Document:

Exhibit 10.13

	
 
    

 

 

CONTRIBUTION AGREEMENT

 

 by and between

 

 BONANZA CREEK ENERGY COMPANY, LLC,

 

and

 

BONANZA CREEK ENERGY, INC.

 

 December 23, 2010

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I. DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II. CONTRIBUTION   TRANSACTION
    	
4
    
	
2.1
    	
Contribution of BCEOC Membership Interests to NEWCO
    	
4
    
	
2.2
    	
Issuance of New Certificates
    	
4
    
	
2.3
    	
Certificate Legends
    	
4
    
	
2.4
    	
Fractional Shares
    	
4
    
	
2.5
    	
Transfer Taxes
    	
4
    
	
2.6
    	
Compliance with Provisions in LLC Agreement
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE III. CLOSING
    	
5
    
	
3.1
    	
Time and Place
    	
5
    
	
3.2
    	
Deliveries at Closing
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE IV. REPRESENTATIONS   AND WARRANTIES OF BCEC
    	
5
    
	
4.1
    	
Organization and Good Standing
    	
5
    
	
4.2
    	
Authority and Enforceability
    	
5
    
	
4.3
    	
No Conflict; Required Filings and Consents
    	
5
    
	
4.4
    	
Ownership
    	
6
    
	
4.5
    	
Accredited Investor
    	
6
    
	
4.6
    	
Restricted Securities
    	
6
    
	
4.7
    	
Investment Intent
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE V. REPRESENTATIONS   AND WARRANTIES OF NEWCO
    	
6
    
	
5.1
    	
Organization and Power
    	
6
    
	
5.2
    	
Authorizations; Execution and Validity
    	
7
    
	
5.3
    	
Capitalization
    	
7
    
	
5.4
    	
Consents
    	
7
    
	
5.5
    	
No Defaults or Conflicts
    	
8
    
	
5.6
    	
Holmes Contribution Agreement
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE VI. COVENANTS
    	
8
    
	
6.1
    	
Ordinary Course of Business
    	
8
    
	
6.2
    	
Regulatory Matters
    	
8
    
	
6.3
    	
Commercially Reasonable Efforts
    	
8
    
	
6.4
    	
Officers and Directors
    	
9
    
	
6.5
    	
Access to Information
    	
9
    
	
6.6
    	
Section 351
    	
9
    
	
6.7
    	
Management Incentive Plan
    	
9
    
	
6.8
    	
Amended and Restated Certificate of Incorporation and   Bylaws
    	
9
    
	
6.9
    	
Further Assurances
    	
10
    

 

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TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE VII. CONDITIONS
    	
10
    
	
7.1
    	
Conditions to Obligations of Each Party
    	
10
    
	
7.2
    	
Conditions to Obligations of NEWCO
    	
10
    
	
7.3
    	
Conditions to Obligations of BCEC
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII. TERMINATION
    	
11
    
	
8.1
    	
Termination
    	
11
    
	
8.2
    	
Effect of Termination
    	
12
    
	
8.3
    	
Fees and Expenses
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE IX. MISCELLANEOUS
    	
12
    
	
9.1
    	
Waiver and Amendment
    	
12
    
	
9.2
    	
Nonsurvival of Representations and Warranties
    	
12
    
	
9.3
    	
Assignment
    	
12
    
	
9.4
    	
Notices
    	
12
    
	
9.5
    	
Governing Law
    	
13
    
	
9.6
    	
Severability
    	
13
    
	
9.7
    	
Counterparts
    	
14
    
	
9.8
    	
Headings
    	
14
    
	
9.9
    	
Enforcement of the Contribution Agreement
    	
14
    
	
9.10
    	
Entire Agreement; Third Party Beneficiaries
    	
14
    

 

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EXHIBITS
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
—
    	
Amended   and Restated Certificate of Incorporation
    
	
 
    	
 
    	
 
    
	
Exhibit B
    	
—
    	
Amended   and Restated Bylaws
    
	
 
    	
 
    	
 
    
	
Exhibit C
    	
—
    	
Form of   Holmes Contribution Agreement
    
	
 
    	
 
    	
 
    
	
Exhibit D
    	
—
    	
Shareholders   Agreement
    
	
 
    	
 
    	
 
    
	
Exhibit E
    	
—
    	
Management   Incentive Plan
    
	
 
    	
 
    	
 
    
	
DISCLOSURE SCHEDULES
    
	
 
    	
 
    	
 
    
	
Schedule   6.4
    	
 
    	
—
    	
Officers   and Directors
    

 

v

 

CONTRIBUTION AGREEMENT

 

THIS CONTRIBUTION AGREEMENT, dated as of December 23, 2010 (this “Contribution Agreement”), is by and between Bonanza Creek Energy Company, LLC, a Delaware limited liability company (“BCEC”) and Bonanza Creek Energy, Inc., a Delaware corporation (“NEWCO”).

 

W I T N E S S E T H:

 

WHEREAS, BCEC currently owns 100% of the outstanding membership interests (“BCEOC Membership Interests”) of Bonanza Creek Energy Operating Company, LLC (“BCEOC”);

 

WHEREAS, BCEC has agreed to transfer and contribute to NEWCO all of the outstanding BCEOC Membership Interests in exchange for shares of NEWCO Class A Common Stock (defined herein);

 

WHEREAS, prior to the BCEC’s contribution of the BCEOC Membership Interests, BCEC will assign to BCEOC, and BCEOC will assume primarily liability for, certain indebtedness of BCEC;

 

WHEREAS, pursuant to that certain WFC Investment Agreement (defined herein) of even date herewith between NEWCO and certain investors set forth on the signature pages thereof, the investors will invest $265 million into NEWCO in exchange for NEWCO Class A Common Stock (“WFC Contribution”);

 

WHEREAS, in addition to and simultaneous with the foregoing contributions, NEWCO also will acquire the outstanding equity of Holmes Eastern Company, LLC from its equity owners (“Holmes Contribution”);

 

WHEREAS, the parties intend for the foregoing transfers to qualify under Section 351(a) of the Internal Revenue Code of 1986, as amended (the “Code”); and

 

WHEREAS, in connection with the closing of the transactions set forth in this Contribution Agreement, NEWCO also will (i) adopt the Management Incentive Plan (defined herein), and (ii) the holders of NEWCO Class A Common Stock will enter into the Shareholders Agreement (defined herein).

 

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements herein contained, the parties hereto agree as follows:

 

ARTICLE I.
 DEFINITIONS

 

The terms set forth below in this Article I shall have the meanings ascribed to them below or in the part of this Contribution Agreement referred to below:

 

 

“Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the general rules and regulations under the Securities Exchange Act of 1934, as in effect on the date of this Contribution Agreement.

