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SERIES A SENIOR CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
By and between
NTR ACQUISITION CO.
and
OCCIDENTAL PETROLEUM INVESTMENT CO
SERIES A SENIOR CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
TABLE OF CONTENTS
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1. PURCHASE AND SALE OF STOCK.
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1
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1.1
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Sale
and Issuance of Series A Preferred Stock.
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1
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1.2
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Closing.
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1
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1.3
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Pre-Closing
Agreements.
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2
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2. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.
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3
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2.1
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Organization;
Good Standing; Qualification.
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3
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2.2
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Authorization.
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4
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2.3
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Valid
Issuance of Preferred and Common Stock.
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4
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2.4
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Governmental
Consents.
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4
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2.5
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Capitalization
and Voting Rights.
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5
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2.6
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Subsidiaries.
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6
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2.7
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Contracts
and Other Commitments.
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6
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2.8
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Related-Party
Transactions.
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6
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2.9
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Registration
Rights.
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7
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2.10
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Permits.
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7
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2.11
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Compliance
With Other Instruments.
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7
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2.12
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Litigation.
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8
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2.13
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Disclosure.
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8
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2.14
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Offering.
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8
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2.15
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Title
to Property and Assets; Leases.
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8
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2.16
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SEC
Reports.
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9
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2.17
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Changes.
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9
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2.18
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Tax
Returns, Payments, and Elections.
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10
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2.19
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Insurance.
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11
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2.20
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Minute
Books.
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11
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2.21
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Investment
Company.
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11
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2.22
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Listing
and Maintenance Requirements.
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11
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2.23
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Representations
and Warranties Regarding Kern.
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12
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3. REPRESENTATIONS AND WARRANTIES OF
OCCIDENTAL.
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12
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3.1
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Organization;
Good Standing; Qualification.
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12
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3.2
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Authorization.
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12
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3.3
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Governmental
Consents.
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12
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3.4
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Compliance
With Other Instruments.
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12
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3.5
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Litigation.
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13
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3.6
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Purchase
Entirely for Own Account.
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13
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3.7
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Restricted
Securities.
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13
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3.8
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Legends.
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13
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3.9
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Financing.
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14
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3.10
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Blank
Check Company.
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14
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4. CONDITIONS OF OCCIDENTAL’S OBLIGATIONS AT
CLOSING.
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14
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4.1
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Representations
and Warranties.
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14
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4.2
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Performance.
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14
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4.3
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Compliance
Certificate.
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15
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4.4
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Qualifications.
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15
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4.5
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No
Action or Injunction.
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15
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4.6
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Proceedings
and Documents.
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15
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4.7
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Transaction
Closing.
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15
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4.8
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Certificate
of Designations.
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15
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4.9
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Secretary’s
Certificate.
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15
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4.10
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Opinion
of Company Counsel.
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16
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4.11
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Note,
Shareholders Agreement and Registration Rights
Agreement.
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16
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5. CONDITIONS OF THE COMPANY’S OBLIGATIONS AT
CLOSING.
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16
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5.1
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Representations
and Warranties.
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16
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5.2
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Performance.
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16
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5.3
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Qualifications.
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16
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5.4
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No
Action or Injunction.
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16
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5.5
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Transaction
Closing.
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17
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5.6
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Shareholder
Approval.
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17
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6. TERMINATION.
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17
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6.1
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Termination
of this Agreement.
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17
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6.2
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Effect
of Termination.
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17
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7. MISCELLANEOUS.
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17
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7.1
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Entire
Agreement.
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17
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7.2
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Survival
of Warranties.
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18
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7.3
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Successors
and Assigns.
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18
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7.4
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Governing
Law.
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18
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7.5
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Specific
Performance
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18
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7.6
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No
Third-Party Beneficiaries.
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18
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7.7
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Counterparts.
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19
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7.8
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Titles
and Subtitles.
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19
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7.9
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Notices.
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19
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7.10
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Finder’s
Fees.
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19
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7.11
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Expenses.
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19
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7.12
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Attorneys’
Fees.
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19
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7.13
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Amendments
and Waivers.
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20
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7.14
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Severability.
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20
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7.15
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Public
Announcements.
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20
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7.16
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Trust
Account Waiver.
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20
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7.17
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Schedule
of Exceptions.
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20
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SERIES A SENIOR CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
THIS
SERIES A SENIOR CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
(this “
Agreement ”)
is made as of the 2
nd day
of November, 2007, by and between NTR Acquisition Co., a Delaware
corporation (the “
Company ”),
and Occidental Petroleum Investment Co., a California Corporation
(“
Occidental ”).
