EXHIBIT 10.1
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into
effective June 12, 1996, by and between SMITH MANAGEMENT COMPANY,
INC., a New York corporation ("Smith Management"), FARMOUT INC.,
a Utah corporation ("Farmout"), RANDALL D. SMITH ("R. Smith"),
JEFFREY A. SMITH ("J. Smith"), JOHN W. ADAMS ("Adams") (R. Smith,
J. Smith and Adams are hereinafter referred to as the "Farmout
Stockholders"), INLAND RESOURCES INC. ("Inland") and INLAND
PRODUCTION COMPANY ("Inland Production").
R E C I T A L S:
WHEREAS, Farmout Stockholders own all of the issued and
outstanding capital stock of Farmout ("Farmout Stock") and
Farmout Stockholders desire to sell, transfer and convey to
Inland, and Inland desires to acquire, the Farmout Stock in
exchange for the "Common Shares" (as defined in Section 1.01), in
accordance with the terms of this Agreement; and
WHEREAS, Smith Management (or its designee) desires to
acquire 950,000 shares of the 1,000,000 shares of Series B
Preferred Stock (as hereinafter defined) of Inland for $9,500,000
of the total of $10,000,000 to be received for the Series B
Preferred Stock, and Inland desires to issue such Series B
Preferred Stock to Smith Management; and
WHEREAS, the acquisition of the Farmout Stock by Inland and
the acquisition of the Series B Preferred Stock by Smith
Management are part of a joint transaction that will be closed in
two separate closings, on June 12, 1996 and July 31, 1996,
respectively; and
WHEREAS, Inland intends to call its existing Series A
Preferred Stock for redemption or conversion on July 31, 1996 and
to the extent any shares are to be redeemed, the proceeds from
the issuance of the Series B Preferred Stock are intended to be
used by Inland to pay any required redemption amounts.
NOW, THEREFORE, in consideration of the foregoing recitals
and the mutual promises, covenants and representations set forth
herein, the parties hereto agree as follows:
A G R E E M E N T S:
I.
SALE AND PURCHASE OF FARMOUT STOCK
1.01 Farmout Stockholders hereby agree to sell, transfer and
convey to Inland at Farmout Closing (herein so called) good,
marketable and indefeasible title to the Farmout Stock free and
clear of any lien, security interest, pledge, encumbrance,
restriction on transferability, defect of title, charge or claim
of any nature whatsoever. In consideration therefor, and on the
basis of and in reliance upon the representations, warranties,
obligations and agreements of Farmout Stockholders set forth
herein, Inland agrees to purchase the Farmout Stock at Farmout
Closing and agrees to deliver to Farmout Stockholders (or to such
persons as the Farmout Stockholders designate) an aggregate of
1,309,880 post-split shares (the "Common Shares") of Inland's
common stock, par value $.001 per share ("Common Stock"), which
shall not be delivered by Inland until January 2, 1997, except
where such delivery is accelerated as hereinafter provided.
Inland's agreement to issue and deliver the Common Shares on
January 2, 1997 shall be secured by a pledge of the Farmout Stock
pursuant to a Security Agreement in the form attached hereto as
Exhibit "A" and incorporated herein for all purposes by this
reference. The Farmout Closing shall take place on June 12, 1996
(the "Farmout Closing Date") at the offices of Inland at 2:00
p.m. (Denver time). At the Farmout Closing, Farmout Stockholders
shall deliver the stock certificates representing the Farmout
Stock to Inland, duly endorsed for transfer, and Inland and the
Farmout Stockholders will execute the Security Agreement and the
Registration Rights Agreement. As noted above, the Common Shares
shall not be delivered by Inland until January 2, 1997; provided,
however, in the event of the filing of a petition in bankruptcy
against Inland, or the voluntary filing of a bankruptcy petition
by Inland, prior to such date, the Common Shares shall be
immediately issuable by Inland without further demand or action
by Farmout Stockholders. Inland hereby acknowledges and agrees
that from and after the transfer of the Farmout Stock by the
Farmout Stockholders to Inland at the Farmout Closing its
obligation to issue and deliver the Common Shares is fixed,
absolute and unconditional, and Inland shall not be entitled to
assert any defenses to such issuance and delivery including,
without limitation, any breach by Farmout Stockholders or Smith
Management of any of their respective agreements, covenants,
warranties or representations herein. The acquisition by Inland
of the Farmout Stock and the issuance by Inland of the Common
Shares are collectively referred to herein as the "Farmout
Transactions".