 

“Amended and Restated Bylaws” means that certain form of Amended and Restated Bylaws of NEWCO set forth on Exhibit B.

 

“Amended and Restated Certificate of Incorporation” means that certain form of Amended and Restated Certificate of Incorporation of NEWCO set forth on Exhibit A.

 

“BCEC” has the meaning set forth in the introductory paragraph hereto.

 

“BCEC Board” means the board of managers of BCEC.

 

“BCEOC” has the meaning set forth in the recitals hereto.

 

“BCEOC Membership Interests” has the meaning set forth in the recitals hereto.

 

“Business Day” means any day other than a Saturday, a Sunday or any other day when banks are not open for business generally in the State of New York.

 

“Closing” has the meaning set forth in Section 3.1 hereto.

 

“Closing Date” has the meaning set forth in Section 3.1 hereto.

 

“Code” has the meaning set forth in the recitals hereto.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Contribution Agreement” has the meaning set forth in the introductory paragraph hereto.

 

“Effective Time” means the date and time of the closing of the WFC Contribution.

 

“Governmental Authorities” means the federal, state, county, city and political subdivisions in which any property of NEWCO or BCEC, respectively, is located or which exercises jurisdiction over any such property or entity, and any agency, department, commission, board, bureau or instrumentality of any of them which exercises jurisdiction over any such property or entity.

 

“Holmes Contribution” has the meaning set forth in the recitals hereto.

 

“Holmes Contribution Agreement” means that certain acquisition agreement between NEWCO and the equity owners of Holmes Eastern Company, LLC dated December 23, 2010, the form of which is attached as Exhibit C hereto.

 

“Law” means any federal, state, local or foreign law, statute, rule, ordinance, code or regulation.

 

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“LLC Agreement” means that certain Bonanza Creek Energy Operating Company, LLC Operating Agreement dated May 4, 2006.

 

“Management Incentive Plan” has the meaning set forth in Section 6.7.

 

“Material Adverse Effect” means a material adverse effect on the business, operations, prospects, properties (including intangible properties), assets, operating results or condition (financial or otherwise) liabilities or reserves of NEWCO and BCEC, taken as a whole; provided, however, that a general deterioration in the economy or changes in oil and gas prices or other changes affecting the oil and gas industry generally shall not be deemed to be a Material Adverse Effect.

 

“NEWCO” has the meaning set forth in the introductory paragraph hereto.

 

“NEWCO  Board” means the board of directors of NEWCO.

 

“NEWCO Class A Common Stock” means the Class A common stock of NEWCO, par value $0.001 per share.

 

“NEWCO Class B Common Stock” means the Class B common stock of NEWCO, par value $0.001 per share.

 

“Order” means any order, judgment, injunction, ruling, writ, award, decree, statute, Law, ordinance, rule or regulation.

 

“Person” means an individual, corporation, partnership (limited or general), limited liability company, trust, joint stock company, Governmental Authority, unincorporated association or other legal entity.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Shareholders Agreement” means that certain shareholders agreement, in substantially the form as Exhibit D, to be executed and delivered by the holders of Class A Common Stock.

 

“Subsidiary” or “Subsidiaries” means, with respect to any Person, each entity as to which such Person (either alone or through or together with any other Subsidiary) (i) owns beneficially or of record or has the power to vote or control, 50% or more of the voting securities of such entity or of any class of equity interests of such entity the holders of which are ordinarily entitled to vote for the election of the members of the board of directors or other persons performing similar functions, (ii) in the case of partnerships, serves as a general partner, (iii) in the case of a limited liability company, serves as a managing member or owns a majority of the equity interests or (iv) otherwise has the ability to elect a majority of the directors, trustees or managing members thereof.

 

“WFC Contribution” has the meaning set forth in the recitals hereto.

 

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“WFC Investment Agreement” means that certain agreement of even date herewith by and among NEWCO and the Purchasers defined therein and executing the signature pages thereto and covering the WFC Contribution.

 

ARTICLE II.
 CONTRIBUTION TRANSACTION

 

2.1           Contribution of BCEOC Membership Interests to NEWCO.  Immediately prior to the Effective Time, BCEC shall contribute all of the BCEOC Membership Interests to NEWCO in exchange for 6,272,851 shares of NEWCO Class A Common Stock.

 

2.2           Issuance of New Certificates.  At the Effective Time, NEWCO shall issue to BCEC a certificate or certificates representing the number of shares of NEWCO Class A Common Stock to be issued to such Person pursuant to Sections 2.1.

 

2.3           Certificate Legends.  The certificates evidencing the NEWCO Class A Common Stock delivered pursuant to Section 2.2 shall bear a legend substantially in the form set forth below and containing such other information as NEWCO may deem necessary or appropriate:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.  THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO A SHAREHOLDERS AGREEMENT DATED AS OF DECEMBER 23, 2010, AS MAY BE AMENDED FROM TIME TO TIME, BY AND AMONG THE ISSUER AND CERTAIN OF THE ISSUER’S STOCKHOLDERS.  A COPY OF SUCH SHAREHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.

 

2.4           Fractional Shares.  No fractional shares of NEWCO Class A Common Stock or scrip shall be issued as a result of the transactions contemplated herein.  Any fractional share of NEWCO Class A Common Stock which would otherwise be issuable as a result of such transactions shall be rounded up to the nearest whole share.

 

2.5           Transfer Taxes.  All transfer, documentary, sales, use, stamp, registration and other such taxes and fees incurred in connection with the contribution transaction contemplated by Article II of this Contribution Agreement shall be borne by NEWCO.

 

2.6           Compliance with Provisions in LLC Agreement.  Pursuant to Section 18 of the LLC Agreement, no member of BCEOC may sell, assign or transfer its membership interest unless such sale, assignment or transfer is in compliance with applicable federal and state securities laws and is consented to unanimously by all other members of BCEOC.  Because BCEC is the sole member of BCEOC and based on the representations set forth herein, the

 

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parties hereto agree that the contribution described in Section 2.1 is in compliance with Section 18 of the LLC Agreement.

 

ARTICLE III.
 CLOSING

 

3.1           Time and Place.  The closing of the transactions contemplated hereby (the “Closing”) shall be held at the offices of Mayer Brown LLP located 1675 Broadway, New York, New York 10019 at 10:00 a.m., local time, immediately prior to the Effective Time; provided that all of the conditions contained in Article VII have been satisfied or waived, or at such other place or time as the parties hereto may mutually agree.  The date of the Closing is referred to herein as the “Closing Date.”

