Document:

Exhibit 10.3

 

REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of April 6, 2004, by and among KERR-MCGEE
CORPORATION, a Delaware
corporation (“Parent”), WESTPORT ENERGY LLC, a Delaware limited liability
company (“WELLC”), MEDICOR FOUNDATION, a Liechtenstein foundation (“Medicor”),
and EQT INVESTMENTS, LLC, a
Delaware limited liability company and successor-in-interest to ERI
Investments, Inc. (“EQT” and each of WELLC, Medicor and EQT, individually, a
“Holder,” and, collectively, the “Holders”).

 

INTRODUCTION

 

Each of the Holders will receive certain shares of
Parent’s common stock, par value $1 per share (the “Parent Common Stock”), in
respect of the common stock of the Company, par value $.01 per share (the “Company
Common Stock”), now beneficially owned by such Holder, upon the
consummation of the merger of the Company with and into a wholly-owned
subsidiary of Parent (the “Merger”) pursuant to an Agreement and Plan
of Merger, dated as of April 6, 2004 (the “Merger Agreement”), among
the Company, Parent and such wholly-owned subsidiary of Parent.

 

Each of the Holders and certain other stockholders
of the Company are parties to a Registration Rights Agreement, dated as of
October 1, 2003 (the “Company Registration Rights Agreement”).  As a condition to its willingness to enter
into the Merger Agreement, Parent has required that each of the Holders and the
other stockholders of the Company that are parties to the Company Registration
Rights Agreement agree, and each such Holder and other stockholder is willing
to agree, to terminate in its entirety the Company Registration Rights
Agreement effective as of the closing of the Merger.

 

In connection the agreement to terminate the Company
Registration Rights Agreement, each of the Holders and Parent desire to enter
into this Agreement providing for, among other things, certain registration
rights applicable to the Holders in connection with the Merger.

 

In consideration of the agreement to terminate the
Company Registration Rights Agreement, and the representations, warranties,
covenants and conditions herein and in the Merger Agreement, the parties hereto
hereby agree as follows:

 

SECTION 1

REGISTRATION RIGHTS

 

1.1         Certain Definitions.  As
used in this Agreement:

 

(a)          The term “beneficially owned” refers to the meaning of such term as
provided in Rule 13d-3 promulgated under the Exchange Act.

 

(b)         The term “Exchange Act” means the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
SEC thereunder, all as the same shall be in effect from time to time.

 

 

(c)          The term “person” means any person, individual, corporation,
partnership, limited liability company, trust or other non-governmental entity
or any governmental agency, court, authority or other body (whether foreign,
federal, state, local or otherwise).

 

(d)         The term “Holder” means each stockholder of the Company set forth on
the signature pages hereto (and any permitted assignee of such stockholder
pursuant to Section 5.3), provided, however, that any such person
shall cease to be a Holder at such time as the registration rights to which
such person is entitled hereunder terminate pursuant to Section 1.9.

 

(e)          The terms “register,” “registered” and “registration”
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or
ordering by the SEC of the effectiveness of such registration statement.

 

(f)            The term “Registrable Securities” means (i) Parent
Common Stock to be issued to the Holders pursuant to the Merger, (ii) any
Parent Common Stock issued to the Holders by Parent upon any stock split, stock
dividend, recapitalization, or similar event, and (iii) any securities of any
person issued or issuable in respect of such Parent Common Stock as a result of
a merger, consolidation, sale of assets, sale or exchange of capital stock or
similar transaction.

 

(g)         The term “Securities Act” means the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
SEC thereunder, all as the same shall be in effect at the time.

 

(h)         The term “SEC” means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.

 

(i)             The term “Transfer” means offer, sell, contract to
sell or otherwise dispose of.

 

(j)             All other capitalized terms used but not
defined herein have the meanings set forth in the Merger Agreement.

 

1.2         Shelf Registration. 
Parent shall use its reasonable efforts to file promptly (and in any
event within 30 days) after filing of the Registration Statement on Form S-4 to
be filed in connection with the Merger, a registration statement on Form S-3 or
other appropriate form pursuant to Rule 415 under the Securities Act (the “Registration
Statement”), and shall use its reasonable efforts to file such other
documents as may be necessary to cause the Registration Statement to be
declared effective by the SEC at the Effective Time or as soon as practicable
thereafter (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualification under applicable
“blue sky” or other state securities laws and appropriate compliance with
applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) as would permit or facilitate the
sale and distribution by the Holders of all of the Registrable Securities then
outstanding (other than any Registrable Securities which any Holder may direct
Parent to exclude from such registration);

 

 

provided,
however, that Parent
shall not be obligated to take any action to effect any such registration,
qualification or compliance pursuant to this Article 1 in any particular
jurisdiction in which Parent would be required to execute a general consent to
service of process in effecting such registration, qualification or compliance
(unless Parent is already subject to service in such jurisdiction and except as
may be required by the Securities Act) or to qualify as a foreign corporation
in any jurisdiction where Parent is not so qualified.

 

1.3         Offerings off the Shelf Registration
Statement.

 

(a)          Each
Holder may from time to time specify by notice to Parent the specific manner of
Transferring of all or any portion of its Registrable Securities (each, an
“Offering”); provided, that such notice must be given prior to the earlier of
(i) the first anniversary of the Effective Time, or (ii) the Transfer of all
such Holder’s Registrable Securities, and Parent shall take such action as may
be required of it pursuant to Section 1.4 to effect such Offering in
accordance with such notice. 
Notwithstanding the foregoing, WELLC may not request that an Offering
pursuant to this Agreement be underwritten, and Medicor and EQT may only specify
on one occasion pursuant to this Agreement that an Offering is to be
underwritten.