1.02 Farmout Stockholders and Inland hereby agree that the
effective date of the acquisition of the Farmout Stock by Inland
shall be June 1, 1996 and Farmout Stockholders and Farmout agree
that Farmout shall make no distributions or payments of cash or
other properties (other than a dividend in the amount of
$213,700), or incur any liabilities (other than accrued income
tax liabilities), after June 1, 1996. Farmout Stockholders and
Farmout also represent and warrant to Inland and Inland
Production that the Farmout Agreement dated effective July 1,
1995 (the "Farmout Agreement") between Inland, Inland Production
and R. Smith, the Option Agreement ("Option Agreement") between
Inland, Inland Production and Smith dated November 22, 1995, and
the Warrant Certificate ("Warrant Certificate") issued by Inland
in favor of Smith dated November 22, 1995 have all been duly and
properly assigned to Farmout, and Farmout is the proper party in
interest with respect to each of said documents. Farmout
Stockholders and Farmout further represent and warrant to Inland
and Inland Production that effective as of June 1, 1996 and
effective as of the Farmout Closing, Farmout owned, and will own,
no other assets, and had, and will have, no other liabilities or
obligations, contingent or otherwise (other than accrued income
tax liabilities), other than the assets represented by the wells
covered by the Farmout Agreement and the warrants represented by
the Warrant Certificate, or the liabilities and obligations
encompassed within the Farmout Agreement, Option Agreement or
Warrant Certificate.
1.03 Until the Common Shares are delivered by Inland to the
Farmout Stockholders on January 2, 1997, Inland hereby agrees
that it will not, without the prior written consent of the
Farmout Stockholders, effect a stock split of its Common Stock,
issue any stock dividend on its Common Stock or engage in a
recapitalization or other event that would cause the outstanding
shares of Common Stock to receive additional securities or be
converted into other securities.
II.
SERIES B PREFERRED STOCK
2.01 Subject to the terms and conditions of this Agreement,
at the "Series B Closing" (herein so called) Inland agrees to
issue and sell to Smith Management, and Smith Management (or
Smith Management's designee) agrees to subscribe for and purchase
from Inland, 950,000 shares (the "Series B Shares") of a series
of 1,000,000 shares of preferred stock, par value $.001 per
share, of Inland having the relative rights, preferences,
privileges and limitations set forth on the "Certificate of
Designation, Preferences and Rights of Series B Convertible
Preferred Stock" ("Certificate of Designation") attached hereto
as
Exhibit "B" and incorporated herein for all purposes by this
reference (the "Series B Preferred Stock"), for an aggregate
purchase price of $9,500,000 ($10.00 per Series B Share) (the
"Purchase Price"). The transactions contemplated to take place
at the Series B Closing are referred to herein as the "Series B
Transactions". Smith Management acknowledges that it is
anticipated by Inland that the remaining 50,000 shares of Series
B Stock will be sold to another purchaser for the price of $10.00
per share and that such sale will close on or around the Series B
Closing, provided, however, Smith Management (or its designee)
shall, whether or not such additional purchase and sale is made,
be obligated to purchase the Series B Shares at the Series B
Closing, and Inland shall be obligated to issue the Series B
Shares to Smith Management (or its designee) at the Series B
Closing.