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1 Sale and Issuance of Series A Preferred
Stock.
(a)
The
Company shall adopt and file with the Secretary of State of
the State of Delaware on or before the Closing (as defined
below) a Certificate of Designations of Preferred Stock
in
the form attached hereto as
Exhibit A (the
“
Certificate of Designations ”).
(b)
Subject
to the terms and conditions of this Agreement, Occidental
agrees to purchase at the Closing and the Company agrees to
sell and issue to Occidental, at the Closing, shares of the
Company’s Series A Senior Convertible Preferred Stock,
par value $0.0001 per share (the “
Series A Preferred Stock ”),
at a purchase price of $1000 per share (the “
Liquidation Preference Amount ”).
The number of shares of Series A Preferred Stock the Company will
sell and Occidental will purchase at the Closing will equal the
quotient of (A) the sum of (1) $35,000,000 and (2) the principal
amount of the Note (as defined below) and (3) the Accrued Interest
Amount and (B) the Liquidation Preference Amount, rounded up to the
nearest whole share.
The
“
Note ”
means that certain Promissory Note of even date herewith, in the
aggregate principal amount of up to $3,000,000, between the Company
and Occidental, together with any Additional Notes (as defined such
Promissory Note) that may be delivered or deemed delivered by the
Company thereunder. The “
Accrued Interest Amount ”
is the amount of interest accrued (and not capitalized) on the Note
through the Closing date. The Series A Preferred Stock will have
the rights, preferences, privileges and restrictions set forth in
the Certificate of Designations.
1.2 Closing.
(a)
Subject to the satisfaction or waiver of each party’s
the conditions in
Section 4 ,
the
purchase and sale of the Series A Preferred Stock shall take place
at the offices of Cleary Gottlieb Steen & Hamilton LLP
simultaneously with the Closing of the acquisition
(the “
Transaction ”),
directly or indirectly, of all outstanding shares of each class of
common stock of Kern Oil & Refining Co., a California
corporation (“
Kern ”)
from Casey Co., a California corporation (“
Casey ”)
pursuant to that certain Stock Purchase Agreement in substantially
the form attached as
Exhibit B (“
Kern Acquisition Agreement ”)
or any replacement acquisition by the Company through a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization or other similar business combination of one or more
businesses or assets in the energy business acceptable to
Occidental (“
Replacement Transaction ”),
or at such other time and place as the
Company
and Occidental shall mutually agree, either ora lly
or in writing (which time and place are designated as the
“
Closing ”).
(b)
At the Closing, the Company shall deliver to Occidental a
certificate representing the shares of Series A
Preferred
Stock and Occidental shall (i) pay an amount equal to
$35,000,000 by wire transfer of immediately available funds as
directed in a written notice by the Company not less than two
(2) Business Days in advance of the Closing and (ii) cancel
the Note. In the event that payment by Occidental is made, in
whole or in part, by cancellation of the Note, then Occidental
will surrender the Note to the Company for cancellation at the
Closing or
shall execute an instrument of cancellation in form
and
substance reasonably acceptable to the Company. In the event
that a Replacement Transaction is structured such that the
Company is not the surviving corporation or survives as a
subsidiary of another entity, then Occidental will have the
right, prior to Closing, to elect to receive at Closing, in
lieu of the shares of Series A Preferred Stock and upon
payment of the amount set forth above, the consideration that
would be receivable by a holder of that number of shares of
Common Stock as would be issuable upon conversion of the
shares of the Series A Preferred Stock that otherwise would
have been issued to Occidental at Closing (the “
Alternate Consideration ”).
1.3 Pre-Closing Agreements.
(a)
Cash Shortfall Funding .
Occidental agrees to advance up to $3,000,000 to the Company
pursuant to the Note prior to the Closing (the “
Cash Shortfall Amount ”);
provided that
all of such Cash Shortfall Amount is used for (i) the
Company’s reasonable and customary expenses associated with
negotiating and consummating this Agreement, the transactions
contemplated hereby and by the Transaction and, if applicable, the
Replacement Transaction (including, without limitation, the
reasonable fees and expenses of consultants hired to conduct
diligence and reasonable legal fees), (ii) the deposit required to
be paid by the Company under the terms of the Kern Acquisition
Agreement or, if applicable, the terms of the Replacement
Transaction and (iii) reasonable operating and other expenses of
the Company for the period during which the Company seeks to
consummate the Transaction or, if applicable, the Replacement
Transaction. Occidental will advance portions of the Cash Shortfall
Amount upon (A) the written request of the Company made from time
to time and (B) submission of reasonably detailed invoices related
to any amount requested. The Company agrees to repay all such
amounts advanced in accordance with the terms of the Note. The
Company will accept cancellation of the Note as payment for the
shares of Series A Preferred Stock under
Section 1.2 .