 

(b)         If
Medicor or EQT (the “Requesting Holder”) intends that an Offering is to be
underwritten, the Requesting Holder shall so specify to the other Holders whose
Registrable Securities have previously not been sold in an underwritten
Offering pursuant to this Agreement (the “Other Holders”) by written notice, in
addition to providing notice to Parent pursuant to subsection (a) above
(indicating the number of Registrable Securities to be offered, the method of
distribution and the name(s) of the managing underwriter(s), which shall be
reasonably acceptable to Parent).  Upon
receipt of such notice, the Other Holders shall have the right to participate
in such underwritten Offering by giving written notice to the Requesting Holder
and to Parent as promptly as practicable but no later than 15 days thereafter,
indicating the number of Registrable Securities to be included in the
underwritten Offering; provided, however, that the Other Holders
shall not have the right to participate in such underwritten Offering if (in
the written opinion of the managing underwriter(s)) such underwritten Offering
is of a type that the Other Holders are not reasonably capable of participating
in; and provided, further, that such participation shall be
limited to an amount of Registrable Securities of such Other Holders that, when
combined with the Registrable Securities of the Requesting Holder, does not (in
the written opinion of the managing underwriter(s)) exceed the maximum amount
of Registrable Securities which can be marketed (i) at a price reasonably
related to the then current market value of such securities, or (ii) without
otherwise materially and adversely affecting the entire Offering.  By electing to participate in a Requesting
Holder’s underwritten Offering, the Other Holders will waive their right under
this Section 1.3 to request an underwritten Offering; provided, that if,
after the Other Holders have elected to participate in the Requesting Holder’s
underwritten Offering, the managing underwriter(s) reduce the number of Other
Holder’s Registrable Securities to be included in the underwritten Offering,
the Other Holders may withdraw from the Offering and their right under this Section 1.3
to request an underwritten Offering shall not be waived.  If requested in writing by the managing
underwriters with respect to any Offering that is to be underwritten (and in
which the Other Holders are reasonably capable of participating), each Holder
agrees not to effect any public sale or distribution of Registrable Securities,
or any securities convertible into or exchangeable or exercisable for
Registrable Securities, pursuant to the Registration Statement (other than
pursuant to such underwritten 

 

 

Offering), during
the period reasonably requested by the managing underwriters not to exceed
seven days prior to and 30 days following the pricing of such underwritten
Offering.

 

1.4         Obligations of Parent.  In
connection with any registration of Registrable Securities pursuant to this
Article 1, Parent shall:

 

(a)          Use its reasonable efforts to cause the Registration Statement to be
declared effective by the SEC at the Effective Time or as soon as practicable
thereafter and to remain effective until the earlier to occur of (x) the first
anniversary of the effectiveness of the Registration Statement (subject to
extension to reflect any Suspension Period) and (y) such period as will
terminate when all of the securities covered by the Registration Statement have
been disposed of in accordance with the intended methods of disposition thereof
by the Holders; provided that, notwithstanding the foregoing clause (x),
with respect to an Offering for which Parent has received notice in accordance
with Section 1.3 and which is intended to occur within a reasonable period
of time (but no later than 90 days) following such notice, Parent will use its
reasonable efforts to cause the Registration Statement to remain effective for
such longer period (not to exceed five years after the Registration Statement
is first declared effective) as in the opinion of counsel for any underwriters
a prospectus is required by law to be delivered in connection with any such
Offering by an underwriter or dealer with respect to those Registrable
Securities subject to such Offering.

 

(b)         Use its reasonable efforts to cause the Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the effective
date thereof (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the SEC
promulgated thereunder and (ii) not to contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein (as applicable, in light of the
circumstances under which they were made) not misleading.

 

(c)          Prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus (the “Prospectus”) used in
connection therewith as may be necessary to make and to keep the Registration
Statement effective and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all securities proposed to be
registered in such Registration Statement in accordance with the terms of any
Offering.  A reasonable time
prior to the filing of the Registration Statement or any prospectus or any
amendment or supplement thereto, Parent will provide copies of such documents
to the Holders participating in such Offering and provide such Holders and
their counsel with an adequate opportunity to review and comment thereon.

 

(d)         Furnish to the participating Holders such number of copies of any
Prospectus (including any preliminary Prospectus and any amended or
supplemented Prospectus), in conformity with the requirements of the Securities
Act, as the Holders may reasonably request in order to effect the offering and
sale of the shares of Registrable Securities to be offered and sold, but only
while Parent shall be required under the provisions hereof to cause the
Registration Statement to remain effective.

 

 

(e)          Subject to the proviso to Section 1.2, use its reasonable efforts
to register or qualify the shares of Registrable Securities covered by the
Registration Statement under the securities or “blue sky” laws of such states
as the participating Holders shall reasonably request and maintain any such
registration or qualification current until the earlier to occur of the time
periods set forth in Section 1.4(a).

 

(f)            Promptly notify each
Holder at any time when a prospectus relating thereto is required to be
delivered under the Securities Act within the appropriate period referred to in
Section 1.4(a), of Parent’s becoming aware that the prospectus included in
the Registration Statement, or as such prospectus may be amended or
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading in light of the circumstances then existing,
and at the request of any such Holder to promptly prepare and furnish to such
Holder a number of copies of an amendment or supplemental prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading in
the light of the circumstances then existing. 
In the event Parent shall give any such notice, each Holder shall
immediately suspend use of the prospectus.

 

(g)         Cause all such Registrable Securities to be listed on each securities
exchange on which similar securities issued by Parent are then listed and, if
not so listed, to be listed on the Nasdaq National Market or the New York Stock
Exchange.

 

(h)         Provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of the Registration Statement.