2.02 Subject to the terms and conditions of this Agreement,
the issuance and purchase of the Series B Shares shall take place
at the "Series B Closing" to be held at the offices of Inland at
10:00 a.m. (Denver time) on July 31, 1996. The date on which the
Series B Closing occurs is referred to herein as the "Series B
Closing Date." On the Series B Closing Date, Inland will deliver
the Series B Shares registered in the name of Smith Management
and/or Smith Management's nominee or designee upon receipt of the
Purchase Price therefor by wire transfer of immediately available
funds to an account designated by Inland, or by such other method
as is mutually agreed to by Smith Management and Inland. Such
certificates shall bear appropriate restrictive legends deemed
necessary by Inland to comply with applicable securities laws.
Effective as of the Series B Closing Date, Inland will file with
the Secretary of State of Washington the Certificate of
Designation.
III
REPRESENTATIONS AND WARRANTIES OF INLAND
Inland represents and warrants to the Farmout Stockholders
and Smith Management, respectively, as of the date hereof and as
of each of the Farmout Closing Date and Series B Closing Date,
respectively, as follows:
3.01 Inland has all requisite corporate power and authority
to execute and deliver this Agreement, the Security Agreement and
the Registration Rights Agreement (in the form attached hereto as
Exhibit "C" and incorporated herein for all purposes by this
reference) and to consummate the acquisition of the Farmout Stock
as provided herein, the issuance of the Common Shares and the
issuance of the Series B Shares as provided herein (collectively
referred to herein as the "Transactions"). The execution and
delivery of this Agreement, the Security Agreement and the
Registration Rights Agreement and the consummation of the
Transactions to be performed by Inland have been duly and validly
authorized by all necessary action on the part of the Board of
Directors of Inland, and no other corporate proceedings are
necessary to authorize the execution and delivery of this
Agreement, the Security Agreement and the Registration Rights
Agreement by Inland or to consummate the Transactions to be
performed by Inland, other than filing the Certificate of
Designation with the Secretary of State of Washington on the
Series B Closing Date. This Agreement has been, and the Security
Agreement, and the Registration Rights Agreement, when executed
at Farmout Closing, will have been, duly and validly executed and
delivered by Inland and, assuming this Agreement, the Security
Agreement and the Registration Rights Agreement constitutes a
valid and binding obligation of Smith Management, Farmout and
Farmout Stockholders, this Agreement constitutes, and the
Security Agreement and Registration Rights Agreement, when
executed at Farmout Closing, will constitute, a valid and binding
agreement of Inland, enforceable against Inland in accordance
with its terms. Upon receipt by Inland of the Purchase Price and
the Farmout Stock, the Series B Shares and the Common Shares to
be issued on January 2, 1997, shall be duly authorized, validly
issued (when issued), fully paid and non-assessable. The Common
Shares will have been reserved for issuance as of the Farmout
Closing Date, and the shares of Common Stock underlying the
Series B Shares will have been reserved for issuance as of the
Series B Closing Date.
3.02 Neither the execution and delivery of this Agreement,
the Security Agreement or the Registration Rights Agreement by
Inland, the consummation of the Transactions to be performed by
Inland nor compliance by Inland with any of the provisions hereof
or of the Security Agreement or Registration Rights Agreement
will (i) conflict with or result in any breach of any provisions
of the Articles of Incorporation or by-laws of Inland or any of
its Subsidiaries, assuming, for this purpose, the Certificate of
Designation has been filed with the Secretary of State of
Washington; (ii) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental
authority, including those of the United States, any foreign
country, state, county, city or other political subdivision,
agency or instrumentality thereof (herein referred to as a
"Governmental Authority"), except for consents, approvals,
authorizations, permits, filings or notifications which have been
obtained or made; (iii) except upon failure to obtain the consent
of Trust Company of the West required to be obtained under that
certain Credit Agreement dated November 29, 1995, result in a
default (with or without due notice or lapse of time or both) or
give rise to any right of termination, cancellation or
acceleration under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, contract, license, agreement
or other instrument or obligation to which Inland or any of its
Subsidiaries is a party or by which Inland or any of its
Subsidiaries or any of their respective assets may be bound,
except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have
been obtained; (iv) result in the creation or imposition of any
lien, charge or other encumbrance on the assets of Inland or any
of its Subsidiaries; or (v) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Inland, any of
its Subsidiaries or any of their respective assets. For
purposes of this Agreement, "Subsidiary" shall mean, when used
with reference to an entity, any corporation, a majority of the
outstanding voting securities of which are owned directly or
indirectly by such entity; and such term shall also refer to any
other partnership, limited partnership, joint venture, trust, or
other business entity in which such entity has a material
interest.