(b)
Option to Purchase .
If the Transaction does not close, in consideration for making
advances under the Note, Occidental will have the option,
exercisable for ninety (90) days after the closing of a Replacement
Transaction by the Company, to purchase up to three percent (3%) of
the outstanding capital stock of the surviving entity in such
transaction (in addition to the right to purchase Series A
Preferred Stock or the Alternate Consideration) at a price per
share equivalent to the
lower of (i) the quotient of (A) the closing price per share of the
Common Stock on the day preceding the closing date of such
transaction and (B) the number of shares of capital stock of the
surviving entity into which each share of Common Stock was
converted in such transaction (which number shall be deemed to be
one if the Common Stock was not converted in such transaction) (the
“
Conversion Ratio ”)
and (ii) the quotient of (A) the average of the closing price for
each of the thirty (30) trading days immediately preceding the date
on which the Company announces such transaction and (B) the
Conversion Ratio, payable, in part, through cancellation of the
Note. The
“closing price” for each day shall be the last reported
sales price or, in case no such reported sales take place on such
day, the average of the closing bid and asked prices for such day,
in each case as reported by the American Stock Exchange, or if such
last sale price is not so reported by the American Stock Exchange,
or if no such sale takes place on such day, the mean between the
closing bid and asked prices for the Common Stock as reported by
the American Stock Exchange. If the shares of Common Stock are not
reported by the American Stock Exchange, the “
closing price ”
for each day shall be the last reported sales price or, in case no
such reported sales take place on such day, the average of the
closing bid and asked prices for such day, in each case as reported
by the national exchange on which the Common Stock is traded. For
the purpose hereof, trading day shall mean a day on which the
specified securities exchange shall be open for business or, if the
shares of Common Stock shall not be listed on such exchange for
such period, a day with respect to which quotations of the
character referred to in the next preceding sentence shall be
reported.
2. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.
The
Company hereby represents and warrants to Occidental that as
of the date
of this Agreement and as of the Closing, except as set forth
on a Schedule of Exceptions furnished to Occidental and its
counsel, specifically identifying the relevant subparagraph(s)
hereof, which exceptions are incorporated by reference into
this Agreement:
2.1 Organization; Good Standing;
Qualification.
The
Company is a corporation duly organized, validly existing, and
in good standing
under the laws of the State of Delaware, has all requisite
corporate power and authority to own and operate its
properties and assets and to carry on its business
as now conducted and as presently proposed to be conducted, to
execute and
deliver this Agreement, the Shareholders Agreement to be
entered into at Closing between the Company and Occidental
(“
Shareholders Agreement ”),
the Registration Rights Agreement to be entered into at Closing
between the Company and Occidental (“
Registration Rights Agreement ”),
the Note and any other agreement to which the Company is a party
the execution and delivery of which is contemplated hereby (the
“
Ancillary Agreements ”),
to file the Certificate of Designations with the Secretary of State
of the State of Delaware, to issue and sell the Series A Preferred
Stock and the Common Stock issuable upon conversion thereof, and to
carry out the provisions of this Agreement, the Shareholders
Agreement, the Registration Rights Agreement, the Note, the
Certificate of Designations and any Ancillary Agreement. The
Company is duly qualified and is authorized to transact business
and is in good standing as a for eign
corporation in each jurisdiction in which the failure to so qualify
would have a
material adverse effect on its business, properties, prospects, or
financial condition.
2.2 Authorization.
All
corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Shareholders
Agreement, the Registration Rights Agreement, the Note and any
Ancillary Agreement, the filing of the Certificate of
Designations with the Secretary of State of the State of
Delaware, the performance of all obligations of the Company
hereunder and thereunder at the Closing, the borrowing under
the Note and the authorization, issuance (or reservation for
issuance), sale, and delivery of the Series A Preferred Stock
being sold hereunder and the Common Stock issuable upon
conversion thereof has been taken or will be taken prior to
the Closing, and this Agreement, the Shareholders Agreement,
the Registration Rights Agreement, the Note and any Ancillary
Agreement, when executed and delivered, and the Certificate of
Designations when filed with the Secretary of State of the
State of Delaware, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with
their respective terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and
other laws
of
general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent that the
indemnification provisions contained in the Registration
Rights Agreement may be limited by applicable laws. The sale
of the Series
A Preferred Stock is not and the subsequent conversion of the
Series A Pre ferred
Stock into Common Stock will not be subject to any preemptive
rights or rights of first refusal.