 

(i)             In connection with any Offering that is to be
underwritten, enter into such customary agreements (including underwriting
agreements in customary form for similar offerings) and take all such other actions
as a Holder or the underwriters reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities in accordance with
terms of any Offering.

 

(j)             Make reasonably available for inspection by
any Holder of Registrable Securities, any underwriter participating in any
Offering, and any attorney, accountant or other agent retained by any such
Holder or underwriter, all financial and other records, pertinent corporate
documents and properties of Parent, and use its reasonable efforts to cause
Parent’s officers, directors, employees and independent accountants to supply
all information reasonably requested by any such Holder, underwriter, attorney,
accountant or agent in connection with such Offering (including, with respect
to any Offering that is to be underwritten, using its reasonable efforts to
furnish to the underwriters for such Offering a cold comfort letter from
Parent’s accountant in customary form covering such matters as are customarily
covered by such letters).

 

(k)          In connection with any Offering that is to be underwritten, use its
reasonable efforts to provide to the underwriters for such Offering a legal
opinion of Parent’s outside counsel with respect to the registration statement,
each amendment and supplement thereto, the prospectus included therein
(including the preliminary prospectus) and such other 

 

 

documents relating thereto in customary form and covering such matters
of the type customarily covered by legal opinions of such nature.

 

(l)             In connection with any Offering that is to be
underwritten, make reasonably available its employees and personnel and
otherwise provide reasonable and customary assistance to any underwriters in
the marketing of Registrable Securities pursuant to such underwritten Offering.

 

(m)       If requested in writing by the managing underwriters, with respect to
any Offering that is to be underwritten, Parent agrees not to effect any public
sale or distribution of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, in each case for its
own account, during the time period reasonably requested by the managing
underwriters, not to exceed seven days prior to and 60days following the
pricing of any underwritten Offering (except as part of such underwritten
registration or pursuant to registrations on Form S-4 or Form S-8 or any
successor forms).

 

(n)         Reasonably cooperate with
the Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be Transferred
and not bearing any restrictive legends and enable such Registrable Securities
to be in such denominations and registered in such names as the Holders may
reasonably request at least one business day prior to the closing of any sale
of Registrable Securities.

 

1.5         Suspension of Use.  In
the event that, in the reasonable judgment of Parent (after consultation with
outside counsel), it is advisable to suspend use by the Holders of the
Registration Statement because Parent is conducting negotiations for a material
business combination or due to pending material developments or events that
have not yet been publicly disclosed and as to which Parent believes public
disclosure will be prejudicial to Parent, Parent shall deliver to the Holders
notice in writing to the effect of the foregoing, and Parent may suspend the
effectiveness of the Registration Statement for up to 30 consecutive days (a “Suspension
Period”) in any 90-day period. 
Notwithstanding the foregoing, the aggregate duration of any Suspension
Period shall not exceed 90 days in any 365-day period.  Upon receipt of such notification, the
Holders will immediately suspend all offers and Transfers of any Registrable Securities
pursuant to the Registration Statement until the earlier of (i) the expiration
of such Suspension Period or (ii) such time as Parent notifies the Holders in
writing that such Suspension Period is ended. 
Parent will use its reasonable efforts to ensure that the Registration
Statement may be used as promptly as practicable after the expiration of the
Suspension Period.

 

1.6         Expenses.

 

(a)          Except as otherwise provided in this Agreement, all expenses incurred
by Parent in connection with any registration pursuant to Section 1 of
this Agreement shall be borne by Parent. 
The costs and expenses of any such registration shall include, without
limitation, the fees and expenses of Parent’s counsel and its accountants and
all other costs and expenses of Parent incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and all
amendments and supplements thereto and the cost of furnishing copies of each
preliminary prospectus, each final prospectus and each amendment or supplement
thereto to dealers and other purchasers of the securities so registered, the
costs and expenses 

 

 

incurred in connection with the qualification of such securities so
registered under the “blue sky” laws of various jurisdictions, the fees and
expenses of Parent’s transfer agent and all other costs and expenses incurred
by Parent of complying with the provisions of this Section 1 with respect
to such registration (collectively, “Registration Expenses”).

 

(b)         Excluding the Registration Expenses, the participating Holders shall pay
all other expenses incurred on their behalf with respect to any registration
pursuant to this Section 1, including, without limitation, any counsel for
the Holders and any underwriting fees or discounts.

 

1.7         Indemnification.

 

(a)          In connection with the registration hereunder, Parent agrees to
indemnify and hold harmless, to the extent permitted by law, each Holder, its
officers and directors and each person who controls such Holder (within the
meaning of the Securities Act) against any losses, claims, damages,
liabilities, joint or several (or actions or proceedings, whether commenced or
threatened, in respect thereof), to which such Holder or any such director or
officer or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon (i) any
untrue or alleged untrue statement of a material fact contained (A) in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or (B) in any application or other document or
communication (in this Section 1.7 collectively called an “application”)
executed by or on behalf of Parent or based upon written information furnished
by or on behalf of Parent filed in any jurisdiction in order to qualify any
securities covered by such registration statement under the “blue sky” or
securities laws thereof, or (ii) any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and Parent will reimburse such Holder and each such director,
officer and controlling person for any legal or any other expenses incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that Parent shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement, or omission or alleged
omission, made in such registration statement, any such prospectus or
preliminary prospectus or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with written information
prepared and furnished to Parent by such Holder expressly for use therein or by
such Holder’s failure to deliver a copy of any registration statement or
prospectus or any amendments or supplements thereto after Parent has furnished
such Holder with a sufficient number of copies of the same.