3.03 The offer, sale and issuance of the Common Shares or
Series B Shares pursuant to this Agreement do not require
registration of the Common Shares or Series B Shares under the
Securities Act of 1993, as amended (the "Securities Act") or
registration or qualification under any applicable state "blue
sky" or securities laws, based on available non-public offering
exemptions which are based, in part, on the representations of
Smith Management and Farmout Stockholders in Section 4.03.
Inland has not taken, directly or indirectly, nor will it take
any action which will subject the issuance or sale of any of the
Common Shares or Series B Shares to be in violation of the
provision of Section 5 of the Securities Act or the provisions of
any securities, blue sky law or similar law of any applicable
jurisdiction.
3.04 No broker's or finder's fees or commissions will be
payable by Inland in connection with the issuance and sale of the
Common Shares or Series B Shares or the Transactions.
3.05 The authorized capital stock of the Inland consists of
25,000,000 shares of Common Stock, and 20,000,000 shares of Class
A preferred stock, par value $.001 per share ("Preferred Stock").
As of the date hereof, 4,092,800 shares of Common Stock and
106,850 Series A Preferred Shares were issued and outstanding.
Except upon written notification to Smith Management and Farmout
Stockholders, Inland will not, prior to the Series B Closing,
issue any Common Stock or Preferred Stock (other than upon
conversion of Series A Preferred Shares or exercise of
outstanding options or warrants), and will not repurchase or
redeem any Common Stock or Preferred Stock (other than the
anticipated redemption of Series A Preferred Shares). Other than
the Common Shares issuable pursuant to this Agreement or the
shares of Common Stock underlying the Series B Shares, neither
Inland nor any Subsidiary has any shares of its capital stock
reserved for issuance, except for shares of Common Stock issuable
upon conversion of Series A Preferred Shares and except for
212,800 shares of Common Stock issuable pursuant to Inland's
employee stock option plan, of which options for 184,960 shares
are outstanding, and 256,911 shares issuable pursuant to other
outstanding subscriptions, options and warrants. No other
options, warrants or securities convertible into Common Stock,
other than the Series A Preferred Shares, are outstanding. All
such issued and outstanding shares of capital stock of Inland are
validly issued, fully paid, non-assessable and free of any
preemptive rights.
3.06 The various reports filed by Inland with the Securities
and Exchange Commission do not contain any untrue statement of a
material fact, or omit to state a material fact necessary to make
the statements contained therein not misleading.
IV
REPRESENTATIONS AND WARRANTIES OF
SMITH MANAGEMENT AND FARMOUT STOCKHOLDERS
Smith Management hereby represents and warrants to Inland
and Inland Production as of the date hereof and as of the Series
B Closing Date, and the Farmout Stockholders each severally
represent and warrant to Inland and Inland Production as of the
date hereof and as of the Farmout Closing Date, as follows:
4.01 Each of Smith Management and Farmout has all requisite
corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions to be performed by
Smith Management and Farmout. The execution and delivery of this
Agreement and the consummation of the Transactions to be
performed by Smith Management and Farmout have been duly and
validly authorized by all necessary action on the part of the
Boards of Directors of Smith Management and Farmout, and no other
corporate proceedings are necessary to authorize the execution
and delivery of this Agreement by Smith Management or Farmout or
to consummate the Transactions to be performed by Smith
Management or Farmout. This Agreement has been duly and validly
executed and delivered by each of Smith Management, Farmout and
the Farmout Stockholders and, assuming this Agreement constitutes
a valid and binding obligation of Inland, this Agreement
constitutes a valid and binding agreement of each of Smith
Management, Farmout and the Farmout Stockholders, enforceable
against each of Smith Management, Farmout and the Farmout
Stockholders in accordance with its terms.