 

3.2           Deliveries at Closing.  Subject to the provisions of Article VII hereof, at the Closing there shall be delivered the certificates and other documents required to be delivered pursuant to Article VII hereof.

 

ARTICLE IV.
 REPRESENTATIONS AND WARRANTIES OF BCEC

 

BCEC represents and warrants to NEWCO that the statements contained in this Article IV are correct and complete as of the date hereof.

 

4.1           Organization and Good Standing.  BCEC is a limited liability company, validly existing and in good standing under the Laws of the State of Delaware, and has all requisite power and authority to execute, deliver and perform its obligations under this Contribution Agreement and to consummate the transactions contemplated hereby.

 

4.2           Authority and Enforceability.  The execution and delivery by BCEC of this Contribution Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary company action and no other company proceedings are necessary to consummate the transactions contemplated hereby.  This Contribution Agreement has been duly and validly executed and delivered and constitutes a valid and binding obligation on BCEC, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization and similar Laws affecting creditors generally and by the availability of equitable remedies.

 

4.3           No Conflict; Required Filings and Consents.  The execution and delivery of this Contribution Agreement by BCEC, and the performance by BCEC of the transactions contemplated hereby or thereby will not violate, conflict with, require any consent under or result in a violation or breach of, or constitute a default (with or without due notice or lapse of time or both) under any organizational document of BCEC or BCEOC, contract or other instrument or obligation to which BCEC or BCEOC is a party or violate any Law or Order of any Governmental Authority binding upon BCEC or BCEOC other than, in each case, where such failure, conflict, violation or breach would not have a material adverse effect on the ability of BCEC to consummate the transactions contemplated hereby.  No consent of or registration, declaration, or filing with any Governmental Authority is required by or with respect to BCEC in

 

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connection with the execution and delivery of this Contribution Agreement by BCEC or the consummation of the transactions contemplated hereby.

 

4.4           Ownership.  BCEC is the sole holder of record of and beneficial owner of all the BCEOC Membership Interests.  On the Closing Date, NEWCO will receive good and valid title to the BCEOC Membership Interests owned by BCEC, free and clear of all liens.

 

4.5           Accredited Investor.  BCEC is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the Commission.

 

4.6           Restricted Securities.  BCEC understands that the shares of NEWCO Class A Common Stock will not have been registered pursuant to the Securities Act or any applicable state securities laws, that the shares of NEWCO Class A Common Stock will be characterized as “restricted securities” under federal securities laws, and that under such laws and applicable regulations the shares of NEWCO Class A Common Stock cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.  In this connection, BCEC represents that it is familiar with Rule 144 promulgated under the Securities Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act.  A legend indicating that the shares of NEWCO Class A Common Stock have not been registered under applicable federal and state securities laws and referring to the restrictions on transferability and sale of the NEWCO Class A Common Stock pursuant to this Contribution Agreement or otherwise may be placed on any certificate(s) or other document delivered to BCEC or any substitute therefor, and any transfer agent of NEWCO may be instructed to require compliance therewith.

 

4.7           Investment Intent.  The NEWCO Class A Common Stock is being acquired for the own investment portfolio and account (and not on behalf of, and without the participation of, any other Person) of BCEC with the intent of holding the NEWCO Class A Common Stock for investment and without the intent of participating, directly or indirectly, in a distribution of the NEWCO Class A Common Stock and not with a view to, or for resale in connection with, any distribution of the NEWCO Class A Common Stock in violation of applicable securities laws or any portion thereof in violation of applicable securities laws; provided, however, nothing in the foregoing shall prevent BCEC from causing a distribution to its owners as approved by the BCEC Board in its discretion at any time after the Closing Date.  As of the Closing Date, BCEC does not have plans to transfer any of the NEWCO Class A Common Stock on a specified date or to a specified person.

 

ARTICLE V.
 REPRESENTATIONS AND WARRANTIES OF NEWCO

 

NEWCO represents and warrants to BCEC that the statements contained in this Article V are correct and complete as of the date hereof.

 

5.1           Organization and Power.  NEWCO is a corporation, validly existing and in good standing under the Laws of the State of Delaware, and is qualified and in good standing to transact business in each jurisdiction in which such qualification is required by Law, except where the failure to be so qualified would not have a Material Adverse Effect.  NEWCO has all

 

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requisite corporate power and authority to execute, deliver and perform its obligations under this Contribution Agreement and to consummate the transactions contemplated hereby.  NEWCO has heretofore delivered or made available to BCEC complete and correct copies of its certificate of incorporation and bylaws, each as amended to date.

 

5.2           Authorizations; Execution and Validity.  The execution and delivery of this Contribution Agreement by NEWCO, the performance of this Contribution Agreement by NEWCO and the consummation by NEWCO of the transactions contemplated hereby and thereby to be consummated by it, have been duly authorized by all necessary corporate action and no other corporate action on the part of NEWCO is necessary with respect thereto.  This Contribution Agreement has been duly executed and delivered by NEWCO and, when duly and validly executed and delivered, will constitute a valid and binding obligation of NEWCO and is enforceable against NEWCO in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization and similar Laws affecting creditors generally and by the availability of equitable remedies.

 

5.3           Capitalization.

 

(a)           As of the date hereof, the authorized capital stock of NEWCO consists solely of 1,000 shares of NEWCO common stock.  As of the date hereof, there are an aggregate of 100 shares of Common Stock issued and outstanding, all of which shares are owned of record and beneficially, by Bonanza Creek Energy Company, LLC.  Except as contemplated by the WFC Investment Agreement and in the Holmes’ Contribution Agreement, future issuances of equity or convertible debt in connection with financing transactions or acquisitions that the NEWCO Board reasonably determines to be in the best interests of NEWCO and its stockholders, and with respect to options, warrants, rights or other equity based awards issued as part of reasonable compensation plans approved by the NEWCO Board, as of the Closing Date, there shall be no outstanding options, subscriptions, warrants, calls, commitments, pre-emptive rights or other rights obligating NEWCO to issue or sell any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock, or otherwise requiring NEWCO to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock of NEWCO or any rights to participate in the equity or net income of NEWCO.  All of the issued shares of NEWCO’s capital stock were issued, and to the extent purchased or transferred, have been so purchased or transferred, in compliance with all applicable Laws, including federal and state securities Laws, and any preemptive rights and any other statutory or contractual rights of any NEWCO Stockholder.

