
5.3 Litigation. No
litigation, suit, proceeding, arbitration, or similar action shall be pending
or
overtly threatened against the Buyer before any court or other Regulatory
Authority which, in the reasonable opinion of counsel for the Seller, could
result in the restraint or prohibition of any such party, or the obtaining
of
damages or other relief from any such party, in connection with this Agreement
or the consummation of the transactions contemplated hereby.
5.4 Required
Approvals and Consents. All necessary approvals and consents for
the transactions provided for hereunder shall have been obtained.
ARTICLE
VI
CONDITIONS
TO THE BUYER’S OBLIGATIONS
The
obligations of the Buyer to be
performed hereunder shall be subject to the satisfaction (or waiver by the
Buyer) on or before the Closing Date of each of the following
conditions:
6.1 Representations
and Warranties True at Closing Date. The representations and
warranties of the Seller contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date with the same force
and
effect as though made on and as of such date. The Seller shall have complied
with the covenants and agreements set forth herein to be performed by it
on or
before the Closing Date.
6.2 Litigation. No
litigation, suit, proceeding, arbitration, or similar action shall be pending
or
overtly threatened against the Seller before any court or other Regulatory
Authority which, in the reasonable opinion of counsel for the Buyer, could
result in the restraint or prohibition of any such party, or the obtaining
of
damages or other relief from any such party, in connection with this Agreement
or the consummation of the transactions contemplated hereby.
6.3 No
Claim Regarding Ownership of Shares. There shall not have been
made or threatened by any person any claim asserting that such person (a)
is the
holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any of the Shares, or any other voting, equity,
or
ownership interest in the Shares, or (b) is entitled to all or any portion
of
the Purchase Price payable for the Shares.
6.4 Required
Approvals and Consents. All necessary approvals and consents for
the transactions provided for hereunder shall have been obtained.
6.5 Absence
of Bankruptcy. There shall be no bankruptcy proceeding, or
proceeding for the appointment of a receiver, trustee or custodian, pending
with
respect to the Seller or the Company.
6.6 Delivery
of Shares. The Seller shall have delivered the Shares to the
Buyer, endorsed in blank or accompanied by duly executed assignment documents
in
form and substance reasonably satisfactory to the Buyer and its legal
counsel.
6.7 Board
Resignations. The Seller shall have delivered to the Company, and
shall have provided copies to the Buyer of, letters of resignation of Paul
F.
Brown, Jr. and Stephen R. Patchin representing their resignations from the
Company’s board of directors and any committees thereof, contemporaneously with
the Closing.
ARTICLE
VII
INDEMNIFICATION
7.1 Indemnification.
(a) Except
as otherwise provided, Seller agrees to indemnify and reimburse the Buyer,
its
successors and assigns, and their respective officers, managers, members,
employees, agents and other related persons (the “Buyer Protected Parties”) for
any and all liabilities, damages (including fines, penalties and civil or
criminal judgments or settlements), costs (including court costs) and expenses
(including reasonable attorneys’ fees and disbursements) (collectively, “Loss”
or “Losses”) incurred directly as a result of any breach of any representation,
warranty, covenant or agreement made by the Seller in this
Agreement.
(b) The
Buyer agrees to indemnify and reimburse the Seller, its successors and assigns,
and their respective officers, managers, members, employees, agents and
other related persons (the “Seller Protected Parties", and together with the
Buyer Protected Parties, the "Protected Parties”) for any and all Losses
incurred directly as a result of any breach of any representation, warranty,
covenant or agreement made by the Buyer in this Agreement.
7.2 Notice
of Claim. A Protected Party shall promptly notify the Seller or
Buyer, as applicable, in writing of any claim for recovery, specifying in
reasonable detail the nature and date of the Loss, and, if known, the amount,
or
an estimate of the amount, of the liability arising therefrom. The
Protected Party shall provide to the Seller or Buyer, as applicable, as promptly
as practicable thereafter information and documentation reasonably requested
by
the Seller or Buyer, as applicable, to support and verify the claim
asserted, provided that
the failure to give such prompt notice shall not affect the Seller's or
Buyer's, as applicable, obligation to indemnify a Protected Party absent
a
showing of actual prejudice to the Seller or Buyer, as
applicable. The Seller and Buyer, as applicable, shall promptly and
fully reimburse the Protected Party to the fullest extent of the Loss following
receipt of such claim, but in no event more than thirty (30) days from the
receipt thereof, time being of the essence.