4.02 Neither the execution and delivery of this Agreement by
Smith Management, Farmout and the Farmout Stockholders, the
consummation of the Transactions to be performed by Smith
Management, Farmout and the Farmout Stockholders, nor compliance
by Smith Management, Farmout and the Farmout Stockholders, with
any of the provisions hereof will (i) conflict with or result in
any breach of any provisions of the Articles of Incorporation or
by-laws of Smith Management or Farmout or any of their
Subsidiaries, (ii) require any consent, approval, authorization
or permit of, or filing with or notification to, any Governmental
Authority, except for consents, approvals, authorizations,
permits, filings or notifications which have been obtained or
made, (iii) result in a default (with or without due notice or
lapse of time or both) or give rise to any right of termination,
cancellation or acceleration under any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, contract,
license, agreement or other instrument or obligation to which
Smith Management, Farmout or the Farmout Stockholders, or any of
the Subsidiaries of Smith Management or Farmout, is a party or by
which Smith Management, Farmout or the Farmout Stockholders, or
any of the Subsidiaries of Smith Management or Farmout, or any of
their respective assets may be bound, except for such defaults
(or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained, or (iv)
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Smith Management, Farmout or the Farmout
Stockholders, any of the Subsidiaries of Smith Management or
Farmout, or any of their respective assets.
4.03 Each of Smith Management and the Farmout Stockholders
has such knowledge and experience in financial and business
matters as enables it or him to evaluate the merits and risks of
an investment in the Shares. Each of Smith Management and the
Farmout Stockholders is an "accredited investor" as such term is
defined in Rule 501 under the Securities Act. Each of Smith
Management and the Farmout Stockholders is acquiring the Common
Shares and Series B Shares, as applicable, for its or his own
account and not with the view to resale or redistribution thereof
in violation of the Securities Act. Each of Smith Management and
the Farmout Stockholders acknowledges that it or he may not
transfer the Common Shares and Series B Shares, as applicable,
except pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act, and that a legend to such
effect shall be included on the certificate representing the
Common Shares and Series B Shares.
V
COVENANTS
5.01 Between the date hereof and the Series B Closing Date,
Inland will afford to Smith Management and its authorized
representatives reasonable access (subject to tenants' rights) to
the plant, offices, warehouses, or other facilities and
properties, including oil and gas properties) and to the books
and records of Inland and its Subsidiaries, will permit Smith
Management and its representatives to make such reasonable
inspections as they may require and will cause its officers and
those of its Subsidiaries to furnish Smith Management and its
representatives with such financial and operating data,
environmental assessment and other information with respect to
the business, assets and properties of Inland and its
Subsidiaries, as applicable, as Smith Management and its
representatives may from time to time reasonably request. No
inspection or examination by Smith Management or the Farmout
Stockholders or their representatives will constitute a waiver of
any claim against Inland for misrepresentation or breach of this
Agreement. Smith Management and the Farmout Stockholders shall
hold strictly confidential all information obtained as a result
of any examination or inspection of Inland and its Subsidiaries;
provided, that Smith Management and the Farmout Stockholders
shall not be obligated to hold confidential information which (i)
was or becomes generally available to the public other than as a
result of a disclosure by Smith Management or the Farmout
Stockholders or their representatives or (ii) was or becomes
available to Smith Management and the Farmout Stockholders on a
nonconfidential basis from a source other than Inland or its
representatives, provided that such source is not bound by a
confidentiality agreement with Inland or otherwise prohibited
from transmitting the information to Smith Management and the
Farmout Stockholders.