 

(b)           NEWCO has no Subsidiaries.  NEWCO does not own, directly or indirectly, any capital of or other equity interest in or has any other investment in any other Person.

 

5.4           Consents.  Neither the execution and delivery by NEWCO of this Contribution Agreement nor the consummation or performance by NEWCO of the transactions contemplated by this Contribution Agreement to be consummated or performed by it will require prior to the Closing (on the part of NEWCO) any consent from, authorization or approval or other action by,

 

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notice to or declaration, filing or a registration with, any Governmental Authority or any other third party.

 

5.5           No Defaults or Conflicts.  Neither the execution and delivery by NEWCO of this Contribution Agreement nor the consummation or performance by NEWCO of the transactions contemplated by this Contribution Agreement to be consummated or performed by it (i) results or will result in any violation of the certificate of formation or company agreement of NEWCO; or (ii) subject to obtaining the required consent, if any, from NEWCO’s senior lender, if any, violates or conflicts with, or constitutes a breach of any of the terms or provisions of or a default under, or results in the creation or imposition of any lien upon any property or asset of NEWCO, the trigger of any charge, payment or requirement of consent, or the acceleration or increase of the maturity of any payment date under: any material contract to which NEWCO is a party or any applicable Law or Order to which NEWCO or any of its respective properties is subject, other than, in each case, where such failure, conflict or breach would not have a Material Adverse Effect.

 

5.6           Holmes Contribution Agreement.  NEWCO has executed and delivered the Holmes Contribution Agreement in substantially the same form as set forth on Exhibit C and is bound by the terms thereof.

 

ARTICLE VI.
 COVENANTS

 

6.1           Ordinary Course of Business.  Except as otherwise contemplated herein or in connection with the WFC Investment Agreement, between the date of this Contribution Agreement and the earlier to occur of the Closing Date or the termination of this Contribution Agreement, BCEC will cause BCEOC to carry on its business diligently and in the ordinary and usual course and consistent with past practice, and, without limiting the generality of the foregoing, and will use commercially reasonable efforts to preserve its business organizations, keep available the services of their respective present executive officers and employees and preserve their respective present relationships with persons having business dealings with it.  Notwithstanding the foregoing, the parties agree that prior to the Closing, BCEC will assign to BCEOC certain of its indebtedness pursuant to a form of assignment mutually satisfactory to BCEC, BCEOC, and the lenders of such indebtedness.

 

6.2           Regulatory Matters.  Notwithstanding anything in this Contribution Agreement to the contrary, if any party hereto or any Affiliate thereof is required to make a filing under any such acts in connection with the transactions contemplated by this Contribution Agreement, such party agrees to make any filing in a timely manner and to use its commercially reasonable efforts to obtain any other regulatory approvals which may be required to consummate the transactions contemplated herein.  Additionally, the filing fees of such Person shall be borne by the party whose equity ownership gave rise to such filing obligation.

 

6.3           Commercially Reasonable Efforts.  Upon the terms and subject to the conditions hereof, each of the parties hereto agrees to use its commercially reasonable efforts to take, or cause to be taken, all appropriate action, and to do or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions as contemplated by this

 

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Contribution Agreement and to cooperate with NEWCO in connection with the foregoing, including NEWCO’s commercially reasonable efforts:

 

(a)           to obtain any necessary waivers, consents and approvals from other parties to material notes, licenses, agreements and other instruments and obligations;

 

(b)           to obtain any material consents, approvals, authorizations and permits required to be obtained under any Law or Order;

 

(c)           to defend all lawsuits or other legal proceedings challenging this Contribution Agreement or the consummation of the transactions as contemplated hereby; and

 

(d)           to effect promptly all necessary filings and notifications and prompt submissions of information requested by Governmental Authorities.

 

6.4           Officers and Directors.  Immediately prior to the Effective Time, NEWCO and its sole owner shall cause the officers and directors set forth on Schedule 6.4 to be appointed and elected, as applicable, to hold the positions set forth opposite their names until their successors have been duly elected or appointed and qualified.

 

6.5           Access to Information.  From the date hereof to the Effective Time, each of BCEC and NEWCO shall afford the officers, employees and representatives of each, complete access at all reasonable times to its respective officers, employees, agents, properties, books and records, as applicable, and shall furnish the others all financial, operating and other data and information as may be reasonably requested.

 

6.6           Section 351.  For United States federal income tax purposes and any applicable state or local income tax purposes, the parties hereto recognize that the contributions described in Section 2.1, as well as the WFC Contribution and the Holmes Contribution, will be treated as contributions to NEWCO in exchange for shares of NEWCO Class A Common Stock to which Section 351(a) of the Code applies.  No party shall file any income tax return or otherwise take any position for income tax purposes that is inconsistent with such treatment unless required to do so pursuant to a “determination” within the meaning of Section 1313(a) of the Code or the corresponding provision of state or local income tax Law.  Additionally, each party agrees to take no action which, alone or in combination with the actions of others, reasonably could prevent the transactions from qualifying for nonrecognition of gain or loss under Section 351(a) of the Code, including, without limitation, any prearranged sale or other disposition of NEWCO Class A Common Stock.

 

6.7           Management Incentive Plan.  The parties hereto agree to cause NEWCO to adopt a Management Incentive Plan, which will reserve for issuance a certain number of shares of NEWCO Class B Common Stock (the “Management Incentive Plan”), which form will be substantially in the same form as set forth as Exhibit E.

 

6.8           Amended and Restated Certificate of Incorporation and Bylaws.  Immediately prior to the Effective Time, NEWCO shall adopt an Amended and Restated Certificate of Incorporation substantially similar to the form attached as Exhibit A, and Amended and Restated Bylaws, substantially similar to the form attached as Exhibit B.

 

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6.9           Further Assurances.  The parties hereto agree to execute and deliver, or cause to be executed and delivered, such further instruments or documents or take such other action as may be reasonably necessary or convenient to carry out the transactions contemplated hereby.

 

ARTICLE VII.
 CONDITIONS

 

7.1           Conditions to Obligations of Each Party.  Notwithstanding any other provision of this Contribution Agreement, the respective obligations of each party to effect the transactions contemplated by this Contribution Agreement shall be subject to the fulfillment at or prior to the Closing Date of the following conditions:

 

(a)           no Order shall have been entered and remained in effect in any action or proceeding before any federal, foreign, state or provincial court or Governmental Authority or other federal, foreign, state or provincial regulatory or administrative agency or commission that would prevent or make illegal the consummation of the transactions contemplated herein; and

 

(b)           all other approvals of Governmental Authorities and of non-governmental persons or entities shall have been obtained (i) the granting of which is necessary for the consummation of the transactions contemplated herein and (ii) the non-receipt of which will have a Material Adverse Effect.