2.3 Valid Issuance of Preferred and Common
Stock.
The
Series A Preferred Stock that is being purchased by
Occidental under
this Agreement, when issued, sold, and delivered in accordance
with the terms of this Agreement for the consideration
expressed in this Agreement, will be duly and validly issued,
fully paid, and nonassessable, and will be free of
restrictions on transfer other
than restrictions on transfer under the Shareholders
Agreement
and under applicable state and federal securities laws. The
Common Stock issuable upon conversion of the Series A
Preferred Stock being purchased under this Agreement has been
duly and validly reserved for issuance and, upon
issuance
in accordance with the terms of the Certificate of
Designations, will be duly and validly
issued, fully paid, and nonassessable and will be free of
restrictions on transfer other than restrictions on transfer
under the Shareholders Agreement and under applicable state
and federal securities laws.
2.4 Governmental Consents.
No
consent, approval, qualification, order or authorization of,
or filing with,
any local, state, or federal governmental authority is
required on the part of
the
Company in connection with the Company’s valid
execution, delivery, or per formance
of this Agreement, the offer, sale or issuance of the Series A
Preferred Stock
by the Company or the issuance of Common Stock upon conversion
of the
Series
A
Preferred
Stock, except (i) the filing of the Certificate of Designations
with the Secretary
of State of the State of Delaware, and (ii) such filings as will
have or have been made
prior to the Closing.
The
Company has not offered shares of its Series A Preferred Stock
or any substantially similar securities of the Company for
sale to, or solicited any offers to buy from, or otherwise
approached or negotiated in respect thereof with, any person
other than Occidental, and the Company will not take any
action that will cause the issuance and delivery of the shares
of its Series A Preferred Stock as contemplated hereby to
constitute a violation of the Securities Act.
2.5 Capitalization and Voting Rights.
The
authorized capital of the Company will consist immediately
prior to the Closing of (a) 1,000,000
shares
of preferred stock, par value $0.0001, of which 40,000 shares will,
as of the Closing, have been designated Series
A Preferred Stock, all of which may be sold pursuant to this
Agreement and shall have t he
rights, privileges and preferences set forth in the Certificate of
Designations, and
(b) 200,000,000
shares of Common Stock .
On
the date hereof, 30,557,205 shares of Common Stock are
outstanding.
The
outstanding shares of Common Stock have been duly authorized
and validly issued, are fully paid and nonassessable, and were
issued in accordance with the registration or qualification
provisions of the Securities Act and any relevant state
securities laws or pursuant to valid exemptions
therefrom.
Except
for (i) the conversion privileges of the holders of Series A
Preferred Stock, (ii) the rights provided in
Section 2. 3
and
2.4 of
the Shareholders Agreement, (iii) the rights provided in
Section 1.3 ,
(iv) 30,427,205 warrants to purchase Common Stock pursuant to that
certain Amended and Restated Warrant Agreement, dated as of January
28, 2007 between the Company and American Stock Transfer &
Trust Company, as warrant agent (the “
Warrants ”),
and (v) options or other rights to purchase up to 1,500,000 shares
of Common Stock pursuant to stock option or stock purchase plans or
agreements that may be approved by the Company’s Board of
Directors prior to Closing, there are no outstanding options,
warrants, rights (including conversion or preemptive rights and
rights of first refusal), proxy or stockholder agreements or
agreements of any kind for the purchase or acquisition from the
Company or any of its Subsidiaries or any of their respective
securities. No
stock plan, stock purchase, stock option or other agree
ment
or understanding between the Company and any holder of any equity
securities of the Company or rights to purchase equity securities
of the Company provides
for acceleration or other changes in the vesting provisions or
other terms of
such securities, as the result of any merger, sale of stock or
assets, change in control or other similar transaction by the
Company. Neither the Company nor any of its Subsidiaries is a party
or subject to any agreement or understanding, and, to the best of
the Compa ny’s
knowledge, there is no agreement or understanding between any
persons that affects
or relates to the voting or giving of written consents with respect
to any security of the Company or any of its Subsidiaries or the
voting by a director of the Company.