 

(b)         In connection with the registration hereunder, each such Holder will
furnish to Parent in writing such information and documents as Parent
reasonably requests for use in connection with any registration statement or
prospectus and any amendment or supplement thereto and as shall be required in
connection with any registration, qualification or compliance referred to in
this Section 1 (including, without limitation, a “plan of distribution”
section, reasonably acceptable to Parent) and, to the extent permitted by law,
will indemnify and hold harmless Parent, its directors and officers and each
other person who controls Parent (within the meaning of the Securities Act) against
any losses, claims, damages, liabilities, joint or 

 

 

several, to which Parent or any such director or officer or controlling
person may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon (i)
any untrue or alleged untrue statement of a material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or in any application or (ii) any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is made in such registration statement, any such
prospectus or preliminary prospectus or any amendment or supplement thereto, or
in any application, in reliance upon and in conformity with written information
prepared and furnished to Parent by such Holder expressly for use therein, and
such Holder will reimburse Parent and each such director, officer and
controlling person for any legal or any other expenses incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided that the obligation to indemnify
will be individual to each Holder and will be limited to the net amount of
proceeds received by such Holder from the sale of Registrable Securities
pursuant to such registration statement.

 

(c)          Any person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party.  If such defense is
assumed, the indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld).  An
indemnifying party who is not entitled to, or (within a reasonable time) elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim.

 

(d)         The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling person of such
indemnified party and will survive the Transfer of Registrable Securities by
any Holder thereof.  Parent also agrees
to make such provisions, to the full extent provided by law, for contribution
to any indemnified party in the event Parent’s indemnification pursuant to
Section 1.7(a) is unavailable for any reason.

 

1.8         Information by Holder. 
Each Holder covenants and agrees that any information provided to Parent
pursuant to this Agreement shall not contain any untrue statement of a material
fact relating to or provided by such Holder, or omit to state any material fact
relating to or provided by such Holder required to be stated or necessary to
make such statements, in the light of the circumstances under which they were
made, not misleading.

 

1.9         Termination of Registration Rights.  The
registration rights granted pursuant to this Article 1 shall terminate as
to any Holder upon the earlier to occur of the time periods set forth in
Section 1.4(a); provided, however, that the provisions of
Section 1.7 shall survive such 

 

 

termination with respect to claims and liabilities arising out of
actions, statements, or omissions occurring prior to such termination.

 

SECTION 2

CERTAIN REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

 

Each Holder, severally and not jointly, represents and
warrants to Parent as follows:

 

2.1         Binding Agreement. 
Each Holder has the capacity to execute and deliver this Agreement and
to consummate the transactions contemplated hereby.  Each Holder has duly and validly executed and delivered this
Agreement and this Agreement constitutes a legal, valid and binding obligation
of each Holder, enforceable against each Holder in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors’ rights
generally and by general equitable principles (regardless of whether enforceability
is considered in a proceeding in equity or at law).

 

2.2         No Conflict.  Neither the execution and
delivery of this Agreement by each Holder, nor the performance by each Holder
of its obligations hereunder will, (i) require any consent, approval, authorization
or permit of, registration, declaration or filing (except for such filings as
may be required under the federal securities laws and the rules and regulations
thereunder, any “blue sky” or other state securities laws or as would not
reasonably be expected to prevent or materially delay or otherwise impair each
Holder’s ability to perform its obligations hereunder) with, or notification
to, any governmental entity, (ii) if each Holder is an entity, result in a
violation of, or default under, or conflict with any provision of its
certificate of incorporation, bylaws, partnership agreement, limited liability
company agreement or similar organizational documents, (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination,
cancellation, or acceleration) under any contract, trust, agreement,
instrument, commitment, arrangement or understanding applicable to each Holder
or each Holder’s Registrable Securities, or result in the creation of a
security interest, lien, charge, encumbrance, equity or claim with respect to
any of each Holder’s Registrable Securities, except, in the case of clause
(iii), as would not prevent or materially delay or otherwise materially impair
each Holder’s ability to perform its obligations hereunder, (iv) require any
consent, authorization or approval of any person other than a governmental
entity, except, in the case of clause (iv), as would not reasonably be expected
to prevent, materially delay or otherwise materially impair each Holder’s
ability to perform its obligations hereunder or (v) violate or conflict with
any order, writ, injunction, decree, rule, regulation or law applicable to each
Holder or each Holder’s Registrable Securities.

 

SECTION 3

CERTAIN REPRESENTATIONS AND WARRANTIES OF PARENT

 

Parent represents and warrants to the Holders as follows:

 

3.1         Binding Agreement. 
Parent is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has full corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.  The
execution and delivery of this Agreement by Parent and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Parent, and no other corporate proceedings on the part of
Parent are necessary to authorize the execution, delivery and performance of
this Agreement by Parent and the 

 

 

consummation of the transactions contemplated hereby (except as
described in Section 4.2 of the Merger Agreement).  Parent has duly and validly executed this
Agreement and this Agreement constitutes a legal, valid and binding obligation
of Parent, enforceable against Parent in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors’ rights generally and
by general equitable principles (regardless of whether enforceability is
considered in a proceeding in equity or at law).

 

3.2         No Conflict.  Neither the execution and
delivery by Parent of this Agreement, nor the performance by Parent of its
obligations hereunder will, (i) require any consent, approval,
authorization or permit of, registration, declaration or filing (except for
such filings as may be required under the federal securities laws and the rules
and regulations thereunder, any “blue sky” or other state securities laws or as
would not reasonably be expected to prevent or materially delay or otherwise
impair Parent’s ability to perform its obligations hereunder) with, or
notification to, any governmental entity, (ii) result in a violation of, or
default under, or conflict with any provision of its Certificate of
Incorporation or Bylaws, (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation, or acceleration) under any
contract, trust, agreement, instrument, commitment, arrangement or
understanding applicable to Parent, except, in the case of clause (iii), as
would not prevent or materially delay or otherwise materially impair Parent’s
ability to perform its obligations hereunder, (iv) require any consent,
authorization or approval of any person other than a governmental entity,
except, in the case of clause (iv), as would not reasonably be expected to
prevent, materially delay or otherwise materially impair Parent’s ability to
perform its obligations hereunder or (v) violate or conflict with any order,
writ, injunction, decree, rule, regulation or law applicable to Parent.