 

7.2           Conditions to Obligations of NEWCO.  Notwithstanding any other provision of this Contribution Agreement, the obligations of NEWCO to effect the transactions contemplated by this Contribution Agreement shall be subject to the fulfillment at or prior to the Closing Date of the following conditions:

 

(a)           the conditions set forth in Section 7.1;

 

(b)           the representations and warranties of BCEC contained in this Contribution Agreement shall be true and correct as of the Closing Date (or, if given as of a specific date, at and as of such date), except for such failures to be true which (i) have been cured prior to the Closing Date or (ii) do not, in the aggregate, constitute a Material Adverse Effect;

 

(c)           the contributions of BCEC pursuant to Section 2.1 and covenants of each of the parties hereto (other than NEWCO) to be complied with or performed on or before the Closing Date pursuant to the terms hereof shall have been duly complied with or performed, except for such failures to comply or perform which do not, in the aggregate, constitute a Material Adverse Effect; and

 

(d)           assignment agreements and unit powers in form and substance reasonably acceptable to NEWCO evidencing the transfer of the BCEOC Membership Interests shall have been executed and delivered by BCEC.

 

7.3           Conditions to Obligations of BCEC.  Notwithstanding any other provision of this Contribution Agreement, the obligations of BCEC to effect the transactions contemplated by this Contribution Agreement shall be subject to the fulfillment at or prior to the Closing Date of the following conditions:

 

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(a)           the conditions set forth in Section 7.1;

 

(b)           the representations and warranties of NEWCO contained in this Contribution Agreement shall be true and correct as of the Closing Date (or, if given as of a specific date, at and as of such date), except for such failures to be true which (i) have been cured prior to the Closing Date or (ii) do not, in the aggregate, constitute a Material Adverse Effect;

 

(c)           the covenants of each of the parties hereto (other than BCEC) to be complied with or performed on or before the Closing Date pursuant to the terms hereof shall have been duly complied with or performed, except for such failures to comply or perform which do not, in the aggregate, constitute a Material Adverse Effect;

 

(d)           NEWCO shall have entered into the WFC Investment Agreement and the transaction described therein shall be closing contemporaneously with the transaction described herein (subject to the statement of timing in Section 2.1);

 

(e)           the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws, in substantially the same forms as set forth on Exhibits A and B, have been adopted by NEWCO;

 

(f)            the Management Incentive Plan has been adopted by NEWCO, and all NEWCO Class B Common Stock reserved thereunder shall have been issued or further reserved for further issuance by the NEWCO Board acting on recommendation from the chief executive officer of NEWCO;

 

(g)           the Holmes Contribution, pursuant to the Holmes Contribution Agreement, shall be closing contemporaneously with the Closing of the contribution described herein (subject to the statement of timing in Section 2.1);

 

(h)           the lenders of the BCEC indebtedness shall have consented to the assignment of such indebtedness to BCEOC and shall have agreed to the form of assignment and such assignments shall have been executed and delivered and the indebtedness shall have been effectively assigned to and assumed by BCEOC; and

 

(i)            the Shareholders Agreement, in substantially the same form as set forth on Exhibit D, has been executed and delivered by the other parties thereto.

 

ARTICLE VIII.
 TERMINATION

 

8.1           Termination.  This Contribution Agreement may be terminated and the transactions contemplated herein may be abandoned at any time prior to the Effective Time:

 

(a)           by any party if the conditions applicable to that party under Article VII have not been satisfied;

 

(b)           by any party hereto if the Closing shall not have occurred on or before December 31, 2010 (unless the Closing has not occurred as the result of a breach of the terms

 

11

 

hereof by the party desiring to exercise the termination right), which date may be extended by mutual agreement of the parties hereto;

 

(c)           by any party hereto if a final unappealable Order to restrain, enjoin or otherwise prevent, or awarding substantial damages in connection with, consummation of this Contribution Agreement or the transactions contemplated in connection herewith shall have been entered;

 

(d)           with the written consent of all the parties hereto;

 

(e)           automatically following the termination or withdrawal of the WFC Contribution or the termination of the WFC Investment Agreement; or

 

(f)            by BCEC if (i) the NEWCO Board fails to approve the terms of the WFC Contribution or (ii) the BCEC Board fails to determine that the consummation of the WFC Contribution is in the best interests of BCEC.

 

8.2           Effect of Termination.  In the event of any termination of this Contribution Agreement pursuant to Section 8.1, the parties hereto shall have no obligation or liability to any other party hereto except the provisions of this Section 8.2 and Sections 8.3, 9.5, 9.6, 9.8, 9.9, and 9.10, hereof shall survive any such termination and, except as provided in this Section 8.2, all documents executed in connection with this Contribution Agreement shall be null and void.

 

8.3           Fees and Expenses.  All costs and expenses incurred by either party hereto in connection with this Contribution Agreement and the transactions contemplated hereby shall be borne and paid by NEWCO upon presentation of such costs and expenses.

 

ARTICLE IX.
 MISCELLANEOUS

 

9.1           Waiver and Amendment.  Any provision of this Contribution Agreement may be waived at any time by the party that is entitled to the benefits thereof.  This Contribution Agreement may not be amended or supplemented at any time, except by an instrument in writing signed on behalf of each party hereto.

 

9.2           Nonsurvival of Representations and Warranties.  No representation and warranty made in this Contribution Agreement shall survive the Effective Time.  This Section 9.2 shall not limit the term of any covenant or agreement which by its terms contemplates performance after the Closing Date.

 

9.3           Assignment.  This Contribution Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, devisees and assigns.  Except as set forth in this Contribution Agreement, this Contribution Agreement shall not be assignable until after the Closing Date (except by inheritance or devise) by the parties hereto, except with the prior written consent of the other parties.

 

9.4           Notices.  All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered if

 

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delivered in person or by facsimile or electronic mail, receipt confirmed and  shall be deemed to have been duly given three (3) Business Days after deposit with a United States post office if delivered by registered or certified mail (postage prepaid, return receipt requested) to the respective parties as follows:

 

If to BCEC:

 

Bonanza Creek Energy Company, LLC

410 17th Street, Suite 1380

Denver, CO 80202

Fax:  720-279-2331

Attn:  Chief Executive Officer

 

with a copy to:

 

Thompson & Knight LLP

333 Clay Street, Suite 3300

Houston, TX  77002

Fax:  713-654-1871

Attn:  Harry R. Beaudry

 

if to NEWCO:

 

410 17th Street, Suite 1380

Denver, CO 80202

Fax:  720-279-2331

Attn:  Chief Executive Officer

 

or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall only be effective upon receipt.