2.6 Subsidiaries.
The
Company does not own or control, directly or indirectly, any
interest in any other corporation, partnership, limited
liability company, association, or other business entity
(“
Subsidiaries ”),
except that, prior to the Closing it may form a new wholly-owned
Subsidiary which, at the closing of the Transaction, would acquire
all of the capital stock of Kern, free and clear of any liens or
encumbrances. Such newly-formed Subsidiary shall have no
liabilities or assets other than, at the Closing, the capital stock
of Kern and any liabilities or assets arising from assignment to
such Subsidiary of the Kern Acquisition Agreement. The Company is
not a participant in any joint venture, partnership, or similar
arrangement.
2.7 Contracts and Other Commitments.
The
Company does not have and is not bound by any contract,
agreement, lease, commitment, or proposed transaction, written
or oral, absolute or contingent, other than (i) the
Kern
Acquisition Agreement ,
(ii) contracts for the purchase of supplies
and services that were entered into in the ordinary course of
business and that
do not require commitments by the Company to pay more than
$100,000, and do not extend for more than one (1) year beyond
the date of this Agreement, (iii) sales contracts entered into
in the ordinary course of business, and (iv) contracts
terminable at will by the Company on no more than thirty (30)
days’ notice without cost or liability to the Company
and that do not involve any employment or consulting
arrangement and are not material to the conduct of the
Company’s business. For the purpose of this paragraph,
employment and consulting contracts and contracts with labor
unions, and license agreements and any other agreements
relating to the Company’s acquisition or disposition of
patent, copyright, trade secret or other proprietary rights or
technology (other than standard intellectual property
assignment and confidentiality agreements with employees and
consultants and standard end-user license agreements) shall
not be considered to be contracts entered into in the ordinary
course of business.
2.8 Related-Party Transactions.
(a)
No employee, officer, stockholder or director of the Company
or member of his or her immediate family is indebted to the
Company, nor is the Company indebted (or committed to make
loans or extend or guarantee credit) to any of them, other
than (i) for payment of salary for services rendered, (ii)
reimbursement for reasonable expenses incurred on behalf of
the Company, and (iii) for other standard employee benefits
made generally available to all employees, (b)
to
the best of the Company’s knowledge,
none of such persons has any direct or indirect ownership
interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business
relationship, or any firm or corporation that competes with
the Company, except that employees, stockholders, officers, or
directors of the Company and members of their immediate
families may own stock in publicly traded companies that may
compete with the Company, and (c) to the best of the
Company’s knowledge, no officer, director, or
stockholder or any member of their immediate families is,
directly or indirectly, interested in any material contract
with the Company (other than such contracts as relate to any
such person’s ownership of capital stock or other
securities of the Company).
2.9 Registration Rights.
Except
as provided in the Registration Rights Agreement and that
certain Registration Rights Agreement dated as of January 30,
2007 between the Company, NTR Partners LLC and the other
persons named therein (“
Existing Registration Rights Agreement ”),
the Company is presently not under any obligation and has not
granted any rights to register under the Securities Act any of its
presently outstanding securities or any of its securities that may
subsequently be issued.
2.10 Permits.
The
Company has all
franchises,
permits, licenses, and any similar authority necessary for the
conduct of its business as now being conducted by it, the lack
of which could materially and adversely affect the business,
properties, prospects, or financial condition of the Company,
and believes it can obtain, without undue burden or expense,
any similar authority for the conduct of its business as
presently planned to be conducted if failure to obtain them
might result, either individually or in the aggregate, in any
material adverse change in the assets, business, operations,
properties, prospects, or condition (financial or otherwise)
of the Company (as such business is presently conducted and as
it is presently proposed to be conducted) (“
Material Adverse Change ”).
The Company is not in default in any material respect under any of
such franchises, permits, licenses or other sim-ilar
authority.
2.11 Compliance With Other Instruments.
The
Company is not in violation or default in any material respect
of any provision of its Second Amended and Restated
Certificate of Incorporation (the “
Certificate of Incorporation ”)
or Bylaws or in any material respect of any provision of any
mortgage, indenture, agreement, (including the Existing
Registration Rights Agreement) instrument, or contract to which it
is a party or by which it is bound or, to the best of its
knowledge, of any federal or state judgment, order, writ, decree,
statute, rule, regulation or restriction applicable to the Company.
The execution, delivery, and performance by the Company of this
Agreement, the Shareholders Agreement, the Registration Rights
Agreement, the borrowing under the Note and any Ancillary
Agreement, and the consummation of the transactions contemplated
hereby and thereby, will not (i) result in any such material
violation or be in material conflict with or constitute, with or
without the passage of time or giving of notice, either a material
default under any such provision or an event that results in the
creation of any material lien, charge, or encumbrance upon any
assets of the Company or any of its Subsidiaries or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, au
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