 

SECTION 4

CERTAIN COVENANTS

 

4.1         Reporting Requirements. 
Parent shall use its reasonable efforts to file the reports required to
be filed by it under the Securities Act and the Exchange Act in a timely manner
in accordance with the requirements of the Securities Act and the Exchange Act
and, for so long as any Registrable Securities remain outstanding, if at any
time Parent is not required to file such reports, it will, upon the reasonable
request of any Holder, make available such information necessary to permit
sales pursuant to Rule 144 under the Securities Act.  Upon the request of a Holder, Parent shall promptly deliver to
such Holder a written statement as to whether it has complied with such
requirements.

 

SECTION 5

MISCELLANEOUS

 

5.1         Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS 

 

 

OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW).

 

5.2         Jurisdiction.  Each of the parties hereto (i) consents to
submit itself to the personal jurisdiction of any state or federal court
located in New York, New York, Borough of Manhattan in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement, (ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and
(iii) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than
a state or federal court located in New York, New York, Borough of Manhattan.

 

5.3         Successors and Assigns. 
This Agreement (and the rights and obligations hereunder) shall not be
assigned (i) by Parent without the prior written consent of the other parties
hereto, and (ii) by a Holder without the prior written consent of Parent;
provided, that any Holder may, by giving notice to Parent, assign its rights
and obligations hereunder in connection with the Transfer of all but not less
than all of the such Holder’s Registrable Securities to a person which controls,
is controlled by or is under common control with such Holder.  This Agreement will be binding upon, inure
to the benefit of and be enforceable by each party and such party’s heirs,
beneficiaries, executors, successors, representatives and permitted assigns.

 

5.4         Third Party Beneficiaries. 
This Agreement is not intended and shall not be construed to create any
rights or remedies in any parties other than the Holders and Parent and no
other person shall assert any rights as third party beneficiary hereunder.

 

5.5         Entire Agreement. 
This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement and supersedes all other prior
agreements and understandings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof.

 

5.6         Amendment.  This Agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto; provided,  that
with respect to the obligations of any individual Holder under this Agreement,
this Agreement may be amended with the approval of such Holder and Parent
notwithstanding the failure to obtain the approval of other Holders.

 

5.7         Notices; Dates.  All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, mailed by certified
mail (return receipt requested) or sent by overnight carrier or by telecopier
(upon confirmation of receipt) to the parties at the following addresses or at
such other address as shall be specified by the parties by like notice: (i) if
to Parent, to the appropriate address set forth in Section 9 of the Merger
Agreement; and (ii) if to a Holder, to the appropriate address set forth on Schedule I
hereto.  In the event that any date
provided for in this Agreement falls on a Saturday, Sunday or legal holiday,
such date shall be deemed extended to the next business day.

 

5.8         Counterparts. 
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, and delivered by means of 

 

 

facsimile transmission or otherwise, each of which when so executed and
delivered shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement.

 

5.9         Severability.  If
any provision of this Agreement shall be held to be illegal, invalid or
unenforceable under any applicable law, then such contravention or invalidity
shall not invalidate the entire Agreement. 
Such provision shall be deemed to be modified to the extent necessary to
render it legal, valid and enforceable, and if no such modification shall
render it legal, valid and enforceable, then this Agreement shall be construed
as if not containing the provision held to be invalid, and the rights and
obligations of the parties shall be construed and enforced accordingly.

 

5.10             Remedies.  Without limiting the remedies
available to the Holders, Parent acknowledges that any failure by Parent to
comply with its obligations under this Agreement may result in material
irreparable injury to the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, any Holder shall be entitled to
injunctive relief or the enforcement of other equitable remedies, without bond
or other security, to compel performance and to prevent breaches of this
Agreement by Parent and specifically to enforce the terms and provisions
hereof, in addition to any other remedy to which they may be entitled, at law
or in equity.

 

5.11             Termination.  This Agreement shall
terminate and be of no further force and effect if the Merger Agreement is
terminated in accordance with its terms.

 

5.12             Headings.  The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

 

[The
remainder of this page is intentionally left blank.]

 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed, individually or by its respective officer thereunto
duly authorized, as of the date first written above.

 

 

	
   

  	
  KERR-MCGEE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Gregory F. Pilcher

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gregory F. Pilcher

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President, General Counsel and

  Corporate Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EQT INVESTMENTS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Kenneth J. Kubacki

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kenneth J. Kubacki

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MEDICOR FOUNDATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Anton M. Lotzer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Anton M. Lotzer

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Albin A. Johann

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Albin A. Johann

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WESTPORT ENERGY LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: WESTPORT INVESTMENTS LIMITED, its

  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Robert A. Haas

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert A. Haas

  
	
   

  	
   

  	
  Title:

  	
  Director

  
						

 

 

SCHEDULE I

 

Addresses for Notices:

 

If to Parent:

 

Kerr-McGee
Corporation

Kerr-McGee Center

123 Robert S. Kerr
Avenue

Oklahoma City,
Oklahoma  73102

Attention:  General Counsel

Fax:  (405) 270-3649

 

with a copy to:

 

Covington &
Burling

1330 Avenue of the
Americas

New York, New
York  10019

Attention: Scott
F. Smith

Fax:  (212) 841-1010

 

With a copy to:

 

Akin Gump Strauss
Hauer & Feld LLP

1700 Pacific
Avenue, Suite 4100

Dallas, Texas  75201-4675

Attention:  Michael E. Dillard, P.C.