 

9.5           Governing Law.  This Contribution Agreement shall be governed by and construed in accordance with the substantive law of the State of Delaware without giving effect to the principles of conflicts of law thereof.

 

9.6           Severability.  If any term or other provisions of this Contribution Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Contribution Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner material to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Contribution Agreement so as to effect the original intent of the parties as closely as possible.

 

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9.7           Counterparts.  This Contribution Agreement may be executed in counterparts and by facsimile, each of which shall be an original document and all of which together shall constitute one and the same agreement.

 

9.8           Headings.  The section headings herein are for convenience only and are not intended to be part of or to affect the meaning or interpretation of the Contribution Agreement.

 

9.9           Enforcement of the Contribution Agreement.  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Contribution Agreement were not performed in accordance with their specific terms or otherwise breached.  It is accordingly agreed that the parties hereto shall be entitled to any injunction or injunctions to prevent breaches of this Contribution Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedies to which they are entitled at law or in equity.

 

9.10         Entire Agreement; Third Party Beneficiaries.  This Contribution Agreement, including the documents and information supplied in writing, and instruments referred to herein and the exhibits hereto, constitute the entire agreement and supersedes all other prior agreements, and understandings, both oral and written, among the parties or any of them, with respect to the subject matter hereof.  This Contribution Agreement shall be binding upon and inure solely to the benefit of the parties hereto, and nothing in this Contribution Agreement, including the documents and information supplied in writing, and instruments referred to herein, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Contribution Agreement, except that each of the Holmes Members (as that term is defined in the Holmes Contribution Agreement attached hereto as Exhibit C) are express and intended third-party beneficiaries of the (x) representations and warranties made by BCEC in Section 4.7 (Investment Intent) hereof and (y) covenants made by the parties hereto in Section 6.6 (Section 351) hereof.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties to this Contribution Agreement have caused it to be duly executed as of the date first above written.

 

	
 
    	
NEWCO:
    
	
 
    	
 
    
	
 
    	
BONANZA   CREEK ENERGY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael R. Starzer
    
	
 
    	
 
    	
Michael   R. Starzer, President
    
	
 
    	
 
    	
 
    
	
 
    	
BCEC:
    
	
 
    	
 
    	
 
    
	
 
    	
BONANZA   CREEK ENERGY COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael R. Starzer
    
	
 
    	
 
    	
Michael   R. Starzer, President
    

 

Signature Page to Contribution AgreementEXHIBIT 10.3

 

April 19, 2011

 

Mark Meiklejohn

c/o Bancorp Rhode Island, Inc.

One Turks Head Place

Providence, RI 02903

 

Re:                               Employment with Brookline Bancorp, Inc.

 

Dear Mark:

 

This letter will confirm the terms under which you have agreed to become employed with Brookline Bancorp, Inc. (the “Company”).  We look forward to your arrival and leadership.  The principal terms of your employment are set forth in this letter (“Letter Agreement”).

 

1.                                       Title; Duties.  You will be employed as President and Chief Executive Officer of Bank Rhode Island.  You will perform such duties as are inherent in such position and such other duties as may be assigned by the Company from time to time.  You will be subject to the direction and supervision of the Chief Executive Officer of the Company.  You agree to serve the Company diligently and faithfully so as to advance the Company’s best interests and agree to not take any action in conflict with the Company’s best interests.

 

2.                                       Employment Date.  You shall be an employee “at will”, with your employment with the Company beginning on the Effective Time (“Employment Date”), as such term is defined in the Agreement and Plan of Merger, dated as of April 19, 2011 (the “Merger Agreement”) between the Company and Bancorp Rhode Island, Inc. and continuing until terminated by you or the Company at any time, with or without Cause or with or without advance notice.  Upon any such termination, except as set forth in Section 4 of this Letter, the Company will have no liability or obligation to make any payment or provide any benefits to you (including, without limitation, any salary or bonus payments or benefits described in Section 3) or to your executors, legal representatives, administrators, heirs or assigns or any other person claiming under or through you, except those required by law.

 

3.                                       Compensation.

 

(a)                                  Base Salary. You will receive a base salary during your employment at an annualized rate of $300,000, (“Base Salary”) payable in accordance with the Company’s usual payment practices and subject to periodic review and, in its sole discretion, increased by the Company annually upon the close of the Company’s fiscal year.  Any adjusted base salary shall constitute “Base Salary” for purposes of this Agreement.

 

(b)                                 Annual Bonus.  In each fiscal year during your employment, beginning in fiscal year 2012, you will be eligible to receive payments under the incentive compensation or bonus programs, as in effect from time to time, as the Company may establish for its 

 

 

employees and/or senior executives, at such levels or award opportunities consistent with other similarly-situated senior executives of the Company.  Any bonus or incentive compensation payments shall be paid as provided in such programs.

 

(c)                                  Benefits.  During your employment, you will be eligible to participate in all employee benefit plans and perquisite plans and policies including but not limited to fringe benefits, retirement plans, supplemental retirement plans, pension plans, profit sharing plans, life, health, dental, vision, accident and short and long-term disability insurance or any other employee benefit plan or arrangement which the Company may, in its sole discretion, make available to its senior executives and key management employees, whether such benefits are now in effect or hereafter adopted, subject to the terms and conditions of each such plan or policy.

 

(d)                                 Dining Club Membership; Automobile.  During your employment, the Company shall pay for your annual membership to the University Club in Providence, Rhode Island.  During your employment, the Company shall provide you with a car allowance equal to Five Hundred Dollars ($500) per month and shall provide you with parking at or near the Bank Rhode Island headquarters consistent with past practices.

 

(e)                                  Vacation.  You will receive twenty-five (25) days of paid vacation time per calendar year during your employment, with such vacation to be taken in accordance with the Company’s policies as in effect from time to time and at such times and intervals as mutually agreed by you and the Company.  You shall be entitled to holiday time and sick leave in accordance with the Company’s policies, as in effect from time to time.

 

(f)                                    Reimbursement for Expenses. You will receive reimbursement from the Company for documented business expenses that you reasonably incur on behalf of the Company in accordance with the Company’s normal policies with respect to expense reimbursements.

 

(g)                                 Deductions and Withholdings.  Notwithstanding any other provision of this Letter Agreement, you agree that the Company shall withhold from any and all payments required to be made to you all federal, state, local and/or other taxes which are required to be withheld in accordance with applicable statutes and/or regulations from time to time in effect.