5.02 Subject to the terms and conditions herein provided,
Inland and each of Smith Management and the Farmout Stockholders
agree to use their best efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the Transactions.
5.03 Inland and Smith Management will consult with each
other before issuing any press release or otherwise making any
public statements with respect to the existence of this Agreement
or the Transactions and shall not issue any press release or make
any public statement prior to such consultation, except as may be
required by law or by obligations pursuant to any listing
agreements between Inland and NASDAQ.
5.04 For so long as Smith Management, the Farmout
Stockholders or any of their Affiliates (which term has the
meaning given to it in Rule 405 under the Securities Act) own any
of the Common Shares or Common Stock underlying the Series B
Shares or any other securities of Inland, Inland covenants and
agrees that it will (i) maintain on a current basis the filing of
all reports required to be filed by Inland pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder; (ii) use its reasonable best efforts to
maintain its qualification for the use of Form S-3; and (iii)
cooperate with Smith Management and the Farmout Stockholders
whenever Smith Management or the Farmout Stockholders wish to
dispose of any securities of Inland owned by them or any of their
Affiliates under Rule 144 and/or Rule 144A under the Securities
Act, to the full extent feasible in order to consummate such
disposition.
VI
CONDITIONS OF SMITH MANAGEMENT
The obligations of Smith Management to effect the closing of
the Series B Shares on the Series B Closing Date are subject to
the satisfaction of the following conditions any one or more of
which may be waived by Smith Management.
6.01 The representations and warranties contained in
Article III hereof shall be true in all material respects on and
as of the Series B Closing Date as if made on and as of the
Series B Closing Date. Inland shall have complied with all of
its obligations contained herein performance of which is required
on or prior to the Series B Closing Date. Smith Management shall
have received a certificate to the foregoing effect executed by
an officer of Inland.
6.02 The Certificate of Designation in the form of Exhibit
"B" shall have been filed with the Secretary of State of
Washington on or before the Series B Closing Date.
6.03 Smith Management shall, prior to the Series B Closing
Date, be satisfied, in its sole discretion, with the results of
its legal and business due diligence of Inland.
6.04 There shall have been no Material Adverse Effect from
the end of the quarter covered by Inland's most recently filed
Form 10-QSB until the Series B Closing Date with regard to the
obligation of Smith Management (or its designee) to purchase the
Series B Shares.
6.05 Trust Company of the West shall have consented to the
issuance of the Series B Shares by Inland and the redemption of
the Series A Preferred Stock on or before the Series B Closing
Date.
6.06 Inland shall send a notice of redemption to all holders
of Series A Preferred Stock simultaneously with the Series B
Closing.
6.07 Smith Management shall have received an opinion of
Inland's counsel at Series B Closing, in the form reasonably
requested by Smith Management.
VII
INLAND'S CONDITIONS
The obligations of Inland to issue and sell the Series B
Shares are subject to the satisfaction of the following
conditions any one or more of which may be waived by Inland:
7.01 The representations and warranties contained in
Article IV hereof shall be true in all material respects on and
as of the Series B Closing Date as if made on and as of the
Series B Closing Date with regard to the issuance of the Series B
Shares. Smith Management shall have complied with all of its
obligations contained herein performance of which is required on
or prior to the Series B Closing Date. Inland shall have
received a certificate to the foregoing effect executed by an
officer of Smith Management, as applicable.
7.02 Trust Company of the West shall have consented to the
issuance of the Series B Shares by Inland and the redemption of
the Series A Preferred Stock on or before the Series B Closing
Date.
VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 The Series B Transactions contemplated hereby may be
abandoned at any time prior to the Series B Closing, as follows:
(a) By the mutual written consent of Inland, Inland
Production and Smith Management;
(b) On or after August 1, 1996, by Inland and Inland
Production, on the one hand, or by Smith Management, on the other
hand, if the Series B Closing shall not have occurred prior
thereto; provided, however, that a party shall not have the right
to terminate this Agreement pursuant to this Section 8.01 (b) if
the Series B Closing failed to occur on or before such date by
reason of the breach by such party of any of its obligation
hereunder; or
(c) by Inland and Inland Production, on one hand, or Smith
Management, on the other hand, if there shall have been a breach
by the other party of any of the covenants contained herein or if
any representation or warranty made by any other party is untrue
in any material respect.
8.02 In the event of the abandonment of the Series B
Transactions pursuant to Section 8.01(a), (b) or (c), this
Agreement shall forthwith become void and have no effect with
respect to the Series B Transactions, without any liability in
respect to the Series B Transactions on the part of any party
other than Section 9.05. In the event of the abandonment of the
Series B Transactions, this Agreement will remain in full force
and effect with respect to the Farmout Transactions and Inland
will remain absolutely and unconditionally obligated to deliver
the Common Shares in accordance with Section 1.01 hereof.
IX
MISCELLANEOUS
9.01 This Agreement (a) constitutes the entire agreement
among the parties with respect to subject matter hereof and
supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject
matter hereof and (b) shall not be assigned by operation of law
or otherwise.
9.02 All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed
to have been duly given when delivered person, by facsimile, or
by registered or certified mail (postage prepaid, return receipt
requested) to respective parties as follows:
If to Inland or Inland Production:
c/o Inland Resources Inc.
475 17th Street
Suite 1500
Denver, Colorado 80202
Fax: 303-296-4070
Attn: Kyle R. Miller
With a copy to:
Glast, Phillips and Murray, P.C.
2200 One Galleria Tower
13355 Noel Road, L.B. 48
Dallas, Texas 75240-6657
Fax: 214-419-8329
Attn: Mike Parsons
If to Smith Management or the Farmout Stockholders:
c/o Smith Management Company, Inc.
885 Third Avenue
34th Floor
New York, New York 10022
Attn: David A. Persing, Senior Vice President and
General Counsel
9.03 This Agreement shall be governed by and construed in
accordance with the laws in the state of New York applicable to
agreements made and wholly performed in the State of New York.
9.04 This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the sane agreement.
9.05 Except as otherwise provided herein or in the
Registration Rights Agreement, each party shall bear and pay all
costs and expenses incurred by it or on its behalf in connection
with transactions contemplated hereby, including fees and
expenses of its representatives.
9.06 Except as provided in this Section 9.06, neither Smith
Management, the Farmout Stockholders nor Inland may assign its or
his rights or obligations hereunder; provided, however, Smith
Management may assign its rights to acquire the Series B Shares
to an affiliate, provided such assignment shall not relieve Smith
Management of its obligations hereunder; and provided, further,
that the Farmout Stockholders may designate other persons as the
recipients of the Common Shares, as long as they do so in
compliance with applicable securities laws.
IN WITNESS WHEREOF, the parties have caused this agreement
to be executed and delivered as of the day and year first set
above.
INLAND RESOURCES INC.
By: /s/ Kyle R. Miller
Kyle R. Miller, President
INLAND PRODUCTION COMPANY
By: /s/ Kyle R. Miller
Kyle R. Miller, President
SMITH MANAGEMENT COMPANY,
INC.
By: /s/ David Persing
Its: Senior Vice
President
FARMOUT INC.
By: /s/ Bruce M. Schnelwar
Its: Senior Vice
President
/s/ Randall D. Smith
Randall D. Smith, Individually
/s/ Jeffrey A. Smith
Jeffrey A. Smith, Individually
/s/ John W. Adams
John W. Adams, Individually