Fax Number:  (214) 969-4343

Phone Number:  (214) 
969-2800

 

If to Medicor:

 

Medicor Foundation

Landstrasse 11

Postfach 130

9495 Triesen

Liechtenstein

Attention:  Anton M. Lotzer

Fax Number:  (423) 233-3934

Phone Number:  (423) 239-6050

 

With a copy to:

 

Richard M. Petkun

Greenberg Traurig,
LLP

1200 17th Street,
Suite 2400

Denver, CO  80202

Telephone:  (303) 572-6500

Telecopy:  (303) 572-6540

 

 

And to:

 

Michael Russell

Dr. Richard J.
Haas Partners

Dukes Court

32 Duke Street,
St. James’s

London, SW1Y 6DF

Fax Number:  020.7.321.5242

Phone Number:  020.7.321.5200

 

If to WELLC:

 

Westport Energy LLC

c/o Westport Investments Limited

Lyford Manor

Lyford Cay

P.O. Box N-7776

Nassau, Bahamas

Fax Number:  (242) 362-5788

 

With a copy to:

 

Richard M. Petkun

Greenberg Traurig,
LLP

1200 17th Street,
Suite 2400

Denver, CO  80202

Telephone:  (303) 572-6500

Telecopy:  (303) 572-6540

 

And to:

 

Michael Russell

Dr. Richard J.
Haas Partners

Dukes Court

32 Duke Street,
St. James’s

London, SW1Y 6DF

Fax Number:  020.7.321.5242

Phone Number:  020.7.321.5200

 

If to EQT Investments, LLC:

 

EQT Investments, LLC

801 West Street, 2nd Floor

Wilmington, DE 19801-1545

Attention: Treasurer

Telephone: (302) 656-5590

Telecopy: (302) 428-1410

 

 

With a copy to:

 

Johanna G. O’Loughlin

Vice President, General Counsel and Secretary

Equitable Resources, Inc.

One Oxford Centre, Suite 3300

Pittsburgh, PA 15219

Telephone: (412) 553-7760

Telecopy: (412) 553-5970

 

And to:

 

Stephen W. Johnson, Esquire

Reed Smith LLP

435 Sixth Avenue

Pittsburgh, PA 15219-1886

Telephone: (412) 288-3131

Telecopy: (412) 288-3063EXHIBIT 10.1

 

 

EMPLOYMENT
AGREEMENT

 

OF

 

WAYNE A. CASE

 

This
Employment Agreement (“Agreement”) is made this 1st day of January, 2004, by
and between Schmitt Industries, Inc., an Oregon corporation (“Schmitt”), and
Wayne A. Case (“Case”).

 

In consideration of the promises and mutual covenants
set forth in this Agreement, Schmitt and Case promise and agree as follows:

 

1.             Term of Employment.   Schmitt hereby employs Case, and Case hereby
accepts employment with Schmitt, on and subject to the terms and conditions
provided in this Agreement for a period of three (3) years commencing on the
date hereof and ending on December 31, 2006 (the “Term”), unless earlier
terminated pursuant to Section 5.

 

2.             Scope of Duties.

 

2.1          Duties.   Case shall serve as the President and Chief
Executive Officer (“CEO”) of Schmitt, and, subject to the policies of Schmitt’s
Board of Directors (“Board”) as enacted from time to time, shall be responsible
for all of Schmitt’s management and day-to-day operations.  Case shall report directly to Schmitt’s
Board of Directors.  Subject to all of
Schmitt’s then-current budgets, business plans and policies, Case shall have
the authority to conduct, and the responsibility for, all of Schmitt’s
operations and day-to-day business activities including, but not limited to,
the following:

 

2.1.1       In conjunction with the Board, the development,
achievement, administration and reporting of current and long-range strategic
objectives, plans, budgets and policies;

 

2.1.2       The achievement of immediate and long-term forecasts and
goals established by the Board from time to time; and,

 

2.1.3       The supervision, development, identity and coordination
of Schmitt’s management team.

 

2.2          Facilities and Staff.             Case will be furnished
with such facilities, services, staff and working conditions, consistent with
Schmitt’s current practices, as are suitable to his position and appropriate
for the performance of his duties.

 

2.3          Full Time and Attention.    Case will loyally and
conscientiously devote substantially all of his business and professional time,
attention and energies (exclusive of periods of sickness and disability and
such normal holiday and vacation periods as have been established by Schmitt)
to the affairs of Schmitt.  Notwithstanding
the above:

 

2.3.1       Case may expend a reasonable amount of time for
educational, professional or charitable activities; and

 

2.3.2       This Agreement shall not be interpreted to prohibit Case
from making passive personal investments or conducting private business
affairs, as long as those activities do not materially interfere with the
services required under this Agreement.

 

2.4          Competitive Activities.   During the Term of his employment
hereunder, unless specifically authorized by the Board of Directors, Case shall
not, directly or indirectly, either as an officer, director, investor,
employee, consultant, agent, independent contractor, principal, partner,
shareholder, or in any other capacity whatsoever, engage or participate in any
business activities or business entity that is, in any way, competitive with
any of the business of Schmitt.

 

2.5          Indemnification and Insurance.   During the Term of his employment
hereunder, Case will receive the full benefit of the indemnification provisions
for officers and directors that are then contained in Schmitt’s Articles of
Incorporation and Bylaws, and shall be a named insured under Schmitt’s
Director’s and Officer’s liability insurance policy, as such indemnification
provisions and insurance policies are in effect from time to time.