 

4.                                       Termination of Employment; Severance; Change in Control.

 

(a)                                  Termination.  Your employment with the Company shall terminate upon the occurrence of any of the following circumstances:

 

(i)                                     Your death or disability;

 

(ii)                                  By the Company for Cause or without Cause; or

 

(iii)                               By you for Good Reason or without Good Reason.

 

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(b)                                 Severance.

 

(i)                                     If the Company terminates your employment without Cause or if you terminate your employment for Good Reason on or before the one-year anniversary of your Employment Date (including, without limitation, in connection with a change in control of the Company), the Company will pay to you (a)(i) any Salary that has accrued but is unpaid as of your termination date, (ii) the awarded but unpaid portion, if any, of any annual incentive compensation for any prior year, (iii) your pro-rated bonus for the year in which your termination occurred based on the “Target Bonus” for the year in which your termination occurred, (iv) reimbursement for any unreimbursed business expenses incurred by you through and including your date of termination, (v) payment for vacation time accrued as of the date of your termination, and (vi) any other amounts or benefits required to be paid or provided by law or under any plan, program, or written non-severance policy of the Company, which shall be paid or provided in accordance with applicable law or the terms of the applicable plan, program or policy (collectively, (i) through (vi), the “Accrued Amounts”) and (b) an amount equal to two times the sum of (i) your annual Base Salary then in effect plus (ii) the amount of the “Target Bonus” for the year in which the termination occurs.  In addition, the Company shall continue to pay, for the twenty-four (24) month period following your termination, for all medical, dental and life insurance coverage provided to you on your termination date on the same cost sharing basis as prior to your termination.  The Company shall also provide you with outplacement services for twelve months following your termination.  If you remain employed by the Company as of the one-year anniversary of your Employment Date, you and the Company will enter into the Company’s standard form of Change in Control Agreement with senior executives and key management employees (the “Company Change in Control Agreement”), which agreement shall govern any termination of your employment in connection with a “change in control” (as defined therein) after such anniversary date and, subject to the terms and conditions thereof, shall provide you with severance benefits equal to two times your annual base salary and bonus.

 

(ii)                                  If the Company terminates your employment without Cause after the one-year anniversary of your Employment Date under circumstances in which the Company Change in Control Agreement does not apply, the Company will pay to you (a) the Accrued Amounts (other than item (iii) in said definition) and (b) an amount equal to one times your annual base salary then in effect.  In addition, the Company shall provide to you, at the Company’s cost, for the twelve (12) month period following your termination, with the medical, dental and life insurance coverage as generally available to full-time employees of the Company during such 12-month period.  The Company shall also provide you with outplacement services for six months following your termination.

 

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(c)                                  Payment of Severance.  The severance payments to which you are entitled pursuant to Section 4(b)(i) or 4(b)(ii) of this Letter Agreement will be made to you, in a lump sum payment, within thirty (30) days after your date of termination; provided, however, if the thirty (30)-day period begins in one calendar year and ends in a second calendar year, the severance payment will not be made earlier than January 1st of the calendar year following the calendar year in which your termination occurs.  You agree that, as a condition to receipt of payments and benefits hereunder, you will execute a release agreement in such form reasonably satisfactory to the Company, releasing and waiving all claims against the Company, its subsidiaries and affiliates other than the right to enforce this Agreement and other than claims arising after the effective date of the release.

 

(d)                                 Death or Disability.  If you die or become totally and permanently disabled during the term of employment, the parties agree that the employment relationship and this Letter Agreement will terminate automatically. For purposes of this Letter Agreement, “disability” shall mean that you (i) are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, are receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.  In the event of your disability, the Company shall continue to pay you your Base Salary (reduced by any benefits you may be entitled to receive under any state or federal disability insurance program, such as Rhode Island temporary disability insurance or federal social security) for a period of six (6) months from the date of disability.

 

(e)                                  Definitions.

 

(i)                                     For purposes of this Letter Agreement, “Cause” means any of the following:

 

(A)                              You refuse to perform any of the duties assigned by the Company or any of its subsidiaries in good faith, when such refusal is not justified or excused by the terms of this Letter Agreement or by actions taken by the Company in violation of this Letter Agreement and such refusal, if susceptible to cure, is not cured within fifteen (15) days after written notice thereof is provided to you;

 

(B)                                You are convicted by a court of competent jurisdiction of embezzlement or other crimes against the Company or any of its subsidiaries, deliberately misappropriate funds of the Company or any of its subsidiaries, or commit an act of dishonesty;

 

(C)                                You materially violate a written policy of the Company or any of its subsidiaries and such conduct, if susceptible to cure, is not cured within fifteen (15) days after written notice thereof is provided to you;

 

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(D)                               You commit an irresponsible act in the performance of your duties or material acts (or omissions) of mismanagement and such conduct, if susceptible to cure, is not cured within fifteen (15) days after written notice thereof is provided to you; or

 

(E)                                 You continue any arrangement, hold any position or engage in any activity that conflicts with the interest of, or interferes with your duties owed to the Company or any of its subsidiaries, and such conduct is not corrected within fifteen (15) days after written notice thereof is provided to you.

 

(ii)                                  For purposes of this Letter Agreement, “Good Reason” means any of the following, without your express prior written approval, other than due to your disability or death:

 

(A)                              Any material reduction in the nature or scope of your duties, responsibilities, authority and powers;

 

(B)                                A greater than 10% reduction in your Base Salary or fringe benefits;

 

(C)                                Any relocation of your principal place of business outside of the State of Rhode Island; or

 

(D)                               Failure of the Company to obtain a reasonably satisfactory agreement from any successor to assume and agree to perform this agreement.

 

You shall have one hundred twenty (120) days from the time you first become aware of the existence of Good Reason to resign for Good Reason. You must provide written notice to the Company, to the attention of the Chief Executive Officer, of the existence of the condition described above within a period not to exceed sixty (60) days of the initial existence of the condition, upon the notice of which the Company shall have a period of thirty (30) days during which it may remedy the condition.