ARTICLE
VIII
MISCELLANEOUS
8.1 Notices. Any
notice, request, instruction or other document to be given hereunder by any
party hereto to any other party hereto shall be in writing and delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid:
if
to the Seller
to: Paul
F. Brown, Jr.
Vice
President-Finance
Royal
Oil & Gas
Corporation
P.O.
Box 809
One
Indian Springs Road
Indiana,
PA 15701
With
copies to:
Thomas
M. Thompson
Buchanan
Ingersoll & Rooney
PC
One
Oxford Centre
301
Grant Street, 20th
Floor
Pittsburgh,
PA 15219-1410
if
to the
Buyer to:
SJ
Strategic Investments LLC
Attn: Mark M. Manno, Esq.
340 Martin Luther King, Jr. Boulevard
Suite 200
Bristol, Tennessee 37620
or
at
such other address for a party as shall be specified by like
notice. Any notice which is delivered personally in the manner
provided herein shall be deemed to have been duly given to the party to whom
it
is directed upon actual receipt by such party (or its agent for notices
hereunder).
8.2 Further
Cooperation. From and after the Closing, the parties will each
take all such action and deliver all such documents as shall be reasonably
necessary or appropriate to confirm and vest title to the Shares in the Buyer
and otherwise to enable the Buyer to enjoy the benefits contemplated by this
Agreement.
8.3 Entire
Agreement. This Agreement constitutes the sole understanding of
the parties with respect to the subject matter hereof. No amendment,
modification or alteration of the terms or provisions of this Agreement shall
be
binding unless the same shall be in writing and duly executed by the parties
hereto.
8.4 Waiver. Any
of the terms or conditions of this Agreement may be waived in writing at
any
time by the party which is entitled to the benefits thereof. No
waiver of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not
similar).
8.5 Expenses. The
Seller and the Buyer shall each pay all costs and expenses incurred by it
or on
its behalf in connection with this Agreement and the transactions contemplated
hereby, including fees and expenses of its own financial consultants,
accountants and counsel.
8.6 Governing
Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware without giving effect to its
conflicts of law principles.
8.7 Attorneys’
Fees. In the event a party fails to perform, does not fully
perform or otherwise breaches its obligations under this Agreement, the
breaching party shall pay the reasonable attorneys’ fees, costs and expenses of
the non-breaching party resulting from such breach or failure.
8.8 No
Third-Party Beneficiaries. With the exception of the parties to
this Agreement, there shall exist no right of any person other than the Company
to claim a beneficial interest in this Agreement or any rights occurring
by
virtue of this Agreement.
8.9 Successors
and Assigns. The terms, conditions and obligations of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. Neither the Seller nor
the Buyer may assign its rights, duties or obligations hereunder or any part
thereof to any other person or entity without the prior written consent of
the
other party hereto.
8.10 Severability. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
8.11 Headings. The
headings of the Sections and paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement
or
to affect the construction hereof.
8.12
Construction. Words of inclusion shall not be
construed as terms of limitation herein, so that references to “included”
matters shall be regarded as nonexclusive, noncharacterizing
illustrations. The parties hereto acknowledge and agree that (i) each
party hereto and its counsel have reviewed the terms and provisions of this
Agreement and have contributed to its revision, (ii) the normal rule of
construction, to the effect that any ambiguities are resolved against the
drafting party, shall not be employed in the interpretation of it, and (iii)
the
terms and provisions of this Agreement shall be constructed fairly as to
all
parties hereto and not in favor or against any party, regardless of which
party
was generally responsible for the preparation of this Agreement.
8.13 References. Whenever
reference is made in this Agreement to any Article or Section, such reference
shall be deemed to apply to the specified Article or Section of this
Agreement.
8.14 Counterparts;
Facsimile. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument. Facsimile
copies of signatures hereto or e-mail of a PDF file containing a copy of
an
executed agreement (or signature page thereto) shall be deemed as effective
as
originals.
[signatures
on following page]
IN
WITNESS WHEREOF, each of the parties
hereto has caused this Agreement to be executed by an authorized representative
as of the day and year first above written.
|
“SELLER”
ROYAL
HOLDING COMPANY, INC.
By: /s/ Paul F.
Brown, Jr.
Name: Paul
F. Brown,
Jr.
Title: Vice
President of
Finance/Treasurer
|
“BUYER”
SJ
STRATEGIC INVESTMENTS LLC
By: /s/ John
M.
Gregory
Name:
John M.
Gregory
Title:
Managing
Member
|