 

 

 

3.             Compensation and Expenses.

 

3.1          Compensation.   During the term of this Agreement, Schmitt
will pay Case an initial base salary of $162,315.12 per year, payable at such
times and in such increments as are consistent with Schmitt’s usual policies.  Any proposed salary change will be
determined by the Compensation Committee of the Board; provided, however, that
Case’s salary shall never be less than the amount set forth above, unless
agreed to in writing by Case.  Case
shall also be eligible for bonuses as may be determined by the Compensation
Committee.

 

3.2          Expenses.   Schmitt will reimburse Case for all
reasonable travel, entertainment and miscellaneous expenses incurred by him in
connection with the performance of his duties under this Agreement.  Such reimbursement will be made in
accordance with general policies and procedures of Schmitt in effect from time
to time relating to reimbursement.  The
Company, at its expense, shall provide Case with an automobile and shall reimburse
him for all expenses in connection therewith.

 

3.3          Taxes and Withholding.   Schmitt shall withhold or deduct from sums
due to Case hereunder all amounts required by applicable state or federal law.

 

4.             Benefits.

 

4.1          Vacation.   During the term of this Agreement, Case
will be entitled to at least 25 days of vacation per year, to be taken and
accounted for in accordance with Schmitt’s policies for same in effect from
time to time, or such additional time as is in accordance with Schmitt’s
published rules regarding vacation.

 

4.2          Group Benefits.   Case shall participate in any pension,
insurance or other employee benefit plan that is maintained by Schmitt from
time to time for employees similarly situated.

 

5.             Termination.

 

5.1          Termination.   Notwithstanding the Term of this Agreement,
Case’s employment with Schmitt may be terminated upon the occurrence of any one
of the following events.  With respect
to Sections 5.1.2, 5.1.3 and 5.1.7, the determination to terminate Case under
those provisions must be made in good faith by all of the directors (except
Case if he is at the time a director):

 

5.1.1       The conviction of Case for any crime that is a felony
under applicable law;

 

5.1.2  Fraud by Case in the performance of his duties
or in his reporting to the management of Schmitt;

 

5.1.3       At Schmitt’s option, if any one of the following
conditions occurs and persists after Schmitt has given Case prior written
notice of its intent to terminate his employment with the specific reasons
therefore, and Case fails to correct the specified problems within a period of
30 days of the effective date of the notice:

 

(A)          Chronic alcoholism, drug abuse, or addiction;

 

(B)           Material failure of Case to apply his full-time
attention and best efforts to the business of Schmitt; or

 

(C)           Material breach by Case of any of the terms and conditions of this Agreement.

 

5.1.4       The death of Case;

 

5.1.5       At Case’s option, in the event of the insolvency of
Schmitt;

 

5.1.6       At Case’s option, with or without cause, by Case giving
Schmitt not less than 90 days prior written notice of termination; or

 

5.1.7       At Schmitt’s option, without cause, by Schmitt giving
Case written notice of termination.

 

 

5.2          Effect of Termination.

 

5.2.1       If Case’s employment under this Agreement is terminated
pursuant to Section 5.1.7, Case shall be entitled to receive, for the entire
Payment Period (as defined below), (i) the equivalent monthly salary in effect
immediately prior to termination to that set forth in Section 3.1.1; and,
(ii) participation for the balance of the entire Payment Period to extent
eligible in all relevant employee benefit programs to which he would have been
entitled if he had continued to serve as President and CEO of Schmitt during
the Payment Period.  All payments
required to be made to Case pursuant to this Section 5.2.1 shall continue to be
made regardless of whether Case secures other employment with any other
employer.  For purposes of this section,
the term “Payment Period” shall mean a period commencing on the date Case is
terminated pursuant to Section 5.1.7 and ending on the date that is three (3)
years after the date of this Agreement.

 

5.2.2       If Case’s employment under this Agreement is terminated
for any other reason than that set forth in Sections 5.1.4 or 5.1.7, Case shall
(i) have no rights to compensation or reimbursement for salary or bonus for any
period subsequent to the date of such termination, (ii) have no right to
participate in any employee benefit programs under Section 4 for any period
subsequent to the date of such termination; provided that Schmitt will
remain obligated to meet any obligations that it may have under COBRA, and
(iii) have no right to any bonus that would have been payable on a date
subsequent to Case’s termination date.

 

5.3          Effect of Merger, Dissolution or
Transfer of Assets.   In the event of any voluntary
or involuntary dissolution of Schmitt, any merger or consolidation of Schmitt
with a third party whereby Schmitt is not a surviving entity, or any sale of
all or substantially all of the assets of Schmitt to any third party and in the
further event that the surviving or acquiring entity declines to assume this
Agreement and/or Case’s employment is terminated by Schmitt or the surviving
entity within 90 days of the effective date thereof, such nonassumption or
termination will be deemed to have taken place pursuant to section 5.1.7 and
Case shall be entitled to the benefits set forth in section 5.2.1.

 

6.             Inventions.   Inventions made or conceived entirely or partially by Case while
employed by Schmitt will be the property of Schmitt.  As used in this Section, the term “inventions” includes all
creations, whether or not patentable or copyrightable, and all ideas, reports,
or other creative works, including, without limitation, computer programs,
manuals and related material, which relate to the existing or proposed business
of Schmitt or any other business or research and development effort conducted
by Schmitt.  All of Case’s inventions
which are copyrightable shall be works for hire.  Case will cooperate with Schmitt to patent or copyright all inventions
by executing all documents tendered by Schmitt for such purpose.  Case hereby grants to Schmitt a power of
attorney coupled with an interest, whereby Schmitt may execute and deliver any
and all documents necessary to so patent or copyright any inventions in Case’s
name, place and stead as if such execution and delivery were done by him, with
such power of attorney accruing in the event that he fails to cooperate as
required by the preceding sentence. 
Notwithstanding the above, this provision does not apply to any
invention which was developed solely on Case’s own time and not using any of
Schmitt’s equipment, supplies, facilities or information, unless (a) the
invention relates directly to the business of Schmitt or to Schmitt’s actual or
demonstrably anticipated research or development, or (b) the invention results
from any work performed by Case for Schmitt. 
The obligations contained in this Section shall survive the termination
of this Agreement.