 

(f)                                    Limitation on Benefits.  It is the intention of the parties that no payments by the Company to you or for you benefit under this Letter Agreement or any other agreement or plan pursuant to which you are entitled to receive payments or benefits shall be non-deductible to the Company or Bank Rhode Island by reason of the operation of Section 280G  of the Internal Revenue Code of 1986,  as amended (the “Code”), relating to parachute payments.  Accordingly, and notwithstanding any other provision of this Letter Agreement or any such agreement or plan, if by reason of the operation of said Section 280G,  any such payments exceed the amount which can be deducted by the Company or Bank Rhode Island, such payments shall be reduced to the maximum amount which can be deducted by the Company or Bank Rhode Island. To the extent that payments exceeding such maximum deductible amount have been made to you or your beneficiary, you or your beneficiary shall refund such excess payments to the Company, as the case may be, with interest thereon at the Applicable Federal Rate determined under Section 1274(d)  of the Code, compounded annually, or at such other rate as may be required in order that no

 

5

 

such payments shall be non-deductible to the Company or Bank Rhode Island by reason of the operation of said Section 280G.  To the extent that there is more than one method of reducing the payments to bring them within the limitations of said Section 280G,  you shall determine which method shall be followed, provided however that if it is determined that such election by you shall be in violation of Code Section 409A, the allocation of the required reduction shall be pro-rata, and provided further that,  if you fail to make such determination within forty-five (45) days after the Company has sent you written notice of the need for such reduction, the Company may determine the method of such reduction in its sole discretion.  If any dispute between the Company and you as to any of the amounts to be determined under this Section, or the method of calculating such amounts, cannot be resolved by you and the Company, either the Company or you after giving three (3) days written notice to the other, may refer the dispute to a partner in the Boston, Massachusetts office of a firm of independent certified public accountants selected jointly by you and the Company. The determination of such partner as to the amount to be determined under this Section and the method of calculating such amounts shall be final and binding on you and the Company.  The Company shall bear the costs of any such determination.

 

(g)                                 Section 409A.  The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to you and the Company of the applicable provision without violating the provisions of Code Section 409A.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If you are deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of your “separation from service,” and (B) the date of your death, to the extent required under Code Section 409A.  Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this subsection (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.  For purposes of Code Section 409A, your right to receive any installment payments pursuant to this Agreement shall be treated

 

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as a right to receive a series of separate and distinct payments.  The Company makes no representation or warranty and shall have no liability to you or any person if any provisions of this Letter Agreement are determined to constitute deferred compensation subject to Code Section 409A but do not satisfy an exemption from, or the conditions of, such Section.

 

5.                                       Notices.  Any notice hereunder by either party to the other will be given in writing by personal delivery, telex, facsimile, overnight courier or certified mail, return receipt requested, addressed, if to the Company, to the attention of the Chief Executive Officer of the Company at 160 Washington Street, Brookline, Massachusetts 02447 or to such other address as the Company may designate in writing at any time or from time to time to you, and if to you, to your most recent address on file with the Company.  Notice will be deemed given, if by personal delivery or by overnight courier, on the date of such delivery or, if by telex or facsimile, on the business day following receipt of answer back or facsimile information or, if by certified mail, on the date shown on the applicable return receipt.

 

6.                                       Remedies for Breach. Each party acknowledges that breach by the other party of the provisions of this Letter Agreement will cause the first party irreparable harm that is not fully remedied by monetary damages. Accordingly, each party agrees that the other party will, in addition to any relief afforded by law, be entitled to injunctive relief.  Each party agrees that both damages at law and injunctive relief will be proper modes of relief and are not to be considered alternative remedies.

 

7.                                       Entire Letter.  This Letter Agreement contains the entire understanding of the parties with regard to its subject matter. There are no other agreements or understandings, whether oral or written, or express or implied, with regard to such subject matter. This Letter Agreement supersedes and replaces any and all prior agreements or understandings between the parties relating to its subject matter, including without limitation, that certain employment agreement dated April 28, 2008, as amended December 20, 2010 between you and Bancorp Rhode Island, Inc. and Bank Rhode Island, except that Sections 4.1, 4.2 and 4.4 shall survive the termination of such employment agreement and are incorporated herein by reference.

 

8.                                       Amendment.  This Letter Agreement may be amended or modified only by a writing signed by all parties.

 

9.                                       Waiver.  Waiver by either the Company or you of a breach of any provision, term or condition hereof will not be deemed or construed as a further or continuing waiver thereof or a waiver of any breach of any other provision, term or condition of this Letter Agreement.

 

10.                                 Successors and Assigns.  The rights and obligations of the Company hereunder may be transferred or assigned to any assign of the Company.  The Company’s obligations under this Letter Agreement will be binding on successors to the Company.  You may not assign or transfer any rights or obligations under this Letter Agreement, and any purported assignment will be null and void.

 

11.                                Severability.  If any arbitrator, agency, tribunal or court of competent jurisdiction finds any provision or part of this Letter Agreement to be excessively broad, in whole or in part, such

 

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provision will be deemed and construed to be reduced to the maximum duration, scope or subject matter allowable under applicable law.  If any provision or part of this Letter Agreement is declared illegal or unenforceable by any arbitrator, tribunal or court of competent jurisdiction even after the reformation and construction as provided in the previous sentence, then the remainder of this Letter Agreement, or the application of such provision or part in circumstances other than those as to which it is so declared illegal or unenforceable, will not be affected thereby, and each provision and part of this Letter Agreement will be valid and enforceable to the fullest extent permitted by law.

 

12.                                 Section Headings.  The headings contained in this Letter Agreement are for reference purposes only and will not in any way affect the meaning or interpretation of this Letter Agreement.

 

13.                                 Governing Law.  This Letter Agreement will be governed by, construed and enforced in accordance with the laws of the State of Rhode Island, without regard to conflict of laws principles.

 

14.                                 Counterparts.  This Letter Agreement may be executed in any number of counterparts, any one of which will constitute an original of this Letter Agreement, provided that this Letter Agreement will not become effective until each party has executed at least one counterpart.  The parties agree that signatures on separate counterparts may be transferred to a single document upon the request of any party.  For the convenience of the parties, facsimile, pdf or other electronic signatures will be accepted as originals.

 

15.                                 Effectiveness.  Notwithstanding anything to the contrary contained in this Letter Agreement, the effectiveness of this Letter Agreement shall be subject to the consummation of the merger described in the Merger Agreement.  In the event the Merger Agreement is terminated for any reason, this Letter Agreement shall be deemed null and void.

 

[Signature Page Follows]

 

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If the terms of this Letter Agreement are acceptable to you, please sign the enclosed copy of this letter where indicated and return to me.

 

Sincerely,

 

 

	
/s/ Paul A. Perrault
    	
 
    
	
Paul A. Perrault, on behalf of
    	
 
    
	
Brookline Bancorp, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
AGREED AND ACCEPTED:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Mark Meiklejohn
    	
 
    
	
Mark Meiklejohn
    	
 
    

 

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