 

7.             Nondisclosure of Confidential
Information.   Case acknowledges that during the term of this Agreement he will learn
and will have access to confidential information regarding Schmitt and its
affiliates, including without limitation (i) confidential or secret plans,
programs, documents, agreements or other material relating to the business,
services or activities, and (ii) trade secrets, market reports, customer
investigations, customer lists, files, accounts and other similar information
that is proprietary information (collectively referred to as “Confidential
Information”).  Case acknowledges that
such Confidential Information is a special, valuable and unique asset.  All records, file materials and Confidential
Information obtained by Case in the course of employment with Schmitt or its
affiliates or service as a director of Schmitt or its affiliates are
confidential and proprietary and shall remain the exclusive property of the
appropriate entity owning the same. 
Case will not for any reason use for his own benefit, or for the benefit
of any person with whom he may be associated, any Confidential Information or
disclose any such Confidential Information to any person for any reason or
purpose whatsoever without the prior written consent of Schmitt, unless such
Confidential Information previously shall have became public knowledge through
no action or omission of Case.  Case,
within three (3) days from the date upon which his employment with Schmitt is
terminated or otherwise upon the request of Schmitt, shall return to Schmitt
any and all documents and material that constitutes Confidential
Information.  The obligations contained
in this Section shall survive the termination of this Agreement.

 

8.             Specific Performance.   Schmitt and Case recognize that the services
rendered under this Agreement by Case are special, unique and of an
extraordinary character. Accordingly, in the event of any breach by Case of the
provisions of Section 6, 7 or 8 of this Agreement and in addition to any other
remedies available to Schmitt by law, Schmitt may specifically enforce Case’s
obligations under such sections.

 

 

9.             Miscellaneous.

 

9.1          Assignability.   The rights and obligations of Schmitt under this
Agreement shall inure to the benefit of and be binding up the successors and
assigns of Schmitt.  The rights and obligations
of Case hereunder may not be assigned or alienated and any attempt to do so by
Case will be void.

 

9.2          Separability.   If any provision of this Agreement otherwise is deemed to be invalid or
unenforceable or is prohibited by the laws of the state or jurisdiction where
it is to be performed, this Agreement shall considered divisible as to such
provisions and such provision shall be inoperative in such state or
jurisdiction and shall not be part of the consideration moving from either of
the parties to the other.  The remaining
provisions of this Agreement shall be valid and binding and of like effect as
though such provision were not included.

 

9.3          Notice.   All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have duly given if personally delivered,
telexed or telecopied to, or, if mailed, when mailed to the other party by
certified mail, return receipt requested, at (a) in the case of Schmitt, the
location of its principal executive offices, or (b) in the case of Case, the
location of his principal residence or last known principal residence.

 

9.4          Jurisdiction and Venue.   The jurisdiction and venue of all actions
between the parties shall lie exclusively in Multnomah County, Oregon.

 

9.5          Governing Law.   The validity, performance, construction and
effect of this Agreement shall be governed by the laws of the State of Oregon,
without giving effect to the conflict of laws rules thereof.

 

9.6          Arbitration.   The parties shall settle by arbitration any
controversy or claim arising out of or relating to this Agreement, including
without limitation, the making, performance, or interpretation of this
Agreement.  The arbitration shall be
conducted in Portland, Oregon in accordance with the then-current Commercial
Arbitration Rules of the American Arbitration Association. The arbitration
shall be held before a single arbitrator (unless otherwise agreed by the
Parties). The arbitrator shall be chosen from a panel of attorneys
knowledgeable in the fields of business and employment law in accordance with
the then-current Commercial Arbitration Rules of the American Arbitration
Association. If the arbitration is commenced, the Parties agree to permit
discovery proceedings of the type provided by the Oregon Rules of Civil
Procedure both in advance of, and during recesses of, the arbitration
hearings.  The Parties further agree
that the arbitrator shall have the authority to grant injunctive relief,
including preliminary injunctive relief, and that an arbitrator’s order for
such relief may be entered in and enforced by a federal or state court of
competent jurisdiction in Oregon. The prevailing Party shall be entitled to its
reasonable and actually incurred attorneys’ fees arising in connection with the
enforcement of its rights hereunder, as determined by the arbitrator. The
Parties agree that all facts and other information relating to any arbitration
arising under this Agreement shall be kept confidential to the fullest extent
permitted by law.  The prevailing Party
in any arbitration regarding this Agreement may enter the arbitration award in
a federal or state court of competent jurisdiction in Oregon.

 

9.7          Waiver; Amendment.   The waiver by any party to this Agreement
of a breach of any provision hereof by any party shall not be construed as a
waiver of any subsequent breach by any party. 
No provision of this Agreement may be terminated, amended, supplemented,
waived or modified other than by an instrument in writing signed by the party
against whom the enforcement of the termination, amendment, supplement, waiver
or modification is sought.

 

9.8          Advice of Counsel.   Case acknowledges that he has had sufficient opportunity to review this
Agreement with counsel of his choosing before signing.

 

9.9          Entire Agreement.   This Agreement constitutes the entire
agreement between the parties regarding the subject matter, and there are no
other understandings, either written or oral, which affect the terms hereof.  This Agreement may be supplemented, modified
or amended only by a subsequent written agreement between the parties.

 

	
  DATED the day and year first above written.

  	
   

  
	
   

  	
   

  
	
  SCHMITT INDUSTRIES, INC.

  	
   

  
	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Wayne A. Case

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